Email Improvement X: Measuring Relevant Customer Targeting

Thursday, July 29, 2010 by Nick Godfrey

Over the past few weeks we have encouraged companies to make nine improvements to their email marketing efforts. Leverage the previous nine improvements, keep adding customer, behavior, purchase and product information on a daily basis with an automated customer data engine, and you will achieve our tenth improvement: Targeting.

 

If your email campaign is obsessed with relevant targeting, not only are you most likely committing the cardinal sin of “blasting,” you’re also behind the curve. You’re not competing effectively. A recent survey from email marketing provider AWeber shows that behavioral targeting dramatically increases email key performance indicators. By specifically targeting email campaigns toward subscribers who have taken an action (opened a particular email, clicked on a link, made a prior purchase), nearly 50 percent of respondents indicated that behavioral targeting increases their conversion rates either significantly or moderately. An overwhelming majority of respondents (71.4 percent) plan to increase their focus on behavioral targeting in their email campaigns over the next year. So avoid this marketing opportunity at your competitive risk.

 

Targeting is the sum total of the right email effort. If you are focused on the most relevant message to your customers, if you know the value of your customers, and if you are focused on each customer’s own unique lifecycle, you stand a very good chance of targeting them appropriately. You will avoid “nag marketing” that, when looked at from the customer’s perspective is seen as “Did you buy? Are you ready to buy now? You didn’t buy just now, so are you ready to buy now?”  Your marketing will be more like that of the personal trainer we mentioned in earlier that customizes a training program depending on an individual customer’s needs instead of being generic and telling everyone to go run a marathon on a broken leg. Most likely your customers will not follow-through on your suggestion.

 

 

 

Email Improvement IX: Customer Personalization Equals Performance

Tuesday, July 27, 2010 by Nick Godfrey

As we move toward the end of the “Ten Ways To Improve Email Marketing” it’s important to keep in mind that these are improvements. They are meant to be taken as ten ways your company can be more effective, not ten ways to trash your current email initiatives. With that intent in mind let’s look at personalization. 

 

In the digital era the goal of any marketing campaign must include a personal touch. Your company has the ability to market to customers as if you know them. To do anything less, especially via email, will be noticed quickly. And it could be used as a reason for customers to disengage. The more you can go beyond just using a name, the better. For example, you should strive to use preferences, favorites things, and customized subject lines the more effective your email effort will be.

 

As I said at the beginning, we’re focused on improvements. Most companies know personalization works better, so how do you improve? Well, first of all I recommend putting some kind of call to action either in the subject line or very early in the email. That call to action must be tied to the actual content of the email. (How often do you see these being absolutely different?) This works best when the subject line is personalized, being based on the data engine that your company has hopefully put time effort and money into. 

 

And there’s evidence that adding a personal urgency will lead to higher open rates, conversion rates and all that other good stuff email is supposed to do if it’s done right. According to a recent survey conducted by Experian CheetahMail, marketers may be able to further boost transactions by including limited-time offers in the subject line of emails. Experian noted that 59 percent of day one transactions were driven by time-sensitive promotions. Coupons, abandoned shopping cart notices and welcome emails also lead to transactions, though often not as quickly as time-limited offers. With a majority of Americans starting their online day by checking their inboxes, the email marketing channel has become extremely popular among businesses. A recent survey conducted by ExactTarget found that 58 percent of consumers check their emails when first logging on to the Internet. I should note here that the LTO (limited time offer) to drive urgency should not be overused. Recently I received over half a dozen emails for a sandal sale. Yes it was a good deal, yet no, I’m not buying any sandals!

 

Here at Customer Portfolios we preach lights-out marketing. That means you can build automated programs that are triggered by behavior. With these you can still market to your customers when the office is closed and the lights are off. Now there’s good evidence that your customers just might see your email first thing in the morning, maybe before your company turns the lights on. That’s a nice coincidence. But it won’t work well unless you greet them by name, address them about what is meaningful to them, and make the offer relevant.

 

Email Improvement VIII: Learn From Your Customers

Tuesday, July 20, 2010 by Nick Godfrey
As I write this a group of wealthy men are wrapping up a major event in which they hit a very small ball across a beautiful area of Scottish countryside all in a chase for fame and fortune. As the British Open fades into memory I remember what a golfing friend of mine once told me. Golf, he said, is all about confidence.

 

So is email marketing. All the companies we deal with have a pretty good level of learned confidence in key areas. They have confidence in their people and product. But they lack confidence in their customers and that confidence can only come from key learning’s about your customers and then applying that learning to email campaigns. In short: Determine what you need to learn per the overall strategy that we’ve been discussing over the past two weeks here on our blog, and sync it with the customer lifecycle.

 

Here’s what you need to accomplish key customer learnings for an improved emails campaigns:

 

• Go beyond the basics: Every company gets the basics of name, address, and maybe even birthdays. But if you go beyond it you can implement the kind of surprise and delight tactics we discussed on our last segment that make email campaigns fun for your customers. Find out things about them that can be tied to their relationship with your brand, like their favorite holiday, book, musician, and even their hometown. This information opens up a lot of information that can be used to customize future campaigns. 

 

• Get preferences: This is very important in many areas of marketing, but critical in email marketing. Suppose a catalog apparel marketer is getting ready to redesign its website. They need to know the preferences of all their customers to know how often they want to receive emails inviting them to go that new site, and it will also need to know whether they still want to get that print version of the catalog that has been the foundations of its business. 

 

• Value Future Behaviors: Incentivize the customer via a solid value exchange to provide you information about their behavior (Lifecycle) and use this information to be relevant (targeting.) This doesn’t require a million dollar budget.  It can be done with integrated, closed-loop marketing. It can also be done with cleaver, bootstrap promotional marketing. It can even be done with a simple Thank You letter.

 

Remember that email is a process not an event. It is a relationship rather than a one-off conversion attempt. Learning as much about your customer as possible will give you the confidence necessary to go the whole round of 18 holes and end up in the lead vs. behind your competition.

 

Email Improvement VII: Make It Fun For Customers

Monday, July 19, 2010 by Nick Godfrey

I’ll be the first to admit that I take this email stuff pretty seriously. That’s because it is so underutilized and poorly executed by so many companies and I passionately believe it is essential to an effective customer strategy. But at this point, after we’ve posted six serious ways that your company can improve its email efforts, let’s lighten up.

 

I’m not suggesting that your casual dining chain hire joke writers for your email campaign. And I don’t think taking a comedic turn when you’ve spent years cultivating a serious tone as a high-end fashion retailer is advisable. Fun has everything to do with a concept I call “surprise and delight.” It’s kind of like the “shock and awe” of email marketing.

 

Surprise and delight means that every now and then you’re going to extend an offer, a discount, an experience, or an information package that is unexpected. This experience must be worth the customer’s while, not a frivolous venture. Like anything else it is also based on data. 

 

There are two kinds of surprise and delight. The first is somewhat random but still based on customer data. Example: A fashion retailer can spice up the dog days of midsummer with an unscheduled email to its most valuable customer segments based on total revenue as a “summer recess” discount. That makes your company more valued and less predictable. And it just might keep those customers on watch for the next campaign you send on the normal schedule.

 

The second kind is an “earned” surprise and delight. In this case, a company can set an internal marker for a certain set of customers based on their behavior. You must don’t need to let the customers know you’re doing it. Example: If a casual dining chain wants to spike its happy hour business, it can email an offer for a “martini night” for its customer that have shown the biggest percentage revenue jump, or even for the customers that have most recently joined its loyalty program.

 

The element of surprise is one that some companies have quite frankly abused. But it doesn’t need to be that way. Gain a trusted relationship by running a quality email program based on data and value, and you can move to surprise and delight. More work for you maybe, but a lot of fun for your customers.

 

Measuring The Implied Marketing Influence On Customers

Friday, July 16, 2010 by Nick Godfrey
Here’s a little slice of marketing nirvana. Suppose you’re the marketing VP for an apparel chain and you decide to take a walking tour of your flagship store. You see a customer exiting with several purchases who says: “Hi, I saw your new billboard on my way to work last week and thought I should come in and update my wardrobe for the fall!”  Then the next one says: “Hey great email campaign. I bought three blouses and a pair of shoes with that recommendation.”


If only tracking campaign response was this easy.  Problem is, too many sales and marketing executives actually expect these kinds of results from explicit campaign response tracking.  A customer will typically receive many communications and specific campaign response might be an unreasonable expectation in a multichannel world. For example, during their repurchase cycle when a company is trying to get a customer to buy a second and even third time they will receive catalogs, post cards, emails and perhaps even phone calls.  Here at Customer Portfolios we associate source codes to each piece of communication so that when a customer makes a purchase, we know the code, verbally or digitally, and we can relate it to the appropriate campaign.  The only problem is that most customers aren’t interested in helping us measure, or as we call it, close the loop (as most customers don’t even know what the “loop” is).  They don’t drive to the mall with one, two or even six catalogs in their hands in order to indicate which one got them there. 

With a marketing database in place you can have the ability to see all. Frequently we talk about having a 360 degree view of the customer and their behavior. We can see the communications that have been sent to a customer along with all resulting behavior and purchases made by that individual customer or their household.  So why rely strictly on the customer to tell us why they bought when we can logically come to that conclusion ourselves by just looking at the communications leading up to the order?  With a database, designed for analysis, we have a complete view of all customer behavior. It is not based on a random anecdote or occasional sales report. 

This is where implicit measurement comes into play. Implicit response analysis takes into account the communications a customer has received, the time they received them and the typical response curve for that type of messaging.  Suppose a customer receives an email or catalog regarding a fall clearance sale. She goes to a store over the weekend and buys an item included in the catalog and email. It’s reasonable to say that the email had something to do with that purchase.  However, odds are that there is going to be no indication from the customer that they even saw the catalog or got an email.  The implicit matchback would identify this transaction as being related to both the email and the catalog and give credit where credit is due. That credit is implied and it’s OK to credit to both efforts. 

Another benefit to using implicit response tracking is the ability to understand how complementary campaigns affect overall customer conversion.  Catalogs certainly provide a customer with many suggestions for upcoming styles and new product releases.  However, these customers are flooded with communications at all times and there is a high likelihood that they will get distracted and ultimately move on to another brand or simply forget how excited they were about a product. A follow up post card or email that strikes the customer while they are in front of a computer and reminds them of the product that they were interested in can provide momentum for numerous additional orders.  By solely using explicit analysis there would be no way to understand the true value in the multiple touch points as only one source code could be captured.  By implicitly tracking customer response we could see that customers who received the email and catalog generated a significant increase in conversion rate compared to customers who received just one or the other.

Ultimately explicit response behavior is valuable.  If a customer raises their hand and indicates a specific promotion drove them to buy a specific item then there is no question about their motives.  However, the explicit behavior should also be used to establish standard response curves, which enable measurement of customer behavior that results from a single or multiple communications.  

So take that store tour, and talk to your customers. But understand that the truth about your customers is deeper and more data driven. 

 

The Customer Reality For Catalog Marketers

Thursday, July 15, 2010 by Nick Godfrey
The perception of direct marketing in the current market is that it is “many channels.” But that’s not the reality. In reality those many channels really boil down to just two: email and catalog. To make this “dual channel” approach work it needs something even simpler, which is a single view of the customer. In short, we have a brain with two sides, and of course that brain works best when one knows what the other side is doing. Additionally, we need to recognize that while one side of the brain has its strengths so does the other side.

 

The single view should enable analytics for the purpose of marketing. The focus of those analytics should always be our customer. Now, we all know that I am not like you and you are not like the person sitting next to you and so on. The analysis will show us how different we are. Yes, there are demographic differences and psychographic nuances, yet what really matters to your business is behavior. My behavior may be motivated by discounts (frugal Yankee) and you may be driven by quality (you want the best.) Knowing where a customer is along that specific lifecycle will also impact what they buy. If I’ve made 10 purchases and that person sitting next to you is another frugal Yankee, and they’ve only just made their first purchase, then we will most likely purchase something similar, yet different. The single view and the analysis will provide the strategic insight that can be translated down to actual tactics.

 

This insight gained from preference, lifecycle and actual behavior will also help to show which channel is optimum for marketing. Because of the price, we are tempted to use email for all customers, all the time. Sure, every campaign will generate an average level of incremental sales, while causing only “some customers” to opt-out. But that is a shortsighted and in the end economically inefficient way to view email for catalog marketing. Every customer that has engaged at the level of joining your email list is a good customer. When you lose a few because of an irrelevant email, those few build up over a short period of time. Eventually it will drive down your brand’s reputation. 

 

For catalogs the cost of printing and mailing does add up to a real number, often significant. Catalogs should be used only for those customers that are real buyers. Targeting beyond RFM is needed. Targeting should use the single view of the customer for segmentation, opportunity analysis, predictive customer and product modeling, and more. This will really show companies whether that print catalog represents value. It will also show who should receive emails echoing our catalogs, along with the appropriate associated offer level, the product to be featured, and the appropriate timing.

 

Now that we have dynamic catalogs and emails reaching out to targeted customers with different messages, offers, products and timing, we have cause to use both sides of our collective brains. Failing to do so will lead to a split brand personality. 

 

Email Improvement VI: Set Customer-Facing Rules

Wednesday, July 14, 2010 by Nick Godfrey

There’s a famous Hollywood story about Jeffrey Katzenberg, the SKG film mogul, who has been known for his obsessive work habits and his demands of the same from direct reports. It was said he had a sign on his wall that read: “If you don’t come in Saturday, don’t bother coming in on Sunday.”

 

Whether or not its true, it’s a good idea to plainly state the rules that a company will insist on when it comes to marketing, specifically customers and email. The days of plaques on the walls have been thankfully replaced by on-board training, company mission statements, Salesforce.com and websites, but I wonder how many companies have actually set in the stone the rules that are absolutely unbreakable when it comes to customers and how they will be communicated with email or other outbound channels. For example: Don’t blast and broadcast! No emails without opt-ins. Respect frequency requests. Honor unsubscribe requests. Communicate value. Make it special. Our whole series of email improvements could serve as an example of these rules. Every company will have its own spin on these rules, but it’s most important that you have them for two primary reasons: 1) the person often responsible for creating the email content may not be privy to the big picture and 2) because after all the people who are receiving the emails are often our good to best customers whom we should respect.

 

I recommend that every company demand that sales and marketing stakeholders meet and decide on what the email communication rules will be. They should then be readily accessible not only to sales and marketing but to customers as well. If customers know a company is acting in its best interest, they will logically be more comfortable exchanging the information necessary for you to execute an effective email campaign. This is especially important for retailers. Rules such as “we will never send you more than one email a week” or “we will always provide value” signal and formalize how you are going to treat customers. Additionally, the rules can come with a promise of “let us know if we are breaking our own rules; we want you to let us know.”

 

Customer rules accomplish the following three important best practices for all marketing, but especially for email marketing:

 

They formalizes executive buy-in. Sales people especially will want to pressure email rules to try and gain extra revenue. If they are given an opportunity to participate in setting the rules they won’t be able to break them as easily. 

 

They allow email tasks to be more effectively delegated. Posted rules will allow lower level managers and assistants to execute email programs with confidence. The margin of error is significantly reduced.

 

They establish a commitment to discipline and customer centricity. Like the Katzenberg sign mentioned earlier, words have a spirit and intent. Committing to email customer rules goes beyond words. They convey a higher purpose for email. It tells employees and customers that we’re emailing to provide value rather than just broadcasting, and we’re doing it with the goal of building a long-term relationship. 

 

Email Improvement V: Customer Lifestyle Direction

Monday, July 12, 2010 by Nick Godfrey

I want you to pretend for a moment that you’re a personal trainer. Here you are at your gym and you have two appointments booked on your schedule. One is at noon; the next at 12:30. The noon appointment comes in. He’s a 30 year old man recovering from a knee injury suffered while training for a marathon. He wants you to help him stay in great shape while he rehabs his knee and keeps his eye on a marathon he has planned for later in the year. Then the 12:30 comes in. She’s a 40 something mom who is a bit overweight and hasn’t worked out since college. She wants you to put her on a diet and exercise regiment that will simply get her on a healthier lifestyle. 

 

OK now, personal trainer. Would you send those two people the same follow up email with the same exercise plan? No, you wouldn’t. In fact you wouldn’t even think of it. Yet, this kind of thing goes on everyday in the world of email marketing. I’ll bet you that every hour of a typical business day, some company is sending the same email to different customers that have different goals and completely different needs from that company. More technically, this represents the fifth way to improve your email marketing plan: Set a lifecycle direction.

 

All customers have different lifecycles, or patterns of purchase and interactive behavior. The right marketing and technology partner will allow you to identify the patterns that will lead toward the most valuable behavior. They will enable you to sue automation to ensure that you find segments of the valuable lifecycles and to ensure that you have the fact based data to address them via email. Too many companies guess at these lifecycles. But you have to know them not guess at them.

 

Let’s go back to the personal trainer. Suppose he worked at a national fitness center chain like Bally’s. If that chain had the right customer database and the right intelligence to know customer lifecycles, he could tap into a common knowledge that would allow him to automatically send an email based on “rehabbing injuries” to the marathon runner, and “beginning fitness” to the 40 year old woman. Then from a corporate perspective, the chain could identify some of these lifecycle patterns. Maybe an email campaign for beginners could invite them to bring a friend. An email campaign for injured clients could offer additional personal training sessions at a discount or even special newsletters about avoiding common injuries to the knees and ankles. 

 

Bottom line companies must set a plan of finding out where someone is today in their use and relationship with your company and then have a plan for where you want to take them. Let’s go back to the personal trainer. Imagine that you went to his gym as an average person of average fitness he promised you to get to the next level. But then you go to the gym to find he only has one program, the one-size fits all program, which is the Rambo III program. You probably would not last long, nor would you enjoy the experience. Actually, you’d probably stop going and speak badly about the trainer and the gym.  You wouldn’t want to go there. Don’t go there with your brand.

 

 

Catalogs Morph For Multichannel Customers

Monday, July 12, 2010 by Nick Godfrey
The catalog has been the workhorse of direct marketers since Hammacher Schlemmer, Montgomery Ward, JC Penny and Sears began selling to frontier settlers (or that is how the legend has been spun for me.) Since then a lot has changed, yet at the same time, a lot has not. Digital printing and online delivery of catalog content has revolutionized the cost and customer ordering structure of this business. But the objective is still to engage customers and prospects, get them to look at products, increase purchase intent and then make a purchase. Simple concept, yet often very complicated. The focus for print catalogs is finite; the opportunity infinite.

 

Today the print catalog is still a powerful tool that contributes to converting the coveted sale. Although it no longer stands alone, it feeds the mix of outbound marketing channels, including email, phone, text, and social media. Additionally, the impact of the catalog on consumer's lives and the company's database can vary wildly, depending on the data, segmentation analysis and lifecycle channel understanding that goes into the targeting of those that will receive a company's catalog.

 

Certainly there is skill in the development process and execution that can generate substantial revenue from catalogs. But that revenue by itself pales next to the opportunity of using a print catalog to feed a multichannel retail engine, revving on customer data and its relevant opportunity for high-octane cross-promotions and loyalty programs. The real opportunity is to move beyond the standard catalog mantra of R-F-M (recency of last purchase, frequency of purchases and monetary value of purchases) to segmentation by past purchases, channel preference, lifecycle stage, and next best offer modeling. This is made possible with a marketing database foundation that is fully integrated with all the touchpoints providing a single view of each customer. This view allows for analysis of the customer showing what they have done, what they will do and then showing if they actually did do it. The up-side is infinite.

 

The opportunity now is to use the catalog in the marketing mix for targeting those customers that are most likely to convert via the most relevant marketing “push”, while avoiding those we know will convert with just an email, postcard or on their own with no encouragement. The approach is as traditional as the print catalog, and as old-fashioned as thrift. But with the right mix of print, online, and even socially enabled marketing catalog marketers can  target the right customers with the right catalog to earn decidedly modern revenue. 

Email Improvement IV: Extending Customer Value

Wednesday, July 7, 2010 by Nick Godfrey

 

In our last post on email marketing for retailers we talked about the commitment to a meaningful customer value exchange. That means your brand is going beyond asking a customer to join your list to receive “special offers” which are given to everyone, which can easily be done via in-store signage announcing the same offer. The exchange entails the customer providing you with their email and you, the brand, committing to give them something of real value, such as access to a limited product offering that the public does not have. Now the opted-in customer feels special, feels happy, feels like they have done the right thing. Brands need to use email to continually make the customer feel special, and not like just another email address receiving just another email blast.

 

A brand that has a customer strategy in place, supported by an articulated customer value exchange, needs to use these to grow and retain their customers. This is done by establishing a customer’s baseline behavior, setting their lifecycle direction and then measuring action and success. Blind investment into providing a customer value will make them happy, but this approach does not work if it loses the brand money. A brand that lacks an understanding of their customers must establish a set of baseline behaviors that will tell us what they do today. When we know this, we then need to use this to determine what we want them to do next. This is what we call their lifecycle direction.

 

Here’s what I mean. Suppose a casual food restaurant has a successful bar and dining business that they wish to continue to grow. They can market to their customers by blasting via all channels with a message like “come in more!” yet this will not really be meaningful to anyone, nor will it be effective. Using email well, the brand can target and measure based on a customer’s behavior and their expressed opinion. 

 

The baseline behavior can be established by measuring response to email as a whole, by the specific offers clicked on and downloaded, and by actual follow-through usage of the offers. (Note, usage can be measured via integration with the POS and payment system, yet it can also be done with collection and tabulation of paper based offers.) This will enable a breakdown of customers by their behavior; the below graph shows a simple example illustration of this:

 

100K Customers

Light

Medium

Heavy

Bar (60%)

40K

15K

5K

Dining (40%)

15K

13K

12K

 

In this example a Heavy customer is more valuable than a Medium customer, who is more valuable than a Light. Bar customers are less valuable than Dining and their behavior and product make-up are quite different. 

 

Now that we have this baseline behavior understanding of our customers, what do we do? What is the next best offer that we should give them? What is their appropriate lifecycle direction? We would like for all our customers to immediately become heavy dining customers, but this not practical in that it is too big of a change for most. A customer’s migration through their lifecycle is typically made up of numerous stages, each being a small change or step forward vs. a large leap. The lifecycle direction plan for our casual food restaurant example could start a positive migration in visit frequency (light to medium) being easier, and visit type (bar to dining) being harder.

 

Within this framework there are numerous variables, such as time of day, day of week, number of people in party, etc., yet the goal is to grow incremental behavior and, once a new level has been reached to maintain it going forward. Obviously there will be ebbs and flows in behavior, but now we have a means of generating insight, testing offers, targeting our marketing efforts and measuring the results and effectiveness. 

 

Email is a critical component within this plan. It is fast, flexible, targetable and measurable. We can use it to help establish our baseline behavior and to migrate our customers along their lifecycle direction, using a mix of primary, and secondary offers along with articulating the relevant value exchange. Anything else is a monologue when it's a customer dialogue that counts. 

 

 

Email Improvement 3: Increase Customer Value Exchange

Wednesday, June 30, 2010 by Nick Godfrey

I saw another interesting research study today that reported that 50% of email users delete marketing emails within two seconds of opening them. That’s according to Litmus Analytics. I’d hate to be one of those companies. It means they’ve engaged half their customers powerfully enough to get them to take that necessary step. But it means the email content is failing.

Any company suffering from a high deletion rate has most likely made a critical mistake that relates to my June 19 post on improving retail email practices. That one pointed out the need to drastically improve your understanding of the customer lifecycle. All customers are not the same. They don’t buy the same products as their neighbor or colleague now, and they won’t have the same value to your company a year from now. Yet, too many companies send the same email to the same customer at the same time. That will crash your open rate for sure.

I’ll also bet that companies who have high deletion rates do not consider the value exchange inherent in email marketing. You, the retailer, are sending your customers much more than an email. You sending them communications that promises value. They provide value by giving you their money, and maybe even an ongoing stream of information. If you are not giving them a valuable communication in return, of course they aren’t going to you’re your email or share it. They’ll hit the delete button as a force of habit. And you have wasted precious time, effort, personnel and customer equity.

A commitment to value exchange means your company is going beyond asking a customer to join your list with the possibility that they will be invited to special events or extended a discount at some point. Retailing is much more immediate than that. You need to use email to make the customer feel special. And there’s no magic algorithm to do it.

Here’s three ways to improve what I call your value exchange quotient (VQ).

 

  1. Base your frequency on customer data. If I say “buy” twice, that translates to “bye-bye.” Email cannot be yet another way to nag customers into a purchase or information-based relationship. Use customer data to understand how often different customers want to receive an email. It’s not about your email marketing program that says “blast the back-to-school discount every week starting August 15.” It’s about the customer data that indicates the email list members that have school-aged kids, and have responded to frequent emails in the past.
  2.  Attach an offer. Even if you properly segment your list and send relevant timely messages, include a compelling offer. Just letting the customer know there’s a back to school offer is not enough. Offer a loyalty program if the customer has more than two kids, for example. Offer a discount for holiday purchases to keep the back-to-school customer coming back.
  3. Work hard and work smart. I use the exercise analogy. The guy who’s 30 pounds overweight and drinking beer every night in front of the TV is not going to run a marathon next week. But he could go for a walk instead of drinking beer. If you have not been running an email program that extends value now, don’t expect that you will win awards for one next month. But you can begin to identify the communications that will be valuable to them and move customers toward higher value to your company. That takes hard work, rigorous analysis, and always striving for the next level of value. 

The Customer's New Intersection: Email And Social Media

Monday, June 28, 2010 by Nick Godfrey

Seems like just when companies get used to a technology and a customer strategy to apply it to, everything changes. But as always there’s customer opportunity in what seems to be a technology chaos. It is with this spirit that companies need to approach the busy intersection of email and social media.

Customers are opening email, forwarding email, and posting about the content on social networks. As we’ve written about before, email is amplified. Now we see data to back it up. Technology has amplified email. In fact email messages that include options to share content on social media sites drive significant increases in click-throughs according to a new study released today by GetResponse, an email marketing firm.

Specifically, the company’s study of 500 million e-mails sent using the service found that emails that included options like share on Facebook or Twitter generated a 30% higher click-through rate than emails without them. Moreover, when e-mails included at least three different sharing options, publishers experienced a 55% higher CTR on average.

Despite these findings, GetResponse reports that only 11.2% of emails actually offer three or more sharing options. That’s up a bit from stats published last year on the same subject, but still low considering what are becoming increasingly clear benefits of social media integration.

As we have written about on this blog recently, it’s time for companies to consider the amplification effect and take advantage of it. We’ve partnered with a company called hearforward to develop a tool to accomplish, measure, and manage email amplification. Expect to read more about it in the near future.

 

Email Improvement Part II: Understanding The Customer Lifecycle

Wednesday, June 16, 2010 by Nick Godfrey
In my last post I discussed the need for an overarching customer strategy. In order to even think about an email campaign, companies must have a defined approach to how they plan to extedn the customer experience in order to get, keep and grow customers.

Communication from the brand is very much a part of the customer experience. It needs to be an extension driven by following the details of the customer strategy. Companies need to know what they’re trying to do, why they’re trying to do it, and how it translates into tactics.

After defining that customer strategy, I think companies need to drastically improve their understanding of the customer lifecycle. All customers are not the same. If you’re a fashion retailer you have the high-end occasional shopper who is distinctly different from the working mom who refreshed her wardrobe every spring and fall. If you’re a casual dining chain you have the happy hour customer who eats, shoots, and leaves by six. This customer is light years away from the Saturday night date customer that comes early for drinks, drops a lot of money on a complete dinner with wine, and then finishes up with a cocktail. An email campaign can influence each different customer group, extending their existing behavior. But the question a company needs to ask is this: Where are you taking them and what are the steps along the way?

This should tie to the overall strategy and move customers from their current behavior to a point where they can be termed a “Best Customer.” Best customer is not defined by open rate and click rate. Best customer is defined by behavior. Email campaigns have to guide customers on that road. And its not the kind of journey marked by “are we there yet?” kind of nagging. Customers don’t buy everything. But they can be influenced on their journey toward fulfilling their potential of buying what they are most likely to want and need.

Example: Let’s go back to that couple at the casual dining chain for a weekend date. If that chain has a database with that customer’s behavior with the ability to analyze what it looks like over time, and if it has data on enough “look alike” customers, it can determine what that customer can be encouraged to most likely do next. Maybe the customer can be encouraged to bring friends next time. Or maybe an email campaign can simply extend a thank you to encourage repeat visits. “We want to be your date spot every time.” But it will alienate that customer if the wrong destination or next action is communicated. Having an off-target offer occasionally is not enough to drive them away, yet doing it regularly will. For example, An email campaign offering discounts is not necessary, because they’re spending money. An offer that encourages you to “bring the family” is probably irrelevant if this customer is dating.

Companies have to know. Guessing is not an acceptable approach for email campaigns. Your marketing department that is responsible for the customer email communications should Ask what that customer can should do next, and should be asked to get them there. The email is not the end goal. It should be a provocative, targeted catalyst to drive your customers to remain engaged and act again.


Stop Blasting Your Customers

Tuesday, June 15, 2010 by Sean Hurley
You need to strike this word from your marketing department’s vocabulary RIGHT NOW. This word is deeply disrespectful to your subscribers, poison for your marketing efforts, and a quick way to ruin the long-term investment you have made in email marketing.
 
The word…..

Is…..
 
Gasp!!!!
 
“Blast”.
 
If you don’t know what it means, suffice to say that it is the practice of sending the same message to your entire customer base. Blasting is the anti-thesis of customer strategy. It ignores segmentation. It ignores customer-centricity. It shows that you have no idea how to put yourself in the customer’s shoes. You cannot grasp what it’s like to open an email for new dresses even though you are a 45 year old man interested in casual shoes “Blasting” needs to go the way of New Coke. “Blast” needs to be capped like an uncontrolled oil well. If you blast you’re the BP of customer-strategy, spreading toxins everywhere without conscience.
 
Blasting compromises your deliverability, your open rate, your engagement rate, and your reputation. Let’s break that down.
 
Compromising your open rate means you have caused customers to ignore your marketing message they have once heeded. That is alienating at best. Lowering your engagement rate means you’re wasting money. And if you’re blasting  you’re compromising  your ability to get your email delivered at all – as ISPs and email providers like Yahoo! and AOL are monitoring the performance of your email in the inbox as one way to determine whether or not your email is SPAM, and whether it belongs in the SPAM box or the Inbox.

There is of course an alternative to blasting. Most simply it’s called targeting. If your company can make the investment of time, attention, and capital it can segment the email list into groups that enable customized emails that are relevant in terms of messaging, product and pricing.  This will increase deliverability, open rate, ROI, and reputation. It is controlled, disciplined, and customer-centric.
 
Blast no more.


Collecting Customer Data: Facebook Provides A Tipping Point

Thursday, June 10, 2010 by Nick Godfrey
There’s a part of me that thinks the recent Facebook mea culpa was admirable. You could give Mark Zuckerberg kudos for acting quickly to reverse some of his bad decisions on the “Like” program and the virtual takeover of shared data. But for me the initial act outweighs any possible reaction. Facebook trampled the boundary between its users and their personal information. They may get away with it. But it points out the dangers of too much personally identifiable information given to one network.

From a marketing perspective, I continue to stress to clients that Internet targeting, as we know it in all its forms, can be very effectively executed without the amount of personal data that Facebook and other sites collect and use. I don’t think a major fashion retailer, for example, is limited by targeting “moms who use coupons and shop for groceries three times a week.” That kind of non-personal profiling gives any company access to a campaign that will achieve superior ROI. Can that fashion retailer company do better with names, addresses, birthdays, and names of friends? Maybe. That fashion retailer would certainly be limited by targeting only “moms.” That’s a big universe that has been defined in a far more scientific fashion.  

Targeting customers has reached a tipping point with consumers because of the Facebook overreach and the Google wifi data grab. It’s unfortunate, because I do believe that responsible use of personally identifiable information will help consumers become smarter and more economically efficient when it comes to couponing , clienteling, customer service, and loyalty programs. But the events of the past month will understandably put consumers on guard.

For brand advertisers, its time to keep then momentum when it comes to targeting. I’ve always said that if consumers saw one day of the Internet experience without any targeting technology, they would be so disappointed with the irrelevant content and advertising that they would want the targeting back in a hurry. That momentum for right now needs to be with behavioral targeting rather than a blind run to gather as much personal information as possible.

It’s also important right now to restore customer confidence. Data breaches will be magnified now. Data responsibility, while using it for good business purposes, is still job one.

One-To-One Marketing Gets A Social Media Spin

Monday, June 7, 2010 by Sean Hurley
Talk about a dichotomy. On one side of the customer strategy we espouse at Customer Portfolios, we want clients to get as close as possible to the nirvana of true one-to-one marketing. Your marketing campaign’s message, timing and relevance should be as customized as possible for each customer. But on the other side of that coin, we’re in a business climate in which social networks have conditioned those customers to spread the word, even if that word was specifically designed for them. We start with one-to-one and the customers make it one to many. Even if it’s a simple email.

It’s an element of uncontrolled marketing, but it also provides an opportunity. I call it the “brand amplification effect.” There is a way to plan for it. Look at your company in search results, social networks, and product review sites and you will see the chatter and link sharing that amplifies your original branding and marketing campaign. A few companies have developed specific solutions to try to add some planning and order to the situation. ExactTarget, in collaboration with ShareThis, provides a new way to engage with email subscribers. It enables subscribers to instantly share emails to their entire network of contacts with the click of a button. By using tools like this companies can understand the impact of social networking in the context of your overall marketing efforts. You can also quantify the results of your social marketing efforts and get actionable data to drive future marketing efforts. It also connects social media sharing activity and profile information with the email data mart to execute programs based on a holistic subscriber profile. 

We have our own take on the amplification effect. Customer Portfolios has partnered with hearforward to facilitate rapid integration of social media. If you haven’t heard of hearforward you will. It’s a pure-play social media firm focused on integrated analytics and is designed specifically to provide greater context for email marketing efforts and drive improvements in retention and engagement. It allows you to understand where the email and its message has been amplified through real-time data from thousands of sources including Twitter, Facebook, blogs, forums, news and video sites. It can reduce attrition by leveraging next-generation lights-out marketing programs and at the bottom line it measures, tests, and improves the viral distance of email communications.

I think many companies want to attack social media first. But that beast is hard to manage. All companies can do is plant the seeds for good social networking feedback by having an excellent customer experience and relevant communications. Email is easier to attack. What we need to measure is its effect. That effect is much louder than it used to be. The sound of one-to-one is now the sound of one-to-many. Companies need to listen.

B2B Marketing Is Still Customer-Centric

Thursday, June 3, 2010 by Peter Quackenbos

On the surface it seems so manageable and straightforward. After all, BtoB marketing lists are certainly smaller than BtoC lists. The customer segments are fewer and it would seem that the opportunities for true one-to-one marketing are many. But BtoB marketing comes with some serious pitfalls. They are different than those presented by BtoC but nonetheless challenging.

I see three specific challenges that marketers will have to deal with in order to make BtoB marketing an effort that will yield real results in the form of lead creation and marketing ROI. 

Complexity of Transactions: BtoB is rarely a simple transaction. One to one consumer marketing is born out of the retail, direct to consumer world. In the pre-Internet days the biggest challenges associated with getting a direct marketing program off the ground was getting the data assembled, cleaned and standardized and pushed to a mailing house on time. As the process developed over the decades, this process became more commonly known as the Extract, Transfer, Load (ETL) process. At the end of the process, media would go out via postal service or phone and finally email. If all went according to plan, orders would come in through any one of the retail sales channels: store, customer service call center and finally Web. But BtoB companies are often selling complicated and more abstract things like “contracts” or “policies,” many products bundled together like chemicals or construction materials, or an even more abstract service. Typically, you want to have your marketing efforts driven by purchasing behavior and complex products and services make targeting those behaviors more difficult.

The introduction of the “organization” into the database adds a new dimension to the data, and a level of complexity. B2C data is relatively easy. The customer has a name, billing and shipping addresses, and a credit card number, with data integrity enforced in the transactional web environment or through a loyalty program where you can tie a card number or coupon back to the same individual each time. But in the BtoB world, you are selling to organizations rather than people. There is inevitably a many-to-many relationship between an organization record and a contact and resolving this not a simple matter. Add to this the layers of hierarchy in a company, divisions, acquisitions, satellite offices, home offices etc. and determining what contacts and addresses can be bundled together into a single sales opportunity is a formidable problem.

Measuring ROI is difficult under ideal conditions and in B2B can actually be contentious. In the B2C environment, there are opportunities for “explicit” measurement. Send an email, click on the email, place an order. This pattern is easy to track and search for in the B2C database and it is easy to create a link between the marketing effort and the result. In the B2B environment ROI has to be measured “implicitly” by guessing causality between outbound communications and a subsequent purchase. This is complicated by the fact the sale is closed by a sales team way downstream and potentially weeks or months from the initial marketing effort. Although many companies are working to close the ROI gap, it’s still an issue. B2B marketers need clear goals and clear outcomes before executing a plan and an agreed upon method for measuring success.  

The conventional wisdom is that anything a marketing team can do in the B2C world will translate to the multi-channel B2C environment, and possibly even be easier considering the smaller data volumes. That’s the myth. In reality, the challenges mentioned above are common stumbling blocks to launching a successful B2B marketing effort. The good news is none of these problems are deal breakers. A well designed and thought out process for managing these types of complexities can lead to profitable marketing programs.  

 

Customer Strategy First; Email Second

Monday, May 24, 2010 by Nick Godfrey
I’ve noticed in a lot of our client talks lately that something is missing from the way companies communicate with their customers. That something is a customer strategy. An overarching customer strategy is necessary before a company can even consider sending email number one.

Here’s what I mean. Suppose a restaurant believes its overall strategy is to attract high-income families with a wide menu and excellent service. That restaurant would never allow a waiter to serve with dirty hands and a bad attitude. Yet, it may allow an email to go to customers with absolutely no knowledge of who the customer is and what that customer’s experience has been. Communication from the brand is very much a part of the customer experience. It needs to be an extension driven by following the details of the customer strategy. Companies need to know what they’re trying to do, why they’re trying to do it and how it translates into tactics.

Here’s three things to consider when crafting a customer strategy for email and other direct customer communications:
  1. Acquire customers with an explicit value exchange and promise. For different customers you have to extend different offers without violating the overall strategy. So if part of your strategy is to attract high-income families, make sure your offers are relevant. Discounts may not matter. But something as simple as a family night that offers special desserts for the kids just might make all the difference between a good customer and a highly valuable customer. It depends on the value being promised.
  2. Engage by following thru with promise. Customer service and experience should be part of any overall strategy but it often gets left behind when it comes to email. When the restaurant promises great service, and then attracts customers to experience it, it can’t just email them with an offer to come again. Send them and an email asking for them to rate that customer service.
  3. Learn from your interactions. Email is among the most measureable marketing tools in the kit. But companies don’t use it. One of the best measures of business success is when customers show repeat behavior, but that doesn’t apply to email. Just because a customer opens an email tomorrow doesn’t mean next week’s email means anything. A company has to learn what the customer wants and know what will get them to take the next step. Think beyond opening the email.

These three suggested steps are not a guarantee. Rather, they are actions to take your customer centric CRM program – or what ever name you may use – forward. Thinking about the customer and their relationship with the brand that includes email, is going to work for you. That’s a guarantee.

Airlines Frequently Forget Their Customers

Friday, May 14, 2010 by Nick Godfrey
There have been a few milestones in the annals of customer-centric marketing and customer loyalty. Unfortunately a lot of them have been milestones of bad behavior. In fact I would put Facebook’s recent trampling of customer data rights as a bad one. I would put Johnson & Johnson’s Tylenol recall in the 80s as a good milestone. And looking back, I see the airline industry as the first to have put in place customer centric programs with a very clear and compelling customer value exchange. The way I saw it: you traveled, you were rewarded; the more you did it the bigger the reward with free flights, better seats and perhaps even a cocktail along the way.

It was easy to understand and it influenced my behavior and purchases. It was a strategic approach that many have since followed, including hotels, credit cards, retailers and more. The airlines certainly did not invent this, yet they perhaps were the first to package it up on an international enterprise scale along with significant rewards that translated into big bucks.

But what are they doing now? Have they forgotten me, the customer? Gone is the customer centric program that was initially introduced. Frequent flyer programs have been diluted, complicated, and stretched to the point that they are completely different product that what they started with.

An article in the NYTimes on May 11th detailed the convoluted rules, black outs, and hoops that a customer needs to do today to be able to redeem and get a reward. The article, The Calculus Of Upgrades, makes it clear that the airlines customer centric points program have degenerated into a massive customer disenfranchise initiative.

The airlines need to pause and become the customer again. Perhaps it is time for them to stop looking at the customer metrics that show a downturn in seats, a bigger competitive set from low-cost carriers and look at frequent flyer programs as if they were a member. If they do, I’m sure we will all be much happier and less grumpy when we next have to bring our own peanuts along on the flight.


Creating A Consistent Customer Experience

Thursday, May 13, 2010 by Nick Godfrey
Marketing is like exercise. It needs to be consistent, long-term, and should produce results. For exercise we all have different results in mind, but marketing should be focused on one thing: producing a better customer experience. Results like increased sales, significant revenue and ROI are essential, but take this thinking little further and look at it from the other side. Look at it  from the perspective of a consistent customer experience that is made up of consistent interactions with a brand and the brand’s marketing. For the customer, this is good. Very good. If it is good for the customer, then typically it is good for the brand.

A brand that has on-again, off-again, disjointed and sporadic marketing efforts will miss out on the virtues of consistency and the benefits that come along for the ride. This will create a broken customer experience. For the customer, this is not good. This in turn impacts the brand.

I find that it is often helpful to look at customer experience from a different lens that puts a theory or thought into a real world scenario. In this case, take a brand’s marketing approach and place it into the context of your personal wellness régime. Your regime will have poor results if you approach it with a series of inconsistent, non-related one-offs. For example, if you skip going to the gym this week, have a shake with lunch, get fries in place of a salad, drink beer rather than going running, you will find that your fitness goes down while your weight goes up, producing negative wellness. The same is with marketing and how it is interpreted by the customer. If it is sporadic and not tied together it ends up producing a broken customer experience that is not effective in achieving the end goal of high customer engagement and a satisfying customer experience.

This is a simple idea, yet often tough to deliver on. The first step is to put down that French fry, get off the couch and get your customer experience groove on.