Customer World

Planning for Enterprise Marketing Platform - Forrester's prescription

Suresh Vittal of Forrester released a report on successful implementation of Enterprise Marketing Platform couple of months ago. It had some interesting learnings for any enterprise planning to get this going in their organization. Here are some highlights:

• Pre-implementation planning should include a full data profiling exercise. Many marketers stop after a cursory audit of their potential data sources. But a basic data audit misses most of the data issues that marketers will encounter during the implementation. Profiling data early helps identify key data inconsistencies with sufficient time to solve them without any delays to subsequent phases. These inconsistencies stem from issues associated with data cleanliness, rapid acquisition of multiple data sources, and data-software incompatibilities. A leading retailer told us, "Our campaign management system likes data to be set up in a certain way. We spent one year structuring the tool to fit our data mart and then switched to organizing our data mart to fit the tool.
• "Major process and workflow revisions are par for the course. By their very nature, marketing automation tools make some processes obsolete and require the creation of others. As one large bank told us, "Marketers must realize that with automation they are capable of planning and executing 50 campaigns instead of three. This means that they will need to pay attention to workflow and analytics."
• Increased demand for analytical skills after rollout requires upfront planning. Traditional marketing practices place little emphasis on deeply understanding one's data — a required skill for using an enterprise marketing platform. As a result, the skills mix of most teams shifts after implementation, and on some occasions teams even undergo a complete reorganization. One large financial services institution found that, "The bulk of requests moved downstream. Marketers who originally dealt with campaign execution are now requesting campaigns and defining segmentation and offer requirements, with the production happening in the background."
• Technology support organizations are essential. Enterprise marketing platforms are complicated enterprise software, which require a technical background to install, configure, and maintain. Marketers should secure advice and assistance from their technology support teams for planning and defining requirements and dealing with integration issues and software upgrades post-implementation. One large insurance organization had its IT department write a portion of its request for proposal (RFP), while a large high-tech firm found great success in partnering with both finance and IT. In both cases, marketing retained ownership of the final decision, but it brought in experts for advice as needed.
• Change management and on-boarding takes longer than anticipated. With changes to process, technology, and skills, most marketing teams need time and resources to adjust. One enterprise-level, high-tech firm told us, "Don't try to shortchange the effort. Refresh it and keep it moving by focusing on process, culture, rewards, and behavior management." A large brand manufacturer told us "Scoping support was a challenge. We were taking a core tool used daily and completely replacing it with a new one. The team was busy just keeping up with campaigns, and now they have to make time to sit with the project team and learn the new tool."

Interview with Drayton Bird - " Internet has accelerated direct marketing"

Paul Dervan had a chat with Drayton Bird, one of the legends of the Direct Marketing industry. His answers are incisive and pretty telling. Take a look:

Me: What is the single biggest change you noticed in direct marketing industry in the past 15-20 years?

Drayton: More people are doing it, less well.

Here are some of the things that have had significant effect on the marketing industry over the last four decades:

• The  computer and particularly the speed with which data is available.
• Databases. Now all organisations want databases because they realise the value they hold. They have seen how easy it is to capture data via a website.
• Direct  marketing attracting more investment than general advertising
• Personalisation  and customisation has allowed more relevant communications to be  produced.
• The  decline in educational standards, especially literacy and numeracy
• The  internet
• The way in which the idea of the brand has come to seem important, even to people who have nothing to do with marketing – and who misunderstand it
• Inflation, especially in media costs, where it has far outpaced general inflation, leading people to seek new ways of marketing
• The greater desire for individual expression, frustrated by the move among those in power towards ever more centralisation. This mirrors what has happened in politics – e.g. the European Union.
• Compliance  – and the obfuscation of language in the pursuit of covering  the corporate rump.
• Changes  in attitudes to sex – greater openness, particularly in  advertising imagery.
• The  increasing use of marketing techniques – usually badly and  often dishonestly applied – by government.

                      

Me: There seems to be a blur between direct marketing, ATL advertising and digital marketing. Do you find this?

Drayton: Yes there is. This is a good thing. This is not a difficult business to master and people should be able to understand and practice all three, since customers switch happily between them. Customers and their motivations do not change even if the media do. Actually as I point out in the new edition of Commonsense Direct and Digital Marketing, the word “digital” is a misnomer. We have digital TV and radio, but marketers don’t think of them as digital.

Me: Is the future of direct marketing looking bright?

Drayton: Yes. My former colleague Shelley Lazarus, now CEO of Ogilvy Worldwide said at the DMA conference not long ago that today, all marketing is direct. This is because of the internet, which is accelerated direct marketing.

Me: What are the common mistakes made by marketers?

Drayton: Here are some I listed recently for another interview...

• Too  many amateurs in a business that calls for professionalism.
• They  fail to study the past – or read.
• They  “seek applause instead of sales” – Claude Hopkins  said that over 80 years ago.
• They forget it’s just salesmanship and imagine it’s a branch of the entertainment business. Entertain, by all means, but make sure it’s relevant.
• They  invest before testing – why guess when you can know?
• They don’t measure. If you can’t measure it, you can’t manage it. What sane person invests in anything without measuring return on investment? Marketers do every day. Why? Because firms see it as an expense, not an investment. That’s why they cut marketing expenditure in recessions.
• They  believe research will supply the answer – when it is only  indicative.
• They  don’t study business as a whole - all they think about is  marketing.
• They  fail to explain clearly to their colleagues what they are doing –  maybe because many don’t really know.
• Over-optimism  and a naive belief that marketing, especially advertising will solve  business problems.
• Hiring marketing directors and senior agency people without checking their credentials. There is too little due diligence in our industry.
• Uncritical  acceptance of “gurus” who are often just recycling old  truths. Me, for instance.

               

Me: What advice would you give anybody starting off in marketing?

Drayton:

• Read. It’s a very agreeable feeling when you walk into a meeting knowing more than anyone else.
• Study people. They are the only profit centre in your business. If you really understand your customers you multiply your chances of success.
• Constantly ask yourself: “What if?” - that is how ideas are born. You need an inquiring mind to succeed in this business.
• Take an interest in as many things as possible outside marketing, which is a very dull subject. If you think about nothing else you will end up a tremendous bore – to others and yourself.

Learning from Clive Dunhumby

Independent has a nice article about Clive Dunbumby, a pioneer in data-led marketing. His involvement in the success of Tesco's loyalty program is legendary.Here's a chance to learn from his experience on how to use data:

If knowledge is power then Dunhumby founder Clive Humby is a very powerful man indeed. Every year, the Londoner's data mining firm peers into a mind-boggling 100 million shopping baskets. The contents of those baskets are sorted by codes, fed seamlessly into powerful spreadsheets and analysed by a team of dedicated number crunchers.By the end, Dunhumby has an eerily complete picture of individual shoppers.

• "If you want to have a dialogue with customers, you have to have permission," says Humby, "we have permission".

• Humby says responses to tailored vouchers are far more positive than reactions to mass market campaigns, which ultimately means better value for customers.

• "Voucher redemption (for tailored messages) is 20 to 30pc -- mind-numbingly high," he says. "If something relevant is sent to customers, they're much more likely to use it.

• "Tesco without Clubcard is unimaginable," he says. "The loyalty data is such a valuable set of insights that it's used with a light touch everywhere.""

• Promotions on coffee don't work because people tend to be loyal to one brand, while beer promotions are a winner because shoppers are happy to try many varieties.

• Tesco's "Supplier Insight" programme is largely used as a bargaining tool, with the supermarket giant offering "blue data" to suppliers tracing general trends with no personal information, but Tesco also uses the scheme to encourage promotions for frequently overlooked customers like older age groups, in a nod to social responsibility.

• Humby stresses that while data mining works well in "high transaction businesses", it will never hold the key to retailing success."If you're stores aren't right, if you haven't got the prices right, then people won't shop," he says, "You can't exploit a loyalty card without the fundamentals."

My take: When you have data, you should first know what does it have as information & how to use it.Don't collect data that you don't know where you are going to use. You should also know what works & does not work - measure & understand everything that you do. Lastly, you should know it is not a magic wand for you to get customers to come back or buy more. You have to get your product right.

The emerging BIG switch

I was reading an article in DM Review, on the emerging applications of business intelligence tools and the transformation expected in the future as 'information inventory' in enterprises gather pace over the next decade. While there are interesting trends on how BI applications will grow( which I have put together as a presentation), I would likely to slightly digress a bit and pick-out some thought-provoking points that has been made in the article:

I found a particularly interesting point that can have a profund impact on many business models which many business managers tend to dismiss or miss many a times:

"This is the trend that Nicholas Carr identifies in his book “The Big Switch: Rewiring the World, from Edison to Google” (W.W. Norton & Co., 2008). This refers to the trend of businesses switching from the internal deployment of software to the outsourcing of large-scale information processing systems, also known as software as a service (SaaS).SaaS is normally thought of as a simplification and economization of the installation, management and maintenance of software.

Carr’s argument is simple: during the industrial revolution, every factory had its own power plant – initially, water wheels and subsequently steam engines. As electrical service became widely available, a big switch took place, and as we know, few factories today have their own power plants because it became more economical for them to use electrical power supplied by utility companies. Carr’s point is that in a similar fashion today, most industries operate their own computer systems but soon will switch to having them managed by outside parties because it is more economical."

How's the BIG switch going to affect your business?

Is it possible for you to envision the big switch in your business that can become a game changer? I personally think this is happening to the so called analytical and marketing applications that I work with everyday. It's increasingly all about finding common business issues across business verticals, developing a common methodology to develop insights, identifying a platform to capture trends that the enterprise business users can access and getting them together quickly to create business impact. We need to have the ability to combine mass customization with scalability in our analytical marketing business.Am sure it's applicable to your business too!

THE BIG switch in BI applications

Coming back to the topic where I started,the article goes on to mention that Diagonal BI applications will substantially extend the benefits of SaaS and will accelerate the outsourcing trend in BI.

| View | Upload your own

Personal recommendations are more authentic

As many channels start to converge, the chatter among customers about products, benefits, uses, problems, referrals is increasingly gaining a lot of attention. It's so easy  today to get on to the web and know what customers think about your products. The ability to fuse this data along with your transactional & attitudinal data that lies within your organization and doing analytics on this information is going to be the next inflection point for marketers.

Here's a presentation by Paul Isackson that brings out the power of this chatter and influence on customer behaviour.

| View | Upload your own

CMO council releases study on 'Leveraging Customer Data and Analytics'

Only 50 percent of global marketers report having a strategy for further penetrating or monetizing key account relationships, reports the Chief Marketing Officer (CMO) Council in a new research study, Business Gain From How You Retain . In addition, a surprising 45 percent rate the effectiveness of customer relationship management (CRM) systems as deficient or needing more work, with only 15 percent of companies rating themselves extremely good or effective at integrating disparate customer data sources and repositories.

 

Conducted in late 2007 and early 2008, the CMO Council's Business Gain from How You Retain study undertook a wide-ranging evaluation of where and how marketers are "operationalizing" customer intelligence and insight to reduce customer churn, increase lifetime value, improve the customer experience, and increase the effectiveness and targeting of marketing spend.

More importantly, marketers are struggling to gain a true and timely view of the customer due to inadequate or incompatible IT systems and databases, siloed data in functional areas, and a limited strategic focus or management mandate on Customer Data Integration (CDI). Compounding the issue is a lack of formalized data-sharing policies and practices in the organization, combined with internal political or cultural barriers and IT obstacles and objections to data integration.

 

"We are seeing a fundamental need for marketers to be more effective at tapping the valuable vein of customer data that runs deep inside all organizations," notes Donovan Neale-May, Executive Director of the CMO Council. "Investing in integrated systems that harvest customer insight is critical to driving both marketing and business performance," he adds.

•       Only 15 percent of marketers say their companies are doing an extremely good or effective job of integrating disparate customer data sources and repositories; 55 percent note there is room for improvement or a deficiency in this area.
•      More than 31 percent of companies surveyed had customer churn rates of more than 10 percent and 32 percent reported turnover of five to 10 percent. In comparison, more than 62 percent said they desired or expected a churn level of less than five percent.
•      Respondents believe customer churn significantly impacts business performance through revenue loss (59.9 percent), reduced profitability (39.6 percent) and greater marketing and re-acquisition costs (36.3 percent). 
  
•      While churn is a big issue, nearly 67 percent of those surveyed say they have no system for re-activating dormant or lost customers, while just over half of respondents have a strategy for further penetrating or monetizing key account relationships.

•       While more than 35 percent of respondents report that the CMO or marketing department (38.9 percent) has primary responsibility for the customer analytics function, they are not leveraging its value. Over 31 percent of those surveyed do no data mining at all and 63 percent are only doing moderate levels of data mining for intelligence and insight.

•             The top six strategic applications of customer information by marketers include:

                        - Up-selling and cross-selling
                        - Segmenting and targeting
                        - Driving retention, loyalty and promotional programs
                        - Identifying new opportunities and unmet needs
                        - Improving customer service
                        - Shaping personalized and customized communications

•      Key initiatives to increase customer retention include improving customer communications (65.2 percent); addressing complaints, problems and pain points (51.8 percent); and enhancing the customer experience (54.8 percent). Unfortunately, fewer marketers noted their companies' willingness to modify business practices and policies to accommodate customer needs.

The laws of physics behind marketing methods

I read an interesting post about how the rules of mass marketing, direct marketing & social media are so different in approach, content, analysis and results. Therefore, for marketers, the challenge of applying & measuring each of them is conflicting, different & downright confusing. The truth though is that data(at an individual customer level) is becoming the DNA for marketing and incremental byte-sized data from each of them come at different points of time - controlled to near-real to real.The key, therefore, is knowing how to use it, apply it basis the method of marketing marketers are executing or seeking solutions for, not making the mistake of transposing one type of marketing hypothesis to the other etc. are key factors of being a successful marketer tomorrow.

Take a look:

Mass advertising is like Classical Physics; large-scale, mostly intuitive and somewhat predictable.

Direct Marketing is like Atomic Physics; small/medium-scale, mostly logical, but the segmentation aspects start to show some bumps and troughs on what appeared to be smooth and simple.

Social Media is more like Quantum Physics; small-scale, counter-intuitive and usually unpredictable.

• Traditional marketers deal with everyones opinions in big bins like sales figures, national focus groups, opinion polls, etc. These roll-ups average out the inconsistencies of individuals and blur together to form tendencies, trends and preferences. The actions taken in mass marketing can expect a relatively consistent result (i.e. send out a coupon and you can expect a certain level of redemption and sales revenue to come from it and the larger the audience, the more likely it is to average out at a predictable result). This is the world that marketers are familiar with and all-in-all it makes sense if you know the system.

• Social Media on the other hand acts on the niche and individual level where things are a lot less certain. The complex nature of blog posts is hard to parse out into definitive numbers and trends.The lack of large numbers makes the reaction and result of social media efforts difficult to determine and measure. It is much more difficult to roll up all of these disparate opinions into a meaningful decision than to look at an opinion pie-chart.So in essence, social media tools have given marketers a microscope powerful enough to see what is going on at smaller scales.

...many marketers in the classical camp are not very happy with what they see, because it doesn’t confirm what they thought they knew. Decisions which appear obvious when looking at large sample sizes becomes more nuanced and contradictory when you see everyone as an individual.

How do measure Customer Engagement?

MarketingNPV provides an in-depth point of view on measuring engagement. This is a complex and evolving subject in marketing. The key however is to start small, keep defining & redefining it, see the results and keep improving it all the time. I think customer engagement must include all touchpoints beyond just net, blogs. It should include store visits, branch visits, call centre, product usage, cross-product holding, depth of features & benefits used by the customer etc.

Take a look at how they see it:

Two Types of Engagement

There are two generally accepted engagement “types”: emotional engagement and behavioral engagement. The former is more popular; the latter is more important.

Behavioral Engagement

It’s important to note that behavioral engagement is not limited to a purchase of a product or service; it encompasses all the interactions that a prospect or customer has in relation to a brand. There are any number of pre- or post-sale activities that can be (directly or indirectly) predictive of a future purchase or re-purchase; they include visiting a Web site, downloading a whitepaper, calling customer service, recommending a product, or even commenting on a blog.

There’s plenty of data available to track how customers or prospects are engaging with a company; the key is to synthesize it into a clear model for demonstrating either short- or long-term economic benefit.

To probe more deeply into these drivers, your next step will be to identify places on the map where you have good data and where you don’t. Look beyond the traditional customer survey information, brand-tracking studies, and the CRM system. What Web analytics are you capturing? Do you have access to point-of-sale data or call-center transcripts?

The key to measuring engagement is:

a. Develop a vision
b. Create a methodical testing process
c. Look for predictive validity of upstream behaviours
d. Leverage your engagement drivers

Marketing - How is it changing?

Forrester, has come-up with some research around emerging trends in marketing ( ahead of their Marketing Forum 2008) - Engagement is becoming an important metric. Key highlights include:

Marketing leaders steer based on hard data. Measuring engagement will take the guesswork out of budget allocation. Engagement can drive awareness, transactions, brand preference, and loyalty. But each of these objectives requires a different approach and investment in people, processes, and technology.Marketing leaders from firms like CompUSA and BMW prioritized one goal, chose a very specific set of tools and vendors, and successfully moved the needle on transactions and loyalty, respectively.

Direct marketers and market researchers unearth deep client needs. Leading direct marketers already combine Web clicks with purchase and loyalty data to unearth a consumer's interaction with the brand. But BrandIntel went a step further and recorded the content that users generated and other consumers read.

eCommerce professionals drive online sales with personalization. More than a third of Web visitors will make a purchase after seeing a personalized recommendation. eCommerce professionals can boost online sales with one-to-one personalization.

Customer experience professionals innovate the brand. Whirlpool observed people at home and used the results to develop a new sub-brand -- Gladiator -- with fridges for men in their garages.To meet these uncovered needs, customer experience professionals will develop a disruptive strategy, simplifying the interaction, amplifying the service elements, and repositioning the brand overall.

My view:  Involvement, Interaction, Intimacy & Influence - 4Is as Forrester calls it, needs to be measured by marketers on a regular basis. This will increasingly make marketing more data-led. They need to be building programs around the 4Is using data. It is important that they start fusing transactional data with web data - clicks, blogs, social networks etc. along with customer service data. This will increasingly give marketers a peek preview into how customers feel, think and talk about their products and personalize their marketing efforts basis the degree of engagement they have identified with these set of customers. 

Personalized communication - Is it lack of data or resolve?

The CMO council in its new global survey, "The Power of Personalization"  has some interesting pointers on potential opportunities that enterprises have in exploting this approach and strategy.

According to the survey:

• Inadequate customer data is the key obstacle facing top marketing executives in their adoption of personalized communication techniques.
• Many CMOs feel the process of developing individualized marketing messages is still largely under-utilized and under-tested.
• More than 55 percent of respondents plan to allocate 10 percent or more of their marketing budgets towards personalized communications, despite their reluctance to declare their personalization efforts successful in the past.
• Many marketers' programs have been deemed unsuccessful because of a lack of actionable customer data used in campaign planning -- as well as because of inadequate analytics used in assessing post-campaign effectiveness.
• 55.1 percent of respondents plan to increase their 2008 marketing budget allocations for personalized communications by more than 10 percent.
• 49.1 percent of respondents blamed "inadequate systems and infrastructure" for limiting personalized communication initiatives.
• "Lack of customer data and insight" and "cost and complexity" were also cited as major contributing factors by 46.2 and 43 percent of respondents, respectively.

My View: I personally believe that many marketing departments in companies are struggling with this new order of availability of customer information, left-brain marketing techniques(viz. analytics) and competency to leverage technology tools. Earlier they had to just "inform", now they need to use customer information to "interact". The traditional job roles and responsibilities need changes, as marketing departments need to have people who understand data, technology and interpret individual customer behaviour.I think marketers must learn to use simple tools, extract whatever data is available and show quick-wins rather than wait for technology infrastructure to be perfect to adopt this approach as they scale-up this kind of marketing. Also, product managers must also have under them customer information managers/ executives who could effectively lead this process. It is also important that the silos in organizations have to be brought together by the CEO to ensure information is used effectively for the enterprise rather than a particular line of business. May be new accounting methods of attributing income, because information of a line of business is used for the other, should be designed for wide adoption of such practices in enterprises.In my opinion, personalized marketing is more than just the 'intent', it is the 'intensity' that can make the needle move!    

Do you onboard your customers?

I am not always excited if somebody tells me I have acquired a new customer. I always look at what is in the plan of the marketing & product teams to make these customers use all the features and benefits of the product, so that these customers can be with them for life. Not too many companies pay attention to onboarding customers. They acquire and forget. Or they pay a lot of attention to how to acquire customers but not do enough review of what is done to keep and grow these customers. Kevin Zimmerman, Sr. Editor, at Peppers & Rogers writes:

Consumer electronics companies and retailers are finding out the hard way what happens when you don't educate customers. Take, for example, the recent situation involving the purchase of popular high-definition televisions (HDTVs). According to Forrester Research Analyst James McQuivey, 20 percent of the sets sold have been returned in some U.S. regions, in large part by consumers who didn't realize what they were buying. Per an ESPN/Knowledge Networks/Statistical Research Inc. study, only 64 percent of homes with an HDTV have HD programming via broadcast or cable, and 13 percent of people who own an HD set do not know if they receive an HD signal. McQuivey forecasts the 20 percent figure will drop moving forward, as more retailers see the need to educate customers about the format if they want to avoid such massive returns.

Who's responsible for customer education?

Henry Choy, senior analyst at Jon Peddie Research says ""The store should do a better job of educating customers, the documentation inside the box must be better, cable companies can get more involved,"..

For a moment, if we as marketers think like customers, then count the number of times we would have read an operating manual, the number times we would have used the features that we primarily bought the product for, the number of times a company that we bought the product from, called to tell you if you have understood the features and used them. In my case, it is close to zero. That's the opportunity waiting to be tapped - Onboard your customers and you will realize there's profits to be made for life.

Do you know how to build analytics from conversational databases?

Peter Kim of Forrester has written a thought-provoking article on the future of the advertising agency. The report argues that consumers now rely less and less on marketing messages when in buying mode. Instead they seek guidance from family, friends and others in their respective communities to guide them toward purchase decisions.

Peter’s views via AdWeek

(Agencies are) “in “a world of hurt” because consumers are tuning out the messages the industry is predicated on producing. Instead, it believes shops need to be organized around communities, not disciplines. What it is calling “the connected agency” would not only know certain communities but also be active members of these groups. Pushing messages would give way to encouraging voluntary engagement, and ongoing conversations would replace time-based campaigns”.

My View:

As communities & conversations become more and more important, there is a need to understand how to build analytical models around huge "conversational  databases" that will emerge. The ability to mine data and conversations together, will become a  huge competitive advantage for service providers. The ones who will succeed are the ones who will be able to overlay the traditional transactional data with conversational data. This is a skill that needs to be built and nurtured if brands and service providers have to succeed in the future.

Treat data with respect

According to a research released by Royal Mail, an estimated 90 per cent of companies fail to exploit data they already hold  on their customers!

It was really disturbing to me as I went thro' some highlights of the report as to how companies value data. In my opinion, in the coming decade, data is going to be every enterprise's only competitive advantage and companies can't take this data casually given the value it can derive, as this research shows.

Take a look at the topline findings:

• Only 15 per cent of companies declare their data as an intangible asset on their balance sheets.
• Data is proven to be a fundamental asset. A firm understanding of a customer database can significantly bolster the bottom line and add value to the company itself, potentially adding millions to a sale price.
• Huw Davis Partnership founder Huw Davis says that clients have increasingly been asking him to value databases over the last few years, and he would recommend more businesses to do so.
• Most companies are getting less than half of the potential value from their customer
  data.

By addressing the data problem, enterprises could potentially increase their value by up to 30 per cent. It is imperative that enterprises look at ways and means to design a customer data strategy road map and extract value from it.

Forrester's ladder of participation and impact on marketing

I was reflecting over the weekend about Forrester's Social Technographics Ladder of Participation. While it was focussed on emerging social technologies, I felt there were some trends, learnings and practices that can be applied from here to refresh marketing thinking, practices, evolving needs to embrace technologies that can make some changes happen and thereby make marketing more relevant to enterprises and CEOs. Let's take a look at this Ladder of Participation first:

I see the marketing eco-system too, taking a very similar shape(with either customers or prospects) in the years to come. The need to 'engage' and run marketing campaigns across a similar ladder is bound to become increasingly important. Marketing will need to 'bucket' its segments of customers or prospects across the spectrum of Inactives to Creators. The 'old world marketing' practice would have stopped with collecters - who I would define as repeat purchasers. Normally, marketing practices would have stopped there.

But, in the 'new world of marketing', customers will be more involved, participative and conversational. Thereby, customers will leave a 'trail of information' behind, in enterprises. For an enterprise, the creators will be the most loyal and demanding. They need to be recognized, valued and encouraged to converse. The ones who do it, will become identifiable and the most important. Also, products/brands will have to become 'information platforms' in such a world. This will also lead to customized design of products and services for them.

The critics are the ones who will have to be 'listened' to. With emerging channels or touch points, the enterprises must open a channel of communication to hear and rectify their problems. They are the ones who can potentially move-up the ladder of participation.

The collectors need to be 'prodded' to talk rather just buy again and again, get them to share their experience and frustrations with the product. And the joiners will have to be moved to become collecters.

This kind of marketing will combine a lot of information, analytical insights, real-time marketing automation to talk to customers in different behavioural states and stages in the ladder. And when enterprises talk of millions and millions of such identified customers or prospects, the need for marketing to deliver scalable, real-time, right-time marketing will only become sacrosanct. The ones who will practice it, will have the ear of CEOs/CFOs and the rest will be left behind.

 

    

Understanding the power of customer lifecycle

David Baker provides some interesting insights on customer lifecycle. I quite like the idea of identifying "switch points" when a customer is likely to switch to another product/brand or is ready to move to a product in the higher tier. The key question to me though is the ability of companies to identify such "customer states" or "behaviour states". Marketing needs to quickly start learning that art of using customer information, drill down and observe these changes in customer patterns and take appropriate action.

He writes:

If you are like most people, you have stages of life and all things around you; people and environments change dramatically over time. We have an early life stage where we learn the primary elements of surviving in this mixed world, the basics, as we could call it. This is where we form our basic judgments, values and shape who we are and the paths we'll lead. This is where we learn to develop our community of generations, or simply break out and build our own communities. We have many milestones that we go through: high school graduation, college for some, young adult life in the working force, family development and planting roots into a community. We then drift into the middle stages of our life, where many foster these communities and evolve the next stage of life till we get to the celebrated later stages of our life and bask in our wealth and watch our families grow up.

A customer lifecycle is just that. It is the foundation of consumer involvement with your brand over time. A customer lifecycle can shift over time, as consumers come in and out of different lifestages.

The key to marketing exactness in developing a lifecycle program is to identify "switch points" when a customer is likely to shift away from your brand, consider new alternatives and potentially develop some brand affinity with your competitor. Many in the marketing space trigger off of key income milestones. We graduate from college, we get married and have dual incomes, we start a family, we invest in our first home, we buy our first automobile, we consider life insurance as a means of protecting our family, we look more closely at investment options. All are viable triggers.

Don't purge that consumer from your database or program if they don't respond; don't purge them if they don't buy. Look deeper and see if a lifestage is influencing their involvement with your brand. That's the essence of marketing!

Eight predictions for marketing in 2008

We are coming to the end of 2007 and dawn of another new year. It's time for predictions again, I presume! Chief Marketer has some predictions:

1. There will be an ongoing emphasis on “engagement” measures. This is getting harder and harder to measure using models that had already lost their efficacy in 1985, and when you combine that with the power of today’s “bionic” consumers, born hot-wired into the Internet with an iPod in one hand and a TiVo controller in the other, engaging them will be the only way of guaranteeing loyalty and profitability.
2. More “brands” will become “Category Placeholders.” As brands become more and more enamored with and enmeshed in “new” media like social networking and messages beamed into consumers’ living rooms from outer space, marketers need to ensure that their brands actually stand for something in the mind of the consumer.
3. Companies will have to move from saying they’re ”Green” to actually being “Emerald City Green.” Playing in the environmental arena won’t be an option in 2008 and brands and holding companies will have to find ways of positioning their offerings in ways that meaningfully support a sustainable future.
4. Media planning will become more touch point focused and personalized.
   Planners will still classify touch points as “above-the-line,” “below-the-line,” and “new,” but planning will be based on three critical considerations: a) which touch point best reinforces brand values, b) where the brand + media equation yields real engagement, and c) where the plan is seamless, believable, personalized, and authentic.
5. Behavior will (finally) trump attitude.More marketers will come to realize that “to know you is not necessarily to buy you” (or, for that matter, even like you). Loyalty and engagement metrics – particularly those configured to provide brand-to-media engagement measures—will be used to identify behavioral “hot buttons” that marketers can add to their toolboxes and their search efforts.
6. Consumer expectations will once more grow.Brands are only barely keeping up now. Expectations remained stable for a short time, but only while consumers were catching their breadths and adopting –then devouring – the newest of the new technologies and innovations.
7. Personal health management will impact brand engagement and loyalty.U.S. obesity is at an all-time high, with Americans among the fattest people on earth. This increase is primarily the result of consuming more calories, that behavior the direct result of technological innovations making it possible for food to be mass/fast prepared far from the point of consumption, and coconsumed with lower costs of preparation (even if you factor in marketing costs).
8. Innovation and loyalty will matter more. What is clear is that the ever-expanding universe of brands will require an informed action plan – one that makes sense to the people on the brand and marketing side of the equation, but one that also accurately identifies and capitalizes upon what people on the consumer side really feel, really want, and really believe. nsumed with lower costs of preparation (even if you factor in marketing costs).

What are the icons of your customer service?

If you are obsessed with customer-centricity in your organization, it make sense to have some icons that serves as a benchmark for the organization to emulate and live-up to. CRM Buyer has an interesting article on how Lands' End did it:

Motivation can take many forms. At Lands' End these days, it has taken the shape of a London taxicab parked in front of the company's headquarters, its black paint buffed to a mirror-like shine, its grille festooned with a Christmas wreath.

Historic Return Policy

Lands' End, now a division of Sears, has built a reputation for 44 years on customer service. The London taxi, returned by a customer in 2005, has become Lands' End's version of a well-known Nordstrom legend, in which a customer was allowed to return tires even though Nordstrom never sold tires.

However, in this case, Lands' End really did sell the car, back in 1984. The London taxi was featured on the cover of Lands' End's holiday catalog that year as a special luxury item. The cab, complete with a right-side steering wheel, and filled with classic English cashmere clothing and gifts, was sold for US$19,000 to a Kansas native. The woman bought it as a gift for her husband, who was a car collector.

In 2005, the man called Lands' End and invoked the company's unconditional guarantee policy that allows customers to return any item that they are not satisfied with for an exchange or refund of the full purchase price. He got the $19,000 back, and Lands' End got the car.

The taxi would be worth between $10,000 and $12,000 now, according to Richard Lentinello, editor of Hemmings Motor News, a monthly publication for car enthusiasts based in Vermont.

It's more than a cab. McCreight says the taxi is a valuable symbol.

"For thousands of employees, or new employees, to say, if you're designing a product, and you're going to need to stand behind that product 21 years later, how dearly and how much attention do you take to design it," McCreight(President of Lands' End) said.

I personally think this is a lovely quote from McCreight and one that is extremely relevant. Many companies develop products or policies, sell or run it for sometime, only to later revoke it! Companies need to realize that such revoked products or policies leave customers confused, frustrated and miffed. It pays to plan just in case your customer returns after 21 years!

The difference between CRM and CEM

Lauren Hoyt, Editor, SearchCRM provides some great perspective on the difference between CRM and CEM( Customer Experience Management):

First there's the question of a definition. I asked Lior Arussy, one of the thought leaders in this arena, to define customer experience management.

According to Lior, a customer experience is the total value proposition provided to a customer, including the actual product and all pre- and post-sales interactions with the customer. Meanwhile, CEM is the science and art of managing all interactions with customers across all touch points in order to maximize the value provided to customers.

"There are quite a few differences between [CRM and CEM]," Martha said. "If we look at CRM, that's how a customer looks to a company. And if we think about CEM, that's really how the company looks to the customer ...we're talking about making it worthwhile to do more business with us because we become more worthwhile to them. It's taking the time to see their point of view, understanding how to be reciprocal with them, understanding how to be trustworthy."

"CEM systems and CRM systems serve different, although complementary, purposes," he said. "While CEM is about creating the best customer experience, CRM is about managing relationships while focusing on maximizing revenues. CRM is tools geared to manage and analyze customer information, while CEM is tools geared to enable and enhance customer interactions."

One more perspective on the future of marketing

I have been posting a lot of thoughts on the future of marketing and how it's changing dramatically. Here's one more perspective from Idris Mootee. He has an interesting presentation on this topic which brings to life the challenges that lies ahead for CEOs, CMOs and their communication partners.Take a look:

| View | Upload your own

Forrester’s 2007 Customer Experience Rankings

Bruce Temkin writes about the recently released Customer experience rankings by Forrester:

#1 ranking in Forrester’s 2007 Customer Experience Index (CxPi)…

The 2007 CxPi ranks 112 firms across 9 industries: Banks, Credit Card Providers, Health Plans, Insurance Firms, Internet Service Providers, Investment Firms, Retailers, TV Service Providers, Wireless Phone Carriers. The CxPi is based on consumer evaluations across three areas: 1) usefulness; 2) ease of use; and 3) enjoyability (see the methodology section below).

Here are the full 2007 CxPi rankings…

Costco took the top spot in the CxPi rankings - just barely beating out Borders. At the other end of the spectrum, Charter Communications landed at the bottom of the CxPi rankings. Here are some additional insights about the overall results:

• Retailers take nine out of the top 10 spots. All but one of the top 10 firms in the ranking is a retailer - and the only non-retailer isn’t a single company but a segment of banks called credit unions. Interestingly, all three wholesale clubs - Costco, BJ’s Wholesale Club, and Sam’s Club - made it into the top 10. Another retailer, Walgreens, came in at No. 11 to round out the firms that received an “excellent” rating.
• Communications firms, health insurers, and banks dominate the bottom. Four organizations ended up with “very poor” CxPi ratings: Charter Communications (for both TV and Internet), Medicaid, Cablevision/Interactive Optimum, and Aetna. Two other health insurers (United Healthcare and Anthem), two large banks (Citibank and JP Morgan Chase), and Sprint filled out the bottom 10.

CxPi Results Across Industries

We also looked at the overall results for the 9 industries included in the CxPi. Here’s how they did across all three components of the CxPi … 

Our 27 retailers significantly outpaced the other industries with an average overall score of 78%. Retailers owned the top spot in each of the three underlying customer experience categories as well, winning both ease of use and enjoyability by wide margins.

Does P&G need another community portal or a platform?

Procter & Gamble has launched a portal for pet lovers - petside.com. According to NY Times:

...Web portal that looks something like a Yahoo or AOL for pet owners, with a bit of Facebook and MySpace thrown in.The site, Petside.com, offers a full menu of information about dogs and cats, from the serious (how to diagnose your pet’s illnesses) to the silly (funny animal videos). There are links to shopping sites (like Petco.com) and articles about topics like what to do if visitors are allergic to your pet (hint: vacuum). Visitors are encouraged to set up social networking profiles in order to meet other pet owners.

While it's a great idea, it raises some questions in my mind. Frankly, I don't have all the answers but it can set a context for a discussion, I think:

1. Can such portals aggregate "interested" customers and create sustained interest ?  Am not sure. There is a lot of content on the web for pet owners. I think marketers need to add context around the content rather than just content. I personally don't think there is a need for one more portal and consumers are not waiting for one, I presume.
2. Is it still old world thinking? The TV era was about creating content and it helped aggregate audience. During the later years,there was proliferation of channels but it was still limited. The internet has opened-up a flurry of 'content creators' with micro audiences. So, it may just  be impossible to lead with content alone. The clutter in  new media is  lot more higher than traditional media. If TV soaps had a 13 or a 26 week interest, such content might have 13 days or 26 days interest?!! How do marketers keep the momentum going?
3. How can P&G create a platform? Thinking laterally, Google creates APIs that can be plugged-in with other sites and hence it is a sort of glue where ever users go on the web. It's in the context of the user rather than the marketer. So, do marketers like P&G have to create CPIs, where  C stands for customers. If I was a pet owner, P&G builds a set of CPIs that can help pet owners get content the way they want.It pulls content from different creators. It's an equivalent of a  "TV remote" in the offline world. If I don't like the content, I switch it off and move to another. P&G's site needs have a lot such CPIs which consumers can use. It may be mobile reminders, email alerts, or a plug-in into my igoogle  which is an independent channel for pet owners, beauty, grooming etc. P&G has to create an open marketing platform for content developers to use its CPIs.

What do you think? To me this makes a lot of sense and seems far more relevant than creating one portal after another.

          

Experience is marketing

In s+b magazine, James Gilmore and Joseph Pine II write that:

Companies in consumer and business markets now pay more and more to reach fewer and fewer households and executive decision makers.

What companies need, therefore, is a new approach to demand creation that actually enables — make that forces — a company to be what it says it is. To borrow the phrase architect Jon Jerde made famous, that discipline is placemaking. Places are what provide the primary means for companies to demonstrate exactly what they are for both current and potential customers. Companies that embrace placemaking understand a fundamental dictum for contending with authenticity: The experience is the marketing. In other words, the best way to generate demand for any offering — whether a commodity, good, service, other experience, or even a transformation — is for potential (and current) customers to experience that offering in a place so engaging that they can’t help but pay attention, and then pay up as a result by buying that offering. Stop saying what your offerings are through advertising, and start creating places — permanent or temporary, physical or virtual, fee-based or free — where people can experience what those offerings, as well as your enterprise, actually are.

Open Social - The platform for customer aggregation

I have often wondered( when I receive mails from different folks inviting me to be a member of several social networking sites they were members of)oops, hear comes one more social network membership!  I was always left overwhelmed. Where is the time for me to become a member of one more social network and interact. Being an active user of linked-in, I have always felt, what if I had a way to get everyone of my contacts across all social networks into linked-in, be it professional and personal.

I think Open Social from Google just does that. Open Social provides a platform for aggregation of Social networks into the social network site of your choice. It's Google's solution of a connector like app for social networks. There are some lovely business application demos from Linked-in & salesforce.com there. I am sure there will a lot more applications, more than just business applications, which will help me get connected to my contacts and connections in Linked-in, wherever they are in any social network.

At the start of the year, I had read 2007 will be the year of Widgets and it's coming alive with this innovation from Google. I am sure there will be a lot more application development around this code but this is according to me is just the beginning. I believe this is going to have some profund impact on how data, information & interests about consumers will get shared and also how businesses will get a lot more collaborative in the future.

Take a look at the launch video:

Engagement and experience are your new 30-second spots

Don Shultz had done a review of the book "Profitable Marketing Communications: A Guide to Marketing Return on Investment," - A topic that's gaining attention among CEOs today. He picks-up 8 tips - 8 investor tips to marketing communications- from the book:

The eight tips are:

• Concentrate on outcomes, not outputs
• Forget consumers, target customers
• Manage your communication investment portfolio
• Differentiate in any way you can
• Engagement and experience as the new 30-second ads
• Apply a "focus investing" approach
• Establish a measurement culture
• Leverage your employee capital 

I quite liked two tips here.

1. The one on engagement and experience as the new 30 sec ads. This requires a lot of processes and breakdown of silos in the organization. But, it is a critical factor, if marketing has to make business impact.
2. Establish a measurement culture is also a great tip as it is a cultur