For specialty retailers, getting current and known customers back in the door is seven times less expensive than trying to find and convert someone who has never heard of you. But how do you speak directly to someone you know — it might be a customer who has made a purchase or a prospect who has signed up on your website to hear more — at the right time, through the right channel, and with the right offer? That is where data driven marketing (or “smart marketing”) comes into play. It’s all about taking advantage of a direct-to-consumer approach, which is fundamentally different than mass marketing.
If you’re still using the antiquated approach of mass marketing, you’re likely talking to lots of people who don’t want to hear from you. This leads to unsubscribes, and even loss of business in some circumstances. On the contrary, smart marketing starts with collecting the right data about your customers and prospects. A good place to start is collecting email addresses.
The amount of revenue that you can drive from a database is related in some sense to the size of the database. The larger the database, the higher response and conversion rates you’re likely to see as a result. While it’s not always comfortable to ask customers for their information, it is quite critical for reaching the right people at the right time. In fact, there are retailers in the bike industry that are collecting 85% of all transactions, which allows them to understand who their customers are, what they’ve purchased and how they’ve interacted with the shop, as well as how they can market to them with valuable offers they truly care about.
Collecting customer data can happen at the point of sale, either through systems like Lightspeed and Shopify, or in person. When it comes to collecting data in person, retailers should train and incentivize their employees to do so by letting customers know what their information is being used for. Rather than adding them to a broad, generic marketing list, they’ll be receiving offers and other information that pertains directly to their specific interests and purchases.
Once you’ve gathered useful information about your customers, aggregating all that data into a single system provides you with a 360-degree view of your customers, their transactions, and potential future touchpoint opportunities. This enables you to segment those customers into more specific groups who want and need different things.
A common mistake retailers make is sending a single email or newsletter to everyone in their database. Without segmentation, they don’t know if those people are customers, if they just purchased a couple of days ago, if they live in a different state now, and so on. Segmentation doesn’t have to be complex — you can simply start by focusing on their behavior. For example, one segment could be those who were on your website yesterday but didn’t make a purchase. Another could be customers who purchased an item over a certain dollar amount, which is an entirely different group of people.
There is no “perfect cadence” of emails in today’s marketing world — in other words, how many emails are too many and how many are too few? Effective marketing today is about using the things you know about a customer and acting on it. The best way to go about that is with the use of email automations.
For example, say you automate an email that goes to someone who was on your website yesterday, or someone who made a purchase seven days ago, etc., once you automate it, it goes out every single day to people who apply to those specific automations, eliminating time-intensive manual efforts each time you gain a new prospect or customer.
This also allows you to send emails that are, in fact, relevant to the person receiving it, which will significantly improve open and click rates. Most retailers see a boost in open rates of up to 60%-70% as opposed to 13%-15% using mass marketing. A few common automations that see the best results include:
At Ascent360, our platform pulls all the customer data a retailer has in their POS and eCommerce systems, creates a centralized view of that data and provides useful insights into how to act on it. For example, one piece of analytics shows you every grouping of your customers from the most valuable 20% to the lowest valuable 20% and how much each of those groups spend. This is where you typically find that about 80% of all revenue comes from 20% of your customers, which are your high value customers. If those customers are driving such a large portion of your revenue, you should be interacting with them differently than your other segments of customers.
With such a powerful marketing platform, where do you start? We recommend starting with simple automations that will encourage your customers to come back to your store or visit your website. Your most likely next customer is your most recent buyer who has already made a purchase.