Evidence Based Marketing 101
By Hugo Koopmans (DIKW.nl)
To judge marketing efforts on the base of their results shouldn’t sound like a complete outlandish idea. Evidence Based Marketing is all about that idea. Evidence based is also another word for scientific, so we are talking about rigorous measuring here, under “controlled” conditions.
Predicting which effort will land the best result is part of that equation. Evidence based marketing is even more than that, but let’s take it from here. Not that I want to ruin your day, but I very much doubt that in your organization results are being measured scientifically. Don’t read any further if you think science is only one way of looking at your business.
Database Marketing revisited
Evidence Based Marketing is the next step in the field of database marketing, were now the key driver is not to deliver a bunch of (product oriented) campaigns according to some planned calendar. Evidence Based Marketing is about the ability to drive your customers experience with an optimal set of propositions, delivered in a consistent matter over all your interaction channels (in- and outbound).
Next Best Action marketing embraces the holistic customer view
T
he ever more demanding customer of our age is pushing our marketing efforts into far more then conversion, in its traditional marketing meaning, alone. We need to think of our customer in all her dimensions if we want to successfully create a loyal feeling towards our brand. This asks for a holistic customer view when we design our customer interaction strategies and we need to not only think about how and what to sell but also on when to focus on service, when to pamper if we meshed up. And of cause we need to cover our risks.
The next best action marketing paradigm is a tactical method to deliver a holistic customer interaction strategy that was first mentioned by people from Chordiant Software. The idea is to set up a lot of possible treatments or propositions that are prioritized depending on individual customer profiles. Calculated in realtime this gives the ability to personalize your message to the customer in a way not yet seen before.
Micro conversions drive NBA interaction strategy.
As next best action marketing is all about setting up a conversation with your customer, it is key to think about the field of Persuasive Technology and how this influences your interaction strategy and next best actions. Micro conversions play a vital role in the on- and off-line customer journey towards conversion.
How to deliver?
The Intelligence Factory enables your marketing department to deliver Customer Intelligence Insights into all of your in- and outbound channels in a factory like a production process. Ad hoc data mining is replaced by adaptive, self learning models that are embedded in the channels to pick up the latest sentiment for that specific channel, thus optimally biased toward the public using that channel. Real-time and centralized decision technology ensures cross channel and consistent delivery of your brands message, thus truly delivering your customer’s demands to a positive and pleasant experience.
Competing on Analytics: only trail & error will convince.
One key message of the book Competing on Analytics by Harris and Davenport in my mind is that within another decade the only way to distinguish you from your competitor is that you outsmart your competitor by more and better analytics so you can stay ahead in your distinctive capabilities.
The good thing of the online world is the relative ease with which we can experiment and test what our customers like. Champion – challenger strategies are easily implemented to continuously improve the best set of propositions to realize our conversion targets and the holistic customer view is there to balance our and our customer’s interests.
The emergence of survival marketing
Companies like Amazon and Google have constantly hundreds of versions of their website live, where each version is actually competing for survival with all other versions. Or, if we look at it one level higher, each (online) proposition is competing with all its neighbors. In this context I would like to point out the similarity of this “survival of fit propositions” to the concept of the meme by Richard Dawkins in the book “The Selfish Gene”.
Survival marketing is the idea that marketers in the near future will look after a set of propositions that evolve over time, these propositions will compete in a pool of next best actions. The way marketeers will control these propositions is by setting constraints on price, discounts and promotion bandwidth in communication channels.
Propositions will not be created manually by marketers but they will be crafted from a context that is defined in the same way ontologies of the semantic web are defined. Genetic programming will facilitate the process of proposition creation. So marketers in the future will more become farmers of propositions. The evolutionary pressure will ensure the exploitation of every possible creative option to deliver to the ever more demanding customer a great experience.
Hear hear!
Effective marketing will no longer be limited to today’s definition of making sales offers but it will include managing and balancing customer experience, value to the customer and value to the company in real time.
The modern marketeer or marketing organisation needs to be a better job of using its left and right brain. The right brain may be used to come up with unique propositions, but the left brain – or evidence based marketing should be used to direct both the dynamic proposition targeting as well as the dynamic proposition configuration.
Your ‘Selfish Proposition’ concept, where each proposition is a meme is a refreshing example. In a way this predicts that evidence based marketing, the left brain of the marketing organisation, has a role to play in the proposition design & development process as well, and that this is no longer a linear process (design first), but it happens very much ‘in flight’ – within customer interactions.
For customers this means in the end more control and influence in the relationship – customer relationship management becomes company relationship management – and marketeers will have to accept that they are no longer the demi gods that rule the customer interaction start to finish – but in the end smart customers and smart companies will benefit.
the term ‘evidence based marketing’ used here suggests a refreshing approach that will separate effective practices from bogus ones, once and for all. So I expected a set of steps to take to subject them to empirical tests, and empirical tests alone. For instance how to define some desired effects for marketing efforts and metrics how to measure them in a standardised way. Or how to set up experimental and statistical tests to determine their occurrances as an outcome of applied practices. And above all, a reluctant use of assumptions or assertions.
Much to my surprise I was taken away on waves of claims and summons like ‘we need’, ‘the customer is’ etc. without a trace of empirical proof.
All of which, by the way, is quite appealing and inspirational, but where is the evidence base in it? Or is the term another inflated victim of marketeers’ misuse?
Hi Greald,
I must say i do agree with your critics here. I got a bit carried away when floating on the waves… so now this 101 turned out more into a future vision on were it potentially could go from evidence based marketing past next best action marketing into survival marketing. Not really a 101 eh?
Indeed the basis is in the emperical appraoch to marketing, driven by rigorous test en set up testable experiments.
If you want more background as to how to setup marketing campaigns and predictive model performance tests I would like to point you towards the lean & Six Sigma project methodologies that imho are very must up to this job. We only need to convince marketing people here…
In Six Sigma there is a lot of emphasis in proper design of experiment and the short cyclic DMAIC cycle(see: http://en.wikipedia.org/wiki/Six_Sigma#DMAIC ) really is fit for purpose if you want to evaluate marketing campaigns or test different interaction strategies.
Also a very under estimated ascept of (db) marketing is dataquality, which is key to target precision in segmenting and predictive modelling. There is much low hanging friut there.
Hope this brings you more back to the ground for your day2day struggle with data, and gives you some handles to improve your conversion?
Regards and thank you for this comment,
Hugo Koopmans [ASQ Certified Six Sigma Blackbelt]