9 ways to boost customer loyalty with Marketing Automation

I'm not a big fan of the lists, but it makes it convenient to talk about a few of the concepts.  Marketing automation is a very important tool for the digital marketer.  I will even go as far as saying it should be the center of the digital marketing universe.  Because digital marketing grew up as being web, this is not a popular view among digital marketers, but that doesn't mean it's not true.  

Gathering knowledge allows to build relationship: the more you know about customers, the more relevant offers you can address. Personalization is impossible without advanced behavioral and transactional analytics.

Marketing automation starts and ends with data.  Data is the basis for running any marketing automation tool.  Without a good data collection and architecture strategy, marketing automation will be hampered to a degree.  It also ends with data because the capturing of the behavior driven informs the next decision.  It is cyclical as far as data collection is concerned.

1:1 Marketing. Dynamic content and e-mails are the base of long-lasting bond with customer, because they show that you treat him individually and adjust offers to his/her particular needs. Also find opportunities to say thank you to them, ask for opinions and suggest complementary products

1-to-1 marketing is the dream.  To cost effectively do this is still farther out, but we are getting close.  The problem becomes content.  To effectively market to each person in the database is unrealistic, but start at the top.  What would it take to market to the top 10% of the database on a 1-to-1 basis.  Start from there and then try to go farther into the customer base.  

Use analytics to improve content quality: with content marketing you can not only educate your customers, but also discuss values you share, what is crucial for establishing loyalty. 30% of customers say that shared values are one of 3 top reasons for being loyal to a brand. Hence invest in content and optimize it. Read more about content marketing and marketing automation synergy.

Good content can be scary for marketers.  The time and effort to create such content is time consuming and costly, especially in the form of man hours.  It is also hard to quantify the results, which normally don't start to materialize for many months.  However, great content builds a relationship with the brand.  Storytelling and guides for customers help them relate to the brand better than most advertising.  Let the analytics guide the decision.  If customers are buying bathroom products from Home Depot, don't send them content about building a fence.  A great timed "how to" on bathroom design could go a long way to loyalty and upsell opportunities.

Measure: don’t just repeat common knowledge that making actual user buy is 7 times cheaper that bringing new one. Use advanced analytics offered by Marketing Automation Systems to measure ROI of your loyalty improving actions, and optimize them.

The crucial part to any marketing automation strategy, how are you going to measure the results?  This thought process usually comes at the end, but it should start at the beginning of your marketing automation journey.  The first thing your boss will ask after the marketing automation system goes live is "how are we doing"?  You need to not only be able to answer his questions, but you need to answer that question for yourself.  Marketing automation campaigns are living and breathing entities.  They are never finished and they need to continually evolve.  The only way to determine the evolution is by understanding the results.  

6 Rules for Creating Killer Email Campaigns

Email marketing still reigns supreme for most businesses when it comes to ROI.  The funny part is how many businesses are not taking full advantage of the medium.  Email is a channel and should not be seen as a strategy unto itself, it is just another way to communicate to the customer.  But because of its low cost and effective targeting capabilities, it is a channel that should be at the top of most companies priority list.

1) Map out the customer flow

Once upon a time I worked on the growth engineering team at Twitter. We were tasked with building something that could turn new signup users into die-hard Tweeters. The secret sauce to user activation was…email! But before we knew when to use email, we had to map out the Twitter user journey.

This is key to a marketing automation.  The first step of a campaign is to identify the goals for the campaign.  After that, the visual mapping of the workflow will save hours of time and allow for better if/then scenario processes to take place within the campaign.  When done visually, it also is easier to see pitfalls and mistakes.  This may seem like double work, but it is an essential step.

2) Master the balance of building your list, while not asking for too much

You’re ready to begin building your email list and customer base. You’ve also heard that the more info you have on a customer, the better. Besides, how are you supposed to create highly personalized email campaigns without any data on a user? Before you start pushing sign up forms with 20 form fields to all of your website visitors, you must first understand that customer intelligence should be built over time.

I am a big fan of finding out 1 thing about your customer in every interaction.  Transactional data about what your customers are buying is the best information to have, but also asking your customers a question with each interaction is not time consuming for them and through time will build a plethora of information for you which then can be used to further segment your customers.  Be careful what you ask.  If you ask something specific about behaviors, your customer may expect you to use this information right away and if you don't, they may become disenfranchised.  

3) Embrace marketing automation 

People say marketing automation isn’t personal and ruins your brand reputation with robot-like communication. I’m going to argue that it actually makes your communication more personal because it can be used to send messages based on individual behavior. Marketing automation makes it so that no two people receive the same messages.

This is a must in my book.  There is no better way to have targeted, individualized communication with large sets of customers without it.  Marketing automation tools should be a fundamental piece of the marketing technology.  It allows for the management of the customer, regardless of the channel.  It makes multi-channel communication possible.  I believe this is the center for all outbound communication, regardless of the channel.

4) Offer value with every touch  (Eat24)

You don’t need a reason to call grandma, but you should have a reason for sending an email to your subscribers. Promotional blasts are the bread and butter of ecommerce companies, and I’m not saying they’re a bad practice, since they do generate revenue. But, before you send another marketing campaign, you should always ask yourself, “Will my customers care?” The answer of course should always be, “Yes!”.

I worked with a company that did an email blast every 2 weeks regardless of if there was anything new to communicate.  The offer that was sent was usually the same offer with a different twist.  

Not only does this approach start to feel the same, which will lead to customers ignoring the email, it also doesn't create a sense of urgency for the customer.  If there is always a timed offering and it is always the same offer, customers will not feel the need to reply to the call of action.  They will start to learn there will be this new offer next week so maybe I'll just wait until then.  This limits the effectiveness of your communications.

5) Recognize lapsed users and bring them back  (Memebox)

Customers sometimes leave. While some loss is inevitable, others are absolutely preventable. A bad marketer doesn’t know who has left or who is about to leave. A good marketer recognizes the signs of churning and targets those users with the perfect message to bring them back.

The best time to market to a customer is before they become inactive.  Once a customer is inactive or has left, it is usually too late and those customers are very hard to regain.  It is very important to identify customer that are about to churn or are changing their buying habits in a negative fashion.  

For instance, a customer may purchase from you with a frequency of once a month, however over the past 3 months they have not purchased anything.  Lets say in this instance your active customer database is purchases within 12 months.  If someone who consistently purchases every month, but has not in the last 3 months, you as a marketer have to change your communications with this customer.  This customer is in danger of churning and you can't wait for 9 more months before they become inactive to recognize this.  At that point it will be too late.

6) Perpetually tinker with A/B testing

Email campaigns, like fine art or software, is never finished. There will always be something else you can do to improve the performance of a campaign. When looking for an email platform, find one that allows you to A/B test any part of your email.

Marketing automation campaigns are never finished.  They are constantly evolving no matter what the situation is.  Testing should be a standard part of all your campaigns.  It is important to remember that a baseline needs to be established before the testing takes place.  Also, be careful not to overlap tests that may have influence on results at the same time.  You always want to make sure you understand what changes drove what results.  If there are too many tests and changes at once, there is no way to possibly understand the impact of the tests.

I would add a number 7, analysis

Find yourself a good, easy to use business intelligence tool and analyze the performance of these email campaigns.  Create many different attributes of your customer.  Slice and dice the data to look for opportunities.  Identify groups of customers that aren't performing up to the standards of others, these are the customers that become new segments to target with different communication and content strategies.  This also is a must in my book.

5 Mistakes You're Making That Are Killing Your Marketing Campaigns

In a past article from Juntae DeLane, he brings up very good succinct points about pitfalls of marketing campaigns.

1. Lack of Audience Understanding

Having a greater understanding of your audience should be the first step when developing a campaign strategy. Some entrepreneurs will produce evergreen campaigns with no specific targets hoping that new targets will emerge. Some may see a practical benefit in doing so; however, why run two campaigns to accomplish one task? Your marketing campaign will be optimized by doing research beforehand so you can make an impactful and relevant introduction to your brand.

The key to digital marketing is knowing your audience.  The more information you have about your customer the better and when using marketing automation tools, it is important to utilize this knowledge.  It is easy to lump as many individuals together and call them segments, however the more individualized your campaigns can become, the better experience the customer will have interacting with your brand or product.  

2. No Strategy

Many marketers get confused when talking about strategies and tactics.  A tactic is how you are going to do something, the strategy is what you are going to do.  They must work in tandem.  Many times marketers start with the tactics, "we are going to send an email to all of our customers who abandon a cart".  Why are you doing this?  You have to start with the strategy of "increase our sales from all parts of the funnel" to reach the tactic.  Otherwise, how do you know the goal?  The goal may be simplified in this case, but so many times a marketing plan is not strategic, it is a list of tactics the company is going to employ.  

Having an overarching strategy will help guide decision making.  Just because you can do something doesn't mean you should.  Focus is the key and understanding the strategy assists in that focus.  

3. Too Much Sales Pitch

I think another way to think about this is understand your customers are not stupid.  They know when they are seeing content from your company they are being sold something.  They want to understand why they need something, how will this make my life better, will I feel satisfaction with this purchase.  By trying to convince them to buy leads to buyers remorse.  The ultimate goal is to create loyal customers that will return again and again to purchase. 

4. No Tracking or Data

With all the tracking services out there, you should be able to easily track your campaign efficacy. From Google Analytics to KISS Metrics you can establish a tracking dashboard at virtually no cost.

However, what will kill your marketing campaign is if you identify the incorrect metrics.

I don't see this too much, most everyone is tracking some kind of performance.  I believe in the comment from above, what are the key metrics that drive the business.  If number of sales is your key metric, this can come at a loss because the amount of money invested to drive those increased sales is more than the revenue being generated.  Be careful to choose your metrics wisely.

5. Too Much Branding

I think everyone believes in increasing brand loyalty is key to a successful business, but this goes so much deeper than pushing the brand.  Brand loyalty comes from consistency, delivering the promise of the brand and always putting the customer first.  These don't come from a catchy slogan or advertising, this comes from hard work to deliver the best customer experiences.  The brand is all aspects of the transaction, from the customer service agent answering the phone to the ways in which a mobile app enhances the buying experience.  

Retention is King

There are too many companies asking, “How do we acquire more users?” that should instead be asking “How do we get better at keeping the users we already have?”.

Its easy when approaching the problem of growth to think that you just need to get more users, after all that seems to be the very definition of growth. However, if you take a step back though and think about growth as the maximization of user-weeks over time, it quickly becomes apparent that focusing on retention has a much larger effect than topline growth. This is also much more of a sustainable growth mindset. Rapid user growth followed by rapid user attrition is an indicator of unsustainable growth. Strong retention of users over time is a good indicator of product-market fit, something you’re hopefully looking to achieve anyway.

Retention is the place I start everywhere I go.  Building a strong retention program is the key to success for any business.  There's the old "It's much cheaper to keep a customer happy than find new ones" saying, but it goes beyond that.  If one thinks about it logically, the bigger base of loyalty business that is retained, the more money one will make.  Retained/loyal customers have many advantages over new or dormant ones.  

Customers in retention campaigns have a well-defined pattern of behavior

These customers are perfect for targeted promotions, cross-sells and upsells.  Because of the purchasing and communication interaction behavior stored from these customers, tailoring offers specific to the needs of customers is the easiest way to convert into sales.  The less that is known about a customer, the more shotgun approach is taken and less likely to obtain real revenue.

Customers in retention campaigns have less expensive communication channels

Because the customer is known, the communication with the customer is much cheaper on a converted basis.  Even through the direct mail channel, which can be as high as $3-4 per piece depending on how elaborate it may be, the conversion rate is much higher on this type of communication.  Most communication in this channel can be near free, with email and push notifications through apps.

On the other side, acquiring new customers is very expensive.  Even if going completely online, the conversion rates are so small compared to the cost per click or action, that it makes the customer acquisition cost upside down for 2 - 3 purchases for many companies.  If the business needs to go traditional advertising routes, now the cost becomes staggering.  

Retention customers bring in the most revenue

While this varies from business to business, I doubt you will find many longterm successful organizations that don't have this phenomena.  The loyal customer is the bread and butter for the business and can be relied upon to grow revenue.  Within retention campaigns there are customers of all different types and understanding the loyal customer that can spend more money is the best opportunity for profit growth.  

It may seem counterintuitive to look for growth in your loyal customer base, but I have always thought of it like this.  The more customers that I can have in the active customer base, the more opportunity I have for growth.  Acquisition rarely can go away and there should always be a plan to acquire more customers, but that cost should decrease as the business matures.  For a very mature business, this cost should be as low as possible.  

A simple way to illustrate this is 

New Customers + Retained Customers + Reactivated Customers = Active Customer Base.

So if the business can acquire at a consistent base, lets call this 1 million customers per year and retain the majority of their customers, lets call this 10 million customers, then they can grow their active customer base by close to 1 million per year.  Now if those customers are retained and a new million come in, the growth lies in increasing the retention customers.  Otherwise, it costs too much to try to double your acquired customers, especially the more mature the company is.  Try to focus on retention first, it is truly the King.

Next Generation Customer Experience - business2community

Terry Green writes for business2community:

...we all talk about customer journey mapping but how many of us have actually done it? No I don’t mean sitting listening to a boring presentation about the subject whilst fiddling with my mobile phone or making a half arsed attempt at it with no commitment – I mean really done it like we meant it?

I’ve always said that the key to getting any customer oriented change programme though an organisation is to get the business leaders to walk a mile in the customer’s shoes. Cliched? Yes but no longer enough. The challenge now is to get everyone inside your organisation to see themselves from the customer’s perspective and to understand how it makes them feel to interact with you.

What better way than customer journey mapping?

It is so important for organizations to do this mapping, but I agree with Green, it never seems to resonate with a larger team.  I feel because people going through this exercise tend to treat this as a transactional exercise instead of an emotional one.  What I mean by emotional is customers have an emotional attachment to their journey, they don't feel like what they are doing is a transaction.  

I believe one person should own the customer journey and bring people into the process for specific parts of the journey.  Journey mapping is a very overwhelming experience, but when broken up into pieces it could generate great conversations from the entire organizations.  When taken into pieces, the organization can concentrate on the emotion of a specific piece of the journey without having to get overwhelmed by the entire journey itself.  

It’s only when you have got your people to stop thinking like vendors and truly moved them into the customer’s headspace that you can start their journey towards customer centricity.

Customer Experience Focused Company? Focus on Design

I was just reading Ben Thompson's latest member post regarding Cyanogen in India.  On a side note, if you don't subscribe to the daily update, it is worth every penny, great insights.  Anyway, he mentions how Cyanogen is focused on engineering around Android so they don't have to be reliant on Google.  Thompson then went on to say the engineering solution is not focused on the customer experience, so it will have a hard time competing in the consumer market.

This got me thinking about the different kinds of companies there are and to dominate in the consumer space, what should a company be driven by to succeed.  I'm sure I'm missing different types of companies, so feel free to let me know if I missed any, but there are a few different types of companies that come to mind:

• Engineering driven companies
• Sales driven companies
• Marketing driven companies
• Financial driven companies
• Design driven companies

I contend the design driven company is the only company that can truly have long-term success in the consumer market.  The design driven company can beat low-cost competitors and drive sustainable profits.  This is the Apple story.

Engineering Driven Companies

These companies are engineer focused.  They look at the world through all the cool stuff they can build, whether it be technology or buildings, the engineer rules the roost in this company.  The problem with the engineering focused companies is they forget the customer experience and focus on the technology.  The need to create something cool outweighs the need to solve a problem.  Samsung fell into this trap with the Galaxy's, especially 4 and 5.  

By not first looking at the customer experience and then trying to solve the customers problems, a company will create cool technology and then try to fit a customer experience around the cool technology.  This will not have sustainability in the consumer space.  The mass consumer will be confused by the technology and get frustrated with the experience.  Eventually that consumer will choose to churn and choose another product that focuses more on their experiences rather than cool technology.

Sales Driven Companies

These companies are focused on making the next sale.  They look at the world through the need to solve the next customers problem, not the customer experience.  A sales driven organization tends to try to be everything to everyone, and we all know how that story ends.  The need to sell the most and constantly focusing on acquisition drives companies to lose focus on retaining customers.  Microsoft was led by a salesperson for many years and while they had success for many of those, they were disrupted many times over.    

By focusing on selling the most of something, the customer experience becomes muddled.  To serve many masters, a company must focus on creating many different experiences at many different price points for the customer.  This creates no expertise in one area and allows for disruption to come from all angles.  Focus is the key to customer experience and the sales driven company has a hard time selling when everyone is not their customer.  When the focus is on the customer experience, a company can acquire and retain at the same time

Marketing Driven Companies

These companies are focused on making the company well known.  They look at the world through their message.  They focus their time to try and get someone to buy a product or position themselves in the minds of the consumer through advertising and social media.  The infatuation with their own creativity and messaging tends to put the focus on the company, not on the customer experience.

By focusing on branding and messaging, the customer experience becomes secondary.  The metrics of this company is awareness and likes, instead of on customer satisfaction and experience.  The marketing company believes they can convince anyone to buy and the power of the brand will hide all sins.  Customers in the long run will not be loyal to the brand if the experience is not up to par.  They may want to stay with the brand, but they will churn for the fact that being cool and hip is not satisfying their ultimate need for the best experience.

Financial Driven Companies

These companies focus on making as much money for their shareholders as possible.  They look at the world through profits and cash flows, leaving the customer as a means to an end for those metrics.  The desire to make the most money trumps the customer experience in all cases, unless there is a clear-cut ROI for that experience.  These companies get uncomfortable with words like experience, because it can't necessarily be measured or used to create a proforma.  

By focusing on profits, the customer experience tends to fall off in favor of saving expenses.  This company will question R&D and figure out ways to save money now, while sacrificing the future of the company.  Wall Street may like the short term gains of focusing on profits, but when the customer experience erodes and the customers start to churn 3-5 years down the line, it then becomes a marketing or product issue.  These may be the least sustainable businesses in the long run.

Design Driven Companies

These companies focus on the design of what they are producing.  They look at the world through solving problems.  The desire to take a customer experience and make it better trumps profits and sales.  The belief in a design driven company is that if the customer experience is better than all others, the profits and sales will follow. Design is how it works, not just how it looks.  

I used to think that Apple was a marketing company.  Of course I did, I was a marketer and Steve Jobs would get up on stage and do great keynotes and their advertising was second to none.  They had to be a marketing company.  If they were just a marketing company, then they would have already been disrupted.  The iPhone would not be a dominate player and they would be a niche product company with nice profits.  

The fact Apple is a design company has kept them from being disrupted.  Their products are designed with the customer experience at the forefront.  Being able to pay for something without having to pull out your wallet with the touch of your finger is a simple solution.  That solution is not coming from a space of engineering, it is coming from a space of design.  Apple looked at the problem and designed a solution that was easy for the customer to use and that is why people use Apple Pay, otherwise Google would have already been the owner of the space because they were first.

When a company is design focused they don't have to be first.  These companies want to truly solve customer problems, not be fast to market.  If the design company can't solve a problem, they won't enter that market.  A design company will be long-lasting and survive into the future because they care about the people paying money to use their products and services.  Those products and services are designed for the customers they serve, not to take advantage of a need of the customer, but to truly solve their problems.  That is true design.   

Digital Trends for 2015 | Digital Marketing

Simon Morris writes:

More than 6,000 mar­ket­ing, and ecom­merce pro­fes­sion­als around the world took part in this year’s Dig­i­tal Trends sur­vey, which has been by far our largest response since we launched this annual survey in 2012. Thanks to all of the con­trib­u­tors who took the time to provide their per­spec­tive. I’m pleased to say the 2015 Dig­i­tal Trends report is avail­able now to download.

I can't wait to dig into this report and green some insight on what marketers are seeing.  I suggest downloading and perusing yourself.  

Per­son­ally, what makes this report inter­est­ing to me, is not just the trends but the insight into how a com­pany needs to adapt to cap­i­talise on these new trends. Two aspects are key here: Strat­egy & Cul­ture. As seen with the emergence of cus­tomer expe­ri­ence as an over­ar­ch­ing dri­ver, we aren’t talk­ing about small shifts in your mar­ket­ing organ­i­sa­tion, but the con­scious deci­sion to develop and align your activ­i­ties with the goal of cus­tomer expe­ri­ence at the heart. How­ever, strat­egy change with­out cul­ture change is inef­fec­tive, to quote Peter Ducker ‘Cul­ture eats strat­egy for break­fast’.

These are concepts I have been writing about the last few days here and here.  Adapting to the "mobile first" shift in the consumers, organizations have to change their culture and structure.  The companies that will be successful in the next 5 years will be ones that adapt to these changes in their organizations, to put the customer first and align the organization around customer experiences instead of functional duties.

Agile is the Key to Digital Marketing Success

Another key topic coming out of the Adobe Summit 2015 is this idea of structuring the organization properly.  Now this is an age old problem and doesn't necessarily just revolve around digital marketing, many organizations fight the structure issue.  I had a mentor that preached to be a successful organization its 80% structure, 10% people and 10% process.  Now that made the people really mad when he said this, because people always want it to be about them.  In reality, it is about them, what he was trying to say is without the proper structure, it doesn't matter how good your people and processes are, they can't thrive if they are always being stifled.

So a day in the life of a digital marketer is too reliant on other individuals for them to be a success, they are stifled by the system.  Now they may produce content and delivering good results, but if the structure of the organization is not optimal, it is preventing these outstanding individuals from being great.  Once the marketer has to jump through so many hoops to achieve the end goal, they are already making compromises.  It may be they are making compromises on the content because they know the content creators will give them push back, or have too long of a timeline, so the request becomes watered down.  The landing page may need a little extra something to up conversion, however that may need a new set of requirements for the web team to build, so to keep things moving the marketer doesn't add that piece.

To be great a digital marketing organization needs to be agile.  Things are changing constantly and the digital marketer needs to move at the same pace, if not faster, than the consumer.  Today the digital marketer is 10 steps behind the pace of the consumer.  The organization tends to be divided into marketer, technical and creative.  These all need to live under the same umbrella.  The second a marketer is waiting on IT or a creative agency, the marketer is not fast enough.

The marketer needs to have those departments set them up for success.  So IT needs to set up the hardware and get the marketer the tools to be self reliant.  IT should not try to control the content being moved and updates that need to be made to websites, landing pages or apps.  Creative agencies need to set up multiple templates and ensure there is enough creative content to fill those templates, but they should not be a roadblock to any content that is released.  If a new email and landing page needs to be created for a real-time need, the agency or brand should not be involved in slowing this process down, the digital marketer should have all the tools and messaging already at their disposal.

If the organization is set up so the digital marketer can see the opportunity (data), glean insight from the data (analysts), create an audience (technical), create a new email marketing campaign (database marketer), create a landing page for the email (creative and technical), create a cross channel ad campaign for that audience (media and creative) and then measure the results (data and analysis), then the organization is set up correctly.  The digital marketer should be enabled to go through this entire process without needing IT tickets, agency or brand approvals or pro-forms to be created and approved from the executive team.  Allow your digital marketing team the freedom to be successful.  Measure their success, give them a budget and guidelines, but empower the digital marketer to drive revenue and jump on opportunities.  The results will speak for themselves.  

Marketing Beyond Marketing

Adobe Summit has come and gone and if there was one big messaging push it was "marketing beyond marketing".  How can marketing be beyond itself you say?  Well that's a good question.  What Adobe had to say was marketing is your product.  So if marketing is your product, then as marketers we have to think beyond what we have traditionally thought of as marketing.  

I love going to conferences with great speakers and company examples of excellence because it really gets your mind flowing.  Of course Adobe is a company that wants to sell you their products in the end, but I truly believe they want marketing to advance regardless if they are your solution choice.  They want to be thought leaders in the space, which in turns sells you more products.  Which oh by the way, is an example of Adobe marketing beyond marketing.

Now as hokey as these tailgates can be, I believe Adobe is out in front of what lies ahead for digital marketing tools.  They want to enable that lifecycle approach to marketing that has only been a tagline.  To manage the customer experience from beginning to end and change the behavior of your customer by being relevant in the content that is provided takes marketing to a whole new level.  

But marketing has to go beyond marketing in organizations.  Up until now the brand marketer has been able to infiltrate the C-suite, but it is the age of the digital marketer and Brand is just one piece of the marketing puzzle.  Brand focused CMO's tend to be advertising first and lack execution around them.  They also tend to defend the brand in strategic meetings instead of evolving the brand around the latest trends, whether they be digital trends or customer related trends.  

Digital marketers have found the C-suite title, with the Chief Customer Officer, but I believe this is just a knee-jerk reaction to an identified problem.  The C-suite doesn't necessarily need to get larger, the role of the CMO must transform.  The CMO must be more of a generalist, someone that understands brand value and developing brands, but they must also be tech savvy and have an extreme customer focus.  CMO's can no longer be the spend first and advertising will fix everything type of leaders from the past, CMO's need to be savvy marketers with an eye on tailoring their marketing spend to better reach the customers when they want to be reached with an experience that matters.  An ad being fed that promotes awareness does not cut it anymore.

When your message is omnipresent in multiple channels when your customer wants it to be there, marketing has truly gone beyond marketing.  We are a long way from that reality, but the framework is being laid which will allow marketers to deliver meaningful content when it matters most.  It's cheesy, yet high concept at the same time, which is why I don't think many people in the audience understood what Adobe was trying to say.  I had a leader who taught me you have to say something seven times in seven different ways for people to understand what you were really saying, well this is one time in one way, so I can't wait to hear or see the next articulation of this concept. 

Marketing Is Dead, and Loyalty Killed It - HBR

Hmmmmm.  I thought I would love this article from the title, but it really was lacking any real insight.  Sure, everyone can point to Apple and say look, they really didn't do any marketing and they sold 74 million devices at $700 a piece.  It took many years and building a sticky ecosystem for them to be able to get to that point.  Loyalty should always be the main goal of your business, but marketing is still an intricate part of that equation. 

The True Purpose of a Loyalty Card Program

Loyalty card programs are now a way of life.  So many businesses in every vertical has a loyalty program based on dollars spent.  The programs range from miles in airlines, to how many stamps does a customer have on their stamp card before they get a free yogurt.  The belief is these programs will drive loyalty and incremental purchases because of the benefits offered for the spend.  But do they really drive incremental spend?  Or should the true purpose of the program not focus on the incremental spend, but something entirely different?

Airlines are the standard bearer for loyalty programs.  Frequent travelers swear by the loyalty programs and can tell you how many miles they have in their account.  With so many travelers being able to quote their miles, this must work correct?  In reality very few of the people traveling through the air really care about the loyalty programs.  Most will actually look for price or non-stops when making a decision on who to fly with.  So who are these travelers who care about the program?  They are the 2% that drive most of the revenue.  Well that's a good thing right?  The funny part about this model is most of these travelers are not actually paying for their flights.  They are frequent business travelers who are not paying out of their own pocket, their work or customers are paying for it.  The irony of these loyal customers is they would never spend that kind of money with the airline if it was their own.  They are loyal to the program because they would like the free travel when they want to go somewhere on personal time, with the family.  

So what happens with the remainder of the travelers?  Is the program enough to drive loyalty?  The answer is no.  But that is ok.  They shouldn't be designed to drive loyalty from these customers.  If they actually did, they would more than likely be too rich of a program.  So what happens to the 98%?  Should companies just not push their loyalty cards on the rest of this market?  

Loyalty program should only be rich enough for customers to want to be tracked.  Now this means many different things for each industry.  For airlines it might mean a free amenity if the customer is a member of the loyalty program.  For a yogurt shop it could be a free topping for a member.  For a casino it is the ability to receive a comp.  Grocery stores are masters, you don't get the sale price unless you are a member.  Of course I want to join for that $10 off of my grocery bill.  

Loyalty programs are an opt-in for tracking behavior.  For the majority of your customers, the loyalty rewards in your program will either be out of reach or not worth any incremental spend.  But, what you are getting is behavioral data.  How often is the customer engaging, how much is the customer spending, what are the customers patterns.  Do they only come for sales?  Do they come only when they have an incentive?  Do they come a certain day of the week?

This is the gold that comes from the loyalty program.  Mining that gold has unlimited opportunity.  Loyalty programs have 3 major flaws.

1. They are not targeted
2. They are not proactive
3. They are easily copied

Loyalty programs treat customers differently based on 1 metric, a total amount of something.  Whether that's miles flown, purchases made or points that equate to dollars spent, the one metric is dollars spent.  Well that is a good start for measuring a customer, but what if a Customer A spent $500 3 times and Customer B spent $10 150 times?  They will both be in the same loyalty tier because they spent a total of $1,500, but they are entirely different customers.  If the company can get Customer A to spend 1 more time, it is worth a lot more than if they can get Customer B to spend 1 more time.  So the loyalty program doesn't incentivize customers equally.

Loyalty programs rely on customers to want to interact.  They are reactive mechanisms, waiting for customers to spend enough to get whatever reward the customer may be wanting.  Of course good database marketers can send out reminders that someone is close to a reward or they might move up a tier, but the reward has to be enough of a carrot for that customer to change their behavior.  

All the great innovations a company can make in their program can be copied by anyone, because it is a documented program.  If the strategy is to own loyalty by having the best program, any competitor could easily come over the top and have a richer program.  This leads a race to the bottom mentality.  The company could always come back over the top, but the programs start becoming too rich, remember only be rich enough to track behavior.  If a competitor can negate your best selling points (loyalty program), then the program can never be a competitive advantage, nor do you want it to be.

This all leads to the true reason to have a loyalty program, tracking behavior.  With targeted direct marketing, companies can inventive the behavior they are looking for.  A company can give Customer A a much different communication and offer because they know that the customer will spend $500 the next time they can get the customer to engage.  The direct marketing can be proactive.  Direct marketing can take a customer from someone that rarely comes in, to someone that engages with the business on a regular basis.  Last, but certainly not least, companies can innovate without being copied. Because direct marketing is not a published benefit, there can be many different tactics for a range of different customers and the competition is blind to the strategies.  

There is so much more opportunity in direct marketing compared to the loyalty program.  By keeping expenses as small as possible in the loyalty program, it leaves much more money for direct marketing to drive the business.  When allowed to drive the business, direct marketing can target customers in many different ways, based on the customers individual behaviors, with incentives that will truly drive that particular customer.  A loyalty program will never be able to do that as effectively. 

Your Digital Strategy Shouldn’t Be About Attention

I really like this article.  Digital has the potential to be one-to-one in real-time, but so many marketers use it as a commercial.  I have been working with Adobe and their marketing cloud for a couple of years now and their vision is very compelling.  Right now it is just that, a vision, but it is getting closer to reality.  

To make such a vision a reality, marketers have to push companies with great visions.  The tools can't push the vision, they have to enable the vision.  If marketers continue to use these tools to push brands and not relationships, the vision will be wasted.  

It’s easy to win “clicks” by titillating people with Kim Kardashian’s naked behind or a list of the world’s cutest human-cat baby unicorn fairies. And it might lend a dreary day a moment of relieved escapism. But it won’t help anyone. To do that, you must educate. Not in the awful, misused corporate sense of the term: dully lecturing them about “product benefits.” But helping them develop the capabilities and skills they’re going to need to live better lives. What will your “digital strategy” help them become better at? Does it have a point? Skiing, dating, cooking, coding, creating, building? If the answer is no, you don’t have a strategy. You have a vaudeville show.

The Case for Why Marketing Should Have Its Own Engineers

Today, he runs the marketing team like an independent agency within the organization complete with its own engineers — a strategy he highly recommends for small teams that need to get a lot done fast.

An interesting article to set up an in-house agency to support all of marketing.  As a database marketer, I truly believe the team needs its own database and its own engineers to maintain this database.  It has to be separate from the IT processes that slow down progress.

Why?

Why shouldn't marketing data be included in the rest of the organizations data?

The simple answer is time.  Most data put into data warehouses are used for analytics.  Sounds just as important right?  Analytics is the driver of making money in the organization correct? 

Sort of.  This data can also include financial data that has different processes based on financial rules, especially for public companies.  Some data might include credit card information, which need to be PII compliant.  This data needs strict data governance and encryption of sensitive data.  All of this takes time.

Time is the enemy of marketing.  The amount of time it takes to get data into a marketing database relates to an amount of revenue that is being lost.  Most data requested into a marketing database is used right away in segmentation for campaigns.  These campaign changes either drive revenue or save on expense.  Having engineers able to get data into the marketing database in an expedited process gives an organization a competitive advantage. The quicker new data equals the more efficient database marketers.  All this leads to more money to the bottomline.  

IBM Watson, the Ultimate Marketeer?

When a computer can figure out whether a movie trailer is going to positively affect an audience or not – it makes you wonder how close we are to computer generated predictions on everything else in life.

Computers make our lives as marketeers so much easier in the past, however with social media and instant access to data, our jobs become much tougher to stay ahead of the curve.  IBM's Watson could be the way we all look at marketing in the future

Predict new trends and shifting tastes

Watson is a voracious consumer of data, and it doesn’t forget anything. You can feed it data from credit cards, sales databases, social networks, location data, web pages and it can compile and categorize that information to make high probability predictions.

IBM Watson is the ultimate in big data.  The ability to analyze sentiment and understand how tastes are changing in the marketplace is invaluable.  Most marketers don't know this until well after the shift takes place.   

Analyze social conversations – generate leads

Most social listening solutions on the market today do an adequate job of giving the marketer signals and reports about their industry, competitors, partners and current customers. But it’s up to the marketer to analyze the information and take action.

What if someone could tell you what to do, not just tell you something happened?  In this age of social media it takes teams of people to keep up on the never-ending conversations happening about the brand.  Taking complexity out of tasks is what technology should do and this sounds like the perfect use of Watson.

Computer calculated and automated growth hacking

If you’re a marketer and not familiar with growth hacking, please study up fast. Growth hackers focus on innovative A/B testing techniques to maximize conversions on emails, websites, social media, online content or just about any digital media available to them. It’s a low cost but more effective alternative to traditional media.

A/B testing is nothing compared to what Watson can do.  Imagine A/B testing on steroids, using predictive analytics and much more information than just clicks on a webpage.  The ultimate in design and the right offer/message to the right person at the right time. 

The Presentation Mistake You Don't Know You're Making - Heidi Grant Halvorson - Harvard Business Review

More is actually not better, if what you are adding is of lesser quality than the rest of your offerings. Highly favorable or positive things are diminished or diluted in the eye of the beholder when they are presented in the company of only moderately favorable or positive things.

This is an intriguing article on add-ons.  It is based on an interview, but there are interesting tidbits later in the article on consumer behavior.

Psychologists Kimberlee Weaver, Stephen Garcia, and Norbert Schwarz recently illustrated the Presenter's Paradox in an elegant series of studies. For example, they showed that when buyers were presented with an iPod Touch package that contained either an iPod, cover, and one free song download, or just an iPod and cover, they were willing to pay an average of $177 for the package with the download, and $242 for the one without the download. So the addition of the low-value free song download brought down the perceived value of the package by a whopping $65! Perhaps most troubling, when a second set of participants were asked to play the role of marketer and choose which of the two packages they thought would be more attractive to buyers, 92% of them chose the package with the free download.

As marketers we tend to find more and more to throw in, we call them soft or no-cost add-ons.  This is intriguing to see that may be negatively impacting the offer.  I guess when I look at it as the consumer, the more stuff there is doesn't necessarily make it worth more in my eyes.  Something to test for sure.

Is This Driving Incremental Revenue?

So I went to lunch with my daughter today.  We were out and about and she loves Tony Roma's, saw that we passed one and asked if we could go to lunch there.  When walking up to the door there was a "check-in with foursquare" sign on the front door.  So I did.

Mind you I was already there, already made my decision to eat there, was going to pay full price before I saw this sign.  I checked in and they gave me 10% off of my meal, for essentially doing what I was already going to do.  So why is this a good strategy?

I understand the whole social aspect of this check in.  This goes to all of my "friends" and they get to see I ate there.  But how many of my "friends" are paying attention to what I am doing, aside from those stalkers I have, by the way, stop reading this, but I digress.  How many people am I really influencing, enough to make up 10% for a meal I was going to pay full price?  I don't see it.  That is a lot of cost to overcome to drive something that can't be measured.

Am I crazy?  I just don't see this as a good business decision.  Just my thoughts.

The Power of Subtraction →

This is something I try to subscribe to everyday.  While I don't necessarily agree with all 5 of his subtractions, I do believe that maniacal focus is what it takes to be the best at what you do.  To focus, one needs to subtract all of the noise that consumes businesses.  ​

Why Email Marketing is King →

A retailer I've worked with which has 900 stores and is very active with email campaigns recently did a great study. It took a group of 105,000 customers in its loyalty club database, divided them into three groups of 35,000, and marketed to the three groups differently, as shown in the chart below (click to see a larger version). Thanks to the loyalty program, it was able to see all subsequent purchases by these customers.

Direct mail has a higher response rate than email. But note that direct mail costs about 100 times as much. Meanwhile, the data collected by the retailer allowed it to calculate its off-email multiplier (a simple matter of dividing the percentage of online sales by the percentage of in-store sales generated by email-only marketing). It is 3.76. In other words, for every email shopping cart sale, this retailer gets 3.76 other, typically non-tracked sales due to the email.

There are a couple of things I have a problem with that logic.  

1. The logic takes every single transaction from either mail or email used with a loyalty card as 100% because of the way they were marketed.  My guess, there's plenty of transactions that happened regardless of the marketing
2. The direct mail and email made nearly $135,000 more than just the email alone.  This well covers the 100 X multiplier of the direct mail and made more profit.  So why is email and direct mail together not king?​

Now don't get me wrong, I like email, but it is a tough channel these days with many businesses flooding the inbox of the customers.  Savvy customers have a separate inbox for businesses because they don't trust they won't get spammed.  ​

Just don't discount direct mail in this day and age.  These days your message has a lot less competition in that channel.

No Change Fees, No Duh

Southwest Airlines has just started airing commercials talking about how other airlines charge for changing your flights. This comes after a year of pounding home the "Bags Fly Free" messaging. I think this is a brilliant move, but of course this is Southwest.

I used to be a fairly frequent traveler and many times I would have the need to adjust my original flights at the last minute. Fortunately I flew Southwest most of the time, so when I did this it didn't cost me $100 just to make a couple of clicks on the website. There were times I had to fly other airlines and it cost me as much as $150 to change a flight. Luckily for me I wasn't picking up the tab, but if I was I would not be a happy flyer. So again Southwest is hitting home with a problem in many of our industries.

Ask a customer what they hate the most and at or near the top would be nickeling and dimeing. This flies in the face of the ultimate goal of business, building a loyal customer base. Why when I stay in a hotel do I have to pay a resort fee for things I either do not use or should be free. For instance, the gym, if I did use the gym on my trip, shouldn't that just be included in the price? It's not like the hotel has figured out the cost of the gym and reduced that from the room price. Also, when I am flying, shouldn't my bags have already been calculated in the cost of the ticket?

Customer centric businesses focus on the customer. Customers hate add-on fees that should already be factored into pricing. The last thing I want to worry about when I go on vacation is how much extra am I going to be charged for everything on my trip. Companies like Southwest make the most profit in their industry because they have the most loyal customers. My guess is if Southwest were to start charging fees for all of these things, then they would be in the same place as their competition, going out of business. Remember, always have the customers best interests in mind and loyalty will follow.