Why Brand Love Is Just Not True Love for Marketers

Just like in our personal relationships , we cannot take brand love and loyalty for granted among our customers. We need to find ways to keep them “enchanted” enough to tell their friends about us, share our incentives and offers to their circles, and stay positive when it comes to conversations about our brand.

The movies I remember most from my childhood all centered around finding that “true love” and living happily ever after, as devoted, loyal spouses that forever tingle at the thought of each other. You know those movies, like “The Princess Diaries,” “Enchanted,” and “Sleepless in Seattle.”

Years later, it became forever clear that “true love” was really just another Hollywood notion to keep people dreaming, and watching more romance movies. Not because true love cannot be found, but because there really is not just one person for every person here on earth. At least, that’s not often the case.

Yet somehow, brands jumped onto the trend of forming brand love with customers, believing they could achieve lifelong loyalty and happily ever after fans. Not.

No, I am not a skeptic that love does not exist and cannot last. But I am a realist when it comes to the ethereal goals of marketers today. The reality of forever and true brand love is right up there with the likelihood that my favorite love flick, “Enchanted” is based on a true story.

Why?

Think about it. Is there a brand you love so so so much that you would never ever stray? And you would take a vow to remain loyal “until death do you part” and even “in sickness and health?” which in the business world is failed expectations, higher prices, faulty products, and such. Not likely.

In every category and in every  market, customers have many options of suitors vying for their attention, time, money, affection, and loyalty. And choosing a brand based on what you valued at a given time in the purchase process or phase of your life is not something you consider as permanent, no matter what the future brings. It’s just a purchase that works then and now, kind of like high school dating works for teenagers, and most often those relationships change over time.

While love for brands is certainly fleeting, it does not mean marketers should not be focused on generating as much affection for as long as we can among every customer we are fortunate enough to have.  It means we need to look at things a little differently.

For example:

  1. Look at the customers’ lifetime value differently. Don’t just focus on securing sales for as long as they are viable in your category. Look at their referral value as that is where their exponential potential comes from.
  2. Engage in referral campaigns not just loyalty campaigns. Reward customers for the value they bring you from new customers, not just their own transactions. This way you are preserving your revenue stream as they slow down and eventually move on.
  3. Pay attention. Monitor offers and incentives offered by other suitors. What new appeal do they have that you don’t offer?  Find ways to offer the same but in your own style.

Just like in our personal relationships , we cannot take brand love and loyalty for granted among our customers. We need to find ways to keep them “enchanted” enough to tell their friends about us, share our incentives and offers to their circles, and stay positive socially online and offline when it comes to conversations about our brand. Reputations last longer than most customers ever will so communications, nurturing, and keeping respect and admiration at the top of each customers’ minds will set us up to secure the next generation of customers.

How the Right Data Technology Can Fuel Your Organic Sales Growth

We’re all on a quest for organic sales growth. We all want to find ways to increase our conversion rate, improve our customer lifetime value, expand into adjacent markets, and launch new products successfully.

We’re all on a quest for organic sales growth. We all want to find ways to increase our conversion rate, improve our customer lifetime value, expand into adjacent markets, and launch new products successfully.

The problem is there are more ideas out there than we have time or money to implement. Do we try to target a fresh audience on LinkedIn, or do we invest in developing a new events business? Do we revamp our content marketing strategy to improve our conversion rates, or do we get into user experience redesign to help retention? With so many good growth ideas — and simultaneously so much pressure to grow our businesses — it can get stressful.

The sort-of good news is that data can help us optimize our decision making, so we can get the most bang for our buck with our limited resources. But here’s the rub: For most publishers, data is all over the place. It’s housed in every system under the sun, from the cloud to Excel spreadsheets to the old CFO’s hard drive to who knows where else.

Data is hot right now, so you might be panicking about the scattered state of data within your own organization. You might even feel tempted to go out and license the latest technology ASAP — maybe a CDP, DMP, or CRM.

Not so fast! If you take nothing else away from this article, remember this: Don’t spend a dollar on technology until you have a plan.

Now, I’m not saying don’t buy technology. These customer data tools are essential for leveraging one of our greatest assets, namely, a lot of information about our readers and customers. I’m saying approach this investment strategically. After all, a large technology investment that flops can be a fireable offense.

Where Do I Start?

If you’re going to spend money on technology, it has to be coupled with a strategy for either getting new customers or keeping existing customers.

Data technology can empower organizations in their quest for new customers in a number of ways. You can use data tools to evaluate the ROI of various marketing and sales channels to get more customers per dollar of overall marketing/sales spend.

Data can help you understand which content and actions reduce the sales lead time. Knowing what worked with your old leads enables you to move new ones down the funnel more quickly, and it makes life easier for your sales and ecommerce teams. Not only that, data can help you identify the predictors of a quality lead versus a waste-of-time lead (what we like to call a whale versus barnacle) so that you’re only sending marketing-qualified leads to your sales team in the first place.

Understanding various segments of your audience — otherwise known as personas or target audiences — can help you identify the groups that really jibe with your value proposition, so you can find the easiest markets to target. Plus, tracking how these segments react to various pricing, discounting, and bundling offers throughout their journey allows you to offer the right product to the right prospect at the right time.

When it comes to keeping customers, data technology can help you understand behaviors that lead to renewal or upsell versus behaviors that lead to churn. Understanding these actions and behaviors can also clue you into the things that customers love (and what they don’t like so much), so you can provide a better customer experience that leads to greater upselling and more repeat sales. Plus, you can create new products and services that suit your best customers’ needs to drive new revenue streams and encourage even greater retention rates.

How Do I Choose the Right Tech?

Selecting the right technology for your business starts with setting specific and measurable goals – and it’s a good idea to put them in writing. Once you do that, you can start looking at technology solutions that will help you achieve those goals.

If you implement a CDP, for example, what are you expecting to see? Maybe it’s a 20% increase in traffic, 30% increase in new business, and 15% increase in retention rates. Do the math to calculate the economic benefit of these results, and compare that to the cost of investing in the data technology. If you’re not happy with the ROI, either keep brainstorming to find new ways to drive revenue, or wait until you see a clearer path to ROI before making the investment.

How Do I Screen Vendors?

Just as important as the technology itself is the company and team behind it. When you’re considering your options, you don’t want a free dinner. You don’t want a fancy PowerPoint. You don’t want a flashy demo.

You want to be able to hand your strategy off to the vendor and have them show you exactly how their solution will deliver your desired results. How have they achieved similar results with other customers? What exactly do you need (or not need) in order to hit these goals?

If the vendor’s sales team doesn’t have the acumen to answer these questions, buyer beware. It may be a sign that the technology is a shiny new object, not something that will deliver ROI for your organization.

What Else Do I Need to Consider?

Don’t expect data technology implementation to be an overnight success. Think of it as a project to take on over a 12-month time horizon. The first step is a small one, and that’s listening to the right data. From there, you can analyze the data you’ve been listening to, and then, finally, take action on those insights.

It’s also important to remember that technology does not use itself. You need to properly staff and educate your team to act on the insights generated by the data tool you choose.

Implementing your new system will require a lot from the people in your organization. They need to learn how to use the new platform, spend time inputting data, assess and analyze the results of the information they’re receiving, make recommendations to leadership on how to change the business’s approach based on analytics received from the technology, and then make those changes happen.

Data technology can do incredible things to fuel your organization’s organic growth. But an investment in new technology is just that: an investment. You wouldn’t buy a house or put money in the stock market without doing some research and laying a solid groundwork first. The same must be true for your preparations to incorporate a new technology tool into your organization. When you properly strategize for, select, and resource your investment, you’ll be well on your way to predictable organic growth.

The Return of Customer Lifetime Value

While the response tactics and ROI metrics of direct are in digital’s DNA, one measurement has been mostly overlooked: Customer lifetime value, or CLV. Now Google is bringing it back into the conversation.

Digital marketing has become direct marketing, embracing many of the tactics that made old-fashioned direct mail successful. But while the response tactics and ROI metrics of direct are in digital’s DNA, one measurement has been mostly overlooked: Customer lifetime value, or CLV. Now Google is bringing it back into the conversation.

I think the reason digital has been slow to adopt lifetime value is its focus on immediate spend and response, opt-ins and ROI. For the most part, digital has developed in the direction of programmatic: Give me what I need right now as cheaply as possible. Long-term value in digital has been measured in email subscribers and SEO rankings. These are different ways to count anonymous traffic; they don’t recognize the individual customer, let alone value the relationship.

But even as digital is becoming more programmatic, it’s also maturing. And brands that built themselves on instant gratification are finding short-term thinking is a liability in the age of customer experience.

Google Approved

In this month’s “Think With Google,” Matt Lawson, director of marketing and performance ads at Google, told marketers “Don’t get left behind: Return on ad spend is out, Customer Lifetime Value is in.” The post opens with this statement:

“To charge ahead in today’s competitive marketplace, brands must think beyond short-term, transactional gains and look toward maximizing Customer Lifetime Value (CLV). While many marketers understand this shift needs to occur, some are grappling with how to get their organizations to focus on CLV and use it to advance goals.”

In it, Lawson interviews, George Popstefanov, founder and CEO of global advertising agency PMG, who says, “If you don’t have some type of lifetime value calculation, even at a broad level, it will soon be impossible to compete.”

They go into a case study of OpenTable: The online restaurant booking app that’s been around for a few year and is now turning to customer lifetime value to measure the value of the relationship with each customer beyond one-time bookings. And of course, by focusing on high-value customers, OpenTable saw the same kind of long-term boost in ROI that direct mailers saw decades ago when they discovered the same metrics.

Signs of Digital Maturity

The “Think With Google” article is a bit self-serving, since OpenTable used Google to figure these metrics. But I think the shift reveals some very interesting things about the state of digital marketing:

  • The low-hanging fruit is plucked. I couldn’t agree more with Lawson and Popstefanov that digital marketers need to include some kind of long-term valuation in order to continue to grow and compete. But I’m surprised it took this long to get there. The beginning phase of any direct marketing model looks like a gold rush with everyone panning for the easy nuggets. But once there are more pans in the river, there’s less to go around. Those miners who invest in deep mines are the ones who continue to cash in. Metrics like CLV are the deep mines for marketers.
  • Branding is back. Customers are tuning out digital marketing that doesn’t have some positive personal association, and that comes back to branding. Even in the conversion-focused, commoditized realm of digital marketing, your brand impression plays a big part in convincing customers to pay attention to your marketing and eventually buy. The more direct the environment becomes, the more a good brand becomes the deciding factor.
  • Google wants to own customer lifetime value, too. The very fact that Google, who’s essentially has been the USPS of digital marketing, is talking about the importance of lifetime value shows they don’t intend to be victimized by a shift how consumers shop online. As digital continues to mature as a marketing channel, look for Google, Amazon, etc., to try to be in position to capitalize on every change.

In digital marketing, what’s old really is new again.

Don’t Get Lost in a Maze of Metrics

There’s a lot of data out there. More than any one marketer needs at any one time. The new frontier in using big data in multichannel marketing is learning what data you need. And that starts with clearly defined marketing objectives. The proliferation of data has caused many marketers to get caught up in minutiae that are not relevant to their objectives. With all the data that’s available, it takes discipline to focus only on the metrics that are relevant. Too often the most important metrics like cost per acquisition and customer lifetime value are overlooked while we’re looking at things like email bounce rates and time on site, which certainly have their place, but should be viewed in the context of how they can be leveraged to improve lifetime value.

There’s a lot of data out there. More than any one marketer needs at any one time.

The new frontier in using big data in multichannel marketing is learning what data you need. And that starts with clearly defined marketing objectives.

The proliferation of data has caused many marketers to get caught up in minutiae that are not relevant to their objectives. With all the data that’s available, it takes discipline to focus only on the metrics that are relevant. Too often the most important metrics, like cost per acquisition and customer lifetime value, are overlooked while we’re looking at things like email bounce rates and time on site. Those are metrics which certainly have their place, but should be viewed in the context of how they can be leveraged to improve lifetime value.

How Many Metrics Do You Need?
Every semester, more than one student in my “Advertising Research” class asks:

How many questions do we need to have in our quantitative questionnaire?

My answer is always the same, and always initially perplexing to them:

As many as you need.

The ensuing discussion is a lesson in the importance of setting clear objectives:

What are you trying to find out? Write down what you need to learn from your survey, and develop questions that will get you that information. Once you’ve done that, count the number of questions you have. That’s how many you need.

That lesson applies to marketing measurement, as well. With all the metrics that our marketing analytics platforms can provide, it’s easy to get buried in a landslide of statistics that don’t really relate to your business objectives. If your objective is lead generation at a landing page, why measure time on site? (Of course if you find that the abandonment rate on the data capture page is high, then look at time on site. You may be asking for too much information.)

Define What You Need to Know
If you’re looking to optimize your cost per lead or maximize lead volume, you’ll need to track cost per lead by individual tactic. You’ll find an interesting approach to maximizing lead volume in a previous “Here’s What Counts” post. But if you’re looking to enroll people in a CRM program and every one of your touchpoints is essential, then you may be able to skip that level of analysis. (If that idea seems foreign to you, check out this “Here’s What Counts” post that talks about a real world scenario where it wasn’t necessary to track cost per enrollment by vehicle.)

Every end has a beginning. Measurement always starts with the objectives you set at the start of a campaign. If they are clearly defined and you focus only on those metrics that are related to the objectives, you won’t find yourself buried in data that’s not relevant to measuring your success.

Marketing Success Is (Almost) All About the Data: Optimizing Customer Loyalty Behavior Initiatives

Much of what I’ve learned over the years about sales, marketing and customer service has to do with the critical importance of customer data, and how those data are converted to actionable insights. It’s how companies generate the right customer data, manage and share data the right way, and use it at the right time. It’s also how they use data to the best effect, to optimize loyalty and profitability, that makes them successful, or not, on an individual customer basis. Culture, leadership, and systems will facilitate effective information gathering, storage and application; and, CRM, CEM, ERP, or other acronyms notwithstanding, it’s impossible to be successful without having as much relevant anecdotal and dimensional content about customers as possible.

Much of what I’ve learned over the years about sales, marketing and customer service has to do with the critical importance of customer data, and how those data are converted to actionable insights. It’s how companies generate the right customer data, manage and share data the right way, and use it at the right time. It’s also how they use data to the best effect, to optimize loyalty and profitability, that makes them successful, or not, on an individual customer basis. Culture, leadership, and systems will facilitate effective information gathering, storage and application; and, CRM, CEM, ERP, or other acronyms notwithstanding, it’s impossible to be successful without having as much relevant anecdotal and dimensional content about customers as possible.

Bill Gates, often a prophet, said in “Business @ The Speed of Thought” (1999):

The best way to put distance between you and the crowd is to do an outstanding job with information. How you gather, manage and use information will determine whether you win or lose.

He might have added, had he really understood how to create and optimize customer loyalty, that what information, particularly customer-specific information, a company collects, and how they manage, share and apply it to the customer will determine how successful they can become.

One of my key sources for the uses of information gathered by customer clubs and, particularly, loyalty programs, for example, is friend and colleague, Brian Woolf (www.brianwoolf.com). Brian is president of the Retail Strategy Center, Inc., and a fountain of knowledge about how companies apply, and don’t apply, data generated through these programs.

In a Peppers & Rogers newsletter, for example, Don Peppers quoted Brian in his article, “The Secrets of Successful Loyalty Programs”:

Loyalty program success has less to do with the value of points or discounts to a customer, and much more to do with a company’s use of data mining to improve the customer experience. Top management hasn’t figured out what to do with all the information gleaned. You have all this information sitting in a database somewhere and no one taking advantage of it.

You need to mine the information to create not only relationships but also an optimum (purchasing) experience. The best loyalty programs use the customer data to improve not only promotions, but also store layout, pricing, cleanliness, check-out speed, etc.

Firms that do this are able to double their profits. When these elements are not addressed, all you’re doing is teaching the customer to seek out the lowest price.”

Tesco, one of the world’s largest retail chains, is using its customer information for a number of marketing and process initiatives. In his book “Loyalty Marketing: The Second Act,” Brian described how Tesco leveraged customer data drawn from its loyalty program to move into offering banking and financial services:

With information derived from its loyalty card and enriched by appended external demographic data, they can readily develop profiles of customers who would most likely be interested in basic banking services, as well as an array of related options, ranging from car loans and pension savings programs, to insurance for all types of needs—car, home, travel and even pets. It costs Tesco significantly less than half of what it costs a bank to acquire a financial services customer. Without a doubt, having detailed customer information gives them a competitive edge.

A few years ago, Tesco parlayed its offline customer data to also become the world’s largest online grocery and sundries home delivery service. Additionally, Tesco uses its customer data to target and segment communications to the millions of its loyalty program members by almost infinite demographic, purchase and lifestyle profiles. In his book, Brian notes that Tesco can create up to 150,000 variations of its promotion and reward statement mailings each quarter. These variations, as he says, ” … are both apparent and subtle, ranging from the product offer (i.e., which customers receive which offers at what price) to the content of the letter and the way it is personalized.”

Tesco is absolutely a company that knows how to leverage customer information. Its customer database contains not just demographic and lifestyle data, food spending in stores and on home delivery, but also specifics about its customers’ interest in, and use of, a diverse range of non-food products and services. As Bill Gates’ statement suggests, incisive and leveraged customer data has enabled Tesco to put distance between itself and its competitors, in both traditional and non-traditional retail markets.

An understanding of the real value and impact of customer information, and a disciplined plan for sharing and using the data to make a company more customer-centric, is needed more than ever. A good analogy, or model, for CEM and loyalty program effectiveness or ineffectiveness in building desired customer behavior, may be what can be termed the “car-fuel relationship.” A car, no matter how attractive, powerful and technically sophisticated, can’t go anywhere without fuel.

Not only that, to reach a desired destination, the car must have the right fuel for its engine, and in the right quantity. For customers, the car is CRM and its key data-related systems components (data gathering, integration, warehousing, mining and application).

The destination is optimized customer lifetime value and profitability. The fuel is the proper octane and amount of customer data.

Leading-edge companies are focusing on customer lifetime value as a destination. They are collecting the right data and using the right skills, processes, tools and customer information management technologies to make sure that key customer insights are available wherever they are needed, in all parts of the enterprise. Jeremy Braune, formerly head of customer experience at a leading U.K. consulting organization, has been quoted as saying: ” … organizations need to adopt a more structured and rigorous approach to development, based on a real understanding of what their customers actually want from them. The bottom line must always be to start with the basics of what is most important to the customer and build from there.”

I completely agree. It’s (almost) all about the data.

CEM: Getting Acquainted With Your Customers

You’ve probably heard of CRM, right? CRM is old hat. An acronym standing for Customer Relationship Management, the goal of any CRM program is to manage a company’s interactions with prospects and customers, while reducing the costs and building customer lifetime value. Now how about CRM’s twin sister, CEM? Probably not.

You’ve probably heard of CRM, right? CRM is old hat. An acronym standing for Customer Relationship Management, the goal of any CRM program is to manage a company’s interactions with prospects and customers, while reducing the costs and building customer lifetime value.

Now how about CRM’s twin sister, CEM? Probably not. Unknown to many, CEM is an acronym that stands for Customer Experience Management. As a side note, Customer Experience is sometimes also referred to as CX. Now if you’re a marketer, regardless of what you decide to call it, Customer Experience Management is a discipline you need to get acquainted with.

In general, CRM programs tend place a heavy emphasis on marketing and communications. After all, establishing touchpoints with customers or potential customers at crucial points in the customer journey is incredibly important to achieve desired behavioral outcomes. Fair enough.

In many ways, CRM programs tend to be one-dimensional in nature, focusing on how the firm makes decisions as regards place, product, price and promotion, with little emphasis on customer needs or desires. It shouldn’t be too surprising then to learn that many CRM programs fail because they use an approach that—while brilliant on paper—is misaligned to actual customer wants, needs or expectations.

This is where CEM steps in. You see, it turns out that to succeed in today’s challenging multichannel and mobile/social environment, firms need to expand their scope of their CRM initiatives to create a program that aims to focus like a laser on customer needs, both rational and emotional, and drive toward expected outcomes and KPIs.

At a baseline, the goal of any CEM program is ostensibly to move customers from satisfied to loyal and then from loyal to advocate by taking a holistic view of the totality of their experiences—regardless of place, time or channel.

This is important because, let’s face it, at the end of the day customer perception is built through interactions across multiple events—most usually through multiple channels. As such, successful CEM programs all feature the capability to manage and track engagement where they actually take place—on the Web, on a mobile device, when a customer speaks with a customer service rep or deals with an automated switchboard on an IVR. It all adds up.

Depending on the type of business, customer engagement channels might include contact the Web (main website), mobile (mobile website or app), brick-and-mortar stores and call centers, while touchpoints may include phone (call center, IVR or in-house customer service team), Social Media, email, self-service Website (traditional or mobile) or in-person. Lifecycle engagement includes ordering, fulfillment, billing and support.

But that’s not all—CEM programs also take into account when engagements take place in relation to the customer’s (or buyer’s) journey. An initial conversation between a sales rep and a new customer would be tracked and discerned, for example, from an inquiry on the Web. And this has real-world repercussions. A customer service inquiry by a high-value customer, for example, would be handled differently than in initial inquiry by a prospect on a Web form.

As is the case with most disciplines, CEM programs have evolved over time. This is a good thing. If you look at the chart, you’ll observe that I’ve broken down CEM into its three dimensions: Engagement Channels, Engagement Touchpoints and Engagement Lifecycle.

You’ll notice that I’ve bolded four of them in red. I’ve done so because these are recent additions to the CEM value system.

Okay, I know I could go on more, but I’m running out of room for this post. Got any questions or feedback? Please let me know in your comments.

Thanks,

Rio