www.head-space.com, Head New Media circa 1997

A groundbreaking Social CRM tool from Underwired

Until recently driving traffic to Facebook pages was the equivalent to old-style viral or word of mouth marketing, using it as a venue for people to engage with a brand. The evaluation of a campaign’s success was based on inference rather than end-to-end tracking – indicated by click-through rates, sentiment scores, mentions, ‘likes’ or Facebook transactions. However until now there has been no simple way of linking prompted Facebook activity to an individual customer’s record.

My company, Underwired, has just launched an sCRM tool which allows address-level tracking, the holy grail of social strategies. It closes the loop between the outbound customer journey and subsequent engagement, bringing relevant data back into the eCRM database. Underwired sCRM allows brands to employ social as part of a fully tracked eCRM programme that never loses sight of an engaged customer.

Underwired sCRM enables brands to capture social data, including an individual’s clicks on ‘like’ and ‘comment’ buttons, external links and video content (including how long they watch it for), photo upload, post and share with friends functions. For example, this means that customers who don’t spend much but have huge social influence can be identified and messaged appropriately, leveraging their real value. For the first time marketers can add an Advocacy dimension to their segmentation.

Making address-level tracking a reality solves an epic challenge for digital marketers, allowing them to pinpoint exactly who is doing what in their brand’s social channels and identify – and properly target – their most active brand advocates.

Social behavioural insight will be critical for marketers in 2011. By building Underwired sCRM into Underwired’s four week audit process, we can now include Facebook as an intrinsic part of a brand’s eCRM and email marketing campaigns. It means we can remove the final remaining blind spots in tracking ROI for online campaigns.

For further information, please visit www.scrm.co.uk

The nudge towards eCRM

ECRM is not a quick fix but requires sustained investment and patience, explains Felix Velarde, managing director at Underwired Amaze.

There are still some companies that haven’t understood the significance of eCRM (Electronic Customer Relationship Marketing). Yes, eCRM, that marketing nirvana, which comes with investment barriers that might make it impossible to buy. How could you turn down something that’s going to take a year to get right, that may cost a quarter of a million pounds but that might make you millions in new revenues?

It feels like an impossible proposition. It’s so difficult for brands to buy that many of them don’t. Those big innovators with money to burn can afford to experiment and reap the rewards, but most brands just can’t see it. Most brands have to focus on their immediate tactical requirements (sell, sell, sell!), and perhaps try social because they’ve heard they can do it for ten grand.

Most brands can’t afford to do eCRM, no matter how big the rewards, and how much it differentiates them from the rest of the market. Or can they?

Let’s go back a few years to when the first major eCRM campaigns started. In 2003 Underwired Amaze proposed to Virgin Holidays taking over an existing email newsletter campaign and building something more sophisticated.

The campaign became segmented, largely by behaviour to start with. What Customer Type 1’s preferred destination, time of year of booking, or decision making time was likely to be, informed when they’d get a special offer on a certain Florida hotel. Quite quickly the second dimension demographics came into play as well. Sending an offer for a free flight for your second child to parents of two made a big impact. The first segmented email sent generated £3million in direct holiday bookings. Virgin Holidays had taken a leap of faith and invested in a campaign that cost around £30k and justified a programme with an ROI of 100:1.

But once the initial surprise had worn off and customers got used to it, there was a long period of lots of detailed activity, lots of creative work going on, but not - it seemed - much return. It changed though, reached a critical mass after about a year, and finally the smiles started reappearing on the client’s faces. And stayed as the programme’s ROI three years later was still averaging 26:1. Fantastic.

The Virgin engagement went exactly like every other eCRM project. It started with a big bang that makes everyone very happy, and settles down. After a few months the quick wins have worn off and it starts looking like nothing is happening at all. After a long, long year though, the eCRM programme starts paying for itself again. But there’s this big, long, frustrating period of doldrums, where the project owner gets disillusioned and it all looks like very hard work for no return, and it’s this that I want to come back to. Why? Because actually it’s this period when the principles that really drive eCRM are hardest at work.

The first principle is segmentation, and if you will indulge me while I teach granny to suck eggs for minute it will set the scene for the second. Segmentation is based on a simple idea, that if you send a specific call to action (an offer, for the sake of this example) that is relevant to the right person at the right time, it’s more likely to be acted on than if you send it to the wrong person or at the wrong time. Let’s take an example. You have three hundred people, 100 are golfers, 100 football fans and 100 cricket fans. You have three offers to go see the Ryder Cup, the FA Cup and the Ashes, in an email, one after the other with a paragraph each. You send the email to everyone. 100 football fans will see the golf offer first, and a third of them will bin the email. The golf players will see golf first and be happy. The cricketers, well two thirds will bin the email before seeing the third, cricket, offer. Your maximum response rate will be 200 - because only 200 of the 300 recipients will have read the offer that appeals to them. Simple. Segmentation says, send one email with one offer to each group (yes, the right offer!), and your maximum response rate is 300 out of 300, a fifty percent improvement.

The second principle is the principle of the nudge. eCRM isn’t an advertising medium, it doesn’t work by bombarding people with messages until they buy - in fact, if you send too many emails it’s obvious what will happen: after the initial hit of increased response people stop reading, after a while they add you to their junk filter, and you never know because after too many emails they can’t even be bothered to unsubscribe.

The job of eCRM is to create relationships. So while the segmentation principle is important, it must be balanced against the need to create a relationship. What we want to do is change people’s behaviour subtly over time. Small calls to action, little asks, are what is required. I want every customer to spend a tiny little bit more every time. I want them to increase their purchase frequency by 2% over six months. I want a 0.1 percentage point increase in average transaction value. Why so little?

What the big innovator brands realised a while ago is that little nudges add up. If I suggest you double your turnover in two years you’d think it impossible. Yet if I suggest you increase it by 3% this coming month you might feel it’s much more realistic. And what happens if you increase your turnover by 3% a month for the next two years? The laws of compound interest say you’ve doubled your turnover. That’s why eCRM is, really, so compelling. Yes there’s a quick win, and yes, there’s a long dull patch, but patience pays off.

Javari’s wasted birthright

Disappointment is... when I buy something from an online store that’s got brilliant products and brilliant service, a fantastic website and a sign-up form that asks me loads of questions - but which then sends me generic emails I have no interest in whatsoever. I mean, I bought some Merrell trainers from this place, Javari, and now they bombard me with stuff about how kitten heels are the next big thing.

Javari is owned by Amazon, world leaders in relevant recoomendations. But Amazon has clearly kept Javari on a very tight budget. The email marketing programme is so, like, yesterday - I couldn’t believe it when such high regard generated by the shopping experience have been so let down by the customer retention programme.

So what should they be doing? Well, for a start, I’m a bloke, buying (what I hope are) cool walking shoes, and I looked at every single Merrell shoe on the site before making my choice. That must tell them something. At least it tells them to relegate the kitten heels to emails I get at weekends or to second place in the content in case I’m the sort who of man who buys shoes for his partner (either way). I wear the same size shoes as I always have, so that might inform tactical sales of remaindered stock and so on. Perhaps they should be sending me news of every new Merrell shoe they get in – Merrell does.

The days of blanket emails to Mr/Mrs AB Sample surely have gone the way of the door drop. Javari ticked all the boxes – indeed, I was looking forward to the emails when I opted in, wondering which agency was doing them. I am so, so disappointed. And that means that although by some miracle I might remember they were cheap and go back if I’m actively shopping, there won’t be any mid-cycle visits to their site, nor serendipitous nudge-driven sneaky sneaker purchases.

Yet we know from long experience that just by maintaining relevant contact using segmented emails, and observing how each segment responds, we can increase ROI by between 25% and 90% straight away and average purchase frequency by 7% in the first year. So why, Javari, why have you ignored your genetic birthright of great customer engagement, and prompted a critique like this? The first you’ve heard of it you say? That’s because you can’t: you’re not listening.

Parlaying custom into advocacy – why brands should be more pushy with their social media

It’s very rare that I get excited about a brand I become a customer of. I’m one of those people who really doesn’t engage with marketing. I’m probably not alone. And yet this is my territory, my metier – I work very hard to create engagement strategies for clients that can be demonstrated to work. I am, as it were, my own worst enemy!

So how do you, as a brand, engage me, as a disengaged person with what I’d consider to be better things to do with my social time than talk about your brand? I’ve been thinking about this in the context of two recent occasions where I have actually felt like praising a brand in public. The first occasion: on the way to a meeting I spilled coffee on my shirt. I was in the city, and I spotted a TM Lewin. I went in, bought a shirt, explained my predicament, and the manager arranged for the shirt to be pressed, in the shop, there and then. I went for a walk for five minutes and hey presto, new, unwrinkled shirt.

I tweeted about it when I got back from my meeting. TM Lewin’s tweetie person followed me and retweeted (quite rightly) my happiness with their service. Fab. The second occasion, this morning, my wife asked me if these were the shoes I normally wear with my suits. I told her they were from Loake, and that I can wak for miles in them – the very first pair of truly comfortable work shoes I’ve had. It crossed my mind to tweet that I love my Loakes, then I remembered I’m not that kind of person (so I wrote this instead).

Both are brands I’d of course love to work with. Both are brands that have built solid reputations for service and product quality. Did Loake sell me these shoes? I think actually I got them from Next, so which of those companies should be the one to do the customer engagement? And why?

One of the striking things about the TM Lewin experience is that very clearly several people from TM Lewin now follow me on Twitter (no idea what they get out of it, but feel free – twitter.com/felixvelarde), but nobody’s ever been in touch. I am clearly, or at least I was once, a brand advocate. I spread the word, in a credible, completely unprompted way. But no-one has since asked me if I’d like to join a loyalty club, or corresponded with me on Twitter or otherwise to find out how to make sure I continue to be an advocate. It’s unpushy, which is nice, but it misses an opportunity. TM Lewin’s social media strategy needs a tweak or two.

And the fact the brand doesn’t have an eCRM programme is quite surprising – all of its customers are repeat customers, we have to buy similar products regularly, we have preferences... TM Lewin could take a leaf out of Pink’s book and keep our sizes on a database, offer us things they already know we want. And so on. The opportunity to create an engaging, relevant and pretty much self-managed eCRM programme should be too good to pass up. And by creating engagement they’ll be parlaying an initial positive first impression into serious loyalty and further opportunities for advocacy.

Someone like me, who doesn’t actively engage, who almost never spontaneously advocates a brand to his friends and acquaintances, might be driven to do so more often. Certainly, I could become a very loyal customer. Since my experience I’ve bought shirts from TM Lewin, though I also buy from Pink, Hackett and others. I could be engaged more, to their exclusion. The next time I think about shoes, I will probably be thinking about buying some Loakes, though because I’m not in their eCRM programme either I have no idea where to start. Perhaps I’ll start with Next. I really can’t remember if it was Next - if not then Loake might lose the sale while I’m wending my (possibly easily distracted) way to their brand – so again, here’s an opportunity.

Brands must – must! – engage with their customers. The best brands, the ones that provide fantastic service, or fantastic products, are the ones that must do so even more – they have an opoprtunity to cement their customers after the first great experience in a way that only becomes more dilute as time goes by. It’s an opportunity that must not be missed.

Follow me on Twitter: twitter.com/felixvelarde

The premature announcement of the death of the web

Wired, The Wall and the Huffington Post have all pronounced the web on its last legs. Wired appears to believe that because there's a popular new way of interfacing with the internet – apps – the web has had its last hurrah. Huff's Josh Silver bases his pronouncement on the news that Google and Verizon have done a deal that may make it possible to have a privileged access scheme for content providers disseminating video to customers.

This latter is the one I think has least relevance. Why? Well, although this time round it is different inasmuch as the faster access is paid for by the content provider rather than the content consumer, there's little difference in practical terms between the tiered access dictated by bandwidth, ISP quality and client technology and the tiered access posited by the new deal. Silver's argument that Google's universal access volte-face signals some kind of tipping point, one that will see content delivered only to the wealthier subscriber, to me seems no different to the gradient we've always suffered. My first forays onto the internet were hampered by the fact that no-one made modem software for Macs at the time. Did it destroy the web or limit its potential for democratised information? Clearly not.

Perhaps we won't see the web become a public access TV channel after all as a result. But then, to the extent that it could it already has. YouTube is gargantuan. Will Hollywood or Bollywood stop making feature films for free distribution on the web? Did anyone really expect them ever to really do that? The web is a medium, a set of protocols, and people all over the world will use it freely to do what they always wanted to do with it. Capitalists will find ways to make money from it. Anti-capitalists will use it to subvert. People will continue to use it to grow this unfettered global conversation

And coming back to apps, they are simply an abbreviated interface to the internet, just as the web is. Perhaps one day there will be a better interface that comes along that is so revolutionary that the whole idea of HTML and hyperlinks is relegated to history, as happened to the revolutionary precursor protocols that saw us Gophering before the web took off (though Gopher's demise was hastened when its owner started charging for it, something that no-one is suggesting can or will ever happen to the web). Apps are cute, cool, capitalist by design, and ephemeral.

Actually the best apps seem to be built in HTML. The web is alive and well and only just coming of age. Long live the web.

That ol’ email technology

Email marketing is awesome. It’s one of those things that has relied on a confluence of circumstances, shifts in attitudes, and technology to flower, but now it has. Just in time, in fact, for brands like Ben & Jerry’s to declare it dead and hop on to social media.

Some years ago a few people in the digital marketing world decided to see if by applying brand marketing principles to email, we might have the medium for proving that online had real, measurable commercial value. Spammers clearly thought the same, and could demonstrate it worked. But around ten years ago spam started being effectively controlled by technology solutions built into our email applications. Brands that wanted to send email to their customers had to get emails white-listed. Branded emails became credible.

At the same time consumer use of email became pretty much universal. As an elective medium it genuinely had power – it’s only there when you open your email programme. But if you’d given your favourite brands, or simply the place you bought your stuff from, permission to say hello, it had legitimacy. The email newsletter suddenly had currency.

In 2003 a few people decided to see if there was room to apply Direct Marketing principles to email. I was so keen I went on a three month hunt for an email bureau that could run segmented campaigns. Finding none (or at least none I could afford) my agency built its own system. To be honest, it was great in theory, but we could never quite get it to work properly. Live re-segmentation based on recipient behaviour was laudable as an aim, but every time we fixed a bug in the technology we tickled another and everything fell over.

Slowly along came fantastic, robust technology providers - the kind that love to fix broadcast problems at two o’clock in the morning - and we were saved. Email marketing became eCRM, everything got segmented, and we started to play with behaviour-based targeting. Fantastic. So fantastic in fact that last year The Sun’s Dream Team Fantasy Football saw a 93% rise in revenues from digital - in three months!

What we’ve learned from all this emailing is that you can track people from start to finish. You can find out how their attitudes change over time, both through inference based on observing their behaviour, and through outbound validation using email and online surveys. We can, as we did with FMCG giant McCain Foods, cross-validate against the real world, benchmarking brand consideration and watching how it changed over six months of precision emailing (up 11% as it happens).

Then a brand like Ben & Jerry’s (whose product I love but at my age can no longer scoff until it’s empty) goes and abandons email for social. I’m sure social is another link in the customer tracking that needs to be incorporated into the strategy. And in fact until recently that was the one thing you couldn’t do. Yes, buzz tracking posited sentiment, but you couldn’t keep your eye on a person, or a segment.

Well, technology is changing. Now there’s the desire to complete the journey outside of email and into social, following people around their digital lifestyle as it were, we finally have the technological capability to do so. We’re incorporating social into eCRM strategies, and we can audit the journey from first contact to sales revenue. It’s a hit. ECRM is no longer confined to email, SMS and landing pages. Technology has set us free.