Invest in your Customers, not Discounts

The amazing thing to me about Black Friday, is why it's called Black Friday.  This annual Thanksgiving shopping frenzy typically marks the first day of the year in which traditional retailers are in the black.

Think about that.  That means they run in the red, or a deficit position, for 11 of the 12 months of the year.  What an amazingly stressful position to be in.

Deep discounting with fantastically reduced prices on key items drive the crowds on Black Friday.  Retailers are willing to take the hit on some televisions and computers to drive sales on other regularly priced products leading up to Christmas.

Love the concept, but the race to the bottom and the hysteria of the crowd is a proposition of diminishing returns.

What if instead of writing off those loss leading products, retailers invested in their customers?  Mark downs will always play a role in competing with store traffic, but think of the potential power even a small portion of that money being directed into customer loyalty / incentive programs would have.

Here is what I would do with that money.

1. Mobilize the shopping experience.  Integrating your inventory into your online / mobile experience is a must have as the smart phone has become an integral part of people's lives.  Make it a part of the in-store shopping experience.  Near field communications (NFC) and Global Positioning Systems (GPS) let us know where customers are.  Provide incentives to customers to use an app that will allow for push notifications alerting them to new information (sales, complimentary products, other customers) to enhance their shopping experience based on their physical location.  Capture their behaviour to learn what works best (and worst) in improving the experience and driving future sales. 
2. Close the transactional loop.  What makes online retailers so good at providing product recommendations and customizing offers is that they have access to all of the customer behavioral and transactional data.  This could be easily replicated for the in-store experience.  Smart shopping carts and mobile could consider in-store location, time spent in an aisle, near a category, what products are placed in the cart, and what products are purchased.  Tie individual customers to those activities through membership cards (some grocers like Sobey's are incredible at this) to create a full behavioral profile.
3. Tailor offers.  This behavioral data is critical, and if you don't have it you are not going to be engaging your customers.  Use the data to understand the needs of your customers.  Segment them, design programs for them - and market to them as individuals - like Amazon does online.  Deliver offers through mobile, email and through direct mail for certain segments.

These programs require investments from different budgets and organizationally could provide problems.  The opportunity here though is two-fold.  You can create loyal customers who don't need discounts to drive them to your store and you may be able be in the black in month one, not eleven.

Rewarding Customers for Interactions: Dropbox

Promotions, giveaways and coupons have been standard marketing tools for decades, and will be for decades to come.  As an incentive to try a product, marketers will basically give it away.

Tried and true this technique has certainly got a lot of customers to experience new products and services, but I've never been a huge fan.  The customer has no buy in or attachment to the experience, just clipping a coupon or hunting for a deal.  As they have no skin in the game I believe they have a lower chance in converting into a repeat (at full price) customer.

I have always preached that brands need to exchange value with customers to build any relationship.  This is not a rebate, or added service at no charge.  This is a tangible item that they otherwise would have otherwise had to pay for.

Social makes this easy for marketers to do as bringing an influencer strategy down to the everyday user is very powerful motivation for consumers.  Tweet, share, repost and I will give you something for it.  That something needs to be more than "free upgrade" or "be the first to know".  It needs to be something that your company values, and by providing it to your customer demonstrate that you value their time and effort.

Kellog's executed a great campaign this summer using this approach with their Tweet Shop program.  A storefront with Kellog's products was setup and customers could "buy" items in the store by tweeting it out.  Obviously this isn't sustainable in the long term, but I'm sure they easily exceeded their campaign goals.

Dropbox does an excellent job of providing tangible, continuous value to their customers in exchange for their activity.  While their basic service (3 GB of storage) is free, premium accounts (100 GB +) are available on a subscription basis.  You can however access additional free storage through a number of simple activities. 

Connecting your Facebook account?  125 MB
Connecting you Twitter account?  125 MB
Writing feedback to Dropbox about why you love their service?  125 MB
Tweeting that feedback?  125 MB
Referring a friend (who then signs up)?  500 MB

Some math can tell us what the monetary value of that service is.  The premium account is available for $99 / year for 100 GB.  That makes the tweet (125 MB) worth $0.12.  This is a very easy cost for Dropbox to absorb and is relational to the effort taken by the customer.  Real value, for actions that have limited intrusion and are completely optional, in exchange for service.

As savvy customers start breaking this down new competitors may emerge and discover a whole new service offering.  Not to be confused with offers and product constructs like in credit cards.  This is a free service that provides additional free service for your effort.

Now, if you all rush out to sign up for Dropbox send me your email address, I could use the 500 MB.

Generating Leads online for Small Businesses

Digital and social are fantastic ways to generate leads for your business.  The problem for a lot of small businesses becomes where should they focus first, and why?

That of course is a complicated question - or series of questions.  A better approach is to think about two pragmatic ones first.

1. What do you want to achieve?
2. What are you able to do?

Understanding what your short and long term business challenges and objectives are will let you answer question one.  Looking within your company to know if you have the time, budget and will to do anything or everything is question two.

I recently had a chance to conduct a digital review for a small business in the Business Intelligence and Analytics space.  Their current website was well designed and generating a lot of traffic for them.  As a smaller player in their field however they have a common challenge of not being well known to their prospective customers and were not generating any leads from their digital efforts.  They had also invested a fair amount of money into their current website and wanted to keep any changes (even improvements) at a minimal cost.

Here are three recommendations I made to help generate leads.

1.  Give content away
Within their service areas and industry vertical sections they had provided some limited examples of their work.  Most of these examples however were password protected and as a technique to generate contact you needed to connect with them to get the password to view more.

I believe that before you can ask a prospect to take that step, you need to show them true value.  My recommendation was to provide a single, solid example of their work within each area and vertical.  No passwords and no hassles for prospects.  Within each example I would also recommended providing a clear call to action to see or learn more by contacting an Account Rep to arrange for an online demo or access to other examples.

2.  Testimonials

No eye rolling here, as this is not news, but is an essential piece of content that helps provide credibility.

For each example of their work my recommendation was to contact the customer who that work was for and ask them to write a recommendation for it.  For this particular case I suggested that they may even write it for them to start and to focus on explaining a) why they chose to use their service and b) what they got out of using it.

No one wants to be the first customer.  People want to know that the tool / service / approach that they are considering is tested and true.

Some new businesses do not have case studies to demonstrate their work, which is a whole new challenge.  Delivering a proof of concept for prospective customers at no charge can help overcome this barrier.

3.  Lead on LinkedIn

LinkedIn is the leading professional networking site and can be very valuable for companies to create awareness, whether you're a massive multi-national or 2 person shop.  Company Pages and Discussion groups are a great opportunity to connect with like minded people, participate in discussions and demonstrate leadership.

The employees of this company had incomplete profiles that linked to the company page, and even then the description of their jobs was not consistent.  Cleaning that up is easy.

My recommendation to them was to dedicate time and energy into leading conversations and establishing credibility through discussion groups.  Identifying groups that their customers (current and prospective), competitors and peers were involved in and joining in the conversations is the start of that.

Starting conversations topics and leading discussions within those groups to get their point of view out is the next step.  This company has a treasure chest of content around their ideas and approach on their website.  By using this content through LinkedIn they can easily get more mileage out of it.

From a budget point of view, none of these recommendation cost very much.  This to me seemed more like an exercise in understanding what the true business objectives are and thinking about how to best achieve them.

MLB doing a great job engaging Fans on Instagram

Major League Baseball was one of the first sports leagues to launch an integrated web template for all of their teams a number of years ago.  They have now done the same with Instagram and are doing a great job of integrating the fan experience online through it.

A recent promotion is centered around Miguel Cabrera's race for the triple crown (non-baseball fans click on link).  In order to have a chance to a Miguel Cabrera bat they asked users to take a picture of themselves wearing a "Triple Crown", upload the photo to Instagram and tag it with #MiggysCrown.

I love programs like this on a number of levels

1. Customer Engagement  Cabrera is an engaging figure and an exceptional talent.  Whether you are a Tigers fan or not this contest gives you a great opportunity to personally be involved at the end of the season
2. Measurement  To participate in the contest there are some simple steps, but they are all measurable and can be used to identify the key drop off (and acceleration) points
3. Repeatability  As MLB embeds their Instagram photostreams into their websites this type of program can easily be replicated across other activities and other teams
4. Sharable Moment  Taking a photo of yourself, supporting a top player and supporting the Tigers - all moments that as a fan and someone who is engaged with the game will support and share with their friends and followers

Other brands have tried programs like this using Twitter hastags and Facebook Photo Albums but it's the integration and simplicity of Instagram that MLB uses makes it a winner.

What Marketing can learn from Politics

Marketers’ today (myself included) talk about the customer being in control and the increased need for them to be able to drive the processes that they engage with.   This is being done through delivering increased customization and personalization from simple preference settings all the way to behavioural segmentation.

As their understanding increases of how these systems work, their expectations of what will be delivered to them (when, what, why and how) also increases.

Some brands have allowed customers to help them in product development and actively seek feedback and participation.  Starbucks is the champion of this, and the new Barclaycard Ring has really embraced it.

The ultimate trust you can show your customers, with trust being the path to loyalty, is by placing your brand in their hands.  Being guided by their insights, needs and desires to define and refine your brand will be the next step.

Political policy is shaped like this today.  The ultimate democratic tool, the opinion poll, shapes policy like no other mechanism.  Polls are used to guide politicians on every issue, big or small, so they can understand what their constituents think – and what they want them to do.

Yes, this means that political leasers have become more of a spokesperson or figurehead rather than a leader, but that discussion is for another day.

Thinking of your customers like constituents means a change in organizational philosophy.  It’s more than focus groups or getting them to like you on Facebook, it’s integrating them into your company.

• Put their involvement on your CMO and Executive scorecard
• Give them direct access to Marketing Managers and Communication Plans
• Engage advocates and detractors in product development and product testing

Take the number one thing on the mind of politicians - unless you keep constituents (or customers) happy you’ll be out of a job next time an election (or purchase decision) comes along – and you’ll have the same focus that a customer has when they are choosing you.

Combining Social with CRM - how to, and must do

In the digital age, customers own the conversation.  They determine what is important and what the merits of an individual product or brand are.

Traditional CRM however is based on push messaging.  While advancements in dynamic messaging and customized content are helping, Customers are fatiguing from traditional marketing channels like email and direct mail.  Social CRM allows brands to better support users an improving interaction by entering into a collaborative conversation with them.

Social is the platform of choice for a select group of key natural human behaviours
1.  Giving and getting advice "can anyone tell me where a good place to get my oil changed is"
2.  Establishing or building your personal identity "home with my little one today, time to be mommy"
3.  Sharing your interests with others "I love the new batman, Bane is crazy!"

The opportunity for marketers is to identify these behaviours within their customers and support the conversations that are happening around them.  CRM methodology typically builds towards Advocates and the sharing of their message to recruit other customers and support the brand.  Social let's us identify opportunities to amplify our message through the activity of all the user groups (Prospect, Customers, Advocates).   

How?
Giving them the content that will allow them to create social currency within their networks.  You can use the content that you built for your current website, or you can ask users for content.

Behavioural targeting through social lets us align product offers and engagement with actual user activity.
…"looking forward to my family coming over this weekend"
…"school is back, I haaatttte making lunches"
This can be done through Facebook media and community management.

Combining these worlds as a single ecosystem is tough for a lot of companies / brands to do, but it will become a must-have very soon.

Using Email and Offers to convert shoppers

A great amount of time is spent designing online shopping experiences with great emphasis on having product availability online.

Despite the best efforts of Information Architects, Graphic Designers, Marketers and yes Strategists over 70% of shopping carts are abandoned online.  There is a huge commitment issue there (which is a whole other story), but amuse yourself about thinking if that’s what actually happened at a place like a grocery stores.  That’s a lot of restocking to be done.

Email is a great mechanism to help convert that sale.  You know what the customer was interested in, and it’s inexpensive communication.  Here is an example of a recent experience I had at happysocks.com after just browsing – not adding anything to my cart.

I went to happysocks.com, browsed and not feeling ready to buy anything provided my email address to receive promotions / communications.

Exactly 4 weeks later I received the offer below – 50% off any order of 10 items or more.  A pretty good deal.  I didn't click through, but I did forward the message to a couple of people.

7 days following that I received another email, with an even more compelling offer – 50% off any purchase, no minimum.  I didn't click through – but was interested to see that they dropped the minimum order requirement

7 days following that I received another email, with their best offer yet – 70% off any purchase, no minimum.  I clicked through, found some great socks and added them to my cart.  

I was interested to see how far they would take this, so I closed my browser window after putting in some order information (but no payment)

That afternoon, I received a follow up email from them.  It noted that I had abandoned my cart (had a link back to it) and encouraged me to tell them if there was anything wrong they could help me with and included a promo code for free shipping for me to use to complete my order.

This sort of escalating follow up is a great way to see a customer through to close the sale.  They know I am interested, they know I am ready to buy.  I'm going to assume (okay, hope) they are capturing these interactions to develop an optimal communications model and offer combinations to ensure everyone wears colourful socks.

How the DM death spiral will happen

You know the routine, come home from work, put your keys down and collect the mail from the day.  There's a normal "pace" to it - a few flyers, some real estate postcards, maybe a bill - but most of it is just junk.

As a marketer I probably pay more attention to it to see what types of messages or programs are in the junk than most people.  Direct mail still can play a valuable role as a mechanism to support acquisition, cross sell and retention in areas like retail banking, automotive, telecommunications and B2B -  but it's days are numbered.

Every client I have though has over time seen diminishing returns from direct mail, and from every perspective.  One benefit of direct mail to the everyday consumer however is that it's volume is what helps keep the price of personal mail - stamps - down.

That got me wondering though about a bad spiral of cost and engagement that could (ok, will) happen with direct mail in the near future.  Follow me on this one.

As people continue to pay less attention to direct mail, the lower the return for marketers.

The lower the return for marketers, the less junk mail will be sent.

The less junk mail sent, the higher the cost of stamps.

The higher the cost in stamps, the less people will rely on mail for meaningful communications.

The less people rely on mail, the less people pay attention to direct mail.

This of course will take time, and isn't going to come to reach a finality for even longer - but this is how I think it will happen

Know what your platform is capable of - and not

Meeting with someone recently they asked me what my favourite CRM platform was.  I've had a chance to work with a wide variety and what struck me about it was it doesn't matter what my favourite one is, but knowing what the capabilities and constraints of the one you are working with does.

In previous roles I've had the opportunity to be a part of the implementation teams for some large deployments, which are massive endeavours.  My role was typically to understand how the business requirements and corporate vision would align strategically to the tool being implemented. 

In the marketing and advertising world the scope is simply understanding what system you are going to be interacting with and what you'll be able to do with it.

The enterprise tools are incredibly similar in terms of capability and it would be very difficult to rank them as a lot of the factors align with their compatibility with your companies current infrastructure, and budget.

The types of tools that I like the most of those that are able to hold customer records of all (or most) of their interactions with you.  Tools like Eloqua are extremely helpful as they offer deployment and analytical (although limited) within it, where as Salesforce.com and it's integration of Radian6 offers another level of social behaviour tracking.


The trick then becomes in knowing what your tool can't do.  Sure, the sales guy said your tool "could" do triggered emails based on interactions or track Facebook posts from linked accounts - but did you buy the module?  I often find that marketing clients only remember what was said in the sales presentation, not what they bought.

Over the last couple of months I've had the unpleasant experience of finding that what a client says they can do (or data they have) is far from the truth.

Adjusting a strategy into phases to show return and demonstrate value can be tough in these instances, particularly when the client has no ability to add new functionality.  Conducting a full discovery process and objective setting can also help prevent these surprises from popping up.

Use 4 Questions to Evaluate your Strategy

There are a wide variety of frameworks and processes to design your strategy.  Assuming they are sound and you've followed them properly it's important to assure yourself that it will be successful in meeting your objectives.

Whether it's restructuring your online presence, launching a product or putting up a banner ad (although that's a stretch to call a strategy) you need to evaluate the quality of your strategy.  Here are some simple questions to ask yourself.

1. Does your strategy take advantage of your key resources?  Think about what you have on hand and what can easily be exploited.  This can be people, content, infrastructure or any other assets.  Does your strategy make full use of these or are they largely ignored?  
2. Can you sustain your key differentiation points?  You've made some assumptions about the competition and your abilities as your competitive advantage.  Are you going to be able to maintain that position or is it relatively easy for your competition to duplicate or exceed?  Or in other terms, once you are in market make sure that you don't lose your key differentiation points.
3. Can you obtain internal alignment?  Your strategy will most likely require participation from other key groups like customer service, sales, procurement or IT for complete implementation.  Can you line up your work against their KPI's or objectives?  Have you got buy-in from the leaders of those groups?  As you build out your launch / project plan these considerations will need to be considered.  If you ignore them you may not be fulfilling the expectation that you set with your customers.
4. Can you properly implement your strategy?  Do you have the budget, people and time to implement all aspects of it?  You do not want to implement with a half-baked solution, you know it will fail and have seen other ideas get ruined in the same way.  If you don't, figure out the roadmap that will allow you to launch in phases.

And if you have more questions that answers after going through this it's time to go back to the drawing board.

How to Document and Measure the Customer Experience

Do you want to know what your customers are doing - and how you are doing at serving them?  Start by documenting the steps that they take in their journey with you and then measure against them.

Most consumer purchase processes follow a typical cycle of Research, Purchase, Service, Recommend and Renew.  Different organizations may call them different things, but you need to start somewhere.  Some industries or products may not have a service element (yes I know that even toothpaste has a 1-800 number, but does anyone call them?).  Map out the big steps a customer takes in it's interactions with you throughout the purchase process as phases.

Within these phases is where the nuances of your service offering and specific product will differ from industry to industry and across competitors.  We'll use getting a phone plan as the example.

Think about what you do in researching a similar product and breakdown the activities that you partake in to move to the next phase.  These are the elements within each phase.  For illustrative purposes only, this is not a set of definitive activities for getting a phone plan, it's a start.

Within these steps are key moments of truth where it is truth where a customer's satisfaction and ability to move forward with the process have the most impact.  This is a critical piece in understanding what your customer is going through and are highlighted for illustrative purposes.

The elements and moments of truth for your particular organization may change over time, and your customers will tell you if they should.


Finally, survey your customers at regular intervals evenly across all phases and elements to gauge their satisfaction and understand the drop-off points within the purchase process.  Applying a heat map technique (illustrated below as green is good, yellow is ok, red is bad) will help your organization understand where your operational focus should be in addressing the needs of your customer - awareness, sales team, customer service, product, etc.


In this example the company ranks high in Comparing Plans and Making Purchase Decision.  This would be typically achieved by having competitive rates and easy-to-use comparison tools available.  Their is however a drop off at Negotiate Final Plan which may mean a sales training issue exists that needs to be addressed.

Automotive: Who owns the Customer?

A colleague of mine recently bought a car.  He kicked tires, did some research, negotiated on the price and drove away happy.

Two days later though, he got an email from the manufacturer about a new sale on the very car that he bought - at an even better price. He was no longer happy.

What happened after was more of a customer satisfaction exercise and that's ok, but the lesson in this is for the different pieces of the automotive organization to understand who owns the relationship with the customer, and who can say what when.

All different elements of the organization want something more from every prospect and customer, but to the customer they are all one and the communications must seem as they are from one.  How do you do this?  By establishing a contact strategy that puts the customer in the middle while addressing the results that each of the areas needs to achieve for a healthy business.

The Original Equipment Manufacturer (OEM) supports the other areas by focusing on customer acquisition and awareness.  They should establish a lead management process that qualifies leads and delivers them to Sales when they are ready to buy.

When a prospect is ready to buy it is time for Sales to do their job.  The entire process and all communications related to it should remain with Sales until a sale is completed.  If no sale is made, the customer should go back to the OEM for ongoing communications.

Once a sale completed however, that customer relationship should be owned by the Dealer.  The time between sales for a customer is long and it is the job of the dealer to maintain a positive relationship and a connection through communication.  Ideally, this is done with the support of the OEM through communication platforms, content and messaging - but the relationship stays with the Dealer.

Part of maintaining that relationship is through Service.  The vast majority of revenue for Dealers comes through Service, but as the key driver in customer satisfaction (both good and bad) only a relationship that is based on trust will only pay off.

Cool down periods between steps in the process, and sorting out recent purchases is a part of the process - but can't be implemented without a full understanding of the various areas and how they relate to the customer.

Design for your Customer, not Tactics

Building a strategy?  Please don't build it around a tactic, or start talking about tactics until you understand your customer.

Start by thinking about your customer and the benefits of your magical widget to them.  Whether a product or service, you should be able to gain some insights when thinking about the emotional and functional benefits.

Emotional benefits?  How it is going to make them feel.
Functional benefits?  What they are going to be able to do.

Understanding how to apply those benefits to customers through tactics can be done by knowing more about your customers.  They are out there, but you need to identify some simple things;

What channels are they interacting in?
How are they using those channels?
How can these benefits intersect with that pre-existing behaviour?

This customer centric approach will produce a more engaging and effective program.

Big Data? Big Deal

There are a lot of articles, posts and tweets about big data and the massive potential for decision makers and marketers - but just because you can capture and store it doesn't mean you should.

The key to making data effective is to understand what you are going to use it for.  Tools today can let you capture the most minute of interactions, shares and "engagements", but if you are capturing it all I see it causing more confusion - by raising more questions - than solving any business problems.

Organizations need to look at the data they capture today and the way that they are using it to first understand where they stand.  Identifying future objectives and the data required to meet them will help them understand what they need to do next.

The goal is not to have the biggest database, or the most complex - it is to have the most useful.