Joining The Dots Between eCRM and Acquisition

Recession indicates retention. The solution (as everyone knows but few seem to practice) to the problems brought about by a severe downturn is first concentrate on what you have, not what you might have. Marketers must - must - get retention right, for a variety of reasons.

• It’s where your current revenue is
• It’s where the lowest hanging fruit for additional revenue is (all you have to do is not screw up, then ask for more business)
• It’s where your biggest advocates lie
• It’s where your data sits
• It’s the biggest source of prospective customers for your competitors

and so on. Reducing churn protects your customer base against better offers or a better story from your competitors, and yes, they’ll try anything. But customers have a certain amount of inertia. Once they’ve started a relationship with a brand they’ll only move through lack of appropriate attention or if you don’t deliver on what’s been promised, so retention starts with not offending customers. ECRM creates stories that will keep customers engaged, and great eCRM creates stories that massively increase engagement and not only reduce churn to near-zero but increase purchase frequency, average transaction value, and active advocacy.

The customer relationship management bit of eCRM isn’t the whole story.

Buried in the above list though is a gem. “It’s where your data sits”. Your best source of information – not just for segmentation strategy – about who’s likely to spend more is your existing customer base. The data you already own can tell you how to run extraordinarily efficient acquisition campaigns.

(By the way, many people in digital have long thought that acquisition campaigns are a load of rubbish because generally they’re about feeding huge numbers of people into a funnel in the hope of converting the few people who, more or less by accident, have been hit at the right time to buy.)

By combining the segmentation that’s been created for eCRM programmes that focus on retention with the data that gets collected on how those segments behave over time in reaction, we suddenly have a potential gold mine. Great eCRM doesn’t just retain, enhance, increase - it tells you how to acquire. The new, richer data tells you which types of people are most likely to be movable from low-value to high-value. And this in turn tells you what kinds of people you want more of. And that, put simply, tells you where to spend your money to increase your feed into the improvable segments. ECRM suddenly becomes not just about retention marketing, but about all marketing.

Motivating the CEO

I just had a call from a client we’ve been after for a long time – they’re the world’s largest operator in a high profile leisure sector. We’ve been talking with them on and off for the last few months, but things had gone a little quiet.

Now, in a recession, new business prospecting is hard. In fact, as an eCRM agency we’re pretty much honour-bound to concentrate on retention, delivering more bang for our clients’ bucks and making sure what we do really works. The corollary is that (hopefully) word then might get around and we’ll win more business. The truth is that the majority of our new business this year has come from existing clients, and previous concentration on winning multi-brand groups has turned out to have made perfect strategic sense.

So it was very nice to find myself on the receiving end of a forty-minute phone call clarifying exactly what the first few steps in a relationship might be. One of the questions I asked during the conversation was what had prompted the call. Seems the CEO had got in touch with the head of customer relationships and told him that retention was a highly strategic issue and that the brand needs to invest in eCRM. Client’s pleased, though I suspect he might have wished for the buy-in sooner. Agency’s happy, because as long as the client’s goals and the budget are right, who’s worried what the trigger is?

But I am. I’d love to know why, after 18 months, the CEO has had an epiphany about digital and retention. It’s slightly like the old days, when we could speak with marketers all day long but it was the CEO who bought the website (and when I say old days, I mean 1995). I’m fully aware that reducing expenditure and improving margins are highly strategic issues, and I’m also aware that digital can address these head on. But I’m wondering why the sudden awareness of eCRM. I’d love to think it was articles in magazines like Revolution, but I’m not certain CEOs read them. I’d be flabbergasted if this particular CEO was following my Tweets about eCRM.

However, I do know that digital has become a strategic issue amongst some business leaders, forced by recession to take a long hard look at how and why the world is changing around their brands. Social media is turning sales funnel-oriented acquisition on its head, Forrester Research are re-educating business strategists with robust models for initiating change – both through listening to what they’ve called the groundswell and by using different approaches to segmentation to drive customer engagement. Don Tapscott’s Grown Up Digital is showing up at CEO professional development organisations like the excellent Vistage. CEOs are really taking note of a (rare) opportunity to leverage the changes wrought by recession that incorporates a new marketing world view driven by customers in a medium that is digital.

Ultimately I guess it’s the CEO’s responsibility to ensure the senior team – and particularly marketing and sales – are on the right track to support the strategic goals of the business. And these strategic goals are not just weathering the storm, but preparing for the opportunities to come.

I’m hoping it means I might get a few more calls.

PS. If you are a CEO, and you’re reading this, that last sentence was a hint ;)

You should follow me on Twitter here.

This post first appeared on my Revolution Blog on BrandRepublic.

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