Marketing Maturity in Depth: Test and Learn Stage

Marketing Maturity in Depth: Test and Learn Stage

The next step on our journey to true marketing maturity is the "Test and Learn" stage. This stage presents the challenge of balancing the growing demand for data-driven insights with the capacity of existing systems and teams. Companies at this stage are actively experimenting with marketing concepts, leveraging both transactional and behavioral data to inform campaigns. However, this rapid phase of change comes with a lot of challenges, from siloed data systems to manual analysis, often putting a strain on internal resources.

In this article, we’ll explore the capabilities and challenges faced by businesses in the Test and Learn stage through the lens of a fictional health and supplement store, "VitaWell." By understanding their journey, you’ll gain insights into how your company can navigate this critical phase.

Capabilities of the Test and Learn Stage

‍

1. Raw Data Collection from POS & E-Commerce

At the Test and Learn stage, businesses like VitaWell have established systems for collecting raw data from point-of-sale (POS) systems and e-commerce platforms. This data forms the foundation for deeper customer insights. Businesses have ensured that they collect purchase data from both in-store transactions and online orders. Every sale is logged, providing valuable information on what products are popular and when. 

VitaWell Scenario: Suppose VitaWell notices a spike in the sale of vitamin D supplements during the winter months. The raw data shows an uptick in purchases but doesn’t immediately explain why. The team spends time sifting through data, cross-referencing weather patterns and customer demographics to identify that their northern customers are driving this trend due to lower sunlight exposure. Their campaigns may be primarily based on assumptions but at least they now have the ability to advise marketing campaigns and learn from them. 

‍

2. Simple Customer Journeys Through Basic Automation

Businesses in this stage often implement simple customer journeys using basic automation tools, ensuring that the customer experience is somewhat personalized and consistent. Companies at this stage can send automated thank-you emails after purchases, and a follow-up email offering discounts on a customer’s next purchase. This simple automation helps keep customers engaged without overwhelming the marketing team.

VitaWell Scenario: A customer purchases a protein powder online. VitaWell’s automation sends a thank-you email immediately. A week later, the customer receives a follow-up email suggesting related products like shaker bottles or BCAA supplements, with a discount offer. Even though this automation is linear and basic in nature, VitaWell is able to create these customer engagements without manual effort. 

‍

3. Established KPI Reporting

Companies at this stage have set up basic key performance indicators (KPIs) to track the effectiveness of their marketing campaigns. For example, depending on goals, companies can track KPIs like email open rates, click through rate, and sales conversions. These metrics are reviewed regularly to gauge the success of marketing initiatives.

VitaWell Scenario: After launching a new product line of organic teas, VitaWell monitors its sales conversion rate as a key KPI. The team notices that while the initial open rates for the announcement emails are high, the conversion rate is lower than expected. This prompts a review of the email content and landing page to identify areas for improvement. The result after a couple rounds of content optimizations are emails and a webpage that are converting at all time highs. 

‍

4. Utilizing Basic Reporting to identify Optimizations

Test and Learn businesses often use reports to identify optimizations for their marketing content and, use basic reporting to compare the performance of different marketing strategies. For example, a company may launch multiple promotional emails—one version features a discount on all products, while the other highlights a specific product with an added bonus (e.g., buy one, get one free). The reporting system helps determine which approach resonates more with their audience.

VitaWell Scenario: The results of VitaWell’s testing between 2 different emails show that while the broad discount offer generated more immediate sales, their targeted product offer led to higher overall customer engagement and repeat purchases. VitaWell took this feedback and started structuring their campaigns to focus more on product recommendations rather than general discounts. 

‍

5. Individualized Offers with Attribution

Even at this early stage, businesses can provide individualized offers, albeit in a limited capacity, and track the effectiveness of these offers through basic attribution models. For example, when a marketer sends personalized discount codes to frequent customers based on their past purchases, Those codes are then tracked to measure the redemption rate, providing insights into the effectiveness of personalized marketing efforts.

VitaWell Scenario: VitaWell notices that personalized codes for their premium multivitamin line have a higher redemption rate among customers who previously purchased high-end products. This leads to a more focused marketing strategy, where premium customers receive offers tailored to their preferences, driving higher engagement and loyalty.

‍

Challenges Faced at the Test and Learn Stage

‍

1. Systems and Vendors Are Not Integrated; Data Is Siloed

A significant challenge for companies at this stage is the lack of integration between systems and vendors, leading to siloed data that is difficult to manage.

Oftentimes, companies at this stage use different systems for their POS, e-commerce, and email marketing, none of which are integrated. This means data from in-store purchases doesn’t seamlessly combine with online shopping behavior, making it harder to get a full picture of customer activity.

VitaWell Scenario: VitaWell’s marketing team struggles to launch a cohesive campaign because the customer data they need is spread across multiple systems. They can't easily segment customers who buy both online and in-store, missing out on opportunities for cross-channel promotions. As a result, campaigns are less targeted and less effective than they could be. 

‍

2. Insights Are Basic; Analysis Is Manual

With systems not integrated, insights are often rudimentary, and much of the analysis is done manually, leading to inefficiencies. Your team may spend hours each week manually compiling reports from different systems, making it challenging to generate real-time insights or act quickly on new trends.

VitaWell Scenario: After manually analyzing sales data from their POS, VitaWell identifies that certain supplements are frequently bought together. However, the manual process delays this insight by weeks, missing the optimal window to capitalize on bundling these products in a timely marketing campaign. The missed revenue helps VitaWell recognize that access to data isn’t always enough, and they need to start looking into further data automations.

‍

3. Marketing and Tech Team Priorities Are Not Aligned

Misalignment between marketing and IT can create roadblocks, slowing down the execution of marketing strategies. One example of this is when a marketing team wants to implement a new CRM system to better track customer interactions, but the IT department prioritizes other infrastructure projects, delaying the integration. The market is seeing a growth of CIOs being heavily involved in the marketing function due to the rapid advancement of technology’s role in marketing. Ensuring that your CIO and CMO functions are fully aligned in what to invest in and the ROI of those investments is vital.

VitaWell Scenario: The marketing team at VitaWell wants to invest in a loyalty platform. However, VitaWells director of Technology, has had no engagement with the marketing team, so when an investment request comes through the Director of Technology, understandably, pushes back due to a lack of strategic alignment. This lack of communication leads to delays in launching the program, resulting in missed opportunities to enhance the customer experience.

‍

Next Steps: Advancing to the Data Centric Stage

As companies like VitaWell continue to navigate the Test and Learn stage, it’s essential to focus on foundational strategies that will drive future growth and efficiency. Here are the critical next steps to ensure that your marketing efforts are not only effective but also sustainable as you scale to the next stage of marketing maturity, The Data Centric Stage.

‍

1. Create a Plan to Achieve a Singular Data Strategy

A singular data strategy is more than just a buzzword—it’s a comprehensive, long-term plan that unifies how your organization manages and utilizes data across all touch points. This strategy should be universally accepted across the organization, aligning technology, processes, people, and governance to ensure data is an asset rather than a burden. Start by assembling a cross-functional team including members from IT, marketing, and operations. Together, define the desired customer experience and work backward to identify the data, systems, and processes needed to support that vision. This plan should outline the specific technologies to be adopted, the roles and responsibilities required, and the processes that will govern data management. Additionally, set clear goals and timelines for implementation to keep everyone aligned and accountable.

‍

2. Invest in a Customer Data Platform (CDP) to Combine Zero, 1st Party, and 3rd Party Customer Data

A Customer Data Platform (CDP) is a powerful tool that allows businesses to centralize and unify customer data from various sources, including zero, first-party, and third-party data. This investment is crucial for companies in the Test and Learn stage, where understanding and utilizing customer insights can make or break marketing campaigns. A CDP provides the infrastructure needed to combine data from multiple sources into a single, cohesive customer profile. This enables more personalized and effective marketing strategies, as it allows for a deeper understanding of customer behavior and preferences. When evaluating CDP options, consider factors like scalability, ease of integration with existing systems, and the ability to handle both structured and unstructured data.

‍

3. Hire a CIO if You Haven't Already, and Create Business Processes to Ensure Their Alignment with the Marketing Strategy

The Chief Information Officer (CIO) plays a pivotal role in bridging the gap between technology and business strategy, especially as marketing becomes increasingly data-driven. If your organization hasn’t yet appointed a CIO, now is the time. Beyond hiring, it’s crucial to establish processes that ensure the CIO's efforts are aligned with the marketing strategy. The CIO should be involved in all major marketing tech decisions, from selecting and implementing technology platforms to defining data governance policies. Establish regular meetings between the CIO, CMO, and other key stakeholders to ensure that technological capabilities are fully leveraged to support marketing goals. Additionally, create cross-functional teams that include members from both IT and marketing to foster collaboration and alignment.

‍

Moving Forward: Strategies for Overcoming Challenges

For companies like VitaWell in the Test and Learn stage, the path forward involves addressing these challenges head-on. Integrating systems, automating data processes, and aligning marketing and IT priorities are crucial steps to unlocking greater efficiency and effectiveness in marketing efforts. By streamlining operations and reducing the lag between insight and action, businesses can turn their experimental campaigns into successful, data-driven strategies that drive growth and customer satisfaction. Learn more about the road to marketing maturity from our Ebook

‍