Smart marketers should always recognize the different touchpoints for customer engagement with their brand, products, and services. And smart marketers know that micro-segmentation and predictive behavior modeling lead to better interactions and deeper relationships.
This awesome resource by Optimove examines two main approaches to customer journey mapping, discuss their advantages and drawbacks, and describe how focusing on customer micro-segments and predictive analytics delivers greater customer coverage with more relevant and effective messaging.
And If you want to get your business or sales funnel launched fast to attract clients consistently, do check out our IGNITE Business Accelerator Program that runs weekly though September and October and Is available Live Online or In Person for DC Area Residents held at the Reston Chamber of Commerce.
One vital aspect of a marketer’s job is to understand the various points at which customers engage with a brand and its products/services, and to ensure the most successful interactions at each such opportunity.
In this eBook, we’ll delve into an alternative, and more successful, approach to managing customer journeys that will make any marketer far more effective.
How do you ensure that every customer receives the right messages at the right time via the right channel? How do you improve the customer experience, identifying the stages of greatest potential or danger?
In this article, we will show you the benefits of the modern micro-segmentation approach, considering your customers’ DNA for better engagement.
Customer Journey Mapping
The management of customer journeys is a powerful way for marketers to ensure that they are engaging their customers in the best ways possible. However, it seems that the mainstream views on the right way to do this are rather limiting, and only succeed at addressing a small portion of one’s total customer base.
While the traditional approach to managing customer journeys relies on a number of static “customer journey maps,” the fact is that customers can actually take an infinite number of different journeys – and marketers need to address all the implications of this reality.
The Traditional, Flowchart-based Approach
Most marketers – and the products that help them manage customer journeys – use a map-based, or flowchart-based, approach. This framework for customer journey mapping is one that enables marketers to plan and take advantage of customer journeys in order to maximize customer engagement and satisfaction. The best flowcharts are built using data-driven research that can express the most important stages of the most common journeys and how to best engage the customer at each one.
This pre-planned flowchart approach offers two primary advantages:
• Control and visibility – The marketer knows exactly what each customer will get at each point of the process map, and in what order, because the marketer designed it in advance.
• Easier internal communication – Because the flowchart can be shown to other people in the organization visually, it is easy to explain the plan and communicate about it with others.
However, the flowchart-based approach has some severe limitations which essentially make it unsuitable for managing the journeys of most of your customer base:
• Journeys are static – Pre-planned journeys can cover common paths that customers take, but they cannot address unplanned or unusual customer behavior
• Limited flexibility – Pre-planned journeys cannot cover every scenario, inevitably leaving many customers behind, or treated too generally, or even incorrectly.
• Relies heavily on the marketer’s inherent abilities – Only the most advanced marketers will be able to foresee and visualize the huge number of different journeys to adequately cover all bases.
• Assumes a single journey for each customer – It is difficult to manage, modify or combine multiple journey maps, even though many customers shift behavior from one path to another during their journey.
The flowchart-based approach to customer journey mapping certainly has its uses. For example, during the brief “incubation” period of new customers, the small amount of variability in most customers’ activities allows the marketer to address the majority of new customers with a handful of static journey maps.
However, during most of the customer lifecycle, there are literally an infinite number of different combinations of activities, behaviors and paths that customers can take. In order to most effectively communicate with each individual customer in the context of his/her actual activities, behaviors and preferences, the pre-planned map-based approach simply doesn’t cut it.
The Modern Micro-Segmentation Approach
A far more comprehensive approach takes a completely different track: instead of pre-planning the various journeys that a customer might take, this approach focuses on dynamically segmenting very similar customers into many small micro-segments, based on their “behavioral DNA.” This approach focuses on using customer data and predictive behavior modeling to identify the most important intervention points – and the best kinds of responses and activities for each – which the brand can utilize to maximize customer engagement and satisfaction.
Briefly, micro-segments are small groups of customers (which can even be one or two customers on any given day) who match a set of criteria defined by the marketer.
Membership in micro-segments is calculated for every customer daily, or even in realtime. These criteria may include any combination of factors, among others are:
• Longevity (length of time customer is in the database)
• Specific website/app activities/behavior
• Spending patterns (amount, frequency)
• Product preferences/affinities
• Response history to previous campaigns
• Predicted customer lifetime value and propensity to churn
Because every customer falls into at least one micro-segment at any point in time, every customer will receive the most relevant and appealing messages/ offers at that particular point in his/her journey
Visualizing the Differences in Customer Journey Mapping
No matter what customer journey maps a marketer can plan, customers will inevitably follow many different journeys of their own making.
Consider a simple, flowchart-based journey that a marketer may devise using a flowchart-based customer journey management tool:
The problem with this type of simple journey map is that many customers will not follow it exactly, rendering it somewhat (or totally) irrelevant to those customers. To make it more relevant to more customers, the marketer needs to continually add more and more nodes and branches to the map. Covering just a few more common customer journeys will quickly force even the smartest and most motivated marketer to create an exponentially more complex flowchart:
In theory, such an approach could possibly cover many of the relevant customer journeys, but in reality, this is impractical: devising, managing and evolving such a complex tree is simply impossible. This is especially true when one considers that it would be necessary to include journeys where a customer backtracks to an earlier stage, repeats stages in a loop, and so forth.
On the other hand, the micro-segmentation approach does not force the marketer to consider and define “hard-coded” journeys. Instead, the marketer need only consider – and address – the customer’s “behavioral DNA” at any point in time, without necessarily worrying about how the customer reached that point. This approach becomes even more powerful when combined with the use of predictive analytics software to send offers to customers based on what it appears they are going to do/want/buy in the near future.
Let’s visualize how this works:
The left-most column in the above matrix may contain dozens or hundreds of micro-segments.
Examples may include:
• Registered less than a week ago, no purchases, browsed handbags
• Spent more than $500 to date, but never responded to a previous campaign
• Played poker in the last week and lost, with a predicted future value greater than $200
• Predicted to churn, bought two or more ski-department products in the past
• Top 10% of all spenders to date, but made no purchase during last 60 days
The remaining columns are actual dates: on each date, customers in each microsegment will receive the highest-priority campaign catering to that particular micro-segment (unless they are still in the “duration period” of a prior campaign and thus intentionally excluded). In this approach, customers create their own unique journeys, and the marketer is always ready for them, with the best messages, offers and incentives. This approach is infinitely more flexible, and therefore infinitely more powerful.
The Ideal Customer Journey Model
At Optimove, we have mastered the micro-segmentation-based approach, allowing marketers to easily and dynamically address an infinite number of different customer journeys.
By focusing on customer micro-segments and predicted customer behavior, instead of hard-coded, pre-conceived paths, this newer, more sophisticated approach provides greater and more accurate customer coverage, with greater flexibility and adaptability.