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.