Nudge Factor

Yet another unrepeatable offer! Bang, Flash!! 25% off today only!!! Ugh. We recently lost a pitch. Not a huge one, but the client was nice, the brand was fascinating and the task was really quite challenging. The client didn't go for us. Or rather they liked us and loved our work but were sold by another agency who offered them a whopping great discount on an email marketing campaign based on some hard-hitting promotions. Which sort of goes to show that on occasion, when you've got one chance at a sale, making the Big Offer is often the best course of action.

Being bitter of course rarely gets you where you want to go. It does make for a very excellent basis for an article which is all about what not to do if you have a marketing, rather than a selling, job to do. And you're reading this because you're in marketing, after all. You may even run email marketing campaigns. I am sincerely hoping you may actually run eCRM programmes, or even better, want to transform email marketing into eCRM and then evolve that into multichannel eCRM. Which is about more than just a series of offers - it's about building relationships around value exchanges that are mutual, and which actually lead somewhere.

Let's start at the beginning for a minute, if you'll indulge me. ECRM is about the journey you take your customers on. Segmentation allows you to create a meaningful, relevant journey for each distinct customer type. In my own business we focus on what we call 3D segmentation - who, what and why, with the "effectiveness" dimension having been beautifully articulated as far back as 1972 when 'need states' were beginning to be discussed seriously as a component of marketing. (If your agency produces personas, they're probably at about 1983, a terrible year for music.) This customer journey takes the form of a series of incremental steps from the first moment they self-identify to the moment they stop ever being a customer, prospect or advocate. Put yourself now in the customer's shoes on this journey. How many times in a row will you want, or tolerate, a 25% off offer? And how many times will you see one before you start to think that's the normal price?

Imagine you're a brand like Domestos (forgive me Unilever, I plucked it out of thin air). You can hit your potential customers with offers all day every day, and quite a lot of them will work - or at least when Joe has already decided they need a bottle of cleaner an offer might either sway them from own-brand, or reduce the margin from someone who would otherwise pay full price. But Domestos is a premium brand. Discounting is not the way to become successful. Discounting is the way that economies rebalance themselves, it's not the way companies make money because it's much more about fundamental survival. Domestos must look to other ways to engage with customers. ECRM with its customer journey and relevance and, ideally, with an understanding of what makes the customer tick, provides this opportunity.

Because really an offer on its own does not make Domestos interesting or engaging, it just makes it cheaper.

We create customer journeys on the basis of the nudge. The nudge says to a customer, because we understand something of the considerations in your life, here's something of a little value, in exchange for a few moments of your attention. If we can do this with some charm, a modicum of relevance and a dash of intelligence, we might get to engage their attention... and if we can get it really right, this may snowball into increased consideration, purchase frequency and even - gasp! - loyalty.

Imagine you're, say, a cleaning brand(!). How about singling out mums with young children. With permission to contact mum, perhaps obtained (and here I may sound a little hypocritical) through some kind of one-off promotion, we could use this demographic insight to plot some engagement. In Keystages 1 and 2 (and later) kids start to learn about hygiene. Perhaps over the course of three months we could send mum on a journey where our value exchange is all about providing her with a heads up about what her kids will be learning, followed by some materials so she can support the learning they do at school when they get home, with some fun activities (preferably not ones which increase her workload, and especially ones which involve creating a mess the kids might run away from!). Follow-the-curriculum, colouring-in activities, downloadables, uploadables, word games - I'm sure you can think of a whole string of things you can give mum which will help her help her kids keep healthy. Not to mention having a cleaner house as a bonus...

It's a series of nudges along a journey to brand loyalty. And you don't really ever need to do any selling. You don't need to say 'Domestos keeps your house safe' out loud, it's implicit in the exchanges of value and values you've transacted with your customer along the way. At some point, one of the little nudges may even involve a voucher or a promotion, just to cement the relationship. You may give them a social space they can meet other mums in too, so long as you listen to their advice to you and you respond in a manner consistent with your brand's values.

ECRM is, or at least never ever should be, about banging on about buy buy buy (I was going to say "Harpic on" but that would have been a bad pun too far). It's about nudging, gently, so your customer wants to go on your journey with you. Because if you can take customers on your journey, while the discount merchants may sacrifice margin for survival, you'll have loyalty delivering straight to the bottom line.

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 www.scrm.co.uk) 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.

What’s our story?

We’ve been doing a brand vision exercise within the wider plc my company belongs to. Someone asked me if I could contribute something that would tell the Underwired story. This, I think, illustrates what we do quite well.

McCain Foods asked us to tell them if digital can engage customers with a brand as well as TV can. We told them we’d prove it one way or the other.

We took over their eCRM programme. We optimised their segmentation, and created a comms strategy to engage brand resistors and deepen the relationship with brand engagers. We devised creative for a monthly, segmented email campaign. Finally, we created a regular survey to match the brand tracking being done by Hall & Partners on TV audiences.

In the first ten months, engagement with brand resistors went from 14% to 63%.

Brand consideration rose 11% compared with the Hall & Partners benchmark.

In six months, average transaction value went up 3%. The core segment grew 29% in volume. And sales revenue went up by a whopping 38%.

Focus has switched from proof to growth. Underwired’s now building a web-based eCRM hub to replace the brand’s website. We’re running highly targeted acquisition campaigns to build the most valuable segments. And our client, too, is thoroughly engaged.

This is what we do. I just thought I’d share it with you.

De-fragmenting Digital

Most clients have a web agency, an online media agency, an online advertising agency... Some have an email delivery platform, or an email marketing agency, SEO and PPC specialists. And then the advertising agency or the sales promotion agency do tactical stuff (virals and vouchers, gobbling money to little useful gain). You might have some of these, or work for one.

Most clients spend lots of time getting their agencies to improve what they’ve got by 3%. That’s a 3% better website, or a 3% better performing ad campaign. It’s all, from what I can see, very tactical, very incremental, deeply fragmented.

But we’re in a recession, and it’s just not good enough. There’s a huge opportunity to think again, to take stock and look around at what’s possible today, not what was possible five years ago when you started on the road to improvement. Today customers expect to have a voice, they expect you to listen to their needs, observe their behaviour and deliver them relevant, timely brand-engagement-inducing nudges and touches, wherever they are, online or off.

ECRM offers a slightly different way of looking at things, provided you define eCRM as a strategic approach rather than an executional method. It requires that you head back into the customer data, evaluate all the touchpoints you currently have - the website, ads, emails, SMS, social media - and create a strategy that is designed not to have the most engaging website, but the most engaging customer journey. This way you become channel-agnostic, and digital execution becomes subservient to how you relate to your customers, not the other way round.

It’s worked particularly well for companies like McCain Foods who’ve turned digital on its head and are now having a single conversation across several different channels. Brand engagement with brand resistors has gone up from 14% to 63% in ten months, which is staggering.

Using a top-down strategic view doesn’t mean getting rid of your agencies, it just means they’ll all be working to a single over-arching strategy, rather than just doing the best they can do in their niche. It means you get a coherent plan that can be delivered as usual through segmented email or segmented microsites, but is flexible enough to incorporate new channels (like social media) as they emerge.

All digital de-fragmentation takes is a little strategic thinking, but what it leads to can be revolutionary.

This post first appeared on my Revolution Blog on BrandRepublic.