But still very compelling…

 

Negotiation skills – and patience…

The ADMA Digital Council released its first white paper in April this year. As the current Chair of the Digital Council, I wrote an article for the Direct Marketing Magazine outlining the key points of the white paper.

Entitled Social Media Marketing and the Direct Marketer Building a more meaningful relationship with the consumer, the purpose of the white paper is to identify and discuss the connection of social media marketing and direct marketing.

This paper has been developed by the Digital Council’s Social Media working group led by Mike Hickinbotham from Telstra, in conjunction with Sebastian Vasta from Optus, Sue Cash from Resonate, and independent social media consultant Ian Lyons.

Rob Edwards, CEO of ADMA, talks about one of ADMA’s (many) roles being to help marketers connect with customers. The inclusion of digital under the broader Council umbrella, as a separate Council in itself, extends that thought to “connecting marketers with customers – in real time”.

The Digital Council has three core work groups focused on Social Media led by Mike; Search led by Gary Nissim from dgm; and Email/Mobile led by MaryJane Aviles from American Express.  

Each group is working on developing white papers for ADMA around their key topic areas. As the digital channel continues to increase in importance to marketers, ADMA is focused on providing the membership with insights, case studies and thought leadership in this area.

When developing the topic for the white paper, the challenge was finding the right place to start. There are so many topics, platforms and opportunities associated with social media that the team could have come at this paper from any angle.

It was decided that the best place to start, naturally enough, was the beginning.

So the purpose of the paper is to provide the ADMA membership base with a number of key concepts relating to social media and the way this channel can be used by marketers engaging with customers.

Full explanations around these concepts can be found on the Posterous blog where the paper is posted (link provided at the end of this article), and this is intended only to be a summary of the paper.

Social Media and the Direct Marketer

1.  Customers speak to one another. The group formerly known as the mailing list/target segment can now engage with one another.
2.  No longer is the marketer the instigator. Traditionally engaging the customer was initiated by the marketer and the media by exception. Now anyone with access to the internet and sharing relevant content with a community of shared interest can engage.  
3.  Content is shared in real time and is searchable. While the dynamics of social media of real-time, searchable content is a reflection of the internet’s capabilities, it is a dynamic that direct marketers need to be aware of and find opportunities to leverage.

The dynamics between Social Media and Direct Marketing

4.  Relationship building. Direct marketing uses analysis of customer data to offer the right product, at the right time, to the right customer. Social Media is more relationship-centric and if effectively applied, could result in building greater trust with customers.
5.  Continuous conversation. Direct marketing is a 1-to-1 communication channel with highly targeted campaigns going from the brand to the customer. As a channel, social media is continuous and multi-directional allowing the communication to be from business to customer, customer to the business and from customer to customer  
6.  Influence the message. Messages are totally controlled by the organisation in direct marketing channels.  Organisations lack the same level of control when participating in Social Media. Influencing the online conversation by being as transparent as possible and acting with integrity will help pay dividends over the long term
7.  Retention through recognition. The Pareto Principle of 80/20 is replaced by Power Law of 90:9:1 in social media.   In Power Law, 1% of the customers create most of the user-generated-content, 9% engage with the content and 90% simply read the content.  
8.  Measurement. Social Media is also highly measureable with some additional metrics that require tracking such as web metrics (# of visitors, time on site, content consumption, content creation, frequency, source), social metrics (e.g. bookmarks, social “mentions” and reach of blog /microblogs like Twitter, inbound links) and sentiment tracking through text mining

How Social Media Could Support Core Business Objectives

9.  Customer Acquisition. People talk. Social media amplifies those conversations to be received by more than the people within ear-shot of your story. And social networking gives these people the tools to easily pass on that message.  This ease in sharing content with or within shared interest communities is motivating businesses to add ‘social’ elements to their marketing efforts.
10. Customer Retention. People talk. If the online conversation regarding your business is negative in sentiment, the online venues where the sentiment is being generated is where your business can constructively engage in the conversation
11. Sales. Many self-styled social media gurus preach ‘social media is ‘pure and holy and cannot be poisoned by sales messages’. This is not entirely true.  
12. Research & Development. A new source of generating revenue is developing new products.  Leverage the world’s biggest focus group to find out what the market wants? Termed ‘crowdsourcing’, social media can be used to your advantage at every step of the development cycle.

Getting started

Step 1: Listening. The best way to start is to start listening – across a variety of channels.  You’ll be tempted to engage but resisting that urge will pay dividends.

Step 2: Engaging. Now that you are equipped with insights on what your customers are interested in, you might like to engage. Your existing web site may not be flexible or dynamic enough to use for your social media initiative – this is where a blog might be perfect.

What’s next?

The white paper is located on posterous http://admadigitalcouncil.posterous.com/social-media-marketing-and-the-direct-markete and we are actively encouraging members to contribute to the discussion.

It’s intended that each sub-group will deliver two white papers a year so topic development is important. Through the contributions relating to this paper, we are hoping to identify the next area of interest for the work group to get their teeth into.

And as a final point, the Digital Council has a great foundation of members and there is always room for more.

Additionally, there are places available for anyone to join the work group and contribute to the next paper. So if there is a social media topic you have been mulling over, debating or have seen coming across the horizon, please let us know – and join in to help deliver the next thought leadership piece.

Over the past few months I seem to be having more and more conversations about CRM.

As budgets tighten (or disappear), pressures for returns increase, the logical focus is on existing customers and stopping the leakage of defection and looking for ways to increase their engagement – and ultimately contribution. The interesting thing is many of the conversations are being viewed as short term tactical activities that will cover off the downturn until things pick back up and the market returns to normal.Things like “… we need a CRM program – now, and can you give us some activities on how we can *insert activity such as acquire, retain, sell grow*…”

CRM is a strategy, not a tactic. Any program should be viewed as a long term investment that can take a while to really show return. It isn’t a quick fix.

Having said that, tactical initiatives can certainly add customers, increase product usage and hit the sales graph in the short term – and are important within the holistic marketing plan. However most tend to be promotionally led, meaning the cost of acquisition and usage increases. And the likelihood of those customers defecting to your competitor when they come out with a newer, shinier offer, increases.

Importantly, with a longer-term strategic vision, these tactical activities can provide the foundation for the future program. And companies that have invested in this area of customer engagement are sitting in an interesting place at the moment.

I am regularly asked “who does it really well” and “what are the best programs”? The good CRM programs are the ones you don’t really see – unless you are a participant. There are two companies I regularly deal with who I have recently received communications from – and this got me thinking about the CRM area – as a customer.

As a MyerOne card-holder, I have been inundated with offers in recent times – I’m thinking that many of their 2.7 million card holders have been – based on the strategy highlighted in B&T on 16 March where Myer announced they were going to move their marketing activity to the MyerOne customer base (http://www.bandt.com.au/news/f8/0c05f3f8.asp). Now whilst these offers aren’t specifically relevant to me – I am the cardholder, my wife is the spender – they have been passed on and I am sure some (more likely many) have been used.

The challenge here is that it can seem to be their catalogue strategy delivered by email – hoping that there is something among the myriad of offers that will trigger an action. And at times there is. But Myer have the data – they get my MyerOne card every time a purchase is made, and they have an opportunity to drill into this data and deliver specific, targeted offers and messages.

The other company that has come to prominence is a Qantas. I have been a Qantas flyer since 2000, and recently they noted my decline in flying behaviour (mainly due to change of job) and have delivered a great incentive to get me flying again (which by the way is working). I was surprised to receive this from Qantas as aside from the weekly/fortnightly Redi-Deals email, the only time I receive anything from Qantas that is relevant and personalised is when my annual renewal comes up and they give me a new membership card that tells me what tier I am the next year.

I cannot ever recall having received something as targeted and relevant. The point to this example, is that Qantas has used my behaviour as observed through my customer data to inform the communication strategy. They have delivered content in the context of their audience. And this can be done irrespective of the size of the company.

So what can businesses do in this climate?

Without breaking the bank, and without taking so long that the market has picked up and we’re “back to normal”, you need to:

Capture customer data – understand who they are and what they do with your company. Track their behaviour – and that includes online and offline. And the database doesn’t need to be a multi-million dollar infrastructure.

Develop customer segments – analyse the behaviour and identify usable customer segments and profiles within your database. Leverage those insights and look for ways to get them further engaged with your brands.

Manage the experience customers have with your company – across all possible am, but something that is relevant and meaningful to your customer and your business.

Differentiate activities – not all customers are created equal – invest your marketing budget in the way that gets the best results.

Spend some time and work through these areas, understand your customers and give them more reasons to do business with you. B ack in Adelaide, there was a guy that ran the corner store near where I grew up and he had it down pat. He knew every customer by name and their family. He knew what they liked, and their purchase habits. Often I’d walk in and head to one corner of the store to return to the counter where he would have 2 or 3 different items sitting there for me – which was hard to say no to.

And after a while, he ran an account for me at his instigation – in fact rarely did he ever ask for money, just put the transaction on the piece of paper stuck on the side of his shelves (with about 30+ others) knowing it would be paid – and confident of getting paid as he knew where we lived! This went on for years – even when I moved suburbs it kept me coming back.

Now, that was understanding the customer and delivering the right experience.  

 

I have attended a number of conferences and continue to notice attendees confessing that Facebook is banned in their workplace. This is slowly reducing but is still very prevalent.

I suppose the banning isn’t the thing that surprises me – it’s the commentary around the statements and the person delivering the message.

At a recent Online Social Media and Business Collaboration conference the topic of Facebook in the work place was raised on a few different occasions. Facebook in the workplace was discussed in coffee breaks and in presentations – where in one instance a show of hands was requested if “Facebook was banned” in their office. I’d say a quick glance around the room showed maybe a third of the attendees raised their hands.

A lot of the commentary about workplace ban of Facebook is based upon the “time wasting” nature. And in a number of instances, the people delivering the comments – and this is a sweeping generalization – are middle management types probably in the 40+ age group. This isn’t overly surprising either as many of these people would be KPI’d around playing their part in productivity and efficiencies of operations, delivering services or widget sales under a broader set of corporate objectives.

Something to consider as media becomes more invasive is that banning Facebook or Twitter can be futile, as access via mobiles (maybe even company provided ones!) is continuing to increase..

Interestingly Peter Williams, CEO of Deloitte Digital and their Innovation Practice, recently said his concern wasn’t using Facebook in work time, but working in Facebook time!

This issue reminded me of a previous life where I was responsible for building a call centre in a credit union. The skill sets of the people needed to deliver the levels of service expected in a call centre of a member based organization are quite specific. They need to be energized by customer engagement and welcome conversations. When the management reporting system was put in place, an interesting anomaly was presented.

The high performers in this area were ALWAYS on the phone – even if there was a lull in the call volumes. If not talking to customers, they were calling family and friends. They were always talking. And this is what made them high performers.

They’d put their conversation on hold to jump onto incoming calls, then get back to who it was they were talking to – or drop the call if it got really busy and call back later. Through observation and discussion, this continuous engagement kept their motivation levels high – and they were the ones managing the greatest amount of traffic, and consistently delivering the highest sales results.

They were highly social and engaged.

 

Simply reading the management reports on call activity would have suggested they were wasting time by having personal conversations in company time – not delivering on the expectations of their jobs. I suppose anyone with a phone on their desk could be accused of the same thing?

 

Perhaps not sweeping bans, but observations and understanding of motivations of staff – which could well inform the motivations of customers – and looking at a responsible usage program could be of benefit. There will always be a group of people looking for ways to avoid their responsibilities – this suggests unmotivated employees. They distract themselves with the phone (desk or mobile), newspapers, sms, water-cooler conversations, the list goes on.

 

The tool that they engage with to pass the time may not necessarily be the issue.

 

The question is, does a sweeping ban actually result in the desired behaviour, and what is the opportunity cost?

 

With the growth of social media conversation channels, and the desire for businesses to join the conversation and become active participants – some would say intruders – it leaves the question “where does email fit?”.

Instant Messenger and SMS always seemed to be complementary to email – the quick chat if your chosen target was online and available at that moment of human interaction need. However if they weren’t there, then email was the logical solution. Heaven forbid a phone conversation – or even walking across the office or upstairs for a face to face!

Just as direct mail had to re-evaluate its role in the communications mix, the time has come for email to do the same thing.

All of this is playing a role in this time of “recipient consideration” and its impact on channel effectiveness.

From a transactional perspective – there is a comfortable and legitimate fit for email. The online ordering and purchasing cycle is not complete without it. As is registration and validation for a range of online activities.

Perhaps the financial consideration of email being cheaper than traditional direct mail has lulled marketers into a false sense of security.

As production and distribution is much quicker, cheaper and potentially environmentally less wasteful, email databases run the risk of being re-used with monotonous regularity – irrespective of the outcomes of the activity.

Additionally, measuring and reporting on the wrong things such as delivery success and open rates – not sales and leads – does not validate the channel.

Given the economic environment, perhaps even communications that cost “only a few cents” to deliver will come under the ROI microscope. Those activities focussing on greater targeting, more specific and differentiated messaging, with impactful creative and relevant offers coupled with commercial attributes in bottom line contribution will come into play.

The question now is what commercial role can email play or is it now purely functional?

All of the direct marketing fundamentals that saw mail come from the abyss and redefine its relevance in the mix sit there waiting for this channel.

Is that ding I hear the sound of the return of email?