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Fusing Relationship Marketing And Online Marketing July 22, 2008

Posted by Elana Anderson in Database Marketing, Integrated Marketing, Marketing Strategy, Online Marketing.
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2 comments

For nearly the past 15 years, my career has been focused on helping marketers leverage data to better understand and more effectively market to customers on an individual level. In my early days in the industry, I worked primarily with marketing groups leveraging offline channels like catalogs and other forms of direct mail. In recent years, I’ve spent most of my time working with relationship marketing and database marketing groups and with online marketing groups. What amazes me (and is my key topic of my post today) is that while these marketers view themselves as so different they are really starting to converge.

Marketing Channels Are Evolving

There’s lots of change happening in the marketing domain. It’s a time of uncertainty but also one of opportunity.  Marketing channels are evolving at a rapid rate:

  • Mass media is less and less effective as audiences fragment and adopt technologies and tools (like DVRs) that enable them to tune out ads.
  • The Internet is no longer “new media” since most consumers are online.
  • Traditional outbound direct marketing channels require more analytic sophistication as response rates decline and more states consider and adopt privacy legislation.

Addressability Is the Common Link

Addressable channels are channels both outbound and inbound – through which marketing can communicate directly with an individual – identifiable or anonymous. This includes traditional direct marketing channels including direct mail and phone, internet channels like Web sites, email, mobile, and social media and, as technology and distribution capabilities continue to evolve, even traditional mass marketing channels like TV, billboards, and radio.

As addressable channels become more prevalent, marketers are recognizing that they need new skills to effectively engage, communicate, and interact with customers. Specifically, marketers must:

  • Listen to all information provided by customers and prospects – both explicit and implied.
  • Understand past and present information to determine the best possible marketing action.
  • Communicate in a compelling, timely, and relevant manner.

What’s more, marketers must do this across inbound as well as outbound channels and in an integrated way.

Interactive Marketing Will Emerge As A Dominant Marketing Discipline

I believe that the best term to describe the fusion of these capabilities is “interactive marketing” which I will define as:

Engaging each customer and prospect in a cross-channel dialog that builds upon their past and current behavior.

Although the term isn’t new, few (other than Prof. John Deighton of Harvard who is widely credited with coining the term) define it as broadly as I have here.

What’s interesting is that, in many organizations, the required capabilities already reside in different parts of the company – relationship marketing, database marketing, online marketing, ecommerce, etc. Unfortunately, rather than integrating these skills many of the companies I talk with are adding duplicate capabilities within stovepipe marketing groups. The result? A widening gap between “online” and “direct” marketing functions.

Rather than continuing to grow the silos, companies should explore cross-training, opening lines of communication, and integrating marketing teams that communicate with customers via addressable channels.

Marketers, Welcome To 2008! January 8, 2008

Posted by Elana Anderson in Customer Experience, Integrated Marketing, Marketing, Marketing Strategy, Marketing Technology, Online Marketing, Web 2.0.
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2 comments

I hope everyone had a wonderful Holiday Season! My 2008 is off and running at a fast clip and, once again, the blog had to wait while I dealt with matters related to my pocketbook. But, here I am and I simply couldn’t resist the urge for my first post of 2008 to be my own set of [perhaps wishful thinking] predictions for marketing in 2008. I mean, what kind of marketing blogger would I be if I didn’t throw my two cents into the discussion?…

Before the holidays, I shared some thoughts with Barney Beal over at TechTarget. He’s just released a podcast of our discussion. So, if you want to hear my voice (including a bunch of “ums”, “you knows”, and even a few giggles), please check it out. I’m also joined by my friend and former colleague, John Ragsdale, as well as Rob Bois from AMR. My lesson learned: don’t attempt to record a podcast on your mobile device while on the go!

So, here’s my outlook on marketing in 2008:

  • No sea change events will rock the marketing world in 2008. What kind of prediction is this!?! I don’t think I’m copping out here… I recently looked back at my predictions for 2005. Short of adding more focus to social computing and Web 2.0, I could republish that document now and call it a day (of course I’m biased, but I think it’s good stuff). My point is: marketers (and industry pundits) need to avoid the urge (and thrill) to seek out the next trend to turn into hype. While it’s certainly important to keep an eye on what’s on the horizon, don’t jump into the next new thing without a clear business hypothesis regarding its potential value. And, by all means, measure against your hypothesis.
  • The Web 2.0 hype will moderate and we’ll get down to business. I’m bullish that we’re past the days when all marketers seemed convinced that they needed start a blog or spend money in Second Life. While these tactics (yes, they are tactics – i.e., not strategy) make sense for some firms, for most they don’t. There’s no doubt that social computing behavior is having a tremendous impact on the way business gets done but it’s no excuse for taking the cart (tactics) before the horse (strategy).Ok, so what is important here? Ever since I joined the industry (late 80’s), I’ve heard statements like “customer is king” and “listen to your customers.” But in those days, marketers had the bullhorn. Today, social technologies give customers a platform and a bullhorn of their own. Companies that aren’t listening run the risk of being caught unprepared (and that costs money). There’s no question that there is tremendous potential to leverage social communities, but we’re still in the early days. In 2008, we’ll start sort it out. For many companies this means sitting on the sidelines and keeping an eye on the developments. For early adopters, be clear about the objectives behind what you are doing and establish how you will measure against those objectives.
  • Marketing organizations will get a social conscience. In line with my previous comments, firms need to recognize that today’s consumers are really good at sniffing out and publicizing inconsistencies between what corporations and their brands say and how they act. In 2008 companies must take this bull by the horns – or risk getting trampled. Specifically, I mean walk the talk and align your brands and your behavior in the marketplace with what you say. Whether you are a cataloger of outdoor living that happens to send up to 40 catalogs a year to some customers on your file, a consumer goods brand that purports to promote inner beauty and self-confidence among young women while marketing other brands that paint women as objects, or a financial services firm that invests in companies with business interests in areas rife with genocide – you need to get on top of this.

  • Significant emergence of on demand marketing technology. Tired of dealing with internal technology groups? Well, some good news for marketers on the technology front. The on-demand marketing technology sector is heating up and more viable (yet still not comprehensive) software-as-a-service options are emerging to help marketers plan and organize their activities more effectively, design and launch multichannel campaigns, and measure results. For more insight on this one, see The “On Demand Marketing Suite” Is Becoming A Reality.

  • More focus on behavioral targeting. “Behavioral targeting” is definitely a term that is generating an increasing amount of interest in the online marketing sectors. But, I also find that the term means different things depending on who you are talking to. I take a broad view. Specifically, I define behavioral targeting as:

    Leveraging aggregated and individual behavior data to deliver targeted and customized content to an individual — through online ad networks, on site messaging, as well as other online and offline direct communication channels.

    If companies would only define it this way, they’d recognize that they may very well have behavioral analysis experts sitting in one part of their company while individuals in another group are struggling to figure out the basics and complaining that they don’t have the right skills or tools. I’ll focus more on this one in future posts, but I want to say here and now that it is high time to get those cool spec wearing web data gurus together with the database marketing quant jocks.

  • Companies will start to sort out the role of the CMO. OK, I couldn’t resist. I know that this is one that tends to turn up every year and maybe it’s wishful thinking on my part but, we’ve all seen the stats about the CMO revolving door and I think it’s time for marketing to step up and take ownership. As I said in my recent post about the role of the CMO, I fervently believe that the role of the CMO is to “define and lead a customer-focused marketing strategy that crosses product, channel, geographic, and even functional boundaries.” If marketing fails to transform itself into this role, I believe that the CMO title will eventually die out and marketing will succumb to a future as a tactical, services-oriented role within the enterprise. As a related aside, I was heartened today to see the news that David Norton who has accomplished so much great stuff heading up relationship marketing at Harrah’s Entertainment has been promoted into the CMO role. We need more CEOs that think along the lines of Harrah’s CEO, Gary Loveman:

“In today’s complex multi-channel marketplace, we must continue to strengthen customer relationships and deliver high-quality brand experiences across our entire portfolio.”

Direct mail: Not dead yet (and won’t be any time soon) November 12, 2007

Posted by Elana Anderson in Customer Analytics, Database Marketing, Integrated Marketing, Marketing, Online Marketing.
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7 comments

Thank goodness it’s Veteran’s Day — I have a USPS-free day to clean up all of the mail that is piling up all over my house. Must be the season, but I’ve dedicated a few posts to the direct mail industry lately (I promise that I’ll find someone else to pick on once we get through Christmas). Just to give you some more proof that direct mail isn’t going to die on the vine any time soon (article from Direct Magazine):

Early next year, Neckties.com going to make its first foray into direct mail, says Herschberg.

We have a direct mail campaign we’re going to be working on after the fourth quarter,” he says, noting that while the firm’s younger customers prefer to shop online, they tend to spend less than their older counterparts.

“People in 50s and 60s more likely to be swayed by combination of online and direct mail,” says Herschberg, conceding that the direct mail effort is “something of an experiment.”

Neckties.com is not alone. Per my previous assertion that ecommerce is actually responsible for increased direct mail circulation… I get a ton of mail from Netflix. If Netflix bothered to match its rented list to its own customer database, they would find that my household (thanks to my husband) is already one of its most active customers (my husband rents movies weekly and has rated over 1900 movies Netflix.com to date!). I have also recently received mailings from online mailings from ecommerce stalwarts like Overstock.com.   

To continue my rant… The most ridiculous catalog I’ve gotten so far this holiday season is the one that was entirely dedicated to field hockey from Longstreth. I’m sure it’s a fine company, but my household has no interest in field hockey (I’d love to know where the shoddy analytics that determined I am into field hockey came from)…. The connection must have been that mouth guard I ordered for my daughter (as required by her SOCCER coach) through one of Amazon.com’s merchants…. My request to Amazon: Don’t just pass me off to the to the privacy policy whim of your partner merchants! Take some ownership and add functionality to your ecommerce site to allow customers to opt-out of catalogs and email when they buy from a partner. 

“Relationship” Marketing November 9, 2007

Posted by Elana Anderson in Customer Experience, Database Marketing, Marketing, Marketing Strategy.
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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).