The most ridiculous term

Have you read the recent Ad Age article in which Brad Jakeman from PepsiCo is quoted as saying that “digital marketing” is the “most ridiculous term I’ve ever heard”?   Many marketing departments are silos with separate work streams, separate analytic teams, and separate strategies.  As a joint Marketo and Harvard Business Review report stated, “To address the challenges of the digital age, marketing may have added new departments such as Web, mobile, and digital.  Paradoxically, these new departments often add more silos and slow things down further, making marketing even less equipped to meet customers in their micro-moments.”

Customers expect a unified experience. How can marketers provide a consistent experience when analysis, insights and strategies are not shared or coordinated?  Mr. Jakeman said it best, “There is no such thing as digital marketing. There is marketing — most of which happens to be digital.”

So what are marketing departments to do?  Agree on a common goal, collaborate, integrate insights, and ultimately create a comprehensive customer-centric strategy.

Are your customer insights a source of competitive advantage?

My prior post talked about the value of customer data.  Your next question will naturally be, “so how do I leverage what I know about my customers to my advantage?”  There are many ways to transform insights into  increased market share.  The lists below are examples but by no means the only things you can do.  However, I would suggest that you see your customer data and its application as a source of intellectual property, something to be guarded and leveraged wisely.

It can enable you to increase revenue by:

  • Identifying those likely to buy in the near term
  • Separating those customers who need an offer to get them to buy versus those who would buy regardless
  • Determining the right accessories or ancillary purchases to promote based on a customer’s purchase
  • Highlighting the “next best” products based on your customers’ purchase patterns

It will also help you retain your customers by:

  • Understanding the customer journey and the experiences that matter
  • Identifying those likely to defect
  • Ranking your customers by their lifetime value so you can reward your best customers

Lastly, it can also help you reduce your costs by:

  • Enabling you to conquest smartly, targeting those that look like your best customers
  • Determining the best conquest sources and communications

Are you leveraging your customers’ data to increase your market share?

Welcome!

How important is it welcome customers to your brand?  If you are a brand manager with a welcome program for new customers, you may be asking yourself this very question.

Welcome programs run the gamut from a simple email that confirms someone has signed up for an e-newsletter or thanks a customer for making a purchase to  a coordinated series of communications across a range of channels (for example, telephone, direct mail and email).  The best welcome programs are integrated across channels and feature tailored messages based on the customer and the product or service purchased. These communications begin shortly after a customer has made a purchase, registered on a website, etc.  They can span as little time as a week to several months depending on the product.

Welcome programs are important for many reasons.  They enable you to:

  • Thank customers.  Let the customer know that you appreciate their business and it reinforces the good feeling they have about purchasing from you
  • Promote new products.  These communications can be used to make customers aware of additional products and services they may want based on what they have already purchased
  • Educate customers.  It is a way for you to communicate with your customers about product features that some may find confusing.  Proactively sharing with them how to access or use a feature could reduce future calls for technical support, saving your brand money and reducing customer frustration down the road
  • Understand your customers better.  It is an opportunity for you to gather information about the purchase process at a time when customers are most likely to talk to you

I have found that customers are most responsive to communications just after they have purchased a product and just before they are about to purchase again.  Take advantage of this opportunity to begin a dialogue with your customers.

What I am thankful for

Thanksgiving Day is a time that I reflect on all the things I am thankful for and the increased emphasis on analytics is one of them.  With a struggling economy businesses want to know the value they are receiving from their marketing dollars.  Analysis can help them determine their ROI and optimize marketing efforts.  Increasingly, companies are looking at their wealth of data as a valuable asset that can drive revenue growth.  With data mining techniques, companies can identify hidden trends and insights that can lead to new customer segments or new product offerings.  Lastly, increases in technology have made it easier and easier to delve into data and display the results visually.  Thus, making it easier to uncover value in your data.

At a recent road race someone asked me what I did for work.  When I told her, with a smile, that I optimize marketing efforts through analysis, she remarked that it was nice to meet someone who enjoyed their job.  I enjoy what I do, in part, because I believe in the value of analysis.  It is very rewarding that others are recognizing that value as well.

New Rules of Content Marketing (#SMB26)

There was another smart and interesting Social Media Breakfast (#SMB26) yesterday morning organized by Bob Collins (@RobertCollins).  CC Chapman (@CC_Chapman), Joe Chernov (@JChernov), Brian Babineau (@BrianBab21) and Rachel O’Connell (@RachelJOConnell) presented their thoughts on Content Marketing.

CC provided useful rules about content that are timeless – “speak human”, “re imagine don’t recycle”, “show don’t tell”, and “do something unexpected”.  Joe provided an overview of infographics and how they can be used to effectively drive traffic, build goodwill, and establish authority. Brian reminded us that we need to “embrace the people’s agenda” and that it starts with being generous and providing value.  Rachel spoke about her rules for content now that there are a plethora of channels where consumers can gain information and they are increasingly turning to friends and reviews to learn more about products and services.  Lastly, there was an ample Q&A period led by Bob.

In addition to great content, Social Media Breakfasts are also a great chance to meet other marketers, compare notes and share ideas.  I came away with some good ideas and examples to consider and you might too.  It is well worth checking out (www.socialmediabreakfast.com).

Happy New Year

The new year has begun. Now is the time to measure the success of your holiday campaigns. How did your campaigns perform? This is an opportunity to look at their effectiveness in terms of building awareness, generating revenue, increasing retention and aiding customer acquisition? How do your metrics compare to industry benchmarks as well as internal benchmarks? How much revenue did they generate and were they profitable? In addition, what worked and what didn’t? Now is the time to evaluate any tests that were done – date/time, subject line, creative, etc. Finally, compare the results of this past holiday campaign to the one before and analyze the differences. The insights from the holidays can inform your strategy for 2012.

To Groupon or not to Groupon?

Much has been written about the value of Groupon and its power to drive traffic to participating retailers.  The hope is that new consumers will try your store and buy additional items, above and beyond the promoted item or coupon threshold.

However, what if consumers come to your business and simply buy the item on offer?  The Wall Street Journal recently reported on a toy retailer that had offered $20 worth of merchandise for $10.  Most consumers bought just the minimum amount needed to redeem the coupon.  According to the Journal, the toy company lost money on 75% of its Groupon sales.  Further, most of the customers who used the coupon were existing customers.  While this is just one story, it is a cautionary tale.

It is important to drive incremental trips and often coupons, discounts, and loyalty reward certificates are an effective means of doing so.  However, it is also important that these trips at least break even.

Trigger emails

One of my clients was asking for my advice about trigger e-mails.  If you haven’t worked with trigger e-mails then you may not be familiar with the ability to set up e-mails that are automatically “triggered” by an event.  There are many behaviors that can trigger an e-mail and below is a selection of the types of trigger campaigns you can develop:

1.  Welcome Campaigns

If a customer makes a purchase or registers on your web site, this is a wonderful opportunity to thank them as well as up-sell existing customers and convert prospects into customers.

2.  Birthday Programs

Why not surprise and delight your customers with a special birthday promotion.  You can send a promotion or special offer in the month of their birthday.  For one of my clients, this program consistently generates among the highest response rates.

3.  Specific Product Promotions

You can leverage past purchase behavior to let customers know about products that might be of particular interest to them.  Amazon is a great example of this.  Based on books I have previously purchased, I receive e-mails about books on topics of interest to me as well as e-mails about new books from authors from who I have bought in the past.

4.  Reactivation Campaigns

If it has been a while since a customer has bought from you, a reactivation e-mail may be in order.  The purpose of a reactivation campaign is to remind customers about your products and services and encourage them to become an active customer again.   This is your chance to win back a lost or inactive customer.

Trigger campaigns are one key element of your communication strategy.  They provide relevant content based on customer behavior and enable you to speak to the particular needs and interests of your customers.

Evaluating a loyalty program

To be most effective, loyalty programs need to continually evolve.  Loyalty programs need to be regularly re-evaluated as customers, products and the competitive environment change.  Stagnation can cause a once valued loyalty program to be seen as old and tired.

To determine the health of your loyalty program, monitor its performance and perception.  The key performance indicators (KPIs) will be tailored to your program, your goals and your business.  However, there are four general metrics which are important for most programs:

1.  The time it takes to earn a loyalty reward

2.  The percentage of loyalty customers who earn a reward

3.  The percentage of loyalty customers that redeem the reward certificate

4.  The percentage of loyalty customers that take advantage of the program

A loyalty reward must be attainable.  If it takes too long to earn a reward, the customers may get bored and give up.  The appropriate time to earn a reward varies by your business and customer behavior.  That said, do not consider this a static number.  It may be that an average of 6 months was appropriate two years ago but 3 months is more appropriate now.

Similarly, if you have a program that requires a particular spending or mileage threshold, the minimum at which a customer receives a reward must be chosen carefully.  If you are a retailer whose median customer spends $250 per year and customers only receive a reward after spending $1,000 annually, very few customers will likely attain the reward.  If you want to encourage increased spending, you can always create tiers.  The basic loyalty membership level could be annual spend of $250 to $499 per year, the silver level could be $500 to $749 per year, the gold level could be $750 to $999 per year and the platinum level could be $1,00 or more per year.  Tiers encourage customers to strive to reach the next level.  Plus, it does not have to be expensive to add additional services for the higher tiers.  For example, you could e-mail platinum level customers in advance of sales or invite them to special in-store promotions.  However, customers must see the value of achieving a higher tier.  It is very easy to see the benefits of tiers when you see fliers with higher tier levels board the plane first or see the shorter check-in line for premier members.

The value that customers see in your loyalty program is evidenced by how many of the customers redeem the certificate.  In addition, if customers do not redeem the certificate then you have lost the revenue that would have been generated by the incremental trip.  Certificate redemption should generate revenue and continued loyalty to your brand.  If not, the loyalty program needs to be re-evaluated.

Finally, customers should be taking advantage of the program.  If not, you should be asking yourself why not.  Do customers not see the program as valuable?  Does my competitor have a better program?

The value of a loyalty program

As I mentioned in my prior post, loyalty programs are a valuable tool.  They can help retain customers and companies can win greater share of wallet as a result.  If a customer can buy the same goods or services from multiple sellers, a loyalty program encourages customers to consolidate their purchases.  It might also create additional demand.  For example, a reward certificate can spur an incremental trip or customers may splurge in order to meet a spending threshold.

Another benefit of loyalty programs is the insight into customer behavior.  This has far reaching benefits.  Take the example of a retailer.  This customer insight can help both marketing and merchandising.  Using the data collected, a retailer can segment their customers based on past behavior so that they can tailor their messages and offers appropriately.  For example, marketers can use this information to personalize product promotions, cross-sell products and identify new customers that have the potential to become to best customers.

Further, this data will provide insight into what products bring new customers into the store, what products drive repeat purchases and what products are typically purchased together. Merchandisers can use this information to plan promotions and make buying decisions.

To be valuable, the data must drive actionable insights and be used to continually improve the loyalty program.  I will write about using data to evaluate the health of a loyalty program in my next post.