Friday, March 31, 2006

eMail Marketing -- The Little Things Count

Content drives click-to-open rates; not images.

That's a surprise to most marketers I talk to. We seem to have a love affair with spectacular grapic design to drive a visual concept. At least, I know I have a belief that such visual concepts work better ... and most marketers that I work with share this notion. And in most media, we're right.

But, apparently not in email.

A Jupiter Research survey of over 1,000 recipients of email campaigns disclosed what it was that caused them to open and respond to the campaign.

The top four attributes out of eight were all content related: the product features (54%), the written copy (40%), the subject line (35%), a compelling offer such as a discount or free shipping (33%).

Only 12% were influenced by a single large image. Only 9% were influenced by multiple smaller images.

In seventh and eighth places, the importance returns again to content issues -- search box within the email (6%) while 3% of the responders got only text versions of their emails (no HTML).

So, when planning your next email campaign, it makes sense to put our attention on the words instead of the graphics.

Marketing Emergency Preparedness ...
Are You There?

The transit strike in New York in December, 2005, has some interesting lessons for all of us in marketing.

Our customer contact systems work just fine – most of the time. But when an emergency hits, most of us are unprepared to keep lines of communication open to prospects and customers. During the strike, research firm Basex conducted a survey of 100 New York businesses.

The report, "Strengthening Corporate Pandemic Preparedness and Response," reveals that about 90 percent of respondents were set up to function only for a short time, if at all.

Marketers need to plan out our customer connection infrastructures well in advance of the need for a sudden increase in the number of communications at critical out-of-service times.

The transit strike should serve as a wake-up call, not only for New Yorkers but for everyone…marketers need to ask themselves if they could continue operating in this fashion (emergency mode) for three months or longer. Are you prepared?

Marketing Success Impacted by
Call Center Performance

A new consumer study sponsored by Five9 found that 76% of customers rated 24-hour customer service as either important or extremely important to their purchasing decision. The report shows that bad call center experiences drive customers away from brands, callers hate giving lots of info, and no one likes IVR traps.

Some of the key findings in this report are:

52% reported 24x7 support to be important and 24% said it was extremely important to their purchasing decisions.

The overwhelming majority of respondents -- 96% -- state that a positive/good experience with a call center agent would increase their sense of brand loyalty.

Most respondents -- 70% -- have changed products/services or not made a purchase due to a bad experience with a call center agent.

Scenarios that resulted in the caller being most dissatisfied with the call center agents/service included:

50% - when the agent was not well-informed on the product/service or could not quickly resolve the issue

35% - when the hold time was too long

25% - when they were required to provide a large amount of personal information prior to being helped.

91% of respondents reported being locked in a self-service menu and unable to request to speak with a live agent. (It’s probably safe to assume these callers weren’t very satisfied with their experience).

Thursday, March 30, 2006

Superior or Average Contextual Marketing Managers

What is it that separates the good from the great, the superior from the average?

Why is it that the average job tenure for a chief marketing officer is so alarmingly short?

One of the differenatiators is that Great Marketing Managers see a future beyond the marketing budget. The budget is such an ugly place to get mired down. Great managers chart a bigger and more ambitious path, they understand the critical decisions that must be made to make the chart into a reality and they get the right people on the bus to help them turn the future into powerful outcomes.

The marketing budget dedicates all of us to incremental growth. It is conservative. Safe. It is usually loaded with a fair amount of deadwood that produces no return on the investment. It is loaded with yesterday's situation and yesterday's results and has no real relation with the future that can be.

Now, ignoring a marketing budget can be a risky venture. It takes real leadership and very smart management and a conviction for what will work.

That's the difference to me. It's what I have observed in three decades of watching well over a hundred chief marketing managers, in companies as big as P&G all the way down to small manufacturers and retailers. The ability to see a bigger future and the means to get there.

Lead Generation Marketing Misses the Mark

Low Hanging Fruit vs. As Much as You Can Eat

Every sales department is desperate for sales. So the pressure on marketing is to generate leads and get them as quickly to sales as possible. This has for decades created the chase for low hanging fruit. Direct marketing programs are launched and bring in 2% of the list as leads. We turn them over to sales and go on to the next campaign. A rolling turmoil of campaigns, each getting a small percentage of leads. Sales then takes over and based on one study of over 100,000 campaigns, it then takes the sales department 8 leads to get a closed sale. You can see then that we are dealing with a very small part of the universe.

If you want to argue the 2% number, as some of my readers have done with me in the past, just take the latest Direct Marketing Association Response Rate study. The average B2B response rate for lead generation direct mail was 2.14% and for B2C it was 1.58%.

We are effectively ignoring 98% of our targeted markets.

Contextual marketing takes the 2% and sends those leads to sales ... and then we begin working the 98% of non-responders. Everytime we send them something in the mail, they can either respond "yes" or they can respond "maybe" or they can not respond at all. So for every outbound initiative, we have a pre-planned set of actions for Yes-Maybe-No.

Continue communicating with them over time. Provide an offer to get them to tell you something about themselves. Then use that information to make your next mailing even more relevant. Eventually you will be getting leads from 10% to 50% of the target list. Persistence and relevance will pay off.

Send me an email (**dwolf**at**cincom.com**) and I will send you a diagram flow chart that illustrates how this process works.

Wednesday, March 29, 2006

Part 2: The ROI of Contextual Math

I hope the columns in my math tables render correctly for you to read them properly.

This part of ROI Math explores the variable cost impact of customer retention vs. customer acquisition.

The two examples below illustrate the return on marketing to current customers is more efficient than new customer acquisition. While acquisition of new customers should not be abandoned, the increased response rates that come from marketing to current customers does support the importance of programs for building customer relationships that help retain customers. In each case, the campaign cost is $11 million and the revenue per response is $50. The reach and response rates are variables that produce ROI’s that are quite different:

Current Customer Campaign New Customer Campaign
Campaign Cost $11,000,000 $11,000,000
Campaign Reach 10,000,000 100,000,000
Response Rate 7.5% 0.4%
Responses to Campaign 750,000 350,000
Revenue Per Response $50 $50
Cost Per Thousand $1,100 $110
Return on Investment 241% 59%


Increased Response Rate from Contextual Marketing Creates Cost Savings

The total cost ($11 million) is the product of the cost per thousand for the communication itself and the circulation or distribution to reach the prospects. It is difficult to alter the average cost per communication without changing the mix between channels, but what about the circulation? What would be the impact of reducing circulation by not sending promotions to people who are unlikely to respond? Again, this is a basic premise of contextual marketing – send expensive direct marketing campaigns at people who are in an active buying cycle and use less expensive communications to build relationships with others who are not yet in the cycle.

Base Example Reduce Circulation 20% Reduce Circulation 30%

Campaign Cost $11,000,000 $8,800,000 $7,700,000
Campaign Reach 10,000,000 8,000,000 7,000,000
Response Rate 7.5% 9.4% 10.7%
Responses to Campaign 750,000 750,000 750,000
Revenue Per Response $50 $50 $50
Cost Per Thousand $1,100 $1,100 $1,100
Return on Investment 241% 326% 387%
Net Profit $26,500,000 $28,700,000 $29,800,000


In the above example, assuming the predictions are accurate, the return has grown from 241% to 387%, based on first a 20% reduction in circulation and then a 30% reduction. In the $3.3 million cost savings could be invested in a similarly responsive promotion, incremental profits of $12.75 million could be generated:

($3.3 million / $1.10 per customer) x 10.7% response x $50.00 value - $3.3 million cost = 12.75 million

Cost Savings and increased Revenue

Looking further at this model, if response could be increased, revenue would possibly increase. More targeted communications, aligned contextually with customer interests, generates an improved response rate well above the increases cited below.

Base Example +10% Response +20% Response

Campaign Cost $7,700,000 $7,700,000 $7,700,000
Campaign Reach 7,000,000 7,000,000 7,000,000
Response Rate 10.7% 11.8% 12.9%
Responses to Campaign 750,000 825,000 900,000
Revenue Per Response $50 $50 $50
Cost Per Thousand $1,100 $1,100 $1,100
Return on Investment 387% 436% 484%
Net Profit $29,800,000 $33,550,000 $37,300,000



In this example, response has been increased first by 10% and then by 20%, with the final example contributing an incremental $7.5million profit.

This leads to a strategy to improve response results while reducing cost. A customer-focused strategy simultaneously establishes both of these goals, increasing response (revenue) while reducing the cost of communications.

Monday, March 27, 2006

Marketing to Customer Needs and Wants

We all use the words "wants" and "needs" when we focus on customer strategies.

If we're doing our work right, we address these wants and needs with our products, our branding and our promotions. We get to using these two words a bit carelessly and almost interchangeably.

But there is a vital distinction. Needs tend to be more objective requirements while wants are more emotional.

I want sweets but I need vitamins.

I need to be a great presenter because I want to make a lot more money.

It is often more productive to market to a customer's wants because they are more subjective and self-activating ... they lead to action. They are qualities that we can appeal to.

If you happen to market a mature product that is a need, you are likely closer to a commodity. The best path is to convert a need into a want so that you can appeal to the individual's emotional desires.

Together, wants and needs help set each of us in a direction. They help us understand what the customer values most. Collectively, they form the context into which we must insert our marketing messages.

Friday, March 24, 2006

Part 1: The ROI Math of
Contextual Marketing


The Justification is in the Numbers

The following scenario illustrates the case for contextual marketing as a more effective model for managing communications expenditures across the lifetime of the customer relationship. Until this is done, you cannot have cost effective, metrics-driven customer relationships.

Let’s look at a business doing $100 million with a product cost of 45%, leaving a gross profit of $55 million. Next subtract out 25% for overhead and 22% for variable marketing and advertising, leaving a net profit of $8 million or 8%. Better than some and worse than some.

Net Revenue $100,000,000
Product Cost $ 45,000,000
Gross Profit $ 55,000,000
Sales & Marketing $ 22,000,000
Other Overhead $ 25,000,000
Net Profit $ 8,000,000


Marketing customer communications is intended to drive increased purchasing, but most marketing organizations do not measure the relationship of customer purchases to the amount spent to acquire the revenue. How then can managers determine appropriate spending levels … where can you reduce expense without losing customers … and where can you invest to get increased revenue?

Three variable factors that can be altered to improve return on investment:

(1) the reach and frequency yields total number of customer impressions
(2) the rate of response from each communication
(3) the average revenue per response.

Let’s look at promotion with a budget of $1 million to reach 10 million prospects. At a response rate of 7.5% and revenue per response of $50, the ROI is 241%.

Promotion Cost $1,000,000
Target Audience 10,000,000
Response Rate 7.5%
Responses to Promotion 750,000
Revenue Per Response $50
Cost Per Thousand $1,100
Return on Investment 241%

Cost per thousand (CPM) is the cost of communications divided by the total circulation (reach):

$11 million / 10,000,000 = $1.10 or $1,100 per thousand

CPM is the average actual cost for each individual communication. From this promotional effort the expected value per response is $50.00 profit. Thus, the break even (BE) response rate can be calculated as: %BE x $50.00 - $1,100/1,000 or 2.2%.

[ ($50 revenue x 750,000 response) - $11 million cost ] / $11 million cost = 241%

This mathematical framework provides a clear method of comparison for each campaign and a metrics-driven approach for reducing or even increasing customer communications budgets.

Catalytic Content Drives
Customer Purchasing Decisions

A primary goal of all marketing campaigns is to cement the relationship so that you get priority treatment over your competition. One measure of this relationship is the interactivity you can create between your target audience and your enterprise. To do that, create what I call catalysts ... a special breed of content designed to trigger specific, pre-planned actions by your prospects.

Catalysts Cause Reactions

A catalyst in the world of chemistry is an agent that causes reactions to go stronger and faster. In the direct mail world, catalysts might be called "offers" but that term is somehow too limiting. We all need to use a variety of catalysts in our programs because different prospects are at different stages of their buying cycle. Sometimes the reactions we are after are subtle and sometimes they are hard-driving toward closure of a sale. We give soft informational offers to prospects in the early information-gathering stage of the buying cycle and promotional offers to prospects who are closer to making a purchase decision.

We include catalysts for different types of buyers. One catalyst might be devised for buyers who are looking for lowest price, another for buyers who want risk-free security, and others for those seeking best quality. By selecting one offer versus another, the prospect is identifying key attributes that allow us to profile her into a customer segment ... then we can feed the segment content and catalysts that are personally relevant and more likely to be useful to the individual. This is the essence of what I call contextual marketing ... discover the customers needs, wants, expectations and interests and market to these unique factors that will increase sales results for you.

A Proven Approach

I have used this approach to catalytic content for 20 years in campaigns to help sell pre-engineered steel buildings for Butler Manufacturing, for such cleaning brands for P&G as Tide, Mr. Clean and Comet, for Wisconsin Tissue restaurant napkins, for Compaq Computers, Toshiba copiers, the Disney Institute, Florida Power & Light. We built the customer database with blank fields for all the criteria we wanted to learn about each prospect and begin communicating with the targets ... as they responded to various catalysts, we recorded the actions in the database and used this knowledge to profile their interests, buying readiness and price point sensitivity.

Our approach and the way we used various forms of catalysts was a prime reason why the rest of the world gets 2% response rates and we get 10-50% response rates. You can do this too. Start simply. Learn how to manage the process. Add complexity as you go. It will work.

Story Telling is Marketing's Greatest Skill

Overcome the Poor Performance of Most Marketing Campaigns:

There are 3 objectives for story telling:

First, to reveal the kind of company you are by communicating the vision behind your products --

To show how your company is relevant to the customer's needs, wants and expectations;

To show how your company delivers value … high value. No bs here, get at the real value you provide and demonstrate it in your story

To show that you can be entrusted with their needs because of who you are, what you believe and what you want out of the relationship and how you return value to the customer.

Second, to identify segments who respond to specific types of stories ... to learn their stories ... and to identify those that are actively moving into a decision-making mode so you can get them into your sales pipeline and sell them more effectively.


I propose 4 Rules for Story Telling:

1. Tell a good story ... engage, inform, inspire, motivate, reward

2. Persuade ... facts, emotions and testimonies

3. Be relevant ... contextual, customer-centric

4. Be catalytic ... surveys, interactive offers, interactive community dialogue

Thursday, March 23, 2006

Field Activated Marketing Excellence

Will Marketing and Sales Ever Get Along?

In one company after another, it seems sales and marketing departments spend more time fighting turf wars with each other than in winning new business. Even if company executives recognize the problem, attempts to correct the misalignment fall short. As counselors to many companies over the years, the fact that each department mistrusts or wants to one-up the other is too often a reason for the failure of marketing programs.

Research by the California-based Aberdeen Group indicates that as much as 80% of marketing expenditures on lead generation and sales collateral are wasted because these efforts are ignored by sales. There’s a significant lack of trust in the tools that marketing departments provide their sales teams, evidenced by the fact that many salespeople reportedly re-create their own materials. Typically, they spend 40 to 60 hours a month re-creating customer-relevant collateral material, research showed.

Field-activated Marketing Support

Field-activated Marketing Excellence is my way of creating trust and cooperation between marketing and sales. Marketing assigns managers to work with sales reps. Weekly communications. Account prioritization. Value-added services from marketing direct to the sales reps in the field. Continuous feedback to marketing from sales. It really is a simple solution … but difficult to make work if attitude and spirit are not positive. Both groups have to accept the fact that without cooperation, they are both doomed to failure.

The goal is to make sure all marketing programs produced get active support in the field … or know the reason why not. The goal is not to assign blame, but to get problems fixed.

Each week, after the marketing managers talk with their assigned sales reps, all the marketing managers meet to look for systemic issues and to develop campaigns that address field opportunities. The pipeline is reviewed and prioritized accounts get special attention –marketing works to help the sales rep move each prioritized prospect faster through its buying process.

Consistent definitions for lead prioritization lead to a common vocabulary.

As criteria are defined, the pipeline report and sales forecasts get increasingly more accurate. Campaigns work, or the Field-activated Marketing Support Process will find out why the failure … the problems are fixed and the next campaign works more effectively. The minutes of the weekly FAME Team Meeting are distributed to everyone involved – this written record increases accountability and allows managers to review progress or problems over time so they can lend their experience and improve processes.

Monday, March 20, 2006

Minding My "T's"

Forgive me also if a few of my words look strange. The letter "T" on my keyboard has decided to take a vacation. Guess I'll call the Help Desk.

Technology Advances; Marketing Must Stay Up

The newest issue of Informaion Today arrived and I spotted an article that caught my attention ... I am always interested in trends so their "Top 10 Technology Trends" took me inside the publication.

Trend 1 is that blogging software will be integrated with our other software. From my point of view, this is essential if blogging is to become a mainstream marketing tool. They missed, however, the necessity to develop better visitor metrics than now exist. Blogs must be as measurable as our websites, since in reality, they are just a specialized website.

Trend 2 was also about blogging. Capturing the top two positions surely means blogging is no longer a second cousin to marketing and IS people. This trend predicts that video blogging is becoming more practical for more people.

Trend 3 is also Web oriented ... Voice Over IP (VOIP) will be integrated more transparently into our lives. Their example: a mobile phone automatically sends a message to a spouse (or a business associate) when the plan lands.

More trends: more technology will enable highly distributed bandwidth; technology will reach us wherever we are; everything will be tagged for easier retrieval and content control; content from a variety of sources will be saved on a non-proprietary format with standardized open document initiatives; standards will win over proprietary operating systems (Microsoft will do what it can to slow this one down); broadband will travel across power lines; and rounding out in Trend 10 is mobile devices will become the primary mode of communication.

Factor in that the NSF has a program moving forward called GENI where they are now developing an entirely new Internet that addresses piracy, spam and all the ills that now plague us.

Roll all this together and all of us in marketing will be scrambling for years just mastering the new technologies that proliferate faster than we can say "Jack Frost."

Why I Disappeared ...

I had a lot of stuff I wanted to post in the last few days, but there were tech problems a Blogger. They might not yet be resolved, so if you have difficulty accessing me in next week or so, it is likely an outage at Google Blogger. They seem to be working hard at fixing he situation, but technology stuff can be difficult at times.

Here's their notice:

A clarification about the filer we restored yesterday: This machine is
indeed up and functioning again, so the affected blogs are no longer entirely
inaccessible. However, it is still not in great shape and we are in the process
of moving all the data off of it and on to better machines. So over the next few
days there may still be lingering and intermittent problems for some blogs. This
includes the "forbidden" errors we're all getting tired of, as well as
occasional publishing errors, or incompletely published pages. If you get an
error viewing a blog, refreshing the page once or twice should clear it. For
publishing problems, simply wait a few minutes and republish, and that should
take care of it. Thanks for your patience while we work on clearing all this
up.

Friday, March 17, 2006

Loyalty Marketing Programs
Failing 68% of the Time

A recent analysis by AMR Research indicates that 68% of retail customer loyalty programs are not working effectively. Against such odds, you might wonder why even start one. It seems that those who have done so cannot determine how to provide enough value to motivate consumer behavior. That's a tough problem for stores that already promote every-day-low-price strategies. How can you give even more to customers in exchange for loyalty?

It is fairly obvious that as consumers we would want something of substantial value in exchange for our loyalty ... to get us to come back to one store instead of shopping around. But if you cannot give ever lower prices, what incentives are left?

The answer, of course, is that love lies in the eyes of the beholder. So the beholder has to tell you what kinds of value they need to get their loyalty. That gets back to the best practice of listening to customers. I know we don't like to do that. It is so much easier to crank up programs on our own with the assumption that we already know what's best for our customers. If this were true, however, we would have 68% of loyalty programs working instead of 68% failing.

To begin with, they will most likely tell you they want every-yet lower-price promotions. Price always pops up in such investigations. But you must dig deeper for victory. To begin with, lowering prices yet again is a cop-out. It is taking the easy road, the less creative road. There are things that all of us as consumers value in addition to money. Value-added benefits such as
personalized services, personalized recognition, advanced notice of new products, a more efficient checkout process, and access to valuable product content and expert advice available only on a Members Website.

There are other issues that determine success or failure of a loyalty program, but if you don't get the value-issue right, they won't matter. Once you are certain you have nailed the value issue, then shift your attention to data, database, and process issues that must also run smoothly and accurately to get the promised performance.

Tuesday, March 14, 2006

How to Define "Customer"

Steve Yastrow posted this on Tom Peters' blog ... his definition of a customer.
"Anyone whose actions affect your results."

I think he has over-simplified things, missing a critical component -- that customers are people who buy stuff from us. Steve's definition takes the most liberal expression and in some situations, this is a useful connotation. Steve would consider employees to be customers. Sure, we must pay attention to employee needs, but employees are not customers unless they buy the company's products.

So a still fairly simple definition could be "anyone who buys the stuff we produce." That has a minor glitch to it -- distributors or other middle-persons buy stuff from some companies and then re-sell it. Who are the end users? Are they customers? When P&G sells its Crest Toothpaste to Kroger ... then Kroger is P&G's customer. When I buy Crest a Kroger, I am Kroger's customer and Crest's consumer. But clearly, P&G must market to both Kroger and the consumer.

Another glitch -- advertisers pay for space in a magazine and subscribers pay to get the magazine. That makes them both customers. But what if the magazine is free to subscribers ... they consume the magazine but never pay.

So let me pitch out another attempt to define what a customer is: "anyone who pays for or consumes the stuff we produce."

How does that work for you. From a marketing point of view at least now I know the audiences that I need to aim programs at. I have to aim at my marketing at both my distribution channels and my end consumers. When we implement a CRM Solution, who is the object of our affection?

Who Should "Own" the Internal Contact Center?

My premise is that marketing should own the contact center. My rationale is that the role of the contact center is two-fold: to provide customer support (read that as customer retention) and to support outbound direct marketing campaigns (read that as customer acquisition). Both responsibilities should be under the management and supervision of the Marketing Department.

Contact centers (previously known as call centers) are the information clearinghouse of most companies. What the Website does not broadcast, the contact center must deliver. What marketing has promised or what sales has sold, the contact center must reinforce. What manufacturing has shipped or procurement has ordered, the contact center must acknowledge.

Yet the talented men and women who attend the phones, the emails, faxes and chat sessions are often hampered in their ability to be the great oracles they are so desperately needed to be. Putting the contact center in marketing puts them in the middle of the action where customer activity originates.

Why Should Customers Be Loyal to Us?

I just came across an old AMR Research slide showing the key drivers behind CRM. Wow, is it revealing!

It reveals that corporations were (at least in 2002 when the study was done) totally fixated on themselves instead of on their customers. At that rate, CRM should never have been called Customer Relationship Marketing ... it should have simply been called Marketing and Sales Automation.

The first driver cited by 33% of respondents was "automation/productivity/efficiency. Second behind that was "competitive advantage." We were staring at our own navals, trying to fix messed up departments and calling it CRM.

The third driver was "customer demands and requirements." We were not leading our clients, they were demanding better service. An admission of total CRM failure.

Following were these drivers: Increased Revenue, Cost Reduction, Saving Time, Keeping Track of All Aspects of the Business.

Then finally, in seventh place, came "Customer Support." Further down the list in 12th position was "Customer Satisfaction."

That AMR study is convincing evidence of what I said in my previous post -- we treat our customers simply as a means to cash ... and they know it. So why should they be loyal to us?

Marketing is Responsible for CRM

The realization that marketing is now responsible for maintaining clients as well as attracting new ones is slowly sinking in. Theoretically, it was the rationale for investing in CRM technologies. But the technologies came and we didn't change what we were doing all along. It proved culturally and organizationally difficult to separate acquisition efforts from service efforts. Managing customer relationships remains a paramount task and we need to increase the marketing bandwidth to cover all the bases.

The goal of CRM is to create more value through interactive and mutually collaborative activities ... the end-state is increased customer retention. That's the primary measurement.

Interim measurements should focus on improvement in:
  1. Customer Sensitivity -- Do we really care about our customers or are they just a means to a prettier bottom line? This shift resides in how we think, how we act, and how we respond to customers.
  2. Convenience -- How easy is your company to deal with? Customers will take the line of least resistance and if that is not your company, it will be another.
  3. Product / Service Quality -- The features have to be there as promised. Reliability must be there as promised. If not, the perception of value delivered will disappear.
  4. After-Sale Service -- Did you disappear? This is one of the most important points in which you have the opportunity for regular contact with a customer. Every opportunity should be optimized to improve the relationship. Continue to offer education and promotion opportunities for your customers. Complacency here will convince the customer that you were not concerned with their well-being.

When it comes to CRM, it is the marketing department's responsibility to nurture the relationship for the long haul -- not IT and not sales. CRM done well is the path to improved profitability.

Monday, March 13, 2006

Marketing -- In Scandal or Crisis


If you tell the truth, you don't have to remember anything.” – Mark Twain

Steve Kayser, Cincom PR Manager, interviews Dr. David M. Abshire, who in 1987 served as a Special Counselor to President Reagan with Cabinet rank, to coordinate the Iran-Contra investigation, and had authority to meet with the President alone. Abshire writes about the experience in his new book "Saving the Regan Presidency."

Dr. Abshire: "There are many instances of presidents – take Richard Nixon and Bill Clinton for example – that dug their hole deeper until they couldn’t get out. Nixon did not know about the initial Watergate break in, but he covered up the investigation. Clinton, instead of admitting to his infidelity at the onset – which is not a crime, made the mistake of lying to a grand jury to hide it from his wife and family and came very close to impeachment.

All of us in marketing will benefit from reading the full interview in Expert Access ... when crises come (not "if") we have our response embedded in solid rock.

Marketing Engages the Blogosphere

The individual opinions blasted out in in the blogosphere are becoming an increasingly powerful force. Together, they form the fabric of online word of mouth that can determine the hottest new product, make or break a TV show, or set off a customer revolt. Eager to tap into the buzz, a growing number of companies are turning to sophisticated new technologies that track what's said on Internet social networks, blogs, message boards, product review sites, "listservs" -- wherever people congregate publicly online.

To capture the chatter, Nielsen BuzzMetrics, a giant in the industry, uses software that collects hundreds of thousands of comments a day. The technology can scan for specific companies, products, brands, people -- anything searchable. It can slice data into a range of categories to quantify the number of times a subject was discussed online, the individuals who mentioned it and the communities where it appeared. Read the entire article.

BlackBerry on the Move Again

The maker of BlackBerry email devices, fresh from settling a lawsuit that threatened its very business, is buying a company that will allow it to marry BlackBerrys with corporate phone systems, The Associated Press reports. "It makes your BlackBerry perform just like your desktop phone," said Jim Balsillie, co-chief executive of the company behind the BlackBerry, Research in Motion. All of us in marketing need to ponder how such developments will impact the marketing strategies and campaigns of the future. It's tough enough mastering marketing but now we have to stay on top of all sorts of emerging technology-based channels, constantly looking for the competitive advantage.

Marketing to C-Level Decision Makers

A lot of my recent email has been people asking for advice on how to create more effective C-level decision maker marketing programs. Since you have never held their position, you don't really know what their day looks like, what problems they struggle with most and how to relate your campaigns to their real world.

You need to understand enough about their world that your campaigns will engage them and create a productive conversation. Your conversation must be valuable to them instead of a marketing pitch.

How do you acquire this knowledge when you are not a C-level person? Sure, you can do target audience surveys, you can run focus groups, you can hire an industry analyst ... but this is sort of second-hand.

Here's one idea that has worked for me.

Find out the professional conferences that attract C-Level managers, especially those that are in your focused industry. Read up before you go ... the trade publications for senior level managers plus online search. Make sure you can converse about two or three of the most current issues plaguing your targets.

Then when you are at the conference, sitting along side them, you are ready to enter a discussion with them and to learn first hand. Refrain from selling. Your goal is simply to confirm your learning so you can create more effective marketing programs.

The better you know your target audience, the more effective you will be.

Wednesday, March 08, 2006

Marketing Must Consider Ease of Use
When Developing Technology Products

Marketing it seems to me has a responsibility for developing products that customers can use. But in her thesis of the Technical University of Eindhoven in the Netherlands, Elke den Ouden discovered sad evidence that we are failing the mark.

When you consider the number of "new technology" products that now fill the shelves -- MP3 players, home cinema systems with remote controls so complex we can't figure out how to TiVo a program, home security systems that go beep in the middle of the night, computerized this and computerized that ... we get a bit overwhelmed. But it is our job as marketers to make these things so they work simply and easily.

E;le's thesis project revealed that the average consumer in the United States will struggle for 20 minutes to get a device working, before giving up.

Product developers, brought in to witness the struggles of average consumers, were astounded by the havoc they created.

She also gave new products to a group of managers from consumer electronics company Philips, asking them to use them over the weekend. The managers returned frustrated because they could not get the devices to work properly.

Most of the flaws, she discovered, were originated in the first phase of the design process: product definition. This shows marketing to be out of touch with the customer. Then we wonder why our promotions don't work, why sales don't hit the goal, why customers get angry.

Tuesday, March 07, 2006

The Inevitable Will Happen

The move from broadcast marketing to conversational marketing will come slowly and all-too painfully to many companies that have spent billions on one-way advertising.

Can We All Learn from Enron?

Enron Revelations as Revealed by Business Finance Magazine's eNewsletter:

For anyone who has read Bethany McLean and Peter Elkind's "The Smartest Guys in the Room" (Portfolio, 2003) or watched the documentary of the same name, the headline of this Associated Press article, Witness: Enron Gained from Energy Crisis (free registration required), will illicit a "Duh." The article explains how the company gamed California's newly (and confusingly) deregulated power market in 2000 and 2001.

The book and/or the documentary ought to be required reading/viewing for finance executives, business leaders and, well, just about anyone in a management position. Since its demise, Enron has been continually held up as a symbol of (take your pick) unethical behavior, employee mistreatment, accounting fraud, the evil underbelly of "The War of Talent," and the importance of whistleblowers.

The debacle has more instructive value to offer. It may be of little consolation to the employees and shareholders who suffered from Enron's culture, but that culture serves as a highly useful "anti-case study" in which a doomed enterprise and flawed culture was systematically created through the decisions, behaviors and communications of its executives.

I couldn't add much more than what Business Finance said ... except that we as marketers have an ongoing responsibility to do the right things ... to create honest, helpful programs ... in a customer-centric world, to do less is gambling the whole brand. In a blog world, the bad news will fly fast.

Marketing ... It's All in the Numbers

Just sitting here pondering how to convince our senior managers to invest in a new customer relationship marketing program.

But lest I reveal any trade secrets, let me move the line of thinking to a B2B provider of package delivery services (you know, UPS or FedEx or that new one with red and yellow trucks). The company’s books tell senior managers that the trucks and aircraft that carry the packages are the assets.

So their focus is largely on the financial management of these assets. But to a marketing manager, these assets have no value unless they are filled up with packages. The more packages you stuff on these assets, the more money the assets make for you.

One step further out … no clients, no packages.

So in the end, the only real assets a company has are its clients who put packages in the assets. Marvelously simple.

And yet, senior managers are still riveted on cost factors instead of growth factors. Unless the CEO comes from a marketing background, what we do for the company is somehow looked at as black magic. It is soft and squishy. It is often unpredictable. The real asset turns out to be the client’s perception of what you do for them.

But what the senior management understand is cost factors. They know that if they cut back on the marketing budget, magical dollars jump to the P&L Statement. But our job is to spend money and get the best client satisfaction for the expenditure … to motivate the client to spend money with our company. Now I can see why they can’t figure out what their TV or magazine advertising is doing for them. But direct marketing? Direct marketing is so measurable that it is scary.

Direct marketing aimed at specific addressable targets, with a contextually relevant message and offer builds up a database of results. Finally, something that senior managers understand!

Numbers!

The real asset for marketing managers is numbers ... the ones we help generate with targeted, addressable marketing campaigns.

Teachable Moment Marketing Campaigns


A survey for Sears concluded that a woman's best friend is her tool kit and reports: "Three out of five women would rather receive an hour of advice from Bob Vila than Dr. Phil.

If you are running marketing campaigns aimed at women, that should be useful advice. They don't want to be preached at but instead prefer advice they can use around their homes. Marketing, after all, must be relevant to what the customer wants.

This opens up the whole concept of The Teachable Moment.

There are times in our life when we are more prone to to interact with a marketing campaign. That time is when we enter The Teachable Moment ... we are in a new situation, we bought a new car, or we're going on a trip, or we have a problem we don't know how to solve. As marketers, we need to understand our customers and what kinds of events are most likely to push them into a teachable moment.

A marketing campaign for a safe and effective hard surface cleaner will be more effective when the homemaker has moved to a new home and is confronted with new surfaces to keep clean. Develop a Teachable Moment marketing campaign aimed at new home owners, with a coupon and sample to start the teaching as soon as they enter their new home. Well, you get the idea.

Whether it's Bob Villa or Dr. Phil ... when we're ready to learn, a teacher will appear. Will it be you?

More Marketing Tips on eMail List Building

Melinda Krueger of Krueger Direct/Interactive must have known I was going to post today about eMail Marketing (my previous post).

As soon as I published "eMail Marketing Made Better," I got an email from MediaPost with an article she wrote about using and abusing eMail lists. It was so timely and relevant to my discussion that I felt compelled to pass along a link for you to follow up on. Melinda explains why she does not use rented lists for her eMail marketing campaigns and she offers some good hints on reactivating non-responders. Her full story is here.

Interestingly, when I googled Krueger Direct/Interactive the SERP gave me a full page of articles authored by Melinda ... clearly she's very active in the business ... but when I tried to get the website address so I could learn more about the services she provides. Can't find her anywhere. I have her email address, but no website. Surely she has not made the classic mistake of no way to learn more about her business????

And, hey, if you have had any nifty eMail marketing ideas along the way, how about sharing them here so we can all get better together?

eMail Marketing Made Better

We all use it. It's so alluringly cheap compared to the Post Office.

But most eMail marketing campaigns respond back to us with results under 1%.

So cheap is not the answer unless we learn how to do it better ... and better ... and better.

The first problem begins before we ever create the eMail itself. It starts with the list. And eMail address lists are bottled up like gold at Ft. Knox. The easiest lists to get are with your current customers so you should have a plan in place to get every customer contact's eMail address.

With this list you can do one of three things:
  1. Sell the customer a better and more profitable version of what they already bought from you ... up-sell
  2. Sell them something new ... cross-sell
  3. Keep them as a happy customer ... retention

But if your task is to generate sales leads from prospective customers, the list problem becomes a bigger issue. Rented lists, while flawed at best, still give you broader reach into a targeted segment.

A List Building Blitz

Typically, postal lists with phone numbers are more available. Put your telemarketing department or your sales reps on a blitz program calling to a rented list. When they connect, the pitch is to send them some super-duper valuable, one-of-a-kind informational offer that you will be glad to eMail to them right away.

When you send them the offer to the eMail address they just gave you, be sure to let them know you produce this good stuff all the time and ask for permission to send them more in the future. Now they have opted-in. Never abust this trust cause it having the right to talk is worth a big chunk of that gold in Ft. Knox.

Set aside a few days each month where you dedicate your entire organization to getting more eMail addresses. Eventually, you will have a list more valuable than any other asset at your company.

Three more things to pay attention to:

  1. Make sure the offer is a killer ... the eMail marketing campaign is all about the offer (not about what you want to sell)
  2. Get a great "From" and "Subject" line -- miss this and the eMail will go unopened and your marketing campaign is a bust. You know something like: FROM: The Cincom Manufacturing Business Solutions Team. SUBJECT: A New Offer that Can Improve Your Profit by Millions
  3. Get the eMail creative right ... pay attention to solid direct marketing principles. Put the power in your opening headline and first sentence. Make sure they know immediately about the offer and how to get the offer. Then explain it more thoroughly and close it out with repetition about the offer and how to get it.

One more thing ...

Put all your results into a database. Who opened? Who responded? Who did not respond? What are your follow up actions with each type of prospect? For example, the offer might not have appealed to them so try another ... or the timing was wrong so go again at a different time.

You worked hard to get their eMail addresses so you could send them marketing programs ... but if you are learning things about them, this should make each outbound marketing initiative ever more relevant to their needs.

Monday, March 06, 2006

Survey on Marketing Department Performance Not Pretty

Physician, heal thyself!

It is never easy to accept criticism, but it is how we learn.

The CMO Council conducted a 4-month study into how we practice marketing ... how we run our marketing departments.

Leading marketing execs admit that their department performance is not top-notch. Only 10 percent see their marketing groups as "highly influential and strategic" within their company. Under half believed marketing was "well regarded and respected."

More than 40 percent of marketers said their departments were aligned with their company's mission, noting significant knowledge gaps about customer insight and access (46 percent), strategic depth and business knowledge (39 percent), and marketing analytics and measurement (35 percent).

Three-fourths said they have no formal marketing performance scorecard to effectively rate their organization.

According to Donovan Neale-May, the CMO Council's executive director: "This study confirms marketers need to move from a tactical orientation to a more analytic and strategic approach that will enable them to realign marketing initiatives with the overall corporate mission. Only marketing executives who successfully transform their organizations through rigorous disciplines, best practices and technology-enabled processes will play a critical role in their company's strategic growth."

The fact about lack of customer insights really hurts.

That's our primary job ... we cannot do anything positive without these insights.

But instead, we get locked in meetings all day with little time to get out and talk with customers. In the end, that's no excuse. We allow all the customer insights to trickle in on call reports from sales reps ... and we all know those reports are tainted by the nature of the sales process itself; they are not objective reports.

Suggestion -- set aside one hour first thing every Monday. No interruptions. Just call prospects or customers at random. Dont' sell them anything. Just find out what's on their minds. What problems do they struggle with ... particularly the problems for which they have no immediate solutions. Suggest a few ideas to help them. Invite them to opt-in for your company newsletter. Invite them to access your blog. Be a thought-leader for them. But most important -- LISTEN. What are you doing that could be done better?

My Running Comments on Google Ads

My faith has been restored.

Since this morning when Google was still placing pharmaceutical ads on this blog, I posted several articles where I purposely optimized the content for the word "marketing."

Now, understand that I do not tend to write here with SEO as a prime objective ... I feel I have more of an obligation to write for you than an engine. So I won't drive you nuts with a lot of keywording ... however ...

... it worked!

Within an hour every ad posted to this site was on marketing. The pharma ads are gone.

So hopefully, the ads I have added in the right column now offer extended and useful content for you.

Good job, Google!

Creative guidelines for compelling online ads

A peek at my notes from the SEO Srategies conference:

The headline title for the ad is the most important element
  • Get the keyword and a differentiator in the title … a 50% improvement
  • Bold your company or brand name
Be specific … vague copy fails every time
Two examples of specific copy for Cincom:
  1. Learn how Product Configuration works
  2. Product Configuration in half the time
  • Another example of being specific:

Arizona Golf vs. Phoenix Golf … the first is too broad if you only offer golf trips to Phoenix … write ads so you don’t have to pay for clicks that won’t convert.

Have a compelling offer that is different, unique:


A few more practical ideas to make your online advertising work more effectively
  1. Use CAP LETTERS for key words
  2. First person stories … trusted authority … price appeal … convenient actions … get information, unlike any other
  3. The word FREE is the easy fast word but it does not qualify the prospect
  4. Display the URL for company site or landing page
  5. Make sure the landing page delivers relevance from the initial ad (strong scent … the ad and landing page should smell the same)
  6. Use price points when this is an advantage
  7. Different populations using different search engines behave differently … but FREE Stuff works all the time
  8. Sell the experience … indulge yourself
  9. Check with the various search engine sites … they all have resources to improve results
    Display Ads
  10. Elements with most impact are Headline, Greeting and Image
  11. “Success” images outperform lifestyle and product images by 58%
  12. Avoid logo confusion in same ad

A Major Marketing Blunder for Me, Too

Just as I was feeling sorry for the marketing department at H&R Block, I hit a blunder of my own. I went away from blogging for a week while attending the SEO Strategies Conference in New York.

No posts from me for a week.

The result: my blog traffic went down by 90%!

Moral of lesson for me and all bloggers ... keep up with regular posting ... give your readers the steady flow of interesting and useful reading.

If you don't, then readers head off for greener pastures to spend their time with other blogs. The competition for attention is as brutal for marketers working in the blogosphere as it is for marketers working in traditional media.

Please come back friends ... I love interacting with you!

Major Marketing Blunder


A marketing miscue could not have come at a worse time of the year ... right when consumers are considering who they want to prepare their tax returns for the dreaded April 15 hit in our pocketbooks. Well, actually it wasn't a marketing miscue, but it sure is a marketing headache.

All the hard marketing work that H&R Block has done in building its brand name, with hundreds of thousands of dollars in TV advertising, now has the potential of unraveling. H&R Block admitted that it filed its own corporate tax return inaccurately -- by $32 million. Block's tax blunder came from underestimating its state tax liability and while this is an issue that is unique to corporate returns, it is enough to cast doubt on their claimed thoroughness.

Everyone in marketing shares the fear of such a miscue in our own companies. Mistakes happen. Marketing managers should always have a positive rebound for any anticipated negative news. We need to protect our brand equity with rapid response marketing strategies.

Block needs to head off the potential negative hit from this mistake. Admit it on their website, but trivialize it and show how this cannot happen ... reinforce its customer guarantee for accurate returns. And Block needs to get active in the blogosphere fast to show negative bloggers a more positive story.

Sunday, March 05, 2006

From Whence Cometh Marketing Vision?


I rather suspect we all believe we have the foresight to do great marketing. But clearly, some of us need to sharpen our tacks before we pin them to the bulletin board of success. I am talking about the kind of foresight that lifts our marketing programs out of the ordinary ... that touch prospects and customers in ways that are so relevant that our audiences know for certain we are talking with them.

Marketing calls for both vision and a vision. We need vision to see over the horizon. We need vision to reach the promised land. We also need a vision for where marketing will guide the business. Vision must be rooted in customer expectations. A vision, on the other hand, is a marketing plan that takes into account how we will capitalize on the opportunities that customers provide to us. It is the roadmap built on vision. It implies Thought Leadership.

Thought Leadership is like the old EF Hutton commercials: The boardroom is filled with executives and there is a loud cacophony of noise as they all chatter away until someone whispers what EF Hutton said. Instantly, quiet descends on the executives and the whole room listens in to the one person who got a tip from EF Hutton.

When we have both vision and a vision, we are just like that commercial. People want to hear from us because we have something important to say. People want to hear because what we say will be relevant to their needs.

Marketing will earn its seat in the board room when we have the vision to see what customers want and a vision for how to deliver the goods.

(image from JIWA Training Center)

Rating Google's Contextual Ads as a Marketing Resource

Here's a different kind of Google Bomb.

I was away last week attending a seminar and while I was gone and not blogging, it looks as if Google has lost its scent. The previous ads in this space were well matched with the content, but this week they have gone to pot. Search engine marketing is being tested here, and not doing so well.

Out of five ads, two were pharmaceutical-related. In the course of writing this blog, I might have mentioned pharmaceutical a time or two ... but certainly not enough to warrant 40% of the advertising here to hit that category. My guess is that not many in marketing are looking for pharma jobs offered by biospacejobs ... if I'm wrong, let me know and call me crazy.

Of the remaining three ads, one from Deloitte offering an excellent whitepaper on Growth Strategies has appeared every day for weeks. If you were interested by now, I should have thought you'd have downloaded this paper. If not, please do so and maybe Google will grace us with a new offer to consider.

That leaves two more ... an opportunity from Fortune to join their forum on innovation and a free Innovation Newsletter from Industry Week magazine. Both are interesting to me, and quite possibly interesting to you, as well. But, hey, Google ... how about more ads with offers that appeal uniquely to direct marketers who are interested in personalized, contextually relevant marketing?

That is, after all, the promise of contextual advertising, isn't it.

(Illustration of Google Bomb from www.addict3d.org)

The Most Important Marketing Question

We can do all the customer surveys we want. We can dig at all kinds of attributes that give us the knowledge to shape marketing success. But when it comes down to the most important goal all of us in marketing have, there's just one question. Put this in every marketing survey you do with customers and you will have a benchmark to all marketing efforts:

Will you refer us to someone else?


If you get a high score on this attribute, you have a very strong story to tell the world. You will likely find bloggers saying good things about you. Every marketing program you initiate will be more successfu.

This question is so vital to marketing success that it should be the standard that all marketers, customer service representatives and sales reps should be measured by ... in fact, it should be the standard for all employees. Everyone in the company has the ability to add to the customer experience and satisfaction or to detract from it.

This is exactly what General Electric does. Top execs at General Electric have their bonuses tied to what they call the "Net Promoter Score" (NPS). The NPS is percent of customers who would recommend GE. They ask customers "on a scale of 0-10 how likely you would recommend us?" The scoring GE uses is customers with a score of 0-6 are considered detractors. A score of 7-8 are passives. And a score of 9-10 are considered GE promoters.

The scoring formula looks like this:

NPS = (No. of Promoters) – (No. of Detractors)

It's all very simple. It is the key to building effective and profitable customer relationships.

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