Friday, 25 March 2011

Facebook Deals and eCRM

Facebook Deals could be revolutionary, although the idea is an old one. In fact, it's more or less exactly what the Tom Cruise film Minority Report imagined - proximity recognition. In the film, our hero's eyes get scanned and every poster he passes makes him an offer he can't refuse. Facebook Deals is slightly more elective that that, and I believe there's a huge opportunity for brands who already do eCRM well.

When you log into Facebook on your mobile, and "check in" to your current location, the account shows you a list of local places, some of which will have offers. For exmple, you can check in to your local high street and see an offer from the local Starbucks offering you a free muffin if you buy a big coffee. Simple and neat.

Redeeming the offer by clicking on it (and showing the cashier) automatically updates your status with an ad to say you've done so. As a marketer you get someone who self-identifies as a customer telling likeminded friends about your brand.

One of the issues that marketers will have to grapple with is that of acceptability: will our customer’s friends feel irritated by the fact that what’s effectively an ad (“I’ve just checked into Starbucks for a free muffin”) appears in their friend feed? This will require testing to get to the bottom of it, but given the trend towards privacy-agnosticism I suspect it will turn out to be a non-problem.

In the immediate future, combining Facebook Deals with newly-possible Social CRM attribution techniques (see you will be able to track customers in your email marketing database through to purchase and back, which means you can assign influence scores to specific segments. In turn this means you can target specific location-based offers based on what you already know about your customers. It's potentially hugely powerful. Handled with sensitivity and intelligence, it will be game changing.

Friday, 18 March 2011

Social media value attribution

Everybody’s talking about how social media is the new big thing. Yesterday it was the next big thing. According to Facebook, the next big thing is, well, unknown so who knows what tomorrow will bring. So we have a marketing world set alight by the potential of social media, queuing up to use it, setting up plans to get into social media. But there’s no real rationale. It’s being done because it looks like it is important. People live there, so our world has changed. But as for value - well, who knows? KPIs all seem to surround the number of fans and Likes, sentiment (no matter how vague this is) and hope. Accountability - attribution - is the elephant in the room.

I’ve grown up with digital. In 1994 I set up a digital agency, building communities around websites for brands like Snickers and Hewlett-Packard. We added channels as we went along - search engines, ads, interactive television and mobile. Around ten years ago we had become part of the world’s fourth biggest advertising network, and the digital world looked full of colour, sexy as hell, with big brands piling in to spend money on visitors, eyeballs and sales. Having sold out, we next built an agency around something brand new in the world of digital marketing: accountability. We wanted to prove that digital could have tangible, measurable and commercial value. So we got into eCRM big time.

Working with brands like Virgin, NSPCC and News International we started creating digitally-delivered campaigns built around individual customers. What we learned about them and from them we used to better engage them. We used insights derived from demography and behaviour to inform targeting strategies that delivered relevant content when it was most likely to work. We used segmentation principles originated by the direct mail companies and facilitated by the cheapest of media, email, to improve response rates and sales revenues. We used Recency, Frequency and Value to benchmark customer segments, applied campaigns bespoked to each segment’s needs, and measured the changes. We gave marketers what they wanted: proof that what they were doing produced specific financial returns.

Today this is what we do, still. Sure, the channels have changed. We now use mobile, SMS and email, but we also use websites. What was once called personalisation has been adapted; for McCain Foods we extended the eCRM strategy from email onto its site, so that visitors see content based on which segment they belong to and where they are in a planned nudge-based customer journey. We track individuals through their entire web experience, bringing behavioural data back into the eCRM programme so we can attribute the contribution their experience makes towards changes in their value. Taking an example, we know that by increasing engagement through the programme, one specific segment has increased its average purchase frequency by 3% a year - leading to an increase in sales of around £1million.

This level of attribution means a client can justify spending part of its valuable marketing budget on this eCRM activity. If the incremental revenue a programme generates, and in particular the incremental margin it generates, is greater than the cost of generating it, then it’s a no-brainer. Likewise, one would think that if you could prove that the incremental margin was less than the cost of generating it, you’d close down the programme very quickly indeed.

And yet, social media defies this superbly clean logic. Because you cannot cast attribution, because you can’t tell whether it’s a positive or negative ROI, the hope that it’s the next big thing and it will be worth it seems to justify investment in it. Where’s the return? I read a statistic the other day that some Facebook campaign had generated an ROI of 4:1 (actually, they said “400%!!”). I’d love to know what that means... at a guess, this company isn’t making 25% margin, and unless it’s making 25% plus, that “ROI” is actually a loss.

So this is where we found ourselves, running fantastic, highly auditable campaigns, leveraging customer data for all its worth, using email, mobile and the web, when this groundswell of social media marketing buzz started preoccupying marketing minds. So Underwired has developed a tool that allows us to make some connections. It allows us to create specific calls to action to customer segments, and watch precisely what they do in response.

By creating this tool we’ve finally addressed the elephant in the room. We’ve added the ability to score individuals according to what social actions they take in response to our engagement programmes. It means we can add an advocacy dimension to our demographic, behavioural and motivation-based segmentation, and this means we can identify people who have value to us as recruiters and word-spreaders. We can even attribute new customers to an individual’s referrals, which gives us real power to tap into social behaviour and account for the results. This is the new big thing.

Wednesday, 9 March 2011

Making social media pay

There’s an apparent conflict between the pragmatic and the desirable. Marketers necessarily want to be able to justify every penny they spend on marketing - especially in a recession - so there's a strong emphasis on the accountable. And then there's social media.

Everyone’s talking about the importance of social media, including channels like Facebook, Twitter, Quora and LinkedIn. The buzz has been incredible. Clearly when movies are being made about the kids who got the movement going, making billions in just six years, that buzz becomes tantalising for brands. And of course nobody wants to play catch-up, no-one wants to be the one who gets the dregs of the success that a new and revenue-generating marketing channel brings with it. Arriving just before everyone else leaves the party is low risk but delivers a very low return.

So how can you reconcile the two things, this requirement for measurable return on marketing investment, and the need to catch the wave?

This is the thinking that led Underwired, already the UK’s leading eCRM specialist agency, to try and bridge the gap between CRM, which is utterly auditable, and social media, which isn’t. To go back to the party metaphor, eCRM is like the bit where you know exactly who you’re inviting to the party and why. Social is the bit after you’ve taken their coat and they’ve entered the room. Once they are in there, all you can do is measure the noise levels (and in fact that's what Buzz Tracking or Sentiment Analysis tools do).

The new Social CRM tool that Underwired has developed actually bridges the gap. It allows you to track an individual into, say, a Facebook environment (with standard functions including Like, Share, Comment, Upload content, watch a video) and see exactly what they do. You can tell if, responding to a call to action in an email campaign, John visits your page, Likes it, comments on it, only watched half the video but sitll shares it with his facebook friends. You can then append that data back to your database, which means that you can create sub-segments of people who respond in a certain way when presented with specific calls to action, offers, promotions or choices.

From a marketing perspective it provides you with a way to further segment your customers. You can assign advocacy scores (even types of advocacy) and use that to inform future campaigns just targeting people who share your content with their friends - real fan marketing. But more importantly, it gives you the means to extend attribution into social channels. And if you can identify precisely which routes your sales came from, without having a big grey area where you’ve temporarily lost control of your customer, it means you can improve your marketing at every single step of the customer journey. Finally, it means you can assign a real value to social media - though of course while it means you can dive in with confidence, you do still of course have to dive in.