Tag: CAC

Posted on

Marketing Strategies: integrating AI/NLP technologies into conversational engagement

gold and white analog watch

Jardine Cycle & Carriage is a well-known brand in Singapore and Malaysia with a reputation that has been built up over the past 125 years and now serving Singapore, Malaysia Indonesia, Thailand, Vietnam, and Myanmar. As a premier automotive dealership on the Malayan peninsula, they have operated since 1899 offering iconic automotive brands like Mercedes-Benz, Mitsubishi, Chrysler, Jaguar, Kia, and Citroën brands.

As the tides of technology continue to reshape industries, JC&C, with its clientele spanning the affluent and high-affluent segments, has seemingly embarked on a new transformative journey by forging an innovative strategic partnership with ada to integrate AI/NLP technologies and “redefine the automotive experience”.

Malaysian multinational Telecomms conglomerate Axiata’s ada (analytics, data, advertising), is headquartered in Singapore and Malaysia, and partners with leading brands across Asia to drive their digital & data maturity and achieve their business goals. In sharp contrast to JC&C, they’re a relatively young company vested by Axiata in 2014 and supported by renowned regional brands like Mitsui, Sumitomo Corporation and SoftBank Group. They bill themselves as a leader in digital transformation across Asia focused on automated customer service solutions and data-driven marketing strategies. Serving 12 markets, working with a composable CDP that makes use of best in class components and leveraging tools like Databricks, ada complements its unique digital expertise with deep proprietary data of 375 Million consumers served by over fourteen hundred employees associated with just as many commercial clients. ada have been recipients of numerous awards like the Effie Awards with Gold, Silver, and Bronze accolades for innovative campaigns in multiple markets.

In an article from The Edge Malaysia Weekly, dated July 8, 2019, Axiata Group’s digital advertising arm, ada, unveiled a plan to revolutionize the advertising industry through the strategic use of tech data and innovative business models.

At the time, led by CEO Srinivas Gattamneni, ada aimed to cater to the evolving landscape of digital consumers by providing digital marketing, data science, and platform-building solutions. Backed by Axiata Digital, ada aspired to become the agency of the future, blending data science, consulting, and agency services.

The substantial investments and ambitious goals aimed to disrupt business models and focus on value-driven approaches to shift industry norms. Central to ada’s digital strategy is emphasis on data-driven advertising, leveraging deep consumer insights to deliver targeted and impactful campaigns. By harnessing data from various sources and investing in technology, ada sought to maximize advertising ROI and drive business outcomes for clients. ada anticipated the seismic shift towards programmatic and automated ad buying, albeit with the concomitant challenges of bad actors using technologies like bots to drive activity and commit fraud.

Despite being a young player in the industry, ada’s apparent rapid growth and innovative approach continue to signal its potential to disrupt the marketing landscape as a whole and shape digital futures in marketing.

Their collaboration with JC&C of course will not come without challenges, amongst them those related to data privacy and security as well as compliance with regulatory requirements. Transparency in what data is used and how it is used is essential in maintaining customer trust and so the integration of AI requires careful planning and ethical considerations.

As Cycle & Carriage and ADA continue on their collaborative journey, the fruits of their labor appear to becoming manifest. From enhanced customer engagement to streamlined operations, the impact of AI integration is apparently palpable, Cycle & Carriage leverages ADA’s expertise to implement AI-powered chatbots, personalized marketing campaigns, and data-driven insights, driving tangible business outcomes and setting a new standard for digital transformation in the automotive industry.

Not every organization can be a JC&C nor will they be able to afford a relationship with an agency like ada. It might not even be that relevant given they are a regionally focused player, however consider the following.

Let’s be clear, Pretectum CMDM is not a part of the tech stack in use in this example, we present it, because it demonstrates some great possibilities for any organization. What we would like you to consider, is how any composable CDP that incorporates something like the Pretectum Customer Master Data Management (CMDM) system, could be leveraged to support more personalized engagement with customers through various touch points in marketing, sales, service, and support channels for any organization.

By centralizing and standardizing customer data across departments and systems, Pretectum CMDM enables businesses to have a holistic view of each customer.

This approach allows for better organizational decision-making, enhanced customer interactions, and the delivery of more personalized customer experiences. More specifically using Pretectum CMDM could involve the following strategies to enhance customer engagement:

  • Personalized Marketing Campaigns: By using the centralized repository of customer data in Pretectum CMDM, you can create targeted and personalized marketing campaigns tailored to individual customer preferences and behaviors.
  • AI-Powered Chatbots: Implementing AI-powered chatbots integrated with CMDM data can provide real-time assistance and personalized responses to customer queries across various channels.
  • Data-Driven Insights: Use the comprehensive customer data stored in CMDM to derive valuable insights that can drive strategic decision-making in marketing, sales, and service operations.
  • Enhanced Customer Service: Ensure that all parts of the organization have access to up-to-date, verified, and consented, reliable customer information from the CMDM system, improving customer service interactions and overall satisfaction.
  • Streamlined Operations: By centralizing and synchronizing customer data, organizations can streamline operations, leading to more efficient processes in marketing, sales, and service functions.

By adopting these kinds of strategies with a CMDM platform like the Pretectum CMDM, organizations can enhance their customer engagement efforts across multiple touch points, ultimately leading to improved customer relationships, increased brand loyalty, and better business outcomes.

Posted on

Good customer analytics starts with good data

man in a brown blazer carrying shopping bags while using his cell phone

The Importance of Comprehensive and Correct Customer Data

Consumer data helps companies a great deal to improve nearly every aspect of their business. With proper data analytics and a data-driven marketing approach, brands are able to gain actionable customer insights, generate quality leads and increase customer loyalty, among other things.

According to a survey done by Harvard Business Review, 58% of enterprises have experienced a hike in customer retention and loyalty by making the right use of customer analytics. 

Elevating the quality of your customer data can benefit your business in a number of ways and here are a few thoughts on aspects you might want to consider:

The enhanced customer experience (CX): There is evidence to suggest that businesses that are customer-centric tend to be way ahead of their competitors. To follow a customer-driven approach, you need access to comprehensive customer-specific data. The gathered and enhanced customer data can be useful in being able to understanding and predicting customer behaviour which in turn can be used to improve customer experience through customized offerings, messaging, interaction and services. Without the data, it is hard to provide anything more than a generic message or offer which may not resonate.

Precise targeting and lead generation accompanied with a lower CAC: Effective marketing can translate into a shorter sales cycle, greater sales volume, or appeal to a wider customer audience. For a marketing campaign to be effective though, it needs to have good data to support the estimation of the potential target market or market segment. Having good customer data opens up the opportunity to segment based on customer demographics, showing where the customers are, their age group, their gender, education, likely income, potential disposable income, and other critical traits that you might consider for targeting.

Drawing customers in for multiple engagements or appealing to new customers is made more likely with comprehensive and correct customer data that allow your business to focus on customer-characteristic-based marketing strategies to generate quality leads.

According to Thomas Griffin Co-Founder and President of OptinMonster in a piece on Forbes – customer acquisition cost (CAC) can be lowered if you have the right targeted message aimed at the right audience, whether it be PPC or contact-based marketing campaigns. To have that message, you need to know something about your audience, particularly if you’re running contact-based campaigns

Brand Improvement: Customer feedback and reviews form an important part of customer data but for this kind of data to be really useful, it needs to be tied to the best possible customer master data. To run effective customer review and survey data analytics you want to be able to paint a complete picture of respondents. Survey submissions that support uncovering the strengths and weaknesses of your brand and offerings can be effective in isolation by conveying a sense of general measures of customer satisfaction but they ultimately reduce their usefulness without reference to customer data.

Survey responses may impair your ability to derive maximum value from responses by being unable to tie them back to the respondent’s lifetime customer value. The CLV model informs you on whether the commenting customers are actually high-value customers or one-off customers who bought on a deal or opportunistically and that may never buy from you again.

Tools matter: we’ve talked about tools before, principally tools like your Customer Data Platform (CDP) and Customer Relationship Management (CRM) solution where you store large amounts of data and consumer profiles. You may even have an ERP (Enterprise Resource Planning) system or a CDM (Customer Data Management) platform. Your business may in fact have all of these., but the question of whether they are fit for purpose or suitable for all the jobs that your business needs to undertake needs to be carefully considered.

We’ve observed that there is a lot of enthusiasm about using AI for data collection accompanied by scraping tools and social media trawlers and transaction aggregators to increase the volume of data collected.  What we’ve also observed is that some of the fundamentals of knowing your customer remain missing or incomplete. This is partially due to poor data collection, collation, and assessment processes but it is also a function of the nature of the tools. Some tools are better suited to transaction processing, interaction or engagement, etc. Very few of the tools that we’ve mentioned, are suited to mastery of the digital customer and if they are, it is typically in the service of a specific application objective.

Customer data is presently experiencing a revolution in the business world. Data for every kind of business, from B2B sales and eCommerce brands to digital content creators, service and hospitality, healthcare and financial services, and a number of others too. All depend on gaining a source of appropriate and correct customer data to increase their leads, opportunities, and ultimately business., Knowing the audience, creating personalized marketing strategies, generating quality leads, and reaching a wider audience is the brass ring that leads to business success.

There is no exaggeration in saying that in today’s world of digital advancement, your company cannot survive without the best possible proper and relevant customer data. We believe you can achieve that with a Customer Master Data Management (CMDM) platform like that offered by Pretectum.

Contact us today for more information.

Posted on

Unraveling Customer Acquisition Cost (CAC): A Comprehensive Analysis

woman holding magnetic card

In business, every decision carries weight and consequence, and there’s a particular metric that holds a special place in the minds of those driving growth and success, namely Customer Acquisition Cost, or CAC for short.

You might think it’s pennies or as much as several thousand dollars but it’s not just a number; it’s a focused lens on the very heart of a company’s growth strategy, revealing how customers are won and the resources expended to do so.

A boardroom of eager-minded executives and marketing mavens will have CAC, as a metric that commands their attention and sparks a great debate. For any business owner or executive, it’s a barometer of potential profitability, offering insights into the efficiency of the investment in acquiring new customers. It’s not just ad spend or payments per click!

Yes, it’s a number, but one that can make or break a business strategy, one that guides decisions on where to allocate resources and which avenues to pursue business growth.

Dependent on every marketing channel, campaign, and sales, service, and support strategy, it needs a search for ways to reduce acquisition costs while maximizing returns and customer retention. CAC is a balancing act, a delicate dance between reaching new customers and managing expenses, all to drive growth and expand market share.

The fascination with CAC extends far beyond the boardroom, however, beyond the marketing department., beyond financial analysis and investors. Stakeholders from every corner like to keep a close watch on this metric, too, as they assess the health and viability of the company’s business model. A growing CAC relative to customer lifetime value (CLV) sends alarm bells ringing, signaling potential trouble on the horizon; a warning sign that prompts deeper scrutiny and closer examination, as stakeholders weigh the risks and rewards of backing a negative trend.

On the front lines of customer engagement, the customer success and retention teams are keenly aware of the implications of CAC; understanding that acquiring a new customer is just the beginning of the journey; they recognize that retaining that customer and maximizing their lifetime value is where the real magic happens.

Armed with insights from CAC analysis, those charged with retention and customer growth, develop strategies to nurture customer relationships, enhance satisfaction, and drive long-term loyalty. It’s a holistic approach that recognizes the interconnectedness of acquisition and retention, all with the ultimate goal of ensuring sustainable growth and profitability.

Don’t dismiss the competition either, they lurk in the shadows, watching and waiting for opportunity. They also focus on CAC, monitoring one another with a keen eye. A lower CAC from a rival can set off a flurry of activity, as competitors scramble to reassess their strategies and find ways to gain a competitive edge.

Considering the science

At the heart of any business lies the quest to acquire and retain customers profitably. CAC serves as the compass guiding this journey, offering insights into the resources expended to bring new customers into the fold. By quantifying the total expenditure on marketing and sales efforts directed toward customer acquisition, CAC provides a tangible measure of efficiency and effectiveness. CAC enables businesses to gauge the return on investment (ROI) of their acquisition strategies, facilitating informed decision-making and resource allocation.

CAC’s significance amplifies when viewed in conjunction with Customer Lifetime Value (CLV) or LTV. While CAC measures the upfront investment required to acquire a customer, CLV delineates the long-term value derived from that customer over their entire relationship with the company. The ratio of LTV to CAC serves as a barometer of sustainability, indicating whether the acquisition costs are justified by the subsequent revenue generated. Favorable LTV : CAC ratios signify healthy customer acquisition strategies, where lifetime value outweighs acquisition costs, yielding greater margin and associative growth.

Calculating CAC requires consideration of various methodologies, ranging from the simplest method to the more intricate. A rudimentary approach involves dividing total marketing and sales expenses by the number of new customers acquired within a specific period. This is straightforward, but as a basic method, it may overlook crucial expenses, presenting an incomplete picture.

Conversely, the complex method incorporates a wide range of additional costs, including salaries, software expenditures, professional services, and overheads. This more comprehensive evaluation provides a more accurate depiction of the true cost of customer acquisition, facilitating informed decision-making and strategic planning but may overload the CAC with costs that are not necessarily directly attributable.

Beyond the surface-level expenses, a thorough analysis of CAC necessitates delving into the myriad associated costs that contribute to the acquisition process. From advertising expenditures and sales team salaries to technology investments and production costs, each component plays a pivotal role in shaping the overall CAC.

The role of CMDM in CAC

Factoring in advanced customer data management platforms, such as Pretectum’s CMDM, ushers in the opportunity for data-driven decision-making, enabling businesses to harness customer data effectively in optimizing customer acquisition and retention strategies.

The insights garnered from CAC analysis transcend mere numerical values, permeating into the strategic fabric of businesses. Armed with a comprehensive understanding of acquisition costs, companies can fine-tune their marketing channels, campaigns, and sales strategies to maximize efficiency and effectiveness. By identifying the most cost-effective channels and optimizing conversion pathways, businesses can minimize their overall CAC.

Targeting the right customer profiles through in-depth analysis enables companies to tailor their marketing efforts toward audiences most likely to convert, thereby minimizing acquisition costs. Prioritizing organic channels and inbound marketing techniques not only reduces CAC but also fosters authentic engagement and brand loyalty. Analyzing the customer journey also provides invaluable insights into potential bottlenecks or inefficiencies, allowing for targeted interventions to streamline the acquisition process. Simplifying conversion pathways and optimizing website user experience can significantly enhance conversion rates while lowering overall acquisition costs.

The integration of CAC with other key business metrics further enriches its strategic relevance. By juxtaposing CAC with metrics such as customer retention rate, average revenue per user (ARPU), and churn rate, businesses gain a holistic perspective of their customer acquisition efforts. Moreover, tracking CAC trends over time enables companies to identify patterns, iterate on strategies, and adapt to evolving market dynamics effectively. This iterative approach fosters continuous improvement, ensuring that acquisition efforts remain aligned with overarching business objectives.

As long as there are customers to win and markets to conquer, the story of CAC will continue to captivate and intrigue, driving businesses forward on their quest for growth and success.