What Customer-Centric, Customer-Obsessed Companies Must Do

In building relationships with and value for customers, my longtime observation is most organizations tend to progress through several stages of performance: customer awareness, customer sensitivity, customer focus and customer obsession. Here is the “executive summary” version of some conditions of each stage.

In building relationships with and value for customers, my longtime observation is most organizations tend to progress through several stages of performance: customer awareness, customer sensitivity, customer focus and customer obsession.

Here is the “executive summary” version of some conditions of each stage.

Customer Awareness
Customers are known, but in the aggregate. The organization believes it can select its customers and understand their needs. Measurement of performance is rudimentary, if it exists at all; and customer data are siloed. There’s a traditional, hierarchical, top-down management model, with “chimneyed” or “smokestack” communication (goes up or down, but not horizontal) with little evidence of teaming.

Customer Sensitivity
Customers are known, but still mostly in the aggregate. Customer service is somewhat more evident (though still viewed as a cost center), with a focus on complaint and problem resolution (but not proactive complaint generation; internal groups tend to point fingers and blame each other for negative customer issues). Measurement is mostly around customer attitudes and functional transactions, i.e. satisfaction, with little awareness of emotional relationship drivers. The organization has a principally traditional, hierarchical, top-down management model, with “chimneyed” or “smokestack” communication (goes up or down, but not horizontal), with some evidence of teaming (mostly in areas of complaint resolution).

Customer Focus
Customers are both known and valued, down to the individual level, and they are recognized as having different needs, both functional and emotional. The customer life cycle is front-and-center; and performance measurement is much more about emotion and value drivers than satisfaction. Service and value provision is regarded as an enterprise priority; and customer stabilization and recovery are goals when problems or complaints arise. Communication and collaboration with customers, between employees, and between employees and customers is featured. Management model and style is considerably more horizontal, with greater emphasis on teaming to improve customer value processes.

It’s notable that, at this more evolved and advanced stage of enterprise customer-centricity, complaints are thought of more in terms of a life cycle component, and recovery is more of a strategy than a resolution.

Customer Obsession
Throughout the organization, customer needs and expectations—especially those that are emotional—are well understood, and response is appropriate (and often proactive).

Everyone is involved in providing value to customers—from C-suite to front-line—and everyone understands his/her role. Customer behavior is recognized as essential to enterprise success, and optimal relationships are sought.

Performance measurement is focused, and shared, on what most monetizes customer behavior (loyalty, emotion and communication metrics—such as brand-bonding and advocacy—replace satisfaction and recommendation).

Customer service (along with pipelines and processes) is an enterprise priority, and seen as a vital, and profitable, element of value delivery.

The management model is far more horizontal, replacing traditional hierarchy; and there is an emphasis on teaming and inclusion of customers to create or enhance value.

Companies that are customer-obsessed, and what makes them both unique and successful, have been extensively profiled by consultants and the business press. Often, they go so far as to create emotionally driven, engaged and even branded experiences for their customers, strategically differentiating them from their peers.

In addition, these companies focus on the complete customer life cycle, and much more on retention, loyalty and risk mitigation (and even winback) than acquisition. Support experiences are strategic, nimble and seamless, and often omnichannel. Multiple sources of data are used to develop insights. Recognizing the information needs of their customers, they invest in altruistic content creation (over advertising); and they communicate proactively and in as personalized a manner as possible

Customer obsession, what I refer to as “inside-out” customer-centricity, has been a frequent subject of my blogs and articles: One of Albert Einstein’s iconic quotes reflects the complete dedication of resources and values needed for an organization to optimize its relationships with customers: “Only one who devotes himself to a cause with his whole strength and soul can be a true master.” Mastery requires, as well, a storehouse of experience coming from experimentation; so, just like in the pole vault and high jump, we can expect that the customer-centricity bar will continue to be raised.

Building Customer-Centric, Trust-Based Relationships

More than a buzzword, “being human,” especially in brand-building and leveraging customer relationships, has become a buzz-phrase or buzz-concept. But, there is little that is new or trailblazing in this idea. To understand customers, the enterprise needs to think in human, emotional terms. To make the brand or company more attractive, and have more impact on customer decision-making, there must be an emphasis on creating more perceived value and more personalization. Much of this is, culturally, operationally, and from a communications perspective, what we have been describing as “inside-out advocacy” for years.

More than a buzzword, “being human,” especially in brand-building and leveraging customer relationships, has become a buzz-phrase or buzz-concept. But, there is little that is new or trailblazing in this idea. To understand customers, the enterprise needs to think in human, emotional terms. To make the brand or company more attractive, and have more impact on customer decision-making, there must be an emphasis on creating more perceived value and more personalization. Much of this is, culturally, operationally, and from a communications perspective, what we have been describing as “inside-out advocacy” for years.

Most brands and corporations get by on transactional approaches to customer relationships. These might include customer service speed, occasional price promotions, merchandising gimmicks, new product offerings, and the like. In most instances, the customers see no brand “personality” or brand-to-brand differentiation, and their experience of the brand is one-dimensional, easily capable of replacement. Moreover, the customer has no personal investment in choosing, and staying with, one brand or supplier over another.

A key opportunity for companies to become stronger and more viable to customers is creation of branded experiences. Beyond simply selling a product or service, these “experiential brands” connect with their customers. They understand that delivering on the tangible and functional elements of value are just tablestakes, and that connecting and having an emotionally based relationship with customers is the key to leveraging loyalty and advocacy behavior.

These companies are also invariably quite disciplined. Every aspect of a company’s offering—customer service, advertising, packaging, billing, products, etc.—are all thought out for consistency. They market, and create experiences, within the branded vision. IKEA might get away with selling super-expensive furniture, but it doesn’t. Starbucks might make more money selling Pepsi, but it doesn’t. Every function that delivers experience is “closed-loop,” carefully maintaining balance between customer expectations and what is actually executed.

In his 2010 book, “Marketing 3.0: From Products to Customers to the Human Spirit,” noted marketing scholar Philip Kotler recognized that the new model for organizations was to treat customers not as mere consumers, but as the complex, multi-dimensional human beings they are. Customers, in turn, have been choosing companies and products that satisfy deeper needs for participation, creativity, community and idealism.

This sea change is why, according to Kotler, the future of marketing lies in creating products, services and company cultures that inspire, include and reflect the values of target customers. It also meant that every transaction and touchpoint interaction, and the long-term relationship, needed to carry the organization’s unique stamp, a reflection of the perceived value represented to the customer.

Kotler picked up a theme that was articulated in the 2007 book, “Firms of Endearment.” Authors Jagdish N. Sheth, Rajendra S. Sisodia and David B. Wolfe called such organizations “humanistic” companies, i.e. those which seek to maximize their value to each group of stakeholders, not just to shareholders. As they state, right up front (Chapter 1, Page 4):

“What we call a humanistic company is run in such a way that its stakeholders—customers, employees, suppliers, business partners, society, and many investors—develop an emotional connection with it, an affectionate regard not unlike the way many people feel about their favorite sports teams. Humanistic companies—or firms of endearment (FoEs)—seek to maximize their value to society as a whole, not just to their shareholders. They are the ultimate value creators: They create emotional value, experiential value, social value, and, of course, financial value. People who interact with such companies feel safe, secure, and pleased in their dealings. They enjoy working with or for the company, buying from it, investing in it, and having it as a neighbor.”

For these authors, a truly great company is one that makes the world a better place because it exists. It’s as simple as that. In the book, they have identified about 30 companies, from multiple industries, that met their criteria. They included CarMax, BMW, Costco, Harley-Davidson, IKEA, JetBlue, Johnson & Johnson, New Balance, Patagonia, Timberland, Trader Joe’s, UPS, Wegmans and Southwest Airlines. Had the book been written a bit later, it’s likely that Zappos would have made their list, as well.

The authors compared financial performance of their selections with the 11 public companies identified by Jim Collins in “Good to Great” as superior in terms of investor return over an extended period of time. Here’s what they learned:

  • Over a 10-year horizon, their selected companies outperformed the “Good to Greatcompanies by 1,028 percent to 331 percent (a 3.1 to 1 ratio)
  • Over five years, their selected companies outperformed the “Good to Great companies by 128 percent to 77 percent (a 1.7 to 1 ratio)

Just on the basis of comparison to the Standard & Poor’s 500 index, the public companies singled out by “Firms of Endearment” returned 1,026 percent for investors during the 10 years ending June 30, 2006, compared to 122 percent for the S&P 500—more than an 8 to 1 ratio. Over 5 years, it was even higher—128 percent compared to 13 percent, about a 10 to 1 ratio. Bottom line: Being human is good for the balance sheet, as well as the stakeholders.

Exemplars of branded customer experience also understand that there is a “journey” for customers in relationships with preferred companies. It begins with awareness, how the brand is introduced, i.e. the promise. Then, promise and created expectations must at least equal—and, ideally, exceed—real-world touchpoint results (such as through service), initially and sustained over time, with a minimum of disappointment.

As noted, there is a strong recognition that customer service is especially important in the branded experience. Service is one of the few times that companies will directly interact with their customers. This interaction helps the company understand customers’ needs while, at the same time, shaping customers’ overall perception of the company and influencing both downstream communication and future purchase.

And, branding the customer experience requires that the brand’s image, its personality if you will, is sustained and reinforced in communications and in every point of contact. Advanced companies map and plan this out, recognizing that experiences are actually a form of branding architecture, brought to life through excellent engineering. Companies need to focus on the touchpoints which are most influential.

Also, how much influence do your employees have on customer value perceptions and loyalty behavior through their day-to-day interactions? All employees, whether they are customer-facing or not, are the key common denominator in delivering optimized branded customer experiences. Making the experience for customers positive and attractive at each point where the company interacts with them requires an in-depth understanding of both customer needs and what the company currently does to achieve that goal, particularly through the employees. That means companies must fully comprehend, and leverage, the impact employees have on customer behavior.

So, is your company “human”? Does it understand customers and their individual journeys? Are customer experiences “human” and branded? Is communication, and are marketing efforts, micro-segmented and even personalized? Does the company create emotional, trust-based connections and relationships with customers? If the answer to these questions is “YES,” then “being human” becomes a reality, the value of which has been recognized for some time, and not merely as a buzz-concept.

Manage Your Team, and Answer Important Questions While You Travel

Did you realize that you have a way to communicate with your team right in your back pocket? True or False: Only wealthy companies use video and film production? Statement: It’s impossible to be two places at once. Did you realize that even while you’re traveling you could answer questions, and keep your team informed? If you travel heavily for your company and are an executive or leader, this article will help you by offering some new communication solutions

Did you realize that you have a way to communicate with your team right in your back pocket? True or False: Only wealthy companies use video and film production? Statement: It’s impossible to be two places at once. Did you realize that even while you’re traveling you could answer questions, and keep your team informed? If you travel heavily for your company and are an executive or leader, this article will help you by offering some new communication solutions.

The types of video production companies use now vary considerably. Anything from sales presentations, corporate communications, customer service, tutorials and internal communications are media treasures.

These types of videos can be there to serve both the client and your employees. The other forms of video production include staff training, employee orientation, safety procedures, promotional video and financial reports. The key point to remember here is they can be viewed on several different devices—iPad, computer, and, of course, mobile phone.

Video can be used as a heavy-duty communication machine even while you’re traveling the tundra. Utilizing video platforms like Skype, Livestream and Google+ Hangouts will put you in front of your employees so you can continue to disperse your companies propaganda, even while miles away. This allows your employees to be not only informed, but to have an emotional connection to you as if you are still present, even when absent.

Some types of video production can cost next to nothing to create. For example, Instagram, Vine, Skype, Facetime and Google + Hangouts. These are simple to use and can be viewed individually or as a group; which allows you to continue to lead your team even if it’s in a busy airport. These platforms give you the ability to promulgate to a tailored crowd. You can choose to speak to one person, several or the entire staff.

The other benefit here is that you can be in several places at once. I bet you wish you could clone yourself so that you can be everywhere at the same time. With telegenic devices, you are able to be in multiple locations, which can save you time and money.

HR Professionals are finding these assets invaluable to effectively inform their troops and train their employees on important factors such as safety, company policies and procedures. The same message is given each time to each individual, allowing more control over the communiqué distributed among the new and existing hires.

While any of these types of television programs would be effective and work, here are some more advanced ideas for the use of video in communicating to your present crowd. Use a thumbnail video in your email signature. This could be a general message from the CEO, President or possibly an HR Supervisor.

One of the best devices that I’ve seen this used with is a USB stick. Placing your corporate mini movie on this type of device is sure to get people interested in what’s on it. We can’t help but be curious when a gadget is in the palm of our hands.

What’s the best way to get started by utilizing these simulcast luxuries? This would be some solid hypothesis; Ask the people that have the most questions directed to them at your company. Have them write up to 10 topics that these videos could address. Do this with the answers to those questions, and Voila!, you have a script created for your first production.

Next, decide who will be your audience. Directly address them individually or within the group. Make the dialogue interesting, as if you were right there in the same room—because technically you are.

Then decide what the best way to distribute this message should be. Should it be Live? Do you want to ensure that they will see it? Do you want this to be measurable and traceable? Consider the style as well. Do you want it to be comical, motivational or serious in nature? A financial report to your stock holders may need to be handled with kid gloves, while a safety video that is going to be viewed by the group and needs to be remembered, and comedy can often be more memorable, even on serious subjects.

I hope that this discussion has sparked a few new ways for you to interface with your peers. If anything, perhaps it’s helped answer the question of how can you communicate with the team while abroad? Either way, I’m sure you will remember that the use of video isn’t always obvious but still effective.

Any further discussion or ideas to be added can be sent to me at egrey@hermanadvertising.com.

5 Reasons for ‘Why Now?’

With the lingering, precarious feelings about the state of the economy, along with plenty of concerns about the business climate in general, I find that there is always a great deal of hesitation around beginning any kind of large- or even medium-complexity project focused on data. In many instances, the general consensus from senior management and even ancillary groups outside of the marketing and data management groups is the company has been doing fine with everything just the way it is, with plenty of “If it ain’t broken we don’t need to fix it” or “Let’s focus on increasing revenue this quarter first” pushback to proposed projects.

With the lingering, precarious feelings about the state of the economy, along with plenty of concerns about the business climate in general, I find that there is always a great deal of hesitation around beginning any kind of large- or even medium-complexity project focused on data. In many instances, the general consensus from senior management and even ancillary groups outside of the marketing and data management groups is the company has been doing fine with everything just the way it is, with plenty of “If it ain’t broken we don’t need to fix it” or “Let’s focus on increasing revenue this quarter first” pushback to proposed projects.

The problem with the first is, quite simply, if corporate data has been ignored, or even just on the back burner for any length of time, it is most assuredly broken. Perhaps it is not critically broken yet, but losing clarity, focus and relevancy in keeping up with the evolving goals of the organization. Bloated with obsolete or irrelevant information and systems fragmented; lagging behind on improvements and upgrades, databases become slow, unreliable and frustrating for both the front-line users and for their management teams who are looking for answers that are surely there but, unfortunately, cannot be mined with the speed and efficiency expected. Of course, when this occurs the frustrations grow and we begin to see various business groups take what pieces of data fit their responsibilities and start building and updating the silos which eventually hamper, rather than contribute to, enterprise-wide success. There is no feedback of newer and more relevant information to the main repository; there is no coordination of contact strategy or organized tempo or voice to communication. What evolves is chaos in overlapping or possibly opposing communication from different areas of the same company. It is a sure way to spur the erosion of customer respect for your products and services, along with a vision of incompetence from prospective customers confused by who you are and where you are trying to lead them.

The problem with this is most organizations will not recognize it as a problem. The groups creating the silos and working from there are perfectly happy to have their own source of whatever data they need. No hassles with requests or production queues. They are able to report the results of their efforts in isolation so management only has to see the rosiest picture. Unfortunately—and exactly because of the isolation factor—little if any sales, lead generation, updates or contact changes ever make it back to the primary data warehouse and the remainder of the organization is not able to share in the refreshed information that will help their efforts, as well.

The cure for that, and the answer to the “Let’s wait” feedback, is for the marketing and IT leaders to jointly be prepared with a roadmap of “Why now” proposals for the value of organizational refresh and consolidation that can resonate across the enterprise.

1. Cost containment: With a single platform view of customers and prospects, with vigorous updates and enhancements from every touchpoint, campaigns are able to be streamlined, based on full knowledge of RFM. Consolidation of duplicated software and vendor charges that are being utilized across multiple silos will allow every department to free up much-needed budget space.

2. Increased Productivity: With budget room made available, allocations can be shifted to incorporate the speed and upgrade solutions within the existing resources. Increasing both throughput and volume while optimizing manpower performance and efficiency.

3. Reducing Risk: Utilizing a centralized team to oversee data operations ultimately reduces the risk and exposure caused by violations of corporate policies, governmental regulations and industry best practices. Contact preferences are able to be maintained and shared across all corporate business units on every channel.

4. Customer Journey: No responsible marketer deliberately sets out to overwhelm, annoy or even spam existing customers and prospects. Without centralized deployment and tracking, however, you will be doing exactly that, oblivious to the damage you are doing to your reputation.

5. Increased Revenue: Removing all of the risks, poor decisions and duplication of effort alone will create a much more streamlined approach to providing all of the proper and most effective strategies for finding, developing, nurturing and hopefully establishing long-lasting client relationships. Consumers, regardless if in a B-to-C or B-to-B environment, buy from companies they respect and trust. Revenue grows and is sustained just as steadily by the quality of your relationship with customers as it is by the quality of your products and services.

Healthy, professional relationships and contact strategy are the value-added-benefits you can quantify and demonstrate to even the most ardent rebels across the company. Use the data you have readily available in your system to show every business unit leader the facts. Prove to them the upside potential that a solid, professional and, most of all, highly reliable marketing automation or CRM solution can provide in boosting revenue year over year. Stealthily, but honestly turn the naysayers into advocates with clean and simple facts.

Do that, and the conversation shifts from “Why Now?” to “How Soon?”

The Meanness of Strangers

The link between sales and marketing is undeniable. So I think it’s time that working adults accept that their communications behavior—whether in email, on the phone or online—is a direct reflection of the brand they’re representing. And if you’re rude to me, I don’t want to do business with you—ever. I first noticed bad behavior in an email

The link between sales and marketing is undeniable. So I think it’s time that working adults accept that their communications behavior—whether in email, on the phone or online—is a direct reflection of the brand they’re representing. And if you’re rude to me, I don’t want to do business with you—ever.

I first noticed bad behavior in an email. It was from a person I didn’t know, so I didn’t feel compelled to open it or read it. And, if I did, I certainly didn’t feel that I had to acknowledge receipt by responding, even to express my disinterest in the product/service.

I guess I deleted his emails from my in-box several times, because his fifth attempt got a little contemptuous.

“I made you a pretty incredible offer on a really good video 3 or 4 times over the past
couple of months, but you never responded …” he complained, “I NEED TO HEAR BACK FROM YOU NOW.” (Yes, it was all in caps).

I admit I hit the “Delete” button without a moment’s hesitation. I resented being shouted at by this stranger. And needless to say, if I needed to produce a really good video, this would NOT be my go-to guy.

The next event was a little more irksome. I was interested in a LinkedIn Discussion Group topic on the World’s most awarded print ad. By the time I joined the discussion, 55 people had already commented before me, and the comments had turned to the relationship between ad creativity and sales. Participants were musing as to whether great creative (as defined by all the awards it won) should be considered great if it doesn’t generate sales for the product.

As an ambassador for the DMA’s Echo Awards, I chimed in that the Echo Awards celebrate the combination of strategy, creative and results. And in my book, it’s the most meaningful award because it acknowledges the difficult and creatively brilliant ways marketing folks are able to position a product in a meaningful way that drives measurable results. I thought it was a fairly innocuous comment, but apparently not.

One subscriber, who seemed to delight in posting negative comments throughout the discussion thread, turned his sights on me. “So … all other award shows worldwide are not ‘meaningful.’ Congratulations. You’ve just offended practically every award-winning creative on the planet. Good luck with that.”

While I have pretty thick skin, his slap across my face hurt—and considering my lighthearted comment, I thought he was way out of line. Looking at his LinkedIn profile, this guy was a freelancer … and certainly one I’ll avoid in the future.

But the worst offenders seem to be those that comment on blogs. It’s easy to log in and add a post to nearly every blog on the web, including this one. But why do the nastiest comments always come from those who log in anonymously? I can understand that you may disagree with me, or think my post irrelevant or incompetent. But if you don’t have anything nice to say, do you get a lot of satisfaction from adding a cranky comment anonymously?

We know that email has created a passive aggressive form of communication. After all, it’s easy to write a snide remark and hit “send” without having to confront the recipient face-to-face. The difference is, when you send me an email, I know who you are. I can pick up the phone and respond … or run into you at a conference or social event. Net-net, we can seek to resolve our differences, or at least have a civil discussion about them.

But an anonymous, negative post always strikes me as a coward’s way out. As a result, I don’t respond with a follow-up comment … and I’m always grateful when one of my readers’ leaps to my defense.

So go ahead and let me know what you think about this blog post. And don’t be afraid to let all the readers know who you are.

Augmented Reality, Wearable Electronics and the Postal Service’s Future

In my previous blog post, I commented on the United States Postal Service and its announced plans for five-day delivery, discussing the importance of hard-copy communication and a commitment to deliver such communication on a daily basis. In extending this commentary, I claim no nostalgia for daily mail delivery, rather simply recognition that such communication has its unique position as a vehicle for superb brand engagement. The Postal Service is not standing still in the digital age.

In my previous blog post, I commented on the United States Postal Service and its announced plans for five-day delivery, discussing the importance of hard-copy communication and a commitment to deliver such communication on a daily basis. In extending this commentary, I claim no nostalgia for daily mail delivery, rather simply recognition that such communication has its unique position as a vehicle for superb brand engagement.

The Postal Service is not standing still in the digital age.

Last October, when the Postal Service announced its intention to raise rates this past January, it also announced its schedule for postage promotions through 2013. And in the mix is a bevy of technology-driven, multichannel “positioning” of direct mail that leverages mobile and interactive channels.

Discounts
Look at this selected line-up from the USPS promotion calendar:

  • March-April 2013: Mobile Coupon/Click-to-Call
    This promotion seeks to increase the value of direct mail by further highlighting the integration of mail with mobile technology in two specific ways. First, the promotion would encourage mailers to integrate hard-copy coupons in the mail with mobile-optimized platforms for redemption. Second, the promotion will drive consumer awareness, and increased usage, of mail containing mobile barcodes with “click-to-call” functionality.

    Provides a 2-percent discount on the qualifying postage for First-Class Mail and Standard Mail presort or automation letters, postcards and flats sent during the established program period that include a two dimensional mobile barcode inside or on the mailpiece. The barcode must either lead the recipient to a coupon that can be stored on a mobile device, or enable the recipient to connect by telephone to another person or call center via a mobile device.

  • August-September 2013: Emerging Technology
    This promotion is designed to build on the successes of past mobile barcode promotions by promoting awareness of how innovative technology—such as near-field communication, augmented reality and authentication—can be integrated with a direct mail strategy to enhance the value of direct mail.

    Provide a 2-percent discount on the qualifying postage for First-Class Mail and Standard Mail presort or automation letters, postcards, and flats that are sent during the established program period and include print that allows the recipient to engage in one of the following:

    • an augmented reality experience facilitated by a smartphone or computer,
    • authentication of the recipient’s identity, or
    • an experience facilitated via Near Field Communication.

To receive the discount, mailers must comply with the eligibility requirements of the program.

  • November-December 2013: Mobile Buy-it-Now
    This promotion will encourage mailers to adopt and invest in technologies that enhance how consumers interact and engage with mail, and demonstrate how direct mail can be a convenient method for consumers to do their holiday shopping.

    Provides a 2-percent discount on the qualifying postage for First-Class Mail and Standard Mail presort or automation letters, postcards, and flats which include a mobile barcode inside or on the mailpiece that facilitates a mobile optimized shopping experience. To receive the discount, the qualifying mail must be sent during the established program period by mailers that comply with the eligibility requirements of the program

Augmented Reality
Next, in January during the media-frenzy of Consumer Electronics Show in Las Vegas, this Venture Beat post appeared, reporting on a USPS mobile app that uses “augmented reality” (subject of the August-September 2013 promotion) to integrate direct mail promotions with interactive programming on a mobile device and give recipients an enhanced digital experience with the mail piece. In augmented reality, a physical ad and an interactive ad comes together by way of an app, developed by Aurasma, rather than a QR Code. Augmented reality can be applied to any visual cues.

The apps keep coming. Associated Press then reported that Val-Pak, the company that sends blue envelopes stuffed with coupons, also wants consumer households to save money while driving. Valpak has partnered with Roximity, a Denver-based app developer, to bring coupons and deals to drivers of newer-model Fords and Lincolns who use the voice-controlled Sync AppLink connected to their mobile phone. The app allows people to hear about personalized deals from stores, restaurants and other businesses as they drive. The “coupon” appears on the driver’s smartphone and can be redeemed once the car is stopped.

Wearable Electronics
And how can you keep it all connected—the mail, the apps, the augmented reality, the mobile coupons? Why through wearable electronics, of course, article courtesy of The Atlantic Wire. The fashion verdict may be out, but the Postal Service is clearly thinking hard on how to keep mail relevant in an increasingly digital—and mobile—age.

I still maintain that the six or seven direct mail pieces I receive a day are precious real estate. They represent a tiny portion of the thousands of advertisements and brand “touches” I’m exposed to each and every day. Yet this is advertising that is largely targeted, and one with which I have a tactile experience—reading, responding, recycling as I deem appropriate. This is a powerful consideration, one that I certainly pay closer attention to. Will I be running to the app store to integrate this experience with my smartphone? Not anytime soon, but a hoodie for my iPod, ThinkPad and Samsung to tote and plug into would be nice.

5-Day Delivery: Cost Cutting or Congressional Gambit?

As a citizen and a close follower of postal goings on, I realize the United States Postal Service and Postmaster General Patrick Donohoe ultimately are not to blame for the 5-Day Delivery announcement which transpired on February 6. Postal customers, labor unions, direct marketers and Americans in general have reasons to be angry—or at least very concerned—as to what is really going on here

As a citizen and a close follower of postal goings on, I realize the United States Postal Service and Postmaster General Patrick Donohoe ultimately are not to blame for the five-day delivery announcement which transpired on February 6. Postal customers, labor unions, direct marketers and Americans in general have reasons to be angry—or at least very concerned—as to what is really going on here.

We all know that it is Congress and the White House—as a whole, not any lawmaker in particular—that largely caused the Postal Service’s recent default and current fiscal mess. Their inability or unwillingness to stop the mandating of 75-year pre-funding of USPS retiree benefits, and the subsequent raiding of those funds for the federal government’s own spending sprees elsewhere, deserves much of the blame.

Cost-cutting and diminishing services to U.S. citizens have been forced on the Postal Service, because a “fiscal cliff” already has arrived at L’Enfant Plaza.

Yes, there are other macroeconomic issues in play at the Postal Service—the digital migration of First-Class Mail, electronic payments and the Great Recession’s most recent effects and after-effects, for example. All the same, forcing such draconian budget mandates on the Postal Service is a serious miscalculation that was (unfortunately) included in the 2006 postal reform law. No other federal agency is held to the same pre-funding benchmark, and even fewer responsibly financed and accountable private pension schemes (there are still a few around) ever look to seven decades to the future.

This needed fixing five years ago, when the economy started to teeter and such rosy views of postal finances quickly began to sour. Here we are in 2013, and we’re still waiting for Congress to act.

The White House hasn’t been helpful either.

Now we’re faced with five-day delivery come August—and we’re left wondering if it can be stopped, reversed, prevented or mitigated, even if Congress and the White House were able and wished to intervene.

Will the reported $2 billion in said-savings really transpire—and make a difference? Has anyone considered the economic trade-offs? We all know many weekend advertisers that relish a spot in the mailbox on Saturdays—and this generates a lot of commerce. Can it all be simply pushed to a Friday?

The reality is that the Postal Service, as much as it seeks to manage itself as a business, remains a quasi-public institution, a part of our Constitution, and subject to both cycles of Congressional meddling and Congressional relief, the latter now being in short supply.

It’s quite amazing that the Postal Service is as efficient and as affordable as any postal service in the world, public or private—delivering communications to our homes six days a week. Still, it must deal with political representation that well may be intended, but which only seems to punt from crisis to crisis—or worse, after each crisis has rendered its most devastating effects.

Here we are in a downward cycle … again. This time our daily mail—and direct mail advertising along with it—is being expedited, by Congress, to the dilemma faced by dying daily newspapers in stagnant metropolitan markets—going, going, gone, at least on Saturdays.

Except this is our Postal Service, belonging to the citizens of the United States on paper. Is this squeeze on hardcopy communication inevitable—and our only choice? Or will some in Congress and the Obama Administration wake up to the fact that the Postal Service is a secret weapon for many brands (and political candidates), as well as a service to its citizens, and, therefore, do all their Constitutional best to ensure a viable future here?

By the way, I LOVE this recent piece in Esquire—required reading for our lawmakers: http://www.esquire.com/print-this/post-office-business-trouble-0213?page=all.

2012 DMA ECHO Green Marketing Award Goes to: Vestas

The Green Marketing Award is not about marketing environmental products, services or causes. Rather, it’s about how efficiency and sustainability—and profitability—are incorporated in a successful marketing campaign. This year’s winner was Vestas Wind Systems (Arhaus, Denmark). The business-to-business campaign, targeting large-company executives at 23 Fortune 1000 firms, was remarkable in how it used market research, social media, direct mail and digital media to provide a truly personalized campaign to convince companies to consider wind energy as a power source for their operations.

During the summer, I had an opportunity to serve as a judge on a panel to select the Direct Marketing Association‘s special ECHO Green Marketing Award winner for 2012. That award was presented recently at DMA’s annual conference in Las Vegas, DMA2012.

The Green Marketing Award is not about marketing environmental products, services or causes. Rather, it’s about how efficiency and sustainability—and profitability—are incorporated in a successful marketing campaign. This year’s winner was Vestas Wind Systems (Arhaus, Denmark). The business-to-business campaign, targeting large-company executives at 23 Fortune 1000 firms, was remarkable in how it used market research, social media (InMail via LinkedIn), direct mail (custom Bloomberg BusinessWeek magazine wraps) and digital media (EnergyTransparency.com) to provide a truly personalized campaign to convince companies to consider wind energy as a power source for their operations.

Vestas tapped two research firms, Bloomberg and TNS Gallup, to complete two studies. One was a Corporate Renewable Energy Index that reported on corporations’ energy consumption, and the second was a Global Consumer Wind Study, that examined consumer demand for renewable energy. The surveys documented that consumers want products made with wind energy, and that corporations are eager to source more renewable energy.

Working with its agency partner, Vertic Inc. (New York, NY), the campaign targeted 419,000 employees and 300 top executives inside the 23 companies. Audiences were segmented by geography, seniority, work role and industry. Opinion leaders also were targeted. Using InMail, LinkedIn company-specific banner ads and the magazine wraps, traffic was generated to 600 individual URLs associated with EnergyTransparency.com where an executive could inspect energy consumption trends in their company and industry sector, along with customer brand preference information relevant to the company.

Overall, the campaign cost less than $1 million, and generated more than 10,000 site visits with average visit lasting more than 7 minutes on average—with 80 percent of opinion leaders visiting the site, and 30 percent of top executives targeted. InMails achieved at 13.37 percent open rate and 5.78 percent conversion rate. Business sales resulting from the campaign were not disclosed.

The judges welcomed seeing 1:1 communication, effective personalized used of social media, magazine wraps, banner ads, and successful delivery of brand interaction among C-suite executives—always a tough challenge. On the sustainability front, judges welcomed use of existing communications channels—magazines already subscribed to, social media networks where professional profiles already are present—to provide messaging, using little in the way of new production materials to convey relevant information. Overall, the campaign focused on energy use, so what better way to reach executives efficiently.

Global, integrated print & digital, b-to-b … congratulations to Vestas Wind Systems and Vertic!

Resources:
This Year’s DMA International ECHO Green Marketing Award Winner (see page 14):
http://dma.seqora.com/prod/Desktop/page.aspx?id=25&mode=SP&name=EchoAwards2012

Creepy Marketing and Social Media: How to Scare Away Your Customers for Good

Halloween is around the corner, so for this week’s post I wanted to turn to a topic that is most definitely apropos: creepy marketing. No, we’re not talking about marketing for Halloween. What’s creepy marketing, you might ask? Creepy marketing is what happens when personalization goes horribly wrong—when good intentions morph into, well, disturbing communication that has the opposite of its intended effect and, instead of helping a brand push a product or service, sends recipients running for the hills.

Halloween is around the corner, so for this week’s post I wanted to turn to a topic that is most definitely apropos: creepy marketing. No, we’re not talking about marketing for Halloween.

What’s creepy marketing, you might ask? Creepy marketing is what happens when personalization goes horribly wrong—when good intentions morph into, well, disturbing communication that has the opposite of its intended effect and, instead of helping a brand push a product or service, sends recipients running for the hills. With the rise of social media and its nearly universal adoption by marketers, it’s high time that marketers learn what not to do when they engage with their customers and prospects.

Fact is, marketers use personalization because it works extremely well. How well? Generally, the more you personalize a message the better it will perform. In a landmark study by Banta Corp. on multichannel marketing, it was reported that incorporating three or four personalized elements in an email boosted its clickthrough rate by 63 percent, and seven or more elements lifted it by an amazing 318 percent!

Wow! With stats like these, you can see why marketers of all stripes have been jumping on the personalization bandwagon like it’s going out of style. During the past few years, we’ve witnessed an explosion of personalized content across the marketing spectrum—direct mail, email, SMS, landing pages … all spiced up by including personalized content or messaging. Out of all of this personalized communication, some has been good, some has been great … and some has been downright creepy.

Last year, I put out a post titled “Creepy Marketing—When Database Marketing Goes Awry,” in which I defined creepy marketing as “if it looks creepy and feels creepy, then it probably is creepy and you shouldn’t do it.” I then go on to point out that an actual example of creepy marketing includes writing out a customer’s name along with other personally identifiable information anywhere visible to the general public. I also include displaying a customer’s age, marital status or medical condition in marketing messaging.

Turning to social media, avoiding creepy marketing takes on a new urgency in the medium where stakes have been raised considerably. The reason why is two-fold: First, because social media involve networks of individuals with public exposure, it’s way easier to creep people out. Second, if you do offend someone on social media, then good luck handling the ensuing social media disaster. Offended parties now have the ability to let everyone on their social networks know right away just how unhappy they are—and they usually don’t hesitate to do so.

So how do you avoid creeping people out in social media? On a strategic level, a thoughtful post by Laura Horton that appeared on VentureBeat.com offers five pointers:

1. Be helpful but not pushy;

2. Be a thought leader, if you can;

3. Be careful what you say, even if you know a lot;

4. Reach out if you see active interest in your brand; and

5. Stay on top of social marketing best practices and trends.

I think this list is a good place to start. More tactically speaking, in her blog Kristen Lamb gives us five examples of social media marketing tactics that not only creep individuals out, but probably don’t work very well, either. Her list includes automatically adding people to your firm’s Facebook fan list, and sending out annoying automated promotional messages on Twitter to random people who might have tweeted about topics you think are relevant to whatever product you’re trying to push. Yuck.

Again, I think this list is a good starting point. Though of course, the possibilities for abuse by marketers are probably endless. Have you ever been creeped out by a company on social media? If so, I’d love to hear about it. Please let me know in your comments.

Happy Halloween and happy marketing!

—Rio

Email to Repair Broken Customer Relationships—What J.C. Penney Got Wrong

Email is one of the more personal forms of electronic communication. Notes from friends and family are co-mingled with marketing messages. This makes it an excellent vehicle for repairing broken relationships. When done well, email apology letters drive sales in addition to mending relationships, but can they save a company from a death spiral? The management team at J.C. Penney is hoping that the recent note from CEO Ron Johnson will reverse (or at least slow down) the sales free fall for the last two quarters.

Email is one of the more personal forms of electronic communication. Notes from friends and family are co-mingled with marketing messages. This makes it an excellent vehicle for repairing broken relationships.

When done well, an email apology letter drives sales in addition to mending relationships. A few years ago, a client had a system failure that resulted in delayed shipments of holiday orders. An email was sent to every customer who had placed an order that season (even the ones who had already received their orders.) The message explained what caused the problem, apologized for any inconvenience, promised to expedite shipments of remaining orders, and offered a gift certificate for future orders.

The immediate response was so positive, the President quipped, “We should plan a problem once a quarter so we can apologize!” The revenue from the apology letter more than covered the expedited shipping. Furthermore, the relationship between customer and company became stronger. The people who received the letter consistently outperformed their counterparts who didn’t get one in both sales and lifespan.

Personal letters help salvage relationships but can they save a company from a death spiral? The management team at J.C. Penney is hoping that the recent note from CEO Ron Johnson will reverse (or at least slow down) the sales free fall for the last two quarters. In May, the first quarter results revealed a 20.1 percent drop in revenue because shoppers didn’t like the new pricing and marketing strategy. Second quarter was worse with another revenue drop of almost 23 percent. Traffic was down 12 percent.

When things are going south at this rate, quick action is required. Johnson admitted to pricing and marketing mistakes when speaking with investors, but his letter to customers is more like an introduction than an “Oops! We goofed.” The letter reads:

Dear valued customer,

You’ve probably heard about recent changes at jcpenney. I’m honored to
say that I’m one of them.

I’m Ron Johnson, and I came here because I have a lifelong passion for
retailing—and jcpenney has been one of America’s favorite stores for
over a hundred years. My goal is to make jcpenney your favorite place
to shop.

I’ve asked our team to innovate in many ways—to help you look and live
better—and to make shopping more enjoyable.

While you will see many changes, you can rest assured that we’ll never
lose sight of our founder’s values. When James Cash Penney built his
first retail stores over a century ago, he called them “The Golden
Rule,” because treating customers with respect was his highest
priority.

One of Mr. Penney’s guiding principles was offering low prices every
day—instead of running a series of “special sales.” We’re honoring Mr.
Penney by returning to his pricing policy, so you’ll find great prices
every time you visit.

We’ve also made it easier to return items, we’re bringing in more
great brands, adding excitement to our presentation, offering free
back-to-school haircuts for kids, and much more.

Basically, we’re putting you and your family first, trying to give you
new reasons to smile every time you visit a jcpenney store.

You’ll see many innovations in the coming months, and I’ll keep you
informed in a series of letters like this. I hope you’ll let me know
how we’re doing, and share any ideas that could help us do better.
Just click the link below to send me a note.

On behalf of the jcpenney team, thank you for shopping with us.

Ron

I’d like to hear from you.
View email with images.

*Please be advised that any information disclosed or submitted will
become jcp property and may be used in public communications.”

The timing of this letter is off. It should have been sent prior to the pricing changes. Now is the time for J.C. Penney to be open about the issues and invite people to share thoughts without the threat that they “may be used in public communications.”

Email messages designed to repair relationships are different from marketing emails. They have to be simple and personal. The J.C. Penney email is designed to look like a letter from the CEO, as you can see in the first picture in the media player at right.

Unfortunately, it looks like the second picture in the media player when it lands in the inbox. The letter is an image instead of text. It isn’t very inviting to a loyal customer much less an unhappy one.

Do’s and don’ts for creating personal relationship mending messages:

  • Do personalize the name. “Dear valued customer” says “I don’t know who you are.” The individual who shared this email with me has been a loyal catalog shopper and had a J. C. Penney credit card. They should be on a first name basis.
  • Don’t use a ho-hum subject. You have to catch people’s attention in a flash. “A letter from our CEO” doesn’t do it. Wouldn’t “Our CEO wants your advice” be better?
  • Do identify the problem and take responsibility for it. “Oops! We goofed!” followed with an explanation and sincere apology is the first step to mending the relationship. If the recipient doesn’t feel your sincerity, additional damage is done.
  • Don’t limit responses by qualifying. Mr. Johnson asks for feedback and then states that the information shared may be used in public communications. Some apology emails offer a discount based on a specific order size. Relationship mending emails have to do two things: Take responsibility and offer some form of restitution. A discount is a promotion. Basing it on a dollar amount is adding insult to injury.
  • Do use text-only emails. A picture paints a thousand words and most of them send marketing signals and awaken spaminators. The purpose of relationship building emails is to restore the relationship. This won’t happen if the email goes to spam or looks like a bunch of boxes with red X’s.
  • Don’t ever forget that relationships with customers are a privilege not a right. When you are truly grateful for the opportunity to serve your customers, it resonates in your messages. Make sure that your marketing team (including the copywriter) has the right perspective when creating messages.