Personalized Offers | Marketing in a digital world

Personalized Offers | Marketing in a digital world

Sudhir Narang
Updated4 Aug 2008
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In May 1996, for example, the chief scientist at a major technology firm was interviewed by Fast Company magazine. Asked what was different about doing business online, he said: “For one thing—and this is only a slight overstatement—you can fire your vice-president of marketing.”

He continued: “The Internet style is to put something up and let other people examine it—no hype, no hoopla, no advertising—unless it’s substantive… It’s no-obligation marketing. And it creates a different kind of customer—a much more committed customer.”

It has not quite turned out that way. Yes, the Internet has made the market more democratic and, yes, the price and quality of many things we buy has become far more transparent. But, one of the defining realities of what BT is calling the digital networked economy is that actually reaching customers and helping them make decisions is no longer an easy matter. Gone, for example, are the days when the US tuned into three television networks and marketers from General Motors Corp. and Proctor and Gamble Co. preached to the American nation in the breaks.

Illustration : Malay Karmakar / Mint

As Fisk observes, the noise of our new markets is deafening. “We are bombarded with at least 1,500 commercial stimuli every day,” says Fisk, who estimates that young people today are likely to have seen around 150,000 different ads by their 18th birthday. And, while “we surf through 300 channels of television, dispersing our lifestyle patterns and destroying the predictability that advertisers used to rely on”, 75% of us now turn to personal recommendation rather than anything marketers might tell us.

Which begs the question—what is an ambitious marketing director to do? Here are a few pointers for surviving—and thriving—in marketing in the digital networked economy:

Look at the world through your customers’ eyes

The first thing to do is to acknowledge the source of the problem—fragmented markets and the proliferation of media and channels. Admit that the old world is dead. Only then can you try to look at the world as your customers do.

We live in a world where oversupply is commonplace. In many markets, too many goods are chasing too few customers. And when it comes to digital products and services, every vendor has an unlimited supply. The result is that the customer is king.

In markets such as these, when organizations encounter difficulties, it is usually because they are not listening or responding to existing and potential customers. To succeed, they must really get inside their customers’ heads. Companies need to look at themselves from the outside in, not the inside out, and this shift in focus must be led by their marketing teams.

Get up close and personal

This outward focus means that marketing is no longer about writing a plan in September, launching your campaign in April, and measuring the result in June. Those days are gone.

In the digital age, your marketing plan is a living document—something that evolves constantly as you learn from conversations and interactions with your customers and the data you gather from them.

Customers are no longer just the passive recipients of your marketing ideas. Indeed, in the digital networked economy, it is often they who dictate the terms of your relationship.

Adam Sarner, of analyst firm Gartner, had said his firm had a strategic planning assumption that 2007 would signal the end of passive marketing. And the figures show why. Blanket marketing of the kind still practised by many firms typically delivers a response rate of between 1% and 5%. What Gartner calls “event-trigger” marketing—that is, using the information you have about your customers and delivering a proposition to them linked to a relevant event, such as a birthday or the anniversary of a previous purchase—can deliver five times the response rate.

But that is just the start. If you respond to the triggers contained in the conversations you have with customers online, Sarner estimates that response rates can be 10-20 times higher than for traditional marketing campaigns.

As Greg Stielstra says in his book PyroMarketing: “Selling SUVs? Don’t think about a prospect’s income or age. Instead, try contacting people whose cars were recently rescued by tow trucks from a snowbank.”

Acknowledge the complexity and then use the technology

The third thing is to acknowledge that you are working in a complex world. To master it, you need to marshal all the technology at your disposal.

According to Sarner, you won’t be alone. Gartner reports investments in marketing automation are increasing at 15% year-on-year—much faster than the 1% and 2% increases in investment in new sales and customer service tools, respectively. It is true that total investments in marketing automation are still only a third of those in other areas of CRM (customer relationship management), but this just underlines the potential for growth.

And, it is not just CRM activity. Take one of BT’s clients—the leading global brewer, InBev NV—for example. In 2005, BT signed a contract to manage the company’s communications infrastructure for seven years. The contract will see the company’s existing data networks being replaced by a new IP platform. BT will also manage the local area networks at InBev’s 640 sites worldwide and support the company’s 24,000 users.

This may not sound as if it is much to do with marketing, but it is. By taking full advantage of new technology, InBev can monitor customer demand, detect changes in customer behaviour and react to them quickly. The company’s marketers can promote its portfolio of brands—global brands such as Stella Artois, Brahma, Beck’s and Leffe and a complex range of more than 200 regional and local brands—much more effectively.

With instant feedback on sales that its new network enables, InBev can compete even more vigorously in its highly competitive marketplace. It can adjust its marketing as purchasing patterns change or whenever a new opportunity is created. Just as importantly, as customers vote with their wallets, the company can align its worldwide production capacity to meet changing demand.

On a smaller scale, there is the work BT is doing with United Cinemas International (UCI) movie theatres in the UK. They have a wide area network linked to television screens in the foyers of their premises on which they run ads. What many people do not know is that the screens are dynamically linked to the tills, allowing UCI to influence the customers’ choice of film as seats are sold. It is a neat little application that clearly demonstrates the immediacy of marketing in the digital age.

Traditionally, it was the marketer’s job to close the gap between customers on the one side and the company on the other. This led to a sale and then, with maybe a bit of post-sales support, the job was over. To succeed today, the marketer has to offer customers—often very discerning customers—a “taster” of what is available and then win them over by personalizing the offer, making it relevant to the customer’s individual interests and circumstances. And then, do it again. And again.

It is a bit like running a corner shop, but on a global basis. And it applies no matter who you are selling to—consumers or other businesses, large or small. The good news is that the digital networked economy (DNE) does not just create the problem, it gives you the tools to deal with it. Marketers just have to wake up and smell the DNE.

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