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.

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

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.

2013 will be the year of Total Customer Engagement

The year ahead will be marked by a number of really interesting developments in how we engage with our customers. One that has caught up with us – and which marks a sea change – is the advent of the Generation Y customer base. Gen-Y uses mobile as its main medium of interaction; if you’re not using mobile to engage with younger customers then you’re probably missing the biggest trick available, though it has been a very slow start since the trend first became apparent five, or so, years ago. Just in passing, to give you an idea of how trends break, let me illustrate this briefly…

Imagine your customer base is, potentially at least, a million strong. And say on day one a single person uses mobile as their main device for browsing the web, and every day that number doubles. By the end of the first week, 64 people use mobile. By the end of the second week that’s 8,192. That’s the point at which as a business you might start thinking there’s a trend. In actual fact it only takes another seven days and that’s your entire customer base. If you didn’t engage in a mobile strategy after two weeks, you missed it. Trends accelerate in an exponential curve – and in the internet age a trend can look slow for a few years, when in fact the numbers are doubling every month. Mobile is one of these, and if you target people born after 1982, that means you’ve got to jump, now!

There’s another trend that’s been a few years in the making, but in 2013 it will have gathered a critical mass, and it’s going to affect you – like it or not. The trend is for Total Customer Engagement. In plain English this means joined-up marketing, the opposite in fact of the “silo” thinking that has driven marketing during the first couple of decades of digital.

Most companies today have a web strategy, which may include e-commerce. They will also have a nascent social media strategy, a Google Adwords programme, and maybe an eCRM programme serving segmented comms to different sets of customers, split by value, behaviour, demographics and motivations. All of which have given businesses learning and insights into how they engage with customers using ‘new’(ish) channels. What’s lacking is integration. The sea change in 2013 requires a fresh way of thinking about customer engagement, which puts the customer at the centre. The trends feeding this are the shift in the balance of power from brand to customer, driven by the shift towards peer decision facilitated by social media, and the power of collective reviews.

So how does a business tap into this before it’s too late to do anything about it? A shift of focus is required, meaning the marketer needs to understand where the consumer is going to be, on- and off-line, when they are at a moment when they are likely to change their view of a brand, ideally positively. If you can identify that, Customer Type A is likely to be on a mobile, using Twitter, when considering whether to shortlist your brand, then you can target them with the right message at the right time and in the correct format. By mapping where the customer is at each critical point in their relationship with you, and mapping a rational sequence of nudges to take them from pre-custom to loyal customer, and then creating a matrix of comms against medium for this map, then you have a plan for engaging them. This Total Customer Engagement plan gives you as a business several things: a plan that can be tested, benchmarked and improved; a brief for your team and their suppliers so they have specific tasks to achieve against your business’s Key Performance Indicators (KPIs); and a framework that can be adapted when new trends become apparent.

This kind of approach is essentially multi-channel and channel-neutral. It’s also measurable and of course by its very nature future proof. By investing in developing this kind of (actually very simple) framework and marketing architecture, it will protect you against the overwhelming trends that are often nearly impossible to spot early, but which end up rather too quickly having strategic impact. Do it now, before it’s too late!