Which of your company’s current campaigns are pulling in high-value customers – and which could benefit from a refresh? Without the right tools for analysis, the answers will remain out of your reach.
Mark Bush, Director of Firebird, identifies room for improvement in the industry, and highlights the areas businesses need to target to kick-start new growth.
I want you to picture a scene that might be familiar: you’re at a big celebration, starting the afternoon with a tall glass of Pimm’s. Later on, you toast the day with a Champagne or three, then move on to wine with dinner. After a few beers with your friends, you end things with a small nightcap of whisky.
The next morning, you have a hangover. What caused it?
If your answer is the nightcap, you’re thinking like a lot of contemporary tools for digital analytics. In other words, you’re not seeing the wider picture; ignoring everything else – the Pimm’s, Champagne, wine, beers – that played a part.
“Opportunities to learn about why customers are booking are being lost”
By default, Google Analytics – one of the most powerful, widely-used resources for monitoring and analysing web traffic – only gives credit to “last-click” attributions. This means that, even if contact with a customer has been made several times online, only their final touch-point is counted when they make a booking.
In effect, it also means that opportunities to learn about why customers are booking – to access clear insights on which of your company’s marketing campaigns or channels is making an efficient impact – are being lost.
Every MD and Marketing Director engaged in good practice in digital marketing and eCommerce knows how important it is to determine “cost of acquisition”. Cost of acquisition is the value of your marketing spend for attracting and converting every new customer. At present, many companies only use last-click stats to calculate this value, and thus attribute successful bookings to the final hurdle alone, whether this be the click of a Google ad, a hyperlinked newsletter article, or something else.
Given how much investment is typically made in digital marketing, the last-click monitoring system is a skewed and inadequate way to assess its effects, in that it overvalues certain channels and undervalues others.
“What if you could see at a glance that adjusting the placement of an ad was likely to bring in good numbers of lifetime value customers?”
Moreover, standard data monitoring techniques fail to tell businesses the type of customers they are attracting. With Google Analytics it can be difficult to know whether conversions are from new or returning customers, not to mention whether they are high-value consumers, who will come back to use the business again and again, or low-value consumers, likely to spend with you just once.
For companies wanting to lead the way with marketing, and achieve a major impact in this area, the goal should firstly be to use systems that track and assign monetary value to every customer touch-point on the way to a conversion. Only then can teams precisely decide which campaigns and channels could benefit from a review or increased funding, which should be expanded or reduced, and which should, perhaps, be shelved.
The extra challenge within that strategy is to determine which marketing channels and campaigns are bringing customers with the highest lifetime value (LTV)– i.e. the type of high-value customer you want more of. Your marketing team can then use that information to optimise future campaigns and return on investment.
What if you could see at a glance from a report that adjusting the placement of an ad was likely to bring in good numbers of LTV customers? Or set a trigger to highlight when extra spend in a specified area would give your business top place in search listings, rather than keeping you down in fourth or fifth? The opportunities are there for the taking right now, as long as you know where to start.
“Within hours you can access automated reports, which track the performance of campaigns and channels on a daily basis”
A specialist Non-Executive Director, or NED, like myself, can quickly help you set up attribution software, which tracks every touch-point towards conversion, and creates models that take the full customer journey into account – including top-of-funnel campaigns created to raise awareness, which are currently penalised by last-click analysis. This far more accurate approach, which would introduce Markov or Shapley modelling, then supports optimisation of marketing decisions based on the most valuable touch-points.
Within hours you can access automated reports, which track the performance of all your campaigns and channels on a daily basis. Depending on your booking cycle, this software could be returning useful data within a month. Soon it will become a core part of your reporting suite, allowing you to continually optimise your output, and is a key step in creating a 360° customer view – a subject I discussed in my first Firebird article.
Once the tools you need are up and running, the right NED can then help you start to factor in attribution touch-points from offline resources – like magazines, billboards, TV – employing a technique called “media mix modelling” (MMM). Though highly sophisticated and valuable, at present MMM is infrequently used.
“Incredibly, very few people know how to put the top analytical tools in place”
As part of Firebird’s unique Foundations programme, which identifies key areas of development for performance and improvement, I offer in-depth analyses of both Data Diagnostics and eCommerce with a specific view to supporting accelerated growth. This is followed by ongoing NED support, to share my specialist knowledge and skillset on a more permanent basis.
Incredibly, despite the digital age that is shaping our practice, very few people know how to put the top analytical tools in place, and make the most of them. While last-click is fairly primitive, it’s broadly used – even by some of the biggest companies out there.
Small and medium businesses that make these changes now will quickly have the edge over their competitors, benefitting from new, intelligent ways to establish growth. I’d call that something to celebrate.
Pass the Pimm’s!
Mark Bush is a Director of Firebird with over two decades of experience in the travel and leisure sector, in senior IT, MD and CEO positions. He is the expert strategist for the eCommerce and Data Diagnostic elements of Firebird’s Foundations for Growth review, offering digital-focused NED support to establish long-term leads for accelerated growth.
Learn more about the programme, and get in touch with Firebird, at www.firebirdpartnership.com
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