jump to navigation

“Relationship” Marketing November 9, 2007

Posted by Elana Anderson in Customer Experience, Database Marketing, Marketing, Marketing Strategy.
Tags: , , ,
7 comments

I just started cross posting some of my blog entries on the CustomerThink site. This week’s post generated a lot of discussion about misguided attempts at relationship marketing. Here are some of the examples that were raised (I’ll summarize from the comments):

  • T-mobile birthday card (with balloon): Described as an “expensively produced standard letter,” the birthday greeting reached a customer with a record of service issues and it arrived late! The customer’s reaction? Not impressed — probably not upset enough to quit T-mobile, but upset enough to blog about it. (example from Graham Hill)

  • Pet birthday card from insurance company: According to Gywnne Young, who submitted the comment, “The card wasn’t edible and it didn’t squeak. So it went in the recycling bin. And far from the warm fuzzy feeling I’m sure the company meant to give me, I was left with a feeling of disgust.”

  • Got you back: “A major electronics retailer regularly sent a birthday card to individuals from a database of prospective customers. One recipient was so incensed over this invasion of his privacy that he took action. After a little Internet sleuthing, he found the name of the company’s CEO, and then found out his wife’s name and HER birthday. Then he sent the CEO’s wife a birthday card, and asked her how she felt about receiving the card, including the obvious insincerity of the sentiment inside the card. The program was immediately pulled.” (example from Andrew Rudin).

Now, let me share a couple other examples with you which had a totally different effect.

  • Recognizing a personal milestone:  When Scotiabank customers pay their final mortgage payment, the bank sends out a letter thanking the customer for her business and congratulating her on reaching the milestone. Internally, bank employees have dubbed the letter, “the wedding invitation,” because it is printed on fancy stock and doesn’t include the typical marketing speak, colorful logos, or offers. Two weeks later, the branch follows up with a phone call: again congratulations, thanks for business, anything we can help you with in the future (no pressure, no pitch)… According to individuals I have interviewed at Scotiabank, this program has yielded an incremental balance lift of $500 per contact (that adds up).

  • Birthday greetings from Bill: For as long as I can remember, I have received birthday cards from Bill. The cards were always handpicked and contained a personal message from Bill. I had never met Bill. Who was he? He was my grandfather’s financial advisor.  My sisters and my cousins all got cards from Bill. And, when several of us had enough means of our own, we too became Bill’s clients.

  • Mom loves the holiday wine and cheese: My mom (a science professor at William and Mary), is very skeptical of marketing (and doctors). She doesn’t fall for anything. That said, she literally gushed over the wine and cheese basket that she received last Christmas from her financial advisor. The basket came with a card and a personal note. She knew it was “marketing,” but it succeeded in giving her the “warm and fuzzies” nonetheless.

What’s different about these examples and what works?

The examples that work are:

  • Between parties that have a significant relationship: What kind of relationship do you have with your mobile company or insurance carrier? Probably not a personal one.  

  • Not a marketing pitch: What!?! Can marketing be subtle? In fact, Scotiabank’s restraint in foregoing the glossy insert or list of latest offers significantly contributes to making these communications more real and sincere for the recipient.

  • Personal and sincere: Scotiabank’s restraint contributes to the sincerity of the message as do the handwritten notes or even just the signature from the financial advisor.

Relationships come from sincere interactions

Maybe we’ve all gone a little too cuckoo over the term “relationship” marketing. Let’s be clear, relationship marketing IS NOT blasting a message to a semi-targeted list. And, I don’t think I’m in the minority here, but most customers really don’t want to have a relationship with the company they buy their toilet paper from.

Here are my top line recommendations to would be relationship marketers:

  • Only be personal when you have a right to be: I plan to crack a bottle of champagne if I ever pay off a mortgage! And, I wouldn’t be upset at all if my bank sent me a card recognizing my achievement. However, if the envelope was stuffed with glossy pitches aimed at securing more of my money, I think I would be a tad perturbed.

  • Look for opportunities that positively impact customer experience:  Think about marketing from the perspective of service. Part of marketing, by it’s nature, will always be to inform but more marketers need to seek our opportunities to offer proactive service and pleasantly surprise their customers. Rather than sending an insincere birthday card, another wireless carrier called customers that had experienced a series of dropped calls to APOLOGIZE and offer a break on the monthly bill.

  • Expand your definition of “relationship marketing” to include community: What can a firm that doesn’t have a substantial — or even direct – relationship with its customers do?  Recognize that it’s not about the toilet paper! Take a look at P&G’s Home Made Simple. Note that the site isn’t simply hawking products — in fact, you won’t even see a single product above the fold. Customers get tips on managing their household, decorating, and healthy living as well as coupons to try new products (but, again, the product marketing appears secondary). P&G gets valuable market research information and a group of customers that are convinced that the P&G is genuinely interested in them. Del Monte’s social community of dog lovers is another good example of how a firm can engage and build relationships and gain insights that allow the company to better understand customers and innovate (see the case study).

Let’s gather some more examples

I’d love to further peel apart the good examples from the bad so, please, add comments here or send me your examples as well your reaction (positive or negative).

Advertisements

Net Promoter Score is not a customer metric October 31, 2007

Posted by Elana Anderson in Customer Analytics, Customer Experience, Database Marketing, Marketing, Marketing Strategy, Marketing Technology.
Tags: , , , ,
2 comments

Did the title attract your attention? Good! I’ve heard a lot of people talking about Net Promoter (NPS) as the “one metric” – the “killer metric” – that marketing needs to worry about. This concerns me!  I’m not here to bash NPS, there are others who are taking that on. As for me, I think Net Promoter is indeed a useful metric – primarily because it is so simple. And that simplicity is what has the marketing community falling head over heels over it. Well folks, let’s not go too gaga.

Why do I say NPS is not a customer metric? At an aggregate level, according to the research led by Fred Reichheld, a high NPS score correlates to business growth. But, aside from a segmentation of promoters, passives, and detractors, it doesn’t tell you much at an individual customer level. Most importantly, it doesn’t give you any insight into your customers’ needs, desires, and motivations or help you determine what to do or how to treat individual customers. Sure, you might think, “we need to turn the passives into promoters,” but how are you actually going to do that when what motivates one passive is completely different from what motivates another?

There is no killer metric

Sorry to say it, but there is no killer marketing metric. Yep, you need to take a balanced approach. You need value metrics to help evaluate the value and impact of marketing investment. You need operational metrics to help run the operation, diagnose issues, and improve efficiency. The way I’ve heard some executives talking lately, I fear they are focusing their marketing team solely on NPS and turning their businesses upside down to turn every customer into a “promoter.” My response? Pull back the throttle and apply a measure of basic business logic – you don’t want to end up with a lot of happy customers and an unprofitable business. If you review the details of what they have to say, this is certainly not what Reichheld and the folks at Satmetrix intended.

NPS, among others, can be a very useful gauge of the satisfaction and general well being of your customer base. But, it must be combined with other customer metrics (like retention, profitability, etc.) and insight (like life stage, attitudes, etc.) in order to effectively inform customer interactions. The bottom line? Business and marketing executives out there need to recognize that building an effective marketing measurement and customer analysis capability requires resources, focus, new skills (analytic and technical), and a lot of elbow grease.

The weekly catalog take in my household October 26, 2007

Posted by Elana Anderson in Customer Experience, Database Marketing, Marketing, Online Marketing.
Tags: , , , ,
add a comment

Catalogs                    Catalog Poundage

To further the points I made in yesterday’s post, I thought I’d display the volume of catalogs that come into my household on a weekly basis. I get rid of them every weekend so the picture shows what arrived in my mailbox between Monday and Thursday. The stats: a grand total of 41 catalogs weighing in at 12.2 lbs. And the holiday season is just getting started!

 Why do I get so many catalogs? I am an avid online shopper. It is a matter of pride to me that I haven’t set foot in a store (other than Costco) to do any holiday shopping since 2000. But, I don’t think that individuals that shop online expect — or want — to be overwhelmed with catalogs as a result. To my point yesterday: we in the direct marketing industry need to be leaders in driving the solution. Starting with opt-in (or at least opt-out) to catalogs is a reasonable place to start.

Catalogers, green is in! October 24, 2007

Posted by Elana Anderson in Customer Analytics, Customer Experience, Database Marketing, Integrated Marketing, Marketing, Online Marketing.
Tags: , , , , , ,
9 comments

Last week’s article in the New York Times about Catalog Choice got me thinking about the catalog industry.

Now a new online service called Catalog Choice (www.catalogchoice.org) is facilitating attempts to unsubscribe. The site was developed by three nonprofit environmental groups — the National Wildlife Federation, the Natural Resources Defense Council and the Ecology Center — to relay requests en masse to specific retailers. Since it was introduced last Wednesday, more than 20,000 people have registered.

Now, I know a little something about how a catalog operation works because I ran very large database marketing technology projects at Staples and Eddie Bauer in the mid-late 90’s. So, here’s my take…

The Internet is partially to blame for increased catalog circulation

Despite predictions that the Internet would decrease direct marketing postal mail volumes, a 2005 study by Forrester Research (disclosure: I edited the report) showed that 60% of high-volume direct marketers (those that mail 50M or more pieces annually) planned to increase their mail spend. What that report didn’t say is that the Internet is actually deserves some of the blame for the increase.

Maybe this bucks conventional wisdom, but think about it. In the old days, catalogers could only build their house file by buying lists and participating in cooperative data sharing initiatives like Abacus. Now, if someone comes and buys on my site, then of course I’m going to add them to my house file. And, I’m also going to add them to my list for my sister brands too. It’s a no brainer. So, today, catalogers still use tools like Abacus and they also assume that every online shopper also wants a catalog. Pretty presumptuous, don’t you think?

Well, today’s over marketed and increasingly environmentally conscious consumers won’t have it. That’s what gives rise to organizations like Catalog Choice. And, this is just the beginning.

The industry needs to take action

I definitely don’t have all the answers here. Catalogers are in a tough place and I sympathize. When each catalog turns a profit, it’s hard to come up with a business case to stop. But I think the industry needs to take the lead and start working on the problem. Here are a few ideas to get the ball rolling:

  1. Enable online customers to opt-out (better yet, IN) of catalogs on your site. You do this for email right? Technically you don’t have to –the CAN-SPAM law only mandates that you honor an opt-out. But, you do it because consumers fought back against email spam. So do it for your catalogs too (catalogs are a lot more expensive than email after all). It’s not hard to add another flag to your database that you check in your campaign list pull process. I am not aware that any retailers are doing this today – it’s time to start.

  2. Allow customers to limit the number of catalogs they receive. Some retailers I’ve worked with send as many as 60 mailings a year to a single household – that’s a lot of paper! Take the catalog opt-in a step further and give your customers a choice to limit the number of catalogs their household receives every year. Now, it’s up to you to figure out – through modeling and contact optimization techniques – which catalogs will drive the most return from that household within the customer’s set limit.

  3. Tighten up the deduplication rules. So, my husband and I don’t have the same last name. That doesn’t mean that we want duplicates of every catalog in our house. I had this argument with a client in 1995. The response I got was, “The catalog could be going to a sorority house or an apartment – we want to get as many eyeballs on each book as possible.” Well, with a little external data and a tad more technical elbow grease, you can easily determine that I live in a residential suburb in a single family home. So, please, don’t send me two catalogs and save yourself a tree and a few bucks in the process.

Sure, the ideas I’m proposing will limit your reach, but they WILL help the environment and be viewed as a step in the right direction by your greening customer base. You can get some leverage from this – publicize the fact that you are committed to being more green and helping the environment. But be careful with this part, don’t say you are green and fail to walk the talk – today’s consumer is watching and now has plenty of channels through which to be heard.

How [poorly] integrated marketing impacts experience October 23, 2007

Posted by Elana Anderson in Customer Experience, Integrated Marketing, Marketing, Marketing Technology, Online Marketing.
Tags: , , ,
6 comments

I recently treated myself to a new laptop. A Sony Vaio – it’s chic, sleek, and tiny. After I got rid of all of the marketing crud – you know, the start up gobbledygook and free trial software, I fell in love with it. I love it so much that I also fell for the “Register and save 20% on accessories” offer that came in the slick little catalog insert in the box.

Sony Discount
 

 

 

 

 

 

 

 

 

So, I went to the Sony registration site, fully expecting that after I provide a few nuggets of personal information I would be launched directly into a shopping experience worthy of Sony Style. Unfortunately, that was not my destiny…

First off, the entry form breaks all kinds of standards. For example, the birthday field isn’t marked as required but must be because, after several failed attempts with no error messages, I finally entered it and my registration was accepted. Whew! Now I’m ready for my Sony Style shopping experience…. Sadly, I was disappointed again…

Sony Confirmation

Now what? How do I get my discount? After three days, my hunger for the cool accessories had not abated so I called the 800 number provided on the catalog. The polite individual I spoke to informed me that I should receive an email with a discount code. “No ma’am, you can’t order the accessories now and get the discount. If you ordered online, you should receive the email in a few days. If you don’t get it, give us a call back.” Sigh…

Finally, after 11 days (!!) I got the long awaited, “Thank you for registering” email. Here’s what it had to say:

Thank you for registering your Sony product on our web site. This email confirms you have successfully registered the following Sony product on our web site: VGNTZ150N

Name: Elana Anderson
Issue Date: 9/25/2007
Model: VGNTZ150N
Serial Number: N/A

A Special Offer from Sony Card:
1500 Reward Points after your first purchase*
http://www.firstusa.com/cgi-bin/webcgi/webserve.cgi?partner_dir_name=sony_1500&page=cont&mkid=6RS3v

No, I don’t want a credit card! I want my 20% discount! Refusing to relent, I called the 800 number again. This time I explained my situation and the service representative agreed to take my order and give me the discount. Mission accomplished – FINALLY! What should have been a simple seamless process took two weeks.

Lessons learned

What does the Sony brand engender for you? If you are like most then great design, high quality, stalwart brand probably top the list. But my experience gives me a view into the inside: big organization, internal silos, and politics. The campaign I described here doesn’t have that many components — it shouldn’t be THAT hard to get right. But, this kind of campaign does touch different parts of the marketing department (people who probably don’t know each other and sit in different offices) and the broader business.

My advice? If you can’t get a simple integrated program like this right then don’t do it at all. Why? It damages your brand when you mess it up.

If you are running campaigns with multiple components that cross organizational silos then you need to organize the stakeholders and nail the process down. Understand the steps, define the handoff points, map the time between them. In the end, it’s all about the process. Ideally, a campaign like this is automated. But, sufficient testing is required up front to make sure it works. And, don’t forget to put some process checkpoints in place so that if something breaks along the way you get an alarm bell. You can have great creative (Sony does) but if the process is disjointed you lose business and look foolish.

In case you missed this… October 15, 2007

Posted by Elana Anderson in Customer Experience, Marketing.
Tags: ,
2 comments

We’ve been talking for years now about consumers are in control and marketers need to change their approach. Marketers need to get to know their customer — listen, interact, establish a dialog. A colleague at Forrester turned me on to The Breakup video by Geert Desager a couple of days after it was published back in May. I showed the video in June at Cheetahmail‘s Client Summit and the audience loved it. I’m still running across lots of you who haven’t seen it. So, if you haven’t yet had the pleasure, take a peek — it’s hilarious.