Thursday 8 January 2015

Strategy in the post-digital era

First came ‘shopping,’ when the shopkeeper made you feel welcome. In my local shop, Mrs Frances knew everyone by name, and could anticipate almost any request. When she was asked for something new, she listened and knew next time. It was very difficult to catch Mrs Frances out more than once. She was there to serve her customers.

Then came ’shopper,’ with aisles that were set out for our convenience. The idea was that by watching how customers behaved in a store, the owner could set the store out best to meet the pressing needs, putting the rarely-bought at the back or in the corners where you wouldn’t get in other peoples’ way while you were choosing. It was a slightly more sophisticated way to put the customer’s needs at the centre of the experience.

This led to ‘customer journeys,’ perhaps biased not in favour of the shopper but in favour of the store. Studying how customers behaved led to commercially-driven thinking about how they could be tempted to buy more, or to vary their choices. Ultimately, brands started asking for prime positions, and others created ranges to meet every conceivable need. Shopping became either a world of temptation, or an annoyance, or more convenient, depending on your value to the store. Data started to be looked at in the abstract, not the personal.

Then along came digital. It removed the shop from shopping altogether in some cases. It became a distracting obsession if I’m honest; and I speak as a digital strategist. Shops talked of the digital versus bricks and mortar future, and took fright at the thought that all industries might go the way of bookselling. FMCG brands spent serious money trying to find ways to market digitally in anticipation of the demise of the real world. It took twenty years for us to get past the notion that digital would replace shopping in shops.

But digital is not the new world. Digital did not replace real life. The digital éclair didn’t win. Digital, like all great revolutions in technology, is being assimilated. We live in a world where we shop. Where the role of every medium, analog, digital or (in the traditional sense) social, will end up just being aspects of our environment. And that presents a massive step change in the way we think of strategy as it applies to marketing to consumers. Gone are the ideas that each channel in its place, run within and by a silo of specialists, with a channel-specific goal and vision. The silos simply have no relevance in a world where a customer journey can take in so many momentary contexts, where as more are added the boundaries disappear and the marketing ecosphere becomes more democratic. 


Appearing in sharp relief once again is the customer. The new marketer has to focus on that, because to do anything else inevitably exposes massive blind spots. We are talking about viewing marketing not as disciplines like CRM, or shopper marketing, or social, digital, outdoor, PoS, but as genuinely coherent customer engagement. The goals are no longer awards, or social kudos, or reducing basket abandonment (although all of these play specific parts), the goal is coherence along the entire customer journey. It’s a new way of thinking. You can think of it as post-digital if you want to put it in (or outside) a box. But the reality in our stark new consumer-centric world is a new discipline: Total Customer Engagement. Welcome to the new era.

Tuesday 9 December 2014

Big plans, no noise

So, my blog has been a little slow of late. Largely because I’ve been immersed in ambitious (and I hope revolutionary) plans. And I’m doing that because as a twenty-year agency vet (I started one of the first few digital agencies, in 1994) it’s so terribly easy to get comfy and do the same things over and over again.

In fact, I’ve launched a number of agencies - sold some, folded one (my bad), watched a couple get absorbed, bought one back… but always relatively small, very cool (my 17-year business partner Jason Holland is to thank for that). Time I think to change gears with my incredible team.

So… no blogs at the moment. Not many articles either. But interesting diversions (see this video from my recent trip to Madrid’s IE Business School) and looking forward to an absolutely amazing ’15. Watch this space!

Thursday 20 November 2014

The marketers who get to grips with CRM today are tomorrow's superstars

Over the past dozen years I have been working in CRM. My team has delivered global strategies for major brands like Virgin, News International and McCain, and I have been teaching marketers CRM skills at the Institute of Direct & Digital Marketing and at Hult Business School, where for the past few years I have taught eCRM to Masters in Marketing students and MBAs. Lately I have been running masterclasses for Heads of Marketing at the Groucho Club (email me for info), and I have noticed something remarkable about people who have these skills: they make unusually rapid progress up the career ladder - so I thought I would pass on a few of my observations.

CRM (Customer Relationship Marketing) or eCRM (the digital version, though these days the terms are interchangeable) is founded on a deep understanding of customers. The skills required include the ability to interpret data, to extract customer insight, and to act on it. They also include the ability to plan ahead, sometimes based on an understanding of what customers do or are likely to do over the span of several years (think: buying a car or a sofa).

The run of the mill marketer tends to get caught up in day-to-day delivery of campaigns; CRM people manage to do this while understanding the over-arching context of the campaigns. More often than not, a campaign within a CRM programme will not drive instant revenue, but will increase the value of the customer to the brand over the course of several campaigns. And this requires a long view. As we all know, daily pressures (get a campaign out, check copy, chivvy along an agency, test an app) do get in the way of thinking big, so how does a savvy marketer make it work?

It all comes down to measurement and markers. CRM requires an understanding of the lifecycle a customer is on, from first consideration of a brand to loyal consumption and recommendation. Using data skills to help map this out provides several fantastic tools at once: a long view of the customer relationship; a sequence of stages in the lifecycle, from engagement to conversion to retention; and a series of timed steps along the journey.

This customer journey map is wonderful, because it allows us to think long term whilst giving us sight of the next few steps. By applying some numbers to each step - say, 1% fewer customers who stop engaging at the end of the step - when they get added up over ten steps that may be a significant increase in revenue. In other words, you can focus on the next immediate improvement, and will find after a while a significant change has been achieved. It's a really simple principle.

That same principle is why some of the people who started out in the geeky bit of marketing, CRM, are now superstars leading their organisations' growth. At each step they set a target and saw what happened. Their success was measured. They proved their value to their employers - and in return, rose rapidly. Many of today's superstar marketers have CRM skills to thank for it.

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Felix Velarde is Chairman at Underwired (underwired.com), the leading CRM consultancy, and teaches at Hult International Business School and the IDM. For information about any of these courses, including those for Heads of Marketing, email him at felix@underwired.com

Monday 18 August 2014

Multichannel is about persuasion

There is a common misconception in modern post digital marketing, which stems from a view that because it is difficult to track which media and devices a consumer uses, it’s difficult to ensure they’re always getting the same message.

This is not the case, however. The functional implication of this is that brands need to extend the notion of “brand consistency” into “communication universality”. In other words, you get the same message in the same style no matter how or where you receive it. Multichannel seems to equate to the “same message on every medium”. Pervasive marketing, put another way.

A practical example of this is those supermarkets that have a TV screen above the entrance, showing either their TV advertisements (ads) or their point of sale (PoS) promotions. You may have seen the crowds of people stopping at the entrance to watch the latest commercial. You haven’t? Well, there’s a reason for that. Every channel is different and each has its strengths. When not playing to their strengths, it manifests as a weakness. There is, in my view, absolutely no point whatsoever in trying to make any communication universal. TV ads work when on TV – they don’t necessarily work in a four-centimetre box in a browser window.

Even if you could devise one that did, how would it work at PoS, or on a mobile without sound? By trying to make a piece of communication platform-neutral, we neuter platform-specific creativity – we render the advantages of each venue, medium or device redundant. Multichannel is therefore a much-abused term in common marketing practice. What multichannel means, when it is not a catch-all for “make it all look the same”, is “use every channel to its best advantage”. Taking this one way might imply a fragmented, incoherent collection of messages. And again, that’s not ideal. So what is?

Multichannel marketing done properly requires a genuine understanding of customer lifecycles and framed within that, customer journeys. Customer journeys are the articulation of researched cycles within awareness, prospect, engagement, consideration, conversion, retention, advocacy and win-back phases of the lifecycle. Data, (Big data sometimes, but not necessarily always) provides the information, data planning – especially CRM planning – provides the insights, and customer journey planning converts this into a series of sequences. Attach to each point in the sequence a trigger, information, value exchange or call to action and we have a plan we can use to map the customer’s engagement from each phase of the lifecycle, leading to the next.

And this is where multichannel comes into its own. With this map in hand, and the data and validating research into the behaviours, preferences and attitudes of the customer, (each map will look different according to the segment defining a particular type of customer and their interactions with the brand), a start can be made on defining how each touchpoint should be executed. For example, if we know that a shopper always shops on a Saturday at 10am in Warwick, and buys a basket of produce, which we can predict, for their family (which we know about), then we might want to increase their loyalty by delivering some real value – in this case, in the form of genuinely relevant vouchers.

We have several possible touchpoints, we could send them a mobile message, for example. Or e-mail. Or in the post. Or at the till. You can see that by approaching multichannel in a simplistic way the answer would be “all of them”.

To make it effective, we need to understand the sequence involved:

“Thanks for shopping with us” – printed on the receipt, same day as last shop.

“Here’s a voucher based on your last-but-one shop” – sent by e-mail, two days before the next shop (which our research shows is when a shopping list is planned ).

“Did you print this week’s voucher?” – a targeted ad on Facebook, Friday afternoon.

“In case you forgot, use this code” – SMS, Saturday morning.

“Do you have any vouchers?” – sales assistant.

This is true of multichannel marketing, albeit using a microscopic sequence to illustrate the principle. It requires coordination of course, which is why most people don’t bother doing it. But the rewards can be staggering – it’s generating an extra £5.75m a year for one of the brands we work with, and it has barely scratched the surface. With an understanding of what multichannel truly means, customers can be engaged to an astonishing degree. Multichannel isn’t about pervasiveness after all. It’s about persuasion.

Thursday 31 July 2014

Is personalisation and segmentation in marketing necessary?

Big brands think personalisation is the preserve of the cutting edge, big budget marketers. But no one should forget that all they are doing is replicating the personal service we, as customers, were once used to when we went shopping to our favourite small independent stores. The reality is it’s in reach of every company, whether small or large: SaaS allows us to do it at low cost, while the big vendors charge millions for systems that can’t possibly ever be fully utilised. The investment that is required is in the customer journeys, the content and the behavioural economics that goes behind planning the programme. Only that way can you drive massive, measurable financial returns.

But do customers actually like it?
Most people prefer to be addressed by name – we’re hardwired to respond (that's why you always hear when your name is mentioned on the other side of the room at a party). If you wish to build a relationship between your brand and a customer, then you have to behave as if the brand is an individual, and recognise the individuality of the person you’re trying to relate to. That’s all but impossible if you speak generically or impersonally. That’s not to say that’s how all marketing works: TV, for example, can work brilliantly to create brand resonance when it ignores the personal relationship between brand and consumer altogether.

So we need to segment our customers to personalise our marketing?
The two are entirely distinct. Personalisation recognises the individual, by identity, position in a customer lifecycle, attitudinal trajectory and behaviour (observed and forecast). Personalisation therefore allows truly individualised communications. Segmentation on the other hand is a ‘meta’ discipline, taking broad-brush strokes to datasets filled with people defined by characteristics; these could be behaviour, motivation, demographic profile, propensity etc. In other words, segmentation is about how you describe people and personalisation is about how you talk to people. Although each is different, it is important to consider both to achieve a desirable outcome from your customers.

By segmenting customers, businesses will have a greater chance of achieving success and thus creating a loyal customer. Segmentation is a no-brainer. There are two examples that come straight to mind to illustrate the power of segmentation. The first was a campaign for Virgin Holidays back in the early days of eCRM, this was the first time we ran an email campaign segmented simply by previous purchase behaviour and the (very simple) campaign generated £3million of revenue on the spot.

The second was a campaign for The Sun’s Dream Team Fantasy Football. Previous segmentation had been unproductive. We took a look, decided to approach segmentation from a motivational point of view and decided the two motivations were likely to be ‘passionate about football’ and ‘in it for the money’. This simple insight increased revenue by 93% in 90 days.

Very often, fantastic CRM is about simplicity and insight, not complexity. In our experience, segmenting customers into 6-7 segments will drive 90% of the value creation available, proving that in fact many customers like brands to appeal to them individually: by doing so it will increase the customer’s engagement with the brand, thus creating loyal, valuable customers.

Wednesday 25 June 2014

24 hours with SmartThings, a home automation adventure

Way back in the mists of time I sponsored SmartThings (smartthings.com) on Kickstarter. About an age and a half later they finally got round to getting the kit licensed in Europe and after a bit of irritation and some judicious chasing, I received a badly packed box of gizmos and a hub, no instructions included. Being a bit of a geek I set to work.

I received a hub, three proximity key fobs and a ‘multi’ sensor, which gauges temperature, angle, humidity, acceleration and closed/open. I set the hub up with only one false start, when I tried to power and network it via an Airport Express rather than directly into my main home ethernet - support from SmartThings was fast but useless, so I let my inner nerd have rein and quickly found the solution.

I then set up a proximity fob, my iPhone (which gives you the option to set a proximity alert when the phone reaches, say, your local train station, or closer, the front door) and the multi. The multi has been attached to an internal door, and set so I get an alert on my phone when the door is opened. I have so far worked out that the most sensible (for now) combination is thus:

  • If my wife or I leave the house and the back door is open, we both get an alert
  • If either of us leaves the house while the door is open, but one of us remains in the house, no alert
  • If I arrive at the station and my wife is home, she gets an alert, but if she isn’t, she doesn’t

I have yet to incorporate the other two fobs. I’ve already decided I want a couple of switchable plug sockets, so that if we both leave the house all the stuff left on standby gets switched off at the socket, and back on when either of us arrives back.

I’m starting to get the hang of it. I suspect it may get slightly expensive, this home automation thing - and I have a suspicion it will eventually change our behaviour (and our electricity bills) for the good. I’ll keep you posted.

Thursday 12 June 2014

It's the Art of Perfectly Timed Marketing

Guest blogger – Jen Talbot, Senior Account Manager

Responsible for the day-to-day account management of some of Underwired's clients including ESPN and Regus worldwide, Jen advises on digital best practice and marketing strategy, and coordinates planning workshops for customer journey mapping.

Jen joined Underwired in July 2013 bringing with her experience from previous roles at Havas EHS in account management and project planning for both digital and integrated campaigns for brands in the financial, utilities and leisure sectors including Barclays Wealth, CPA Global and E.ON.

In an age of connectivity, where everything has become instantaneous, the sense of meaningful communication has been lost in the constant noise of notifications and reminders. So, with this being today's reality, what does this mean for the modern day marketer?

When you see a stunning rainbow or a great piece of street art, what do you do? Instagram it, Vine it, Tweet it, Facebook it? When you're out for the day how many times do you respond to texts, WhatsApp messages, emails or tweets?

Media theorist, Douglas Rushkoff, has outlined our obsession for trying to capture the moment, but never quite living in it, in his new book 'Present Shock'. He makes the point that, "The only kind of people that used to be contacted this frequently and this incessantly, were 911 operators - and they would only do it for two or three hours during the day. And then they would be medicated in order to be able to live that way".

Kronos vs Kairos 
Taking inspiration from Ancient Greek, today's marketers have two differing methods to select from, when looking to determine the 'right moment in time' for customer communication. Definitions of 'Kronos' and 'Kairos' - both Ancient Greek words for 'Time' - distinguish these methods:

1.Kronos 
Kronos means chronological or clock-driven. A marketer's version of Kronos is: "I know that by sending my newsletter on Thursday at 1pm I will get a better response than at any other time". Or "I know that by sending an email every week I will get more repeat purchases".

2.Kairos 
Kairos is the alternative sense of time, succinctly put by John Pulakos, in his 1983 article 'toward a Sophistic Definition of Rhetoric': "In short, Kairos dictates that what is said must be said at the right time." In marketing, we can interpret this as both the readiness or 'openness' for conversation, and the choice of selecting the appropriate moment.

The age of bombardment 
According to Microsoft, the average person has 184 emails in their inbox and receives at least another 28 emails each day. According to Ofcom, 49% of people regularly 'media mesh' - using devices for completely unrelated activities whilst watching TV - and an average of 500 million tweets are sent everyday.

With all this noise and irrelevance, companies are forever looking to achieve efficiencies using the Kronos method, a chronological approach to sending marketing communications. By doing a simple Google search of 'best time to send email' 1,550,000,000 results are produced. But how many companies implement this approach without looking further into their audience motivations?

When IS the right moment? 
One source suggests potential reasoning for the most successful time frames for each sector and industry. For example, the 'post work peak' (between 5pm and 7pm) is considered to be the best time to send marketing emails, in terms of open rates.

When Gmail announced the implementation of 'tabs' to its inbox, companies were concerned that response rates would go down. In fact, within the first few weeks of the update, the opposite was true and the open and transaction rates actually increased. Although rates are approaching the average again now, this uplift highlights the affect of taking the Kairos approach and the importance of having an audience that is 'ready' to view marketing emails. This 'readiness' essentially means that recipients are in more of an open mind to click through to the email and transact where relevant.

Kairos in CRM 
Readiness, or indeed Kairos, is absolutely key to CRM, as it ensures marketers are carefully considering when the audience is 'ready' to hear from your company. In so many cases, communication programmes are run on a periodic or silo basis - onboarding, newsletters, loyalty programmes, retention - all overlapping and clamouring for attention.

Let's think now about how many times a company has said 'thank you' to you for being a customer. Now let's think about how many times a company has said 'thank you' only to use this as an opportunity to cross-sell? Some might see this second option as an efficiency that their customers would appreciate. But by having a 'dual-purpose' communication you actually weaken both messages. There should be a time and a place for everything. The acceptance and desire for tools, such as the Gmail 'tabs' or Outlook's 'advanced rules', show the increasing importance for customers to control when they are ready to be spoken to. So with this in mind, a thank you should just be that; 'thank you'.

Kairos in practice 
Confused.com is a good example of using Kairos in practice. Having used the insurance search engine for a quote comparison in March, a month later - when I'd nearly forgotten about it - they sent me a birthday email. There was no sales message, just a humorous email from the brand mascot, Brian the Robot. The email immediately put me in a great mood and brought Confused.com to the front of my mind. It made me want to show my friends and it generally made me feel pretty good to be a customer. A couple of months then passed by and they nudged me again, this time about a new app that was available.

Confused.com is playing the long game as it clearly understands that it will be a year before I make another decision about my insurance. We both know that I'm not in the market right now, but in the meantime I'm being made to feel appreciated - and entertained - therefore enhancing the chances of a repeat purchase. And before I return to the website, to potentially make a purchase, I have been providing my word of mouth recommendations to colleagues and friends about the company and its great customer service.

Conclusion 
So after all this talk of Ancient Greek, where do we as marketers stand? Well, hopefully with a realisation that when juggling existing communications plans, business goals, stakeholder opinions and a disorganised or legacy database, the thought of "What does the customer want from my company?" can often fall by the wayside. But, this question should hold equal if not a greater importance than the thought of "What do I (the business) want to tell my customer?" This is because it can inform and give greater value to everything from data segmentation to communications content.

When a communication becomes supportive and not 'shouty', useful but not needy, and timely yet not thoughtless, we start to see appreciation in the form of response. Through this approach, we regain the value of meaningful communications and become able to cut through the chaos of a 'Present Shock' inbox.