Marketing automation is the order of the day
Wanted: AI Marketers
“Zalando replaces more than 200 marketing jobs with AI”. You might well remember that striking headline from just three years ago. The news that the global fashion platform Zalando was handing control of its marketing and communications functions to an AI-based algorithm as part of a large-scale restructuring was nothing short of spectacular. According to a company press release, the aim was to achieve a more “personalised customer approach” by creating “AI driven marketing solutions”. In fact, Zalando hired around 2,000 new employees in the same year and has vigorously promoted personalisation and individualisation in marketing ever since. So what precisely was Zalando aiming at? Well, they want to increase the personal relevance of their products for their customers, develop new item recommendation systems, personalise the shopping experience and more. The fact that so many of the new hires were data analysts confirms the direction of Zalando’s strategy: innovative digital marketing based on artificial intelligence technologies. Zalando is widely regarded as a pioneer in this respect. The stock-market-listed online retailer employs around 120 researchers in machine learning alone.
In demand: Data Brokers
In recent years, digitalisation has profoundly changed the way companies of all sizes and in all industries communicate with their customers and market their products. There used to be a time when it was enough to launch a good product and get the word out with classic marketing measures. Those days are long gone. The facts that competition is more intense than ever before and there is an abundance of high-quality products and services of almost equal value are forcing marketers to develop new approaches. The task of raising awareness of innovative products and services among consumers whose basic needs are already more than satisfied has become – if you want to put it in military terms – a “war for consumers”, a competitive battle that is increasingly being fought with the “weapons” of data mining and big data.
The underlying concept: The brands with the best consumer data (age, job, hobbies, income and political affiliations) can deploy the kind of personalised marketing that is perfectly tailored to their target group’s interests and spending power. Such approaches rely on detailed consumer data, which needs to be collected, stored and evaluated in order to create profiles by linking and analysing the data material, which are then used in online marketing. The value of these data sets is now evident in the rapidly growing number of companies whose business model is based on the collection, processing, analysis and trading of data. The lucrative business of data brokers is booming because data have become a new asset class in their own right.
For Sale: Marketing Automation Tools
This new paradigm in marketing will enable brands to better understand their potential customers, implement marketing initiatives more efficiently and with a greater degree of personalisation, and to professionally measure and maximise marketing ROI. A colourful bouquet of channels and instruments (email, PR, advertising, content marketing, lead management, analytics, SEO, conversion optimisation, etc.) is available. If this is to be coordinated efficiently and effectively, there is no way around modern tools for marketing automation. The good news is that there is no need for each and every marketing team to completely reinvent the wheel; there are now plenty of companies that specialise in this area whose solutions can be implemented for the entire customer life cycle – from upselling and cross-selling to loyalty and customer retention programmes. There is undoubted potential to streamline marketing functions and workflows and to make results measurable, ultimately saving time and money and accelerating revenue growth. According to benchmark analyses, companies that use marketing automation can improve their pipeline by up to 45 per cent and generate 25 per cent more revenue. At the same time, salespeople have about 20 per cent more time to do what they do best: sell.
In Focus: Digital Marketing Leadership
Those who want to not only survive but thrive in this competitive environment will need to embark on the path to digital marketing leadership sooner rather than later. In one of our most recent studies, we at the European Real Estate Brand Institute, together with the Berlin School of Economics and Law and in cooperation with KPMG, investigated how prepared real estate companies are for this. The results are rather sobering: According to the study, marketing departments in the real estate sector are still predominantly dedicated to pure communication and tend to neglect the essential task of data generation via market research, competition monitoring and marketing controlling. Digitalisation is seen as an opportunity, but the necessary digital mindset (willingness to experiment, risk and error culture, data orientation) is on average less well developed. Budgets for digital marketing have certainly increased within the industry, but significant investment in digital state-of-the-art tools are more the exception than the rule. The study also reveals that marketers in real estate companies still have some room for improvement when it comes to “hard” digital skills (data and IT expertise, modern project management). So, there is a need to catch up. Another finding of our study is that efforts are rewarded: marketing departments with a very high Digital Marketing Leadership Index score achieve a significantly improved position on the C-level of their companies as well as a much better market performance compared to those with a low index score. As the study confirms, success is therefore within reach, both internally and externally.
With this in mind – continue to nurture your most important asset: Your brand
With branded regards
Your Harald Steiner