Figuring out how to spend marketing dollars wisely is a challenge for any business, and it's especially tough for smaller companies. We see examples every day of cheap marketing that works, from an unlikely source: spammers.
Get past the methods and look at the messages and you'll see that some spammers have a good grasp of marketing concepts. Yes, they resort to volume mailing from compromised systems to get their messages sent out, but they also compose those messages in a way that entices their targets to click through.
Whether it's done though ad-hoc analysis or formal use of analytic tools, they know the hot topics and hot buttons, which is something legitimate businesses can learn from.
Adam Froman, CEO of Toronto-based research and interactive marketing firm Delvinia Interactive, says that for small businesses faced with rapid change and tight budgets, the key is to find reasonably priced tools that can give fast answers but are still grounded in sound methodology.
Fortunately, he adds, there are many such tools available. But the first requirement is neither tools nor money, it's data. You've got to have something to analyze.
"Typically the place small businesses focus initially to leverage analytics and data mining is in two places," says Lori Bieda, executive lead of customer intelligence for analytics tool vendor SAS Americas. First, they develop a better understanding of their business, then they use analytics on that information to help identify opportunities.
Spammers tend to use the news as input, and they analyze that data as carefully as a business looks at its customers. Knowing what's trending and carefully crafting spam messages to appeal to people's curiosity is one way a spammer gets messages read. Similarly, a small business can use its internally collected customer and sales data to prime the pump, crafting messages to appeal to the particular interests and needs of customers.
Montreal-based Beyond the Rack (BTR) is a private shopping club for women and men who want designer brand apparel and accessories at discount prices. It offers timed sales events to its almost three million members, so it needs to know as much about its customers and their preferences as possible.
"Our entire business is highly data focused," says CEO Yona Shtern. "We leverage detailed monthly cohort analysis to drive our online marketing decisions."
BTR uses a combination of homegrown and commercial products, including SQL Server, Oracle, Microsoft Access and even the humble Excel spreadsheet, to look at things such as the source of new members, and their subsequent purchasing patterns. Data helps the company quantify the value of its various recruiting sources and aim its marketing budget where it will do the most good.
Ms. Bieda says the drive for useful information is typically a four-step process:
- Build a customer database, including basic information such as products and services they have purchased and how they’re used, and channels of interaction.
- Use analytics tools to glean insights from the data. This does not need to be expensive – there are free or low cost tools available, as well as companies that will do the work for you until you get comfortable with the techniques. A shortage of data is no excuse for neglecting analyses. You can purchase demographic data that, when married with information such as customer postal codes, provides a start at giving you useful customer profiles.
- Decide on the best actions to take based on the analyses. “This is all about campaigns and automating marketing processes for small businesses,” Ms Bieda says. “This helps small businesses that, for example, promote their products online or at trade shows, to create effective follow-up campaigns to capitalize on those leads. On-demand analytics can also be used to create simple offers that small businesses use to cross-sell existing customers on the next best offer. Amazon is a master at this.
- Measure results and refine techniques accordingly. Ms Bieda says that after small businesses test marketing campaigns, they can use basic analytic tools to measure results, automate future campaigns, and expand learning. Spammers watch click-throughs like hawks so they can determine what did and didn't work and make corrections, and that's a spammer technique other businesses should emulate.
The Canadian Opera Company (COC) is Mr. Froman's poster child for smart use of analytics. The company was struggling to understand the digital habits and behaviour of its subscriber base, with little information to go on. But it did have postal codes, and those provided the starting point – when overlayed on Delvinia's demographically segmented databases – for a subscriber profile that it has continued to build on. And it turns out opera customers are more digitally inclined than most.
Delvinia has just helped refresh the COC website, first using Google Analytics to review site usage since its last revamp two years ago. The analysis showed what people click on, what information they access, and how they navigate the site. Delvinia then surveyed the opera company's subscribers and its user community for their input and combined it with the analytics results to come up with a more usable site.
"The digital age is great for collecting data," Mr. Froman says. "But you have to interpret it properly."
For example, with the help of analytics he was able to determine how and where people were leaving the COC site, revealing dysfunctional or confusing areas that were fixed in the refresh.
The COC also took advantage of the new knowledge on its tech-savvy customers and designed and produced a live online production that included not only the actual opera, but background material from those who worked on it and the ability for viewers to interact with fellow opera lovers.
Sentiment analysis is another area in which analytics can help. It tells companies how consumers view their brands. It's not new, but according to Tessie Ting, co-founder of Toronto-based social media research firm Conversition Strategies, techniques have evolved with the emergence of social networking, as researchers harvest Twitter feeds, Facebook posts and forum comments to get spontaneous input from consumers.
"Market researchers have been doing it for years through surveys, using a sample of respondents," she says. "The difference is we are now using unfiltered, unprompted comments from consumers about products and services they buy and use in their daily lives. However, instead of a few hundred, we deal with millions of data. These comments are collected and edited to ensure quality and validity and then scored for sentiment, negative or positive in a continuum."
Sentiment scores can be combined with other research to help companies adjust their strategies and address areas most in need of attention. If a brand has a great reputation for everything but customer service, it can work on that weakness before it irreparably damages the brand.
"Everything you do collects data," Mr. Froman points out. "Companies want insights."
Even spammers. And that, he says, is where analytics come in.
Special to The Globe and Mail