Spray and Pray is NOT a Customer Contact Strategy


My family and I recently moved  into a new house, and in the process I utilized the “moving” services offered by Big Satellite Company [name changed to protect the guilty].  I was a little perturbed when I was unable to coordinate the moving service online, but that’s another topic.  Anyway, all went well and the move went great – they even threw in some free premium channels for free as a “value add” to using the service.  Great way to protect against attrition to competing companies or, god-forbid, cable.

Here’s the kicker – a day later I received an email from Big Satellite Company asking me “Did you know that you can manage your account online?”.  My first inclination was to reply and ask them “Do you know that I had been doing so for my 10+ years as a customer?  Not to mention that the account service I most recently used was not accessible online?”.

Obviously there is a business rule trigger that sent me the email, likely because I called in to the service center to request the moving service, but the automation rules failed to recognize the fact that:

  1. I am frequent user of their online system for account changes.
  2. The service most recently used in not available online.

To borrow from the ESPN crew, C’mon MAN!

I know this is probably rocket-science to some, but companies can do better!

Spray and Pray is not a Customer Contact Strategy – by this I mean that automating communications with your customers should not be done simply for the sake of doing it, and furthermore, not all customers are created equal.   A sound Customer Contact Strategy should span each and every potential interaction a company could have with a customer regardless of contact or delivery channel.  And, these contacts should be well thought out, situational, and personalized to maximize relevance to the customer.  This results in improving sentiment towards your brand with the big payoff being not only the retention of customers, but perhaps more important, the recommendation of your product or service to the customer’s extended “network” of friends, family, and colleagues via social networks .  This is often exacerbated by the  interactions being handled through different software platforms and the wide spread practice of outsourcing portions of CRM processes to different companies (or handled internally by different teams)  as well as the proliferation of subcontracted delivery channels – but trust me when I say that it can be done!

Ask me how…

If it’s worth doing, it’s worth doing RIGHT…


We’ve all heard variations of this sentiment – many credit it’s creation to Hunter S. Thompson in his epic adventure “Fear & Loathing in Las Vegas” (yes I called it epic).  Having spent nearly 7 years in the Army, I vehemently subscribe to this train of thought and often find myself discouraged when business owners and marketers take short cuts to save a buck now, when in reality they could be costing themselves more in the long run. 
Here are 2 recent “personalization” experiences that illustrate the point (I have changed the names to protect the guilty).  In both cases, these prestigious, national brands are applying technology to reach consumers with personalized communications, but the effort is lackluster at best due to some shortcomings on the data side:
 
I am a subscriber to the print edition of Super Cool Business Magazine, although I have not activated or created an online profile with the companion website.  My subscription to the magazine was offered to me via direct mail, and I responded (and paid) via the web, and this is not the only title from the publisher to which I subscribe.  So – let’s recap.  The publisher has my name and postal address, as well as information about other magazine titles they offer to which I also subscribe.  They have my personal email address derived from the online subscription activation/payment as well as online profiles associated with other titles
 
Herein lies the rub – over the last month or 2, my wife has been receiving emails from Super Cool Business Magazine and “trusted partners” personalized to me (“Dear Mark”).  Obviously they have performed some sort of email address append to their file and/or performed some data massaging to “household” my record – the result is that my wife’s personal email address is associated with my name and postal information.  I say to her – “No problem – just forward me the email, and I will go online and update my communication preferences to include my email address instead of yours”.  Easier said than done.  When I clicked the link in the email to make changes to my profile, the only option was to completely unsubscribe.  So I did – too bad for this publisher – now their database is short one email address and who knows how many others experienced the same thing?  All of this results from having the right intentions (combination of marketing + technology) but with poor execution. 
 
My second example comes to us from a respected German automaker; my wife and I both drive cars from this brand and we loyaly use the local dealership for our maintenance and repair needs.  Our vehicles are both model year 2004 sedans, but different models.  The dealership’s use of email as a CRM extension and marketing tool has been sporadic at best.  The various emails we receive related to marketing promotions, coupons, and service appt reminders all seem to be coming from different systems – to the point that the email templates (colors, logos, fonts) seem to have no cohesive design elements connecting them. 
 
Herein lies the rub – the dealership cannot seem to get my email address associated with me and my vehicle, and my wife’s email address associated with her and her vehicle.  They will personalize a marketing message with “Dear Mark”   and reference my Model/VIN# in an email to my wife and vice-versa.  Sometimes, the emails will have her name and my VIN# to my email address.  There does not seem to be any rhyme or reason.  To add insult to injury, there is no way to go online and self-police the data in a communication preference center – again, the only option is to unsubcribe, and the unsubscribe page for each email is different.  We have even made calls to the dealership providing updated information to no avail – it appears that the dealer marketing system, the dealer service scheduling system, and the corporate marketing database are not synchronized. 
 
So what’s the lesson?  Don’t take shortcuts and make sure your data is in order before personalizing communications or at least offer a 2-way dialogue that enables consumers to contribute to the conversation.  Here is a great article on personalizing email communications from MediaPost:
 

How to increase customer response with trigger-based marketing (via MySalesHero’s Blog)


I have written about this topic before, but here is another angle and great insight from my colleague, MySalesHero….

How to increase customer response with trigger-based marketing You don’t have to be a superhero to know how important it is to be in the right place at the right time. It’s the same for your marketing programs. Timing is everything. Photography services for the recently engaged. Accounting assistance for an expanding company. Lawn care services after a new home purchase. By delivering the right offer just when your customer is ready to buy, you’ll improve buyer response every time. These trigger events in yo … Read More

via MySalesHero’s Blog

With the sprouting of gray hairs…


With the sprouting of gray hairs comes the realization that life is changing. First it was the reading glasses and now the gray hairs in my beard. This got me thinking about how my life today is different from a year ago not to mention 5, 10, or 15 years ago, and how much it will continue to change in the future. Fast forward through the sentimental and philosophical and you end up with the simple notion that:

“People need stuff and that stuff changes depending on their Lifestage”.

It Doesn’t Take a Genius
Marketers have known this for years and I take no credit for pointing this out. Many have gone to great lengths to create tools and methodologies to capture new clients whose journey through life is punctuated with events that ultimately define their needs (“needs” are very subjective and a whole ‘nother story). Life events include things like getting married, buying a home, having children, getting divorced (for more than 50% of U.S. society), becoming an empty-nester, and finally becoming a senior whose only interest seems to be spoiling the grandchildren and driving with a turn signal on. Let’s just say that my neighbor and I are both buying diapers but for different reasons – talk about cradle to grave, right?

Successfully reaching these consumers and getting them to buy your product or service depends on your ability to deliver a relevant, timely and compelling message in the appropriate and desired channel, which might include direct mail, email, mobile, social, search, or display.

Lifestage + Channel
This is a topic with increasing interest as of late – just this past week I read a MediaPost article that talks specifically about marketing to new parents in the mobile space. Apparently new parents are the group most likely to be responsive to mobile marketing. Some could guess that the lifestyle of those with young children is chaotic and thus making this group more receptive to “marketing on the go” since they are no longer spending a lot of time surfing the web, sifting through their inbox, social network, or even their direct mail as diligently as they did before children. When it comes to proximity or geo-location type of mobile marketing, again, the segment of those with children under 6 was most positive about the idea, as opposed to the “gotta have the new technology young male” as many would assume.

Since mobile marketing is still relatively new and untapped, only later will we later find out if mobile marketing receptiveness is less about the lifestage (having children under 6) and more about the generation of those who presently have children under 6? Only time (and science) will tell.

Image compliments of webcomic XKCD - http://xkcd.com/


Science is Fun!
There’s that word science again. The science behind marketing doesn’t have to be complicated. As a matter of fact, there are many solutions in the marketplace today that let you benefit from the science of others. Examples of this from Acxiom include things like “Life Event Triggers” which enable one to choose a prospect list based specifically on a recent life event like graduation, marriage, or child-birth. If your product or service is specifically relevant to people experiencing these events you can simply “subscribe” to receive lists of prospects in your area that recently “triggered” an event. Combine that with some technology and you can automate direct mail programs to effectively go “door-to-door” for you.

If your product or service does not have a clear tie to a specific life event, this is when you might use a Lifestage Segmentation system to uncover commonality in your current customer base to target new customers. Acxiom has a Lifestage Segmentation solution called PersonicX – if you follow the link you can see an interactive introduction to PersonicX. This solution segments U.S. households into 30 Lifestages that are then assigned to one of 70 Clusters. The Lifestages have cool names like “GenX Parents”, “Boomer Barons” and “Active Elders”, while the Clusters are sub-categories like “Cartoons and Carpools” or “Apple Pie Families”. Each Lifestage and Cluster is defined by a specific set of demographic variables combined with geographic and behavioral factors and represent a modern take on “birds of feather flock together”. Consumers move from one Lifestage/Cluster to another over time.

Using these types of solutions can be a very beneficial and simple way to inject some “science” into your marketing. With a simple list of your current customers you can identify the Lifestage of each with PersonicX, and chances are you will see the old 80/20 rule highlighted in a previous post come to life. There will likely be a concentration of your best customers in only a handful of Lifestages & Clusters. Based on this insight, you would be ahead of the curve if you were to then obtain a list of prospects in your trade area that are in the same Lifestages and Clusters as your best customers.

I look forward to your thoughts and feedback on using Lifestages to improve your targeting and increase response…

“You Put Your Chocolate in My Peanut Butter!”


We’ve all come to love the irresistible combination of chocolate and peanut butter served to us by the folks at Reese’s and can probably name scores of other perfect combinations in nearly any context. Things like cell Phones with cameras and Gin & Tonic; or people like Sonny & Cher or Will & Grace! Not to mention the ever-present “Value Meals” and Price Fixe menus in nearly every segment of dining these days. I guess 1 + 1 does equal 3?

To this end, my blog is aptly named marketing+technology and I wanted to share with you some fine examples of how the combination of sound marketing principles with appropriate technology can yield tremendous results.

I assume you’ve read my recent post about getting reading glasses? Anyway, yesterday I received an automated phone call from the retail eyeglass location where I purchased my glasses. The computer voice on the other end of the line was a very pleasant-sounding young lady, British or Australian I think, who identified herself as calling from the store in question and asked to confirm that I was Mark Donatelli (she even pronounced it right – better than many people!) and if I was willing to answer 2 survey questions about my recent experience. After I pressed 1 (Yes) to continue, I was asked to rate my experience from 0 to 10 (10 being best) and rate my willingness to recommend them to others. After pressing my entries I was then asked to record a short message about why I rated the experience as I did. Done and Done. After this 20 second process I immediately thought “They put chocolate in the peanut butter!”.

By this, I mean that they took the solid marketing and CRM practices of:

1. Follow up with your clients after their purchase.
2. Survey your clients to measure satisfaction.
3. Ask your clients for an endorsement or quote regarding your satisfaction.
4. And as a by-product, they were also able to verify my phone number in their database.

These steps if done by a person would be time-consuming and costly, but with the injection of some technology the process is automated and efficient.

To take this a step further, I imagine that about 11 months from now I will receive a postcard reminding me to stop in and have my annual eye exam. If they were really cookin’, I might get a birthday card with a discount coupon on prescription sunglasses – we’ll have to wait and see on that one. Regardless of industry, these types of automated “campaigns” can have a positive effect on your business by deepening customer loyalty.

From a prospecting standpoint (as opposed to the CRM scenario above), the combination of technology and sound marketing principles can be even more powerful. For example, a national home improvement store might have ongoing, automated direct mail programs for New Homeowners, New Movers, Households expecting a child, or those will children headed to college. Each mail program has a creative design and content relative to the “lifestage” the recipient is experiencing. This allows the store to call attention to specific, relevant products likely needed by the recipient. Without technology to automate the data acquisition and delivery, then merging with creative and print, this would not be possible.

Imagine if Peanut Butter and Chocolate had never met? Tell me about your marketing+technology idea and let’s make it happen!

A trip in the way back machine below – 80’s commercials for Reese’s Peanut Butter Cups.

Who are your BEST customers?


When this question is posed to a small business owner, a sales associate, or a marketer, it often results in a firm, clear answer like seniors, baby boomers, or soccer moms. Or if in B2B circles, something like “mid-market manufacturers of durable goods”. If you then follow with a simple “Great, but how do you know that?” this is where the blank stare comes in, followed by “I’m in the store all day and I greet all of the customers” or “I personally perform all of the quotes for new clients”. So it must be true – you CAN judge a book by its cover!

Wrong – everyone knows that not all soccer moms are created equal!

Data Rules
The reality is that in order to truly understand who your best clients are, you need data. This data can be transaction level data from point of sale systems, historical, summarized sales data from your accounting package, and even third parties in the form of demographic, psychographic, and behavioral data that is appended or added to your customer records. If you don’t have sophisticated systems for collecting and managing all of this data, do not fret for there are some simple ways to get started. And it is important that you get started!

Why is identifying my BEST customers so important?
There are two major reasons why it is important to identify and recognize your best customers.
1. The first is supported by the now mythical adage that “it is cheaper to keep the customers you have than it is to acquire new customers”. This statement has been spewed more ways than I can count and is credited to more sources than I can name, but the fact is that there is truth to these words and understanding who your best customers are enables you to strengthen the relationship and their loyalty through personalized customer service as well as relevant & timely communications and offers.

2. The second reason understanding your best customers is important, is that the insight gleaned from analyzing your current customers can be leveraged to find prospects that exhibit the same demographic, psychographic, and behavioral characteristics, which through deductive reasoning tells us they are good candidates to potentially become one of your best customers. Or in other words, “birds of a feather flock together”. Doesn’t marketing to those with a higher propensity or likelihood to become customers verses marketing to everyone make sense? The cost of acquiring a new customer will improve, contributing to an overall improvement in the return on marketing investment.

Getting Started
Whether you sell directly to consumers or to other businesses, there are several low-cost ways to get started. Assuming you already have a database of your customers and have some access to transactional or historical sales data, below are several approaches that with a little elbow grease will yield great results:

1. Use the Pareto Principle; “Roughly 80% of the effects come from 20% of the causes”. I used to work in the paper business (no, not Dunder Mifflin – but close) and one of the primary sales management tools was the “80/20 report” which simply showed us who our top clients were from a revenue and gross profit standpoint – ie where sales should be spending their time and attention. The inverse was also true – the accounts at the bottom of that report might be candidates for direct efforts to stimulate growth, or even all together pruning. Firing a bad customer is often worth more on the bottom line than landing a new one.

2. Use of a “20/50/30” approach to isolate the “best, middle, and worst” – this is an extension of the above and segmenting customers into three (or more) categories might enable more precise prescriptive actions per segment, drive pricing tiers, etc. My aforementioned experience in the paper business had an answer to this as well – all clients (client being defined as having a minimum number of purchases or a minimum value of purchases in a rolling 12 month window) were categorized as Platinum, Gold, Silver, Bronze and Lead, with new accounts and “up and comers” or those with high potential falling into the Nickel segment. This is a very eye-opening exercise, because depending on the metrics chosen to rank and segment, you may find that who you thought was a great client could be very average or worse yet unprofitable.

3. RFM Analysis (Recency, Frequency, Monetary) – This method will highlight several “groupings” of clients in a stack/rank fashion – see the sample RFM Analysis in Fig. 1 below. This type of analysis is especially valuable since it takes into account multiple factors such how recently a customer purchased, how often they purchase, and lastly how much they have spent. Those that find themselves at the top of this list, should find themselves at the top of your marketing list as well. I employed this method when working with a marketing service provider that focused on small businesses. We were able to create a list of 150 great clients that were on autopilot. By proactively engaging with them we saw an immediate increase of business from this group by simply offering them an incentive to “upgrade” to a higher level service package. They were already satisfied clients, we just needed to give them a reason to show us more love.

Fig. 1 Simplified RFM Analysis

Metrics for all three of these methods might include things like Revenue, Gross Profit, Number of orders, Average order size, and even returns, issue escalation, or other inbound requests. It depends on your industry, but these metrics along with questions like “Do the clients use self-service tools or are you providing full service to all clients?” can provide valuable insight into who your best (and most profitable) customers really are.

4. Product/Service Consumption Matrix – Lastly, another way to slice and dice your customers is to look at them from a product or service perspective to identify the products and services that are consumed by each client and isolate segments based on your ability to cross sell and up sell clients to expand your relationship with them.

Building on your Effort
So now that you have worked on one or more of the above methods for segmenting and ranking your customers, imagine taking a deeper look at the top performers based on 3rd party data like demographics, psychographics, and behavioral data to define the ideal criteria for who you should be prospecting – talk about super charging your marketing efforts. Demographics are things like age, income, home ownership, marital status, presence of children, ethnicity, etc. and can be very telling in and of themselves when looking at who your best prospects are. Psychograhics are more about the underlying motivations, values, interests, and attitudes of people, and these can add another layer of insight in determining a prospect’s intent or likelihood to respond. Lastly, behavioral data is available in many forms. This might be actual click stream data from your website or perhaps licensed data from third parties who aggregate point of sale data by SKU. For example, believe it or not, it is possible to identify individuals who are male homeowners with six-figure incomes, who travel for pleasure >5 times per year, and have purchased golf clubs in the last 6 months.

Sound like a great prospect for a golf getaway… When do we leave?

Selling to Consumers with Marketing Automation


Previously I used Las Vegas as the backdrop for what I deemed to be sure signs of the coming economic recovery – call it my own “Vegas Consumer Confidence Index”. Closer to home I am witnessing yet another sign that, despite all other indicators, there is compelling evidence that Home Services companies should continue actively marketing to consumers.

The value of Route Density to SMBs who provide Home Services
On most weekday mornings (and some weekends), shortly after 7:00 AM, I am greeted by the hum and thrashing of lawn mowers as one of five (5), yes five, different landscaping crews descend on my neighborhood to cut, edge, and trim every living plant in sight. I do not live in a gated community or otherwise “affluent” neighborhood, which brings these questions to mind:

Question: As American savings rates are off the charts and middle class consumers have cut back on most discretionary spending, what makes Home Services businesses like lawn care or pool cleaning continue to be viable?

Answer: I think this can be summed up by saying that “consumers, regardless of the economy, will continue to pay for work that needs done if the work is either difficult, undesirable, or requires special tools and skilled labor”. I know I fall into this category.

Question: Why are there 5 different companies serving my small corner of the world, when “owning a neighborhood” or having “route density” is not only more profitable for these businesses, but the green thing to do as well?

Answer: Imagine the reduction in fuel costs and transportation time if a crew could work in a single area all day. Way back when I worked for a budding lawn service (I passed on “investing” and now the guy is in early retirement with 25 crews in a 2 county area, but that’s another story) we typically spent our morning in one neighborhood and our afternoons in another. We were able to mow twice as many yards if we could stay put in a single area.

These principles hold true for companies providing any type of service delivered at or in a consumer’s home, whether one-time like decorating, home improvement, or closet systems or recurring like pool cleaning, lawn care, pest control, and housekeeping.

SMBs selling to Consumers can Generate New Business with Automation
In the past, many Home Services crews have been known to put a sign in the yard, blanket the neighborhood with door hangers, or even resort to dropping a clear plastic baggie with a business card and some gravel at the end of my driveway (now that’s bootstappin’). These approaches are all attempting to accomplish the same thing – enter the Utopia of multiple clients in the same neighborhood, and in some cases do a decent job. The rub with these methods are:

1.) With Yard Signs, exposure is limited to only those that pass the house, and is not specifically targeted or personalized. And there is a limited life span – the sign will not be there very long.

2.) While door hangers can be personalized and targeted if a data source is put in the mix, most don;t put forth the effort and door hangers do require some additional effort or costs to have the hangers distributed. A third party can distribute them for a fee likely bundled in the overall cost of printing, or the business can have workers perform this task, but aren’t they better used actually serving customers?

3.) At first glance, the clear plastic baggie with a business card and stones seems like a clever solution since the crew can just drive around and drop the bags on driveways as they pass through the neighborhood, but I would argue that the cost of the bag, fuel, time, business card, and the labor to assemble these “kits” combined with the lack of personalization and targeting and the poor brand image that might result, make this an unattractive option for entrepeneurs with their sights set on growth.

Set it and Forget it
Made famous by Ron Popeil, this direct response anthem for his Showtime Rotisserie Grill has a place in consumer marketing through the use of high quality data and automated marketing solutions. Imagine if each and every single-family homeowner in a neighborhood were to receive a full color, personalized postcard with a compelling offer, within a 2 days of a Home Services crew being in the neighborhood, then several more times over the next few months, long after the crew has left – AUTOMATICALLY. As you know in marketing, with frequency, recall and ultimately response, improves. The mechanisms that support this would be the Home Services business providing the addresses of their customers on a daily, weekly, or monthly basis, from which a mailing list of the neighbors would be produced and queued for automated mailing.

An extension of this concept can be deployed using what we call Trigger Data, such as New Homeowners or New Movers. These segments of the population are ripe for services as they settle in to their new digs. In the case of New Homeowners, they are credit worthy and ready to decorate, fix up, and furnish their new home. I have even seen the use the birth month of a consumer to trigger an automated offer mailing in the month prior. The possibilities are endless!

My favorite is a “have you seen this car” postcard featuring an image of the same make, model and color of a vehicle recently purchased by a neighbor. The card goes on to talk about the low prices, incentives, and the great deal my “neighbor” got at the dealership. Good stuff.

Here is a great video featuring my colleague, MySalesHero, as he helps a contractor apply these principles…

I look forward to your comments or questions.

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