• December 2, 2008
  • By Jessica Tsai, Assistant Editor, CRM magazine

Trigger Marketing Hits the Bull's-Eye

You may think you're familiar with all the different kinds of marketing out there, but have you heard of "trigger" marketing? Whether you have or not, there's a chance the technique, which relies on customer behavior, is worth a shot -- perhaps now more than ever. In fact, according to a recent report released by Aberdeen Group, leading companies who have already successfully implemented (and have seen quantifiable results from) trigger marketing, and the research firm believes that this recession is the perfect time for the average and below-average companies to invest in the approach.

The report "Trigger Marketing: Timing is Everything" defines a trigger as "a device that automatically executes a response to a certain event." According to Jeff Zabin, research fellow of customer management practices at Aberdeen and author of the report, in a marketing context the method produces campaigns that are "more precise [and] lower volume," helping to minimize the risk of marketing fatigue. "It's really migrating from a product-centered view of the world to one that is more customer-centric," he says.

"Everyone talks about 'the Holy Grail of marketing,' " Zabin adds -- the right time, right channel, right offer, right person. "It's almost a cliché at this point, but there's some truth to it." Of those four factors, he believes timing is perhaps the most important, one which the trigger strategy carefully examines: whether you will get a better response to your campaign today, tomorrow, or a month from now. The report also suggests that companies happen to be feeling pain at precisely the points that trigger marketing addresses -- 42 percent ranked as their number-one pressure the challenge to "increase return on marketing investment," followed by "increase customer acquisition" at 34 percent.

Aberdeen categorizes the top 20 percent of companies as Best-in-Class (BIC); the middle 50 percent fall into the Industry Average segment, and the bottom 30 percent are Laggards. The BIC firms reap the benefits of:

  • precision marketing effectiveness;
  • cross-sell and upsell effectiveness; and
  • customer profitability.

The other differences are quite stark, with 83 percent of BIC companies reporting the use of transactional behavioral triggers, compared to 55 percent of Industry Average firms and 42 percent of Laggards, according to the report. Moreover, 35 percent of the BIC firms indicate that their trigger marketing efforts were "extremely successful," whereas only 8 percent of Industry Average and 4 percent of Laggards said the same.

Despite the apparent benefits of trigger marketing, Zabin admits that it's certainly "easier said than done." Industry Average and Laggard companies lack the necessary degree of sophistication in terms of advanced analytics, predictive modeling, or even measuring their various channels, touch points, and campaign performance.

"I've found that, to a large extent, the BIC [firms] already have not only the technology in place and the analytics to support trigger marketing, whether that's in-house or outsourced to a third party, but they're also organized around trigger marketing," Zabin says. "[Best-in-Class companies] have business processes in place [and] the organizational resources to support it."

Zabin says that, to date, trigger marketing primarily has been adopted by financial service institutions and insurance companies, but the approach has spread into other verticals such as consumer packaged goods and retail. "I think the challenge is [that] while every company is sitting on a mountain of consumer data, that data isn't necessarily actionable, and it does take fairly sophisticated technology and analytical capabilities," he says. A common misperception he encourages marketers to avoid is confusing segmentation with trigger marketing. Trigger marketing, he says, comes down to optimization -- and the effort requires a well-rounded view not just of your own business objectives, but of the consumer as well.

In other words, companies shouldn't expect to simply buy a solution, flip a switch, and expect trigger marketing to work its magic. Software, Zabin says, "is the easy part." The next step, far more complicated, involves assembling the right team of people -- Ph.Ds, statisticians, mathematicians -- capable of writing the rules and algorithms that tie into an overall campaign management system.

Not that Zabin considers the obstacles insurmountable. In fact, he says, it's not even as daunting as it seems. "It's not a long process if you're outsourcing to a vendor who is well versed in doing this," he says, estimating that, once the data is available, a basic trigger marketing solution can be up and running in a matter of weeks. By Zabin's estimate, there are about 40 to 50 vendors capable of filling that role, including:

  • marketing solutions providers Conclusive Marketing and Portrait Software (both sponsors of this report);
  • enterprise marketing management provider Unica;
  • data warehousing and analytics provider Teradata; and
  • database marketing companies such as Experian, Axciom, Harte-Hanks (Aberdeen's parent company), and Epsilon.

While instant channels such as email and mobile come most readily to mind in terms of trigger marketing, Zabin says that just about any channel can be employed in trigger marketing. If someone buys a DVD player, for instance, send them a direct-mail coupon for 20 percent off a DVD in two weeks. If they call the contact center with a product complaint, follow up a couple of days later with a callback to ensure the problem was resolved.

A complimentary copy of the report can be accessed here (registration required).

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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