27 Apr The New CRM. Campaigns and Lists are Dead.
In the last blog, I promised to expand upon some of the points made with regard to the changes in CRM. In this post, I will try and explain my point that “Campaigns and Lists are dead”.
First let’s provide a little bit of background.
In recent months, there have been several significant developments and changes in the industry. One of the most significant (in my opinion) is the shift from Kotler’s 4P’s to 3D’s.
As we know the 4Ps have formed the basis for marketing approaches and the design of CRM software for the last 40 years. During this time marketing departments got together from September to November to define the campaign schedule and budget for the next year. They decided that January was for Tax savings, February for Holiday loans, etc. Once this was done and the Product campaign calendar created, then they set about creating lists of people (using segmentation, scores and models) to whom they would offer these products. This was the way that CRM software was designed and it was the way they worked.
Well with the 3Ds things are a little different. I believe this idea was originally put forward the ever excellent David Raab (@draab) who said that Marketing now could be categorised into three main functional areas; Data, Decision and Delivery.
The ‘Data’ portion of this incorporates multitudes of differing technologies (sourcing and loading of structured and unstructured data, real-time and batch analytics, etc.). Raab coined the term Customer Data Platform (CDP) to cover this concept and even helped set up the CDP institute as a source of information on the whole subject. Have a visit and you can see the literally hundreds of companies and technologies in this space. The really key change here is that what is produced from a CDP is a set of individual leads. These leads are the result of analysing actions / activities of individual customers and the leads are generated based on changes in activity rather than propensity or scores.
For the ‘Decision’ portion covers the area of what to do with the lead now that it has been generated (what should I say, through which channel, etc.)? For this Raab coined the term Journey Optimisation Engine (JOE). Simply put, you now have the lead, what are you going to do with it and how are you going to use it to advance the Customer’s Journey and experience? I will delve a little deeper into JOEs in the next blog, so let’s move one.
Finally, the ‘Delivery’ part is pretty self-explanatory and is most often covered by terms like Omni-Channel delivery.
Well now we have a new picture explaining and categorising CRM. You can see another take on this on David Raab’s article here.
What does this mean for us in Marketing? Let’s look into the Data portion in a little more detail.
I was told about a competitor’s presentation to a Bank recently. They were busy showing off their CRM system, which had lots and lots of new shiny technology. The approach seemed to be based on Real-Time ‘Events’ with the idea being that “Today’s Customer will not wait and expects you to respond to their needs immediately”.
At one point the Bank asked how they could define, develop and deploy Campaigns and the presenter responded by looking down his nose, sneering, “Nobody does Campaigns anymore”. Well, apart from the charming manner in which the message was delivered, he was in fact correct.
In fact, it is safe to say that pretty much all of the data analysis in every modern Marketing/CRM suite that you can buy now from the major vendors (IBM, SAS, Teradata, SAP, Pega, Adobe, …) is focused around the analysis of individual customers rather than segments and lists. Also it is focused on the detection and analysis of their actions/activities (Events), rather than their propensity, as the basis for contact.
What has brought about this change in the industry? There are two possible reasons:
- CRM Vendors finally saw the light and realised that the Model, Score, Segment, Campaign List approach they had been championing for the last 30 years was not giving great results (average 1%-2%), and that analysing Customers individually and contacting them when something changes was dramatically better (>30%)? or
- Technology has changed and advanced such that analysing 10m customer’s activities, movements, location, browsing, searches, clicks and purchases has become possible.
Sadly, the answer is the second. The simple fact is, that with the advent of web services, messaging, geo-location and fast networks, you can now monitor each and every customer to a degree that has never been possible – in real-time. This is fine, and potentially a marketer’s dream, except that this is still an emerging approach and there are two main problems:
- The technology and approach is recent, so there are no ‘products’. If you like this approach, then you have to roll up your sleeves and get coding, using the vendor’s toolset.
- Regardless of the number of data points analysed, this will not alter the number of times customers get married, have kids, start jobs, divorce, need a loan, buy a house, etc. So, it means looking through a billion data points instead of a hundred thousand for the same hundred leads.
So in conclusion, the CRM world has moved away from Campaigns/Lists and is embracing Events. Hooray.
We at eventricity have been saying this since 2004. It has only taken these guys 15 years to get to this point. In fact, here is a picture that I drew with a colleague of mine (Frans Tolen) in 2001 or so.
In it we tried to say that the best approach for marketing was NOT to plan your campaign contacts with customers based on a calendar, but based on the individual Customer’s actions and to do this you would have to monitor tens or even hundreds of Events daily instead of producing lists monthly. In 2001 it was a prediction. In 2017 it is finally the norm.
So, Campaigns and Lists are dead and Events are the new Black.
In the next article, I will talk a little more about the Decision section of our diagram and Journey Optimisation Engines (JOEs). In the meantime, the question is, “Are you still creating lists or are you creating contact leads based on Significant changes in a Customer’s activities?”
Feel free to contact us, if you would like to discuss how you might do this as cheaply, easily and painlessly as possible.