WHAT EXACTLY IS “ INTELLIGENCE?”

BOOK 1 What Exactly is “Marketing Intelligence?”

A TWO-PART SERIES WITH EIGHT WAYS THAT RETAILERS CAN USE MARKETING INTELLIGENCE TO IMPROVE MARKETING ROI AND DRIVE MORE PROFIT

WHAT EXACTLY IS “MARKETING INTELLIGENCE?” STOP GUESSINGSMARTFOCUS AND START EBOOK USING 1 | PAGE YOUR 1 MARKETING INTELLIGENCE INTRODUCTION

How this eBook works

This quick-to-digest eBook series consists of two sections, each designed to be consumed in less than 15 minutes. Each part is a separate document, but both work together to help you understand how Marketing Intelligence makes you a smarter marketer. It’s short, it’s to the point, and best of all, it doesn’t waste your time with fluff. Oh wait, was that fluffy to say that there’s no fluff? Let’s get on with it!

BOOK 1 BOOK 2

WHAT EXACTLY IS YOUR CMO IS SCREAMING, “MARKETING INTELLIGENCE?” “DO THIS, NOW!” AND HOW DO YOU GIVE SO SEE HOW OTHERS CUSTOMERS WHAT HAVE DONE IT! THEY WANT? DOWNLOAD BOOK 2

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INTRODUCTION

What Exactly is “Marketing Intelligence?”

If you’re reading this, you’re a smart marketing A report from IBM says that professional. You’re experienced, you’ve “1 in“A 3 report business from leaders IBM says don’t that mastered the art of writing crafty email subject lines and running sticky promotions and you trust“1 inthe 3 informationbusiness leaders they don’tuse calculate an ROI after every campaign. But are to maketrust thedecisions.” information That’s they not use you really using Marketing Intelligence to do intelligence,to make decisions.” that’s a typical That’s not a better job? marketer’sintelligence, daily that’s grind. a typical marketer’s daily grind.” WHAT IS IT? IBM / ZIKOPOULOS ET AL., 2012, UNDERSTANDING BIG DATA, • Marketing Intelligence is a means to MCGRAW-HILLIBM / ZIKOPOULOS ET AL., 2012, understanding your customers, what they’re UNDERSTANDING BIG DATA, doing, and how you can influence them. MCGRAW-HILL

• It’s defined by the data that you collecton your customers’ activities, how they respond to campaigns, how they behave on your website, what they purchase online and in your stores, which devices they use, where they live, and on and on.

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INTRODUCTION

For example, looking at past display ad Today’s customers use Marketing Intelligence is much more than campaign results, developing a new campaign many different devices. Does that marketing smarts, and can help you far beyond a based on those results, and aiming at increased single campaign. It can help you: click-through rates as the goal is using only a matter to your business? Marketing portion of your Marketing Intelligence. It limits Intelligence tells you! • Build your entire your scope, blinds you from the other ways • See which specific customers to target those same customers interacted with you, and in an individual campaign impairs your ability to impact customers beyond that single campaign and channel. • Identify market trends and merchandising 8% opportunities OTHER On the other hand, using your complete • Make you look like a marketing rock star! Marketing Intelligence looks at which 10% TABLET customers have responded to similar email and • You’re already collecting all of the data— ad campaigns in the past, which customers email, ad, web, point-of-sale, loyalty, etc.— and you’ve invested a lot into those systems. have browsed relevant products on your 16% website, and how past purchases might indicate SMARTHPHONE 66% It’s email clicks, webpage views, point-of-sale likely targets. You’ve expanded your scope COMPUTER beyond a single channel, included purchase and transactions, demographic data, and everything browsing data, and maximized your ability to in between—and beyond. get customers to do what you ultimately want them to do: make a purchase. It’s all the data that you have, combined and presented in a way that a marketer can understand, see the insights, and execute on the action.

Chart: Google/Ipsos OTX, “Pre-Holiday 2012 Consumer Intentions,” October, 2012. http://www.google.com/think/research-studies/holiday-consumer-intentions-2012.html

WHAT EXACTLY IS “MARKETING INTELLIGENCE?” SMARTFOCUS EBOOK 1 | PAGE 4 GETTING STARTED

Getting Started: How to Turn Data into Intelligence

Every company has multiple marketing and Fast Company says that, “every day, transactional systems in place. Usually those we create 2.5 quintillion bytes of systems are good at one thing, and that’s not combining data from other systems. data.” It’s probably not all yours, but it shows that everyone is getting You’re collecting tons of data, and tomorrow, buried by data! you’ll collect tons more. Unless you get ahead of it today, you’re not only getting buried PEARSON, B., (2013, MAY 21). deeper and deeper, you’re missing out on huge HAVE YOU HIRED A STAR DATA ANALYST TODAY? opportunities to influence customers, drive more FASTCOMPANY.COM. revenue, and fight off competitors.

So how do you go from marketing data to Marketing Intelligence? You connect, you dig, and then you go.

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CONNECT DIG GO

Connect the data that’s currently not connected— Start digging in to your data to learn what your As you start digging into your data, you need email with point-of-sale (POS), POS with web, customers are doing, but you, as marketing, need simplicity and speed. What you don’t need is web with social, and more. Since your systems to have your hands on the data. more confusion. are siloed, getting data together might sound like a big, IT-driven project, but it’s easier than you Relying on a BI analyst or a data scientist or More and more, the biggest constraint for think and can be done in the cloud. someone from IT or (gasp!) a consultant is marketers is time. Budgets aren’t infinite and keeping you one or more steps removed ROI is important, but even more pressing is the It’s a simple task if you have the right tools, from the answers. ticking clock behind fickle customer behaviors, tools that were built expressly to bring together fleeting trends, and ever-changing competitive data and designed for marketers to use. It’s also You know your marketing strategy. You know tactics. Being slow means being second place, simple if those tools present your customer what questions to ask first and what questions and second place is the first loser. data in a way that’s simple to understand and to ask next. Disconnecting marketing from that’s easy to see the opportunities. the intelligence means missed opportunities, And data connectivity should work both ways: missed insights that spark ideas, and slow if it was easy to pull in your marketing and Simplicity is the key here. If marketing response times. It also takes your marketing customer data, it should be just as easy to push users can’t easily get to and understand the gut out of the process and your ability to see out your groupings, targets, and offers based intelligence, then you’ve wasted your money. marketing opportunities that non-marketers on what you’ve learned. would never see. Why? Because once you find an interesting You wouldn’t have a data scientist look at the insight, you’ll want to quickly create a campaign results of a blood test, you’d have a healthcare and execute it. If your systems are already professional do it. Same goes for customer and connected, then it’ll happen fast. and marketing data.

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Your Customers are Screaming, “Here’s What I Want!”

When you have a complete picture of customer Focusing on your marketing data is taking a behaviors and activities, your marketing starts to backwards approach. When you put the word revolve around what the customer wants instead “free” in an email’s subject line, open rates go of what you want to force feed them. Knowing up. So you put the word “free” into every email that they purchased a new backpack online subject line. But that’s not customer-centric, only after getting your 20% discount email tells it’s marketing-centric. It’s looking in, not out. you a lot about their purchasing habits. It also And that’s the crux of marketing intelligence: gets you in the habit of looking more at the combining your customer data with your customer data than at the marketing data. What marketing data to get that complete picture of the customer wants, when they want it, and how your customer, because it’s the customer that they want it presented to them. you want to cater to, not marketing.

How can you use what your customers are telling you? Let’s look at a few ways.

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GETTING STARTED

#1 Affinities

Everyone knows that grocery customers who The real comes in when you want to drive Affinities also go far beyond just simple purchase tortilla chips usually also purchase more sales of a particular item. With the ability campaign creation and targeting. For a sporting salsa. That’s a very simple example of an affinity, to dive into affinities, you can use your marketing goods retailer, take someone who purchased a which is a combination of items or actions that intelligence to look at all of the customers backpack. Are they a frequent hiker, a student, or customers are highly like to buy or do together or who’ve purchased that item, what campaigns just going on a one-time vacation? Look at their in sequence. These insights come from customers they interacted with prior to that purchase, what other purchases to stitch together items they’ve who’ve already demonstrated the affinity, so then other items they purchased, which channels purchased with, before and after the backpack. it’s easy for you to target other customers who they purchased on, which emails they opened, If it’s hiking socks and a headlamp, they fit the have yet to follow-through on the entire activity. and on and on. Using some fancy math, your hiker profile. If it’s a guide book and a power marketing intelligence creates not only a map of converter, they fit the vacationer profile. Now Customers who live in urban areas and purchase the patterns leading up to the purchase of your your marketing intelligence is helping you to a mountain bike are likely to purchase a car bike target item, it tells you exactly which customers use affinities to segment customers. rack within 28 days. Why? Maybe they find out have done many of the behaviors leading up to that all of the good dirt trails are far away from that purchase. Every action a customer takes tells you their home and they quickly get tired of trying something about their likes, dislikes, and possible to shove a mountain bike into the trunk of their Yep, you’ve just used your marketing intelligence next steps. Affinities helps you figure out how to Jetta. But, really, that individual customer’s “why” to target everyone who has purchased a use that data to drive your marketing. is less valuable than the wider customer tendency mountain bike in the past 28 days but has not yet to buy those two items in sequence and within a purchased a car bike rack. You push those names certain timeframe. into your marketing automation tool and hit them with a campaign touting your great selection of bike racks.

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GETTING STARTED

#2 Timeline

As soon as a new customer enters your life, later, a sports car, then a family sedan, then a customers want to be given a softer, personalized the clock starts ticking. Will they make that first minivan, then a convertible. Or, maybe you have a sell. Or, maybe as your best customers know purchase? How about the second? Will they be wide range of categories and a customer timeline more and more about your offerings, they want a a lifelong customer or are they just a one-timer? is defined by getting them to purchase more and hands-off approach and prefer a self-serve route. If they buy the budget option, when will they be more often. ready to move up to the model? Your combined marketing and customer data Or, maybe it’s understanding the churn of your is the only way to discover what it is, then to A customer’s timeline is that hopefully long arc most loyal or valuable customers. You might intelligently group your customers based on their from first touch to last. It tracks how customers have 1,000 high-value customers in Q1 and it “stage” and create targeted strategies to guide mature, how you move them to different stays steady at 1,000 for Q2, but are they the them towards your promised land. You segments, and how they respond to different same customers? How many of those are new to need that complete view of what they do, when incentives or campaigns over time. the segment and how many dropped off? With they do it, and how long they’ve been doing it. marketing intelligence, you can quickly target just You probably already know your business, but those customers who’ve dropped off with the your marketing intelligence helps you delve into goal of getting them back to spending. customer timelines to really understand what drives different customers over their lifetime Whatever it is, knowing the various timelines as your customer. Maybe you have a very well- that different groups of customers take and how defined timeline for customers, where they you want to guide them along their way takes purchase, say, an economy car, then a few years marketing intelligence. Maybe your longtime

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GETTING STARTED

#3 Attribution

Ah, attribution. If marketing were a third grade • Did all of those interactions contribute to Still other methods take a propeller-headed class, attribution would be the tattletale. influencing that purchase? Attribution tells you. approach with probabilities and statistics and algorithms giving appropriate credit where it’s • Did all of those display ad views (not clicks) Attribution tells you what’s working and what’s due. It’s a customized approach, and is very contribute to a future purchase? Attribution not. It’s a quantitative measure showing which specific to the type of company or marketing tells you. specific marketing dollars are making an impact, or customer being analyzed. and it’s been an elusive number to pinpoint. Sure, • Is it better to blast an email campaign before it’s easy to see how many customers clicked an on-site , or after? Attribution No matter which method of attribution you on an email and then made a purchase in the tells you. choose, it all comes back to the same marketing same sitting. But it’s not always easy to connect intelligence: get all of your data, from all of your the dots to see that those customers also There are currently several popular methods channels, across all of your customers, into the saw your display ads in the weeks before, and for determining how to attribute credit to each same place so that your attribution method opened but didn’t click your last few emails, and customer touch point, like “first click” or “last of choice has all of the marketing intelligence visited your website to purchase some unrelated click,” where the first or last click in the available to it. You can’t create an accurate item two weeks ago. It’s even more difficult to activities leading up to purchase are given the full attribution with partial data, obviously. connect online behaviors with off-line sales, but credit and all other touches are ignored. Other attribution can connect those online touch points, methods give equal or time-weighted credit to such as customers who’ve seen an ad, then done those touch points between first and last click. In some research on your website, then purchased equal weighting, if the customer had 5 different an item in your brick and mortar store. touches leading up to the purchase, each would get 1/5th of the credit. For time-weighted, the credit diminishes as touches extend farther back in time from the purchase.

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GETTING STARTED

#4 Strategic Customer Targeting

Using your marketing intelligence, you’ll find Think of it as segmentation, but on a more Your marketing intelligence might even tell you specific ideas to drive more revenues. As you campaign-focused level. You probably already that the best way to engage this group is via translate those different ideas into action, rarely segment your customers by male/female, urban/ display ads and a banner on your e-commerce will you simply target your entire customer base rural, age groups, income levels, and other site. How would you know that? Because you’ve with the same message. That flies in the face of demographics. You might also even have deeper considered all channels across all customers and marketing intelligence. segmentations, like shoe buyers or young single all past campaigns. You’re using your complete professionals or high net worth grandparents. These customer and marketing data to determine which Instead, the whole purpose of improving your obviously help you better target your message, but customers to hit, when to hit them, and where to marketing intelligence is to better target and there’s still room to{ increase the accuracy. best present the message. serve your customers with the right offer at the right time on the right channel. Otherwise, you Marketing intelligence helps you give customers risk bombarding them with generic and frequent what they want, when and where they want it. Or, noise that may occasionally interest them, but conversely, it helps you to know which customers to definitely tires them of your brand. hit with what message on which channel and when. Strategic customer targeting is the “who.” If you What strategic customer targeting does is allow want to sell more iPhone cases, at the most basic you to use your marketing intelligence to identify level, you’ll want to target (a) customers who own which customers are most likely to respond to a iPhones and (b) who haven’t recently purchased particular message or campaign or offer. It helps a case. Targeting broadly might get you a few you improve click-through rates and open rates more takers, but it also reduces your campaign’s and purchases by thoughtfully choosing which effectiveness and increases your chances of customers get which marketing campaigns. alienating customers, especially those without iPhones.

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What Can Marketing Intelligence Do for You?

Think it’s difficult to get to the nirvana that’s described above? It’s not. Regardless of what you can do next, your customer data is becoming bigger by the second. The only way to get a handle on it is to start digging into it now. What do we suggest? Moving on to Book 2, of course.

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BOOK 1 BOOK 2

WHAT EXACTLY IS YOUR CMO IS SCREAMING, “MARKETING INTELLIGENCE?” “DO THIS, NOW!” AND HOW DO YOU GIVE SO SEE HOW OTHERS CUSTOMERS WHAT HAVE DONE IT! THEY WANT? DOWNLOAD BOOK 2

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THIS EBOOK IS BROUGHT TO YOU BY SMARTFOCUS

The of Everything is the macro- SmartFocus is the leader and innovator in trend of connectedness that’s changing the contextualized and personalized messages. way customers shop. With more than half Our platform includes beacon technology that of online visits and a third of eCommerce knows when your customer visits a physical transactions now coming from mobile store; real-time predictive recommendations devices, mobile and proximity marketing are generated at the precise moment they open more important than ever. your email or visit your site; and powerful insights that use smart analysis of Big Data At SmartFocus, we have capabilities to to effortlessly generate a truly personal provide context-aware marketing for a mobile experience. world. Our technology will help you truly know your customer and engage them with For more information, please visit us at: the right message, at the perfect moment, www.smartfocus.com wherever they are – in store and online across all of their preferred channels.

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