Customer World

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.

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 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.

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.

 

    

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).

Emerging Technology trends that will shape business and economic growth - McKinsey's perspective

Carleen Hawn has drawn-up a nice summary of McKinsey's article.

Technology alone is rarely the key to unlocking economic value: companies create real wealth when they combine technology with new ways of doing business. … we have identified eight technology-enabled trends that will help shape businesses and the economy in coming years. These trends fall within three broad areas of business activity: managing relationships, managing capital and assets, and leveraging information in new ways.

A. Managing relationships

1. Distributing cocreation

The Internet and related technologies … allow companies to delegate substantial control to outsiders—cocreation—in essence by outsourcing innovation to business partners that work together in networks. By distributing innovation through the value chain, companies may reduce their costs and usher new products to market faster by eliminating the bottlenecks that come with total control.

The Caution:
Companies pursuing this trend will have less control over innovation and the intellectual property that goes with it, however. They will also have to compete for the attention and time of the best and most capable contributors.

2. Using consumers as innovators

Consumers also cocreate with companies; the online encyclopedia Wikipedia, for instance… Companies that involve customers in design, testing, marketing (such as viral marketing), and the after-sales process get better insights into customer needs and behavior and may be able to cut the cost of acquiring customers, engender greater loyalty, and speed up development cycles.

The Caution:
But a company open to allowing customers to help it innovate must ensure that it isn’t unduly influenced by information gleaned from a vocal minority. It must also be wary of focusing on the immediate rather than longer-range needs of customers and be careful to avoid raising and then failing to meet their expectations.

3. Tapping into a world of talent

… Much as technology permits [companies] to decentralize innovation through networks or customers, it also allows them to parcel out more work to specialists, free agents, and talent networks…new talent-deployment models could emerge [and] changes in the nature of labor relationships could lead to new pricing models that would shift payment schemes from time and materials to compensation for results.

The Caution:
This trend should gather steam in sectors such as software, health care delivery, professional services, and real estate, where companies can easily segment work into discrete tasks for independent contractors and then reaggregate it … Competitive advantage will shift to companies that can master the art of breaking down and recomposing tasks.

4. Extracting more value from interactions

Companies have been automating or offshoring an increasing proportion of their production and manufacturing (transformational) activities and their clerical or simple rule-based (transactional) activities. As a result, a growing proportion of the labor force in developed economies engages primarily in work that involves negotiations and conversations, knowledge, judgment, and ad hoc collaboration—tacit interactions, as we call them. By 2015 we expect employment in jobs primarily involving such interactions to account for about 44 percent of total US employment, up from 40 percent today.

The Caution:
Tere is still substantial room for automating transactional activities, and the payoff can typically be realized much more quickly and measured much more clearly than the payoff from investments to make tacit work more effective. Creating the business case for investing in interactions will be challenging—but critical—for managers.

B. Managing capital and assets

5. Expanding automation

Companies, governments, and other organizations have put in place systems to automate tasks and processes [like] forecasting and supply chain technologies…. Now these systems are becoming interconnected through common standards for exchanging data and … this information can be combined in new ways to automate an increasing array of broader activities, from inventory management to customer service.

The Caution:
Automation is a good investment if it not only lowers costs but also helps users to get what they want more quickly and easily, though it may not be a good idea if it gives them unpleasant experiences. The trick is to strike the right balance between raising margins and making customers happy.

6. Unbundling production from delivery

Technology helps companies to utilize fixed assets more efficiently… Information and communications technologies handle the tracking and metering critical to the new models and make it possible to have effective allocation and capacity-planning systems. Amazon.com [has] expanded its business model to let other retailers use its logistics and distribution services [and] independent software developers … buy processing power on its IT infrastructure so that they don’t have to buy their own. Mobile virtual-network operators, another example of this trend, provide wireless services without investing in a network infrastructure.

The Caution:
Companies that make their assets available for internal and external use will need to manage conflicts if demand exceeds supply. A competitive advantage through scale may be hard to maintain when many players, large and small, have equal access to resources at low marginal costs.

C. Leveraging information

7. Putting more science into management

Technology is helping managers exploit ever-greater amounts of data to make smarter decisions and develop the insights that create competitive advantages and new business models. From “ideagoras” (eBay-like marketplaces for ideas) to predictive markets to performance-management approaches… Leading players are exploiting this information explosion with a diverse set of management techniques. Google fosters innovation through an internal market: employees submit ideas, and other employees decide if an idea is worth pursuing or if they would be willing to work on it full-time.

The Caution:
Leaders should get out ahead of this trend to ensure that information makes organizations more rather than less effective. Information is often power; broadening access and increasing transparency will inevitably influence organizational politics and power structures. Environments that celebrate making choices on a factual basis must beware of analysis paralysis.

8. Making businesses from information

Accumulated pools of data captured in a number of systems within large organizations or pulled together from many points of origin on the Web are the raw material for new information-based business opportunities… market imperfections include[ing] information asymmetries and the frequent inability of decision makers to get all the relevant data … allow middlemen and players with more and better information to extract higher [prices] by aggregating and creating businesses around it.

The Caution:
But that sword can cut both ways; today’s aggregators, for instance, may themselves be aggregated tomorrow. Companies relying on information-based market imperfections need to assess the impact of the new transparency levels that are continually opening up in today’s information economy.

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:

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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.

          

Add social value to your customer's financial value

Forrester has some interesting insights on the growing importance of social value in determining customer value:

• As marketers, we find ourselves relying more and more on consumers to impact others in their purchase decisions.  Evaluating customers based only on their business or financial value - such as my much-loved Life Time Value, or an operation's ROI - is *has been*. 

What's social value?

          I've simplified it into 3 components:

1) A customer's knowledge and involvement - in short, his level expertise  and  interest  in the  category and brand. 

2)  How he participates, and the value of his connections - what social activities is he involved with (both on and offline) and where (on what networks is he active).  The value refers to the value of the connections themselves:  are the communities more tightly-knit or diffused, are they public or more intimite.

3) The number of contacts the customer has in each network.

Your CRM or loyalty program members and active web users would be great starting points for social scoring. 

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:

Accountable Mass Media

Well, don't these words - Accountable & Mass media present an irony of sorts to you? 

Yes, surely this has been the way things have been happening for last 3-4 decades. Mass marketing has never been accountable. It's never been addressable 'one household at a time' too. Either, it was not possible or it was too expensive to do it. Technology is surely breaking down these myths and introducing possibilities like never before. Take a look at how this happening or expected to unfold in the near future:

"Since May, Google has been selling ads on the 125 national satellite channels distributed by EchoStar Communications’ DISH Network. Cable networks routinely provide distributors with a few minutes each hour for local commercials; Google is responsible for a portion of EchoStar’s local time and creates an online auction market for it.

Google then analyzes the data from set-top boxes to determine exactly which ads were watched or skipped, with a second-by-second breakdown. With Nielsen’s help, Google will begin to take that information and overlay sampling-based ratings, adding a rich demographic layer to the raw numbers that EchoStar provides."

The reports from Google can pinpoint the moment when viewers most commonly changed the channel, potentially helping marketers shape the creative work on their commercials. For instance, if viewers are turning the channel after seven seconds, the agency might revisit the opening of the ad.

“We see a future in which, when you sit down in front of your television set, you will see ads that are more relevant for you,” said Mr. Steib of Google. “When we make advertisements more relevant to viewers, inventory becomes more valuable and the return on investment is much higher for advertisers.”

Marketing is content - Part II

Continuing with my thinking on this topic, NY Times has interesting article that further reinforces this thought:

Behind the shift is a fundamental change in Nike’s view of the role of advertising. No longer are ads primarily meant to grab a person’s attention while they’re trying to do something else — like reading an article. Nike executives say that much of the company’s future advertising spending will take the form of services for consumers, like workout advice, online communities and local sports competitions.

“We want to find a way to enhance the experience and services, rather than looking for a way to interrupt people from getting to where they want to go,” said Stefan Olander, global director for brand connections at Nike. “How can we provide a service that the consumer goes, ‘Wow, you really made this easier for me’?”

Traditionally, the “service” provided by advertising was cheaper media content for consumers. But the services of the future may be virtual workout coaches, map applications for cellphones, health advice and matchmaking services.

I think this kind of content fused with enriched data( on what customers use as a service, which will arise out this content) will drive the future of marketing. 

Marketing is content

I just love this thought by John Jantsch on how marketing today is all about content.  I can't agree with him more. Marketing is no more about messages, no more about offers, no more pushy about sales messages. It's transforming into a world of content. That's really what consumers want to read, enjoy and absorb.

While he has focussed on small business and their needs, I think there is a bigger thought for even large companies.

If you have a product, find out what content can you create around it?

He talks about the concept of creating mixed media content and how businesses need to adapt to provide such content to their prospects. He writes" Now when a surfer goes to a search engine looking for content they may find local directory results, images and video mixed into the organic results. If you aren't producing these types of content you may find it tougher to compete."

To me again, this is just not restricted to the web. It's applicable to every form of media - TV, Radio, DM, E-mail, telemarketing etc.

Next time , if you don't have content around your product, don't start marketing!!

Managing the multi-channel paradox in retail banking

Frost & Sullivan has released a report on managing the multi-channel challenges that retail banking is faced with today. According to the report, multi-channel banking has increased the potential for diminshed sales opportunities despite the expanded number of distribution channels!

The report says:

"...the number of bank channels and touch points have proliferated and so has the complexity of the service delivery which has added to the overall cost structure. Rather than lowering the overhead, the greater number of touch points actually prompted customers to increase their transactions - resulting in higher overall costs...."

Some of the best practice recommended are:

1. Meet and exceed the needs of the high value customers - Find ways to creatively service the needs of these customers.
2. Provide "consistent" quality of multi-channel  experience - Don't create a fragmented feel of interactions across multiple-channels.Create an organization-wide customer experience strategy.
3. Integrate across channels.
4. Provide action-oriented intelligence - Integrated data can provide proactive customer interaction measures.
5. Employ Event-based selling

I believe the key point here is getting different silos of retail banks to work together with a common customer experience strategy across mutiple product offerings, agreed metrics around different channels( for acquisition, retention, cross-sell and customer service issues) and drawing-up proper handshake processes between channels when customers interact with banks.

Consumers - Which mediums do they trust the most?

Consumers have problems trusting online advertising, according to a global study by the Nielsen Company.  The survey claims messages in traditional media such as television, newspapers and magazines generated more confidence among consumers than those in web searches, links and banners.

Nielsen says 63% of respondents trusted newspaper ads, while 56% trusted TV spots and magazine placements. This contrasted with just 26% who trusted banner ads and 34% for search ads. Results for mobile ads, often touted as the next big thing, were disappointing as only 18% of those surveyed claimed to trust them.

Consumer reviews posted online were more favorably received with 61% of respondents trusting them, while 60% trusted brand websites. Personal recommendations scored highest with 78% of those surveyed expressing confidence in them.

Consumer-generated media in general scored highly. Globally, 61% of respondents said they trusted blogs and other forms of CGM, while the figure in North America was even higher at 66%.

Credit Card marketing in Facebook

Rob Walker has an interesting article on how Chase has developed a credit marketing  program in Facebook.

“We felt Facebook would be a good partner for us, since they had such strong credibility in the students’ world,” explains Sangeeta Prasad, who oversees branding for Chase Card Services. “And we felt, you know, financial institutions lacked credibility. Students don’t see credit-card issuers or financial institutions in general as meeting their needs.” Thus the company started offering a new card it called +1, primarily by way of a “sponsored” Facebook group.

The +1 program was largely devised by Noise Marketing, a company that specializes in reaching young adults with nontraditional branding tactics. Making Facebook central to a college-focused effort had obvious advantages. “Everyone talks about the fragmentation of the media,” observes Noah Kerner, the C.E.O. of Noise Marketing. “Yet there’s never been such a concentration of people from one segment in one place before.” The Chase + 1 group has attracted so many participants in large part because of a rewards-program scheme. One tweak of this familiar tactic is that some of the rewards are tied to “credit education” material. Kerner maintains this coupling is what’s “really resonated” with students. “It’s connecting with them on a basic level: ‘O.K., you’re not trying to pull the wool over my eyes, and I appreciate that,’ ” he says.

That said, the education component doesn’t use precisely the same curriculum that, say, Consumer Reports would design. Students are advised not to spend money they don’t have, which is hard to argue with. But some might replace the counsel to “Pay at least the minimum due on time so you don’t waste money on late fees” with a blunt example of how fast debt can accumulate if the minimum is all you pay.

Kerner says that more good-behavior incentives are in the works — like rewards for paying your bill on time. And it’s the rewards that really seem to draw people in. The +1 system involves racking up “karma points.” You get 1 for joining the group, 15 for registering your +1 card, 5 for taking a brief “credit essentials” quiz and so on. These points can be disposed of only within Facebook: either spent at a special store (White Stripes’ “Icky Thump”: 10 points; Ticketmaster gift card: 35 points; Facebook T-shirt: 10 points), donated to one of several designated charities or given to other Facebook members.

Interesting isn't it? Looks like there is a convergence of traditional direct marketing thinking with web and loyalty for which Facebook seems to be a great platform to begin with.

Google Phone and push advertising - Is it still old world marketing?

Business Week has an article on Google Phone and its impact on targeted push-based advertising:

Imagine your cellphone as a mini marketing machine. As you head into your car after dinner, a text alert pops onto the screen of your handset announcing the 9 p.m. lineup at a nearby cineplex. You choose the Jodi Foster flick The Brave One and a promo video for the next Warner Bros.

That kind of 24/7 advertising engagement--on a phone, no less--may sound like a nightmare. But what if you could determine the kinds of products you get pitched? Or, when your flight gets canceled in a faraway airport, text messages pop up for the best hotel deals in town? No random insurance ads or airline deals for trips to places you never visit. Best of all: Watch or read the custom ads, and your phone minutes are free.

Google and advertisers drool over the growth potential in wireless. The more than 2 1/2 billion phones in use worldwide exceed the number of PCs and TVs combined. On Sept. 17, Google announced a Web program aimed at advertisers who have created sites for display on cell phones and other handheld devices. Like its online ad network, Google's AdSense for Mobile delivers ads relevant to the advertiser's mobile audience. "The sheer volume of users across the globe makes mobile the next channel for information," says Dilip Venkatachari, director of product management for Google's mobile team.

Doc Searls has a fantastic point of view on how this is just getting no where and is becoming extremely customer unfriendly. Take a look at his view on this:

Here’s my nirvana scenario,...:

No damn advertising at all. I don’t care how warm and fuzzy Google is, I don’t want to be tracked like an animal and “targeted” with anything, least of all guesswork about what I want, no matter how educated that guesswork is. Tools on my phone that let me tell sellers what I want, and on my terms – and not just on theirs. Whether that’s a latte two exits up the highway, next restaurant that serves seared ahi, or where I can buy an original metal slinky. I want to be able to notify the market of my shopping or buying intentions without revealing who I am, unless it’s on mutually agreed-upon terms.

Even when we study customer wants and needs, our perspective is anchored on the sell side. We ask “Which company (or product, or service) will serve them best?”, rather than “How can we as customers best express our wants and needs so that any seller can fill them?” The ironic distance between these two perspectives is deep and immense.

I agree with Doc totally, after sometime only advertising funded business models(around which there is so much hype) sound a bit far fetched to me. It assumes that customers are wanting every product or service free or subsidized in exchange for ' targeted'  advertising messages!!! Also, the other huge assumption that I am willing to give up my privacy and personal information for all of this, also sounds quite impossible to believe and not just there waiting to happen in the immediate future.

It needs a new model keeping the customer in the centre of all this rather than sellers!

Getting your blog strategy right

If you are a company having a blog where potential or current customers visit, Greg Verdino has some great advice on how to make it interesting and compelling:

"..we put together this simple graphic that presents the 7 Strands of Blog DNA - the key elements that, when combined in a unique way, make any given blog what it is.  Original, compelling and unlike anything else on the web."

Is it customer or consumer?

The word customer and consumer is used interchangeably today.What's right? Should we, as marketing folks, understand where to use customer or consumer? Susan has some interesting take on this:

My real problem was that I'd crossed over from a world where the buyers of your services have individual names (financial services), to a world where the buyers of your goods are largely a nameless mass (most consumer products).

What's the difference between a product and a service, really?

Here's a nice definition for a service:

"Any act or performance offered that is essentially intangible and does not result in ownership of any thing"    - Prof. Brian Engelland, MSU

You are dealing with a service when...

[1] Production and consumption are hard to separate. Examples: travel, investments

[2] Intangibles form a large part of what is being purchased. Examples: insurance, consulting

[3] There is no change of ownership. Customers typically rent a service, rather than owning it. Examples: credit card or loan, hotel room

[4] A sale that does not happen today cannot be recovered in the future. Examples: empty seats in a theatre, lost interest on a mortgage

[5] Customers must evaluate the purchase decision with few tangibles to go on. Examples: health care

[6] Output quality is variable, and depends on the performance of individuals. Examples: Hair styling, interior decorating, surgery

[7] Manner of dress, body language, and expressed language form part of the brand experience.  Examples: air travel, retail banking

[8] Cycle of purchase is repeated through 'rental payments'. There is no smooth movement through a consumption cycle, and there are frequent 'moments of truth'.  Examples: health club membership, anti-virus software rental, weight-loss groups

[9] Employees behavior and knowledge is central to delivery and quality. Examples: financial planning

[10] The memories of the experience may be as important as the experience itself. Examples: vacation travel, theme parks

[11] There are high degrees of customer contact during production. Examples: health care, spa services

[12] Competing offerings may differ in how much of the work of production is shifted to the buyer.  Examples: online brokerage vs. full service, self-serve vs. full service gas station

[13] Suppliers assume real economic risks (exceeding the revenue potential) by choosing a given customer. Some interested customers must be rejected. Examples: credit cards, insurance, auditing

[14] Customers assume real economic risks (exceeding the fee paid for the service) by choosing a given supplier. Examples: mutual funds, home insurance

[15] Everyone calls them clients, users or customers, rather than consumers

So now you know. There you have it. Try to keep your customers and your consumers straight now, okay?

Learning customer loyalty from Apple

Inside CRM has a very nice and insightful post on how Apple creates loyal customers. No points, no cards - just pure, enriching experiences and great products. Here are a few that I liked the most:

A store just for Apple:Apple has historically been troubled by big-box sales staffers that are "tragically ill-informed" about its products, a problem that made it difficult for Apple to set its very different products apart from the rest of the computing crowd. By creating a store strictly devoted to Apple products, the company has not only eliminated this problem but has made an excellent customer-loyalty move.

Complete solutions: Apple's products complement and complete each other. Buy an iPod, and you can download music via iTunes.

Media fodder:Apple gift wraps news stories that are just begging for speculation and hype. By perpetuating this cycle of media frenzy, Apple reminds its customers that they're excited about buying new Apple products now and in the future.

New innovations:By giving customers an opportunity to employ Apple in their living rooms, pockets and offices, Apple makes it easy to stay loyal to a brand they already like.

Future of Marketing

Here's a nice quote from Todd Watson of IBM:

"Trackable, slicable, diceable, inferenceable, correlative, targeted digital advertising and communication based on explicit consumer expressions (search queries, online viewing, online shopping behaviors, etc.)  is the future of marketing. It's not just about the eyeballs anymore.  And increasingly, it's going to be all about the data"

The difference between network and community

I have noted offlate, there has been a lot of interest with marketers talking about the need to build online communities and getting closer to their customers online. There has been a lot of action around this, where brands have built programs or websites or built sponsored content within a group on the web to make this happen. I have often wondered how will all this work for brands. Some of the questions, I have always had are:

• When brands enable specific online spaces for consumers to meet and spend time, what is the desired impact that the brands hope to achieve and what will be results or ROMI(Return on Marketing Investment) of such an initiative?
• Do marketers believe that consumers will find their best network of friends/ interest group in a specific branded online space and is that the best place to meet and share ?
• Consumers are interested in hobbies, interests - like music, food, beauty, friends, dating etc. Why will they align themselves to specific brand related community sites?
• How many such branded online spaces as a consumer will they become a member of? It's crazy given the amount of brands one consumes and interests that one has! Also, take into context millions of things they would like to do on the web.
• What's the motivation for repeat visits for such spaces and how does one keep the interest alive?

For example, closer home in India, we have sunsilkgangofgirls promoted by Unilever. I registered into this website and went into different gangs(groups) to seek answers to my questions. I was really not suprised to see very few members in different gangs - Uptown Club, famous 5, sushmitateam had just one or two members while there were several such hundreds of gangs that have been started or registered. While there are a lot of activities and content in this site, engaging the gangs with all of this is the key task and challenge, I presume.

In this context, I came across a very interesting point of view by Chloe Stromberg of Forrester on how marketers need to understand the difference between community and network as it is often misused.

I hear marketers using the words "community" and "network" interchangeably.

But a community is just one type of network.  My working definition of network is: a group of people who have something in common and who have a motivation for connecting.  For example, a bunch of people who all buy the same brand of toilet paper, but have no desire to meet, are not a network.

It's easy to recognize different types of connected groups offline.  But as marketers wade into the less familiar universe of social computing, a lot of people assume that any type of online network associated with their brand is an online community.

What other types of online networks are there?

• Emotive networks (e.g., CarePages, PreludeDriver.com) -- Commonality: a powerful emotional experience, like being diagnosed with an illness or loving a particular type of car.  Motivation to connect: find people to share your experience with.
• Advice networks (e.g., Berkeley Parents Network, del.icio.us) -- Commonality: you're trying to do an activity like parenting in the Bay Area, learning about emerging technologies.  Motivation to connect: get suggestions from someone whose perspective you value.
• Dating networks (e.g., Match.com, Yahoo! Personals) -- Commonality: you're single, maybe you share similar social values.  Motivation to connect: meet a sweetheart (not a community).
• Blog networks (e.g., Micropersuasion, Greg Mankiw's Blog) -- Commonality: the ideas that you're interested in.  Motivation to connect: affect the public dialogue about the ideas.
• Wiki networks (e.g., Wikipedia, CarGurus) -- Commonality: you want the unvarnished, comprehensive truth to be free and available.  Motivation to connect: get the whole picture.
• Linkedin -- Commonality: you want to leverage business relationships.  Motivation to connect: get a sales/deal contact, recruit someone, find a job.
• Facebook -- Facebook is a tool, not a network, although that may be changing.  Existing offline networks use Facebook to socialize.  Commonality: having gone to the same college.  Motivation to connect: Socialize or build relationships with people of social standing.  (I'm going to dodge the class bullet on this one -- Dana Boyd has kicked off the discussion here:http://www.danah.org/papers/essays/ClassDivisions.html)
• Myspace -- There is a strong commercial dimension to the networks forming on Myspace.  Commonality: anything.  Motivation to connect: be found by anyone, share.  This open-door, hello-world atmosphere is especially conducive to small biz commercial activity (e.g., if I'm an unsigned band, I want anyone anywhere in the world to find me, buy my music, and come to a show).

It is important for marketers to understand the 'motivation to connect' as they go about building their 'network of customers' for their brands online.

TiVo of the Online World

NY Times has an article on whiting out of ads in the online world thro' a software called Adblock Plus, very much akin to TiVo in the offline world. Adblock is an open source software and has already over 2.5 million users!! Here's an example of how a whole business model of advertising will get hiccups with applications such as this in an online world.

The key point however to me is that in an online world the traditional model of advertising based on interruption, will not work. Else, consumers will take control and reject them with applications like Adblock plus. Hence, the old world form of communication - banners, emailers belong to the Advertising 1.0 world. SEM, SEO are at least a lot more contextual but even these will have to evolve as they will become blindspots in some time.

However communication in the online world will have to change from "Informing" to " Entertaining". Hence, we will need a lot more "Content thinkers" rather than "creative Copywriters/Art directors" who are trained to "sell" products or develop "messages". Consumers will consume content that's interesting, involving and participative.It's got to have some gossip value, surprise value, upgradable value to consumers so that they can pass it along with their comments or inputs. To me the more I think, the online model of communication has to have a mix of  TV programming, TV commercials, event marketing, promotions, traditional DM rolled into one.

It's got be as "unadvertising" as possible. I guess only that format will lead to a lot more believability, credibility, have some retention value in consumers' minds and will not be blocked!

In the online world, we need to forget the word " Advertising" and think "Contentization" .

Nokia - From selling phones to selling services

Nokia has announced the launch of digital music service.

NY Times reports the Nokia Music Store, to open this year, will let users download songs from the Internet to their computers or directly to mobile phones over wireless networks, which Apple’s recently released iPhone cannot do.

Nokia said it would price music downloads at 1 euro for each song, or 10 euros for each album, in the same price range as many existing mobile music services. In addition, customers would have to pay for the use of phone networks for the download, though many operators are starting to offer monthly flat-fee packages.

The great advertising shift

Henry Blodget, a former Wall Street Internet analyst brings out a very telling analysis of where companies' marketing investments are shifting:

• US advertising revenue at 4 big online media companies--Google (GOOG), Yahoo (YHOO), AOL (TWX), and MSN (MSFT)--grew by $1.3 billion in Q2, or 42%. 
• US advertising revenue at 15 big television, newspaper, magazine, radio, and outdoor companies (Time Warner, Viacom, CBS, etc.) shrank by $280 million in Q2, or 3%.

Put differently, U.S. advertising revenue at all 19 companies increased 8% year over year in Q2, to $13.8 billion ($55 billion annualized).  The online portion of this pie grew from $3 billion to $4.2 billion (23% share to 30% share).  The offline portion, meanwhile, shrank from $9.9 billion to $9.6 billion (77% share to