Marketing Science, what is it and what could it be? (Part 1)
With six years of experience in the marketing data domain, collaborating with four different companies across diverse industries, and interacting with numerous colleagues, I’d like to provide insights into what marketing science encompasses — what it ought to include and the possibilities it could explore.
I’ll be focusing on marketing science, a field typically associated with data scientists working in marketing, but it also has relevance to marketing analytics.
In every company, marketing teams are primarily divided into two groups based on their business goals:
- User Acquisition (aka Growth): teams in this category are dedicated to expanding the user base. Their primary focus is on bringing in new users to the product or service.
- User Retention (aka Engagement): on the other hand, teams in this category are tasked with retaining existing users. Their goal is to engage users effectively to ensure continued interaction and loyalty.
While both teams may seem to target the same end goal — the user — it’s crucial to recognise that they interact with users at different stages of the customer lifecycle:
The customer begins as a prospect before becoming a part of your business. Once it activates for the first time, the customer is acquired and considered an active customer. Achieving the status of a retained customer involves keeping them on your platform, encouraging interactions, and facilitating purchases. Conversely, when a customer departs from your platform and remains inactive for a while, they are considered churned.
It’s important to note that a customer can transition directly from being acquired to churned. Retaining a customer proves to be the most challenging aspect of the business.
As Acquisition and Retention teams primarily operate on different stages of the customer lifecycle, they need strategies tailored to varying levels of understanding of the user and employ distinct tools for communication.
Growth strategies primarily unfold through paid marketing channels targeting prospective users. These channels may encompass online platforms such as social media networks or offline mediums like TV and radio.
Retention strategies require the utilisation of internally implemented Customer Relationship Management (CRM) tools to oversee data pertaining to acquired, retained, and churned users. The key communication channels for retention include email, push notifications, and in-app notifications. The challenge lies in precisely defining the content and cadence of these communications.
Disclaimer: There are points of contact within these two strategies, as some paid marketing channels allow you to execute retargeting campaigns (which can enhance your retention strategies) or to include customer data for optimisation. Additionally, if you possess sufficient information about prospect customers, you can convert them using your retention channels.
This presents a highly practical approach to organising marketing teams. It becomes straightforward to delineate goals, allocate budgets, and formulate strategies for each team when they are grouped by business goals. This alignment typically corresponds closely with the company’s stage: whether the emphasis is on expanding the business or fortifying the company with a base of loyal customers.
Marketing science teams play an important role in supporting marketing efforts across the entire customer lifecycle. This includes tasks such as identifying the best media mix for customer acquisition, implementing measurement and attribution strategies, estimating the lifetime value of a customer, predicting a customer’s propensity to make future purchases based on marketing triggers, and more.
The focus of Marketing Science is dependant on the maturity of the organisation.
In the case of many new tech businesses, the emphasis is often on aggressive growth. This translates to a ubiquitous presence in marketing media channels to enhance user acquisition — a common factor among such companies. Given that many marketing media operate on a bidding strategy, increased competition for bids can drive up prices, resulting in substantial budgets for growth strategies.
On the other hand, engagement strategies rely on internal user data, with incentives often taking the form of discount vouchers to encourage continued customer interaction. While the ideal scenario involves organic generation of the call to action, practical considerations sometimes necessitate more direct approaches.
It’s crucial to recall the timeless wisdom of John Wanamaker (1838–1922): “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” In this context, the overarching focus of Marketing Science is on the measurement, attribution, and optimisation of marketing spend. Given that paid media typically commands a significant portion of the budget, it becomes the primary focus of attention.
So, marketing science takes on the responsibility of marketing channel optimisation. The question that arises is: who is focused on the customer? Ideally, marketing science teams should be robust enough to cover both channel and customer optimisation. However, this is something only highly mature marketing teams can do, excel in both marketing channel and customer optimisation. While the concept of a “customer 360” is well-known, it stands as one of the major shortcomings of the industry.
Given that marketing science often lacks the resources to integrate the customer perspective into channel optimisation — typically starting with optimising toward a specific call to action rather than the entire customer lifecycle — addressing the customer viewpoint becomes a collaborative effort across various teams. This involves marketing, product, customer experience, and sometimes IT teams, among others. Strikingly, none of these entities takes sole ownership of customer science, leading to uncoordinated efforts on the same topic.
Some companies believe that introducing a Customer Data Platform (CDP) could resolve this issue. However, from a personal standpoint, I’ve never seen the implementation of a new tech tool as the solution to an organisational problem.
I hope you enjoyed the reading of the first article of this series. In following publications, I will try to cover some challenges associated with paid media optimisation, exploring how marketing science can support teams for a better customer understanding and how to integrate both to maximice the outcomes of your marketing efforts. Please leave comments about your experience with data and marketing to enrich our collective knowledge!
