Combat rising prices with more effective spending today

Usually, clean data is seen as a business undertaking that will have long-term effects. A major initiative that requires the data team to dedicate significant time and attention (taking them away from other critical, customer-facing tasks). Something you’ll see the payout from down the road. While all that is true - better data can have a major impact on decision making and the growth of a company in the future - it’s also something that can have an immediate financial impact for your business. And in today’s inflationary environment, there’s not a company that doesn’t need some immediate help. 

Even though spending is up 18% over 2020, the first three months of 2022 saw consumers buying 6% fewer items at retail than they did the previous year. According to McKinsey, the full effects of inflation have not yet been seen, largely because individuals are dipping into savings. But what happens when the savings run out or consumers hit their threshold of how much they’re willing to pull? For DTC-first brands on a growth trajectory, all of this might seem disheartening or overwhelming. But the way we see it, brands in this space are already set up really well to weather the storm. 

“Revenue management” isn’t a term that’s used much by digitally-native DTC brands. But if we had a quarter for every time it came up in a Q1 2022 earnings call in response to questions about price increases and inflation, we could all retire on a tropical island. Formerly a tactic used primarily by the hospitality industry, it was the buzz-phrase across entertainment, CPG and almost every other business sector you can think of. So what is revenue management and why is everyone talking about it in response to inflation? 

It’s simply a business technique used to optimize inventory and maximize profit. The primary goal is to sell the right product to the right customer at the right time for the right price. (Pretty much what we’re all after in the end). The process involves data collection, market segmentation, forecasting demand/inventory availability and optimizing decisions, then re-evaluating over and over again. 

To us, this sounds a lot like the processes DTC brands use to run their businesses every day. So if these Fortune 500 brands are citing “revenue management” as their primary tactic in response to inflation, maybe DTC brands have a chance to come out ahead. You are already collecting customer data, and using it to segment the market and forecast demand. You already rely heavily on the data-informed customer journey to guide decisions. Now it’s just a matter of doing it even more effectively. And the first step is to address the first step: data. By cleaning and unifying the data your brand already has, every part of the process that relies on the data will improve. 

Here are a few ways clean data can immediately impact marketing, saving money and resulting in more effective campaigns this week. 

1. Remove duplicate accounts from marketing platforms.

This one might have a really large or a really small cost savings for your brand. If you rely primarily on email or social media marketing, you might save a couple hundred dollars by removing duplicate customers before your next campaign. If you have a catalog program, that number could be in the six figures. The only way to understand the value is to look at the data and find out exactly how many duplicates there are. 

2. Stop promo abuse.

We’ve all done it. Signed up as a “first-time” customer with a second email address for that 20% off promo. But when every customer is spending $18 less AND you’re not capturing accurate data to create a better customer experience, is the promo even worth it? Or would it be more worthwhile to reward loyalty… gathering repeat customers and the ability to create an accurate picture of the customer journey? We’ll let you decide. Or better yet, let the clean data decide. 

3. Reward repeat purchasing.

Rewarding loyalty can lead to an increased repeat purchase rate (immediately) and brand advocates (eventually). But this is only possible if loyalty is recognized, by unifying clean customer data across systems. Otherwise the same customer is potentially classified as a first time buyer every time they make a purchase. 

4. Make sure your marketing platform has all your customers in it.

This one seems like a no-brainer, but platforms don’t always play nicely with each other. Have all of your customers in Shopify been uploaded into Klaviyo? We already talked about the duplicate issue, but missing customers can mean you’re losing out on loyalty. 

There are also several ways clean data can impact the bottom line this quarter, which are proportionately more effective than the immediate impacts. 

1. Re-evaluate audience segmentation and targeting.

If you’re not planning your media based on cost of customer acquisition or lifetime value, there’s a missed opportunity to take a longer term approach to your campaigns. Obviously winning new customers costs a lot more than building loyalty, so it’s important to spend money acquiring customers that will be valuable to your brand in the long-term. Of course, the only way to understand what your most valuable customer looks like is with a complete and accurate picture of past customer behavior.  

2. Optimize your media mix modeling for customer acquisition.

While raw data might say that most first-time customers come through Facebook advertising, clean data might show that it’s really TikTok. How’s this possible? It all comes down to properly identifying first-time customers, which is impossible when data is fragmented across systems and not unified around real people. 

3. Re-evaluate product leaders and other ad content.

Every brand has products that are good at winning first-time buyers. There are also products that are more successful at creating loyal customers. Are they the same product? Is the product you’re featuring in line with your campaign goals? Clean data can give a clear picture of which products accomplish which goals, making your advertising campaigns more effective. 

4. Better inventory forecasting and ordering.

Knowing the customer journey is the best way to forecast inventory needs, and proper ordering is an issue clean data can certainly help solve. Do customers buy your products in a certain order? Is there a large portion of customers poised to hit step number four on their journey? You can be prepared for when they do. 

The benefits of clean data in the long term are significantly more than what can be seen this week or this quarter. We have a lot to say about the benefits of better data-driven decision making for scalable and sustainable growth (you can read about that here). We’ll just leave it at this: Knowing that clean data can give you confidence in the results of your next big decision, why wait? 

In the face of rising costs and decreased buying power, brands that want to grow have to make effective decisions. In just a couple of days, you could be marketing on clean data (that will probably pay for itself with your first campaign). Let this be the most effective decision you make this week.