According to Dennis Becker of Mobivity (a provider of personalized customer engagement solutions to drive customer frequency and spend), brands need to understand where their money is going versus blindly buying services.
This is where Return on Marketing Spend (RoMS) comes in. Becker explains to Digital Journal role in which data plays in RoMS and why RoMS will be the sea-change of traditional agencies to seek out and work with digital tech companies.
Digital Journal: How important is a digital marketing strategy for businesses?
Dennis Becker: In recent years we have noticed an important pivot from “is your strategy digital first, or digital only.” We believe that the marketplace is transitioning from focusing on if you should use digital, to how are you using digital to drive increasing returns on marketing spend, efficiently. It’s no longer viewed as a channel, and rightly so. It’s an integral way that businesses engage and transact with their customers.
DJ: Does this include multi-channel experiences?
Becker: Absolutely. The best channel a brand can engage is the channel that their customers are on, and almost every restaurant brand will find that a growing percentage of their customers are digital natives, people who’ve grown up with smartphones, computers and Internet and don’t distinguish between digital and other channels. That being said, it’s essential for brands to be able to attribute increases in customer spend and frequency across channels to determine which channels are driving increased guest frequency for higher returns on marketing spend.
DJ: What key marketing trends can we expect in 2020?
Becker:Expect to see more brands analyzing their Return on Marketing Spend (ROMS) across all of their multichannel media investment. With technology, such as AI, enabling restaurant and other retail brands to make sense of their millions of sales transactions from thousands of retail points of sale and promotion management solutions that enable tracking of offers and restricting sharing of offer codes, retailers are going to be in a better position than ever to get a handle on what channels are really driving customer spend and frequency.
In addition, we believe that when they start to analyze which channels are driving sales at the lowest costs, they’ll start to be more thoughtful and intelligent about where they invest their substantial media budgets. Expect brands to begin to invest more resources into their owned channels, including mobile messaging, loyalty programs and apps. Not only will the find these channels driving the greatest ROMS, they also enable brands to engage directly with their customers while building and owning their own valuable data about their customers to drive more intelligent discounting and promotions as well as media mix allocation.
DJ: What is the significance of Return on Marketing Spend?
Becker:Typically, brands focus on attributable sales by channel to determine how to break out their marketing budgets. With a multi-channel focus, it can be increasingly difficult to know which marketing dollar drove a specific customer purchase. Mobivity employs AI to help restaurant brands and other retailers around the world to make sense of the firehose of transaction and redemption data they get from having millions of customers transact at thousands of points of sale. This not only allows them accurately analyze which channels motivate customers to spend more and visit more frequently, but also which channels drive the highest Returns on Marketing Spend, enabling them to intelligently optimize their promotions and media budgets. It truly is game-changing for the highly competitive spaces of QSR/Fast Casual and other retailers.
DJ: Will brands become more targeted in terms of how and when they market?
Becker:Absolutely, because the alternative is quickly becoming no longer an option. More precise targeting and higher personalization opportunities will drive the next wave of effective marketing for restaurant and retail brands. It all starts with understanding the ROMS across all of their channels and have a mechanism in place to personalize discounting strategize to achieve the highest guest frequency and spend at the lowest possible cost. E-commerce retailers, like Amazon, have mastered this capability. Although to be fair, they generally have one or a just a few points of purchase and the ability to collect first-party data from every customer. Multi-unit restaurants and retailers haven’t had this ability. Until now.
DJ: How important will data collection and analytics be for firms?
Becker:Look, retailers have plenty of data. The problem is it’s been like drinking from a firehose, when you collect millions of transactions from thousands of locations every week. But they are starting to realize that data, especially at the UPC and transactional level, is rapidly becoming “the new oil.” Technology and data science is finally leveling the playing field for multichannel retailers. The data of how customers interact with brands and the learnings behind what drives a store visit or sale is what will train and power the AI and machine learning algorithms that provide brands with opportunities to grow in more intelligent and efficient ways, driving higher guest spend and frequency at the lowest possible cost, generating better Returns on Marketing Spend than ever before.