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December 9, 2013

How to Use Data for Marketing (Even if You Can't Do Big Data Yet)

December 9, 2013 | By | No Comments

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Building on your dataRichi Jennings of NetApp has (@richi on Twitter) a great look about the role of Big Data for retail over on Forbes today, stating the future of retail is all in Big Data.

I agree. Well mostly, anyway.

Big Data will play an enormous role in how companies across an array of industries help their customers — and help their businesses.

However, while speaking at a conference last week, I talked with a number of business executives and thought leaders struggling to make Big Data work for their companies. And part way through these conversations, it hit me why so many struggle with putting Big Data to work: They’re trying to boil the ocean. The challenges present by Big Data have, in a few cases, stopped them cold.

Why? Well, Big Data creates a number of difficult questions for marketers and their businesses, such as:

  • How can we collect the information we’re looking for?
  • How do we store this much information?
  • How do we provide access to the information to the right people and avoid exposing customers’ private information to the wrong people?
  • Where do we get sufficient computing power to crunch the data (without violating customer privacy or proprietary information)?
  • How do we interpret what the information tells us? Are we really able to understand what the data says?
  • How can we communicate what we’re learning in an effective enough way across the organization?

All of these questions represent valid concerns and relatively thorny problems. Many companies lack the people, processes, knowledge, and infrastructure to address these in a significant way without equally significant (read: unwelcome or unavailable) investment. The common assumption suggests the only way forward is to dive in head-first, with multi-year, multi-million dollar commitments.

That commitment may well be necessary.

However, the scale of those efforts shouldn’t stop you from using the data you already have to improve what you already know about your customers. A number of businesses I’m working with have seen dramatic improvement in their business results by conducting smaller, more targeted experiments using existing tools in parallel with their Big Data investment.

These insights have been used to lower customer acquisition costs, increase conversion rates across channels, and improve product development for businesses across a variety of industries. Techniques like A/B testing, web analytics modeling, and holdout tests use existing data to suggest answers to key questions. None replace necessary investment in the deep strategic insights these clients expect Big Data to deliver.

But they produce results in the near-term while brands work towards their long-term solution.

If you’re interested in learning more about the future of e-commerce and marketing via the social, local, mobile web, register to receive a special report I’ve produced in conjunction with hotel marketing firm Vizergy, “Digital Hotel Marketing in a Multiscreen World.” While it’s targeted specifically at hotel and resort marketers, the lessons apply to just about any business. You can get your free copy of the report here.

You might also enjoy some of our past coverage of the social, local, mobile web and what it means for your business, including:

Tim Peter

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October 25, 2013

Retailers and Consumer Tracking: One Fatal Mistake to Avoid

October 25, 2013 | By | No Comments

E commerce tipsFurther blurring the lines between e-commerce and “just plain ol’ shopping,” The Wall Street Journal’s Digits blog today highlights how tracking companies plan to notify in-store shoppers about tracking activities.

Or rather, they will if the retailers agree. As Digits notes:

“Notably, no major retailers or the industry group that represents them signed the code of of conduct. The tracking companies are asking their retail clients to do this, but retailers themselves haven’t publicly agreed to post signs in their stores.”

Um… yeah. That seems super smart. Or, not, really.

To be fair, the National Retail Foundation apparently wasn’t invited to the table (or chose not to attend — the article is unclear on that point):

“Very few [retail] companies have had any involvement with this process,” said Mallory Duncan, Senior Vice President and General Counsel. ”Our members are still examining it.”

Now, I have no idea right now the right mechanism to alert shoppers about tracking activity. But, I do know that alerting customers is the right thing to do.

Period.

Online marketers have dealt with this problem for years. And if we’ve learned one thing, it’s that customers don’t buy from you if they don’t trust you. Retailers face increasing challenges from e-tailers due to advancements like same-day shipping from Fancy and the rest of the AGFAME cohort (Apple, Google, Amazon, Facebook, Microsoft, plus eBay, Walmart, and others). Don’t make it any harder on yourself by ignoring your customers’ privacy concerns.

Ultimately, customers will buy from businesses that offer good value and treat them with respect. You absolutely can do both and succeed. And, more to the point, your success depends on offering both.

If you’re interested in learning more about the future of e-commerce and marketing via the social, local, mobile web, register to receive a special report I’ve produced in conjunction with hotel marketing firm Vizergy, “Digital Hotel Marketing in a Multiscreen World.” While it’s targeted specifically at hotel and resort marketers, the lessons apply to just about any business. You can get your free copy of the report here.

You might also enjoy some of our past coverage of the social, local, mobile web and what it means for your business, including:

Tim Peter

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October 15, 2013

How Do You Know Your Social or Mobile Marketing is Working? (Travel Tuesday)

October 15, 2013 | By | No Comments

Watching customers not analyticsI’m amazed when businesses tell me their social or mobile marketing activities aren’t generating any value for their business. In an era when guests read and post reviews or compare prices from their mobile phones while in your hotel, restaurant, or store, doesn’t it seem odd that more businesses are unable to engage with these guests in a meaningful way? (And by meaningful, I mean revenue-generating).

Maybe the problem isn’t that your social and mobile marketing isn’t working. Instead, is it possible you’re not asking the right questions?

For instance, Smart Insights profiles a number of service companies using mobile and social effectively, highlighting the following case:

“Using Google Analytics, Thompson Hotels found that guests who were also ‘fans’ on social media spend about 35% more during their stays than guests who were not.  These visitors also booked directly through the hotel website, circumventing fees charged by 3rd party booking companies.”

That sounds an awful lot like a win, no?

Frequently when I talk to hotels, restaurants and retail locations, they’ve got plenty of good ideas for driving business and engaging customers. What they often lack is a clear picture of what’s working. Sure, you’ve got Google Analytics (or Adobe Site Catalyst, Coremetrics, KISSmetrics, etc.). But do you have the people and processes to get real value out of it? Are your analytics tools helping you answer your business questions?

Figuring out where to spend your time and money isn’t that difficult if you can clearly see what produces results. Are you putting enough energy into solving that problem?

As you put your marketing budget together for next year, make sure that you’re not just budgeting for social and mobile tactics, but also planning for how you’ll measure success in those areas, the questions you’ll ask about your customers, and the resources necessary to find the answers.

And if you’re interested in learning more about the future of e-commerce and marketing via the social, local, mobile web, register to receive a special report I’ve produced in conjunction with hotel marketing firm Vizergy, “Digital Hotel Marketing in a Multiscreen World.” While it’s targeted specifically at hotel and resort marketers, the lessons apply to just about any business. You can get your free copy of the report here.

You might also enjoy some of our past coverage of the social, local, mobile web and what it means for your business, including:

Tim Peter

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October 7, 2013

Solving for "Why": The Myth of More

October 7, 2013 | By | No Comments

E-commerce strategy developmentBusiness, and marketing specifically, often focuses on “more.” But here’s a question for you: Is more always better?

I’d argue that cases exist where “more” isn’t always a good thing, at least not in itself. Let me give you an example.

A company I worked with recently (they’ve given me permission to share this), called me in because they’d launched a promotion designed to bring in more traffic and, they hoped, more sales.

They’d achieved the first goal; traffic to their site skyrocketed. But… something went wrong. Their revenues didn’t increase. In fact, they fell.

What went wrong?

Hang with me for a second and I’ll explain.

First, there’s a fairly simple model I’ve used for years for evaluating e-commerce strategies and tactics that looks like this:

Revenue ( R ) = Visitors ( V ) times Frequency ( F ) times Conversion ( C ) times Purchase Value ( P )

Or, more simply:

Revenue = V * F * C * P

If you want to increase your revenues, you can increase:

  1. The number of visitors your site gets
  2. The frequency those visitors come to your site
  3. The conversion rate among those visitors (you can bone up on what conversion rate is here)
  4. The value of the transaction from those visitors who convert
  5. Some combination of the above (there are 11 possible combinations, in case you’re curious)

Increase one or more of these numbers and you can expect your revenue to grow. And the more of these four variables your chosen initiative affects, the more likely you are to increase revenues. Which, you know, is kind of the point. This model also works for ad-supported businesses with just a little finessing.

Too often, businesses look to grow one of these numbers in isolation from the others (a problem I’ve discussed at length here and here). Occasionally, this isolated focus occurs because companies “silo “teams, for instance making one group responsible for promotional tactics and another responsible for improving site functionality.

Fortunately, that wasn’t the case here. Unfortunately, the tactic the company had chosen—creating so-called “link-bait” content designed to increase the number of sites linking in, improve their search engine ranking, and grow traffic—did increase their traffic, but it didn’t consider any other component of the model. And ignoring the other elements caused the overall decline they experienced.

So what went wrong?

Well, a few things:

  1. The content wasn’t particularly relevant to their business. While the content was well written, eye-catching and increased their traffic, almost none of the new traffic converted.
  2. The new visitors rarely returned to the site. The client’s frequency metrics fell pretty sharply as the “new” visitors almost never came back to the site a second time.
  3. The new content distracted long-time customers. Not only did the new content not encourage repeat visits or purchases, it actually distracted the company’s existing site visitors from their initial purchase intent, hurting conversion rate.
  4. The additional traffic slowed their site response. A couple of their pieces got picked up by larger content aggregators and the added volume hurt site stability, which impacted sales during peak periods. Worse, their operating expenses increased because of the need to improve server capacity (while the cost of a single additional visitor is essentially free—low marginal cost, in economic terms—the cost of a 2.5x volume increase was not).

Fortunately, none of these were long-term problems. By shifting focus from “more traffic” to “more qualified traffic,” we were able to re-engage existing customers, improve conversion rates, and drive higher purchase values from visitors to the site (visit frequency returned roughly to pre-link bait campaign levels). Result: happy customers and happy business owners.

Now, does that mean “more traffic” is a bad goal? Or “more” anything, for that matter?

Not at all.

But you’ve also got to consider what you want those visitors (or what-have-you) to do when they arrive at your site and whether they’re drawn from new visitors or people you’ve already engaged with—or, of course, both.

So when you’re thinking about “more,” think also why you want more. Then align your objectives, strategies, and tactics with solving for “why.”

If you’re interested in learning more about the future of e-commerce and marketing via the social, local, mobile web, register to receive a special report I’ve produced in conjunction with hotel marketing firm Vizergy, “Digital Hotel Marketing in a Multiscreen World.” While it’s targeted specifically at hotel and resort marketers, the lessons apply to just about any business. You can get your free copy of the report here.

You might also enjoy some of our past coverage of the social, local, mobile web and what it means for your business, including:

Tim Peter

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August 16, 2013

Facebook Isn't Offering a Mobile Payments Platform. But What They Are Offering is Far More Interesting.

August 16, 2013 | By | No Comments

Facebook moving into commerceOn yesterday’s podcast, I mentioned that Facebook was launching a PayPal competitor as reported by AllThingsD. Turns out, not so much.

But, what they are doing is really interesting all the same.

TechCrunch clears up the confusion noting Facebook’s payments test is a companion that fills in billing info. Key story highlight:

” The feature pre-fills credit card and billing info for making easier purchases through PayPal, Stripe, Braintree or other payment processors in third-party mobile apps. It’s not a payment processor itself, but could help Facebook prove the ROI of its ads.” [Emphasis mine]

Now, clearly there’s a need for this kind of app. I’ve mentioned before how poor usability hurts the growth of mobile.

But the bigger trend, one I’ve mentioned in the past is that “he who owns the data, owns the customer.” (You can read more about that in my presentation on where marketing and online distribution are headed below):

Companies like Facebook, and its AGFAM brethren—Apple, Google, Facebook, Amazon and Microsoft, plus eBay who deserves an honorable mention—recognize the value of customer data.

You’d think Facebook would love to get a piece of the highly profitable payments pie. But this move shows where they believe the real value lies.

If you’re interested in learning more about the future of marketing on the social, local, mobile web, register to receive a special report I’ve produced in conjunction with hotel marketing firm Vizergy, “Digital Hotel Marketing in a Multiscreen World.” While it’s targeted specifically at hotel and resort marketers, the lessons apply to just about any business. You can get your free copy of the report here.

You might also enjoy some of our past coverage of the social, local, mobile web and what it means for your business, including:

Tim Peter

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March 20, 2013

What Happens in an Internet Minute? (Cool Infographic)

March 20, 2013 | By | One Comment

If you haven’t seen it, you’ve got to check out this infographic from Intel detailing what happens in an Internet minute:


(Click to embiggen)

Clearly, these are some staggering stats. And they illustrate many of the types of trends I’ve talked about before, such as the growth of mobile use, what mobile will do to your sales in 2013, why e-commerce still has lots of room to grow, and why it’s destined to win in the long run.

But, by any measure, the data Intel provides speaks volumes. Check out the whole thing if you have a minute to spare. And see what happens on the Internet in that same amount of time.

Interested in more? Sign up for our free newsletter and get more information on how to build your social, local, mobile marketing strategy.

Tim Peter

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January 28, 2013

Finding and Following Your Customer's Digital Footprint

January 28, 2013 | By | 3 Comments

4 ps of marketingI had the great privilege to guest host @IBMBigData’s weekly CXO Chat on Twitter focused on Customer Experience Optimization. The session was called Finding & Tracking Your Customer’s Digital Footprint and looked at your customers’ digital footprint and how you can leverage consumer behavior in your marketing and customer service efforts. It was an incredibly lively discussion and I learned as much as I shared.

Since it was on Twitter, my answers were limited to 140 characters or fewer. But I think that really focused the discussion clearly on the best things you can do to improve your customers’ experience using the data available to you. In the sections below, I’ve tried to capture the spirit of the session while adding some context (e.g., tweets/questions/etc. from other participants) where appropriate.

Anyway, check out the Q&A for yourself:

Can you follow your customers’ digital footprint?

  • It is possible. But first think about what you’re collecting and why.
  • Customer relationships depend on trust. Make sure you have treat customer data with care.
  • Have a clear sense of what’s your data (aggregate usage information, opens, clicks, shares, retweets, etc). vs. customers’.
  • All personally identifiable information (PII) belongs to customers, always. Handle with care.
  • If you’re uncomfortable telling customers how you plan to use their data, ask yourself whether you should collect it at all.
  • RT @IBMbigdata @Marco_Saito “Capture” probably wrong verb. “Access” better. Footprint doesn’t need to be in your database…
  • Finally, remember you don’t need to know everything to know enough to help customers achieve their goals.

How can businesses track the digital footprints to profile their customer base?

  • Don’t be afraid to start small. Gather the data that will help you help your customer.
  • Exactly: RT @DnBUS: Businesses need to rethink marketing segmentation. It’s more dynamic & individualized than trad. demos.
  • Focus on your customers’ behaviors first. They’re a better predictor of future behavior than anything else.
  • Great point. RT @Marcio_Saito Most times, more important to know which venues customer are (context) than what they said (data).
  • Ask customers permission and to volunteer additional information in exchange for content, services, utility.
  • Then (where appropriate) join those disparate data together to create a clearer picture of customers wants, needs, dreams
  • RT @ValaAfshar: Mature service orgs are using prior contact history and predictive analytics to deliver proactive services.
  • One participant on Twitter (@marksalke) asked: “But do customers/consumers care to be ‘analyzed’?”
  • My reply: @marksalke It’s an important question. Depends on how you’re going to use it. Customers want help. If if helps, then yes. If not…
  • But don’t ask customers for the things you should already know (past contact, repeated discussions, etc.)

How far back should we trace the digital footprint? Why?

  • Only go back as far as necessary to help your customers accomplish their goals. Remember trust matters more than anything.
  • Exactly right: RT @stevemassi: customer will ID themselves when theres value in it for them
  • Whenever you’re gathering customer information, ask “how does my having this help my customer?”
  • It’s very easy to slip past “helpful” and towards “creepy.” Don’t go looking for data you can’t use to help your customer.
  • @SJAbbott Seeing those trends is fine. Data in the aggregate is cool if you exclude PII. Just don’t try to mine individuals that way.

How do you use the digital footprint to personalize the customer experience?

  • Focus on behaviors first. What do your customers do? How can you enhance the experience based on what you already know.
  • Tough to give examples in 140 chars, but consider the following scenarios…
  • We already know so much that we could use better. On website, what browser, referrer, geolocation, search query, etc.
  • How can you use that data to offer more relevant responses, content, experiences?
  • On social channels, activity, friends, followers, fans, etc. What do these tell us about customer wants, needs, dreams?
  • @tmustacchio It’s one approach. Though instead of “all available” data, focus on most meaningful data first.
  • Definitely. RT @IBMbigdata Use digital insight to fill in gaps in customer story to then personalize the exp
  • Great! RT @adamtoporek Blend internal data with social/public footprint for total picture. Then take WIIFM approach to cust

How do you bridge the gap between digital and physical footprints?

  • Carefully. 😉 Again easy to slip into “creepy” territory. Instead ask, “How do my customers use these channels together?”
  • Pay attention to transitions. Are customers shifting between physical/digital based on choice or frustration?
  • For many businesses mobile will be key. RT @DnBUS A5: One way to integrate physical & digital footprints: mobile.
  • Keep messages consistent across channels as people move. Help keep them from getting lost.
  • 60% of consumers between 18-34 sleep with their phone due to FOMO (fear of missing out). Offline no longer exists.
  • @SMSJOE That’s right. Customers don’t think “channel.” They think “company.” If you do it bad in one channel, it can follow you.
  • Mobile will drive much of the transition between offline and online. See here: http://ow.ly/hch4Q
  • RT DnBUS @stevemassi Good point. We must also get permission to observe mobile use & offer guidance. Understand context of use 1st
  • @marksalke @stevemassi Many already are today. Mobile doesn’t just mean your app. It’s a truly “personal” computer now.

How can businesses take advantage of digital footprints to innovate, differentiate and grow?

  • Again, think first about how it helps your customer. Use data to improve service.
  • With rise of consumer review, photo and social sharing sites, your brand is what your customer says it is.
  • Exactly! RT DnBUS A6: Digital footprints can fuel innovation by revealing what customers need & want & what they expect from you.
  • Customers who have great experiences tell their friends. Customers with bad experience tell everyone they know.
  • Listening to what your customers real needs then applying those lessons will help you improve products and quality of service.
  • Yep. RT @ValaAfshar The art of building trust is to use the information *not* to manipulate, but rather to personalize and inspire.

What best practices should companies employ in leveraging and cross pollinating digital footprints?

  • Protect your customers’ private data first, last, and always. You don’t own it but it’s entrusted to your care.
  • @OBI_Creative I basically agree. But remember you have to listen deeply for what they really want, not just what they say they want.
  • @OBI_Creative Think Henry Ford’s (apocryphal) “faster horse” quote: http://ow.ly/hciUm
  • Establish and maintain cross-functional teams representing different aspects of customer journey. Avoid silos at all costs.
  • Each member of team needs to reflect context as well as content of digital footprint. How/why it matters to customer interaction.
  • @thecxguy asked: “but the question remains. What is “private”?”
  • I responded: Tricky question. Consumers will differ on where the line is, but I still believe PII is (mostly) private.
  • RT @DnBUS: Remember that each “touch”/interaction–regardless of communicating team–is a brand experience.

Should customers disguise their digital prints from businesses? Why or why not?

  • Whether they should or not, they will. Especially from companies that haven’t earned their trust.
  • Customers will increasingly protect their footprint when companies misstep. Don’t misuse what isn’t yours.
  • Customers should share their footprint but only if they receive value in exchange. Data is currency.
  • RT @thecxguy exactly. progressive biz will show their cust what data they collect, what they use it for and give option 2 opt out

It was a great session and I look forward to continuing the dialogue with this group. You should check them out, too.

Interested in more?
Sign up for our free newsletter
and get more information on how to build your social, local, mobile marketing strategy.

Tim Peter

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December 20, 2012

Thinks Out Loud Episode 11: Does Podcasting Make Sense? A Digital Marketing Case Study

December 20, 2012 | By | One Comment

Where does podcasting fit

Podcasting Case Study

Web Analytics Ideas

Biznology Post and Webinar

HSMAI Roundtable Interview

Contact information for the podcast: podcast@timpeter.com

Technical details: Recorded using a Shure SM57 microphone
through a Mackie Onyx Blackjack USB recording interface into Logic Express 9 for the Mac.

Running time: 13m 13s (How appropriate heading into 2013)

You can subscribe to Thinks Out Loud in iTunes [iTunes link], subscribe via our dedicated podcast RSS feed or download/listen to the podcast here on Thinks using the player below:

Tim Peter

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November 7, 2012

What You Can Learn About Marketing from Nate Silver

November 7, 2012 | By | One Comment

Predicting the futureHere’s an interesting bit of information from last night’s election coverage:

“The New York Times election statistician, Nate Silver, perfectly predicted all 50 states last night for President Obama, while every single major pundit was wrong–some comically wrong.”

Silver uses the same techniques highlighted in the book Moneyball (and to a lesser degree, the film). Silver’s results underscore why I’m such a fan.

Your ability to manage your business depends in large part on how effectively you measure your business. So, with that in mind, here are four past tips on how to measure more effectively:

Finally, I’ve written a whitepaper on Best Practices for Website Analytics for the hotel industry, though the lessons apply across many industries. Contact me if you’d like a copy.


Normally, I use this space to talk about what we do here at Tim Peter & Associates. But with so many suffering the after-effects of Hurricane Sandy, please visit the American Red Cross and help any way you can.

Tim Peter

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October 22, 2012

You Don't Have 50 Key Performance Indicators

October 22, 2012 | By | No Comments

Measures that matterI’d like to take a moment to consider the notion of what exactly a key performance indicator is. Companies often talk about using key performance indicators to measure and manage their business. And, in theory at least, that’s a good idea. But many companies fall short in their implementation because they don’t properly identify their true, key performance indicators. Oh, sure, they track loads of numbers, review lots of data and produce numerous reports. But do those numbers, data and reports mean anything about the current state and future health of the business?

Sadly, the answer for many companies is “no.”

So let’s start over by looking at key performance indicators in more detail.

A key performance indicator is, simply, a number that tells you whether you’re on the right track to achieve your goals.

That’s it.

For instance, a financial services company I worked with tracked “DART’s” as their key performance indicator: Daily Average Revenue Trades. The company made most of its money on transaction fees from trades executed. However, not all trades produced revenue for the company due to internal account management, error corrections and the like. So simply counting the number of trades, while interesting — and potentially valuable from an operational standpoint — didn’t offer a clear picture of how the business was doing each day. But, subtract the non-revenue trades from the picture, and suddenly you’ve got a formula for accurately representing how the business was doing.

You can measure the same with any of your marketing activities, regardless of your product or service. What does a sale look like in your business? Is it an actual sale? Is it a lead generated? If you’re a non-profit, is it a donor pledge or an additional email address added to your mailing list?

The only problem with sales numbers, of course, is that they represent a trailing indicator. That is, the number doesn’t reflect the financial health of the business going forward. It only reflects a snapshot in time of where the business is right now. A better option when it exists is to look for leading indicators, metrics that inform you how the business will look in the future. Some examples include phone calls received, email addresses captured, leads generated, brand searches, etc.

Is social media activity — friends, fans and followers — a leading indicator? Well, the jury’s still out. But I’m going to make the case for yes. Here’s why:

Any consumer who takes the time to share something about herself with you — whether through Facebook, Twitter, Foursquare, LinkedIn, Google+ or whatever the social media flavor of the month is — has indicated interest beyond the average consumer. That is, all the ones who didn’t choose to connect with you. And years of research into market effectiveness shows that consumers exposed to repeated messages transact at higher rates and, often, higher dollar values.

Of course, the point here is to determine the metrics in your business that actually show how business is doing and manage to those (you can check out our guide to Web Analytics Fundamentals for help in how to measure them). To unlock a door you need a key. And you can’t unlock your business’s true potential if you’re not looking at key performance indicators.


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