Retail and ROI: how to minimise cost and maximise value

In the current retail environment, major players all over the UK are closing stores – including House of Fraser, New Look, and Marks & Spencer. Given this state of affairs, it’s more important than ever before for retailers to maximise their marketing investment for greater return on investment (ROI). And yet, on current evidence, a great many marketers simply aren’t doing this: it’s expected that, in 2018, some 26% will be wasting their budgets on the wrong channels and strategies. With GDPR firmly in effect, retail businesses now have a clear opportunity to rethink their marketing strategies and boost their profitability. Key to this is choosing a marketing ROI model - are you looking to maximise value, or minimise cost? Budget, operational priorities, and commercial objectives will all affect your choice of model. Let’s take a closer look at each. Minimising cost If you’re a smaller player looking to minimise cost, then you’ll need to think about how to find efficiencies in your email marketing strategy. Essentially, this is about reducing the time, money, and manpower involved in devising, implementing, and analysing your email campaigns. Happily, whether you’re running welcome campaigns or upsell campaigns, there are plenty of ways to find these efficiencies. We’ve put together four of the main approaches below. Reuse data (and reuse campaigns) Naturally, this point must come with the necessary post-GDPR caveat that you cannot use or reuse anyone’s data unless you have their explicit consent to do so or another lawful basis for contacting them. If you’re working for an online retailer, you’ll likely have a deep well of customer data to draw from. This information can provide valuable insights into customer preferences, behaviours and tastes; enabling you to identify who has looked at which pages when and which visits have resulted in purchases. With marketing technology software such as Adobe Campaign, you can template emails, campaigns, and workflows to target these customers again – creating variance where appropriate in terms of signature, layout, phrasing, and timing, but essentially using the same setup. This is much cheaper than starting each campaign from scratch. Centralise governance Governance is essential for all businesses, especially multi-national brands distributing content across many global markets. Communications ought to be consistent and unified at a regional and international level – and email marketers must have the support necessary to roll out effective campaigns. Look for ways to unify functions within singular tools and technologies, and then ensure that every marketing team uses them. This will ensure that they manage and roll out campaigns in the same way: lowering costs and guaranteeing uniformity across the department. Don’t hesitate – automate Minimising cost is often less about cash savings than minimising employee workload. It’s therefore worth automating your email marketing journey wherever doing so is possible, legal, and straightforward. This is more easily done than you might think. By using your current customer information as a guide, you can automate emails according to their online behaviours – whether they’ve registered, purchased an item, filled out a form, or otherwise. Automation can therefore relieve much of your burden. Campaigns won’t run themselves, and you will need to check in on keywords, performance, and other considerations, but the less you have to do manually, the more time you have to think – and act – strategically. Find cost-effective digital marketing tools Digital marketing tools are comprised of numerous features and functions, only some of which will be relevant to your business. Before starting any project or implementation, it’s worth thinking about whether your technology has everything you need – and whether, for that matter, you need everything it has, or if you’re just paying for it anyway. If there are opportunities to find a tool that can perform certain functions more effectively, less expensively, or (ideally) both, seize them. It may be difficult to change tools or solutions, but if it will create cost savings or improve performance, it will be worth it over the long term. Maximising value Maximising value is the other ROI model. It’s more suited to larger enterprises with larger budgets. The guiding principle of this model is that the money you earn today can be used to create more value in future Its purpose is not so much subsistence as growth. Each process and project should thus be about looking for opportunities to maximise value – for the business and for its customers. Of course, it can be quite difficult to know where to start. Retailers should begin with low-hanging fruit: ‘abandoned basket’ campaigns, for example, can be highly effective (provided you have the requisite opt-ins). But beyond these individual campaigns and actions, maximising value is about understanding the entire customer journey. And there’s a reason they call it the singular ‘customer’ journey: because it’s more effective to treat them as individuals than as an aggregated blob of assumed interests. Adobe Target and other tools allow you to serve content according to what customers have clicked on – improving conversion rates, for sure, but also improving their overall user experience. Personalising and optimising campaigns in this way will maximise your value and your ROI. There is, of course, far more to maximising value. Choose your toolset Before you set about maximising value, it’s necessary to look at toolsets. There are two approaches here: the first being best of breed – wherein you select the best tools for your particular purpose, sometimes from a variety of sources – and the second being single vendor, wherein you get everything you require from one provider. Best of breed offers superior control over the technology that you use, and it’s better for companies that don’t operate according to traditional business models. The implementation period also tends to be less costly and time-consuming (partially because you’re largely setting things up as and when they are required). If you’re happy to mix, match, and manage a variety of tools (and the vendors who offer them), it’s ideal. Nonetheless, the best-of-breed approach can be problematic for people who aren’t happy to micromanage vendor relationships and technological processes, and you do run the risk of using a number of tools that don’t quite complement each other. A single vendor approach has some clear advantages: you only have to worry about one relationship, and because this vendor is providing every tool, there’s usually greater synergy between the applications you use. Your vendor may not do everything perfectly at the start, but they’re interested in preserving the business relationship and therefore have a clear incentive to adjust their offering to your specific needs. Test and measure Regular testing and measurement is an essential component of maximising value. For smaller sample sizes, you can stick to regular A/B testing – where you change one element of an email such as a headline or a CTA, send it out alongside the original, and determine which is earning more conversions. With larger data pools, you can deploy multivariant tests, which change several elements at the same time: the headline, the image, the position of a button in the copy, and more. Just ensure you stay in control of the population within the test group. Harmonise data With all the usual GDPR caveats, it’s important to ensure that data is shared between departments wherever possible. Integrated, harmonised information is key to effective marketing campaigns – and you can’t do that when data silos have built up across various teams. If you have information at a national and local level, for example, why not integrate it? If customer service has information that marketing can use, why not share it? Wherever possible, break down silos and consolidate information: your email marketing campaigns will benefit. Whether you’re minimising cost or maximising value, it’s worth nurturing your chosen ROI model. Deploy your budget in the correct ways and optimise your activity: your business – and its customers – will benefit. By Dirk Wybe de Jong, vice president of digital marketing at Celerity, an agency which specialises in the strategic use of data and technology to drive results.

Retail and ROI: how to minimise cost and maximise value

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