In this white paper, we describe three broad trends in Customer Relationship Management (CRM) which are behind the recent interest in real time marketing. The term real time marketing is used today in many different ways. We describe one way to think of real time marketing that reflects how data is gathered and decisions are made about customers and prospects. From this perspective, customers' activities generate events which are used to update profiles about them in real time. The updated customer profiles are then used as the basis for targeting and to provide personalized, real time interactions across channels.
We begin by describing three trends.
Trend 1 - Multiple Channels. The first trend is that over the past thirty years, the number of marketing channels has grown much faster than our ability to view customers from an integrated perspective across channels. During the last few years, this phenonmenon has only gotten worse.
During the eighties, direct mail was used to reach customers and prospects. The data consisted of exposures and responses to campaigns. Simple segmentation was sometimes used.
The nineties saw an explosion of data, but not necessarily a corresponding increase in our understanding of it. Retail data about transactions and purchases began to be captured, and a greater and richer variety of third party data became available. Two important channels were added call centers and customer service centers.
The current decade has seen three important new channels emerge. Email marketing, web sites, and mobile devices are now all becoming standard. This in turn has led to a further explosion of data.
| Decade | Data Source | Customer Touch Point | Time Scale |
|---|---|---|---|
| 80's | campaign data | catalog | by the next campaign |
| 90's | third party, purchases, & transaction data | retail, call centers | by the next call |
| 00's | click stream, e-marketing & e-commerce data | web estate, email, wireless | by the next click |
Table 1. During the past three decades, additional channels have been added, additional data has become available, and the time scale in which customers expectations need to be met has shortened.
Trend 2 - New Time Scales. The second trend is that during the past thirty years as the number of touch points has steadily increased, the time scales on which they operate has shrunk dramatically.
In the eighties, few companies sent out more than a few catalogs a year. The time between catalogs was measured in weeks to months, and data was fresh if it was updated by the "next campaign."
In the nineties, as retail, call centers and customer service centers were supported, the relevant time scale became by the "next customer customer contact," which was usually measured in days to weeks.
In the current decade, with web sites and email, the relevant time scale is by the "next click," whether the click is from a visit to a web site, in response to an email, or an internal update by a customer service representative at a call center.
Trend 3 - Higher Customer Expectations. During this same period, there has been a steady increase in customers' expectations. If a customer makes a large purchase on a web site and then calls the catalog the next week to place a follow up order, the customer expects the customer service representative to be aware of the previous order. If a customer has trouble completing an order on a web site and follows up with a phone call, the customer expects the customer service representative to be able to help.
What these three trends mean as a whole, is that today compared to just a few years ago, there is a lot more data traveling across a lot more channels in a much shorter time, and that customers have much higher expectations about what should be done with it. Real time marketing can be thought of as one way of dealing with this situation. It provides a mechanism, based upon events and profiles, so that customers and prospects receive offers and individualized attention which reflects their most recent interactions. We now describe events and profiles which are at the basis of real time marketing.
What is an event? An event is any information about a customer or prospect. Each channel generates events. Newer channels such as web sites and email tend to generate more events and events which may only be seconds apart.
What is a profile? A profile is simply any information about a customer or prospect. Profiles can contain basic information about customers and prospects, including their names, addresses, and most recent purchases. In addition profiles contain information that is used for targeting, such as a customer's segment, lifetime value, and the dollar amount of recent purchases.
It is not necessary that the information used for targeting contain any information that is personally identifying information or PII. This is important. It means that real time marketing can be done with profiles, sometimes called targeting profiles, which do not contain any PII.
What is the CRM or event loop? The basic process behind real time marketing consists of the following steps:
These steps are called the event loop and form the basis for real time marketing.
What is real time marketing? Real time marketing is simply marketing which is always based upon the most current information about customers and prospects, that is, on the most current events, regardless of touch point.
Historically, each channel has used separated CRM systems and these have not generally been integrated. Recently, some CRM systems have supported multi-channel functionality, but require that all contacts with customers make use of their system.
By supporting events and profiles, an enterprise can have one view of its customers and prospects, regardless of the channel and independent of the CRM system or systems being deployed. This is what the customer expects.
For more information, please contact Open Data Partners www.opendatagroup.com.
Robert Grossman is the President of Open Data Partners, which provides consulting services, outsourced data services, and litigation support services related to data. He is also the Director of the Laboratory for Advanced Computing at the University of Illinos at Chicago, which develops internet-based technologies. He has written over 100 papers and edited four books in data mining, direct marketing, e-business, high performance computing, and related areas. He has a Ph.D. from Princeton and a A.B. from Harvard.
This article is copyrighted by Robert L. Grossman, 2002.