Data drives everything we do here at Summit, and it is no different when it comes to our approach to planning online marketing through peak. In this article we will share some practical tips and techniques that will help maximize the return on investment (ROI) of your online marketing budget and improve business profitability through peak. Here are some simple steps that can support businesses, big and small alike.
Plan budgets based on performance data
At the core of great customer planning is budget allocation; knowing how much to spend on your online marketing and when, for maximum business impact. We have integrated a number of data sources and developed a simple three phased approach to budget planning at a category level:
1. Annually – use category profitability to help you get the most bang for your marketing buck and category demand to help you identify where there is most trade to be won throughout the year. The example below highlights how category A is considerably more reliant on peak, with 50% of the annual budget allocated October – December, compared to only 30% in category B.
This graph compares the allocation of online marketing budget over the course of a year, between a number of different categories – profitability and demand in category A is more driven by the peak period therefore a greater % of marketing budget has been allocated.
2. By week – once you know how much budget you should invest in peak we recommend using sales and cost of sale data to break the budget down by week delivering the best ROI. As illustrated below, the investment into Black Friday week is more than three times as high as any other week.
This graph highlights how much budget should be spent in the example category by month and by week as well as cumulatively through the period.
3. By event – eg Black Friday – use customer behaviour, such as visits and device conversion, from similar past events to predict how customers will behave. As shown below, device usage changes from; mobile in the morning, desktop during the working day and tablet in the evening.
This graph highlights the % of visits to the site by device by hour.
Budget planning recommendations:
- Consider peak in your annual plans and make sure you allocate the right amount of money by category. peak will be more important to some categories than others so we recommend bespoke annual budget plans for each.
- Use sales and marketing costs to plan budget by month, week and day, so you have budget to take advantage of the opportunities ahead of you – squeezing every drop of ROI over the period.
- Use in day behaviour to win the key days and events in the calendar, detailed day plans will help you stand out and be a reason for customers to return later in the season.
Build customer plans using behavioural data
On the face of it customer planning seems mighty challenging as behaviour can appear erratic and unpredictable. Are customers on a research journey or a purchase journey? Are they buying for themselves or for others? Is this the main present or a stocking filler?
Behavioural data sources can help you identify what really matters to customers and when;
- Visits and sales – used to identify when customers are in the market, ready to buy
- Clicks in the journey – highlights when customers are deep in the research phase and want product information
- Items per basket – shows whether customers are thinking about gifting for others or buying for themselves
- Average order value – helps identify sales of big ticket items and stocking fillers
- Conversion rate – shows when the last minute rush starts
- Category time to buy – changes when in peak, with customers taking fewer days to buy from first click. Supports accurate campaign optimisation, reporting and forecasting
By knowing the value of these key behavioural data points we have been able to identify five customer periods through peak:
This illustration highlights how a number of behavioural data points can be combined to build a clear customer plan for the peak period.
- Early shoppers: customers who start the research phase as early as possible
What to do – help them find the right product information.
- Peak planners: customers willing to put more items in their basket as they take advantage of full stock availability and early season offers
What to do – make it easy to find the latest toys and gadgets
- Black Friday deal hunter: customers buying big ticket items with high average order values
What to do – highlight unbeatable prices on items such as consoles and bikes
- Christmas gifters: Customers more willing to convert on smaller gifting items such as health and beauty
What to do – take the pain away from the last minute rush and give these customers a stress free experience
- Sale savvy: Customers buying in sale are opportunistic; they require fewer clicks to be convinced
What to do – grab their attention with products such as fitness and electricals to get their new year off to a great start
Customer planning recommendations:
- Pull out key behavioural data sources for the time period and identify changes in your customers behaviour and motivations
- Break peak down into a number of distinct ‘customer phases’ with a mission, a behaviour and the categories most in demand
- Design a marketing plan for each ‘customer phase’ that help customers get what they want, with a great experience
The process of planning with data doesn’t have to be arduous or technical. Here at Summit, we have developed an approach to peak that can be replicated by any online retailer and is proven to drive improved ROI and performance with customers. Download our quick guide when you sit down to plan for peak 2016, or alternatively contact us for more information.
Martin Corcoran – Head of Insight Consulting
T: 078 7090 6871 E: [email protected]