On the first episode of our podcasts series titled ‘The Customer Show’, Soumajit Bhowmik talks about ways retailers can unlock profitable growth with digital marketing. The Customer Show acts as a platform for marketers, technologists and futurists come together to discuss how brands can get ahead of the digital revolution and stay consumer ready. Play the podcast or read the transcript below. Watch out for more episodes.

Question 1: It would be great to hear key trends and insights which you think marketers in Asia should be aware of

The world is increasingly moving online. Companies have increasingly started understanding the importance of being present online, the importance of Micro-moments in a user’s browsing. More importantly, the conversion decision for a user online depends on multiple touch points or influence. Just to gather a few numbers regarding online behavior at least for a country like India –

1. Number of online shoppers will grow to 175 million by 2020, a 3.5x growth over 2015
2. 75% of new internet users growth will come from rural
3. Digital spends will grow from 1.1 B$ to 4.5 B$ by 2021 – a 282% growth
4. 70% of ecommerce transactions via mobile phones
5. Mobile video traffic is expected to grow 11.5 times during 2016-2021 at a CAGR of 63%

These numbers provide ample testimony to the fact that online is the way to go for better returns on ad spends if channels and devices are capitalised in an effective way, along with channel intelligence and optimization added on a regular basis.

Question 2: What are key objectives marketers are trying to solve?

Acquire new customers (OnO) – This is what every marketer wants, don’t they? You need new customers – be it online or for your offline stores, to grow your business. It is a known fact that existing customers get you a major chunk of revenue, but to get that volume of business or growth curve, your primary focus has to be new customer acquisition. I mean, remarketing or getting repeat business is a science well documented and marketers have sorted those channels more than new customer activation channels or journey. A lot of innovation and optimization is focused around this. Marketers have also realized that they need to look at New Customer acquisition campaigns through a different lens than remarketing or RoI centric campaigns.

LTV – Increasing Life Time Value of your existing customers has multiple variables that need to be sorted. The frequency of purchase, the purchase value, the affinity or purchase behavior shown by a customer, and each of them have very specific Digital Marketing processes to solve and yield higher CLTV.

Optimizing spends – Marketers also need to ensure that over time they get the most out of their marketing spends. Which takes us straight into a marketers favourite term – Optimization. You need to constantly better RoI from marketing spends through better targeting, better spend allocation, channel planning, campaign optimization and creative diversity.

Question 3: Are marketers able to achieve them?

While quite a few marketers have been able to objectively look at existing issues and work towards resolving them, there is still a large gap between expectations and reality. Few of the primary issues that we see are –

Agencies are input focused – Most Digital Marketing agencies work on inputs and not deliverables. So, CPC, Budget, over reliance on competitor activities, recommended channel spends and split form the baseline for creating a digital marketing plan. And that is where things go wrong. Ultimate goal for a company needs to be the starting point for all Online marketing initiatives – conversions, sale, leads, engagement, etc. Then agencies need to work backwards and plan what is needed to achieve that – cost, spends, channel split, etc.

Gap between Online and Offline data – Even though online and offline customers behave differently, for a brand, the end customers share similar profile. So why can offline customer data be better leveraged to reach out to online audience? Currently both worlds work in silo, and the learning curve for online campaigns or marketing increases to cover that up.

Technology – attribution, tracking, etc. Attribution is a necessary evil. You need to be able to tell exactly which platform or which channel is working best for you. Most digital marketers would agree that cross device conversions, assisted conversions, and to add a layer of complexity to it, web to app conversions and vice versa, attribution period, reattribution period, etc are all real issues when it comes to generating sufficient marketing intelligence to drive Digital Marketing. There are tools that help you solve most of these issues, but they come at a price. A price which might not be justified when your revenues are not at scale. So how do you then judge on what to spend and where to spend? You either have an inhouse Business Intelligence tool or rely on marketers who have generic information for your business vertical.

Question 4: How can marketers use these techniques and technologies to drive profitable growth?

Drive the right customer through the right channel. Marketers need to understand the nuances of customer preferences. You understand that it is all about customer convenience at the end of the day. And hence it is extremely important that we are equally competent to handle all possible channels of marketing either inhouse or through an extended team, so that the final aim is better RoI from Digital marketing and not channel wise success parameters. You should be able to have an output driven approach to organic marketing like SEO, Social Media Marketing, Content Marketing, Influencer Marketing, Creatives and content. You also need to plug in all paid marketing channels like Google AdWords, Facebook, Remarketing outside of Google and FB, Alliances, Affiliates, Video and Display advertising as required for immediate and sustainable conversion. If you have an app, you need to exploit the customer life cycle efficiently, with expertise on app Installs, app engagement, ASO, etc. With all these comes the importance of analytics and CRM. To do cohort level analysis and then segment customers based on their purchase patterns will help you drive the right customer through the right channel.

Question 5: I think every channel has its own strength. While consumers coming from search  have possible buying intent while social is a great way to build referral sales. Tell us how can brands crack this puzzle of Bringing the Right Customers to the Right channels?

Organic, Paid, App, CRM

Its not really about bringing the right customer to the right channel, as much as it is getting across to the right customer through the right channel where they are already present. Every customer is different and shows different browsing and purchasing behavior. Gone are they days when we could use a carpet bombing strategy and expect some of the audience to react to our ads.

There are multiple ways to reach out to your target audience through the right channel as per user segment, and it depends on your business maturity. For an existing ecommerce company the method would be very different from someone who is going to go live. If the company already has offline presence, the game changes a lot as well. In a nutshell, we either use some existing signal or profile data and see which platform will yield the maximum return from us, or we use existing filters and competitor data to give us a starting point. After that, its all about optimizing, tinkering with spends, slicing and dicing of customer data and checking what works best for whom.

And this is where your marketing needs to be structured in a more value based model. There would be some channels which give you new customers, and you should not look at RoI for those channels. Rather CAC (Customer Acquisition Cost) needs to be the benchmark there. Similarly for reactivation or generating repeat purchase, you might not spend at all on Paid media. Online CRM can drive a major chunk of repeat purchase, if done in a structured fashion without just spamming customers.

Question 6: You brought out an interesting channel in this conversion. Tell us how brands should look at CRM and how one can maximize existing customers’ potential

CRM Online – For online CRM there are 2 things which play an important part. One is the channel mix and other one is the analytical overview of CRM as a channel which in turn guides your regular CRM activities using the channels mentioned in point 1. In terms of channel mix, we have SMS, Email, App Notifications, Web notifications, browser notification, Facebook Campaigns on custom audience, Display campaigns. We can use these channels to target existing customers from their email ID and phone number data. In fact, with rapidly declining conversion rates of SMS, and with challenges in email sending (like Spam, Promotions tab, domain warmup, cost incurred), Facebook and other display networks have evolved as very good replacements. In fact for offline customer base, online targeting through FB is a very good channel, just like it is for customers under DND, for whom SMS is not possible.

The 2nd part of it is Analytics, where you need to segment customers based on their recency of purchase, their affinity (towards brand or discount or price point) and then see how historically every cohort has performed. This gives us a good idea about how much revenue can be expected from each cohort. We can then tune our online CRM to achieve revenue targets for each cohort.

Question 7: Tell us some inspiring examples of brands who have got it right – Driving right customers to right channels

W + Aurelia, Jabong, Unilever

Question 8: What should marketers look for in the future when in comes to new channels with chatbots, Alexa, etc coming up?

Marketers should look for more intelligent ways of targeting, AI driven optimization of Digital Campaigns, multi touch point view of customers which in turn helps us figure out a lean path to conversion for each customer profile. That is how does a customer react or browse through your website before making a purchase decision – which channels bring him/her to your website, which time of the day, which day of the week. We should evolve to a point when marketing data should tell us which segment of customers will purchase at which point of time, at what price point and through which channel. That will reduce marketing cost without reducing revenue!