The Web Helps Real-Time Targeted Marketing Come of Age


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Since 1998 or so, the Internet has been upending consumer habits and industry practices, as marketers have tried to understand and reap the benefits of consumers’ rapid adoption of this new medium. What started out as a secondary channel to generate traffic for information seekers has now grown into a critical component of any well-designed business or marketing plan. Today, the Internet is the fastest-growing marketing channel and is beginning to challenge television and radio for billions of advertising dollars.

Looking forward … expect more of the same!

According to Forrester Research, the web is now the most popular remote shopping channel for consumers, outpacing catalogs, direct mail and telephone. Forrester analysts estimate that consumers browse, research or purchase goods online in more than 67 percent of all consumer-shopping episodes. That figure is estimated to exceed 75 percent by 2006.

As shopping patterns have changed, age-old advertising and marketing practices have been turned upside down. No longer are consumers “controlled” by large companies with big mass media budgets. Today’s web-enabled customers are totally in charge of what they view and how they make each purchase. Through the web, the customer has control and choices—immediate, massive choices—that are available anywhere and anytime. Successful marketers will have to give them what they want, wherever they are and whenever they want it.

In the early years, the Internet was largely regarded as a new customer acquisition tool. That is no longer the case. Today a web site must also serve a major role in customer retention, loyalty and cross selling. At BeNOW, we consistently see that more than 50 percent of the response from a typical cataloger’s house file mailings now comes back through its web site.

New ways

Merchants today are realizing that they can’t survive by just collecting customer information and using their database to execute periodic outbound direct mail and email communication campaigns. In today’s world, these outbound campaigns are increasingly “too little and too late,” arriving when even your most loyal customers are frequently focused on other activities.

The web has brought companies to the next logical step: real-time targeted marketing (also called inbound marketing). Existing customers and known prospects are approached at the best possible moment: when they have arrived at the web site (or call center) and have begun researching or shopping. They receive precise, personalized messages in real time that include offers of unique value to them based on their individual past shopping behaviors and current web session data. Relevant personalization and recognition of an existing relationship makes the customer feel valued, increases loyalty and generates additional purchases.

When CRM systems came on the scene in the late 1990s, many expected them to include real-time Targeted marketing capabilities. But the marketing side of CRM never materialized, and CRM evolved primarily to address streamlining customer-facing business processes and enhancing operational efficiencies. Perhaps this was because many of the founders of CRM software firms came from the ERP software industry.

The overall design of a complete customer information system is well understood. At one end are the CRM touch-point systems like web sites and customer service centers that interact with customers. At the other end is the analytical marketing database where all detailed customer data is collected and mined to develop insight into customer behaviors and needs.

Somewhat surprisingly, the CRM and analytical marketing database solutions have, to date, remained almost completely separate. Perhaps because the respective software systems have significantly different designs and different operational requirements, they have been developed by different vendor sets. Internally, different corporate departments manage the systems. Until now, there may have been little reason or interest for these departments to collaborate on unifying the entire customer marketing system. This is about to change.


CSO Insights, a leading CRM research firm, recently completed a worldwide survey that assessed and ranked the 2006 priorities for targeted marketing across some 281 participating companies. The study analyzed more than 30 opportunities for targeted marketing.

Companies were asked, “Looking forward one year (to 2006), how do you see the importance changing for the following targeted marketing approaches inside your company?” They were given the choice of decreasing significantly, decreasing, no change, increasing or increasing significantly. The chart below shows the percentage of companies that foresaw efforts increasing and increasing significantly as separate pieces of each bar.

Increased Importance of Targeted Marketing
Marketing Type % Increasing % Increasing Significantly Total %
Web-based Marketing 49.8 26.5 75.3
Data-based Marketing 43.4 29.7 73.1
Email Marketing 46.6 23.7 70.3
Other Data-based Marketing 46.1 13.2 59.3
Direct Mail 35.2 11.4 46.6
Telemarketing 24.7 7.3 32.0

Source: CSO Insights

The results show that web-based marketing is the top-ranked target marketing priority for 2006, with almost 80 percent of the firms reporting an increase or significant increase in importance. More than 70 percent of firms surveyed also reported plans to enhance the importance of targeting in their email marketing.

Interestingly, the CSO Insight study shows that the increased importance of targeted marketing of web sites and email is also raising the importance level of database marketing. With more customer data available than ever before, the participating companies reported planning increased investments in campaign management, data analysis and analytical tools/services to enhance their ability to efficiently deliver highly segmented and personalized communication programs. These enhanced database marketing tools will support better targeting in both the inbound and outbound marketing initiatives.

Looks as though these companies are gearing up to give their customers exactly what they want. And isn’t that the whole point?

Charlie Carey
Charlie Carey is senior vice president of business alliances at BeNOW, the strategic database marketing services provider, located in Wakefield, Massachusetts. He brings more than 25 years of diversified customer information-management experience to his role of building BeNOW's partner network.


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