I want to start with a marketer’s conundrum. My statistics show that I have acquired five customers, they all received a welcome offer and it worked because they all purchased! Amazing – this is what my job is, to use various channels to get new customers to sign up and purchase.
Except…what if…those five customers…are all one person using different channels to take advantage of popular welcome vouchers and discounts? As a marketer, I know this is possible and even very likely, but how do I fix it? It looks like I’m hitting my targets. So, maybe I won’t lift the veil on that particular problem, for now.
Let’s say those five customers are all me. I have bought five pairs of shoes at £100 each, (£80 with my 20% off) from a major shoe chain. Whenever I register as a new customer (thank you Gmail!) I get emailed a 20% off code. Well, I’m never going to buy at full price again knowing this exists. It’s great for the retailer, I’ve bought five pairs of shoes. However, the retailer is looking at a false picture of five customers and this picture affects a whole range of important marketing metrics.
Live Time Value (LTV), repeat purchase, churn, Customer Acquisition Cost (CAC)…how much time do marketers spend looking at these metrics? And how often do they see a completely incorrect view? Given that these metrics should be the foundation of and inform future ad spend, these are key to the overall success of a business and chances are, for many merchants, that wrong decisions are being made right now because these new customer metrics are incorrect. Because the data is broken.
Single source of truth
Data, data…it’s been talked about so much in recent years and yet, the hidden black diamond of data is being misunderstood and overlooked. Open Banking is about banks, something to do with finance…Wrong! Open Banking does what it says on the tin. It opens up all of the data that banks have (anonymised, of course), giving retailers the clear and correct view of what happens at the bank account level. This is the most reliable and accurate data marketers can get.
So how does it work? How do I get this ‘Open Data’? With Open Banking, retailers have better access to their customers’ data – agreed. This works by working with a third party such as Open Banking solution like Upside who, via partnership with Plaid, holds what’s called AISP registration and can share anonymous banking data on their customers. By having access to the data, retailers can gain insights into customers’ shopping habits and behaviours.
A new world of data analysis opens up – marketers can see the frequency of spend, location and average order value and benchmark all of these metrics against the rest of their industry. Showing what % of wallet share they have is more meaningful as a metric than an inaccurate measure of new customer sign-ups.
Regardless of email or delivery address, the money can only come out of my bank once. When a customer connects with an Open Banking solution, the retailer can see if they have purchased in the last 24 months or not. This data provides a view of true new customers and it becomes easier to target them specifically with a genuine new user offer. These new customers can now really be classed as newly acquired and marketers can breathe a sigh of relief.
Nobody says that marketers are not doing their jobs properly, they are just often lacking the tools they need to really understand their customers and subsequently their business.
The power of data
Anonymous data can help merchants to understand their customers better as they get a more detailed view of consumers’ behaviour – giving insights into spending patterns and interests. This is all incredibly useful to the first movers who decide to capitalise on these analytics by extracting insights. Acting on them by offering time relevant, hyper-personalised offers helps retailers remain far more relevant to the customer than a scatter-gun marketing approach. Overall, although this might sound like an invasion of privacy, it is the most consumer-centric approach to marketing.
Getting a full view of the data available via Open Banking is nothing short of amazing. However, most marketers are copywriters, ad designers, product positioners, sales people, part of an internal product feedback loop, strategists, channel managers…and now, everyone wants them to be a data scientist? The answer seems to be ‘yes’, according to this 2020 survey of companies looking to hire for their marketing functions.
The top skill companies want the marketer to have is ‘Data measurement and analysis’. Gleaning insights from reams of data from multiple sources is a tall order. By going straight to the source of truth, marketers can eradicate several columns and rows of data sheets and get directly to the stats that are important without being distracted by the irrelevant details.
A new way of thinking
Look at the large blue-chip companies. They are usually pretty good at taking part in benchmarking exercises. Instead of focusing all efforts on channel sales, all merchants should be looking to understand where they fit in the market; to know if their gains or losses are simply in line with what their industry is seeing or there is another challenge.
Open Banking allows this to be easily done and brings the type of insights that, to date, have only been available to Amazon and Google. Third parties like Upside now arm merchants with a new way to take immediate action on that data. A movement towards cleaning up data and focussing on the right metrics could be what makes or breaks a company in the post COVID-19 world.