Marketing has been turned on its head in the past few years, given the immense power and reach that digital provides. But, digital marketing soon will be entering another evolution, driven by increasing consumer demands to be “always on,” and powered by the big data that makes campaigns highly relevant.
That’s according to new research from McKinsey & Co. that notes that mobile connectivity, the evolution of the Internet of Things, and advances in big data analytics to gain insights from big data are creating a new era in digital marketing.
McKinsey describes the current landscape as one where consumers want to interact anywhere and anytime. But, in the future, they will:
- Want to do new things as disparate kinds of information are linked more effectively for them
- Expect all data stored about them to be targeted to their needs or used to personalize their experiences
- Demand that all interactions be simple
“One thing is clear: the consumer’s experiences with brands and categories are set to become even more intense and defining,” the report notes. “That matters profoundly because such experiences drive two-thirds of the decisions customers make, according to research by our colleagues; prices often drive the rest. [Companies] will need to be familiar with emerging tools for gathering the right data across the consumer decision journey.”
An executive of one major bank told McKinsey that smartphone apps have already made brick-and-mortar contact unnecessary for many young consumers.
Moreover, one European beverage company has beta tested beer coasters embedded with NFC technology. The technology allows a consumer to tap the coaster with a cell phone and get a history of a beer she’s considering buying, including bars where the beer is served, upcoming promotions and friends who have provided online recommendations for the beer.
“Digital information technologies, operating behind the scenes to integrate data on all interactions a consumer has across the decision journey, will provide insights into the best influence pathways for companies, while also triggering new personalized experiences for consumers,” according to McKinsey.
McKinsey suggests that the beer coaster is just the tip of the iceberg as consumers increasingly will demand more personalized experiences where a phone tap, click or a stylus will personalize offers based on information such as recent social media “likes,” recent travel, income and what consumers’ friends like. With each of these interactions, consumers will be creating additional big data that companies can use to fine tune customer experiences.
So, how can companies build strategies to effectively meet these new expectations of consumers in the evolving digital landscape?
McKinsey suggests companies:
- Design interactions across the consumer decision journey
- Make data and discovery a nonstop cycle
- Deliver with new skills and processes
Many companies today have defined customer interactions across a few channels, but they now must address “the entire story of how individuals encounter a brand and the steps they take to evaluate, purchase and relate to it across the decision journey.”
For example, one apparel retailer gathered managers from multiple functions to go into the field and research how customers shopped, identifying triggers and motivations that drive behaviors. These managers identified seven use cases, or customer situations that lead to satisfaction along different decision journeys.
“Out of the work came not only a shared, company-wide sense of the decision journeys of consumers but also immediate buy-in to a wide range of initiatives that could boost market share,” the report notes. “These initiatives are on track to provide an eight percent sales lift above what the existing plan envisioned and were implemented more quickly because of the management team’s shared sense of engagement.”
To attract the attention of increasingly demanding customers and motivate them to buy, companies must know them, what they expect and what works with them.
“Data lie at the heart of efforts to build that understanding – data to define and contextualize trends, data to measure the effectiveness of activities and investments at key points in the consumer decision journey, and data to understand how and why individuals move along those journeys,” McKinsey notes.
Companies need to view data through three different lenses:
Telescope. Firms need clear views of the broad trends in their markets and for their brands. For example, companies need to track what people are searching for online, what they are saying on social media and their actions online, on mobile devices and in-store.
Binoculars. Companies must be able to quickly link databases of every customer contact with a brand, pushing every customer-facing function to work together to create an integrated view of the customer decision journey, McKinsey advises.
“Getting a head start can help companies build ongoing test labs where they tune the ability to create and analyze the right data and immediately learn where to add investments,” the report notes. “One bank has already realized millions of dollars in added value from the knowledge that weak points in the customer on-boarding process were undermining major marketing programs. Only when branches, call centers and marketing worked together could the bank find the right fixes, improve customer satisfaction, and raise marketing’s return on investment.”
Microscope. To provide the personal experience that consumers demand, firms must study the multiple types of customer decision journeys that they will need to support moving forward to be able to display that they know what customers want.
Finally, to provide these new experiences to customers, company leadership must rethink the role and the structure of the marketing organization, McKinsey advises.
“The changes are likely to cut deeply, transforming the way companies manage campaigns and communities, measure performance, provide customer support, and interact with outside agencies,” according to the research.
McKinsey concludes that the payoff can be high for companies that can excel in tomorrow’s digital landscape by harnessing the power of big data.
“Executive recruiters tell us that corporate boards are looking for more people who can challenge and improve a company’s approach to social media, big data, and the customer experience. Staying ahead of the design, data, and delivery requirements of on-demand customers is much more than a marketing issue – it will be a crucial basis for future competitive advantage.”
Next Steps:
- Subscribe to our blog to stay up to date on the latest insights and trends in big data and data analysis.
