Download Drive Greater Marketing Impact By Leveraging Online

A Forrester Consulting
Thought Leadership Paper
Commissioned By SAP
Drive Greater Marketing
Impact By Leveraging
Online Communities
September 2016
1
Marketers Struggle To Understand
Customers And Provide Them With
Relevant Content
Technology has enabled customers to access endless
amounts of information at the touch of a button. Marketers
today must work harder than ever to gain and maintain the
attention of customers, or risk losing business to the
competition who can more readily meet those needs. As a
result, companies are trying to better leverage customer
data to help gain a richer understanding of their prospective
customers. In this study, we found that marketers’ primary
focus in leveraging customer data is to improve
segmentation and targeting and help create more
personalized offers. However, we also found that
approximately 50% of companies are struggling to reach the
right buyers and understand their customers. Why?
Because they don’t have the right data or don’t know how to
use it properly. Key challenges include (see Figure 1):
›
Lack of information about new buyers prior to making a
purchase.
›
Inability to utilize customer data effectively.
›
Inability to reach the right buyers.
›
Inability to reach buyers in appropriate channels.
CHALLENGES WITH PROVIDING THE RIGHT CONTENT
Businesses routinely struggle to provide content and
messaging that is relevant and useful to the recipient. When
we asked businesses what types of content they considered
to be most valuable in supporting online purchases, usergenerated content (including buyer ratings and reviews and
Q&A discussion threads) topped the list. Businesses
recognize the impact that peer-generated content can have
in supporting purchase decisions by boosting customer
confidence or providing answers to simple questions, yet
user-generated content is what businesses have the
hardest time connecting prospects to. When we asked
businesses what types of content are the most challenging
to connect to prospects, we found that Q&A threads and
buyers’ ratings and reviews topped the list. Both were
ranked as a top five challenge by 66% of respondents.
The inability to provide the right content to prospects (at the
right time) is detrimental to businesses. It ultimately means
that prospects find the message irrelevant and end up going
elsewhere to find the information they need and make their
purchases. Our survey supports these findings, as nearly
two-thirds of marketers reported that the greatest dropout of
online prospects occurs during the product discovery,
exploration, and buy phases of the buyer journey. These
prepurchase phases are the critical moments for marketers
to deliver relevant messages and content that will drive
purchases, but failure to properly connect prospects with the
content they need results in missed sales opportunities.
FIGURE 1
Businesses Don’t Have The Right Data To Support Key Marketing Priorities
“Where does your company place the greatest priority when it comes
to leveraging customer data for marketing?”
Priorities for
leveraging customer
data for marketing
Segmentation and
targeting
77% ranked as a
top three priority
Creating
personalized offers
63% ranked as a
top three priority
Primary challenges in supporting prospects’
online purchasing journeys
Lack of information
about new buyers prior
59%
to making a purchase
Inability to utilize
55%
customer data
effectively
Inability to reach
the right buyers
Inability to reach
buyers in appropriate
channels
48%
45%
Base: 279 marketing and eCommerce professionals involved with online marketing strategies in NA, EMEA, APAC, and LATAM
Source: A commissioned study conducted by Forrester Consulting on behalf of SAP, August 2016
66%
of companies
see the highest
prospect
dropout during
the prepurchase
phases
2
purchase journey. As well, as prospects move from one
phase to the next, businesses need to facilitate that
transition (i.e., from exploration to buy) in order to capitalize
on the opportunity and reduce the risk of dropout.
CHALLENGES WITH MAKING BETTER USE OF DATA
Companies are making efforts to increase the effectiveness
of marketing by improving their ability to work with data and
by gaining richer, more meaningful insights into customer
preferences. Forty-six percent of companies surveyed are
looking to leverage a greater variety of consumer data to
include more about preferences and desires rather than just
traditional demographics. As part of this, 47% are also
encouraging greater post-purchase engagement with
customers through communities and social channels as an
avenue to better understand their customers (see Figure 2).
FIGURE 2
Companies Are Trying To Improve Use Of
Customer Data To Better Support Marketing
›
›
“In what ways is your company trying to increase
the effectiveness of marketing to better
support customers in their journey?”
(Select all that apply)
Improving analytics capabilities
to better leverage existing
data streams
Creating tighter integration between
different data sources to get a more
complete view of the customer
Encouraging greater post-purchase
engagement with customers through
communities and social channels
Leveraging a greater variety of
customer data to include more about
customers preferences and desires
55%
Lack of user-generated content to help with product
exploration. Marketers can leverage data to create
content that exactly matches the expressed needs of
customers. However, as mentioned earlier, customers
see greater value in user (peer)-generated content versus
content created by the company trying to sell them
something. Facilitating opportunities to create and access
user-generated content is significant for driving greater
marketing success.
50%
47%
46%
Base: 279 marketing and eCommerce professionals involved with online
marketing strategies in NA, EMEA, APAC, and LATAM
Source: A commissioned study conducted by Forrester Consulting on
behalf of SAP, August 2016
Despite these increased efforts to better use data to support
marketing, marketers are still seeing challenges with
supporting online prospects to make purchase decisions.
The challenges include:
›
Lack of opportunity for buyers to engage directly with
brands to answer questions. Marketers can use data to
segment and create personalized content, but relying on
that data can’t replace the value of direct customer
interactions. Both businesses and prospects can benefit
from direct engagements. Businesses can gain more
knowledge and data about their customers, along with an
understanding of what product-specific questions or
concerns they might have, and prospects receive the
product information they need to feel more confident in
their purchases.
Inability to track and connect users across their
purchase life cycle. Understanding where prospects are
in their purchase journey and being able to guide them
toward making a purchase is critical for marketing. It is
impossible to optimize marketing efforts and support
prospects without knowledge of where they are in their
Marketers Are Not Capitalizing On
The Value Of Online Communities
Marketers believe that online communities can offer a viable
solution to deal with the many challenges they face in
having the right information about consumers, reaching
them at the right time, and providing access to usergenerated content:
›
›
›
Fifty-nine percent of companies believe that customers
are using community-generated content when making
purchases.
Seventy-seven percent of marketers agree that
community-generated content accelerates buying
decisions.
Seventy-one percent agree that individuals who utilize
community-generated content are more likely to make a
purchase those than those who don’t.
3
Notwithstanding the identified advantages that communities
offer, only 49% of companies are currently using branded
online communities to interactively engage with customers
and prospects online. The most common channels of
engagement are branded social media pages and online
videos, events, and contests. While each of those forms of
engagement has its own merit, none yield the specific
customer insights and data that businesses need for better
segmentation, targeting, and personalization of marketing.
The data that companies currently collect primarily comes
from customer profiles, social media, individual
questionnaires, etc., but only 40% collect data from online
engagement platforms where they can get the deeper
understanding of customer preferences, intent, and opinions
(see Figure 3). Consequently, 39% of companies don’t
believe they are fully harnessing the potential of communitygenerated content in supporting prospects thought their
purchase journey (both pre- and post-purchase).
Marketers Aim To Improve Use and
Awareness Of Communities To Drive
Greater Engagement
Businesses recognize the limitations they face with
supporting prospects online. However, they also recognize
the value that communities can play in supporting prospects
on their buyer journey. We found businesses are prioritizing
the following as they plan to improve online engagement
with prospects to support better online purchasing
experiences (see Figure 4):
FIGURE 3
Companies Most Commonly Leverage Traditional
Customer Demographic Data
“What methods/channels does your organization
use to collect customer data?”
(Top five options shown)
Customer database/profiles
65%
Social media
57%
Surveys/questionnaires
51%
Loyalty programs
45%
Online engagement platforms/
tools (i.e., communities)
40%
Base: 279 marketing and eCommerce professionals involved with online
marketing strategies in NA, EMEA, APAC, and LATAM
Source: A commissioned study conducted by Forrester Consulting on
behalf of SAP, August 2016
›
Increasing awareness of branded community and
social channels. Many companies have communities,
but far fewer are able to leverage them effectively.
Increasing awareness of communities will help draw more
prospects to those sites to look for support and
information, which benefits both the consumer and the
business. As awareness improves, 46% of companies are
planning to increase activity on communities to stimulate a
higher volume of buyer discussions. This will give
FIGURE 4
Communities Play A Key Role In Improving Online Engagement
“What is your company doing, or looking to do, to improve online engagement with prospects to
support them in their customer journeys (i.e., pre- and post-purchase)?”
Already doing this/in process of doing this
Planning to do this
Increase awareness of branded community
and social channels
49%
41%
Have tighter integration of content between
communities, product catalogs, and commerce sites
48%
42%
Invest in technology to better connect the exploration
and purchasing phases of the buyer journey
49%
Enable easier filtering and searching of product-related
content on community and commerce sites
Deepen the level of engagement with
your buyers via communities
Increase activity on branded communities to
stimulate a higher volume of buyer discussions
46%
44%
38%
39%
39%
42%
46%
Base: 279 marketing and eCommerce professionals involved with online marketing strategies in NA, EMEA, APAC, and LATAM
Source: A commissioned study conducted by Forrester Consulting on behalf of SAP, August 2016
4
businesses a deeper understanding of their customers as
well as facilitate the creation of more user-generated
content to support new prospects in their purchase journey.
›
›
Creating tighter integration of content between
communities, marketing, product catalogs, and
commerce sites. Once prospects or customers find a
community site, they must be able to find the content they
need. Businesses are striving to enable easier filtering
and searching of product-related content on community
and commerce sites. This helps ensure prospects have
the information they need, regardless of their stage in the
purchase journey. From a marketing perspective,
leveraging customer information from the various sources
can lead to improved segmentation, targeting, and
personalization of marketing content.
Investing in technology to better connect the
exploration and buy phases of the buyer journey.
Prospects spend a great deal of time looking for
information prior to making a purchase, which can often
involve jumping around between multiple websites,
communities, and branded sites to find answers. By
enabling the opportunity to seamlessly connect between
the exploration and purchase phases, businesses can
capitalize on prospects who are ready to make a
purchase, rather than just serving up information only to
have prospects make a purchase elsewhere.
THE VALUE OF INCREASED BRANDED COMMUNITY
ENGAGEMENT
Communities provide a more in-depth level of content and
engagement that isn’t found with social media or short-lived
promotional events. Discussion boards, Q&A sessions, and
opportunities for open dialogue with prospects and
customers yield a much richer understanding of what
matters most to these customers. This information is
priceless in building an effective marketing strategy. When
we asked companies to what degree insight into their
customers’ attitudes and opinions informs marketing efforts,
89% of companies said that customer data plays an
important role in their marketing strategy — and 51% said it
plays a critical role.
Companies recognize this interconnection between
fostering improved community interactions and driving
better customer engagement. As community content grows
(much of it user-generated), it provides a great wealth of
information to help prospects find the answers they need to
make a purchase. This is why 87% of companies consider
customer communities to be important for driving better
customer engagements (see Figure 5). When asked about
the specific benefits and opportunities that communities can
provide, marketers identified the following top benefits:
FIGURE 5
Communities Can Help Provide Customer Data To Help Shape Marketing Strategy
“To what degree does insight into your
customers’ attitudes and opinions inform
your marketing efforts?”
It is taken into
consideration
with other
customer data
38%
“How important are online customer
communities as they relate to driving
better customer engagement?”
It plays a
critical role
in our overall
marketing
strategy
51%
Base: 279 marketing and eCommerce professionals involved with online marketing strategies in NA, EMEA, APAC, and LATAM
Source: A commissioned study conducted by Forrester Consulting on behalf of SAP, August 2016
Important/
Very Important
87%
5
›
›
›
Gain a deeper understanding of customers to help
craft more resonant marketing messages. Marketers
can target the right people by using basic demographics
such as age, gender, and income, but communities
enable businesses to learn about customer preferences,
perceptions, and attitudes. This can ultimately help drive
more successful marketing by providing the right targeting
and personalization of marketing messages.
“What are the key benefits you hope to achieve by
creating more effective marketing content?”
Drive longer-term loyalty
with customers
Create richer connections with customers through
more continuous interactions. Communities offer the
ability for more personal interactions with customers via
tools such as live chat, discussion boards, and Q&As.
These interactions are valuable for both prepurchase and
post-purchase activities, as they bring customers to
branded sites to find the answers they need to support
purchases, or help guide product usage or
troubleshooting after purchase.
Leverage user-generated content to create more
impactful marketing messages. User-generated content
is a core benefit of communities for consumers, but savvy
marketers can repurpose that content to support
marketing campaigns. Customers trust and value peergenerated content, and by infusing it into marketing
messages, it can add greater credibility.
As the benefits of communities are realized, businesses
gain a deeper understanding of consumers and can create
richer online engagements and more relevant marketing
messages. This will produce lasting benefits for businesses,
with the top expected outcomes to be (see Figure 6):
›
FIGURE 6
Businesses Anticipate Distinct Business Benefits
By Making Marketing More Effective
Driving longer-term loyalty with customers. A positive
online purchase experience goes a long way in winning a
customer’s trust and loyalty. Consumers are more likely to
return for answers to subsequent questions and/or to
make purchases if they have positive experiences with
quickly finding the information they need to make
purchases and interacting with peers via communities.
66%
Increase brand awareness
61%
Increase revenue — drive
direct sales (i.e., reduce
buyer dropout)
60%
Increase buyer satisfaction
with brand
53%
Help buyers make smarter
purchases
Improve/simplify the
buyer journey
38%
22%
Base: 279 marketing and eCommerce professionals involved with online
marketing strategies in NA, EMEA, APAC, and LATAM
Source: A commissioned study conducted by Forrester Consulting on
behalf of SAP, August 2016
›
›
Increasing brand awareness. Consumers often don’t
know where to look or where to go when researching new
products or purchases. Businesses that nurture their
community sites into repositories of valuable content (both
user- and brand-generated) are more likely to be
discovered by prospects looking for answers. This creates
positive recognition for the businesses, which can lead to
greater online traffic and opportunities.
Increasing revenue (i.e., reduce buyer dropout). One
of the key values of a strong online community is the
ability to give customers and prospects the support
needed to make smart purchase decisions. Leveraging
community data to help target the right people at the right
moments in their journey will drive greater conversions by
reducing online dropout currently caused by the inability
to fully grasp and meet customer needs.
6
Key Recommendations
Marketers need a deeper understanding of their customers and prospects in order to achieve greater marketing
success and improve online customer experiences. Online communities are one specific way businesses can better
understand and support current and new customers. However, just having an online community is not sufficient to
accomplish this goal. To fully realize the value that online communities can offer, marketing teams must first:
•
Understand what data your business needs to support your marketing goals and align your services to
capture that data. A solid understanding of customers’ needs, opinions, and preferences is vital for successful
marketing. Broad segmentation of prospective customers does not enable the level of personalization or
customization that tech-savvy customers now demand. Ensure you have the right data to guide your marketing efforts
to reach the right prospects, and provide them with the information needed to make a successful purchase.
•
Leverage communities to capture greater customer insight and drive user-generated content creation.
Community interactions, such as discussion boards or Q&A threads, offer a deeper glimpse into customers’ needs,
challenges they face, or even the things they are most excited about. Businesses can capture this data to improve
targeting, personalization, and overall customer purchase satisfaction. Communities also provide user-generated
content for other customers to read and respond to, which can be highly influential in driving purchase decisions. That
same user-generated content can also be captured and leveraged across broader marketing campaigns.
•
Make communities more than just a single stop in the buyer journey. Communities are not just a resource for
providing customers answers they need to make a purchase. Instead, communities offer ongoing opportunities for
customers to engage with other customers or for your brand to share stories, troubleshoot challenges, and explore
new products. They can be leveraged as a marketing tool across the customer journey, from product exploration to
product usage. Businesses that leverage communities in this way will find they improve brand awareness, build
customer loyalty (driving repeat purchases), and enable more effective marketing through the use of user-generated
content. This is a win-win, as it provides advantages for customers by enhancing online experiences and better
enabling purchases, and helps businesses by reducing online dropout by improving dialogue with their customers.
Methodology
In this study, Forrester conducted an online survey of 279 marketing and eCommerce professionals involved with online
marketing strategies in the US, the UK, Germany, China, India, Brazil, and Mexico. The survey evaluated how their
companies are leveraging communities to support online marketing efforts, both pre- and post-purchase. Respondents were
offered small incentives as a thank you for time spent on the survey. The study began in July 2016 and was completed in
August 2016.
Project Director: Chris Taylor, Market Impact Consultant
Contributing Research: Forrester’s Infrastructure and Operations Professionals research group
About Forrester Consulting
Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their
organizations. Ranging in scope from a short strategy session to custom projects, Forrester’s Consulting services connect
you directly with research analysts who apply expert insight to your specific business challenges. For more information, visit
forrester.com/consulting.
© 2016, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources.
Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, RoleView, TechRadar, and Total Economic
Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. For additional information, go to
www.forrester.com. [1-ZVTFL3]