When a customer completes a purchase in a brick-and-mortar store, most marketers don’t know whether or not that purchase was driven by digital messaging. Since only 6 percent of retail sales happen online, marketers are missing out on a huge opportunity to show the value of their email and other digital communications by not tracking the impact these messages have on the 94 percent of retail sales that happen in brick-and-mortar stores.
While many marketers rely on last-click attribution (which is an inaccurate model) for online measurement, incremental revenue is the only way to measure the impact of digital marketing efforts on in-store sales. Some marketers have tried implementing an incremental revenue model by using unique coupon codes, e-receipts and credit cards to track whether purchases were made online or offline, but, while they are better than doing nothing, these methods can be flawed and unreliable ways to attribute sales.
The best way to measure online and offline impact of digital direct marketing is through a highly ubiquitous loyalty program — one where the majority of customers who are interacting with the retailer on a daily basis are members of the program and actually use it when transacting. Based on a customer’s loyalty number, a retailer can track whether a customer did or did not receive a certain message (via holdout and treated group assignments), whether it’s an email, an SMS text, a push notification or a display retargeting ad. By comparing the revenue from loyalty program members who did receive the message (the treated group) and the revenue from members who did not receive the message (the holdout group), marketers can calculate the total incremental revenue that can be attributed to delivering the digital marketing communication.
Don’t fake loyalty
Yet, loyalty programs are only effective if every customer is prompted to enter his or her loyalty number at the point of purchase, and sometimes that can be difficult if there is no intrinsic value in the actual loyalty program itself. Some loyalty programs that call themselves loyalty programs are what I would call a “faux” loyalty program: they are really just an attempt at tracking in-store revenue better. But if the customer doesn’t see any value in the program, there is no incentive to actually use it, and that undermines the very goal for having the “faux” program in the first place.
On the flip side of the transaction, if store associates at the point of sale scan the same loyalty card for every customer to speed up the process, that’s not going to accurately measure incremental revenue either. This has happened to me several times, even in a store where I do already have a loyalty card and want to earn the rewards I know are coming to me. Marketers must coordinate with the store operations team to ensure that the checkout processes are optimized, effective and consistent for accurate offline attribution.
Changing how execs view marketing value
Measuring the offline impact of digital marketing is a team effort and directly translates into how marketing is seen from a business perspective. A majority of marketers are shortchanging the value of their email, SMS, push and display programs by not measuring offline impact and therefore not projecting the most positive and accurate image of marketing efforts. Incremental offline revenue can help prove to the executive team that digital direct marketing programs are much more valuable than what’s been shown through online-only sales. Once the value of such programs is portrayed internally, the C-suite is more likely to see the ROI of digital marketing efforts and therefore increase the budget and allocate more (human) resources.
Reach your customers where they are
Retailers who do not have a method for measuring incremental revenue are often unwilling to invest in key, revenue-driving in-store triggers because they don’t understand the true value of their digital marketing efforts. In-store browse communications powered by store associates and iBeacons, geofencing and push notifications, eReceipts and other offline messages are perhaps the biggest opportunity for a retailer to digitally engage with shoppers while they are in the store on their path to purchase and get them to spend more. Yet, without being able to measure incremental in-store revenue, these innovative and lucrative communications are likely to continue to site forever in the middle a priority list and never see the light of day.
So do yourself a favor and start measuring incremental revenue and stop undervaluing your relationship marketing program.
Image via Can Stock Photo