Blog: Strategy & Planning

Have you taken the time to look around at what's happening across many business organizations lately?  The typical IT and Marketing departments have gone through a dramatic change.  The last few years have been quite a renaissance for these groups.  Gone are the IT operations and development groups.  Most of these roles have traveled the less-expensive-yet-not-always-faster outsourced direction.  Now, there are more clouds than switches.

We are all familiar with the typical social media platforms such as Facebook, Twitter and YouTube, but some companies are bringing social media in-house and reaping enormous dividends.  While shopping for some outdoor gear, I came across Backcountry.com and discovered a whole community of customers who were actively participating in the e-commerce site.  Almost every item I viewed on the site had a collection of reviews, comments, Q&A and customer-submitted photos.  Before purchasing a shirt, I was debating which size to get and decided to post a question to the "Product Wall" about whether it runs large or small.  Within an hour, I received an answer, not from a Backcountry.com employee, but from a fellow customer on the site who had purchased the shirt a week before.  Add to cart, checkout.

Honda recently caught my attention with their new social media marketing campaign - "Everybody Knows Somebody Who Loves a Honda".  I found this particularly interesting because Honda is directing people to Facebook in order to participate in the experiment.  I could not recall another company of Honda's stature using a foremost social media platform for an official marketing campaign and customer engagement platform.  Interesting!

After visiting the page myself, I see that Honda has amassed an impressive network of 268,000 fans (as of Nov 2009).  Counting all of the fan's friends, this network reaches over 3.3 million Facebook users.

That may be one of the toughest questions your organization has to answer.  A consumer might be completely satisfied with a brand, but does that mean she won't jump at a chance to save money, become more efficient, etc?  It can be hard to stay loyal when there are many options available, and simply providing world class customer satisfaction is no longer enough.

Walker Information Inc. recently polled consumers on the topic of loyalty.   Their research indicated "there's still a yawning gap between the percentage of people who say they're satisfied with a business and those who consider themselves 'loyal' to that business-intent on maintaining the relationship and continuing it into the future."  Jeff Marr, Vice President at Walker offered this, "Many companies have figured out how to deliver satisfaction, but they've not yet figured out how to earn loyalty anywhere near those levels."

Loyalty is often simplistically defined as an emotional connection with a brand; a continued preference for something that meets a person's needs in a given category. 

In that same vein, attrition is viewed as a point in time "defection" by a customer that consciously and visibly switches to another brand.  In my experience, companies that adopt this crude definition often miss the fact that customers rarely (expect perhaps in membership or subscription oriented business models) think of themselves as having a "relationship" with a company.  Instead they tend to think in a much more pragmatic and transactional way about how your company meets their needs and whether your products deliver value for money.  Viewed from that perspective, attrition is a much more complex and subtle issue and the right measure is "engagement," which is a composite measure of the many individual actions a customer takes on an ongoing basis that touch your brands in ways that lead to purchase. 

Miss last week's Webinar on Making the Right Marketing Investments?  Never fear, the Webinar replay is live!

During the event, Marketing Operations expert Niall Budds introduced the marketing roadmap as an essential tool for helping companies make the business case and build a plan for sustainable marketing improvement.  

This was not a theoretical discussion, but instead a practical guide to help marketers:

• Understand the importance of a marketing roadmap
• Identify the critical components and more importantly, how to get started
• Talk about how to use the roadmap as an internal tool for building the business case
• Learn from other companies that have parlayed roadmaps into marketing ROI

Click here to view the replay.  If you like what you see, send me an email and I'll send you a white paper on the topic (avail on October 28th). 

We work with a fortune 100 financial services company that has over 10 million customers and a strong focus on marketing through their call centers.  We were working with them on a contact management strategy for their high value segments, with particular emphasis on the call center where they'd been unable to translate some of the analytics insight they'd rolled into their direct mail and online programs. Call center reps were taught to sell, sell, sell and this mentality was actually hurting the firm with their most valuable customers. 

A  July 2009 study of Fortune 100 companies found that more companies had a presence on Twitter (54%) than on Facebook (29%). According to the study, which looked at corporate blogs in addition to Twitter and Facebook, about one-fifth of Fortune 100 firms only used one of the three channels. Those companies were overwhelmingly likely to choose Twitter (76%) over Facebook (14%) or blogging (10%).

I work in the business of Customer Relationship Management and have seen many companies achieve considerable success in finding and keeping profitable customers.  However some of my own personal experiences make me wonder whether companies are too focused on the forest and not spending enough time on the trees.  Or, to put it another way, focusing on a concept as grand as the "Customer Relationship" assumes that there are customers out there who think of how they deal with large companies or brands in the same way as they think of their personal relationships.  That is often not the case.  From a customer's perspective, the "relationship" with their bank, say, is often viewed as just a series of individual experiences of specific transactions or events.  There is very little true "loyalty" present, and what little there is can easily be eroded or destroyed by a bad experience.

Let me illustrate using a recent example ...

We believe marketing's boundaries have been significantly extended.   Marketing can no longer recommend "best offer to the best channel at the best time" and then do a back-end analysis to see what worked.   Successful marketers today must seamlessly integrate with the actual customer interaction... with the channel being an instrumental determinant of how marketing succeeds.  

Financial services firms are shifting to a more sales-centric mode. With this shift, companies should invest in tools to help them understand how Website visitors engage with and use content. Web analytics tools can be used to measure site effectiveness, determine site priorities, and develop the optimum sales purchase path. Unlike e-tailers, where conversion equates to a purchase, financial services firms traditionally struggle to co-relate web activity; true success events or "conversion" are often less clearly defined.

On a recent vacation to South Florida, my friend and I decided to take a half-day fishing charter out on the high seas.  Through a little research, we found Capt. Stan of Weedline Fishing Charters in North Palm Beach.

Capt. Stan has a great reputation as an experienced fisherman and charter captain.  The photos on his web site show happy customers proudly holding up their catch.  As the day approached, we looked forward to sunny skies, calm waters and a great fishing experience.   One thing we hadn't anticipated was what was waiting for us.... 25 knot winds and three to five foot ocean swells.

One of the pillars required to become more effective at marketing is organizational alignment, a state where a company's strategy and culture are compatible and consistent with each other. If your organization is embarking upon a major change initiative, you may find the links below helpful in pursuing organizational alignment:

As Marketers try to do more with less, automation is typically at the top of the list of ways companies are looking to increase efficiency and productivity.  In our role as marketing service providers, we're often asked to identify and recommend the right solutions for companies and to identify specific ways the technology can help them meet their marketing objectives.

Whether marketing to consumers or Healthcare Practitioners (HCP's), many pharmaceutical companies have changed the way they segment.  HCP segmentation, for example, is no longer driven exclusively by specialty type and rearview mirror volume metrics such as NRx and TRx.  Instead most companies are becoming savvier and incorporating marketing and analytic best practices to build robust customer profiles and segmentation schemes that are based on customer need and value, interest, attitudes, and behaviors.  Integrating customer data from multiple data sources, appending records with commercially available data (census, demographic, interest/lifestyle, etc.) and surveying prospective and current customers to determine attitudes about the disease, treatment programs and tools, and the brand are all part of developing an effective data strategy to be able to tag customers to segments.  The challenge, however, is that newly created segments don't always manifest themselves to customer records that already reside in the database.  So how can you make your segmentation actionable and realize the benefits? 

Market forces are brutal. I still remember one of the most insightful things I heard during graduate school was one of my economics professors saying "for all of the good things a free market does, people tend to forget one key point: the market shows no mercy". With all of the depressing economic news in recent months, it is easy to understand why companies are standing pat and generally not taking on new marketing strategy and infrastructure projects.  That said, there are companies that realize that an economic downturn can be the best time to build market share and strengthen their position within a given industry.

Bruce Temkin of Forrester Research speculates that customer experience is impacted by six tenants or laws, which he tongue-in-cheek equates with the three laws governing physics. The laws are as follows:

1. Every interaction creates a personal reaction.
2. People are instinctively self-centered.
3. Customer familiarity breeds alignment.
4. Unengaged employees don't create engaged customers.
5. Employees do what is measured, incented, and celebrated.
6. You can't fake it.

The behavioral targeting and online advertising industry is keenly watching the online consumer privacy debate unfold. As consumer groups and experts on both sides debate the privacy guidelines, it is expected to have far reaching consequences to online advertising and could drive a fundamental shift from behavioral and contextual targeting to analytic driven segmentation and targeting.

1. What People Want (and How to Predict It) (MIT Sloan Management Review) – Companies now have unprecedented access to data and technology for informed decision making. Can they beat Will Smith’s track record at choosing films that deliver $120 million or more?
2. Behavioral Economics and Marketing (Dan Ariely) - Behavioral economics, which attempts to explain consumer behavior not covered by standard economic theory, may have profound implications for marketing decision makers.
3. In Hard Times, Fear Can Impair Decision-Making (Gregory Berns) – Understanding how people make decisions in an atmosphere of fear may be crucial to figuring out how to market in a tough economic environment.

I recently had an experience with my car which perfectly illustrates the challenges that companies face in coordinating their actions to maintain loyal customer relationships. 

Here's my story ...

My lease was about to expire and I decided that since I had been very happy with my car, I would enquire as to the buyout price on the lease.  So I called the brand's financial services company and asked for the buyout amount.  When I heard the figure I tried to negotiate a little and asked if maybe they would give me a loyalty discount for sticking with their brand.  The answer I got was a robotic "I'm sorry sir that price is non-negotiable".

Online marketing trends come and go, but none take permanent root without a supporting data strategy.  That's right, a data strategy.  It really is that simple.  No behavioral targeting tool, ad serving platform, or marketing automation solution is worth much without it.  They are blunt instruments without an underlying analytics engine to chart the course.  And I don't mean the 12TB of data streaming directly out of your web analytics tool into some poor analyst's lap, but a true understanding of how to distill and parse that data into something meaningful and, wait for it ... actionable.

A recent white paper authored by Bruce Temkin, Vice President and Principal Analyst specializing in customer experience at Forrester Research, introduces "The 6 Laws of Customer Experience" and rather tongue-in-cheek equates them with the three laws that govern all physics. The "6 Laws" are:

1. Every interaction creates a personal reaction.
2. People are instinctively self-centered.
3. Customer familiarity breeds alignment.
4. Unengaged employees don't create engaged customers.
5. Employees do what is measured, incented, and celebrated.
6. You can't fake it.

Okay, I've always hated the saying about eating your own dog food, but in this case, I think it's appropriate.  And if you're reading this, it means it got your attention! One of the basic tenets of our Customer Experience platform - and a differentiator for us - is that we examine the customer experience from a customer's perspective. So, it's only fitting that we ask our customers about their experience with us.  And now, with the launch of our new (and much improved) customer satisfaction survey, we have put in place a tool to help us understand and measure our customer's perspective of how well we understand and address their needs. 

Customer Experience Management focuses on building a consistent, integrated, relevant customer experience across all touchpoints that leverages customer insights to help enable an organization’s customer strategy. It is much broader and larger than just coordinating marketing messages out to customers. Many organizations are considering or implementing Customer Experience Management initiatives. However, as most of these organizations have found out, this is not an easy task. Consider the following real-life example:

We are living through historic times, with a new president and administration facing a wide range of challenges, not least of which is how to best shore up an increasingly fragile and volatile domestic economy. As decisions are made regarding what policies should be implemented, the Obama administration will begin to examine the impact of their options on many levels. Understanding the best balance between short-term results and long-term value is something businesses do as a matter of course, but which poses unique challenges for non-profit and government organizations.

What comes to mind when you think of loyalty programs?  I'm guessing it's not S&H Green Stamps or the Gold Bond Stamps program.  However, the prevailing loyalty programs in today's marketplace are nothing more than more automated versions of these early vanguards.  We've traded in stamps for points and books for online statements.  But the underlying structure of the loyalty program has remained the same.  It's high time we wipe the slate clean and re-think loyalty program objectives and design.

In this economic environment, we're all struggling to get more out of our current investments. My husband and I live in Marin County, CA where double-digit real estate value growth is the norm. While the rest of the country is staring down drastically declining home values and possible foreclosures, our community has dropped from an average single-family home price of $1.3M to a meager $1.1M in the last year and is facing mere single-digit growth projections in the next fiscal. Let's just say that Marin County is as good as any place to live out the uncertain times that lie ahead. So while a few short-sighted neighbors post "for sale" signs, we are investing in finishing out our attic and laundry room to get the most out of our existing space, knowing this will pay immediate and future dividends.

Think about the world before the industrial revolution. There were no factories, no organized labor and therefore no systematic ways of producing goods and services. Instead there were a myriad of individuals or small workshops working in isolation, sometimes producing masterpieces of craft and art that we admire to this day.

I think the analogy applies very directly to the state of customer intelligence today where, despite all of the advances in data, technology and the stated objective of most companies to embrace “analytics” or “customer intelligence”, this still remains an area which in my opinion is at best a cottage industry within most large organizations.

In October 2006, Netflix announced that they will pay anyone $1Million if they can improve the accuracy of their customers' suggested interest rankings (http://www.netflixprize.com/). Why? Netflix realized that if they could improve their accuracy by 10% it would be worth well over $1Million annually to the company through improving communication relevance through well targeted online movie suggestions.

In his Origin of the Species, Charles Darwin made the famous observation that it is not the strongest species that survive or even the smartest but the most flexible. As we look at the carnage in the markets and a looming recession, the questions you should ask are these:

• How do I survive this market?
• If survival is not an issue, how do I take advantage of this situation?

The answers may surprise you. It is not that different from what Darwin found. This is a time that calls for nimbleness and agility. It may be a wonderful opportunity to change the very nature of your marketing.