In the ever-evolving landscape of digital marketing, China presents a unique environment where traditional advertising methods often take a backseat to the influence of Key Opinion Leaders (KOLs). KOLs, who are highly influential individuals with significant followings on social media platforms, play a crucial role in shaping consumer behavior and driving marketing success in China. This article delves into the significance of KOLs in Chinese marketing, their influence on consumer behavior, strategies for effective KOL collaborations, and the future of KOL marketing.
Understanding Key Opinion Leaders (KOLs)
Key Opinion Leaders, commonly known as KOLs, are individuals who have established credibility in a specific industry or field and possess a substantial online following. They can be celebrities, bloggers, industry experts, or even ordinary people who have gained influence through their expertise, charisma, or engaging content. In China, KOLs are particularly powerful due to the high trust and loyalty that followers place in them.
Platforms for KOLs
Several social media platforms in China serve as the primary channels for KOLs to engage with their followers:
Weibo: Often compared to Twitter, Weibo is a microblogging platform where KOLs share updates, opinions, and promotional content. It’s a popular platform for celebrities and public figures.
WeChat: As a super-app that combines messaging, social media, and payment services, WeChat is a versatile platform for KOLs. They use WeChat Official Accounts and mini-programs to engage with their audience.
Douyin (TikTok): Known for short-form videos, Douyin is an ideal platform for KOLs to create engaging and viral content. It’s particularly popular among younger audiences.
Xiaohongshu (Little Red Book): Combining social media and e-commerce, Xiaohongshu is popular among young consumers, especially for beauty, fashion, and lifestyle products. KOLs on Xiaohongshu often influence purchasing decisions through detailed product reviews and recommendations.
Bilibili: Known for its focus on anime, comics, and gaming, Bilibili is a video-sharing platform where KOLs share content related to entertainment and pop culture.
The Influence of KOLs on Consumer Behavior
KOLs wield significant influence over consumer behavior in China. Their ability to shape opinions, drive trends, and inspire purchases stems from several key factors:
Trust and Credibility
Chinese consumers place a high level of trust in KOLs, often viewing them as more credible and relatable than traditional celebrities or brand advertisements. This trust is built on the perceived authenticity and expertise of the KOLs, who provide honest reviews and recommendations.
Personal Connection
KOLs often establish a personal connection with their followers through regular interactions and engaging content. This relationship creates a sense of community and loyalty, making followers more receptive to the KOLs’ recommendations.
Trendsetting
KOLs are trendsetters who influence fashion, beauty, technology, and lifestyle trends. Their endorsements can propel products to instant popularity and drive significant sales. For example, a beauty product recommended by a popular beauty influencer on Xiaohongshu can quickly sell out due to the influencer’s authority in the beauty community.
Social Proof
The concept of social proof plays a crucial role in KOL marketing. When followers see their trusted KOL using or endorsing a product, they are more likely to believe in its quality and effectiveness, leading to increased interest and purchases.
Strategies for Effective KOL Collaborations
To harness the power of KOLs effectively, brands must adopt strategic approaches to collaboration. Here are key strategies for successful KOL partnerships:
Identifying the Right KOLs
Choosing the right KOLs is critical for the success of any campaign. Brands should consider several factors when selecting KOLs:
Relevance: The KOL’s niche and audience should align with the brand’s target market and product category. For instance, a skincare brand should collaborate with beauty influencers rather than gaming influencers.
Engagement: A KOL’s engagement rate is more important than their follower count. High engagement indicates an active and interested audience, which is more likely to respond positively to promotions.
Authenticity: Authenticity is key to building trust. Brands should look for KOLs who genuinely use and endorse products, rather than those who promote products indiscriminately for money.
Building Long-Term Relationships
Long-term collaborations are more effective than one-off promotions. Building a long-term relationship with a KOL allows for deeper integration of the brand into the KOL’s content, creating more authentic and convincing endorsements.
Consistency: Regular mentions and features of the brand in the KOL’s content help build familiarity and trust among followers.
Exclusive Partnerships: Consider exclusive partnerships where the KOL becomes a brand ambassador. This exclusivity can enhance credibility and brand loyalty.
Co-Creating Content
Co-creating content with KOLs ensures that the promotional material is authentic and aligns with the KOL’s style. This approach can include:
Product Reviews: Detailed reviews and demonstrations of the product by the KOL.
Behind-the-Scenes Content: Sharing the process of product creation or the KOL’s experience with the brand.
Interactive Campaigns: Engaging followers through challenges, live streams, or Q&A sessions with the KOL.
Leveraging Multiple Platforms
Using multiple platforms maximizes reach and engagement. Each platform has its strengths, and a multi-platform strategy ensures comprehensive coverage:
Weibo for Wide Reach: Use Weibo for broad exposure and trendsetting.
WeChat for Deep Engagement: Use WeChat for more personalized and in-depth interactions.
Douyin for Viral Content: Use Douyin for creating engaging and viral short-form videos.
Xiaohongshu for Detailed Reviews: Use Xiaohongshu for detailed product reviews and recommendations.
Measuring and Optimizing Performance
Measuring the performance of KOL campaigns is crucial for understanding their effectiveness and optimizing future strategies. Key metrics to track include:
Engagement Rates: Likes, comments, shares, and overall interaction with the content.
Conversion Rates: The number of followers who make a purchase or take a desired action after seeing the KOL’s content.
Brand Sentiment: The overall perception and sentiment towards the brand in the comments and discussions.
ROI: The return on investment from the KOL campaign, considering both direct sales and long-term brand equity.
The Future of KOL Marketing in China
As digital marketing continues to evolve, the role of KOLs in Chinese marketing is expected to grow and transform. Here are some emerging trends and future directions:
Micro-KOLs and Nano-KOLs
While mega-KOLs with millions of followers are still influential, there is a growing trend towards micro-KOLs and nano-KOLs. These smaller influencers, with more niche and engaged followings, offer higher engagement rates and more targeted reach. Brands are increasingly collaborating with multiple micro-KOLs to tap into specific communities and build authenticity.
Live Streaming E-Commerce
Live streaming has become a significant trend in Chinese e-commerce, with KOLs hosting live sales events where they showcase and sell products in real-time. Platforms like Taobao Live and Douyin Live have popularized this format, which combines entertainment and shopping. Live streaming allows for real-time interaction, instant feedback, and impulse purchases, making it a powerful tool for driving sales.
AI and Data Analytics
Advancements in AI and data analytics are enabling more precise identification of suitable KOLs and more effective campaign optimization. Brands can leverage AI tools to analyze vast amounts of data, predict trends, and measure the impact of KOL campaigns more accurately. This data-driven approach enhances the efficiency and effectiveness of KOL marketing.
Cross-Border Collaborations
With the globalization of e-commerce, cross-border collaborations are becoming more common. International brands are partnering with Chinese KOLs to enter the Chinese market, while Chinese brands are leveraging foreign influencers to expand globally. These cross-border partnerships require careful cultural and market understanding but offer significant growth opportunities.
Authenticity and Transparency
As consumers become more discerning, authenticity and transparency will continue to be paramount. Brands and KOLs must maintain genuine and honest communication to build and retain trust. This includes clear disclosure of sponsored content and a focus on long-term relationships over short-term gains.
Conclusion
Key Opinion Leaders are an integral part of the marketing ecosystem in China. Their ability to influence consumer behavior, drive trends, and create authentic connections makes them invaluable for brands looking to succeed in the Chinese market. By understanding the dynamics of KOL influence, adopting strategic collaboration approaches, and staying attuned to emerging trends, brands can harness the power of KOLs to achieve marketing success in China. As the digital landscape continues to evolve, the role of KOLs will only grow, offering new opportunities for brands to connect with consumers in meaningful and impactful ways.
How to Sell Online in China: A Comprehensive Guide如何在中国进行网上销售：综合指南
Selling online in China presents a vast opportunity for businesses around the globe, given the country’s massive and digitally savvy consumer base. With over 900 million internet users and a rapidly growing e-commerce market, China has become a powerhouse for online retail. However, navigating this complex market requires a deep understanding of local platforms, consumer behavior, regulatory environment, and marketing strategies. This guide will provide a comprehensive overview of how to successfully sell online in China.
Understanding the Chinese E-commerce Landscape
Before diving into the strategies for selling online, it’s crucial to understand the Chinese e-commerce landscape, which is dominated by several major platforms and characterized by unique consumer behaviors and expectations.
1. Major E-commerce Platforms
China’s e-commerce market is dominated by a few key players, each offering distinct advantages and catering to different segments of the market:
Alibaba’s Tmall: Tmall is the largest B2C platform in China, known for its wide range of products from international and local brands. It offers businesses a trusted platform with a large user base but requires rigorous approval processes and significant investment.
JD.com: JD.com is a major B2C e-commerce platform known for its robust logistics network and focus on authentic, high-quality products. JD.com also offers a marketplace for third-party sellers.
Pinduoduo: Known for its group-buying model, Pinduoduo focuses on lower-tier cities and price-sensitive consumers. It’s a rapidly growing platform that offers unique opportunities for brands willing to engage in price competition and social commerce.
Xiaohongshu (Little Red Book): Combining social media and e-commerce, Xiaohongshu is popular among younger consumers, particularly for beauty, fashion, and lifestyle products. It’s an ideal platform for influencer marketing and content-driven sales.
WeChat: As a super-app integrating social networking, messaging, and e-commerce, WeChat allows businesses to create mini-programs and stores within the app, offering a seamless shopping experience.
2. Consumer Behavior
Understanding Chinese consumer behavior is crucial for success in the market. Key characteristics include:
Mobile Dominance: The majority of online shopping in China is conducted via mobile devices. Ensuring a mobile-friendly experience is essential.
Social Commerce: Social media and e-commerce are closely integrated, with platforms like WeChat and Xiaohongshu driving sales through social interactions and content sharing.
Preference for Local Brands: While international brands are popular, there’s a strong preference for local brands, especially in lower-tier cities.
Trust and Authenticity: Chinese consumers highly value trust and authenticity. Ensuring product quality and authenticity is vital for building brand loyalty.
Steps to Successfully Sell Online in China
Market Research and Entry Strategy
Before entering the Chinese market, conduct thorough market research to understand consumer preferences, competitive landscape, and potential demand for your products.
Consumer Insights: Analyze consumer preferences, trends, and purchasing behavior in your product category. Identify key demographics and target segments.
Competitive Analysis: Study your competitors, both local and international. Understand their strengths, weaknesses, pricing strategies, and marketing tactics.
Market Entry Strategy: Decide on the most suitable market entry strategy. Options include setting up a Wholly Foreign-Owned Enterprise (WFOE), partnering with local distributors, or leveraging cross-border e-commerce platforms.
Choosing the Right E-commerce Platform
Selecting the right e-commerce platform is critical for reaching your target audience and achieving your sales goals. Consider the following factors when choosing a platform:
Target Audience: Match your target audience with the platform’s user demographics. For instance, Tmall and JD.com are ideal for reaching urban, high-income consumers, while Pinduoduo is suitable for price-sensitive, lower-tier city residents.
Platform Requirements: Understand the platform’s entry requirements, fees, and operational processes. Some platforms have strict vetting processes and require significant upfront investment.
Logistics and Fulfillment: Consider the platform’s logistics capabilities. JD.com, for example, offers robust logistics support, which can be a significant advantage.
Setting Up Your Online Store
Setting up your online store involves several key steps, from registering your business to designing your store and listing products.
Business Registration: Ensure your business is properly registered in China or through a cross-border e-commerce solution. This includes obtaining necessary licenses and permits.
Store Design: Invest in professional store design that reflects your brand identity and appeals to Chinese consumers. A visually appealing and user-friendly store can significantly impact your sales.
Product Listings: Create detailed and compelling product listings. Include high-quality images, accurate descriptions, and specifications. Highlight key features, benefits, and use cases.
Pricing Strategy: Develop a competitive pricing strategy that considers local market conditions, competitor pricing, and consumer purchasing power.
Marketing and Promotion
Effective marketing and promotion are crucial for driving traffic and sales to your online store. Leverage a mix of digital marketing strategies to reach and engage your target audience.
Search Engine Optimization (SEO): Optimize your store and product listings for Chinese search engines like Baidu. Use relevant keywords, meta tags, and high-quality content to improve your search ranking.
Pay-Per-Click (PPC) Advertising: Invest in PPC advertising on platforms like Baidu, Alibaba, and WeChat. Targeted ads can drive immediate traffic and conversions.
Social Media Marketing: Engage with consumers on popular social media platforms like WeChat, Weibo, and Xiaohongshu. Create engaging content, run contests, and collaborate with influencers to build brand awareness.
Influencer Marketing: Partner with Key Opinion Leaders (KOLs) who have a strong following in your target market. KOL endorsements can significantly boost your credibility and reach.
Content Marketing: Create valuable content that educates, entertains, and informs your audience. This can include blog posts, videos, tutorials, and user-generated content.
Customer Experience and Service
Providing an exceptional customer experience is crucial for building trust and loyalty among Chinese consumers. Focus on delivering top-notch service at every touchpoint.
Localization: Localize your website, product descriptions, and customer support to cater to Chinese consumers. This includes offering support in Mandarin and adapting your messaging to local cultural norms.
Customer Support: Offer prompt and efficient customer support through multiple channels, including live chat, email, and phone. Address customer inquiries and issues promptly to build trust and satisfaction.
After-Sales Service: Implement a robust after-sales service strategy, including easy returns, refunds, and warranty services. A positive after-sales experience can enhance customer loyalty and encourage repeat purchases.
Logistics and Fulfillment
Efficient logistics and fulfillment are critical for ensuring timely delivery and customer satisfaction. Consider partnering with reliable logistics providers to streamline your supply chain.
Inventory Management: Implement effective inventory management practices to ensure product availability and avoid stockouts. Use data analytics to forecast demand and manage inventory levels.
Warehousing: Choose strategic warehouse locations to minimize delivery times and costs. Some e-commerce platforms offer warehousing and fulfillment services, which can simplify logistics.
Delivery Options: Offer multiple delivery options, including standard and express shipping. Provide tracking information to keep customers informed about their order status.
Regulatory Compliance
Ensuring compliance with Chinese regulations is essential for operating legally and avoiding potential penalties. Stay informed about the latest regulatory changes and requirements.
Product Certification: Ensure your products meet Chinese safety and quality standards. Obtain necessary certifications and approvals for regulated products.
Data Privacy: Comply with China’s data privacy laws, including the Personal Information Protection Law (PIPL). Implement robust data protection measures to safeguard customer information.
Advertising Regulations: Adhere to advertising regulations and guidelines. Avoid false advertising, exaggerated claims, and misleading information.
Performance Monitoring and Optimization
Continuously monitor your store’s performance and optimize your strategies based on data insights. Use analytics tools to track key metrics and identify areas for improvement.
Sales and Traffic Analytics: Track sales, traffic, conversion rates, and customer behavior using analytics tools. Identify top-performing products, traffic sources, and customer segments.
Customer Feedback: Collect and analyze customer feedback to understand their satisfaction and identify improvement areas. Use surveys, reviews, and direct feedback to gather insights.
A/B Testing: Conduct A/B testing on various elements of your store, such as product listings, pricing, and marketing campaigns. Use the results to optimize your strategies and improve performance.
Conclusion
Selling online in China offers immense opportunities, but it requires a deep understanding of the local market, consumer behavior, and regulatory environment. By conducting thorough market research, choosing the right e-commerce platform, setting up a well-designed store, implementing effective marketing and promotion strategies, providing exceptional customer service, ensuring efficient logistics, complying with regulations, and continuously monitoring and optimizing performance, businesses can successfully tap into the lucrative Chinese e-commerce market.
Navigating the complexities of the Chinese market may seem daunting, but with the right approach and strategies, businesses can unlock significant growth and achieve long-term success. By leveraging the insights and best practices outlined in this guide, you can position your business for success in China’s dynamic and rapidly evolving e-commerce landscape.
In the digital age, the vast amount of data generated by consumers offers unprecedented opportunities for businesses to understand their audience better and tailor their strategies accordingly. Behavioral data, which refers to the information generated by users’ interactions with a business’s digital properties, such as websites, apps, and social media platforms, is particularly valuable. By analyzing this data, businesses can gain deep insights into consumer behavior, preferences, and trends. This article explores three effective strategies for harnessing behavioral data to enhance business outcomes: personalized marketing, product development, and customer journey optimization.
1. Personalized Marketing
Personalized marketing involves tailoring marketing efforts to individual consumers based on their behavior, preferences, and interactions with a brand. By leveraging behavioral data, businesses can create more relevant and engaging marketing campaigns that resonate with their target audience.
a. Understanding Consumer Preferences
Behavioral data provides detailed insights into what consumers like, dislike, and are interested in. By analyzing data such as browsing history, past purchases, and interaction patterns, businesses can create detailed customer profiles. These profiles help marketers understand individual preferences and predict future behavior.
For example, an e-commerce platform can analyze a user’s browsing and purchase history to recommend products that align with their interests. If a user frequently browses outdoor gear and has purchased camping equipment in the past, the platform can personalize marketing content to showcase new arrivals in outdoor gear, exclusive deals on camping equipment, and related accessories. This level of personalization increases the likelihood of conversion by presenting products that the user is genuinely interested in.
b. Segmentation and Targeting
Segmentation involves dividing a broader audience into smaller, more homogenous groups based on specific criteria. Behavioral data enables more precise segmentation by considering factors such as purchase frequency, average order value, and engagement level.
With these segments, businesses can tailor their marketing messages to address the unique needs and preferences of each group. For instance, a fashion retailer can segment its audience into categories like frequent buyers, occasional shoppers, and inactive users. For frequent buyers, the retailer can send personalized emails with early access to sales and exclusive offers. Occasional shoppers might receive reminders about items left in their cart or personalized discount codes to encourage purchases. Inactive users could be targeted with re-engagement campaigns highlighting new arrivals or special promotions.
c. Dynamic Content and Real-Time Personalization
Dynamic content refers to web or email content that changes based on user behavior and preferences. Real-time personalization takes this a step further by adjusting content instantaneously based on the user’s current interactions.
For instance, a news website can use behavioral data to show personalized article recommendations on its homepage. If a user frequently reads articles about technology and sports, the website can prioritize showing the latest tech and sports news when the user visits. Similarly, an online streaming service like Netflix uses real-time personalization to recommend shows and movies based on the user’s viewing history and ratings. This approach keeps users engaged and encourages them to spend more time on the platform.
2. Product Development
Behavioral data can significantly impact product development by providing insights into how consumers interact with existing products and what features they value the most. By analyzing this data, businesses can make informed decisions about product improvements, new features, and entirely new product lines.
a. Identifying Popular Features and Pain Points
Understanding which features are most popular and which cause frustration can guide product development efforts. Behavioral data such as feature usage frequency, time spent on specific features, and user feedback can reveal what customers find valuable and what needs improvement.
For example, a software company can track how users interact with different features of their application. If data shows that a significant portion of users frequently use a particular feature but also encounter issues with it, the company can prioritize fixing these issues in the next update. Conversely, if a feature is rarely used, the company might consider removing it or replacing it with something more valuable to users.
b. Testing and Iteration
Behavioral data allows businesses to adopt a data-driven approach to testing and iteration. By analyzing how users respond to new features or changes, businesses can make informed decisions about product development.
A/B testing is a common method where two versions of a product feature are tested against each other to see which performs better. For example, an e-commerce site might test two different checkout processes to see which one leads to higher conversion rates. Behavioral data such as completion rates, time spent on each step, and user drop-off points can provide clear insights into which version is more effective.
c. Anticipating Market Trends
Behavioral data can help businesses stay ahead of market trends by identifying emerging consumer preferences and behaviors. By monitoring how users interact with products and what they search for, businesses can anticipate shifts in demand and adapt their product offerings accordingly.
For instance, if a fitness app notices an increase in searches and engagement related to home workout routines, it can respond by developing new content, features, or partnerships focused on home fitness. This proactive approach allows businesses to capitalize on trends and meet consumer needs before competitors do.
3. Customer Journey Optimization
Optimizing the customer journey involves enhancing every touchpoint a customer has with a business to create a seamless and satisfying experience. Behavioral data plays a crucial role in understanding and improving the customer journey.
a. Mapping the Customer Journey
Behavioral data provides a detailed view of how customers move through the various stages of the buying process. By mapping the customer journey, businesses can identify key touchpoints, pain points, and opportunities for improvement.
For example, an online retailer can track a user’s journey from the initial visit to the website, through product browsing, adding items to the cart, and completing the purchase. By analyzing this data, the retailer can identify where users are dropping off and why. If a significant number of users abandon their cart at the payment stage, the retailer might investigate potential issues with the payment process, such as technical glitches or a lack of preferred payment options.
b. Enhancing User Experience
Improving the user experience (UX) is essential for retaining customers and encouraging repeat business. Behavioral data can reveal areas where the UX can be enhanced to make the journey more enjoyable and efficient.
For instance, a travel booking website can use behavioral data to streamline the booking process. If data shows that users frequently get stuck or abandon the process when selecting flight options, the website can simplify this step by offering clearer options, filters, and assistance. Improving UX based on actual user behavior ensures that changes directly address user needs and pain points.
c. Personalized Customer Support
Behavioral data can also enhance customer support by enabling personalized assistance. By understanding a customer’s history and interactions with the brand, support teams can provide more relevant and efficient help.
For example, if a customer contacts support with an issue, the support agent can access the customer’s previous interactions, purchase history, and behavior on the website. This information allows the agent to offer tailored solutions and recommendations, improving the overall support experience. Additionally, proactive support measures, such as sending reminders for upcoming subscription renewals or offering assistance with frequently encountered issues, can be implemented based on behavioral data.
Conclusion
Harnessing behavioral data is crucial for businesses looking to thrive in the digital age. By leveraging this data for personalized marketing, product development, and customer journey optimization, businesses can create more engaging, relevant, and satisfying experiences for their customers. Personalized marketing enhances relevance and engagement, product development driven by behavioral insights ensures that offerings meet consumer needs, and optimizing the customer journey creates a seamless and enjoyable experience. As technology continues to evolve, the ability to effectively harness and analyze behavioral data will remain a key competitive advantage for businesses across all industries.
Expanding a business into China, the world’s second-largest economy, presents immense opportunities and unique challenges. With its vast consumer base, rapid technological advancements, and dynamic market conditions, successfully launching a business in China requires strategic planning, cultural understanding, and adaptability. This article outlines the top 10 rules for launching a successful business in China.
1. Conduct Thorough Market Research
Before entering the Chinese market, it is crucial to conduct comprehensive market research to understand the local landscape, consumer preferences, and competitive environment.
Consumer Behavior: Study the purchasing habits, preferences, and pain points of Chinese consumers. China’s consumer base is diverse, with varying needs and expectations across different regions and demographics.
Competitive Analysis: Identify key competitors and analyze their strategies, strengths, and weaknesses. Understanding the competitive landscape can help you position your business effectively.
Market Trends: Stay updated with the latest market trends and emerging opportunities. China’s market is rapidly evolving, and staying ahead of trends can provide a competitive edge.
2. Understand and Comply with Local Regulations
Navigating China’s regulatory environment can be complex. Ensuring compliance with local laws and regulations is critical to avoid legal issues and establish a reputable business presence.
Business Registration: Understand the process and requirements for registering a business in China. This includes choosing the right business structure, such as a Wholly Foreign-Owned Enterprise (WFOE), Joint Venture (JV), or Representative Office.
Licensing and Permits: Identify and obtain the necessary licenses and permits for your industry. Different sectors have specific regulatory requirements that must be met.
Intellectual Property Protection: Register your trademarks, patents, and copyrights to protect your intellectual property. China has made significant strides in IP protection, but proactive measures are essential.
3. Form Strategic Partnerships
Building strong relationships with local partners can facilitate market entry and growth. Strategic partnerships can provide valuable insights, resources, and networks.
Local Distributors and Suppliers: Collaborate with reliable local distributors and suppliers to ensure smooth operations and supply chain management.
Industry Associations: Join industry associations and chambers of commerce to connect with key stakeholders and stay informed about industry developments.
Government and Regulatory Bodies: Establish positive relationships with government and regulatory bodies. Local authorities can provide support and guidance, especially in navigating regulatory processes.
4. Localize Your Product and Marketing Strategy
Localization is essential to resonate with Chinese consumers and meet their specific needs. This involves adapting your product offerings, marketing strategies, and communication style.
Product Adaptation: Modify your products to align with local tastes, preferences, and cultural nuances. This could include adjusting flavors, packaging, or features to suit Chinese consumers.
Marketing and Branding: Develop a localized marketing strategy that reflects the cultural values and trends of your target audience. Use local influencers, celebrities, and social media platforms to enhance brand visibility.
Language: Ensure all marketing materials, product descriptions, and customer support are available in Mandarin Chinese. Clear and effective communication is vital for building trust and engagement.
5. Leverage Digital Platforms and E-commerce
China is a digital-first market with a high penetration of internet and mobile usage. Leveraging digital platforms and e-commerce can significantly boost your business growth.
E-commerce Platforms: Utilize popular e-commerce platforms like Alibaba’s Tmall, JD.com, and Pinduoduo to reach a wide audience and drive sales.
Social Media: Engage with consumers on major social media platforms such as WeChat, Weibo, Douyin (TikTok), and Little Red Book (Xiaohongshu). Develop a strong social media presence to build brand awareness and interact with your audience.
Digital Marketing: Invest in digital marketing strategies, including search engine optimization (SEO), pay-per-click (PPC) advertising, and influencer collaborations to enhance online visibility and attract potential customers.
6. Focus on Customer Experience and Service
Providing exceptional customer experience and service is crucial for building a loyal customer base in China. Chinese consumers have high expectations for quality and service.
Customer Support: Offer prompt and effective customer support through various channels, including phone, email, and social media. Providing assistance in Mandarin Chinese is essential.
After-Sales Service: Implement a robust after-sales service strategy, including warranty, returns, and repairs. Positive after-sales experiences can enhance customer satisfaction and loyalty.
Feedback and Reviews: Encourage and monitor customer feedback and reviews. Addressing customer concerns and continuously improving your products and services based on feedback can strengthen your brand reputation.
7. Build a Strong Local Team
Hiring and retaining a skilled local team is essential for navigating the Chinese market and understanding local consumer behavior.
Talent Acquisition: Recruit talented professionals with local market knowledge and expertise. Consider hiring local managers who understand the cultural and business landscape.
Training and Development: Invest in training and development programs to enhance the skills and capabilities of your team. Providing opportunities for career growth can improve employee retention and performance.
Company Culture: Foster a positive company culture that values diversity, collaboration, and innovation. Building a strong organizational culture can attract and retain top talent.
8. Adapt to Cultural Differences
Understanding and respecting cultural differences is vital for successful business operations in China. Cultural sensitivity can help build trust and rapport with local stakeholders.
Business Etiquette: Familiarize yourself with Chinese business etiquette, including greetings, gift-giving, and meeting protocols. Showing respect for local customs can enhance business relationships.
Communication Style: Adapt your communication style to align with local norms. In China, indirect communication and maintaining harmony are valued, so being tactful and considerate is important.
Festivals and Holidays: Acknowledge and celebrate major Chinese festivals and holidays, such as Chinese New Year and Mid-Autumn Festival. This can foster goodwill and strengthen relationships with employees, partners, and customers.
9. Implement Effective Risk Management
Managing risks effectively is crucial for sustaining business operations and growth in China. Identify potential risks and develop strategies to mitigate them.
Regulatory Compliance: Stay updated with changes in regulations and ensure compliance to avoid legal issues and penalties.
Economic and Political Risks: Monitor economic and political developments that could impact your business. Develop contingency plans to address potential disruptions.
Supply Chain Management: Implement robust supply chain management practices to minimize risks related to logistics, inventory, and supplier reliability.
10. Invest in Innovation and Technology
China is at the forefront of technological innovation, and investing in technology can drive business growth and competitiveness.
Research and Development: Invest in research and development (R&D) to innovate and improve your products and services. Collaborate with local research institutions and universities for R&D initiatives.
Digital Transformation: Embrace digital transformation by adopting advanced technologies such as artificial intelligence (AI), big data, and the Internet of Things (IoT). These technologies can enhance operational efficiency and customer experience.
Sustainability and Corporate Social Responsibility (CSR): Focus on sustainability and CSR initiatives to align with China’s environmental goals and social values. Implementing sustainable practices can enhance your brand image and appeal to socially conscious consumers.
Conclusion
Launching a successful business in China requires strategic planning, cultural understanding, and adaptability. By conducting thorough market research, complying with local regulations, forming strategic partnerships, localizing your product and marketing strategy, leveraging digital platforms, focusing on customer experience, building a strong local team, adapting to cultural differences, implementing effective risk management, and investing in innovation and technology, businesses can navigate the complexities of the Chinese market and achieve long-term success. Embracing these rules and continuously learning and adapting to the dynamic market conditions will pave the way for a prosperous business venture in China.
1. Even in the wake of Covid-19 lockdowns years after the start of the pandemic, China represents a massive investment opportunity for international investors looking to diversify their portfolios.
2. Whether you are looking to start your own business or seek investment opportunities in China, there is no shortage of innovation in China.
3. While some sectors in China have taken a battering in recent years, that doesn’t make China “uninvestable”; it means that those without experience on the Chinese market should seek professional help before committing to long-term business decision.
4. These insights come from many years spent in Mainland China, as Horizons has unmatched business and employment expertise in the country. If you are interested in expanding in China, contact us today.
China is an attractive market for some of the world’s largest conglomerates. In the last few years, China has established a niche for itself regarding national and economic issues, making many entrepreneurs and established companies race to the country.
There are over one billion people in China. It has a fast-growing economy that is also rated as the second largest in the world. It is also the largest exporter and importer of goods in the world. Furthermore, the company offers affordable and reliable technology, as well as a highly productive workforce. All of these factors make China a powerful country to do business in. This is why most Fortune 500 companies have a presence in the country.
China has many thriving sectors, including agriculture, manufacturing, oil and gas, automobile, pharmaceutical, and tourism. China is currently promoting certain small business opportunities.
If you are considering opening a business or expanding your business to China, these opportunities may help you generate impressive income while allowing you to enjoy a low profile. Here are some of the most promising business ideas and investment opportunities in China currently.
Please note: This article does not contain investment advice. Horizons is sharing anecdotal insights based on what we have seen generate success in China. If you seek genuine investment advice, please speak to a certified investment professional.
Best Small Business Ideas in China
Rounding out the list of the best small business ideas in China for 2024 are:
1. Automation Control Products
The number one small business in China is a technology company that sells industrial automation control products. Marketing similar products may yield the results that you want. Consider this option if you are looking for a new business opportunity.
2. Supplemental and International Education
Previously, the supplemental education market in China was huge. After-school private tutoring services were one viable option. Another was providing online classes to students and workers. These classes are important in China, which prides itself on having a strong educational system.
It is customary for many students to continue their studies after the end of the traditional school day to gain a competitive edge. Because online classes were convenient and accessible to more people, it was a viable option for many and was an in-demand opportunity for businesses.
However, due to regulation, the supplemental education market has been reduced. While supplemental (“after-school”) education was a popular and lucrative industry, new regulations passed in August 2021 made so-called “edtech”, or online teaching platforms, comply with a specific and strict set of regulations; it also banned any supplemental education targeting pre-school aged children, and set limits on supplemental education for children aged 6-15. Finally, existing “subject training institutions” (teaching English, Math, and other subjects) must also comply with a strict set of regulations, and no new subject training institutions are permitted to form. Naturally, this wiped out many companies large and small by more than 83% nationwide and has made the supplemental education space less attractive as the barrier to entry is much higher.
However, not all hope is lost– a different category of supplemental education called “quality education training courses” are less regulated and (for now) is permitted to form. This category covers subjects like music, art, sports, and other non-core subjects; and these courses are permitted to be taught in English. For those looking to start a supplemental education business and become a private GCSE maths tutor, talk to a professional about “quality education training schools”; but for foreign individuals interested in opening an English training center or something similar, this is no longer possible.
Small businesses that involve trading are often successful because they help create additional business opportunities across the globe. Because China is the largest exporter and importer of goods in the world, it is easier to create a profitable importing and exporting business in the country. This has been doubly true since the border situation became more complicated in 2019. Companies in need of goods are seeking trustworthy partners based locally to receive and qualify samples of desired goods, make factory visits, etc.
If you have not yet launched a business and are looking for ideas, this is one to consider.
4. Pharmaceuticals
The pharmaceutical industry in China is massive and highly profitable. Furthermore, in China, businesses often have access to cheap labor and raw materials. However, selling pharmaceuticals in China requires businesses to acquire the proper license.
Forbes China has previously listed a pharmaceutical company in its list of top 10 small businesses in the country, so it might be an industry worth considering if you are willing to go through the regulatory red tape.
5. Health Products
Environmental concerns, more access to health information, and the presence of new diseases and illnesses have made current generations more concerned about their health than previous generations.
Health product businesses may include herbal goods, supplements, and skincare products. In China, there are many small health products businesses. Some successful businesses focus on women and the beauty industry while others appeal to both genders.
6. Ecological Environment Construction
The world has taken notice of more environmental concerns and China has followed suit. It is encouraging businesses that are taking an eco-friendly approach and constructing ecological environments, such as afforestation projects, seeding plants, and garden landscape engineering. More businesses in Shanghai have been focusing on waste in recent years. With Shanghai city’s push for proper garbage sorting and waste disposal, some businesses see an opportunity in the city’s move to be more green.
Companies that provide technological research on ecology are also in demand.
7. Direct Marketing
Direct marketing is one of the best opportunities for small businesses because it is reliable and has relatively little overhead.
It requires that businesses be able to communicate well and develop key connections with customers to be successful. Some businesses focus on helping international businesses communicate effectively to the Chinese market, while other businesses focus on helping Chinese businesses communicate effectively to international markets. Both business focuses can be lucrative.
8. Internet Access
Not all consumers in China have or can afford to have internet access in their homes or businesses. However, many people still need this access. Operating a small-scale internet business is a simple way to participate in the Chinese economy while not having to invest substantially into it.
9. Food
Food production: When deciding on which business initiative to pursue, it is important to consider needs so that you can opt for a safer option when available. Everyone needs food, but with a population exceeding 1.35 billion, China is in particular need of this resource.
Food (restaurant): Alternatively, many people come to Shanghai to live their dream of opening a restaurant or bar, both local Chinese and foreigners. Shanghai for example has the most coffee shops in the world. The locally-owned F&B sector in China is a powerhouse, and in most cities, the owners form a tight-knit community.
Best Investment Opportunities in China
There are also certain sectors that are prime for investment in China including:
1. Manufacturing of Household Commodities
China is one of the largest producers of household commodities. They are often cheaper than the products produced in other countries, allowing them to be more competitive. Consider starting your own household commodities manufacturing company.
2. Online Stores
China’s access to advanced technologies allows it to be a source of thriving online shops. There are several advantages to investing in this type of business in China, including that you do not have to keep all of the products that are offered in your shop in China.
You do not have to invest in inventory. Instead, you can make agreements with manufacturers in which you list their products on your shop and sell them to your customers for a markup.
3. English-Language Schools
Since English is often the language spoken by business leaders around the world, many Chinese professionals are trying to increase their English-language skills. You can open a school that teaches professionals how to speak English, especially in business settings.
This type of business requires minimal capital investment and you may already have the skills necessary to run a successful business of this nature.
Again, the English-language teaching sector has taken massive hits over the last few years; while we may not see the optimism in English-language schools anymore, someone with a high risk tolerance might make a tactical choice to invest in schools offering “quality education training courses”.
4. Domestic Shipping Companies
Another investment opportunity is to invest in a haulage business, which transports goods by road or rail. It includes transporting ore, coal, and supplies. Since China is a country with some of the highest volume of goods in the world. In such a massive, diverse country, populated by avid consumers, goods need to move constantly across the country. There is little that is more important in a country of this size than a greased supply chain. This ensures that your investment might continue to pay off even in traditionally uncertain times.
5. Mobile Phones and Accessories Businesses
With its ready access to technology, a productive workforce, and cheap raw materials, China has revolutionized the mobile phone industry. China offers cheaper mobile phone and accessory options in comparison to some of the overpriced goods of this nature elsewhere in the world.
Having this type of business can be a highly profitable business venture when done correctly. The key to success with this type of business is partnering up with businesses outside of China to whom you can supply mobile phones and accessories. Cheap accessories that you may be able to sell include batteries, chargers, battery banks, cases, memory cards, and USB cords.
6. Electronics and Gadgets
China also produces other electronics and gadgets.
Investing in an electronics manufacturing company or factory can allow you to get or make the products more cheaply, which can then be sold abroad at more affordable prices.
7. Jewelry or Diamonds
Gold and silver plated jewelry are popular in China and other parts of the world. China has a vibrant jewelry ecosystem, not just for gold and silver, but also for pearls, jade, and other precious stones.
Connecting with industry insiders and experts in the jewelry industry in China is not so difficult, and could lead to interesting business opportunities.
8. Fashion Accessories
Bags and shoes are some of the most important accessories around the world and the production cost in China is not high.
If someone invested in a fashion accessories business in China, it is reasonable that those goods could be sold in developed and developing countries alike.
Conclusion
China has ample opportunities for small business and investment. Regardless of which investment vehicle you choose, it is important that you launch your business in an efficient and compliant manner.
Horizons can advise you of the regulatory schemes in place and inform you of the guidelines you must meet, whether that means a minimum capital investment or a necessary license to conduct the type of business you are considering in China.
As the world’s leading trading nation and a GDP of more than $10 trillion, China is an attractive option for business expansion. However, companies cannot simply rely on the marketing strategies that they have implemented in western cultures when launching their brand in China. These marketing campaigns may not resonate with the local Chinese market.
Everything in China is different, including how consumers find the business, the social media channels that are used and rules on how to do business in the country. It is important to understand these differences. Having a strategic partner like Horizons can help you successfully market your product or service to the local Chinese community.
Marketing in China
While you might have a great product, this is not enough to secure success in marketing it to the Chinese market. There are so many products and businesses in China, so it is critical that you are able to make yours stand out.
It is critical that you have a customized China marketing plan and strategy. Having Horizons as part of your team allows you to access our significant resources, including market research and strategic consulting. We can analyze your business and products and develop a customized marketing plan for you.
China E-Commerce Rules
Many companies want to target the expansive Chinese market that has more than 1.3 billion consumers. China represents the largest group of ecommerce shoppers in the world with 30% of the cross-border ecommerce market. The Chinese ecommerce market exceeds 8.8 trillion RMB.
In one encouraged shopping day, more than $25 billion in ecommerce merchandise. Given these attractive figures, many businesses want to join the ranks of others who have successfully launched their product in China.
China requires that any business that advertises in China obtain a license.
While a business may not necessarily need to obtain a license to sell a product in China, it will need a license to legally advertise in the country. Some businesses choose to get around this requirement by working with a trade partner who can distribute their product through their TMall or JD store.
Digital Advertising Rules in China
China has strict rules related to online access. Consumers cannot access many of the websites that are popular in the rest of the world. In China, popular websites like YouTube, Instagram, Facebook and Google are not accessible to the general public.
To form an effective digital marketing strategy, you will need to advertise on channels that are accessible and popular in China, with the key channels being:
WeChat
Baidu
Sina Weibo
Toutiao
Tencent Channels
However, the process is not simply to use these channels like you might be used to in western cultures.
China Digital Marketing Platforms and Channels
List of the most popular digital marketing channels
These channels have their own rules and requirements. For example, advertising on Baidu requires that you make a minimum deposit of 30,000 RMB before you can get started and to create an account.
Before you can legally take part in any digital advertising, you must obtain a valid industry license. Additionally, many industries have strict rules regarding what type of advertisements you can run.
For example, if you are selling health and supplement products in the country, you will need a specific license for this purpose. Some platforms will not allow foreigners to create an account so you might need to go through a partnered agency who will manage your account and act as your media buyer.
Many businesses choose to work through an agency instead of managing their own advertisement account. Some channels require that you spend a certain amount of money each month on the account to obtain superior support.
Horizons can discuss your advertising and marketing needs and help you develop a strategic marketing plan.
Social Media Advertising in China
Like in other parts of the world, social media advertising is an important aspect of advertising products in China. The most popular platforms in China for this purpose are WeChat and Weibo.
As the largest channels in the country, many businesses use these two major sites to advertise their products. Most digital marketing agencies in China promote these channels.
However, there is a cost and time factor involved with using social media advertising that you should be aware of before implementing your digital marketing strategy. Additionally, other channels may better resonate with particular demographics or industries.
As part of your digital marketing strategy, you may wish to consider other social media channels, such as:
Sine Weibo – This is a popular microblogging network in China
Tik Tok or Douyin – A popular video social media platform similar to Snapchat
Toudou and Youku – These are popular video sites similar to YouTube
Tencent QQ – This is China’s ICQ
Toutiao – This is a popular Ai news platform
It is important to consider which digital channels will help you grow your business in the Asian market. This is where market research really comes in. By researching and studying your target market in China, you can determine the channels that will best position you to market your product.
Through a dedicated digital marketing strategy, you can increase brand awareness and develop a loyal customer base.
Role of Key Opinion Leaders in Chinese Marketing
In China, influencers are referred to as “key opinion leaders” or KOLs. KOL marketing is influencer marketing in which a respected person in the field advertises the product on popular social media platforms in China. These key opinion leaders are able to influence their audience, often due to their own position in the field and credibility.
While fashion and beauty blogs often feature young social media models, these key opinion leaders may have more robust backgrounds, such as tech backgrounds or healthcare providers. Because these people have credibility in their field, they are often able to influence consumers to follow their advice and purchase certain products.
However, a KOL China marketing strategy is often very expensive because these influencers usually only work for large sums of money. It is not uncommon for a large brand in China to pay hundreds of thousands of dollars to establish one KOL campaign on a platform like WeChat. KOL marketing is a key component of many large businesses’ marketing plan.
When considering a KOL marketing campaign, it is important to ensure that the influencer you choose is suited to promote your business. There may be major celebrities that have widespread recognition, but there may also be famous influencers who are particularly relevant in certain fields who may charge less to be part of your KOL marketing strategy.
Expanding a business into China presents unique opportunities and challenges, particularly in the realm of digital marketing. China boasts one of the world’s most vibrant and sophisticated social media ecosystems, with platforms like WeChat, Weibo, Douyin (TikTok), and Little Red Book (Xiaohongshu) playing pivotal roles in daily life. This article explores strategies and best practices for effectively utilizing these social media platforms to establish and grow a business in China.
Understanding the Chinese Social Media Landscape
China’s social media landscape is dominated by several key platforms, each with its own distinct user base, features, and marketing potential:
WeChat: Often described as a super app, WeChat integrates messaging, social networking, e-commerce, and payment services. With over 1.2 billion monthly active users, it is a crucial platform for any business looking to engage with Chinese consumers.
Weibo: Known as the “Chinese Twitter,” Weibo is a microblogging platform with over 500 million monthly active users. It is particularly effective for brand awareness campaigns and real-time engagement.
Douyin (TikTok): The Chinese counterpart of TikTok, Douyin is a short-video platform with over 600 million daily active users. It is highly influential among younger audiences and is known for its viral content and powerful algorithms.
Little Red Book (Xiaohongshu): This platform combines social media with e-commerce, allowing users to share and discover product recommendations. It has around 200 million monthly active users and is popular among young, urban women.
Kuaishou: Another leading short-video platform, Kuaishou has a strong presence in lower-tier cities and rural areas. It offers a more grassroots approach compared to Douyin.
Best Practices for Leveraging Social Media in China
Successfully leveraging Chinese social media platforms requires a deep understanding of local consumer behavior, cultural nuances, and platform-specific features. Here are some best practices to consider:
1. Establish a Strong Local Presence
Localizing your brand is the first step to effectively engage with Chinese consumers. This involves not just translating content but also adapting it to align with local tastes, cultural references, and trends.
Language: Ensure all content is in Mandarin Chinese, using simplified characters.
Cultural Sensitivity: Be mindful of Chinese customs, holidays, and cultural symbols.
Local Influences: Collaborate with local designers, artists, or influencers to create culturally relevant content.
2. Utilize WeChat for Comprehensive Engagement
WeChat is indispensable for businesses in China due to its multifunctionality. Here’s how to leverage it effectively:
Official Account: Create a WeChat Official Account to engage with followers, push out content, and provide customer service.
WeChat Mini Programs: These are sub-applications within WeChat that offer advanced features such as e-commerce, task management, and games without leaving the WeChat ecosystem.
WeChat Pay: Integrate WeChat Pay to facilitate seamless transactions directly within the app.
Content Strategy: Share a mix of informative, promotional, and interactive content. Utilize WeChat’s Moments (similar to Facebook’s news feed) for ads that blend seamlessly into users’ social streams.
3. Leverage Weibo for Brand Awareness and Real-Time Engagement
Weibo is a powerful tool for increasing brand visibility and engaging with users in real-time.
Influencer Partnerships: Collaborate with Key Opinion Leaders (KOLs) who resonate with your target audience to amplify your reach.
Trending Hashtags: Participate in trending hashtags to increase visibility and engagement.
Live Streaming: Utilize Weibo’s live-streaming feature to interact with followers, launch new products, or host events.
4. Create Engaging Short-Video Content on Douyin
Douyin’s short-video format is ideal for creating viral content and engaging younger audiences.
Creative Content: Focus on entertaining, visually appealing, and shareable content. Challenges, user-generated content, and behind-the-scenes videos are particularly popular.
Hashtag Campaigns: Launch hashtag challenges to encourage user participation and increase content virality.
Influencer Marketing: Partner with popular Douyin influencers to tap into their follower base and leverage their creativity.
5. Harness the Power of Little Red Book for Social Commerce
Little Red Book is a hybrid platform that combines social sharing with e-commerce, making it ideal for product discovery and purchase.
User-Generated Content: Encourage users to share reviews and experiences with your products. Authentic user-generated content drives trust and credibility.
KOL Collaborations: Work with influencers to create content that highlights your products and their benefits.
Interactive Campaigns: Run interactive campaigns such as giveaways, contests, and live-stream shopping events to engage users and drive sales.
6. Adapt to Kuaishou’s Grassroots Appeal
Kuaishou’s user base is more diverse, with strong representation from lower-tier cities and rural areas.
Authenticity: Focus on authentic, relatable content that resonates with everyday life.
Engagement: Engage with users through comments, live streams, and interactive content to build a loyal community.
Local Influencers: Collaborate with local influencers who have a strong connection with their followers.
Strategic Implementation for Business Success
To maximize the effectiveness of your social media strategy, consider the following strategic steps:
1. Comprehensive Market Research
Conduct thorough market research to understand the preferences, behaviors, and pain points of your target audience in China. This will inform your content strategy and platform selection.
2. Integrated Marketing Approach
Adopt an integrated marketing approach that leverages multiple social media platforms in synergy. Cross-promote content and campaigns to create a cohesive brand presence.
3. Data-Driven Decision Making
Utilize the analytics tools provided by each platform to monitor campaign performance, track user engagement, and gain insights into consumer behavior. Use this data to refine your strategies and optimize ROI.
4. Compliance and Legal Considerations
Ensure compliance with China’s regulatory requirements for social media and digital marketing. This includes adhering to content guidelines, data privacy laws, and advertising standards.
5. Continuous Adaptation and Innovation
The digital landscape in China is fast-evolving. Stay updated with the latest trends, platform features, and consumer behaviors. Continuously adapt your strategies to stay relevant and competitive.
Case Study: A Global Beauty Brand’s Success in China
To illustrate the effective use of social media in China, let’s consider the case of a global beauty brand entering the Chinese market.
Objective: Build brand awareness and drive sales among young Chinese consumers.
Strategy:
WeChat Engagement:
Launched a WeChat Official Account to share beauty tips, product information, and exclusive offers.
Developed a WeChat Mini Program for seamless shopping and loyalty rewards.
Weibo Campaign:
Partnered with top beauty KOLs to promote new product launches and create buzz.
Utilized trending hashtags and live streaming for real-time engagement and product demonstrations.
Douyin Content:
Created short, engaging videos showcasing makeup tutorials and beauty hacks.
Ran hashtag challenges to encourage user-generated content and increase brand visibility.
Little Red Book Strategy:
Collaborated with influencers to share authentic product reviews and usage experiences.
Hosted live-stream shopping events to drive immediate purchases and interact with consumers.
Kuaishou Outreach:
Focused on relatable, everyday beauty content to appeal to Kuaishou’s diverse user base.
Engaged local influencers to build trust and community around the brand.
Results:
Increased Brand Awareness: Achieved widespread brand recognition across multiple social media platforms.
High Engagement: Interactive campaigns and influencer partnerships drove significant user engagement and content sharing.
Boosted Sales: Integrated e-commerce strategies on WeChat and Little Red Book led to a substantial increase in online sales.
Conclusion
Expanding a business into China requires a well-rounded, culturally nuanced approach to social media marketing. By understanding the unique characteristics of platforms like WeChat, Weibo, Douyin, Little Red Book, and Kuaishou, businesses can effectively engage with Chinese consumers, build brand awareness, and drive sales. Through strategic planning, localized content, influencer collaborations, and data-driven decision-making, businesses can successfully navigate the dynamic Chinese social media landscape and achieve long-term success.
Foreign businesses cannot make the mistake of assuming that because they have experienced success in other countries that the same approach will automatically work in China. Creating a local version of a product often involves many distinct steps, such as translating the language on the product’s labeling and considering the various markets within China.
It is important to start closer to a beginner mindset when emerging into the Chinese market and not make assumptions about previous use by consumers in other regions.
You may have to consider how the local Chinese market may respond to your product or service and what objections they might have to it. Additionally, you may need to consider the different geographic regions in China and whether there are certain areas that will be more responsive to your product or service than others.
You may also need to consider if the timing of your entry into the Chinese market is optimal. You might be too early or too late into the market. Consider using effective market research offered by Horizons to test your product early and affordably.
You must learn about problems consumers in China are having and develop solutions to address them. Creating customized protypes will show that you value the experience of the Chinese user. Talking to potential customers and learning from their experience can give you great insight into the market.
#2 Marketing Strategy for China
Once you have conducted some market research and determined that your product might fit the local market, you should then begin adapting your market strategy to the Chinese. You will need to consider the significant cultural differences in China in comparison to the other cultures where you have previously launched your business. Avoid having a minimal return on investment by not staying loyal to a proven marketing strategy that worked in the west.
You will need to adapt your social media strategy to local channels and make key changes in your marketing plan so that you bring in the Chinese market and do not alienate potential customers. For example, since Facebook doesn’t work in China, you may need to spend more time on WeChat, a social media platform and corporate marketing base.
Companies may garner more success when they publish product catalogues, share interesting content and promote events on this platform. Having a strong social presence and being actively engaged is expected in the Chinese market.
You may need to learn about how to use the Weibo wholesale platform to connect with local customers.Another effective strategy is to observe your competitors’ marketing strategies and see how they are successful. You can also test different marketing strategies by focusing on certain channels and then measure their return.
It is also important to market your product in a way that demonstrates cultural awareness. Collectivism is usually more important in China and eastern cultures than individualism. Some activities may be more socially inherent to these consumers, such as shopping online.
Your marketing strategy should be adapted to resonate with the local market in China. We can provide strategic consulting that is based on our intimate knowledge of the Chinese market and culture to help you better match your product or service to your eastern companies.
#3 Technical Issues
Western cultures that are accustomed to Googling everything and having easy access to information may be surprised to know that China’s Great Firewall actively blocks a number of important websites. This site provides a list of blocked websites in China, including the following:
Google
Gmail
Facebook
Twitter
Dropbox
Slideshare
Google Drive
iStockPhoto
New York Times
Bloomberg
YouTube
WordPress.com
Google Wallet
Google Chrome
Microsoft OneDrive
Google Translate
Therefore, if you come to China and plan on doing work here, you should be prepared to use different programs and not to have access to some of the tools you might take for granted.
Additionally, you may experience problems when attempting to use APIs, SDKs or other plug-in services from abroad. Push messaging services, map services and other standard tools might also create problems.
It is not uncommon in China for businesses who have went through the process of hosting their site on a whitelisted IP to experience unexpected slow down, finding their site is inaccessible or their system becoming unreliable.Additionally, it may be difficult to obtain the type of license you need.
Foreign businesses can avoid some of these problems by hosting their server in China and building global and local solutions into their technological infrastructure.
#4 Local Platforms
Many businesses have apps or platforms that they are used to using to sell their product or service. However, operating in China may require you to adapt to local platforms instead, even if you are not familiar with them. You will want to connect with customers on their level and on the platforms that they are used to using.
For this reason, online sellers might want to sell off popular channels like Taobao, TMall or Alibaba stores. These are the channels that locals are most familiar with, so it will be much easier and cheaper to try to appeal to them on these channels rather than luring them to your individual website.
Similarly, businesses that use mobile apps may need to create a WeChat application to reach their customer base and use this as their primary way to engage with potential customers. Many international mobile applications are not widely used by the Chinese market and many of these are quickly abandoned.
Chinese customers often prefer using WeChat for many of their service purchases and using payment solutions through this platform.
#5 Local Partners
Many foreign businesses decide to work with a local partner to have better access to local networks and connections, as well as a better understanding of the language and culture. They may create full joint ventures with these domestic companies. This arrangement can help you have more success and have a trusted partner who can assist you with the common challenges associated with launching a business in this massive market. It could also allow you to have access to more equitable options.
Working with a local partner can also help you use an ICP license, which is very restricted. This allows you greater access where you need it most.
#6 Local Employees
Not all business entities in China are allowed to hire local employees. Working with a local partner can give you access to hiring from the local talent pool.
However, if you do not want to have a formal arrangement with a domestic corporation in China, another option is to use the PEO services of a recognized employer-of-record like Horizons.
We have access to the greatest talent throughout the world and can help you find the perfect members to add to your team, including operational employees, management and others. We can also help you navigate the immigration system and assist with visa processing so that you can complete this process seamlessly.
Once your employees are in place, we serve as the employer-of-record and are responsible for all compliance measures and reporting to local and national government.
#7 Business Cycles
It is also important to learn how to measure the success of your business in shorter cycles.
China is a vast country that prides itself on its ability to quickly innovate and be successful. Therefore, many businesses must enter the market at lightning speed. It is also important to gain the first-to-market advantage since knockoffs are quite common and competition will quickly emerge.
These factors will require you to continuously evaluate your product or service to determine if it is still a good fit for the market. If it is not, you will need to be able to quickly pivot and make necessary changes to remain relevant.
Contact Horizons
Horizons can assist you with every aspect of launching your business in China, from conducting market research, providing strategic consulting, helping with business formation, visa assistance, legal assistance and handling all HR and payroll responsibilities.
Contact us today to find out more about how we can be your strategic partner in your expansion.
1. China has become a leading country globally in business processing, manufacturing, and Information Technology (IT) outsourcing opportunities for foreign companies.
2. Education is highly valued in Chinese culture — this means as an outsourcing destination, foreign companies will have access to an immense pool of highly educated individuals with specialized skills to meet current and future market demands.
3. One of the top benefits of outsourcing to China is cost saving, while key disadvantages can be related to quality control and Intellectual Property (IP) concerns.
4. There are a several issues related to compliance that need to be overcome when outsourcing to China – A Global PEO can help mitigate any compliance challenges, ensuring a smooth transition into the Chinese market.
China has advanced to be one of the world’s leading outsourcing nations — expanding as more than a manufacturing hub to catering in outsourcing opportunities across other capacities – such as business process and IT outsourcing.
As the most populated country in the world, China presents a unique opportunity to foreign companies to increase their access to a vast pool of talent, skills, services, and entry into neighbouring markets. Not only can this cut costs and maximise profits but improve the overall efficiency in business operations – ultimately setting them apart within their internal markets.
This article will highlight China as an outsourcing destination and discuss the top benefits and disadvantages companies need to consider when choosing to outsource to China in any capacity.
What is the definition of outsourcing?
In business terms, the practice of outsourcing is when a company looks to hire a third-party to perform duties, create goods, support operations, or provide a service to the company. Some examples of a third-party source is an individual with specialised skills (think consulting), an entire department (IT, HR, legal or accounting), a software solution (SaaS or PaaS), or a specific service (data entry, content creation, marketing etc.). Companies choose to outsource to lower costs and improve efficiencies and gain a strategic competitive advantage. A company can outsource onshore, offshore or to neighbouring countries.
What types of business activity can be outsourced to China?
China is constantly expanding its aptitude for outsourcing opportunities in business processing, manufacturing, and IT outsourcing. Below will be a brief rundown for each of these categories and highlight some common business activities associated with each that can be outsourced to China.
Business process outsourcing to China
In recent years, the Chinese market share for providing business process outsourcing (BPO) services to foreign companies has seen exponential growth. BPO services that are commonly outsourced to China include both front and back-office processes. The top types of BPO services include accounting processes such as payroll solutions; administrative tasks such as data entry; customer experience through contact centres; procurement services; digital marketing; content creation and travel reservations and itinerary bookings..
Manufacturing outsourcing to China
China is the world’s largest manufacturing nation, cultivating it’s leading position since the 1950’s with major industrial reforms. This makes China a goldmine to foreign companies if seeking to outsource all or part of their manufacturing needs. Even some of the biggest consumer-oriented multinational companies such as Apple and Tesla have chosen to expand or completely base their manufacturing facilities in China. The most common products that can be outsourced to China include electronics, clothing and textiles, shoe manufacturing, furniture, and plastic products.
IT outsourcing to China
The drive towards digital transformation globally has enabled China to create a solid foundation to build and provide IT outsourcing opportunities. In-house software development is renowned for being a costly undertaking for any business, so being able to acquire high-quality solutions at a fraction of the cost makes China a lucrative choice with foreign companies. As with its ever-growing market of innovative local software solutions, companies can also outsource database development, web development, virtual helpdesks, application support and management services across all these avenues.
What are the benefits of outsourcing to China?
Below will be a brief synopsis of the top three benefits of outsourcing to China.
Cost Saving
The undisputable principal reason and benefit for companies to outsource to China is that its cost effective across several avenues. China presents numerous opportunities to save cash and maximise profits, while presenting ample access to an abundance of local talent across many industries. There is also the benefit of lower salary caps for basic or specialised skillsets and cheap access to raw materials and manufactured goods.
Additionally, many mundane and repetitive business processes such as employee onboarding or purchase order processing – once tasks that could only be completed through manual labour – have been transformed into autonomous and effective technological solutions. China presents copious opportunities to adopt locally developed software in an increasing array of business processing tasks. This presents companies with a unique opportunity to eliminate all associated human labour costs either partly or in their entirety.
Access to a massive, growing consumer market
As the most populated country in the world, choosing to outsource to China instantly presents companies access to one of the fastest growing and largest consumer markets globally. Building on this benefit pinpoints to China’s convenient geographic location, producing further market entry access advantages if looking to introduce products into other Asian and European markets.
Highly educated and skilled potential workforce
Prior to the COVID-19 pandemic, the Chinese economy was already undergoing rapid changes that focused on launching initiatives towards education, training, and its supporting infrastructure. These initiatives also surround the development of technical skills that support technological innovation and adoption.
Additionally, education is highly valued in China and considered a great source of pride linked with enhancing a person’s worth and career. The key benefit of this makes China home to an immense pool of highly educated and rising talent that can meet current and future market demands.
What are the disadvantages of outsourcing to China?
It’s important to recognise and understand what the disadvantages are with any new business endeavour. Here are the top three disadvantages that should be considered when choosing to outsource to China.
Compliance
Companies looking to hire foreign talent in China need to take a few things into consideration. Chinese employment and labor law are relatively complex and are subject to round the clock audits and enforcement by the Chinese Government. There is also a competing tension between policies for accelerating and controlling innovation – emphasised by the creation of the Chinese Social Credit System, a system to control and determine a company’s “trustworthiness” in their business operations. It is important to understand these regulatory systems and the potential consequences of non-compliance when outsourcing to China.
Control
For businesses that like to have control over their business processes, this can sometimes get lost if outsourcing to external agencies. Outsourcing to China can run the risk of facing quality control issues, intellectual property (IP) violations and differing standards for monitoring of task and employee performance.
A key consideration if a company is looking to outsource its product manufacturing surrounds the fact that quality control practices in China are still underdeveloped across many industries. Quality control issues can mean your product does not meet the local standards as set out in your local jurisdiction.
China also has had instances in the past where foreign Intellectual Property (IP) rights and international copyright standards have not been respected. Highly problematic if you’re looking at creating or have an existing cutting-edge product on the market.
Both these points can have a significantly negative impact for a company, both financially and reputationally if not taken into consideration.
Language and Cultural differences
Finally, as a consideration when looking to outsource to any country, language and cultural barriers can pose a considerable challenge. Although language barriers are easy to overcome, cultural ones can prove more difficult and result in a misalignment in business vision moving forward.
In a recent Deloitte survey, 27 percent of respondents identified as a key learning from prior outsourcing, the importance of a third-party strategic advisor. If you have no local connections in China, you might consider hiring a Global Professional Employment Organization (a ‘Global PEO‘) to facilitate your entrance into the Chinese market. Global PEOs can also help companies with an existing presence in China, but who are concerned they are not meeting their compliance requirements.
These third-party companies take over and maintain compliance through rigorous contracts. This ensures a business is and can remain compliant in their new market. Although considered a cost-effective measure to get the ball rolling, it can take considerable time researching to find an appropriate Global PEO that is good value for money and can cater to all required business needs.
Conclusion
If your company is seriously looking at outsourcing to China but is not sure where to even begin – then Horizons can provide the needed support in getting the process started. For example, Horizons are leading experts in providing China Payroll solutions, acting as the employer of record within China, saving on costs and the need to establish a legal entity in China. This means you will be able to begin quickly and compliantly trading in China. Check out how Horizons can help your business expand globally.
Retail data — it’s hardly the new kid on the block, yet it’s top of mind for many marketers right now. Why?
With a surge in online shopping in recent years, major retailers have amassed troves of data from loyalty programs, consumers’ purchases and more — and have made this set of superior data signals available to advertisers along the way. Though 80% of purchases still take place in stores,1 marketers can leverage retail data from both in-store and online purchases to gain deeper insights into their consumers’ unique demographics and shopping behaviors.
Retail data is “clean,” meaning it provides deterministic insights and verifiable information about consumers. Deterministic data signals are well known elements for lower-funnel and last-click strategies, but marketers are seeing success across all consumer touchpoints — from awareness to point of sale.
Did you know?
91% of U.S. advertisers plan to either maintain or increase their investment in retail data in the next couple years.2
As more retail data becomes available, both super-users and nonusers should consider activating it across campaigns with a more holistic approach in mind. Here’s how:
Aim to extend reach by starting with audience seeds
If you’re looking to extend your audience reach and engage customers, retail data insights enable you to do so across a range of media channels. One of the challenges many advertisers face is that they either don’t have first-party data or the data they do have access to may not be usable or scalable. Enter retail data. This data set can serve as a foundation for advertisers building out their campaign seeds — the first step to creating a campaign within Kokai.
For those bringing robust first-party data to the table, you can explore how retail data can augment, complement or even shift your audience strategy within our platform. Retail data also helps you amplify audience and campaign targeting strategies, regardless of if your brand sells product with the retailers providing that data.
Don’t limit your retail data strategy
Many brands want to be able to capture consumers’ attention by driving awareness on Connected TV (CTV) and then retarget them with a conversion message on the websites they visit across the open internet. You can leverage the powerful insights provided by retail data to help drive bottom-funnel strategies, sure, but there’s a myth that such data can only be used to drive campaigns focused on outcomes or sales. Retail data can certainly be leveraged at the awareness and consideration phases of a campaign as well.
Consider how a CPG brand releasing a new yogurt product could create awareness by incorporating retail data into their new campaign: To reach consumers most likely to purchase, they’ll start by building an audience of verified buyers appended with retail data, which may look like the following…
The campaign parameters will be set up to reach these audiences across media channels and with controlled frequency across CTV and audio platforms. During a midcampaign review, the CPG brand will evaluate which audiences are driving the most unique reach, adjusting the campaign as necessary. Following a successful campaign flight, you can access incremental reach, cost per unique household, completion rate and other relevant metrics to help you accomplish your campaign goals.
Close the loop with more precise measurement
Marketers aiming to hold media spend accountable to business outcomes need to look no further than retail measurement capabilities. Retail data can help close the loop between the media you’re running and the impact it’s having on in-store and online sales. No longer reliant on proxies alone (click-through rate and video completion rate, for example), you can now leverage strong, deterministic signals that can help you optimize campaigns midflight as well as attribute ad campaigns to business impact (closed-loop attribution).
It’s possible to see how your ads are driving online and in-store sales outcomes with ourRetail Sales Index (RSI). RSI offers you an understanding of performance across multiple retailers with a single report and standard attribution methodology. For brands looking to supplement first-party data with third-party retail data, RSI will provide consolidated insights leading to better investments and growth. And for those brands without their own first-party data sets, RSI can help unlock actionable insights and give you the context needed to optimize campaigns on our platform.
Take the next step
Since the advertising ecosystem is still adjusting to include this type of data, you’ll have a first-mover advantage when it comes to enabling retail data for your media plans. You can start today with seeds and even augment your advertising strategies with RSI and the Quality Reach Index to help improve campaign performance. By bolstering campaign data and qualifying the reach of each campaign, you can achieve marketing success for your brand.
Most marketers want to answer one key question: Did my ads actually cause new-customer behavior, or would the people who saw my ads have converted anyway?
Most marketers want to answer one key question: Did my ads actually cause new-customer behavior, or would the people who saw my ads have converted anyway?
Even the most advanced attribution models don’t resolve this question. Sure, they can help you understand how many of the people you reached went on to make a conversion. This can lead to helpful insights about your audience, including where to find them and how they are interact with your brand. But at the end of the day, many marketers use last-touch attribution, which only shows a correlation between an ad exposure and a conversion; it doesn’t measure causation or incremental lift. In other words, it doesn’t tell you if seeing your ad actually caused a person to convert.
This is where Conversion Lift comes in. By using Conversion Lift experiments to measure campaigns on The Trade Desk, you can understand how your ads are driving incremental results. You can answer questions like:
What is the impact of my media spend on The Trade Desk in driving incremental conversions?
Which of these three Connected TV (CTV) creative assets drove the most incremental conversions?
What audience strategy drove the most incremental conversions?
How does Conversion Lift work?
Conversion Lift uses test and control groups to compare the behavior of people who were exposed to your ads to other people from your target audience who were not exposed to your ads.
We’re essentially running an experiment to see if the variable of serving an ad to someone causes them to take a specific action — in this case, engaging with your brand in some way, whether that’s going to your website, visiting a store, or buying a product.
With some advertising platforms, lift experiments require a certain level of investment in public service announcement (PSA) ads. This is not the case with our solution. We use a process sometimes known as ghost bidding. Once a user is eligible to be bid on by a client’s ad media, they are randomly assigned to either a test or control group. If a user is assigned to the test group, we place a bid to show the user the ad; otherwise, we mark that we would have bid and they’re put into the control group (aka holdout). This means you don’t have to set aside any of your media budget for PSA ads, as there’s no additional cost to run Conversion Lift.
So how do we run Conversion Lift experiments on The Trade Desk?
1. First, you need to define the conversion event you want to measure for the campaign. Ideally the tracking tags are set up and collect data for at least two weeks (ideally a full month) before the experiment begins.
2. You work with your rep at The Trade Desk to set up the campaign, define audience targeting, and adjust the relevant cross-device settings.
3. Our platform then creates randomized statistically sound test and control groups based on your target audience, using our cross-device graph to ensure that all devices for a single user are assigned to the same group. We bid on the test group only, and the control group comprises a similar set of users we would have bid on but don’t.
4. We track conversions and compare the differences in conversion behavior between the test and control groups (which are essentially the same) to analyze, understand, and report on incremental lift in conversion events driven by ad exposure.
The next lift phase: single-cell vs. multicell experiments
The standard Conversion Lift experiment is called single cell and it helps you understand if your campaign spend is working to drive incremental conversions.
But things really start getting interesting when you consider multicell experiments. These give you the ability to conduct true hypothesis testing in our platform, with experiments that aim to answer the question “What is the best way for my campaign to drive incremental conversions?”
With multicell experiments, you can test a variety of variables:
Creatives. Compare different creative variations (such as alternate copy or visuals).
Media channels. Compare different channels and media-mix strategies (such as video versus display versus both).
Frequency. Test multiple frequency caps to uncover optimal ad exposure.
Recency windows. Discover the best way to retarget by comparing recency windows
Conversion Lift best practices
While Conversion Lift may sound like the perfect solution, it does not always make sense for every advertiser or campaign. For example, if you’re running a mass-reach campaign outside of The Trade Desk, let’s say on linear TV, then it’s likely that the control group will be contaminated due to ad exposure from non-The Trade Desk media. In this case, Conversion Lift may not be the right fit.
Once you’ve determined that it is the right fit, there are some nuances to setting up experiments and interpreting results. Here are some best practices that we recommend:
Feasibility:
Channels: Are you running on channels that are supported? Currently we support display, video, CTV, audio, and native.
Conversion types: All online conversions and in-app events are eligible for Conversion Lift experiments. We also support several offline conversion events.
You can measure lift in foot traffic from several location partners, including PlaceIQ, Foursquare (including Factual), and Adsquare.
You can also measure other offline conversion events, such as in-store sales from a weekly data feed, from partners like LiveRamp.
Tracking-tag (pixel) placement: Tracking tags must be set up and collecting data for at least two weeks (ideally a full month) before the experiment begins. This enables us to confirm that test and control users had similar conversion behaviors before the test group was exposed to ads.
Conversion Lift experiments can only run on decisioned media. This is not a good solution for programmatic guaranteed campaigns, since we’re not able to withhold ads at a user level.
Single-cell experiments
If you’re trying to understand the overall impact of an advertiser’s media within our platform (on top of any external media), the experiment should be done at the advertiser level so that the control group remains consistent across all campaigns and is not exposed to any of the advertiser’s media from our platform. This is recommended, especially if you’re using the product for the first time, as it will lead to the highest levels of lift.
If you’re trying to understand the impact of a subset of campaigns/ad groups on top of all other media running on (and outside) our platform, the experiment should contain this subset such that the control group does not receive ads from the chosen campaign but does from all other campaigns running for the advertiser.
Multicell experiments
We recommend testing a maximum of four cells for a single experiment to get statistically significant results without impacting scale.
Holdouts: You can choose anywhere from 5 percent to 50 percent for your holdout group, but we typically recommend around 20 percent. The larger the holdout, the greater the probability you will detect lift (if it exists), but the more it can impact your campaign’s ability to scale.
Cross-device: You should enable the appropriate cross-device targeting settings for all audiences in your experiment to ensure that all devices from a person or household are assigned to the same group (test versus control).
Results:
Results can vary greatly depending on the the brand, campaign, target audience, and conversion events
being tested. This means we cannot provide benchmarks for Conversion Lift results.
Generally, we recommend taking an iterative test-and-learn approach, trying out different variables to gather actionable insights.
Whether you’re running single- or multicell experiments, we always recommend implementing a learning agenda by thinking through the hypotheses you want to test with Conversion Lift. Testing different variables can help you understand how your media investment is driving incremental conversions so you can try to achieve more efficient performance and make better investment decisions.
As marketers brave the new world of increasingly complex targeting, cookieless attribution, and analysis strategies, the need for an all-encompassing measurement method is increasingly apparent.
Unlike traditional siloed measurement methods, which offer visibility over only one marketing channel at a time, omnichannel measurement provides a holistic view of an organization’s entire marketing strategy at once. Modern marketers are now able to make more accurate and informed decisions about not only their next marketing tactic but their entire marketing strategy as a whole with granular prescriptive insights.
The Growing Use of Omnichannel Measurement & Challenges Ahead
This past January, 90% of consumers surveyed demanded an omnichannel experience from the organizations they buy from. This is both good and bad news for forward-thinking marketers aiming to create a state-of-the-art marketing strategy.
On the one hand, this metric reflects the surging popularity of all-encompassing brand experiences spanning not only platforms but also channels and devices.
On the other hand, it signals an era in which it is no longer acceptable to analyze and measure results from each marketing campaign channel by channel. In short, omnichannel measurement is no longer a trendy “optional” technique – it’s a strategy that is rapidly becoming indispensable to all organizations.
This creates its own challenges, as any marketer already using an omnichannel measurement strategy already knows. While an efficient analysis strategy may be relatively simple to set up with the right omnichannel marketing tools on hand, the question of effectiveness remains. Many marketers face overwhelm when digging into their data and find themselves unsure of how to use the insights it provides effectively. Others struggle to bring together analysis results from multiple sources due to an ineffective omnichannel measurement platform. As we dig into some of the most important keys to effectively measuring omnichannel performance, we’ll discover how the right measurement platform can solve all these challenges and more, even before they appear.
4 Critical Keys to Measuring Omnichannel Performance
Every omnichannel measurement strategy needs to start off on the right foot using a few essential techniques. The 4 keys we’ll explore below not only optimize the effectiveness of every step in the marketing funnel but also ensure data from all channels is accurately collected, measured, and analyzed.
1. Run Test Measurement Experiments
Don’t just guess at which marketing tactics will serve you best – experiment with them painlessly and risk-free.
One of the key techniques marketers can use to ensure their entire marketing strategy is working cohesively and deploying optimally is running test marketing scenarios using Marketing Evolution’s Scenario Planner. This innovative approach allows marketers to take a peek into the possible future of their marketing tactics and choose the best ones to combine into a holistic marketing strategy.
2. Look Closely at Attribution Models
While every marketer is likely aware of the critical role accurate attribution plays in developing an effective marketing strategy, many are still using outdated approaches such as last-touch attribution. Also, the focus is on ‘attribution’ when in fact, ‘contribution’ takes into account the lag effects advertising exposure has on consumer choice.
By examining an organization’s attribution models and updating to more effective methods, marketers help ensure the accuracy of their marketing data by acknowledging the role every customer interaction plays in conversion.
3. Add Omnichannel Metrics to Routine Analytics Reporting
Don’t let all that valuable omnichannel data go underutilized! When building out your analytics reporting metrics, be sure to incorporate the specific KPIs you’ll be tracking in your omnichannel measurement strategy. This may sound like a no-brainer, but a simple mismatch in labeling or definitions when measuring marketing data can create an apples-to-oranges comparison scenario in which vital pieces of information get lost, which is the opposite effect you want your omnichannel strategy to have.
4. Analyze Overall Performance Using Aggregate Data
This may be the most important omnichannel measurement key of all: using aggregate data to analyze overall performance is possible at the person level with AI/machine learning-based techniques.
There is no scenario in omnichannel measurement in which each marketing channel should be analyzed independently. Instead, every step in the funnel and every customer interaction should be aggregated and analyzed together.
Only by ensuring that every data point is combined effectively at the end of the omnichannel measurement process can a truly holistic overview of a marketing strategy take shape.
Proven advances in AI/machine learning for marketing are available to ensure a holistic understanding of the synergistic effects of advertising exposure across media channels on consumer and customer choice.
9 KPIs to Use When Measuring Omnichannel Performance
While each industry demands its own unique set of data points to create a holistic omnichannel measurement strategy, there are a few unifying data points that every optimized marketing plan includes.
Effectively analyzing these 9 KPIs will ensure your marketing strategy is optimally efficient from the first touch to ultimate conversion.
1. Membership Enrollments
2. Social Media Engagement
3. Website Engagement
4. Content Page Engagement
5. Customer Conversion
6. New Customer Registration
7. Customer Satisfaction Score (CSAT)
8. Net Promotor Score (NPS)
9. Purchase Consideration
How to Organize Omnichannel Performance Measurement
Now that you know what to measure and how to analyze the data you glean, how do you get started?
One of the most important things to remember when starting up or running an effective omnichannel performance measurement strategy is to break down silos around data channels. This means bringing channel managers and department heads together to aggregate every bit of relevant information in one place before starting analysis or decisioning.
Without this key step, marketers are likely to end up with an incomplete and inaccurate picture of their marketing strategy. But when done correctly, eliminating silos creates a holistic and actionable view of an organization’s marketing landscape, creating a foundation from which to build successful future marketing campaigns with more conversions at lower costs.
How Marketing Evolution Can Help with Omnichannel Performance Measurement
A great omnichannel performance measurement strategy starts with a great measurement and analysis tool. When your data is accurate, relevant, and aggregated across all your marketing channels, you can be confident that every marketing decision you make is not only correctly prioritized but also perfectly timed.
Marketing Evolution has the solution. From aggregate data that fuels your cookieless marketing strategy to state-of-the-art attribution models to omnichannel measurement solutions, Marketing Evolution has your back. Check out a free demo of our flagship solution, Mevo, and discover how easy and effective omnichannel measurement can be today.
Omnichannel marketing is the integration and cooperation of the various channels organizations use to interact with consumers, with the goal of creating a consistent brand experience. This includes physical (e.g. stores) and digital channels (e.g. websites). The goal of an omnichannel marketing strategy is to create a convenient, seamless user experience for consumers that offers many opportunities for fulfillment. An omnichannel strategy may give consumers the chance to find and purchase online, in-store, or a combination thereof – such as “buy online and pick up in-store”. Today, organizations across industries are leveraging omnichannel strategies, including healthcare, retail, finance, technology, and more.
Thanks to online channels, modern consumers have more options than ever and expect information in real-time. Omnichannel marketing enables them to engage with brands on their own terms, leading to a better customer experience overall.
What is Omnichannel Marketing?
Omnichannel marketing is the seamless integration of branding, messaging, and online and offline touchpoints as consumers move down the sales funnel, enabling a more impactful customer experience.
Omnichannel marketing takes a consumer-centric view of marketing tactics. Consumers can now interact with brands on innumerable channels, from social media to customer service hotlines. An omnichannel approach ensures that the consumer has a positive, consistent experience on each channel, by offering a few key elements:
Consistent, identifiable brand tone and vision
Personalized messaging based on specific interests
Content that is informed by past interactions and current stage of the buyer’s journey
An identifiable brand simplifies brand recognition, while personalization based on interests and shopping history makes consumers more likely to interact with branded content across channels.
What’s the Difference Between Multichannel vs. Omnichannel?
While omnichannel and multi-channel are both concepts based on the idea of engaging consumers across multiple platforms, they are not interchangeable. Multichannel looks at the specific channel and how the transaction will be completed there. Alternatively, omnichannel takes into account that the customer journey may span multiple channels – and looks at how to create the best experience as consumers move between them. Each interaction is a touchpoint on a path, leading to a conversion. Let’s take a deeper look at the differences between the two:
Multichannel
Multichannel is much simpler in its intention, which is to distribute content and advertisements across various channels. A multichannel strategy makes an organization available to consumers online, in print, in-store, etc. The consumer can choose where they want to interact with the brand, however, content and engagements within these various channels are often very siloed. With this in mind, multichannel is more reflective of operations, reaching as many channels as appropriate, while omnichannel is more reflective of the overall customer experience.
Omnichannel
Omnichannel also makes brands accessible across online and offline channels, however, it goes a step further to ensure an integrated, seamless experience across each one. As consumers move across devices and online and offline platforms, transitions are seamless and messages are informed by prior encounters. An omnichannel approach enables organizations to truly take a consumer-centric approach that keeps the comprehensive customer journey top of mind.
The Benefits of Using an Omnichannel Approach
Today, most brands will agree that an omnichannel approach can yield the best results. While implementing an omnichannel approach is far from simple, when done properly it offers a host of benefits. Today’s consumers are accustomed to being bombarded with messaging from various brands, and as a result, they have become increasingly selective of which brands they choose to engage with. Creating omnichannel customer engagements can act as a brand differentiator, bringing the following benefits:
A Better User Experience – Since omnichannel focuses on the individual experience across devices instead of the channel, the customer experience (CX) is better. By focusing on the customer instead of the platform, companies can drive more sales and better retention rates.
Cohesive Brand Strategy & Identity – Creating a seamless strategy across channels means building an easily identifiable brand image and tone. Organizations should base this image on core audience needs and values. By focusing on the overall experience and working within your brand guidelines to target each channel, you will have a more comprehensive brand strategy that will translate into increased loyalty and more targeted messaging.
Increased Revenue – An omnichannel approach encourages customers to engage with a brand across multiple touchpoints and channels. These increased, diverse engagements at each stage of the buyer’s journey can help increase revenue, as research shows that customers that engage with multiple touchpoints tend to be 30 percent more valuable. This more targeted messaging also builds loyalty, making it more likely a customer will purchase from your brand again. Repeat customers on average contribute to 40 percent of revenue, despite being a smaller portion of your consumer base.
Better Attribution Data – Going truly omnichannel should not just extend to a user’s experience with your brand, but with your data analytics as well. By tracking engagements across channels, brands get a better understanding of what the customer journey looks like, when and where consumers prefer to engage, and which campaigns have created the most value. All of this data can be put back into your strategy to build more targeted campaigns and optimize media spend.
What is Omnichannel Attribution?
In a world where there are now multiple touchpoints across channels, which should get credit for the conversion? That can be difficult for marketers to answer, without the appropriate attribution model in place. Marketers often rely on multi-touch attribution and media mix modeling (MMM) to understand what led to a conversion, however, these models are not perfect.
MMM: Media Mix Modeling only looks at long-term aggregate data, rather than person-level insights. While this allows marketers to see the impact a campaign had on conversions, as well as historical trends, such as times of year when shoppers increase or decrease engagements, it does not provide insight into individual preferences. MMM also uses several year’s worth of data, meaning teams cannot use this model to optimize campaigns in real-time.
MTA:Multi-touch attribution offers granular, person-level data in real-time across each touchpoint. When analyzed, teams can use this data to make changes to campaigns as they run, to better cater to consumer needs. The challenge with multi-touch attribution is that it is difficult to determine how much credit each touchpoint should be given for a conversion. For example, was the webinar or the email campaign more influential in moving the consumer toward conversion?
Attribution models no longer have to rely on outdated practices and can now give a more holistic view of the marketing funnel and the buyer’s journey. Just as omnichannel tactics combine online and offline channels, omnichannel attribution removes silos between campaign measurements to understand the role each touchpoint played in the journey.
Leveraging omnichannel attribution offers a host of benefits to brands, allowing them to correlate online and offline measurements, and gain visibility into both person-level insights and aggregate, historical shopper trends.
Steps for Leveraging Omnichannel Marketing
As noted, creating an omnichannel experience needs to take into account how the individual interacts with your brand. It focuses not on the channel, but the experience as a whole. With this in mind, there are a few essentials when it comes to creating an omnichannel experience:
1. Data Collection
Collecting accurate, timely data about your consumers is essential to the implementation of an omnichannel strategy. This data will allow you to understand when your target audience prefers to interact with brands and on what devices, which type of messaging they are more likely to engage with, what products and features they are looking for, etc. This data will be the driving force behind an omnichannel strategy.. Brands need to make sure they have the tools in place to effectively collect this data across online and offline channels. A smart way to do this is with Unified Marketing Measurement (UMM), an attribution model that combines the person-level metrics of multi-touch attribution, with the historic, aggregate measurements of media mix modeling. This way, touchpoints can be informed by individual preferences as well as historical trends such as regional or seasonal elements that affect engagements / conversions.
2. Data Analysis
Data collection is only the first step. Without a team and platform that can translate all of this big data into actionable insights, it is useless. Brands need to deploy an analytics platform that can distill all of this data in near real-time so that teams can course-correct while campaigns run, to meet consumer needs in the moment.
3. Customer Journey Mapping
Before launching an omnichannel campaign, organizations should be sure to create customer journey maps for each of their audience segments. The customer journey map evaluates the steps taken between the customer discovering the brand and purchasing from the brand. Outlining these maps allows brands to create more targeted campaigns by considering individual interests, the user experience and interface, and factors outside of the brand’s control that may impact the path to purchase, such as economic factors.
4. Brand Guidelines
It’s important for organizations to develop a brand identity with clear guidelines for messaging and creative. These guidelines should be adhered to across each channels to help facilitate brand awareness and recognition through a cohesive message. Another way that organizations can help facilitate an omnichannel experience is by leveraging brand tracking tools that can help measure and predict their brand’s health in the mind of the consumer
5. Testing / Optimization
One of the most important components of an omnichannel marketing strategy is to continuously test the efficacy of your omnichannel approach. This enables the marketing team to determine ways to optimize campaign spend, messaging, creative, and more. Today’s organizations should utilize media planning tools that can run “what if” scenarios that take budget, target audience, multiple KPIs and media mix into consideration and in turn provide a highly granular media plan that can maximize ROI and inform future decision-making.
Examples of Omnichannel Marketing
When building an omnichannel strategy, take a look at these brands who have done so successfully:
1. Starbucks
Through its mobile rewards app, Starbucks is able to better integrate the mobile experience with the in-store one to put consumer convenience first. Users can reload their cards from their phone or desktop computer. By using the app to pay, they are rewarded with points that can be applied to a free coffee. Additionally, they can skip the morning line by ordering in advance.
2. Walgreens
Walgreens created a custom mobile app that makes it easier for customers to refill prescriptions, which they can then pickup in store. Their app also showcases store specific inventory making it easier for customers making a trip to decide which location they should visit.
3. Timberland
Timberland is combining the convenience of online with the experience of the in-person customer experience through the installation of near field communication (NFC) technology. Timberland created Touchwalls in their store, which leads to further information on their shoes. Customers can then add these to their online shopping list or purchase in-store. In addition, Timberland utilizes a product recommendations engine to gain exposure to lesser-known products based on user preferences.
Industries Applying Omnichannel Tactics
Omnichannel approaches have become popular across industries as consumers become more empowered, however, they are particularly prominent in these verticals:
Retail: Retail in particular has faced drastic changes in today’s omnichannel environment. With the ability to buy in-store or online and the emergence of social media and review sites, retail marketers need to centralize how consumers are interacting with their brand across a multitude of channels to ensure a positive outcome.
Healthcare: Healthcare customers generally interact with many touchpoints across various providers, from hospitals, to primary care, to pharmaceuticals. By analyzing data around the customer journey and engagements, healthcare providers can better cater to individuals, providing them with data that matters most to them, while mitigating potential health risks.
Automotive: Since cars are a long term investment, keeping top of mind and driving customer loyalty are big priorities for car dealerships and manufacturers. Today’s advertisements may not yield the desired effects immediately, but if they engage current customers and interest prospects, they will impact sales down the line. However, the buying journey, even in automotive has changed with 80 percent of shoppers researching cars online first. Additionally, it is estimated that 4.5 million cars could be sold online only in 2020. Having an encompassing advertising strategy that engages with buyers across all touchpoints has become more vital than ever.
Financial Services: The banking and financial services industry is shifting from a product-obsessed mindset to a more customer-centric view. As they do so, organizations must consider how they can deliver personalized experiences that can gain insight into which of the various services and products would be the best fit for each user based on their personal preferences, wants, and needs.
Trends in Omnichannel
As omnichannel becomes more popular, several trends have emerged that can help make these efforts more effective to improve consumer satisfaction and maximize marketing ROI. These include:
Integration of In-Store and Online – Many consumers are shopping online, only to pick up their purchases in-store. This could be to avoid searching for items in-store or to avoid delivery fees. Today’s shoppers are expecting the ease of their online experience to be integrated with the in-store experience. Almost 70 percent of US shoppers expect a notification that their order is ready within 2 hours of ordering it online. When Destination XL realized this trend, they combined customer location data with inventory to help customers find what they were looking for online to pick it up in-store. Additionally, stores like Kohl’s have created parking spots designed for shoppers who are picking up orders they made online.
Focus on the Brand, Not the Channel – As the Forrester Report: “Retailers are Starting to Reap the Rewards of Omnichannel Commerce” notes, “Customers believe they are engaging with one unified brand or organization, regardless of the various touchpoints that they use. This means retailers must ensure the continuity of information and resources across digital and store touchpoints — or risk losing customers to competitors that do.” Brands need to provide a consistent identity across channels with messages that resonate with the customer, regardless of platform.
More Devices for One Purchase – Customers are frequently beginning their journey on one device and making a purchase on another. However, many retailers are struggling to address this element of the customer journey, as it can be difficult to account for all cross-device interactions. Failing to account for this shift in trends could drastically impact your bottom line and media spend optimization efforts.
Multiple Channels Mean Better Customers – When tracked correctly, customers who visit your site across multiple devices tend to be better customers and spend an average of three to four times more than customers who only interact with a single channel.
Key Takeaways
An omnichannel marketing strategy allows teams to meet their consumers where they are, with the right message at the right time. Through omnichannel marketing, organizations can deliver a unified customer experience that acknowledges the previous touchpoints along the customer journey. This not only fosters brand awareness in the mind of the consumer, but also leads to improved engagement, increased ROI and sales, and enhanced customer retention and loyalty.
Today, organizations can more easily enable an omnichannel experience for consumers through the help of advanced marketing performance measurement platforms that can offer reliable, person-level insights to identify the optimal media mix, targeting, and more. By analyzing the customer journey at every step, organizations can make more informed decisions about how to optimize campaigns and reduce wasted ad spend.
Streaming TV (STV) is the digital distribution of video content across devices with an Internet connection, rather than a cable signal. The digital content that’s distributed includes both live and pre-recorded content, such as TV shows, movies, news programming, sports, and more.
The audience for STV includes cord-cutters and traditional TV users, and it continues to grow. As streaming content becomes more popular with viewers, advertisers have the opportunity to reach this growing audience through video advertising on smart TVs, computers, mobile devices, gaming consoles, and other streaming devices (such as a Fire TV Stick).
STV is also called over-the-top (OTT) TV and includes content such as TV shows or livestreams watched over the Internet. The difference between OTT and CTV is that the former refers to how the content is distributed over the Internet, meaning video content that is streamed without traditional satellite or cable providers. The latter is the device used to view that content, like a gaming console or smart TV, for example.
What is connected TV advertising?
Audiences are streaming their favorite shows across a variety of devices and services, so brands should consider how to connect with these consumers where they’re watching. CTV advertising and Amazon Streaming TV advertising can help them get started.
CTV advertising is a form of digital advertising that appears within streaming content. For example, it includes ads shown alongside TV shows or livestreams viewed on streaming devices. Another example is interactive ads, which are shown to a specific audience and include actions for viewers to take. Other categories of video ads include in-stream ads or online video (OLV) ads, which run within video content on websites.
Advantages of connected TV advertising
CTV advertising can help brands reach audiences where they are already consuming content. It’s a form of digital advertising that can expand brand reach beyond shoppers in physical or online stores to audiences who are viewing content in a variety of places on websites and within videos. By considering these viewers, advertisers and vendors could further expand their brand reach.
CTV video advertising can help advertisers expand their reach beyond linear TV to the cord-cutters and cord-nevers who are streaming their entertainment instead. There are a variety of places where the ad could be shown, in content such as premium TV shows, apps that stream news videos, or Twitch livestreams via the Internet.
To get started, brands, sellers, and agencies work with content distributors, like Amazon Ads, to place their ads within streaming content. Currently, Amazon Streaming TV ads are purchased programmatically, meaning that the ads are bought and sold digitally by an automated system.
CTV metrics and measurement
CTV uses an automated system to provide advertisers with optimized ad prices and placements. One example of a pricing process for CTV programmatic advertising is based on marketing metrics such as video completion rate (VCR) and cost per completed view (CPCV). CPCV measures the price of each completed ad. The VCR of CTV ads tend to be very high, since many streaming services do not allow ads to be skipped.
Other measurements of CTV include brand reach, the scope of the audience, and brand lift, which looks at a brand’s perception and favorability. CTV ads can help improve both brand reach and brand lift by reaching the wide audience of cord-cutters and digital content consumers.
Additionally, brands that also sell products in Amazon’s store should be aware of metrics for new-to-brand customers, which measure the shopping activities of audiences after they see a CTV ad. STV ads can help increase the online visits (measured in detail page views and detail page view rate) to a brand’s product pages. By doing so, brands can help expand their reach and encourage audiences to take the next step in their shopping journeys.
STV advertising benefits
The benefits of CTV advertising include reaching a broader audience, proactively providing customers with the necessary information to take the next step in their shopping journeys rather than waiting for them to make the next move. STV video ads can include a call to action (CTA) that provides customers with information on shopping for products featured within the ads. This integrated shopping experience can help customers find what they need without disrupting their entertainment experience.
Marketing has evolved dramatically with the advent of data analytics and technology. Today, marketers have access to vast amounts of data that can provide valuable insights into customer behavior, which is crucial in creating a data-driven marketing strategy. However, without the ability to analyze and interpret this data in a timely manner, these opportunities can quickly slip away.
Speed to insight allows marketers to spot trends, identify emerging opportunities, and address issues in real time. It is the key to staying agile and responsive in an ever-evolving marketplace. In this blog, we will explore why speed to insight is crucial for a data-driven marketing strategy and how it can give businesses a competitive edge with the help of Salesforce Marketing Cloud and Mevo.
What are the Problems of Traditional Data Analysis?
Traditional data analysis faces several challenges in today’s fast-paced digital age. Firstly, traditional methods often rely on manual processes and are time-consuming. With the ever-increasing volume of data generated, it becomes difficult to analyze and derive insights efficiently using traditional techniques.
It is also limited in handling complex and unstructured data types such as text, images, and videos. This restricts the ability to gain comprehensive insights from diverse data sources. Lastly, traditional approaches may not be equipped to handle real-time data analysis, which is crucial for making timely and informed business decisions.
The Marketer’s Challenge: Speed to Insight for Better Marketing Strategy
Automation and standard procedures are crucial for marketers as they strive for speed in their decision-making processes. According to Salesforce Research, many marketers are unable to access insights quickly enough to make impactful decisions. Waiting for 6-12 months for traditional mix modeling and attribution implementations is not feasible for marketers who need fast and data-driven decisions. Legacy Solutions’ slow speed-to-value track record serves as a warning for buyers, highlighting the need for a solution to address the critical need for speed in marketing decision-making.
The challenge lies in receiving these data insights as quickly as possible. With the rapidly-changing market landscape and consumer behavior, marketers must stay agile and adapt their strategies accordingly. By having access to real-time data, marketers can make timely adjustments, optimize their campaigns, and ensure they effectively reach and engage theirtarget audience.
The Solution: Getting Actionable Insights Efficiently with Salesforce Marketing Cloud and Mevo
Manual processes and a lack of automation have long hindered legacy marketing mix and media attribution. This has led to inefficiencies, errors, and the need for constant rework. The Salesforce Marketing Cloud and Mevo combination aims to address these issues by leveraging end-to-end technology.
The Mevo App automates the ingestion of various data feeds from Salesforce Marketing Cloud Intelligence, utilizes GenAI for automated modeling, and presents the data in an easy-to-use UI. Additionally, it provides a comprehensive consumer-level outcome data set for further analysis and mining. By streamlining and automating the marketing mix and media attribution process, this combination offers improved speed and accuracy in delivering results.
Recent Salesforce customers have experienced remarkable results in terms of throughput due to the implementation of this data mastery solution. In collaboration with the Mevo App and Salesforce Marketing Cloud, a significant agency complex updated its Marketing Intelligence base data on April 8th. Two days after, the UI started displaying modeled media optimization and reallocation recommendations that produced a return on investment.
This remarkable speed sets a new record in the Martech sector, enabling marketers to swiftly adjust and act across the entire media mix in near real time. Gone are the days of waiting for months to obtain actionable insights; now, marketers can make informed decisions promptly.
What are the Best Practices for Implementing Speed to Insight in Data-Driven Marketing Strategy?
Quickly gathering and analyzing data allows marketers to make informed decisions and adapt their strategies in real time. However, achieving speed to insight requires following best practices and implementing effective strategies.
Here are some of the best practices to consider for your business:
Utilize Real-time Data Analysis
Implementing speed to insight in a data-driven marketing plan requires real-time data analysis. This involves utilizing tools and technologies like Salesforce Marketing Cloud and Mevo that can process and analyze data quickly, allowing marketers to make informed decisions and take immediate actions based on the insights gained from the data.
Automate Data Collection and Integration
Automating the collection and integration of various data sources is crucial to achieving speed to insight. This includes integrating data from different channels, such as social media, website analytics, customer relationship management (CRM) systems, and third-party data providers. By automating this process, marketers can save time and ensure they have access to up-to-date and comprehensive data for analysis.
Implement Agile Marketing Practices
Adopting agile marketing practices can greatly enhance the speed to insight with data-driven marketing strategies. This involves breaking down marketing campaigns into smaller, manageable tasks and continually testing and iterating based on insights gained from data analysis.
Foster a Data-Driven Culture
Establishing a data-driven culture within the marketing team is essential for implementing speed to insight. Hence, it involves investing in the right tools, promoting the use of data in decision-making, encouraging collaboration between data analysts and marketers, and providing training and resources to enhance data literacy among team members.
A Single Customer View (SCV): Everything You Need to Know
By Samuel Kellett
2023/11/24
The term single customer view (SCV) has been bandied about in marketing circles for over a decade. It’s something that is often referenced and is vital for a business’ marketing and sales efforts.
But mentioning a term isn’t the same as understanding it fully, which many have trouble doing with a SCV. Obtaining a complete view of the customer calls for an immense amount of data collected and organized in the right way, which isn’t an easy thing to do. And with a host of variables that can go into the process (how the data is sourced, identity resolution, the speed of profile updates, etc.) it’s hard to lock down a universal definition that sums it up in a short, simple way.
That’s why we’re diving deep into what a unified customer view is, how your business can use it, and why it is so important for ecommerce businesses to use to optimize the customer journey. Keep reading to learn everything there is to know.
Key Takeaways
A single customer view (SCV) can change the way your marketing team connects with customers.
An SCV is a database with customer profiles (containing accurate data points like their purchase history, site activity, product recommendations, etc.) for every individual person who interacts with your business.
Single customer view data is used to manage customer segmentation and marketing automation campaigns.
Your SCV allows you to optimize the customer journey and understand how to personalize marketing communications for customers.
What Is a Single Customer View?
In the age of digital commerce, there’s never been more information for marketers to use to create effective campaigns. But there’s also never been more important data points to keep track of.
With customers shopping and purchasing from multiple different devices and the universal move toward omnichannel communication, a method of cataloging all that data is required for ecommerce businesses.
At its simplest, a single customer view solves this problem — a single customer view is a database with customer profiles (containing accurate data points like their purchase history, site activity, product recommendations, etc.) for every individual person who interacts with your business.
But not all single customer views are created equal. A true single customer view is more than just a customer database that can store customer data. It needs to be scalable, flexible, and updated in real time so your marketing team can offer the best possible customer experience.
That last point is a crucial difference. SCV data is used to enable segmentation and marketing automation — if the system is out of date, your customers could be seeing the wrong messages. Despite this, many companies that claim to offer a single customer view still manage their data with a rigid framework and time-delayed updates, which can be detrimental to marketing efforts.
To fully understand the important need for a unified source of data, let’s break down the different types of data needed to make SCVs work. Then we’ll walk through the history of customer data management that led to the single customer view, the biggest benefits that businesses can get from a holistic view of their customer journey, and actionable examples of a true single customer view in use.
Collecting Customer Data for a Unified Customer View
To create a holistic, unified view of your customers, you need to be able to collect data from a range of sources, including:
Behavioral data: All the relevant interactions like clicks, preferences and filters picked, and time spent on page that a customer has with your brand. You need data on the categories and products they favor, the products they’ve added to a basket, and the searches they’ve abandoned.
Customer relationship and offline data sources: This includes all the pertinent personal information, including any data that you might need to complete a purchase or reach your customer through marketing channels. This includes data such as a postal address, telephone number, email address, social media channels, etc.
Transactional data: This encompasses all the purchases that your customer has made with your business, like products purchased, the volume of each purchase, order values, product returns, and so on.
Data on GDPR consent acquisitions: Your business is responsible for keeping track of consent management for each customer, ensuring your brand is GDPR-compliant.
Optimizing the Customer Journey With a Single Customer View
With so many different data sets and customer profiles to manage, maintaining a single customer view can be a real challenge for businesses. But there are several benefits to collecting data in a SCV.
A Centralized Place for All Your Data
First, a unified customer view helps to ensure data quality by providing a centralized data repository. Each customer’s data points are directed towards a single, interconnected profile, which makes sure you don’t have siloed data getting lost in the cracks between different marketing channels, touchpoints, and customer interactions.
This can be helpful for businesses that rely on data from multiple sources, especially with multiple channels as well as online and offline data to organize.
A Holistic View of Every Customer
A SCV offers a complete, 360-degree view of your relationship with your customers. This can help inform marketing decisions by providing a complete picture of who they are, what they want, and how they’re connections with your brand can grow with future interactions.
For modern businesses looking to personalize their marketing for their unique audience, a single customer view is crucial. It provides context and insights that can help businesses tailor marketing messages to meet the exact needs of their customers. Without a SCV, truly personalized marketing is next to impossible.
Improved Customer Service
Finally, a SCV can help improve customer service by providing a more complete view of the customer’s interaction with the company. This can help businesses identify opportunities to improve the shopping experience and customer satisfaction.
Overall, collecting data in a single customer view can be beneficial for businesses in terms of data quality, helping brands make more informed marketing decisions and offer prospective customers and loyal patrons the best customer service.
Why Real-Time Data Is Vital for a Single Customer View
To understand the need for a unified customer view and its vital relationship with up-to-the-minute data, let’s take a look at the history of data management and how the digital landscape evolved into the data-rich era we live in now.
The History of Database Management Systems
In the 1970s, when the internet was in its infancy, companies began storing their customer data using relational database management (RDBM) systems. These data warehouse systems allowed companies to store data as individual pieces of information in different fields (first name, last name, customer ID, etc.), and then access that data through SQL queries. As the popularity of computers continued to climb, this method of managing customer information became the standard and fueled better and more targeted marketing campaigns.
The internet continued to grow, and companies continued to invest in their RDBM systems. These systems could still handle the customer information being gathered, and most companies saw no need to change their methods.
That was the case until about 2008, when big data started hitting hard. Suddenly, data was the most important resource for businesses and marketers, and the sheer amount of customer information that could be gathered increased exponentially. The formerly superior RDBM systems could no longer efficiently handle all the details.
The Need for a Single Customer View
The idea of a unified customer view was born then out of necessity. Customer data was far richer and more detailed than ever before. Customers were starting to make purchases from all different directions: in-store sales transactions, purchases on their phones, buying on tablets and PCs. All that customer data was going to different places, often managed by different departments, and even using different software.
There was more and more danger of data duplication and inaccurate data being assigned to customer identities because there was no way to effectively track the customer throughout their lifecycle and communicate with them in a relevant way.
Introduction of NoSQL Databases
Non-relational (NoSQL) databases began to be seen as the best solution to the siloed customer data problem. NoSQL is built to handle large amounts of unstructured data. It’s more flexible, scalable, and faster than SQL when dealing with something like big data.
Unlike SQL, NoSQL systems can track any piece of data at any time, with no need to prepare the structure for it. New data sources can be tracked without the need to set anything up, and the system is much less likely to produce duplicate data.
In short, NoSQL was better for using the data these companies now had access to.
Unfortunately, decades had been spent building relational databases— countless personnel hours and piles of cash — and this widespread system was now showing its limitations.In addition to the previously mentioned issues of collecting more detailed data and customers that connect through multiple devices, all methods for the company to interact with customers were disconnected as well.Customer relationship management (CRM) systems were in one data silo, email management was in another, analytics in a third, and on and on.
The legacy companies that had invested early on in relational database management (Oracle, IBM, Emarsys) were now at a disadvantage. With all the time and money spent on their now out-of-date RDBM systems, they couldn’t just start over from scratch.
Instead, they tried to convert their relational databases into non-relational databases (NoSQL). This required pushing together a number of different data silos and pointing them all in the direction of the customer, hardcoding something that looks like a single customer view but doesn’t function with the same flexibility or speed.
How Did Bloomreach Solve the Single Customer View?
Rather than altering existing tech to face a new problem, Bloomreach had the opportunity to look at the problem first, then create the tech around it. As soon as a customer interacts with your company, you need to qualify them and take action in that exact moment.
This approach allowed Bloomreach to create a truly customer-centric system: an all-in-one customer data platform built around NoSQL, rather than one adapted to work around the limitations of relational datadabes.
Bloomreach Engagement allows businesses to collect all customer data relevant for activation in a single place so you can power personalization efforts across the entire customer journey.
No matter what data point you gain — whether it’s on-site data, back-end data, offline data, calculated metrics, or predicted future data — your single customer view reflects customer behavior with your brand. It’s the key to utilizing customer insights, segments, and attributes in real time and creating personalized experiences at scale.
Bloomreach Engagement brings the essential marketing tools together with this unique 360-degree customer view. You get a CRM system, email management platform, campaign building and automation capabilities, real-time predictions, analytics, and more, all available within one dashboard.
Plus, the same data that powers all your efforts is constantly updating — so fast that you can actually watch a customer profile update itself as the customer clicks around.
But it’s not just about speed. The flexibility of this customer-centric system, built around NoSQL and using an in-memory framework, creates new opportunities for communicating with customers. With a system parsing each individual action that every customer takes in real time, Bloomreach has developed powerful customer recommendations that adapt and interact with the customer, even as they browse the site.
Picture it like this: with legacy systems, you get dropped in the ocean on a scraped-together raft made from what’s floating around you. It keeps you from drowning for now, but it’s not ideal.
With Bloomreach Engagement, you’re on a boat designed for the ocean. Not only does it keep you afloat, it’s the optimal method for navigating the seas.
Finally, another advantage of an all-in-one platform is how quickly the software can be implemented. Bloomreach’s basic software can be set up and running within days. The most barebones version can be installed in minutes, as it only requires a single code integration.
Compare that to the weeks or months required to integrate all the disparate parts of a legacy company and it’s easy to see the full benefits of Bloomreach Engagement.
Understanding a Single Customer View
In the simplest sense, a single customer view is a database of customer profiles (one for every user) composed of purchase history, site activity, product recommendations, etc.
A true single customer view is a valuable resource, letting businesses utilize real-time data to enable personalized customer journeys, detailed segmentation, advanced predictive analytics, and more.
NoSQL (non-relational) databases are superior to relational databases when dealing with large sets of detailed data (i.e., big data).
Not all single customer views are equal — most legacy companies run their SCVs on converted relational databases, creating a slower, less-flexible single customer view than one built around a NoSQL database from the beginning.
Bloomreach Engagement‘s single customer view is built around NoSQL. It’s flexible, updates in real time, and combines CRM, email management, campaign building and automation, real-time predictions, analytics, and more into one main dashboard. It will allow you to personalize customer experiences for your valued consumers.
With the power of a single customer view, your marketing efforts can offer the one-to-one personalization that today’s customers crave from their favorite businesses. It’s an essential tool for any digital marketer looking to get ahead in the modern digital landscape.
For ages, achieving optimal model accuracy has been revered as the ultimate goal, with marketers relying on model fit as the benchmark for discovering the ideal equation that harmonizes with their data. However, what if there’s a deeper layer to model accuracy beyond mere numerical alignment? What if we challenge conventional wisdom and explore alternative dimensions of accuracy that transcend traditional models?
In this blog post, we will embark on a journey to reimagine model accuracy, pushing the boundaries to truly grasp the essence of marketing insights. Come along as we venture into unexplored territory, uncovering a novel perspective on accuracy that promises to transform our approach to data-driven marketing decision-making.
Key Takeaways Covered in this Post:
The Importance of Parameter Alignment in Maximizing Media Mix Effectiveness
The Importance of Testing at Scale in Marketing
The Profit-Driven Nature of Publishers and Its Implications
Overcoming External Factors: Using Marketing Response Models
Exploring the Connection Between Generative AI and Model Accuracy
The Search for Accurate Testing: Where to Go?
Unlock the Power of Accurate Testing and Optimization with Marketing Evolution
The Importance of Parameter Alignment in Maximizing Media Mix Effectiveness
In the process of optimizing the media mix, achieving proper parameter alignment is critical for obtaining accurate test outcomes. Parameter alignment entails the degree to which selected parameters align with the goals and objectives of media campaigns. By meticulously selecting and refining appropriate parameters, marketers can fine-tune their media mix, facilitating closed-loop marketing adjustments. This involves establishing parameters that accurately capture the target audience, reflect key performance indicators (KPIs), and are in line with the overarching marketing strategy. When parameters align effectively, test results become dependable and actionable, empowering marketers to make data-driven decisions and enhance the effectiveness of their media mix.
The Importance of Testing at Scale in Marketing
Conducting large-scale tests aids marketers in collecting dependable data and making well-informed decisions regarding their campaigns. Nonetheless, a hurdle marketers often encounter is attaining statistically significant results during campaign testing. Limited resources and time constraints pose challenges in testing multiple variables and thoroughly analyzing their impact. A potential remedy to this issue is A/B testing, enabling marketers to compare two campaign versions and identify the superior performer. However, A/B testing has its constraints as it only evaluates two variations at a time and may overlook the intricate nuances of consumer behavior. Consequently, conducting tests at scale becomes imperative to ensure comprehensive and precise insights for optimizing marketing strategies.
The Profit-Driven Nature of Publishers and Its Implications
Publishers typically maximize their financial returns, prioritizing revenue generation over rigorous testing and evaluation of marketing metrics. Rather than thoroughly testing and refining their marketing endeavors, publishers might lean towards strategies that yield immediate profits. However, this approach could overlook opportunities for more effective or innovative marketing tactics. Additionally, the profit-driven focus of publishers can result in unpredictable fluctuations in testing campaigns. They may hesitate to allocate resources to experimentation and swiftly abandon campaigns that do not yield immediate positive outcomes. Consequently, this hampers long-term growth potential and prevents potentially successful strategies from being uncovered.
Overcoming External Factors: Using Marketing Response Models
Marketing response models, such as generative attribution, aid marketers in gauging the influence of diverse marketing tactics and external variables on consumer behavior and response. Consequently, marketers can evaluate the efficacy of their marketing campaigns and implement necessary adjustments for enhanced outcomes. These models also facilitate an understanding of how external factors, such as economic shifts or shifts in consumer preferences, impact consumer responses.
The benefits and challenges lie in integrating non-media and environmental factors, thereby providing a comprehensive understanding alongside traditional factors like media, individual, geographical, and temporal details simultaneously.
Moreover, marketing response models assist marketers in identifying and mitigating the impact of external variables on testing campaigns. By integrating these models into their testing methodologies, marketers can gain deeper insights into how external factors shape consumer behavior and responses. This comprehension empowers them to make well-informed decisions and devise strategies to navigate external fluctuations.
Exploring the Connection Between Generative AI and Model Accuracy
Traditional models often require assistance in accurately attributing the impact of various marketing touchpoints, leading to incomplete insights and less-than-optimal decision-making. As we strive to expand the horizons of model accuracy, it becomes crucial to explore emerging technologies like generative attribution, which have the potential to enrich our understanding of marketing insights. Among these technologies, generative AI emerges as a particularly promising candidate. By harnessing the power of machine learning, generative AI can forge new and innovative marketing strategies, uncovering previously obscured patterns and insights.
But how does generative AI intersect with the concept of model accuracy? The answer lies in generative attribution.
Generative AI has the potential to revolutionize marketing attribution by analyzing vast amounts of data and identifying the genuine drivers of success. Envision a scenario where every marketing effort is precisely attributed, enabling you to optimize your strategies with unparalleled accuracy. Generative AI opens up new horizons for marketers, empowering them to unveil hidden patterns, identify unexplored opportunities, and make data-driven decisions that truly make a difference.
The Search for Accurate Testing: Where to Go?
It’s imperative for marketers to prioritize investments in precise measurement and analysis, yet discovering dependable testing methodologies can pose a challenge. Marketing response models could be one option for a viable solution. These models take into account consumer behavior, market trends, and external influences, resulting in more dependable outcomes. By leveraging such models, marketers can mitigate external variables and gain precise insights to steer marketing strategies and enhance performance.
A modern and scalable approach is to implement advanced analytics and machine learning algorithms that have the capability to sift through vast datasets, identifying patterns and correlations that may elude traditional testing methods. These tools empower marketers to unearth insights and make informed, data-driven decisions to optimize their strategies. However, it’s crucial to underscore the importance of using predictive analytics in conjunction with marketing response models to ensure accuracy.
Artificial intelligence, including generative AI, is used in advertising today to do everything from generate ad creative and copy to optimize ad budgets and predict advertising campaign performance. You can even use AI to scale up ad creative almost instantaneously or spy on your competition’s ad strategy.
In fact, modern advertising runs on AI…
Almost every ad you see online relies on AI to reach your eyes and ears in real-time. Today’s leading ad platforms, like Google Ads and Meta Ads, use AI to sell, target, and place ads micro-second by micro-second across vast ad network that span millions of digital destinations, apps, and experiences.
That means AI literally dictates who sees your ads and how much you spend to reach audiences on just about every popular ad platform out there.
(For example, Meta’s AI uses ad frequency and relevancy to determine the price and display rate of your ads on Facebook and Instagram.)
So, AI literally determines if your ads succeed or fail.
This creates a huge challenge—and a big opportunity—for advertisers.
First, the challenge…
Today’s AI-powered ad platforms give you the ability to run thousands of ad variations to micro-segmented audiences at scale. But human ad professionals aren’t equipped to take advantage of these superpowers.
We can’t keep up with all the data generated by these platforms or process it fast and well enough to move the needle in our campaigns. And we simply don’t have the resources and bandwidth to create thousands of ad variations on the fly to test each and every moment.
And it shows…
Instead of unlocking our true potential in digital advertising, we launch a handful of simple campaigns with some basic optimization. These campaigns usually underperform.
Now, here’s where the opportunity comes in:
You don’t have to try (and fail) to keep up with AI-powered ad platforms on your own. You can actually use AI to help you…keep up with AI.
Today, advertisers have access to powerful, off-the-shelf AI tools that can do things like: generate nearly unlimited creative assets, micro-target audiences, scale up campaigns and budgets, conduct thousands of tests, and even run campaigns autonomously.
So, let’s take a look at how to actually understand and adopt these tools in your own advertising.
What Is AI for Advertising?
You don’t need to know everything about AI to use it in your advertising—you just need to know these basics.
The best definition of AI comes from Demis Hassabis, founder of AI company DeepMind, which was acquired by Google. He says:
AI is the “science of making machines smart.”
That means making machines that can do intellectual tasks that humans can do. Tasks like: read, write, and understand text; see and identify objects; move around obstacles; hear and understand language; and sense the external environment.
Machines are able to do all of these things thanks to AI.
That’s because AI allows machines to learn. Unlike traditional technology, AI can actually detect patterns in data, then learn to make predictions from those patterns. It can then learn from its outcomes to make better and better predictions over time.
Once trained by humans, AI can go learn and improve on its own. The more data you give an AI system, the better it can learn and improve.
Whether you know it or not, you use AI dozens or hundreds of times each day.
Gmail and Google Docs use AI to understand what you’re typing, then predict what you want to type next. Every time you (and millions of others) use this feature, you train the AI to get better and better at predictive text.
Self-driving cars use AI to detect obstacles and drive safely. Every mile they drive gives them more data to improve their driving abilities.
Siri and Alexa use AI to understand voice commands and predict what responses make the most sense. Every time you talk to them, they learn to improve the quality of their responses.
In fact, AI isn’t just one technology. It’s an umbrella term that encompasses a range of smart technologies like these that can learn and improve on their own. Some AI technologies you might hear about are: machine learning, computer vision, natural language generation (NLG), natural language processing (NLP), deep learning, neural networks, and speech recognition. There are dozens of others, too.
You don’t need to know every term to be successful with AI. You just need to understand that AI-powered technology has the revolutionary ability to learn and improve on its own.
The ability to learn and improve on its own is why AI gives you a huge competitive advantage in advertising.
Why Do You Need AI for Advertising?
AI is an absolute must if you want to win in the new landscape of modern programmatic advertising.
Thanks to the internet and programmatic advertising, we now have the ability to reach consumers across hundreds of digital platforms. We also have the ability to target them based on hundreds and thousands of demographic and behavioral data points. We can even test hundreds or thousands of different ads to see what they respond to best.
Unfortunately, humans aren’t good at managing any of this.
Make no mistake, we’re great at being strategic and creative. This served us well in the Mad Men days of advertising, when a smart idea and clever slogan meant your ad campaign would succeed. Today, we are still integral to strategizing and creating unforgettable ads.
But we’re not good at the rest of it. We can’t analyze all the data we now have quickly enough to take action to improve campaigns. We can’t manage hundreds or thousands of ad, targeting, and budget variations to get the best results. And we certainly can’t find new customer opportunities in a sea of data.
AI can do all of these things and more. That’s why forward-thinking companies are using AI to:
Allocate advertising budgets, both across channels and audiences
Adjust advertising budgets automatically to hit KPIs
Find new advertising audiences and conversion opportunities
Build richer audience profiles
Determine and hit campaign goals
Gain insight into competitors’ ad spend, creatives, and strategies
Create ad copy
Create visual ad creative
Hyper-personalize ad messages and images to individual consumers
Hyper-personalize ad targeting
Predict ad performance before launching campaigns
And much more
Top Use Cases for AI in Advertising
There are dozens of use cases for AI in advertising—here are some of the most powerful ones.
There are literally hundreds of use cases for AI in advertising. Here are a handful of the most valuable ones that forward-thinking players in the advertising industry are using today.
Buy and Place Programmatic and Digital Ads
Today’s advertising relies on programmatic to target and deliver ads in real-time across the internet. AI is critical to the infrastructure that underlies advertising products on many platforms, though you may not always see it. Modern programmatic platforms often use AI to manage real-time ad buying, selling, and ad placement.
In fact, all digital advertising exchanges and platforms use artificial intelligence to regulate the purchase and sale of advertising in real-time. That includes programmatic exchanges, third-party networks, and advertising on platforms like Facebook, Instagram, and Snapchat.
You won’t find these exchanges, services, and platforms revealing how their AI algorithms work anytime soon though. But that’s the point: Even behind the scenes, artificial intelligence dictates how your ad spend gets used, who sees your ads, and how effective your overall campaigns are. That means if you run paid advertising, you need to understand the terminology around artificial intelligence and ask the right questions about how the AI used by ad platforms may be affecting your spend.
A very basic example of this is:
Facebook advertising, specifically ad frequency and relevance score. These two numbers are key pieces of data that Facebook’s algorithms use-without human involvement-to dictate how much you pay and how your ads are displayed.
You might think showing your ad more frequently is good. But it’s not. As Social Media Examiner puts it:
Traditional advertising research has shown that optimal ad frequency is at least three exposures within a brand purchase cycle. Traditional advertising schools say that you need to “hit” your audience with the same ad as many times as possible. However, repeat exposure on Facebook might actually hurt your campaign.
That’s because Facebook’s algorithms take into account user feedback. If you show your ad too often, and it’s rated poorly by users, your relevance score may go down. “In most cases,” says Social Media Examiner, “the higher the frequency, the lower the relevance score.”
A high relevance score means your ad is more likely to be shown to a target audience than the other ads you’re competing with. That translates into better performance and lower costs.
In modern advertising, you need to try to understand the algorithm as much as you understand your audience.
Optimize Advertising Budget and Performance
Performance optimization is one of the key use cases for AI in advertising. Machine learning algorithms are used by commercially available solutions to analyze how your ads perform across specific platforms, then offer recommendations on how to improve performance.
In some cases, these platforms may use AI to intelligently automate actions that you know you should be taking based on best practices, saving you significant time. In other cases, they may highlight performance issues you didn’t even know you had.
In the most advanced cases, AI can automatically manage ad performance and spend optimization, making decisions entirely on its own about how best to reach your advertising KPIs and recommending a fully optimized budget.
In another case, there exists at least one platform that allocates ad dollars automatically across all channels and audiences, so human beings can focus on higher-value strategic tasks, rather than manual guesswork about what works and what doesn’t.
Your ad targeting matters just as much as, if not more than, your ad copy and creative.
Thanks to platforms like Facebook, LinkedIn, Amazon, and Google, you have a seriously robust set of consumer data with which to target audiences, both through desktop and mobile advertising. But manually doing so isn’t always efficient.
AI can help here. We know of at least a few AI systems that look at your past audiences and ad performance, weigh this against your KPIs and real-time performance data coming in, then identify new audiences likely to buy from you.
Create and Manage Ads for You
AI-powered systems exist that will actually partially or fully create ads for you, based on what works best for your goals. This functionality is already present in some of the social media ad platforms, which use some intelligent automation to suggest ads you should run based on the links you’re promoting.
AI tools today excel at generating all different types of marketing language, and that includes the short, punchy copywriting that often succeeds in digital advertising. These systems leverage natural language processing (NLP) and natural language generation (NLG), two AI-powered technologies, to write ad copy that performs as well or better than human-written copy—in a fraction of the time and at scale.
We often see brands have great success having their human copywriters work hand-in-hand with AI counterparts, with each refining the other’s copy and giving each other ideas. The result is something that’s better than human or machine ad copywriters can produce on their own.
Generate Ad Variations Automatically
Using AI, you can generate ad variations automatically. That means you can take a single ad, give it to an AI tool, and it will spin that ad off into a number of different variations. Those variations could include different ad sizes and formats to adhere to different platforms. Or, they may include different designs and creative based on all the various campaign ideas you and your team have come up with.
No matter what variations you produce, one thing is constant:
You no longer need to do this type of work manually.
Generate Images and Videos for Ad Creative
AI is getting increasingly good at generating images and videos for your ads.
Popular image and video generation tools are wowing audiences online as people share stunningly creative, artistic, and photo-realistic results using off-the-shelf technology. In just a year or two, these tools have grown in sophistication by leaps and bounds. We’re quickly approaching a world where you no longer have to spend a huge amount of time, money, and energy creating breathtaking visuals that capture an audience’s attention.
Personalize Ads Based on What Motivates Consumers
With AI, you can actually highly personalize your advertisements based on what motivates consumers. AI solutions exist today that can understand the language and content that motivates different types of people, then automatically adjust your ad content to reflect those motivations.
For instance, User A may respond better to language that emphasizes discounts and value, while User B may respond better to language that gets them excited and joyful. AI can actually tell the difference, then tailor your generic advertising message in different ways to appeal to each of these users.
Predict the Effectiveness of Ads in Advance
AI’s predictive capabilities unlock a number of superpowers, including in advertising. Using AI trained on vast amounts of proprietary ad data, we can begin to predict how effective our ads will be before they even launch.
That’s because AI can extract signals from millions of successful campaigns, then apply these to new ones. In the past, we’d simply guess at what ad elements would appeal most to our target audience. Now, we have the ability to get far more predictive using AI.
Run Ad Creative and Messaging Tests at Scale
It’s likely you’ve run some type simple A/B test at some point in your advertising career. But with AI, we can do far more robust testing of ad creative and messaging—and we can do it at scale.
AI tools today allow us to test hundreds or thousands of ad copy and creative variations quickly and automatically. AI’s ability to handle data-intensive tasks at scale makes it a perfect complement to human advertisers who aren’t very good at this task.
The result?
AI can do testing at scale for us, then we can focus on using the insights from those tests to create better campaigns that resonate with more humans.
Spy on the Competition’s Ad Strategy
As an advertiser, you don’t operate in a vacuum. Even with a winning campaign, you still face stiff competition from the other advertisers trying to either reach your audience with unrelated offers or actively competing in your market. AI can give you a leg up when it comes to the competition.
AI tools exist today that allow you to essentially spy on your competitor’s ad strategy. These tools use AI to develop a full picture of which ads your competitors are running on which platforms, as well as how much they’re spending and what offers they’re promoting.
Analyzed in aggregate, this information can reveal exactly what your competitor is up to—and give you the insights you need to outmaneuver them.
Real-World Examples of AI in Advertising
AI advertising is reshaping how brands do business.
But AI’s potential in advertising isn’t just theoretical…
Forward-thinking brands are using the technology today to increase advertising productivity and performance.
Equipment Company Attracts Top Talent Using AI Advertising
HOLT CAT is a heavy equipment company that was interested in attracting talent across a specific line of business. Limited talent was delaying work for customers and slowing down new sales. HOLT CAT turned to AI to create an ad campaign that could attract talent quickly and effectively.
Using employee data and AI-powered ad platform AiAdvertising, HOLT CAT was able to personalize ad messages to appeal to top candidates for open positions. Using the tool, they were also able to get clarity on exact ROAS, and lower their cost per hire by 20%. Not to mention, the company hired 270 new people since the start of the campagin—and, on average, 40% of those hires report being influenced to join the company by the advertising.
One of World’s Largest Investment Firms Uses AI to Boost Ad Conversion Rates by 15%
Vanguard, one of the world’s largest investment firms ($7 trillion in assets under management), turned to AI language platform Persado to conduct highly personalized advertising.
The company’s Vanguard Institutional business faces a heavily regulated advertising environment, and was only able to run ads on LinkedIn. Due to regulations of what companies could and couldn’t say in ads, the financial services ad landscape lacked easy ways to stand out.
Using AI from Persado, Vanguard was able to hyper-personalize its ads and test them at scale to see exactly what approaches resonated with consumers—a level of personalization and testing impossible without AI. As a result, the company saw conversion rates go up by 15%.
Ecommerce Company Gets 3,000% Return on Ad Spend Using AI
In one high profile example we covered, an AI advertising system helped an ecommerce company achieve a 3,000% return on ad spend—while reducing costs.
Entrepreneur Naomi Simson, a host on Shark Tank Australia, owns a company called RedBalloon, which sells gifts and experiences online (think: an experience-focused Groupon). She was spending $45,000 per month on ad agencies alone to run digital advertising for the brand. She was paying over $50 to acquire a single customer at the time.
Desperation drove her to investigate every possibility. She found an AI tool for advertising called Albert. The tool uses sophisticated AI to analyze ad campaigns, then manage targeting, testing, and budgets.
The tool was able to do things humans couldn’t. In one day alone, it tested 6,500 variations of a Google text ad and learned from the experiment. Over time, the tool was so effective at learning from data to improve performance that it skyrocketed RedBalloon’s return on ad spend. At one time, the company was getting a whopping 3,000% return on ad spend. They also cut marketing costs by 25% thanks to improved efficiency.
Top AI Advertising Tools
Here are some of the top AI advertising tools to look into for smarter, scalable ad campaigns.
So, which AI tools do you actually use to get real-world results?
There are literally thousands of them to explore. Here are just a few AI advertising tools and solutions you can start testing in your own ad campaigns.
Persado
Persado uses hyper-personalized AI generated content in ads to boost conversion rates across LinkedIn ads, Facebook ads, and other types of advertising and content creation.
Thanks to applying machine learning to their vast proprietary database, Persado understands what language resonates most with different types of consumers. Their solution then automatically personalizes your standard marketing and ad copy to tailor it to the language that motivates each user most.
The result?
Highly personalized ads that create significant uplift in performance (and revenue), because you’re speaking to consumers in the language they prefer—their own.
Emotiva
What if you could use artificial intelligence to measure someone’s attention and response to ads—just by analyzing their facial expression?
Emotiva uses proprietary machine learning to accurately measure emotions and attention levels. That means you can use AI to determine which ads are most effective based on how people actually feel about them and how they actually pay attention to them. It’s like cracking a secret code that tells you precisely what works and what doesn’t.
Pathmatics
Pathmatics uses AI to bring transparency and insight to advertising.
The tool shows you exactly how your ads perform across channels and gives you competitive intelligence about how your competitors’ ads perform, fueling ideas for effective creative and placement.
Using the Pathmatics’ AI technology, you can literally see exactly what ads your competitors are running in real time and get a complete picture of their ad strategy.
Omneky
Omneky is an AI ad platform that generates personalized ad content at scale.
Using this generative AI tool, you can generate thousands of optimized ads quickly, then precisely target each one to different audiences. Omneky can even determine which creative resonates most, so you can improve your ad content moving forward. The tool works with platforms like LinkedIn, Reddit, TikTok, Youtube, Facebook, Snapchat, and Instagram.
Celtra
Celtra automatically uses AI to generate variations of your ad creative at scale.
Celtra will take a single piece of creative you’ve produced, then spin off countless variations for different platforms, formats, and styles. This makes it easy to literally generate thousands of assets automatically.
(Seriously, if you’re creating variations of ads manually, you shouldn’t be.)
OneScreen
OneScreen uses AI for out-of-home ad delivery, targeting, and measurement. The company’s machine learning algorithm automatically optimizes which content and ads get shown to audiences, taking the guesswork out of out-of-home advertising.
GumGum
GumGum uses computer vision technology to learn from images and videos across the web, then help you place ads in the exact spots consumers will see them.
AiAdvertising
AiAdvertising is an AI-powered ad agency that takes the guesswork out of getting ROI from your ads. The company uses proven tools and strategies to help you maximize both budget and performance across your ad campaigns.
In turn, marketers and advertisers get more predictable, scalable, and effective campaigns, thanks to the power of human experts combined with intelligent machines.
explored the origins and convergence of Data warehouses and Customer Data Platforms (CDPs) and how their integration has become the cornerstone of modern enterprises’ growth strategies. As we continue the series, we’ll focus on building a cross-functional team to maximize the potential of data warehouses and CDPs working in tandem. We’ll identify critical stakeholders from engineering, data, and marketing and discuss strategies for uniting them to address use cases and drive innovation in customer engagement and retention.
Part 2: The Significance of a Cross-Functional Team:
Organizations must foster collaboration across various departments to fully leverage the combined power of data warehouses and CDPs. If we break down the acronym CDP, we should always remember that the goal of working together is to focus on the Customer first. This requires fostering a customer-driven culture that leads by listening to the voice of the customer in the Data and building a robust Platform for collecting and activating their preferences so we can adapt to the customer’s needs as we engage with them.
A cross-functional team made up of members from engineering, data, and marketing is not only beneficial but crucial for ensuring the seamless integration and utilization of these technologies. Organizations can develop a holistic approach to data management and customer engagement by bringing together diverse skill sets and perspectives.
Key Stakeholders:
Engineering: The engineering team is crucial in implementing and maintaining the technical infrastructure required for data warehouses and Customer Data Platforms (CDPs). Engineering teams are also vital in implementing event capture libraries across applications, websites, and mobile platforms. These libraries standardize the capture of behavioral events on the front end before they are sent downstream to various destinations. Engineers work closely with data and marketing teams to understand the specific behavioral events these teams need to capture to meet their requirements.
Data: Data scientists and analysts form the core of data-driven organizations, tasked not only with extracting insights from extensive data in warehouses and captured by CDPs but also with empowering business users. Their job involves providing the necessary data to make informed decisions for analytics while ensuring a unified definition of the customer across operational systems such as help desks, marketing tools, and sales platforms. By employing advanced analytics like machine learning and predictive modeling, data teams reveal patterns and trends in customer behavior, informing marketing strategies and personalizing experiences. However, synchronizing all systems to operate off a single customer record definition presents a significant challenge.
Marketing: The marketing team is a key player in customer engagement and retention, leveraging insights from data warehouses and CDPs to tailor campaigns, personalize content, and enhance the customer journey across various platforms. However, when marketing tools are isolated from the data stored in warehouses, marketers face significant challenges in accessing and utilizing this data directly for complex targeting efforts. Typically, they must coordinate with data teams to extract sophisticated audience lists, a process that can slow down campaign execution and reduce agility. While CDPs assist in forming customer profiles, they often fall short in enabling more intricate targeting without further engineering support. This necessitates a collaborative effort with data teams to devise and implement data-driven strategies that effectively resonate with segmented customer groups.
Uniting Stakeholders to Address Use Cases
Organizations must foster collaboration and communication among key stakeholders to leverage data warehouses and CDPs effectively. Here are some strategies for uniting these teams
Establish clear goals and objectives:
This is a critical first step in leveraging the integration of data warehouses and Customer Data Platforms (CDPs) to their fullest potential. This involves clearly defining the specific use cases and desired outcomes that the organization aims to achieve through this integration. It’s essential to articulate what success looks like, whether it’s improved customer insights, enhanced marketing campaigns, or more personalized customer experiences.
To ensure a cohesive effort toward these goals, it’s vital that all stakeholders—from engineering and data teams to marketing and executive leadership—are not just aligned, but they are the driving force behind the objectives. This alignment includes:
A thorough understanding of each party’s role in the integration process
How each group will contribute to achieving the established goals.
Setting clear goals and objectives aids in the evaluation of the integration’s effectiveness over time. By having predefined metrics for success, organizations can measure progress, identify areas for improvement, and make informed decisions about future data strategies. This strategic approach maximizes the benefits of data warehouse and CDP integration and facilitates a culture of data-driven decision-making within the organization.
Encourage cross-functional collaboration:
Once clear goals and objectives are established, creating opportunities for engineering, data, and marketing teams to collaborate closely on projects and initiatives is crucial. By fostering a culture of data-driven decision-making, organizations can encourage all stakeholders to utilize insights from data warehouses and Customer Data Platforms (CDPs) in their everyday processes. This mindset shift promotes a more strategic approach towards leveraging data, resulting in projects and initiatives that are deeply informed by actionable insights.
To ensure these cross-functional meetings are outcome-focused and adept at overcoming blockers, organizations must prioritize setting clear objectives. Design these sessions to drive collaboration and innovation by enabling team members with varied backgrounds to contribute their unique insights and skills towards achieving specific goals and resolving any challenges that may arise.
By setting up cross-functional teams and defining specific use cases that require input from engineering, data, and marketing, companies can ensure that these teams have a focused direction to work towards together. Creating shared workspaces, either physical or digital, can further enhance this collaboration, providing a platform for continuous communication and idea exchange. This collaborative environment not only accelerates project development but also breeds innovative solutions that may not have been discovered in siloed teams.
Conclusion:
Building a cross-functional dream team is not just essential for maximizing the potential of data warehouses and CDPs in driving customer engagement and retention – it’s a gateway to a world of possibilities. It’s about maximizing the potential of data warehouses and CDPs in driving customer engagement and retention. By bringing together key stakeholders from engineering, data, and marketing, organizations cannot only develop a holistic approach to data management and customer-centricity but also pave the way for innovation and growth. Through collaboration, training, and continuous iteration, businesses can stay ahead of the curve in delivering personalized experiences and fostering long-term customer loyalty, and that’s where the real excitement lies.
In our next post, we’ll explore real-world examples of how leading companies are leveraging data warehouses and CDPs to drive growth and innovation. Stay tuned for insights and inspiration on applying these strategies to your organization.
You’ve heard the buzz about customer data platforms. You’ve heard the letters CDP bandied about. Maybe your boss asked you if your company needs a CDP. Maybe you’re a boss wondering the same thing.
Whatever questions you have about CDPs, you’ve come to the right place. We’re here to give you all the info you need on this crucial marketing technology.
Key Takeaways
Ecommerce professionals can simplify their tech stacks and easily personalize customer experiences with a customer data platform (CDP).
A CDP is a smart, user-friendly software that confidently consolidates and manages all customer data, creating a unified, enduring record of each customer’s attributes.
Unlike some other database software programs, a CDP is a tool built mainly for marketers. But having access to technical support will be essential for integration and operation concerns.
While a CDP is similar to customer relationship management (CRM) software, it is also distinctly different and a CDP with marketing automation capabilities gives marketers additional options to power ecommerce personalization.
What Is a Customer Data Platform (CDP)?
A Customer Data Platform (CDP) is a type of marketing technology software. Specifically, it’s a kind of unified customer database software: one that creates persistent, consolidated records of all your customers, their attributes, and their data. A good CDP should easily integrate with your existing data and allow for easy retrieval of the data it stores.
A CDP builds a complete picture of your customers on an individual level. It collects first-party customer data (transactional, demographic, and behavioral data) from a multitude of sources and systems, and links that information to the customer that created it.
This creates a 360-degree customer profile, also called a single customer view, which can then be used by third-party tools or built-in marketing automation toolstoexecute marketing campaigns and analyze their performance.
How to Build a Customer Data Platform
So, how do you build a CDP? For any customer data platform to function, there are three main steps involved:
Integration
First and foremost, compiling and assembling all relevant data into a single database is the primary task of any CDP. It works to solve the problem of disconnected data sets by linking all your sources and systems together in one place.
Organization
Once your data is integrated, a CDP needs quality control protocols. It needs to identify and address any missing information, remove duplicate data sets, and cross-check for accuracy so that segments and audiences can be identified.
Identity Resolution
After connecting all the dots, merging data from multiple sources and attributing it to specific customer profiles is where a customer data platform really shines. This is called data unification and it lets you build complete profiles of every individual customer, where you can build and expand on insights as they interact with your business.
What are the Values and CDP Characteristics
There are a variety of businesses offering various CDP offerings, but the best of the best provide a few essential characteristics that every marketer should look for:
Ready‑to‑Use Solution
All customer data is neatly organized and available for immediate use. Some technical resources are required to set up and maintain the CDP, but it does not require a high level of technical skill compared to a traditional data warehouse.
Single Customer View
Customer data collected and organized with a CDP is visualized through individual data profiles for each user. This 360-degree view of the customer is possible due to the fact that all customer data is located in one central location.
Customer Data Unification
Inconsistent data from multiple online and offline sources is combined to create a unified single customer view.
Accessible Data for Third Parties
Data contained within a CDP is ready for use in third-party systems focused on adtech and campaign delivery.
Who Needs a CDP
Unlike some other database software programs, a CDP is a tool built mainly for marketers. That doesn’t necessarily mean that a CDP can be operated without any technical support. To get the most out of a CDP, an organization will typically need these three roles:
Marketer: a person who understands the market and can suggest business-tailored use cases for the CDP.
IT Person: someone to help support the marketer during the implementation phase of the CDP, and can help manage tasks like using webhooks, deploying recommendations on the web, or helping with integrations. Knowledge of HTML, CSS, and Javascript is also helpful for building powerful weblayers.
Analytical Person: someone that knows how to work with data and what to track in custom dashboards, how to analyze A/B tests, and can report results to the marketing team.
These don’t have to be three separate people, but for maximum value from a CDP you’ll need all those skills.
What Is the History of Customer Data Platforms?
Managing customer data is nothing new. From handwritten filing cards and massive independent mainframes to modern cloud-based solutions, the search for the best tool has been going strong for decades. Modern computing power has significantly increased the pace of progress, allowing for more and more useful tools.
Online customer relationship management (CRM) software was introduced in the 90s and allowed companies to manage their interactions with both current and potential customers. These customer relationship management platforms could also perform customer data analysis that could help drive retention and sales. While useful, these tools had some limitations: They only managed data for registered clients and only used predefined first-party data.
Things changed in the 2000s with the rise of data management platforms (DMPs). These were aimed towards advertisers and helped with the planning and execution of media campaigns. Unlike CRMs, DMPs worked with second- and third-party data, and could segment anonymous IDs.
The customer data platform (CDP) was introduced a few years back as a reaction to the demand for an improved customer experience and omnichannel marketing initiatives. Older tools, while useful for their purposes, had created data silos. CRM data was one thing, DMP data was another — and marketers weren’t able to productively use all the data they had access to.
CDPs solved this problem by offering a unified customer view that gathers a company’s first-party data (and to some extent, second- and third-party data) into a single, comprehensive platform. A major advantage of CDPs is their ability to store extremely granular first-party data, such as events on a website.
Bloomreach Engagement: A CDP Since 2012
Bloomreach acquired Exponea in early 2021, a SaaS company that built its CDP architecture from the ground up starting in 2012. This has allowed Bloomreach to refine and improve its customer data platform, and build powerful tools on top of it to help modern businesses manage customer data and harness its utmost potential.
Thanks to years of hard work and growth, Bloomreach has an industry-leading CDP, made even more powerful by user-centric analytics, predictions, recommendations, and marketing automation layers. We call it Bloomreach Engagement.
Why Is Customer Data Important?
Today’s customers expect a lot from companies. They’ve experienced good personalized service, and if you want to keep their business, you need to provide that elevated standard. A consistent customer experience across channels, appropriate recommendations, tailored communications — for today’s customers, these are necessary.
Not many companies can actually deliver these personalized experiences. But if you can’t meet customers heightened expectations, you have a problem. If customers think you don’t care about them, they’ll take their business somewhere else — and they won’t be coming back. The fight to win those customers back will be much more difficult than getting their business in the first place.
This is why it’s so crucial to have well-maintained, accessible, and insightful customer data. And now, a good CDP makes that possible. It’s only a matter of getting the right data.
What Kind of Customer Data Does a CDP Work With?
The sheer volume and speed of digital data is hard to comprehend, and overwhelms traditional database software. A CDP, however, is purpose-built to manage this flow of data.
The most reliable way for a CDP to collect this type of data is via their own SDK, but most CDPs can also ingest data from other systems via JSON or batch ETL transfers.
The types of data a CDP can work with include:
Events: behavioral data that arises from a user’s actions in a session on a website, in an app, or on a mobile browser.
Customer Attributes: this includes names, addresses, contact details, birthdays, etc. Advanced CDPs can also store machine learning-powered predictions, such as likelihood to purchase.
Transactional Data: purchases, returns, and other info from ecommerce or POS systems.
Campaign Metrics: engagement, reach, impressions, and other metrics from campaigns.
Customer Service Data: live chat data, number and length of interactions, frequency, NPS scores, and other data from CRM systems.
What Makes Customer Data Platforms Different From DMP and CRM?
When comparing data gathering software, it’s easy to get overwhelmed. There’s a sea of similar acronyms, product descriptions that look almost the same, and lots of claims about which program best suits your needs.
You might have come across customer relationship software (CRM), CDPs, and data management platforms (DMP). While their capabilities might sound similar, it’s important to understand the distinctions between them so you can evaluate vendors and choose the right product for your business needs.
CDP vs. DMP vs. CRM: Table Explained
Holistic Customer Data: Does the platform manage customer data from all available sources (behavioral, demographic, personal, transactional, device, etc.)?
Lasting Customer Profiles: Does the platform retain data for a long period of time?
Packaged System: Can the platform exist as a ready-to-use piece of software?
Real-time Capability: Does the platform update data in real time, allowing for quick reactions to changes?
Open Platform: Is it simple to get data into the platform? Is it easy to share data from the platform with other services?
Cross-channel Personalization: Does the platform allow for the personalization of messages across different customer touchpoints?
Only Anonymized Data: A data management platform by design works with anonymized customer data. CRMs and CDPs work with identified customers, and allow for granular views of individual customers.
Identity Resolution: Does the platform allow you to connect the customer behavior of anonymous visitors with known customers after they have given their consent? Does the platform recognize customers across devices?
First-party Data Priority: Does the platform primarily deal with data from first-party sources?
Third-party Data Priority: Does the platform primarily deal with data from third-party sources?
Requires IT Support: Does day-to-day operation of the software require support from IT?
Finding the right platform is no easy task. But understanding what you can expect your CDP to do for you on a daily basis helps.
In our knowledge card, you’ll get essential know-how on CDPs and learn more about the features that your company should be looking for in its CDP.
Types of Customer Data Platforms
The customer data platform market has matured, leading to a number of different providers. These providers are differentiated based on their target market and their intended use cases. Let’s take a look at some of the differences.
A Standalone CDP vs. CDP + Marketing Automation
A key distinction among CDP vendors is whether they provide a product which is only a CDP, or a CDP plus other capabilities. It’s crucial to understand what your vendor is providing, because this distinction can cause large differences in how your business uses the CDP.
A Standalone CDP
A standalone CDP is exactly what it sounds like: a customer data platform without extra capabilities. It ingests all of a company’s first-party data and builds complete pictures of all of your customers (a single customer view). Usually, a standalone CDP will offer analytics capabilities, allowing for granular segmentations of your audience.
This data is accessible for use by other systems, but the standalone CDP cannot execute campaigns. It needs dedicated tools that can make use of the comprehensive data it collects.
For companies that already have campaign execution tools, a standalone CDP might make sense. But companies that lack those capabilities should consider a CDP + marketing automation platform.
CDP + Marketing Automation
A customer data platform coupled with marketing automation is the next generation of the CDP. It combines all the benefits of a standalone CDP with marketing campaign tools, creating a single, powerful, customer-centric marketing platform.
This gives marketers the complete toolset they need for creating incredible customer experiences by bringing together AI-driven marketing capabilities, real-time analytics, and UX optimization with a CDP.
A CDP combined with marketing automation simplifies workflows and increases productivity by collecting frequently used tools into one integrated interface. But it is also flexible and can fit into your existing tech stack — it molds around what you already have and fills gaps.
Facilitates more precise targeting and higher-quality interactions with customers
Allows for meaningful analysis of marketing initiatives across different channels
Enables agile responses to changes in the market or customer preferences
Bloomreach Engagement: The Most Versatile Platform on the Market
Bloomreach offers you the flexibility to pick and choose which features you want to use; it’s not an “all-or-nothing” solution. Although Bloomreach is a CDP + marketing automation, it can act as a standalone CDP to provide a unified source of customer data to an existing technology stack, or it can be used to handle all marketing activities using the additional layers of campaign execution and analytics.
If you already have a CDP, Bloomreach Engagement’s customer data engine can help you fully activate your data and maximize the ROI of your ecommerce marketing efforts. Our customer data engine is what makes our platform truly stand out with capabilities that go beyond the standard scope of marketing toolsets. Our powerful data core combines CDP capabilities and advanced analytics to help marketers understand the customer journey in real time and create omnichannel campaigns that drive results.
The Difference Between Enterprise-grade CDPs and Small Business CDPs
There are multiple CDP providers out there, each with differing purposes and capabilities.
A key consideration when choosing a CDP is the intended scale of the software. Is it built for small businesses? Or is it a full-fledged enterprise solution? There are some key points to remember when answering these questions:
Scalability. Enterprise-level companies need to work with massive amounts of data. That data can change quickly, and for a CDP to be useful, it needs to respond to those changes swiftly and accurately. This means that CDP architecture needs to be built for scale from the very beginning.
Flexibility. No two companies are the same. For enterprise-level companies, a plug-and-play solution will almost never be suitable for the unique needs of a company — therefore flexibility in a CDP is a must-have. A customer data platform must be able to ingest a company’s data from all its unique sources, as well as interface successfully with the platforms the company uses to function.
Integrity. A CDP needs to be trusted with the sensitive data it uses, and that can mean data for millions of customers. This requires rigorous security protocols and a dedication to privacy. These need to be core values of the CDP provider if they are to be trusted with customer data.
Bloomreach Engagement: An Enterprise-grade CDP
Bloomreach Engagement was built from the ground up as an enterprise-grade CDP. Thoughtful product planning and experience with world-class clients has made Bloomreach an industry leader in customer data platforms for the most demanding of applications.
Scalability: Bloomreach’s agile in-memory framework is scalable by design and is ready to handle massive volumes of rapidly changing data at the speeds necessary for business success.
Flexibility: Bloomreach easily adapts to the needs of enterprise-class businesses. A quick onboarding process integrates Bloomreach with existing data. A rich API makes third-party integrations smooth and painless. And native integrations with best-in-class tools means Bloomreach works with the tools you already use.
The Benefits of a Customer Data Platform (Key CDP Use Cases)
There’s a mutlitude of benefits to using a CDP, but most the types of advantages you get from a platform really boils down to the way your business wants to employ it.
And just as there are numerous benefits, there is the large number of CDP vendors on the market, which can be overwhelming. When choosing a vendor, it’s helpful to consider the use cases you hope to accomplish with a help of CDP.
While it’s important to have high-level goals (improve the customer experience, foster loyalty, etc.), you also need to know how a CDP can help you achieve those goals through lower-level use cases.
We’ve collected what we believe to be some of the most important use cases, and benefits, below.
CDP Use Cases:
1. Online to Offline Connection
Merge online and offline activities to create an accurate customer profile. Identify customers from online activities when they enter a brick and mortar store.
2. Customer Segmentation and Personalization
Segment customers according to their behavior (RFM, LTV prediction) to deliver a personalized, omnichannel experience throughout the entire customer lifecycle.
Integration with Facebook Ads, Google Ads, Google Analytics, and Doubleclick enables you to leverage insights and run powerful acquisition and retention (lookalike) campaigns outside of your website.
Create different recommendation models such as “similar products” or “customers also bought” and deliver the best shopping experience to drive engagement, increase brand loyalty, and sell, up-sell, or cross-sell your products or services.
Quickly transform the appearance of your pages. Use our smart website overlays (pop-ups) or send cart abandonment emails to increase your ROI. Create different designs and determine which variant performs better with the automatic A/B testing feature.
7. Omnichannel Automation
Guide your customers through their entire lifecycle with personalized messages sent to their preferred channel, significantly enhancing your opportunities to both acquire and keep a loyal customer.
Increase email open rates. Thanks to an AI-powered algorithm, you can determine the ideal distribution time for each user based on their email opening habits and reach them at this optimal hour.
9. Reviews Optimization
Get better and more frequent online reviews from your customers through personalized omnichannel communication and NPS survey analysis.
How Can a CDP Improve Customer Lifetime Value and Foster Customer Loyalty?
The most effective way to foster customer loyalty is to give your customers exactly what they’re looking for: a consistent, high-quality, and personalized experience. Customer data platforms make it possible to deliver these experiences at scale, personalizing the journey of each customer.
If your data is siloed, you can’t create a consistent experience for your customers. Without that central data hub, you can’t provide the omnichannel experience customers expect, which is receiving up-to-date interactions regardless of which channel the customer communicates through.
How Long Does It Take to Implement a Customer Data Platform?
The short answer? It depends. A very rough estimate would be 4-12 weeks.
The long answer? Without knowing the details of your organization and business needs, there’s no one-size-fits-all answer. There are a few things you’ll need to take into consideration:
Integration complexity — how many tools will you need to integrate with?
CDP output requirements —what will you need from the CDP?
Current state of your data — data cleansing can lead to a longer implementation
Unique business rules — are there business-specific stipulations to consider?
Identity merging needs — siloed data can lead to a single customer having multiple profiles across different platforms, and merging these profiles takes time
Level of detail in data attributes
Every business that wants the benefits of a CDP will have different requirements and goals, making it impossible to give a precise answer to how long the implementation process will take.
Nevertheless, most businesses can expect to go through a similar set of steps when implementing a CDP.
Let’s walk through the typical steps in the process of implementing a CDP.
We’ll also look at the differences between implementing a standalone CDP and CDP with built-in campaign execution and analytics capabilities.
The 3 Necessary Stages To Implementing a CDP
1. Planning Phase
All the necessary groundwork for integrating a CDP needs to be taken care of before any technical work can begin. Some necessary parts of this stage include:
Project Scope Creation: describe business goals, use cases, step-by-step integration and implementation.
Tracking Document Creation: describe customer attributes, consents, and custom events to be tracked.
2. Integration Phase
Once ouy lay the groundwork, it’s time for the technical integrations to begin. Most of the integration steps will be standard for any data collection tool, but this process will vary slightly depending on what type of CDP you choose. Let’s go over the routine integration steps first:
CDP Initialization: This is the process of connecting the CDP to your online & offline data sources, allowing you to identify your customers and analyze their actions. With Bloomreach, this is very simple: just paste a snippet of code into the header of your website. Other solutions might look quite different.
Customer IDs and Attributes Tracking: After initializing the CDP, set up customer IDs and attributes tracking for the information you’ve decided to collect. This data is helpful for segmenting your audience, triggering campaigns, sending personalized information, and more.
Events Tracking: Follow and get insight into customer behavior by tracking purchases, clicks, returns, browsing behavior, and more. Connect this to a customer’s unique identifier to build complete pictures of each customer.
Data Imports: Connect all your existing data (customer data, event data, product catalogs) to your new platform.
The steps in this importing process depend entirely on your CDP.
If you are using a Standalone CDP, you will want to integrate it with your other tools and platforms so you can make the most of its capabilities. Consider which of the below platforms you want to use. They will each need to be integrated with the CDP.
These integrations are unnecessary with a CDP + marketing automation, since analytics and automation abilities are built in.
If you are using a CDP + Marketing Automation, there’s no further integration process needed. A CDP + marketing automation platform doesn’t require any integration with analytics and execution tools, since those capabilities are native. As soon as the platform is integrated, you can begin analyzing data and executing automated marketing campaigns.
Note: If you want to keep some of your existing third-party tools, you can integrate them with Bloomreach Engagement, just like a standalone CDP.
3. Execution Phase
You’ve finished initializing your CDP, you’ve set up customer identifiers and event tracking, you’ve integrated all your tools and platforms — now you can start using your platform to power insightful analytics and marketing automation.
But again, this process will look different depending on what type of CDP you employ.
Because a standalone CDP was not built together with your analytics and execution platforms, you can expect the following:
A CDP + marketing automation offers some advantages for execution. Thanks to an all-in-one solution, marketers can expect:
One User Interface
Unified Technology
Bidirectional Data Flow
Easy Omnichannel Orchestration
Real-time Response
How to Choose the Right CDP for Your Company
After you’ve decided that a CDP is the right tool for your business, you’ve got to decide which vendor to choose. The number of possible vendors might make the choice seem overwhelming, so it’s important to have a plan for your buying process.
Each company will have different requirements and use cases, but some parts of the buying process should look the same for most businesses.
First, you need to define your use cases. How do you plan to use a CDP? Do you want a CDP with execution layers and ecommerce personalization capabilities? Or do you just need identity resolution and customer segmentation (standalone CDP)? Answering this question will help you better understand your requirements.
Once you’ve done that, you can start to match your requirements to potential vendors. Can they handle the use cases that you require? This allows you to create a short list of candidates.
Next, evaluate the vendors you’ve selected. Ask them to demonstrate their platform executing a use case that you require, instead of relying on a canned demo that only showcases the best that platform has to offer. This will show you if a potential solution is right for you or not.
Finally you can make your decision. This might involve an RFP or a pilot project to make sure that the solution you’ve chosen actually meets your needs. If it has, congratulations! You’re ready to start taking advantage of all a CDP has to offer.
