Still Trapped in the ‘Digital’ Silo?

I don’t understand what “organic meat” is supposed to be. As opposed to what, “synthetic meat”? Last time I checked, we are still consuming body parts of dead animals, not some manufactured flesh out of factories or labs. In the future, we may be able produce just chicken breasts

I don’t understand what “organic meat” is supposed to be. As opposed to what, “synthetic meat”? Last time I checked, we are still consuming body parts of dead animals, not some manufactured flesh out of factories or labs. In the future, we may be able produce just chicken breasts — though they are not exactly mammals — out of replicators using DNA samples of really tasty breeds. When that day comes, I will pay extra for “real” chicken meat, and I won’t mind calling it “organic.” But, at the risk of sounding too much like the late George Carlin, if they mean that they simply did not inject a near-fatal dosage of chemicals into these creatures until the moment of their beheadings, let’s just call them “chemical-free” chickens.

I also get confused when I hear the word “digital marketing.” In comparison to what, “analog marketing”? That word made some sense when online marketing existed on a different plane, altogether. We all needed to differentiate old-fashioned direct marketers from the Internet-savvy ones, somehow.

However, such differentiation is meaningless now, in the days when every move we make is constantly digitized, online or offline. Many retail stores boast more than 90 percent collection rates of their customers’ transaction records, and it doesn’t stop there. Advanced marketers are making the best of collected data, and personalize every touchpoint, again, online or offline. I’ve been saying this for more than 10 years now, but let me say it again: “The future of online is offline” (refer to “The Future of Online is Offline”). And personalization? It doesn’t just belong to the online domain, but it should be about every interaction point with customers.

Because I am not an offline guy (hence, “non-digital”) just because I bought my golf driver in a store. If you trace every click I made to pick a particular brand and model, you would find that I left plenty of data trails leading to the purchase of a new golf driver. Now, am I still just an “offline” guy to you? If so, why do I get so many generic emails and banners everywhere I go in cyberspace? Some look like they are “targeted” toward me (albeit, most aren’t exactly personalized).

One may say that “digital” is just a word, and I shouldn’t be too allergic to it. I beg to differ. Words alter the way we think. Words confine us as they build walls around boundaries, imagined or real. Once the boundaries are set, it even changes the way we organize our collective activities. One distinct symptom of such a mentality is databases locked in silos, guarded by gatekeepers of fictitious domains.

Case in point: When a division is named as “Digital Marketing,” and the head of that division is called “Senior Director, Digital Marketing,” what do you think she is spending her days thinking about? The entire customer journey? I highly doubt it, even though “customer journey” is becoming another buzzword in marketing. And no, the customer journey doesn’t start from the moment when someone types in a search word, or when someone puts some items in the shopping cart to check out the price. The journey starts when the first interaction begins, online or offline, initiated by the marketer or the consumer.

Let’s put ourselves in the consumer’s shoes for a minute, and see how the journey looks — in the most simplistic way:

  • Initial Stimulus: Some marketer poked the interest, via email, direct mail, catalog, banner, social media — such as Facebook — or a message through mass media, such as TV, radio or magazines. Imagine how many different divisions and agencies got involved in this one step. No wonder proper “attribution” is so difficult. And most channels are not limited what we call “digital” or “online,” while they certainly play important roles.
  • Shopping and Browsing: While many marketers can’t even agree on what “response” means anymore, it most definitely is initiated by the consumers. In the old days, when we had no means to trace every move to the purchase, response meant “purchase.” In the digital world, we can break it down to clickthrough, pageviews, interactions, shopping cart, etc. — which must lead to some type of monetary transaction. If the consumer in question “searched” for a particular item, that would create a whole new stream of actions and reactions during shopping. Unfortunately, consumers are a lot like free-range chickens, and they may just show up at the store to browse or purchase, providing only a limited view of their actions. But such limitations will soon disappear with all these new ways to track movements in the real world.
  • Purchase: Retail marketers may simply call it “purchase.” Digital folks may call it “conversion.” Traditional direct marketers may call it “response.” In any case, this the undisputable indicator of success for any channel. But the customer journey is clearly not over yet. Too bad that many pure digital players stop short here, or even before the final conversion.
  • Repeat Purchase: Initial purchase is where good-old CRM begins. Because we get to deal with rich transaction data from that point on, dealing with paying customers requires different types of specialties for sure. But if you don’t want to treat existing customers as if they are new to the store, connections must be made through all touchpoints. That would lead to proper channel attribution and management, as well.

Now, this is undoubtedly a simplistic view of the world, but it illustrates the customer journey must be, duh, customer-centric, not brand-, division-, channel- or product-centric. I have been repeating this line throughout this series, every time I talk about database structures that are ready for personalization, attribution or any other analytical activities regarding customers and prospects. But I am repeating this line for a different reason here.

I have been consulting with all kinds of companies in various industries for a long time. And I have encountered numerous companies that are well-suited for top-level analytical talents, at times supported by “analytics-ready” databases. Even with such ideal settings, however, large and small organizations often struggle to perform true customer-centric marketing or tracking. Now, why is that?

Ironically, it’s because most companies that claim to be involved in advanced analytics are set up to deal with only one channel at a time. Furthermore, each channel-oriented division is structured to be rewarded based on the success of the assigned channel. That type of organizational structure inevitably promotes tunnel-vision, as if, “Hey, I just have to worry about this one channel.” As long as 1 million emails are blasted without a hiccup this week, who cares about “other” types of customer experiences? Isn’t there another division that worries about such geeky stuff? The typical comment? “I heard that there are guys who build segmentations, or something like that.” Unfortunately, such a mentality is the worst type of roadblock on the way to true customer-centric marketing.

General Stanley McChrystal’s new book “Team of Teams” illustrates the danger of such silos in this unquestionably complex world, where no one — whether our customer or our enemy — is just one-dimensional anymore. In a complex environment, the good performance of one team (or division) may not matter that much for the big picture. A Special Forces team may be really good at catching the target, but that won’t matter if interrogation doesn’t yield useful information in time due to a series of minor glitches, or worse — a valuable piece of intel was not even picked up by the ops team during the mission as the goal was not properly shared with them, because they did not “need to know.” Battles are won, but wars are lost that way in modern days.

Most hierarchical organizations designed for simplistic division of labor in 20th century-fashion aren’t well-suited for dealing with an ever-changing, complex world. When the marketing team structure is geared toward channels, it becomes that much harder for any one team member to see the whole customer journey, let alone care for it. And yet, we casually use words like “digital marketing,” as if that is a cool thing, and create teams, compensation plans and supporting technologies around it.

I’m sure channel-based targeting is better than no targeting at all, but what are we going to do when we all get to have wearable devices in the near future? Are we going to create a new division of marketing just to handle those, like many companies created “mobile” or “social media” divisions? Do you really believe that the overall demand goes up with the invention of new channels and devices? I’m sorry, but I wouldn’t buy more golf drivers just because there are new channels through which I can purchase them. I am still the same person who happens to have access to new channels. Why did the dot.com bubble burst? Because the new channel — at that time, the Internet itself — didn’t really create more demand like every investor hoped.

I dare to say that we the marketers must break free from that channel-oriented mindset — pronto. Let’s forget about inadequate data structure for a moment here, and let’s change the way we think about the customer journey first. Sometimes changes in mindsets lead to changes in technologies.

Too many marketing organizations are acting as if they are shooting a movie without a director. A movie is not just the sum of a script, acting, camerawork and post-production. Likewise, true customer-centric marketing, where every message is personalized via every touchpoint, is not some random amalgamation of email, banner, search, direct mail, social media, mass media and in-store marketing. If the focus of analytics is limited to digital (i.e., online) channels, for instance, that would be like judging a marathon based on the first five miles.

All the marketing activities should be carefully orchestrated following the customer journey from the customer’s point of view. Now, if the benefits of personalized marketing are still in dispute, I will understand inaction of marketers. Not everyone is a believer of 1-to-1 marketing, after all. Otherwise, let’s not pretend that we care for personalized messages when, in reality, marketing forces are assigned to one channel at a time. The demand for personalized messages is ever-greater, precisely because there are too many channels that each consumer has to face every day. This is not some buzzword that will disappear after a few years.

In the end, this “digital” marketing is not about toolsets, technologies or data platforms. It’s about a customer-centric mindset, regardless of channels. It’s of course necessary to deal with each channel somewhat separately, because they all call for special knowledge. There’s no way for anyone to understand every piece of technology on a professional level.

However, the teams must learn to work together better. Much better. Databases, analytics, targeting technologies, channel specialists, channel-specific delivery mechanisms and messaging strategy must all work in sync as a seamless unit with a common goal. Each specialist must expand horizons to have some understanding of other team members’ functions and challenges. Like the way a good orchestra works. Conversely, if an orchestra worked the way most marketing teams do, it would sound like a third-grade band equipped with world-class instruments. That would be a real shame, wouldn’t it?

Author: Stephen H. Yu

Stephen H. Yu is a world-class database marketer. He has a proven track record in comprehensive strategic planning and tactical execution, effectively bridging the gap between the marketing and technology world with a balanced view obtained from more than 30 years of experience in best practices of database marketing. Currently, Yu is president and chief consultant at Willow Data Strategy. Previously, he was the head of analytics and insights at eClerx, and VP, Data Strategy & Analytics at Infogroup. Prior to that, Yu was the founding CTO of I-Behavior Inc., which pioneered the use of SKU-level behavioral data. “As a long-time data player with plenty of battle experiences, I would like to share my thoughts and knowledge that I obtained from being a bridge person between the marketing world and the technology world. In the end, data and analytics are just tools for decision-makers; let’s think about what we should be (or shouldn’t be) doing with them first. And the tools must be wielded properly to meet the goals, so let me share some useful tricks in database design, data refinement process and analytics.” Reach him at stephen.yu@willowdatastrategy.com.

2 thoughts on “Still Trapped in the ‘Digital’ Silo?”

  1. Splendid piece, Stephen, one of your best.

    The silo mentality is everywhere: defensively “it’s not my problem”; offensively, “that’s my territory, (and my bonus) stay clear!”.

    I was at a pousada on the coast of Brazil recently where every employee shared both in an even division of the tips and the profit. Seldom have I seen such happy teamwork and seldom have I had such great service.

    If there were a way of blasting the silos away, we should all certainly become anti-silo anarchists.

    Ultimately, what we are looking for is the maximum ROMI, Return On the Marketing Investment. By everyone sharing equally in the rewards as the ROMI improved, perhaps each would become less protective of his own fiefdom and more willing to look outwards rather than inwards.

Leave a Reply to Stephen Yu Cancel reply

Your email address will not be published. Required fields are marked *