1) The rise of mobile devices and consumers' need for omnichannel experiences is changing how direct marketing must be designed and executed. Websites and content need to be optimized for mobile and integrate online and offline experiences.
2) Building trust, emotional connections, and relationships is important as perceived brand trust and advocacy are strong drivers of customer behavior. Content marketing and video are ways to engage customers on these levels.
3) Traditional satisfaction metrics are outdated and new metrics like advocacy better predict business outcomes by capturing customers' influence on others. Analysis of advocacy drivers is key to improving performance.
4) Direct marketing now requires customer dialogue, inclusion and collaboration to engage in two-way conversations and involve customers in brand messaging and
Psychic Reading | Spiritual Guidance – Astro Ganesh Ji
The New Realities of Successful Direct Marketing
1. The New Realities of Successful
Direct Marketing
August 22, 2013
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2. Today‟s Speaker
Heather Fletcher
Senior Editor
Target Marketing
Michael Lowenstein, PhD, CMC
Chief Research Officer, The Relational Capital Group
Thought Leadership Principal, Beyond Philosophy
Moderator
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4. About the Presenter
• Over 35 years of B2B and B2C management , research,
and consulting experience; passionate about brand-
building, offline and online communication approaches,
and customer behavior
• Focus on major and evolving new marketing and
customer behavior influence trends
• Author of 150+ articles and white papers, and several
customer-centric marketing and customer experience
books, including –
– Customer Retention (1995); The Customer
Loyalty Pyramid (1997); Customer WinBack
(2001), One Customer, Divisible (2005), and…
– The Customer Advocate and the Customer
Saboteur (2011): Linking Social Word-of-Mouth,
Brand Impression, and Stakeholder Behavior
– New ebook, A Customer-Centric Year, now in
development
5. 1. The rise of mobile and impact on direct response design
and execution
1a. Consumer requirement for omnichannel information and
purchase
2. Effect of perceived brand trust, and emotional and relationship
behavioral drivers
3. Satisfaction measurement is so „80‟s, and the need and
availability of accurate, actionable, and real world performance
metrics
4. The name of the game is customer dialogue, inclusion and
collaboration/involvement
5. The reconsidered importance of, and new techniques for, direct
marketing analysis, modeling, and testing
6. Addressing the downstream behavioral power of customer
experience
Today‟s Webinar: Examining Six
(Maybe Seven) Critical New Direct
Marketing Realities
6. New Direct Marketing Reality
#1 and #1a:
#1 - The Rise of Mobile and Impact on
Direct Response Design and Execution
and
#1a - Consumer Requirement for
Omnichannel Information and
Purchase
7. Web and Content Personalization
• Site personalization algorithms/application tools much more prevalent –
for both B2B and B2C visitors
• The names of the game are leads and conversion, keeping visitors on the
site, driving multiple page usage and visits, and monetizing visit results
• Functionality can‟t be sacrificed for design/graphics (which actually drive
down page visit time), nor can emotional engagement
• Must also drive offsite, offline and digital behavior
• Increasing emphasis on in-the-moment and real-time content/messaging
• Test, test, and retest using A/B and multivariate tools: Most designers
apply usability approaches such as ethnography, think-aloud tests, sorting
techniques, observation, and live site methods - - NOT NEARLY ENOUGH!
• Modification of classic customer behavior research approaches needed
8. Evolving Active Inclusion Of Mobile
Device Requirements and Channels
• In mid-2013, 56% of Americans own a Smart Phone
• 15% of global Internet users now on mobile; increasing at 50% per
year, and not expected to slow over the next few years
• Priority need: Site design modification or transformation
• This includes menu simplification, easily identifiable branding, text
size reduction, links to full web site
• More focus on display responsiveness, sized for fingertips
• Content, especially (based on study results), must be optimized for
mobile viewing; example of high email deletion on mobile if not done
• Focus on in-the-moment and real-time marketing content, for online
and offline/digital social sharing
9. “Engagement” and “Social” TV
• Customizing content experiences via photos, bonus clips, games, etc.
• Principally aimed at reality TV shows, but also applied to build viral
interest in mainstream programming (The Wire, Sopranos, Homeland,
Breaking Bad, True Blood, Dexter, Doctor Who, Jersey Shore, etc.)
• Digital content offered as video-on-demand, through online and
mobile formats (to provide immediacy), proven to deepen relationship
for program and sponsor; can also boost viewership of main program
• Notable failure, Fringe: Fox created the Observer, a mysterious character
with a unique, bald-headed look. To raise interest in "Fringe," Fox had the
Observer show up on other shows, including 2009 All-Star game and a
2009 episode of “American Idol” However, little crossover between sports
fans, reality TV fans, and sci-fi fans, making a promotion an odd fit.
• Example: Last Chance Kitchen, 11 minute episodes of eliminated
candidates from Top Chef. Created 24% online reach lift for Toyota
10. Building in „New‟ Email Campaigning
• Email is a preferred communication method: Trustworthy, relevant,
conversational, and can be omnichannel
• Trend to hypertargeting and simplicity: short messages, custom
designs and/or microsegmentation, emotional focus on engagement
• Trend toward more real-time marketing support
• Significantly more mobile emailing
• Digital mailbox modification will create more personalization
• „Share-worthy‟ email content to create more social value, downstream
neural communication
• „Transactional „ proactive emailing on rise: account alerts, password
resets, order updates, receipts, shared content, etc.
11. Is Email Generating Leads/Return Visits?
• Does it have a „hook‟ (i.e. USP), subject line, and a call to action?
• Is it micro-targeted according to individual customer interests and
needs?
• Does it reflect buyer/user/influencer personas?
• Is it tailored to buying/customer life cycle stages?
• Is it using social media tools – shares on LinkedIn, Twitter, Facebook,
Pinterest, etc. – to extend value of campaigns?
• Is it „hygienic‟, i.e list accuracy, opt-in/opt-out strategy, message
consistency by medium?
12. Don‟t Undervalue or Underuse Offline
Communication
• Ed Keller (Keller Fay): 15% of population are creating 1.5 billion brand
impressions every day
• Though digital media and viral campaigns get a lot of attention, and
may increasingly start conversation, much of the actual dialogue still
takes place offline (B2B and all demographic and lifestyle groups of
B2C consumers, per The Face-to-Face Book)
• Despite media focus on neural communication negativity, much of
WOM is positive
• Should be blended with online, digital, traditional electronic and print
communication media
• „Stars‟ of peer-driven WOM: Apple/iPod, Toyota, WalMart, Hewlett-
Packard, Budweiser, Zappos, Amazon, Google
13. New Direct Marketing Reality #2:
Effect of Perceived Brand Trust, and
Emotional and Relationship
Behavioral Drivers
14. In Praise of Content Marketing
• Puts a „personality‟ on both the organization and its value proposition
• Helps to develop new business and identify market position
• Multiple communication and expertise showcasing opportunities: ebooks,
blogs, articles, podcasts, videos,
• Ability to create and sustain thought leadership
• Enables employees, as authors and contributors, to be ambassadors for the
enterprise, increasing the emotional/relationship connection with customers
and prospects
• Ideal balance may be 80% thought leadership and 20% marketing
• WARNING: Avoid temptation for content to be too closely tied to sales and
customer life cycle
15. Leveraging Rich Video
• Attractive, differentiating, and engaging alternative to text: Proven
higher conversion and customer retention rates (compared to text)
• Anticipated (by Cisco) to be 70% of consumer Internet traffic by 2017,
up from 57% now
• Formats such as video web meetings, screen shots, interactive web
events, available in multiple formats: Mobile, Internet (Instagram,
Vine, You Tube, etc.), TV
• On-demand ability for marketers to reinforce brand position, image
and relevance through consumer engagement
• Can connect/integrate with personalization CEM and CRM tools
• Examples: Home Depot demo podcasts; Luna Ukulele and Guitar
demo podcasts
16. Impact of Trust and Reputation
Bank A:
Proaction Provides Positive Behavior-Driving Value/
Service Consistency and Reliability Seen As Key Negative
17. Bank B:
Sense of Belonging and Proactive Service Positive Drivers/
Significant Erosion and Behavioral Impact of Trust and Confidence
18. 11%
24%
2%
1%
23%
2%
10%
4%
6%
3%
11%
2%
2%
1%
3%
26%
2%
3%
3%
9%
3%
2%
2%
35%
3%
4%
3%
2%
Q8A. Is a stable company
Q8B. Has a positive reputation
Q8C. Is a vendor that positively stands out from its competitors
Q8D. Is a reliable company
Q8E. Is a company I trust
Q8F. Is easy to do business with
Q8G. Understands my overall business objectives
Q8H. Is a preferred vendor for organizations like mine
Q8I. Exhibits market leadership
Q8J. Reduces commercial risk
Q8K. Manages our relationship at a strategic level
Q8L. Has vertical industry expertise
Q8M. Invests in the future to be a leader
Q8N. Is a company that ensures my personal success
Alienated/Amb Advocate
B2B Company:
Reducing Commercial Risk Is Key Positive, As Is Trust (Also Negative)
19. New Direct Marketing Reality #3:
Satisfaction Measurement is So
„80‟s, and the Need/Availability of
Accurate, Actionable, and Real
World Performance Metrics
21. • Grow Revenue
• Position Brand
• Increase Share
• Decrease Risk
The Impact of New Communication and Real-Time
Influence has Pushed the Strategic Relevance of
Advocacy and Brand-Bonding Behavior
Assessing customer relationship has its genesis in quality assessment.
Realization that quality alone does not generate a satisfied customer.
Satisfaction gets to some of the intangible dimensions of the
relationship, but is a passive measure and does not explain nor predict
retention.
Embrace customer retention to the framework, but it
does not capture the influence customers have on
“other” customers and partners.
Advocacy captures the influence the
customer and partner base have, in
addition to measures below.
80s:
Quality
90s:
Satisfaction
Late 90s:
Loyalty
Current:
Advocacy
22. The Role of Customer Advocacy and Brand Bonding
In marketing and services decision-making guidance and ‘how-to’
action, including…
Marketing and Communications Planning and
Engagement Media Effectiveness
Customer Service/Touchpoint/Process Experience
Effect
Company Image and Reputation Impact
Product and Service Development
Customer Relationship Building
Brand Messaging and Positioning Assessment
Loyalty Program Development/Refinement
Customer Life Cycle Optimization
23. 10%
14%
17%
15%
22%
5%
1%
6%
12%
Staff always takes
the time to talk with me
I have an open and
honest relationship with the
people at my bank
Staff proactively suggests products
and strategies that will help me
Staff suggests only those
products that are best for me
Staff follows up with
information as needed
Staff delivers service
in a timely manner
Staff are trained to offer
reliable services
Staff appears competent
and knowledgeable
Staff makes me feel like
a valued customer
24%
21%
14%
1%
Alienated Advocate
Critical to Reducing Alienated Critical to Building Advocates
13%
13%
9%
6%
1%
Advocacy Driver Analysis
Swing up and swing down (‘swing voter’) analysis identifies the performance
attributes that will drive customers from Alienated to Ambivalent, Ambivalent to
Allegiant, Allegiant to Advocate.
Analysis repeated for
brand, product and
key touch point
attributes for input
into an overall
improvement action
plan.
Quality of Staff Services
25. Advocacy Segmentation: Profile of Attitudes
(Top Two Box Ratings)
Critical Attribute
(Scale: 1 – 10; 9 and 10 Are Top Boxes)
Advocate Allegiant Ambivalent Alienated
Brand
Has earned my trust and confidence 81 28 6 2
It is a pleasure to do business with them 78 22 5 1
The bank is definitely for people like me 79 26 7 2
Staff
Staff makes me feel like a valued customer 75 22 8 2
Staff are trained to offer reliable services 71 20 7 3
Staff follows up with information as needed 71 18 5 2
Value Proposition
Breadth of checking and savings accounts offered 62 13 4 1
Variety of cards with different features suitable to you 53 11 4 1
Communication of different products and their features 60 13 3 1
27. Price is the most frequently
stated reason for defection.
Changes in business focus also fuel
discontinuation.
Though content is also mentioned, a
closer look at the verbatim
comments indicate that most often
a business focus change rendered
the content less meaningful, rather
than a dissatisfaction with the
content itself.
Reasons for Defection
28. 3%
10%
5%
6%
3%
36%
2%
1%
4%
6%
2%
1%
6%
15%
3%
1%
18%
2%
2%
2%
19%
2%
1%
4%
23%
2%
18%
2%
Customer service
Timeliness of information
Usefulness of product delivery method
Product quality
Information content‟s relevance to your needs
Competitiveness of pricing
Billing accuracy
Timeliness of problem resolution
Licensing requirements
Ease of doing business
Reputation
Market Leadership
Understanding of your data/information needs
Customer focus
Building Customer Advocacy and Reducing Alienation
29. Reality: Key Advocacy and Brand-Bonding
Business Value Message
“The benefits of building advocacy can’t be ignored. Satisfaction
and loyalty are important, but they’re old news. It’s a new dawn
in customer experience strategy, where the customer controls
over 50 percent of the brand message. Forward thinking
companies will be the ones that identify and work with their
customer advocates to genuinely build trust in the brand, the
customer base, and the bottom line.”
Cultivating Customer Advocates: More Than
Satisfaction and Loyalty
2011 Peppers & Rogers Group White Paper
30. New Direct Marketing Reality #4:
The Name of the Game is Customer
Dialogue, Inclusion and
Collaboration/Involvement
What happens when Advocacy and
Brand Passion (Excitement) can be
brought together in the same
person?
31. Actively Encourage and Facilitate Two-Way
and Multi-Party Dialogue
• Push and mass messaging has given way to partnership and inclusion
• „Conversation Catalysts‟ (Keller Fay): Create more opportunities for
customers to talk to each other, learn from marketers, and share positive
and negative experiences
• Content should be timely and engaging to stimulate involvement; brands
should actively encourage response (text analytics/learning applications)
• Leverage consumers to help with positioning, cross/omni channel
messaging, product and service development
• Example: Harley Owners Group (H.O.G.) clubs, especially in Europe
• Example: Denny‟s Canada mobile loyalty program, providing points for
friends and social invitations for them to meet members at Denny‟s
restaurants
• Example: Umpqua Bank and Zane‟s Cycles in-store cafes in U.S.; Metro
Bank in U.K. (employee dialogue, involvement of kids and pets)
• Example : Rackspace interactive podcasts between employees and users
35. New Direct Marketing Reality #5:
The Reconsidered Importance of,
and New Techniques for, Direct
Marketing Analysis, Modeling, and
Testing
36. Review: What are we testing?
• Graphics, including embedded streaming video, photos,
and illustrations
• Headlines and key lead-in statements
• Messaging/copy and theme concept alternatives
• Alternative and multi-channel media and formats –
electronic/email, print, online/web sites, mobile, social,
promo devices/advertising
• Color or black & white
• Invitation/order/reply forms
• Pricing variations
• Incentives/premiums/special promotions
• Availability dates/timing
• Personalization/digital printing
• Drop/campaign flighting dates
• In-house engagement, such as website support and
customer service
40. The Value(s) of Multivariate Testing
• Traditional A/B split-run testing too slow and expensive
• Because only one factor can be tested at a time with A/B, it is often
difficult to identify what optimum performance could be in different
marketing situations
• Control, or original, version may perform better than test version in
A/B – taking design back to square #1
• Through multivariate testing, many elements can be evaluated at the
same time: salutations, typefaces, copy lengths,
illustrations/graphics, offers, bonuses, media alternatives, response
devices, etc.
• Simultaneously testing conversion/success rate of each factor or
element; significantly less expensive, with smaller sample sizes, and
greater accuracy
• Plentiful availability of „bookshelf‟ testing software for extrapolation
and estimation of results
41. New Direct Marketing Reality #6:
Addressing Downstream Behavioral
Power of Customer Experience
42. How does your company create, and
benefit from, involved customers?
They are, or can become, your best customers
They are loyal, buy more products from you or exclusively
use your brand (narrowed consideration set)
They are your unpaid, voluntary (even enthusiastic) outside
sales force
They contribute to new product and message development
They are the strongest promoters and endorsers of your
brand, online and offline
They respond to your array of marketing efforts, and are
responsive to both multiple channel communication and
real-time engagement
44. Bringing It Together: How Do These
Companies Drive Optimum Loyalty Behavior?
• Zappos – corporate service/values orientation; customer service
• Wegmans – distinctive store design and upscale customer experience
• Southwest Airlines – employee ambassadorship; customer-focused
processes; passenger experience
• Umpqua/Metro Bank – café-like bank design; ultra-proactive service
• Tesco – „Price Promise‟ comparison on all programs (retail, banking,
insurance, etc.); Downton Abbey sponsorship
• Lego – innovative brand-building and product development, microsites,
product mini-series, social networks, clubs and club magazines
• Amazon – micro-targeted and personalized online communications and
site landing pages
• Baptist Health Care – employee teams, extraordinary service and
community outreach, legendary word-of-mouth
• Ritz Carlton – unparalleled service, personalized guest experience
• IKEA – low prices, unique in-store experience, proactive service
• Rackspace – online dialogue/podcasts between employees and users
• The Container Store – mobile digital catalogs; in-store experience
• IBM – consultative content–rich strategy for each business segment
45.
46. Video Links
1. Lowenstein on 10 Years of Direct Marketing Change
http://bit.ly/13iiEmj
2. Getting the Message Out Now vs. 10 Years Ago
http://bit.ly/172N9yK
3. Doing It Right - Which Marketers Understand the New
Ecosystem vs. 10 Years Ago
http://bit.ly/1cyLXKD
4. Content Marketing and Trusting Customers – Loyalty Now vs. 10
Years Ago http://bit.ly/1662vjq
47. Thank You!
Link to my CustomerThink customer experience portal blogs:
http://www.customerthink.com/user/michael_lowenstein
Link to “Back to the Future” blog in CustomerThink:
http://www.customerthink.com/blog/the_new_realities_of_succ
essful_direct_marketing
For further information, or if there are post-session questions,
please contact me at: mwlowenstein@gmail.com or
856-283-1182
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