Consumers are increasingly taking the shopping process into their own hands - and typically outside of the view of your highly-skilled retail sales staff. And these wily and well-informed consumers control when, how and to whom they identify themselves. In the automotive industry alone, Jupiter Research estimates that 22 percent of all retail sales in 2004 were generated from the Web - a number that is forecasted to grow. Being able to predict and relevantly interact with these consumers is paramount.
"Most retail organizations employ a form of lead management system to identify, manage and track these leads," says Jack Bowen, chief marketing officer at global software and lead management consulting firm Urban Science. A world-class process begins with lead collection and distribution; continues with lead scoring, drives differentiated lead treatment; uses robust data analytics and metrics; and concludes by tracking retailers' adoption of performance standards. Smart Business recently caught up with Bowen in his Detroit office.
You started the lead process with lead collection and distribution. What exactly does that involve?
At some point, shoppers or buyers will identify themselves in a retail environment - either through the Web or at point of purchase. That introduction is accompanied by personal data, and/or session information. A savvy marketer will compile all of the various leads and corresponding information into a single tool to be used by the retailer. Typically, the marketing organization is provided with the information directly through its Web site or other collection points (call centers, events). However, secondary industries have grown to develop, aggregate and sell what are called third-party leads to retailers and marketers - edmunds.com is a well-known example of an aggregator in the auto industry.
Just aggregating and distributing leads is a sign of a strong operation. By taking it one step further, though, a marketer can add even more value.
How do you know if the lead is going to buy?
Separating shoppers from buyers will give marketers a considerable edge. We do this through lead scoring, a process in which the leads are ranked on their chance of closing, thus resulting in a purchase. To get the score, the lead data is compared to demographic data and owner information. For example, clients can benefit from certain data mining tools that calibrate close-rate models for use in real-time online lead scoring.
Marketers and retailers need to understand that lead scoring is not an end, it is a means. The fact that the marketer knows the score of a lead doesn't increase its likelihood of closing, but the score arms them with the knowledge to determine how that lead should be treated.
So if lead scoring doesn't increase the chance of a lead closing, what does?
Consumers are more likely to buy if they're treated according to their expectations. To determine these treatments, scored leads are separated into segments based on their rank. Then we assign a treatment to each segment. If the lead ranks as a 90 - which has a high chance of buying - then we would recommend an aggressive approach. Essentially, the treatment depends on the score.
Through this "treatment determination" process, a marketer prioritizes his resources against the leads with the greatest likelihood to close. This doesn't mean leads with lower scores should be ignored, it means that the marketer must find an effective way to treat that lead in order to raise its likelihood of closing.
Once the leads are assigned their treatments, everything is sent on to the retailers, who have the task of following up.
How do you know what impact the system is having?
The data accrued throughout the lead management process is a gold mine. It can be used to further refine and target a company's marketing strategy, but some analysis must be conducted before a marketer can reap the rewards. The most important is a disposition and close rate analysis, in which a lead is followed throughout the entire process, ending with whether a purchase was made.
This data can be analyzed by retailer, by geography, by a certain chronological period, by certain demographics; any combination possible. Then, certain patterns begin to emerge and the marketer will see which treatments actually work. Reporting that information back to the marketing organization is what keeps everyone on the same page.
How can you maximize retailer engagement?
Once a marketer begins to understand what is causing leads to close, and which of his treatments are working, then he should establish a series of behavioral standards for his retailers. For example, if it's discovered that leads have a higher chance of closing if they are followed up by the retailer within an hour, a marketer might want to set an hour as a standard follow-up time. By monitoring the system, he can see if his retailers are meeting his expectations.
JACK BOWEN is chief marketing officer for Urban Science in Detroit. Reach him at (800) 321-6900.