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.

Bob, The Ad Contrarian

I had a bit of an argument with some guy called Bob, who blogs as The Ad Contrarian. He appears to have some kind of following in the oldschool advertising world. And he doesn't like the new-fangled stuff like the internet. So I had a bit of a pop at him in the comments on his blog (about a post he wrote in April).

Anyway, it was all very entertaining, and I don't think either of us came out of it well really – both of us have very different viewpoints and the world takes all sorts. It's a long set of posts and you can, if you like, read the whole thing on his blog. Be warned, he ends up doing quite a lot of swearing ;)

The interesting thing for me was that he then decided he was so right he'd paste the whole thing as a new blog post right on his home page, inviting people to side with him using the comments field. Which some of them have, along with the expected number of insults (pompous Brit etc.) However, many of them haven't, and I've decided to close the door quietly and back away. Anyway, here I am writing about it. I wish I'd been more articulate (though I enjoyed the wordplay), and that I'd used more stats to nail the argument down, but ultimately it's his blog, his followers, and his industry he caters to. Me, I'm just an interloper in his universe, though I still think my universe is taking over :)

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.

Ten Things I've Learned About Social Media

I started a digital agency in 1994 and pretty quickly made my share of 'netiquette' mistakes. I'm still learning, but some things never change...

1. Politeness oils the wheels
Social media online are just like any social setting: whether it's your (or someone else's) blog, Facebook, Twitter or a Newsgroup, being polite generally makes for an easier life.

2. Social media are ephemeral
When I started I used Bulletin Boards (BBS). A few years ago Bebo was all the rage. As was AOL Instant Messaging. Online forums too. Today everyone's Twittering. Tomorrow we'll all be Waving. What's cool or 'now' now won't be in three years, so get used to it. Make best use of whatever works for you right now, and keep up to date with what's next, or you'll always be behind the curve.

3. It's in public!
Whatever you say, everyone can see it. They don't have to be your friends, you don't have to have OKed it (especially Twitter), pretty much everything's there forever. Don't ever say anything you don't want held against you or quoted out of context. The funny picture of the lamp post incident taken by your flatmates will haunt you.

4. People tolerate mistakes
Everyone makes mistakes, and some of us made a lot of mistakes in the early years. It makes you a rounded human being. Unless you're a brand, in which case it will make your brand seem fallible. So if you cock something up as a brand, apologise fast and profusely and go overboard to fix it, and you might just show people you care about your reputation.

5. A brand, in this new digital age, is its people
Given the above you might think you need to be anodyne to be a brand online. But brands need personality. So you need to find people who can represent your brand who you can trust not to screw things up (see 3 and 4 above), and who have a way of communicating that fits with your vision of how you want your brand to be perceived.

6. You can't edit live conversation
If you can find the right people to Tweet on your brand's behalf (or blog or broadcast or whatever), then give them free reign. It adds character to your brand. They'll make mistakes, but it shows you as a brand have faith in your people. Unless you're the BBC, which has a policy that every tweet needs a second opinion before it's tweeted.

7. Talk to each other
Make sure you're not talking at crossed purposes. In other words make sure that at least once a month everyone who is online on behalf of your brand (the web guy, the person from customer service, the PR person, the CEO, Janet) gets together to talk about what they're doing. If you don't one day you'll contradict yourselves, and 3 kicks in.

8. Social media = timesink
Social media have a tendency to be super-absorbing - you'll dive in and not emerge again for an hour. Limit yourself. I tweet and blog and Facebook too much, and I should know better. Also, the less you interact the less you'll screw up.

9. Monitor results
For the last year or so I've tracked the number of new business leads, PR opportunities, new supplier introductions and new corporate relationships that are attributable to social media. You'd be astounded. I reckon my daily 20 minutes has got me a dozen articles and interviews, and two big pieces of business. I'm even writing about social media - and my agency's an eCRM agency.

10. Have fun
I've made loads of contacts through blogs, Facebook and Twitter, met lots of interesting people, found a few good suppliers and engaged in some extremely entertaining and informative debates. Along the way I think people have got to know my company a lot better, through my own public interactions and those of my colleagues. It's meant people can relate to us a little better. It's given the power back to the customer - they're the ones who make all the important decisions, after all.

This article was written for the Institute of Direct Marketing. You can follow me on Twitter at twitter.com/felixvelarde

How to produce revolutionary eCRM

Everyone wants to get eCRM right of course. But given that there are something like 40 different definitions of what eCRM is, just knowing where to start can put the kybosh on the grandest of ambitions. In 2003 some colleagues decided that what we really wanted, given increasing investment in digital, was to prove that relationships built and nurtured online actually delivered commercial results. And that's what we set out to do.

Today, eCRM in my view is simply the science of creating lasting digital-channel relationships that can be measured commercially. In other words, our ability to measure the results of tactical campaigns is all very well, but we need to attach results to our engagement with a specific customer over the course of the life of that engagement - which ideally should last much, much longer than a tactical campaign or two! So, how do the best practitioners go about it? Here are a few of the critical steps in creating an eCRM programme.

Understand what data you hold

Most marketers have a wide variety of different pots of data – transactional, email marketing, website traffic, in-store, loyalty club, competition entries, addresses with forgotten provenance. The first thing that has to be done is to find a way to make the data consistent (for example making sure “Forename” is matched up to “First name”). Next it needs to be centralised. This might be as straightforward as giving it to an agency who will give back a rationalised database containing everything they were given. You’ll probably find that a huge amount of the data doesn’t have a useful name attached to it (web traffic, or perhaps records that only contain first names).

You’ll almost certainly find that much of the data is out of date, or plain wrong (petitions signed Mickey Mouse!). You’ll also see that you probably have an awful lot of it.

The first task is to look at the data and start looking for patterns. You can do this in-house if you have a data team, or an eCRM or data agency can do this for you. Essentially they are looking for a way to segment the data into reasonable groups. For example, these groups might (if we focus on customers) include:

• Customers who spend more than £10, £20, £30, £40
• Customers who buy on particular days of the week
• Customers who respond to discounts versus those who respond to added extras
• Customers who have visited the website once before purchase versus those who visited four times.

That’s pretty straightforward. From this basic data we can probably derive a few insights which might be useful. For example, the above might show us that there is a correlation between the number of visits to the website and the value of purchases.

And there may be a correlation between the transaction value and how many times a customer has been contacted with what kind of call to action. Ideally the data will show relationships between a customer’s average transaction value (ATV) and the length of time they’ve been a customer.

So we’ve started to derive insights that can inform our strategy.

The data you already hold will probably show you some surprising things. One retail client had data that showed an ATV that was higher than expected – and almost every customer we looked at had a transaction value well below the average. Eventually we found a tiny segment of a few people who, every time there was a 50% discount offered on a DVD, would buy a thousand and eBay them for a profit. It gave us an unexpected marketing angle – we could promote specific titles to this specific segment without broadcasting it to everyone and wasting one of our (limited) contact opportunities – meaning we could send everyone else an offer that would be perfect for them instead.

So understanding what data you hold is critical. Eventually the holy grail of eCRM is a ‘“single customer view’”, where there’s just one database that all the sales, marketing, web and long-term data is fed into. For many that’s nigh-on out of reach, and in our experience of working with household name brands it’s not necessary in order to have a hugely successful eCRM programme generating massive revenues.

Turn the insights into a strategy

I’ve already mentioned some of the benefits of understanding the data – often it tells you what you need to do. In one of the above examples if four visits to the site makes for higher ATVs, then the marketing activity should concentrate on driving four visits. OK, that’s a bit simplistic perhaps, but you get the idea – eCRM basically works on this principle. Look at the data, see what it tells us to do, find out why (a whole subject in itself, which I won’t go into here), then establish a marketing programme that gets people to do more of it.

So we identify the different segments, and what each delivers commercially over time, say a year, and eventually a lifetime (this is called the ‘Customer Lifetime Value’, or CLTV). Then we prioritise. There’s little point in spending 10% of the eCRM budget targeting 10% of the base if that 10% only contributes 2% of the revenue. The segmentation tells us what to do. If we have limited resources, then broadly speaking spend the money on the segment with the highest CLTV!

And execute

Email is the cheapest way of reaching lots of different segments with relevant tailored messages at precisely the best time, as shown by the data.

It’s easy to allocate different creative executions based on the segmentation rules, and it’s straightforward to transfer data to email suppliers (unless you’re going via an eCRM agency who will manage the selection and broadcast process for you). It’s also – critically – easy to see the results in real time. Opens and click-throughs are OK as indicators, but properly integrated analysis is is central to any serious eCRM programme, and there are specialists in providing this kind of straight-through tracking. Ideally of course you’re tracking from email to sale and repeat purchase, and adding this information to the central database so you can see long-term trends and adjust your eCRM programme accordingly. This gets your by-segment ROI, and your CLTV, and informs refinements to the segmentation and comms strategies.

Great eCRM incorporates email, community hub sites, tactical campaigns (to grow specific segments or to fulfil business needs, like filling up under-booked hotels), sometimes even mobile. It’s tested, constantly, and honed until it produces reliable results time after time. It actually removes uncertainty and takes the guesswork out of marketing. Great eCRM can have a fantastic effect –like McCain Foods who changed engagement rates amongst brand resistors from 14% to 63% in under a year, or the improvement in ROI of 32% for The Sun’s Fantasy Football game this season. Done well, eCRM revolutionises marketing.

An abridged version of this article appeared in UTalkMarketing

eCRM - where on earth to start?

There are a few clear benefits to eCRM. Firstly it removes confusion and uncertainty for marketers in recession. There are proven methods, and they generate testable results, so marketing budgets can be allocated on a strict ROI basis. Secondly, solid eCRM programmes build relationships with consumers that can be both brand engagement-based as well as transaction-based. For example we've taken a 14% click-through rate from McCain "brand resistors" and transformed it into a 63% click-through rate in ten months.

The interesting thing for me as someone constantly trying to work out what's next, is that eCRM is a platform, not a channel. It's definitely not email marketing, although it uses it. It's not a technology, though it uses many technologies. What it is – and this is reflected in how it's practised – is a principle. ECRM comprises understanding (data and analytics), insights (informs planning and ideas), relevance (segmentation, targeting, timing) and testing. Notice I didn't use channels anywhere in there; I believe channels are simply the function of targeting.

And the channels can be anything – email (cheap as chips, immediate), SMS (cool but with ethical issues), microsites (essential in my view), e-commerce (handy if you want direct ROI!) and so on. We also use social media, online sales promotion, SEO, you name it – as long as you can directly track it.

All great. Sometimes though you have to start somewhere, and for many clients getting us in to take over and drastically improve an email marketing programme is the best way. Quick wins can generate millions in sales, or massive changes in engagement – as I mentioned in the case of McCain Foods. Speaking of which, we're counting down to the launch of a huge new initiative for them this autumn, providing consumers with a truly segmented brand experience and a new platform for a (properly integrated) eCRM programme.