Wednesday, 14 May 2014

Total Customer engagement: growing trend of "Total Customer Engagement" and how this is affecting the future of marketing

When I was a kid, we used to shop in the same places all the time. We'd walk down the street and say hi to the butcher walking in the other direction. He'd always have a smile, and maybe make a cheeky comment about us kids. When we went into his shop he'd comment on what veg would go with the meat my mum had chosen, and tell her to say hi to Jeoff when we went into the greengrocer's next door. There was always a kind word. For decades my family shopped in the same shops. There wasn't anything called customer engagement. But that's what it was.

Nineteen years ago the web turned up, messed up customer experience by turning it on its head, reducing the shopper interaction to seven clicks, shopping carts, price comparison and basket abandonment. Almost twenty years on, we've learned a huge amount about technology, about acquisition, about usability, great design, optimisation and the always-on mentality. Having now come out the end of e-commerce's terrible teens, here are the things we now know:

Retention only comes after acquisition
Loyalty only comes after service
Advocacy only comes after loyalty
Win-back only comes after failure
Three clicks is best, though if you have a process that takes more than ten by the time you've got the customer to seven she's unlikely to turn back and go to your competitor
Responsive design means you can make the experience similar across PC, tablet and mobile

...and so on.

What we've also started to understand is that the customer is on a journey. Over a decade, we have perfected the art of defining that journey by understanding that there is a natural sequence that doesn't feel forced if you ask the customer to take the journey with you. This in turn, is based on the idea of the nudge - that one little step at a time can lead to significant change. When we look at where a customer is, what they like, where they go and where we want them to go, we can then readily develop a map of the customer's journey from first point of contact to lifetime loyalty, in little incremental steps. 

The art of customer journey planning, which came out of the in-store retail experience and the desire to drive customers past high margin discretionary items on the way to their target staples, has been translated to the online world and perfected over ten years by the specialist eCRM agencies like Underwired and others. And this customer journey, delivered using the cheapest digital channels, has been developed to allow brands to examine each little, incremental step on its own and optimise its performance. By extension, when lots of little increases in performance are added together, huge changes in revenue can be achieved. To illustrate this, by increasing revenue by 3% for a single step, when applied over 24 steps will double your revenue. We do this all the time.

By adding a dimension of customer focus to this rather technical, commercial focus, segmentation has been taken from its shopping experience roots (for instance, when our butcher would know that because ours was a three kid family, we'd be more likely to buy mince than a steak), via direct marketing thinking, properly defined in the early seventies, to the digital age. This digital age has allowed marketers to think in big numbers, to define shopping habits not through inference, but through observing behaviours from Google search to repeat purchase in an e-commerce system. Behaviour, enhanced by adding demographic data, married to motivation (back again to inference) gives us 3D segmentation. And 3D segmentation gives us the tools to develop different customer journeys for different types of customer.

All of this you're familiar with, I suspect. Marketing is now largely scientific. We can develop customer journeys for different customer types and take them from one step to another leading to maximal (or at least optimal) lifetime value.

It's been a revolution. And the kids have grown up. Almost twenty years on since the first days of the web and the painful birth of a new way of retailing, this discipline of how to engage with customers is finally about to emerge from its teens.

So where does it go from here?

The next generation of retailing takes what has gone on up until now and builds on it. In actual fact the Next Big Thing is really simply an extension to everything  you have just read: if you look at how segmented customer journey planning has been expressed in practice, the next step in its evolution is quite clear. Thus far, we have made use of digital channels to do all of this. The web to capture attention, to engage people with the brand on the website (or landing pages), to engage and retain them using email, to convert them to customers using e-commerce.

And thus far, we've been viewing the customer journey as something we as master marketers define for our customers.

In fact, customers are on their own journey. They have lives, which are multi-threaded, which involve the web, and mobile, and walking down the street with their kids. They live lives ruled by their motivations, the people they listen to, their immediate needs, and their whims. And, critically, they are influenced by all sorts of things that aren't just digital.

The customer journey plan does work. It does have a crucial role to play - as marketers we must have a framework for holding the hand of the customer while we take them one step further: without it we don't know how to brief it to agencies, we don't know how to measure success and we don't know how to optimise it. But it ignores the fact that customers (actual real people!) have their own sequence, and they are unlikely to share it with us, even if they know it themselves.

One of the facets of this which informs what will happen next is that in real life, customers aren't just on email. They don't just use digital. Sometimes the critical nudge that will take the customer from point 16 to point 17 isn't online. We may have to reach them offline.

The customer journey requires us to think in a channel-agnostic, or multi-channel, way. The future of this marketing discipline requires us to map the customer journey without assuming it will be served at every step by an online touch-point. If we do this, the customer journey plan we describe can more closely reflect the customer's own journey and the way she actually lives her life. By defining customer engagement on the basis of what nudges and steps are required first, and then adding in channel selections based on the customer's own journey, second, we can create single-minded, focused, multi-channel strategies and campaigns. 

This is the next generation of marketing. It's called Total Customer Engagement. It gives us the tools to leverage 3D segmentation and digital insight to deliver the kind of supreme engagement previously only delivered by the local family shop keeper. 

Friday, 2 May 2014

Who are The Inheritors?

Guest blogger - Jamie Barnett, Planner
Working with Underwired's Planning Director Ivan Fernandes, Jamie helps develop digitally integrated strategies and CRM programmes to address its clients' challenges and goals. Jamie started her career client-side at Williams-Sonoma in San Francisco before moving to the UK in 2011, where she jumped the fence to go agency-side working for brands such as Heineken UK, Iceland Foods and LoveFilm. Jamie has an MBA in Marketing and Brand Strategy and a degree in Graphic Design, Psychology and Communications.

Although it’s not exactly as William Golding had originally written in Lord of the Flies, we are all holders of a modern day conch – using it to wield as much power as we possibly can. Every day we spring out of bed and enter into society armed with our mobiles, iPads, laptops and cameras. A metaphorical extension of ourselves, our smart devices give us a kind of power similar to that felt by Ralph, Jack and Piggy on the deserted tropical island.
Instead of just consumers, we’ve now become creators and curators of content, challenging the traditional relationship with brands that has existed one-way up until now. Instead of just one conch, brands now have multiple conches, sounding off simultaneously via multiple social platforms, as well as those from consumers. This impacts the noise to signal ratio. Naturally, this new dynamic shifts power and challenges the traditional brand relationship with consumers.
With all of these conches now in the picture, the question then becomes – who really has the power over a brand’s communications – the brand or the consumer and does it really matter?

Wag the dog
As Malcolm Gladwell pointed out in his book The Tipping Point, consumers can play a pivotal role in a brand’s rejuvenation and in creating viral movements. They can keep brands honest and create momentum for campaigns and competitions. But as with cases like Dove’s Real Beauty Sketches, is it the dog wagging the tail or the other way around? I think, brands should take the consumer’s power into consideration and tailor it accordingly.
In a way, it’s a bit like giving a classroom full of students a single story starter and letting each pupil generate their own narrative. A colouring book with a new box of crayons and no rules about staying within the lines – the framework is there, but the outcome is unpredictable.

A happy marriage
The basis for my opinion stems from the notion that direct interaction with a brand (and the opportunity to help shape its culture), authentically integrates that brand into a consumer’s lifestyle. In an era where marketing and advertising are ubiquitous consumers are tired of being marketed to – they want to be a part of the process, not just the end result.
They want to help create content and ‘own’ a piece of a brand that lends itself to their constant strive for self-actualisation. In a consumer becoming a creator and / or curator of content, the brand becomes integrated into a consumer’s life either as a memorable experience or as part of a re-occurring ritual – not just a product or purchase. It’s at that point that a consumer is most likely to become brand loyal increasing their value to the brand significantly. By allowing consumers to post, tweet and publically engage with a brand, they become increasingly invested in it and as a result the brand becomes a stronger part of popular culture.
However, that being said I do still believe in having a long-term strategy and vision as well as adhering to a brand’s guidelines and heritage. One way to ensure a healthy balance of the two is to create a comprehensive CRM strategy based on a brand’s consumer preferences and behaviours – facilitating interaction at each stage of a consumer journey. Not only does this allow brands to evolve organically, but in many cases it allows them to reach audiences that they didn’t know possible. As with any happy marriage, it’s a give and take and an exercise in listening and responding in kind.

Beautiful harmony
Whilst technology and social media have forever changed the dynamic between consumers and brands, it’s how a brand responds to this change that will make or break its success in the marketplace. Instead of trying to quiet the army of conches, or being the loudest conch in the room, brands should look to skillfully conduct them all to create a beautiful harmony and a solid relationship that will keep a brand current and relevant throughout the years.
So… what does your b(r)and sound like?