The digital conundrum

Today’s question: we’ve arrived in the digital age, everyone’s online, Blue Nile’s cleaning up on diamonds, and the whole world seems to have gone social media mad – so, should we jump on the bandwagon too? For the small family jeweller, or even the large high street family jewellery chain, it’s a question that has taxed business owners and marketers with increasing frequency over the past few years. Indeed, now that the smart phone accounts for nearly as much online traffic as PCs, and the website is almost every retail chain’s largest single store, it’s a question that has gone from one that might have been shelved until now to one that may well be business-critical imminently.

So what are the basic decisions that need to be made, how do we decide what to do, and how should we prioritise? The first is simple: the decision is based on a simple set of questions, all around threat/opportunity. Can we compete without going online? Can we gain any benefits from going online? And to answer this, the process is relatively straightforward. You need to ask yourself how you relate to your customers.

For example, are the majority of your customers one-off purchasers? If so, are they really? In other words, do they buy on several one-off occasions (wedding, birthday, Christening, Bar Mitzvah, anniversary)? And if so again, is there something you can do to keep a relationship going? Of course, retailers already do a lot of good things, from a great in-store experience, knowledgeable and engaging staff, appropriate (via self-selecting customers) range of products ... but how do you follow this up and keep in touch? Digital channels may provide one answer of course, as email – today’s postcard – costs pennies to generate and send, even in relative bulk.

If you have a few hundred customers it’s fine to do this by hand, because you can do this instantly and more or less from memory, but again digital’s power here is the ability to divide customers up into groups (husbands, over-50s, partner’s birthday in October, anniversary in May) and automatically send the right message to the right person at the right time. Simple segmentation like this can mean compelling messages, as opposed to the one-size-fits-all approach most retailers seem to take. In fact, an approach like this uses the power of digital to re-create the personal service-based relationships of old.

For this kind of approach of course you need data. The big retailers have this down pat and collect data at point of sale (age, marital status, reason for visit, products looked at and bought, birthday etc.) and add it to a centralised database (which could be as simple as an Excel spreadsheet or as big as a Single Customer View database integrated with your EPoS system). You can augment this data at the till, or by leveraging your website. To do this you might consider asking customers to visit the site and they’ll get some value exchange, perhaps free engraving next time they buy, or a free trinket (first of a collectable) for their daughter, or the chance to win something. This kind of simple value exchange gives you an opportunity to learn both about the individual and about your customers in general. This in turn gives you data from which you can start to make decisions and of course, the data with which you can create targeted, timely and relevant campaigns to drive sales and support your ongoing (if infrequently manifested) relationship.

One benefit of a relationship supported and bridged online is that you can use it to ask questions about your strategy. For instance, if you’re trying to work out if your customers might buy if you built an e-commerce site, ask them. You may be surprised, they may tell you things you never knew (“we browse in your shop because it’s friendly but we buy from your competitors online because it gets delivered to the recipient gift wrapped.” or even “My family used to come to the shop but we moved away and only get there once a year, we might buy more often if we could do it from home!”), but of course you do have to ask in the right way. Most people like to be asked their opinion though, as the implication that you value their opinion confers a sense of belonging and ownership. Your website is the perfect venue for this, especially as a simple survey can be extremely cheap to produce and promote.

The benefits may not immediately justify spending thousands (or even hundreds of thousands) on a serious e-commerce strategy. But, by creating relationships with your customers, by using cheap and easy channels like email to help bridge the long gaps between visits to your shops, you can easily develop loyalty and brand fealty, at a very low cost.

By the time you have hundreds of thousands of customers, and you start changing the purchase patterns – say frequency, or order value – of swathes of them by a few percent, you could be talking millions in incremental revenue. Even for the independent family jewellers, the difference between a declining, ageing customer base visiting spontaneously and a loyal, engaged customer base who increasingly use the internet to keep in touch, make decisions and use the web to book appointments to view and choose wedding rings, may even be the difference between fading away and reinvigorated growth.

Underwired caps incredible month with RAR finalist place

Underwired, the leading eCRM and Customer Engagement agency, has been shortlisted in the Recommended Agency Register (RAR) Awards.

The awards recognise the agencies that have been highly-rated by their clients and to date, over 14,000 customers have rated the agencies they work with. The awards are a reflection on an agency’s ratings across a number of areas including Creativity, Effectiveness, Value for Money, On Time/On Budget and Client Service.

This news comes on the heels of an incredible year for Underwired, which now counts Marks & Spencer, Mitchells & Butlers, Travelodge, British Land, ASICS worldwide, East Coast Railways and the Financial Times among its clients. Less than a year ago the management team led by Jason Holland and Felix Velarde took the agency independent, and in the past month Underwired has won over £1m of contracts.

Jason Holland, Underwired’s co-founder and creative director, said “This reflects Underwired’s culture of partnership and collaboration, and in particular the rapport the client services team has built with our clients. We do business-critical, highly strategic work, and that demands genuine trust. That’s built on a foundation of value for money and doing stuff right and on time – but it’s also partly a reflection of the passion we have for the work we do with our clients.”

The Ad Contrarian, A Response

(In response to this post)

Hmm, do you know what, although I mistook the original post by Dave as directing readers to *his* blog (sorry TAC - and Dave - I'm a TAC newbie), I can't recant my reaction.

So, firstly: Dave I apologise, I'm sorry I took your name in vain, but to be honest I thought your 'read this' Tweet was in itself provocative, and when I read the TAC post I mistook it as an extension. My bad.

Secondly, TAC, I'm sure you're lovely too. I'm sure you've got a trillion years of understanding consumer behaviour, and I'm sure you're right about how venal, faddish and self-important the marketers you work with are.

But here's the thing. The internet did change everything, utterly and without mercy. We have a globally distributed notion of justice. We have a globally distributed set of cultural norms. We (finally) have a near-universal language. We have a US President accepted as a good replacement for the universally reviled previous global leader who everyone in the world knows intimately, and who has been elected based on a third of the world's cultural norms. We have a world of consumers who elect and buy, taken over from a locale of consumers you used to sell to.

Consumer behaviour may not have changed. But expectation, motivation, influence and conversion to buy have changed forever. The consumer, finally, is king. And TV, though still a powerful medium, hasn't caught up despite 12 years of interactive TV. The day TV advertising can be segmented not by programme but by the individual consumer's implicit or explicit at-that-moment requirements will be the day TV gets back on its feet. And yes, when we started an interactive TV agency for Lowe in 1998 it was arguably way too early. The fact it produced interactive TV ads for Tesco and Unilver, two of the most far-sighted marketers, doesn't take away from the fact that it couldn't make money - but it was necessary to help get the ball that may one day save the TV advertising industry's arse rolling.

My own view about what people might remember is that it takes two types of people for progress to happen - the innovators and visionaries who come at things too early but set up the parameters of the experiment, and the reactionaries that temper the enthusiasm but enforce rigour. I'm quite happy to be in one of the groups, and I'm glad of the existence of the other, because your maturity means I can borrow, say, the discipline of data planning and prove that what we do works better for the new world's consumers than what you used to do when it was the only way.

Glad this social media thing is here though, because previously the only way we could have an argument was down the pub or in the letters pages, so thanks Twitterverse and blogosphere, at least you've revolutionised how fast one man can flourish his own reactionary views, another can highlight them, a third can get it all wrong before correcting his mistake, and how fast presumably this will turn into pixels in the wind. Personally I'd much prefer to do this over a pint than in public, but hey, you know that when even the Iranians are using Twitter to complain about injustice, the world's all gone and changed while you were busy watching television ;)

Making eCRM Sizzle

ECRM is king. So why isn’t everyone doing it? OK, perhaps the rhetorical excuse for a diatribe about how everyone really must start doing it properly is a bit transparent. Actually there might be a perfectly rational explanation, no matter how much I might, as a passionate advocate of eCRM, be wary of it. The answer is very, very mundane.

We’ve recently been involved in two quite big pitches, for brands everyone’s heard of and almost everyone uses, both in transport. We’ve been drafted in as a wildcard – the brief’s been about making email marketing deliver revenues. We’ve come in and talked about strategy and how relationships, customer journey cycles and touchpoints affect frequency of purchase and average transaction values. We’ve talked at length about the processes involved in mining data, creating simple customer segmentation then rich, layered segmentation (starting with sponge cake and aiming for gateau, I suppose). We’ve described processes for selecting email providers, deliverability consultants, analytics. And we’ve talked about the results – millions in demonstrable incremental revenues, customer lifetime values that go up by 3% (read: millions of pounds), over the first couple of years.

Looking back over these two pitches, which we didn’t win (our normal win rate is around 75%), it’s clear why. These two clients wanted to improve their email marketing. Simple as that. What we should have talked about was how we improve email campaigns so they drive results. We should leave the data stuff as a functional but implicit element, same as usability, or build standards, or testing. We’ve been guilty of trying to explain the thinking, not the practice. In old speak, we’ve been trying to sell the sausage, not the sizzle. Sure, eCRM is infinitely more complex than just email marketing... there are plenty of big projects that integrate segment-driven microsites, emails, SMS and e-commerce, all in aid of making the customer the centre of a brand’s universe. But actually from some clients’ points of view they may simply want to take the next step in improving what they do already, and that may be taking a newsletter and making it more relevant through simple segmentation.

And if we do take this approach to those pitches where the brief really is for improving email marketing, then perhaps we can take these clients and move them on to eCRM by stealth. If we can start with quick wins – the kind that generate sudden revenues – then we can go on to justify spending time and money on strategic thinking, segmentation and online touchpoints. In retrospect, we’ve been guilty of a lack of patience, and it’s a trait endemic to the leading edges of the digital industry. So with (probably the vast majority of) clients new to eCRM, we need to start on ground that’s already familiar, in order to help transform the mundane into something that ensures that it’s the customer who’s king.