Digital transformation delivered
In the 1980’s, Qantas Airlines relied on one single channel to drive customer engagement – a vast network of sales agents providing fare information and booking services. After the company established a call centre and, in the mid-90’s, embraced the tools propagated by the rapid development of the Internet, Qantas made the flight quotes available to the wider public. In 1999, Qantas was the first company in Australia to successfully use e-mail as a marketing tool.
The marketing efforts have intensified from then on and, for the last couple of years, the airline has established a significant presence across various social media. In 2014, Qantas launched its own digital marketing business – Red Planet – targeted at corporate clients. Even the marketers at Qantas now use Red Planet themselves to design and target ads for customers – ads that are four times more effective than ads delivered through conventional media-buying channels.
The case of Qantas illustrates not only the scale of the evolution of marketing tools across recent decades, but also the challenges related to channel proliferation that many companies face today. Experience shows that an extensive use of “the digital space” does not necessarily translate into effective marketing campaigns – campaigns that, in the end, give a boost to the bottom line of the business. The key to a successful digital transformation is an organisation-wide effort that breaks free from the traditional, silo-based approach to marketing, analytics, technology and operations, and that spans across all of four layers simultaneously.
Channel and content
Faced with the proliferation of online and offline channels, most companies have gone with a fragmented, and therefore ineffective, approach to channel marketing. Even a simple lack of coordination between channel managers can leave customers bombarded with inconsistent messaging across different media.
A more pressing, and more basic problem, however, is limited segmentation and behavioural targeting of customers. Marketing teams produce generic content that does not recognise or respond to the needs of any specific client niche and thereby fails as an effective customer engagement solution.
The solution to this challenge is an omni-channel approach that targets customers with relevant content, identified through algorithms drawing on each customer's previous behaviour. In fact, brands need to incorporate the Customer Decision Journey as the backbone of any audience-targeted messages.
Going through subsequent stages of the client’s decision-making process, it remains crucial to identify the existence of the loyalty loop that differentiates the new and returning types of customers. Companies need to become skilled not only in recognising customers who can serve as positive product advocates, but also in monetising their strong preferences and ability to influence others. Think about Pepsi versus Coca-Cola enthusiasts, and their passionate brand commitment.
Data and analytics
No marketing team should make a decision without having, and using, hard data that supports it. Fortunately, every single piece of customer interaction creates data that can be structured and analysed with the right resources. The results of analysis should feed back to the channel and content layers to produce better customer engagement over time, so every customer interaction improves the next interaction.
Inconsistent and inaccurate channel marketing results in an incomplete view of customers, frequently compounded by limited tracking of interactions. Building the 360-Degree Customer View that maps interactions, behaviours, spend and visitation patterns lets marketers obtain a comprehensive idea of the targeted audience, that can serve as the basis for any customised content. Then you can deliver the right message to the right person at the right time.
A common misconception among company management is that obtaining the technological solutions that make comprehensive data analytics possible must require large upfront investments. We believe effective channel marketing requires above all pragmatism (use string and sellotape if that's what you have), and only later a flexible and straightforward technology architecture framework. Making use of open source solutions, and leveraging SaaS and PaaS, allows the company not only to deploy new marketing initiatives faster and obtain meaningful results sooner, but also to bypass outdated legacy systems and elaborate technical processes.
Ten years ago building an A/B testing tool might have required ten people and six months of work. Today, A/B testing tools like Optimizely are widely available – some are free, and others cost less than $100 a month. This sort of technological agility shifts the focus of finance debates away from massive, binding capex considerations to more regular and manageable optimisations of operating expenses. CFOs love digital transformations!
Last, but not least, an effective digital marketing roadmap relies on a cohesive and well-incentivised organisational structure that can move quickly to seize opportunities. A ‘silo-ing’ of capabilities across the marketing team with limited cross-departmental engagement is a main obstacle to deploying campaigns with consistent, positive outcomes. Successful digital transformation is only possible in a fail-fast culture that promotes the test-and-learn approach to marketing in every channel.
Instead of fine-tuning a small number of conservative marketing tests, we are better off launching a large number of aggressive tests in an 80/20 fashion, driving not only marginal improvements from the tests that succeed, but important learnings from those that do not. The minute we start showing money flowing in, attitudes toward testing will change drastically among even the most risk-averse set of sceptical stakeholders.
Leaders of digital transformation have to push across all layers. If you fail to deliver on any one of them, the effects will be much less impressive. Imagine having great channel strategy, but no data to support it. Or a great omni-channel, data-driven customer engagement strategy with technology failing to deliver on it. Or, most commonly, a well-thought-through plan across these layers that fails to excite the troops and get them to execute it.
As a leader, it’s up to you to figure out what the right balance of the dials is.