Direct Marketing

Can Direct Mail be Environmentally Friendly

I am probably going to regret opening this can of worms but lately my thoughts have turned to the impact on the environment of direct marketing. I am not crazy enough to tell you that marketing (especially direct mail) is a positive environmental force - a few industries today can claim to be that. But I do think that my colleagues and I are reducing the impact, albeit in a small way.

By focusing on customer data, companies can dramatically change the environmental impact of their direct mail initiatives. Specifically,

1. By building a complete view of the customer (linking disparate databases), companies can reduce duplicate mailings and control the flow of communication to their customers.

2. Using analysis techniques such as predictive modelling and segmentation, communications can be targeted maximizing the impact of every piece of mail. This can ensure that only those most likely to respond will receive a piece of direct mail.

3. By cleaning up databases, and fixing addresses, undeliverable mail can be reduced.

4. By enabling opt-outs (and using the CMA opt-out list)- and specification of contact preferences - companies ensure that those who do not want to receive mail do not get it.

5. By merge-purging external lists against one another and internal files, targeting of the same prospect multiple times can be avoided.

My response for years when asked "Oh, so you are responsible for all this direct mail I get" has been "No, I am responsible for all the direct mail you DON'T get". I have a feeling I might be asked that more and more in the coming years!

For more on this read the Aberdeen Group's report:
Green Marketing: Leveraging Customer Data to Reduce Direct Mail Waste by Aberdeen Group.

I am also encouraged by the new focus being shown on this issue by our key industry groups – perhaps too little too late but all action is better than nothing:

- NAMMU (National Association of Major Mail Users) has an annual award that recognizes innovation in making the mailing industry as environmentally friendly as possible. The winner in 2007 was Domtar for their EarthChoice Paper.
- DMAT (Direct Marketing Association of Toronto) has recently announced the creation of a taskforce to study the issue of environmental responsibility.
- The Forest Stewardship Council of Canada (FSC) launched their FSCXpert (FSCX) Program late last year – this is an educational program and designation for graphic designers, and communications and marketing professionals committed to responsible forest management.
- And, of course, the CMA has a variety of case studies and green tips available to marketers who want to reduce their environmental footprint.

Leverage Your Data With 1-to-1

Let’s take a magic carpet ride through the space-time continuum.

Fast-forward ten years from now. Will anyone be doing mass advertising? Will there be any value in Television advertising, unless it’s targeted to each household or individual. The future of marketing can only be as good as the technology available, and considering where it’s at now; we’re in for some hardcore one-to-one marketing.

Right now, personalization is where TV was 40 years ago. Everybody knows it’s there, but no one quite knows what to do with it yet.

Early response rates on personalization have been very promising – three times the industry average, with many running higher – but there’s not enough of a track record to make accurate predictions. Marketers like to go with what works, and having an X factor can be intimidating. That enchanting unknown territory of “potential ROI” is like the land of OZ.

It seems like a lot of people are getting into personalization, including companies as diverse as Xerox and Canada Post. These companies offer complete conception through production one-to-one services. There are other companies such as Lift Agency that specialize in personalization and have been pulling in impressive results for clients such as Telus and Mercedes.

Personalized mailings aren’t in any way new. Variable print technology has been around for many years. But advancements in client databases and increasing awareness with one-to-one marketing is starting to perk up some ears to the idea of leveraging available data to really speak to customers in a way that resonates and promotes stronger relationships.

So if you have the data, why not use it?!

Comparing Apples to Apples.

Recently, I have had the same conversation with two separate people. We were talking about the Dove Revolution campaign. The people with whom I was speaking both said they couldn't believe how well that spot had done at Cannes. It did well in the interactive category. They were aghast that what was basically a television spot would do so well in an integrated category of an award show. After all, there was no real interactive component. How dare they. There was no "online experience" to be had. Nothing to do but watch the spot. I've heard this lament time and again about various campaigns. In fact, the same argument has been waged in the pages of Marketing Magazine recently where, in the letters to the editor section, one Creative Director took another Creative Director to task for arguing that a television spot or outdoor billboard posted on YouTube does not make it "online creative". Perhaps not. But here's where I have to play devils advocate.

To my mind, the internet is obviously a place where you can interact with creative. But it's also much more than that. It's also, like television, a place where you can build a brand and create awareness. Like a direct marketing campaign, it can generate a lead, collect customer information, be extremely personalized, and provide an offer. Like a retail promotion, it can get you to enter a contest and win something spectacular.

Of course, the online space is a discipline. There's a way to produce online creative that is obviously different from how you develop other creative, and you have people who specialize in the space. But it's also a channel with the power to build awareness, generate a response, and engage a consumer.

And that brings me back to the campaign that started the conversation in the first place, the Dove Revolution spot, and the reason I'm writing this post. This was my role as the devil's advocate in my conversation with my friends.

The Dove campaign won at Cannes because it was brilliant creative. Plain and simple. It didn't matter where it appeared. It ran online, but why can't the online space be used to build a brand and generate PR? People who work in the online space know its potential. But do they harbour, dare I say it, some bias that online advertising can only be immersive and clickable? Only "interactive"?

Then, after having had both conversations, I had a revelation. Perhaps the award shows themselves (like Cannes) are creating this controversy and encouraging this argument. Perhaps the problem isn't the creative. Perhaps it's the way the work is submitted and judged. Maybe it's the categories in which the creative must be entered. Was the Dove campaign competing with work that was more experiential? Were apples being compared to apples? And if not, why not? Why don't interactive award shows create categories that break the work down into the objectives of the campaign. Mass/Awareness online ads should compete with online ads that were created to do the same job. Promotional campaigns should compete with campaigns against those objectives. And so on. Perhaps they'd have to rethink how the whole award show is built. Perish the thought!

In the mean time, don't blame the Dove campaign for being beautiful. Just let it compete with its own kind.

Name that Spot!

I just saw a car commercial while watching one of my guilty pleasure shows (don't ask) and paused it before any branding revealed itself. I turned to my wife, who had seen the spot several times, and asked her who the commercial was for. She couldn't remember and neither could I. We both took a guess and we were both wrong. The logo isn't actually revealed until the end of the spot. Go figure. Here are descriptions of 5 current spots running on Canadian television (including the spot in question). See if you can name the products they're for.

1. A team of contortionists form the shape of a car.
2. A woman puts her baby to bed. An alarm goes off and the baby is now a teenager getting out of bed. In the next shot, we see him kissing his mom goodbye and leaving the house as the mother looks on lovingly.
3. A computer is pulled out of an inter-office envelope while a cool song is playing in the background. (Come on, that one’s easy.)
4. A woman is climbing on a rock wall as a grandmother repels down beside her. A microwave then drops down on a rope. The grandmother opens it, takes out the product (still hanging from the rope) and feeds the younger woman this product.
5. Two identical fish float unto a white background to a cool song.

Clearly some of the above spots are more effective and memorable than others. Some are easy to connect to their product because the product is central to the concept of the commercial. The creative doesn’t overpower the message or the product. Or the brand is so consistent across all media that the spot could only be for that product.

The key benchmark for evaluating whether a TV commercial works or not is, can you remember what the commercial was for after being entertained by it. Do you remember it the next day or a week later. If the answer is no, the spot in question wasn’t worth the money it took to produce it, or the cost of the media. It wasn’t worth a dollar. It’s that simple.

Service/Delivery Analytics: A Renewed Frontier?

There has been quite a lot of attention again put on marketing ROI (Return on Investment), ROMI (Return on Marketing Investment) over the past year as companies and practitioners continue to look for ways to demonstrate the impact of their marketing efforts.

The entire space of marketing analytics has seen phenomenal growth over the past decade as more and more companies have sought to refine their marketing activities, especially direct marketing. Thanks to its nature, it is a relatively straightforward thing to apply rigorous testing and analysis to direct marketing efforts to demonstrate the lift and ROI on a particular marketing campaign. As a practitioner myself for the better part of 15 years now, I know that with even a little bit of data I can design and deploy a successful direct marketing initiative and clearly demonstrate an ROI (usually positive!) for a client and repeat that success over time to generate piles of money on their behalf.

However, I’ve recently begun to wonder whether we’ve pushed too far into a cycle of ever-refining our marketing efforts without thinking of the bigger picture in which we are doing it. This has been informed by a recent personal experience that I’ll share quickly to set the stage for the remaining comments:

My roof is missing shingles and part of the fascia on the front gable of our house. It has been for the better part of a month now. I’ve called 5-6 different suppliers to get quotes to fix the situation. Out of the 6, three have actually provided me a quote. One never called back, two (2) told me it would cost me money for them to receive the privilege of a quote.

Of the ones that provided a quote, one said they wouldn’t warranty their work. When I asked “why?” they said it was industry practice on repair work because they don’t want to be responsible in case the rest of the roof has a problem. I tried to explain that I wasn’t expecting them to warranty my whole roof, only the part they fixed in case it has trouble. No deal, so I eliminated them from the search.

I finally settled on the one company that provided a prompt quote and seems to have the experience to do what I needed. They have a great website you can visit to see the type of work they do, how long they’ve been in business, etc. The trouble is, I’ve been waiting for the better part of 3 weeks now for them to actually come and do the work. When I call them to find out why they haven’t come, I get a lot of excuses (the guy is sick; they tried but it was too cold or windy) but here I still don’t have a solution to my problem. The best part is, when I call and am put on hold, they have a lovely-voiced woman who soothes me with talk of how much this company values my business, and how their business is built on referrals and happy customers.

By now I hope you are getting some of the point to come. As a direct marketer and marketing consultant, I am quite confident I could go into this business and help them better target their efforts and make more money doing so, but if they can’t deliver on that business, am I really delivering them a benefit or am I just letting more people experience their terrible service, thereby destroying their long-term referral and growth potential? They have no doubt spent quite a bit of money on building their business and branding it via their website, however their service experience is in direct contradiction to what they promise.

This brings me back to my original point. Perhaps instead of focusing ever more finely on our marketing ROI, we need to step back and think harder about our abilities to deliver our products or services. I still see a lot of companies that are excellent at direct marketing put barriers between themselves and their customers, making what should be simple experiences complex because of “industry standards” or “policies”.

I’m not saying abandon ROI, because it is and should remain the benchmark of evaluation for marketing efforts. However, have you given any thought in the last little while to some of the following questions related to service delivery and fulfilling your promise to customers?

1. Do you know how many times an average customer has to call you to get their problem resolved?
2. Do you know how many of your calls are resolved in one shot vs. the service situations that require repeated call backs on your and the customer’s part?
3. Do you know how much money it costs you in dollars and cents to have to keep going back and forth with a customer to resolve a complaint or improperly fixed problem?
4. Do you have any measures of your service delivery success or failure in terms of how the customer experiences the situation?
5. What are your policies and procedures with respect to customer facing situations? Are they designed to make it easier for you or do they actually make it easier for your customer to deal with you?

When you look long and hard, some of the numbers can be staggering. With one of my previous employers, we went through the exercise of trying to calculate how much money we could save by refining the account opening process. By our estimate, it would have been about $180,000 -$250,000 per year and it would have shaved two days of customer time out of the process.

This type of effort garnered a lot of effort back in the heyday of CRM as companies were looking at automating various capabilities within their organization, but it seems to have waned in recent years, at least in my experience.

In closing, I still believe we do need to keep our focus on ROI and the benefits of our marketing efforts, but perhaps the time has come to target the guns at our service and fulfillment areas as well. It will benefit both companies and customers.

P.S. If you want a list of bad roofers, give me a call.

Why Don’t the Same Rules Apply?

Whenever new marketing technologies arrive, marketers often seem willing to dispense with the traditional metrics and ROI calculations. As email marketing arrived on the scene, marketers were so enamoured with the speed and low cost (more on that later!) that they forgot to see if it actually had a positive impact on the customer behaviour. Throwing the direct marketing rule book out the window, most proponents seemed happy enough to look at “open rates” and “click throughs” regardless of how this translated into something more tangible like sales, value or even, perish the thought, ROI.

But isn’t that what makes direct marketing so interesting in the first place, the ability to accurately quantify the actual impact on client value? The last few years have seen a move to make email marketing campaigns as measurable and accountable as more traditional direct marketing. However, in my experience, many still forego the basics like “control cells” and assign all purchases to the success of the campaign, as though no one would have bought the latest Britney single without receiving the e-newsletter promoting it.

New and potentially interesting technologies arrive on a daily basis providing an ever increasing set of channels in which to communicate and interact with clients and potential clients. Podcasting, Facebook, Blogging, Neural Implants (oh wait, that one hasn’t happened yet). However, as each one enters the marketers’ toolbox, there seems to be little effort put into how exactly are we going to measure it. Again people fall back on somewhat less interesting metrics such as the number of “members”, “posts” or “tags” something achieves. While those are indeed measurable, without better linkage to behaviour, there is no way to determine whether these investments in time, money and brand are generating a positive return for the company.

Back to the low cost issue. Yes, many of these technologies are relatively inexpensive and the time to delivery can be fast, however, they are definitely not free. There are still some hard costs in terms of dollars. But there are also soft opportunity costs related to the time spent by marketers regularly managing and updating a Facebook page versus working on other marketing opportunities. And perhaps the larger cost is the potential opportunity cost of flooding clients / prospects with a non-stop barrage of contacts from you. This may ultimately translate into decreased receptivity of other marketing messages, which would then have a much higher cost to the company.

I’m no Luddite, but I think that we need to continue to strive to find ways to apply the same rules of measurability that made direct marketing so successful in the first place to these new technologies as they arrive. This will help marketers prioritise their efforts and investments and identify which new tools actually can provide marketing value.

The Decline (and Rise) of the Creative Brief

Now that I've started my own company, I'm reminded of how critically important the Brief Document is to developing creative. And not just good creative, but insightful, smart, relevant and strategically sound creative.

If I had to assign a grade to the average Brief I've seen over the years, I'm afraid I'd be pulling the parents into the classroom to discuss my concern for the child's future. In fact, the future of the Brief, I believe, is in serious jeopardy unless changes are made.

When I first started in this business, Briefs were treated with the respect they deserved -- both by the account people developing them and by the creative people inspired by them. I use the word "developing" up there in the previous sentence because that's really what should be happening -- and back in the old days, that is what happened. Briefs were developed by account people who understood that Briefing Documents were their opportunity to inspire brilliant creative. They weren't just filling out a form or transcribing the Client Brief from one template to another template. (Or worse, doing nothing at all.) They were developing a Creative Brief that added value, a unique perspective, clarity, and most importantly, inspiration.

Client Briefs and Creative Briefs are not the same thing.

Client Briefs contain marketing data, extensive background, customer data, research, the demands of several constituents (product managers, their bosses, marketing managers, their bosses, etc.).

Creative Briefs should be an important distillation of Client Briefs -- not just a cut and paste of the Client Brief into the Agency Creative Brief template. The Agency Creative Brief is an opportunity for the agency to gain consensus. It should be used to ensure that there is a common understanding of what is being asked by the client. The focus should be crisp. Once developed, it should be discussed, face to face with the client to ensure that what they're asking for is being understood and communicated.

When I became an Associate Creative Director, one of the Account Directors with whom I worked suggested that I review the Briefs his account team wrote before they went back to the client or were briefed into a creative team. At the time I thought that was an unusual request. But then I realized that the Creative perspective on a Brief is different than the Account Team's or Client's perspective.

I've reviewed Briefs ever since. Upon review, I would have a discussion with the Account Person and if I had any questions or if I needed clarification, they could be addressed either by said Account Person or by the client before using up valuable Creative Team time. (Too often, the strategy gets figured out during the Creative Development process instead of during the Briefing process.)

By the time the Creative Team was briefed, the Brief would be strategically sound, clear and creatively inspiring. And that means, the creative product would be right the first time. (Right the first time from the client's perspective -- because the work would fit the brief like a glove.)

So how do you know if your Brief deserves a passing or failing grade?

1. There can only be ONE Key Communication Objective. It should be one sentence. No longer. And it should be directly linked to the Customer Net Takeaway section of the brief.

2. Think about the Consumer Problem. The Brief should clearly and simply communicate what the consumer problem is. Your product or service is the Solution to that problem. And the features and benefits are the Proof that your product or service delivers. (I've just told you the secret structure to any campaign in any channel. I guarantee it works.)

3. The Features and Benefits. They are not the same thing! Knowing the difference and communicating them clearly make all the difference.

4. The Product is not the Offer. Make sure the offer is clear and it'll be clearly communicated in the Creative.

5. There is such a thing as too much information. Say everything as economically as you can and everything will be that much clearer.

6. Target Audience. If there's only one target, great. If there's more than one target, then you probably need a matrix breaking down how the Key Communication Objective changes against each target.

7. What does the Target Audience currently think? And what do we want them to think once they've been exposed to our campaign? This is important because it gives the Creative Team inspiration for how to overcome customer objections to your offering.

There is so much more that could be written about the Brief. And you're probably reading this and thinking how basic it all seems. But if you can answer YES to any of the following questions, then it might be time to think about briefing differently.

1. Does it ever seem like the Agency/Creative Team isn't "getting it"?
2. Do you ever sit in creative presentations and think "this isn't what I asked for"?
3. Do your Creative Teams ask too many questions after they've already been briefed?
4. Does it ever take more than one round of Creative to get what you thought you were going to get?
5. Do you feel like your Agency isn't adding any value?

I guarantee that if you challenge your Agency to write a Creative Brief, (or as an Agency, if you take the time to develop a Creative Brief for your teams and your Client) you will get better Creative, faster. You will cut down on the rounds of changes/new concepts. And that means you will be paying for fewer hours.

People think "process" takes up too much time -- then end up paying for the extra hours when the work needs to be done the second time.

Stop the insanity. Fix the Brief.

Facebook Stats Primer

Do you want to reach Canadians age ...
any age ≈ 8,462,520 people
13 to 24 ≈ 4,070,400 people
25 to 35 ≈ 2,650,000 people
36 to 49 ≈ 1,238,220 people
50 to 65 ≈ 493,940 people

Do you want to reach people who say they are in ...
Ontario. ≈ 3,864,340
Toronto ON≈ 1,735,060
Woodstock ON≈ 19,120
Norwich ON≈ 440

British Columbia. ≈ 1,281,440
Alberta.≈ 1,091,720
Quebec. ≈ 952,220
Nova Scotia.≈ 364,040
Manitoba ≈ 271,140
Saskatchewan ≈ 246,660
New Brunswick.≈ 183,900
Newfoundland.≈ 133,320
Prince Edward Island ≈ 26,900

Do you want to reach Canadians who proclaim to be:
Liberal≈ 666,200
Moderate≈ 262,300
Conservative≈ 312,840

Do you want to reach Canadians who list themselves as
single ≈ 2,182,020
in a relationship ≈ 1,776,480
engaged ≈ 307,880
married ≈ 1,528,860

Do you want to reach Canadians who listed the following as favorites;
Britney Spears. ≈ 8,040 people
Rick Mercer Report.≈ 11,680 people
Canadian Idol. ≈ 11,840 people
To Kill A Mockingbird ≈ 38,560

Do you want to reach Canadians who work at
Rogers. ≈ 2,980
Bell Canada ≈ 4,840
MacLAREN McCANN ≈ 240
Organic ≈ 100 people
Cossette Communications. ≈ 100
Ogilvy.≈ 80
BBDO. ≈ 80
Leo Burnett. fewer than 20 people

Do you want to reach any cross section of them today? Do you see value in targeting your media down to hundreds of people, and pay for click? Or better yet, do you want to provide real value to any of these people beyond your message?

Do you still think Social Media is a fad?
All numbers sourced: Facebook Ad Manager application.

Numbers current as of 10:30 am, Thursday Jan 31st 2008

The Ultimate Decision

The Promise:
It came upon us as a promise, wrapped in the innocence of simplicity. The inner core of a brand captured miraculously in a simple question.

“How likely is it that you would recommend us to a friend or colleague.”

The Net Promoter Score was born. The brainchild of Fred Reichheld, a Bain & Co. Fellow and Dr. Laura Brooks of Satmetrix Systems. The sort of material that Harvard Business Review writes their cases about. In fact HBR did publish an article in Dec 2003 with the eye catching title “The one number you need to grow”. The equivalent of a viral campaign unfolded, supplemented with a book… global speaking engagements.

Just as a black hole, the simplicity drew everyone to it. The promise, incubated by field studies at 400 businesses (turns out to have been 50+ in the end) which held that if we managed our customers properly – our business would grow. To do so only required our focus on customers who are either our promoters (scoring you a 9 or 10), passives (scoring you a 7 or 8) or detractors (scoring you 6 or less). Wait a minute – that’s all our customers. Exactly, but we’ll get to that again at the conclusion.

The Formula: % of Promoters - % of Detractors = Net Promoter Score (NPS)

Therefore if 50% of your respondents were promoters and 20% were detractors – you netted out at a score of 30. The higher the score the better.

NPS we were told would accurately predict a company’s ability to impress customers, turn customers into advocates, and -- in turn -- become an indicator of potential business growth. Scientific proof that this simple metric was ultimately more powerful and meaningful than any other management theory about customer satisfaction, customer retention, passion, loyalty or …well anything. So simple even a CEO could follow it ;-^)

And so the market embraced the theory. From all corners of the world. Heavyweights like GE (Real Estate division) Philips, HSBC, IBM (Enterprise Content Management), LEGO, Enterprise Car Rental, Intuit, Schwabb, American Express, Microsoft and others.

A simple approach, developed by respected accreditted professionals, endorsed by a world class university adopted by companies. What’s so bad about any of this?

The Questions:
Cracks in the foundation started to develop because of the lack of support to the contentions. Namely that the NPS was not a strong predictor, that there was evidense of research bias in the support used to substantiate the NPS and that the ACSI was not uncorrelated with firm growth..

“We find no support for the claim that Net Promoter is the ‘single most reliable indicator of a company’s ability to grow.’ The clear implication is that managers have adopted the Net Promoter metric for tracking growth on the basis of the belief that solid science underpins the findings and that it is superior to other metrics. However, our research suggests that such presumptions are erroneous. The consequences are the potential misallocation of resources as a function of erroneous strategies guided by Net Promoter on firm performance, company value, and shareholder wealth.”

Source: Timothy Keiningham et al. July 2007 A Longitudinal Examination of Net Promoter and Firm Revenue Growth

Other studies, other experts, opinion leaders, bloggers (see below) added their voices to the boisterous cacophony – worthy of the NYSE trading floor on a black bear day.

Undaunted, NPS supporters countered (see below) with their own assertions the NPS being as good as more complex measures and for the most part avoiding any direct discussions surrounding the statistical annomalies brought forward by Keiningham.

In this quote, Dr. Masden acknowledges being part of the team at the London School of Economics that vetted the NPS Score and asserts its ongoing validity as a reliable method of linking customer loyalty to growth.

"As far as the current debate goes, anyone who has read the information being disseminated from the “anti-Net Promoter” camp quickly comes to the realisation that the one Net Promoter question is, at the very least, just as good as more complex proprietary measures, that are tough to translate to the average executive and employee. But that leaves me questioning: why are we hung up on the measurement? The real conversation needs to be about how to get an organisation to be customer-centric and what that can mean for a company’s future”

Source: Clickadvisor.com on Sept 17 Net Promoter: the ultimate debate on customer loyalty

The Stalemate:

There is too much of an industry and ‘cult’ established around the NPS for it to dissapear on the basis of the allegations laid against them. In defence and defiance they point out that we are all ultimately pursuing the same path. True.

One can argue that the NPS may have accelerated the customer centricity movement, the other important benefit is that in its simplicity it has refocussed the dialogue on using metrics which can be widely disseminated and easily understood. Well in the words of Tim Keiningham

“ I too believe that loyalty consultants and researchers have over-complicated the message (and the analyses) with more advanced statistics than it took to get the Apollo space missions to the moon. It makes it impossible for management to understand, communicate, and rally support. This is ridiculous!”

The Ultimate Decision:
Believe it or not up to this point was the easy part. The hard part is deciding for yourself what happens next.

Will there ever be one metric to fit all needs? Highly improbable – and any contenders will not be allowed to make unsubstantiated claims. Instead of waiting for the new simple metric, we must continue to move forward with as simplified a system we can devise, implement and gain compliance with.

There are many competing schools of thought (Customer Experience Management, CRM, Loyalty/Continuity, Value Drivers, Image, WoM) reflecting the different successful business models/brands in the market.

To understand which approach will work best for your brand you must identify three things:

1. who your profitable customers are

2. what kind of relationship your profitable customers wish to have with your brand
a.Share of Wallet: the traditional CRM-centric make me a compelling (price/promotional) offer and I’ll buy it from you (or perhaps your competitors) – a brand relationship centered on the transaction.
b.Share of Mind: the traditional marketing promotions/communications approach – focussing on the key value proposition – a rational based brand relationship.
c.Share of Heart: Customer Experience Management – How people feel about the brand experience. Experience seen as a price mitigator and continuity reinforcer – an emotion based brand relationship.
d.Share of Life: How customers see the brand as a longer term partner for their category requirements, solutions and corporate/sustainability responsibility – an ‘adult/mature’ brand relationship.

3. within the relationship type identify the activities the enterprise must do to instill the longer-term repeat purchase pattern it seeks.

The key in my opinion is instead of defining your brand as an advocate of a particular ‘school of thought’ and then trying to mold your customers to fit within that model, we must instead look and manage this from the customer’s perspective. Therefore come to recognize the ALL of these relationship types exist simultaneously among different groups of your customers. What and how you communicate will be best served by understanding the type of customer they are first and from there make the ultimate decision as to how to relate and evolve with your customers.

Cheers
Miro

Suggested Reading:
NPS Adovcates:
The Ultimate Question. Driving Good Profits and True Growth. Fred Reicheld

www.satmetrix.com

www.netpromoter.com

Dr. Laura Brooks’s – VP Satmetrix latest blog posting

The Satmetrix white paper describing the research

Research conducted by the London School of Economics

Dr. Marsden from Clickadvisor.com on Sept 17 Net Promoter: the ultimate debate on customer loyalty

NPS Contrarians
Loyalty Myths: Hyped Strategies That Will Put You Out of Business and Proven Tactics That Really Work, Tim Keiningham, Terry Varga, Lerzan Aksoy, Henri Wallard

A Longitudinal Examination of Net Promoter and Firm Revenue Growth

The Value of Different Customer Satisfaction and Loyalty Metrics in Predicting Customer Retention, Recommendation, and Share-of-Wallet

January 2007 Maritz Research White Paper

COLLOQUY magazine article

When the Promise of a Customer Reward fails to Connect.

Before you read my story, here's the lesson in it - sometimes it's better to do nothing – to not make a decision to buy something new or trade in the old. Sometimes doing nothing is a reward in itself.

Such was the case this past week, when I was thinking of upgrading my cell phone to one of the “mobile” varieties. You see I’ve owned the same one for 5 years and it basically does one thing very well – make phone calls. But getting a mobile, on the other hand – opens me up to a new world of digital possibilities.

“I’m ready for this,” I convinced myself – a mobile lets me do everything – download music, take photos, text friends, check my LinkedIn and Facebook accounts, watch podcasts – even be at the ready to shoot video just in case... of escaping circus elephants rampaging down Yonge Street. I imagined taking that esteemed position on YouTube – owner of the most downloaded video in history. I can’t wait any longer, I thought – where do I go to sign up...?!

The timing was perfect too. I just received a friendly letter from my carrier telling me I had been a “valued” customer for more than 5 years – 3 of these without a contract to bind us together. It seemed because I had chosen to be with them, they recognized this and were about to reward my loyalty big time.

The letter went on -“we would like to thank you for your business.... so we’ll give you a credit worth up to $250 as a bonus renewal offer towards the purchase of a new phone or PDA when you renew your service agreement...“thank you for choosing us.”

Sweet, I thought - I can get a really cool mobile for next to nothing and gladly surrender to a three year term until the next generation of mobiles comes along.

Well, here’s what happened.

I went into one of my carrier’s retail stores, letter in hand, and was met by a pleasant sales person named Wanda. I told Wanda I was ready to make my move to mobile, and even had a $250 bonus credit as a renewal offer to work with. I explained I’d been a loyal customer for five years and just got this special letter saying as much. “Wanda, I said - only show me the best and latest of everything you’ve got. I’m ready!”

“Well actually,” Wanda said, “the price you see beside each model is the price you pay – we’ve already factored in the discount – the $250 credit in this letter anyone can get.” Oh I see. So I asked Wanda to check my account. Surely there’s a notation saying how loyal a customer I have been and to give this golden apple whatever he asks for....

She looked up my details and paused...hmmm, she said, slightly puzzled, “it says here DO NOT RENEW.” “What? I asked, what does that mean?”

“Well, she explained, you have a really good mobile rate we don’t offer anymore, so when we get you in here and sell you a new mobile phone, we put you into a “current (read: more expensive) rate plan.”

My hopes of going mobile were quickly fading like a weak transmission signal....

With either of us not ready to give up, Wanda took me through the latest models, asking lots of good questions in order to point me towards a model and monthly plan that we thought would suit my needs.

I thought to myself, well I’m already here, Wanda is helpful, I love this mobile model she showed me, and it’s not that much more a month – I’ll just suck it up and get it.

We made our way back to the register when she dropped another one. “I wanted to mention that you’ll also have to pay a $35 ‘upgrade fee’ because you’re getting a new model.”

Call me crazy, Wanda, but can we summarize here?

1. The $250 bonus renewal offer I received is available to anyone – not just us “valuable clients?”
2. I still have to pay the net cost of the phone ($49.99 for the model I wanted)?
3. If I do get a new mobile, I have to go into a more expensive monthly rate plan?
4. I have to pay an upgrade fee on top of the $49.99 for the phone?
5. I'm a valued client - a loyal customer?

How sad - I did understand all this correctly. Oh sure, I could call an 800 number, wait on hold for 20 minutes and then complain to the customer rep on the other side of the world that I feel totally taken advantage of. But why bother? If they don’t get it... why bother??

I have two points of view here on how I’m feeling after this experience.

As a Marketer
I see the revenue and profitability potential with this program. It probably went something like this: Generate a list of active GTA subscribers with expired contracts. Send them a letter with a $250 phone credit as incentive to drive them in store. Then upgrade their model and monthly plan.

I’m sure the ROI on this program is through the roof – the DM piece was less than $1 and the lifetime value of my business is in the thousands of dollars.

What is the effect on long term customer satisfaction with these types of programs? Did anyone really scrutinize the offer copy and come to the conclusion that it was in fact no offer at all? What's the cost of losing a high value customer (me) to their bottom line?

As a Customer
I feel like I was tricked into coming into the store – duped by a letter implying I was entitled to a reward for my loyalty that didn’t even exist. I feel cynical about what it means to be called a "valued customer" and what a "bonus renewal" offer really means.

That day, my goodwill towards this company dried up quicker than fresh rain on a desert floor. So I did absolutely nothing – I walked out of the store with my old model, trusted and reliable cellular phone, knowing that every month I get a bill for services that I’m paying less than the company wants me to.

I guess I do get a little reward after all.

When Customer Service sells. And when it doesn't.

I'm going to forget that I'm a marketer for a moment and pretend that I'm only a consumer. I think it's important to do that every now and then (or whenever I'm not at work) because consumers don't think like marketers. They think like my Dad who doesn't understand what I do for a living.

My internet service provider used to be a company well known for its pitchbeavers. One day, that internet service crashed and said company could not seem to figure out why or how to get me back up to high speed. So I switched to Rogers for my home internet connection. Then, about a year later, I needed a new cell phone, so I naturally switched to Rogers Wireless. Then my wife and children needed cell phones. Rogers was the first place I thought of. Then I got telemarketed one day and was asked to switch my home phone to Rogers. So I did. Now, when Rogers goes into the dog walking business, I'll be there with my two labs and a leash.

The reason I've become one of Rogers' best customers isn't necessarily because they have better phones, or faster high speed access. It's not even that they put everything on one bill. Even beavers can do all of that.

It's simply that I have had excellent customer service experiences with them each and every time I've needed to deal with someone at Rogers. Now, I'll be the first to admit that I hate their Interactive Voice Recognition (IVR) system. (Please get rid of that thing!!!) But once I get a real person, they're always helpful, patient, kind and results-oriented.

Then I happened to walk in to a Rogers retail outlet about a month ago for a superficial issue with my Treo 650. The store's sales representative, Alex, told me I was eligible for an upgrade to the new 680. I bit. (Love a new gadget.)

Over the following week, I realized that the 680's battery didn't seem to hold a charge. By 9:30 pm, I'd be out of battery. I contacted the store and spoke to Alex. He emailed me back with an online solution which I tried right away. Didn't work. He suggested I come in to the store (not convenient since it's located at Queen's Quay and I live in North Toronto) for a new battery. So I did. He wasn't there but the other rep had the battery for me. The new battery didn't fit the new Treo. Not impressed.

Later that day, I got an email from Alex saying he would replace the whole Treo, that he was sorry for any inconvenience, and that his goal was to be sure I was happy with my purchase.

I couldn't believe that the customer service I experience whenever I call Rogers extended right down to store level.

All of this to say, why doesn't Rogers differentiate itself from everyone else by advertising something that is NOT a commodity in their very commoditized business? Customer Service. Their advertising is all about fewer dropped calls, the Fave Five, and everyone in the family wanting an internet connection. I don't get it. Any number of telco's can make the exact same claims, and are.

Rogers, you have an opportunity to differentiate yourself in your advertising. I'm doing my part as a consumer with this posting. Now it's your turn.

While I'm on the topic of customer service, I have to ask, is WestJet for real? Seriously. Their advertising shows flight attendants chasing people down in the street to return cell phones and giving the sweaters off their backs to passengers returning to a cold climate from a sunny vacation. Maybe they really can fulfill on those promises. But as a viewer of those commercials, I'm not buying or believing it.

If an advertiser has a valid point of difference (like stellar customer service), and they go so far over the top with their advertising campaign that it stretches credibility in the consumer's mind, they're wasting their money.

Got any amazing customer service stories? Share them with those of us who would be more than happy to put our faith (and hard earned money) into companies who think like marketers -- and consumers.

CMA eMarketing Professional Certificate Course Starts In One Month.

Quick reminder that the fall semester of the Canadian Marketing Association's eMarketing Professional Certificate Course is just one month away.

I have taken on the responsibility of instructing the course from Ken Schafer of Tucows and have also revamped the course materials, updating the outstanding sessions originally crafted by Ken.

The course covers web site best practices, usability, social media, email, search, eCommerce, privacy, analytics and online advertising with practical examples, case studies and stimulating discussions over a 15 week period. Students will leave with a solid foundation of today's digital landscape and a superior marketing skill set in order to go forth and make their own mark in the growing medium.

It starts up September 26, 2007 and there are only a few spaces left. For those interested in taking a deep dive into the ever evolving world of digital marketing, don't delay.

Kick start your future with the CMA's eMarketing course. For more information, or to register for the course, please visit the CMA website. I hope to see you there.

UPDATE: I forgot to mention the course is available in Toronto and Montreal. Mitch Joel, and Dave Haber of Twist Image will be the course instructors in Montreal.

Merging of Disciplines not new – It just finally has enough scale to get noticed…

A recent report released by the DMA , titled “The Integration of Direct Marketing and Brand” concludes that the lines between DM and brand marketing have all but disappeared.

So what exactly does this mean? Having spent a good part of my career in direct marketing and direct response, quantitative research supporting the secret that I have been sharing with clients over the last few years really gets my attention. The cat is now out of the bag…well sort of…

Some key findings of the report can be found here. So back to the question of what this report really means when all is said and done. Ultimately what it means is that there is yet even more credence and credibility supporting what a few select marketers have known and practiced all along – direct response and direct marketing tactics, working in tandem with traditional branding, can help to build stronger brands.

This type of thinking has manifested itself over the years, with the term, “brand response” becoming a self descriptive notion for an amalgamated version of the practice. Of course brand response is not the same as direct response – they are two entirely different practices, but more on this later.

Now I must clarify – direct response and direct marketing alone is not enough to build and sustain a brand – witness the current plight of Dell, a piece of business that in its heyday was at the pinnacle of DR advertising. I worked on the business for a period of time and let me tell you, it was science at work. The dynamic model, forecasted with good accuracy, the impact of all controllable inputs (ad vehicle, offer, positioning, day of week etc.) on weekly unit sales. Of course, ROI was the ONLY success measurement. Terms like brand awareness, brand health, and brand equity were all deemed to be foolish irrelevant terms reserved for those who couldn’t stomach the harsh realities of applying what we deemed to be rocket science to data. Ah the “D” word – data…

Data and the use of data is one of the major differentiator’s between direct response and brand response advertising. DR is all about getting a response – that’s it. Response mechanisms such as toll free numbers and url’s along with a strong offer or two are used to illicit a consumer response. The currency of measurement is the “cost per” metric – cost per contact, cost per lead and cost per sale. The “conversion to” metric links all the “cost per” stages together and ultimately ROI is established. The end goal of the data is to help establish a clear and visible link to dollars invested and dollars returned. The data’s only function is to define success through the dollar

Brand response or BR is really about ensuring that essential brand practices are used to encourage a response. “Cost per” metrics are important, but they are not the definitive success metric – sales and brand awareness are. Where DR is considered to be a hard sell, BR is considered to be a soft tell. We have executed BR campaigns where the metric of success was an opt-in email address along with identification of the respondent’s nearest product dealer. Yes – perhaps we couldn’t completely verify how much of our advertising spend resulted in product sales, even in the best DR Campaigns this is difficult to do. However, what we could say for certain was that several hundred people reached out to us and accepted our invitation to have us communicate with them on a regular basis. We now had an interested group of “brand respondents” - time to implement a solid CRM initiative.

Is there anything really new under the sun?

I've been reflecting a lot lately on the fact that it seems like there are no new ideas when it comes to marketing a new product or service. Sure, you can find all sorts of products that are "NEW & IMPROVED!". But where are the seriously new ways to market old products or brand new category changing products.

Back in the mid-90's, Peter Coish and his team at Wunderman looked around the world and saw that home and auto insurance was being sold on television via 1-800 numbers. England was ahead of the curve and home & auto insurance products were all over the telly -- all you had to do was call a 1-800 number to sign up. While a bank or two in Canada may have tipped their big toe into the water at that time, nothing really came of it. Until DirectProtect Home Insurance jumped into the deep end of the pool when it was launched by Peter and his team as a test on television. The campaign (you may remember a tiny man walking around a big yellow coffee mug and telephone receiver) was a raging success and won the CMA's highest honour -- the Best of the Best Award at that year's RSVP Awards.

I returned to Wunderman the following year and Peter and I launched DirectProtect Auto Insurance. Again, a brand new entry into the marketplace for auto insurance. A new way of selling insurance was born. Now it's a commodity market. But my point is that Peter and his client looked beyond Canada for inspiration and had the vision and guts to reinvent that success here.

Another famous example is what Dave Nichol did with President's Choice. The model was established in the States and Europe, I believe. There was nothing like it in Canada. They tested the concept with a Chocolate Chip Cookie and the rest is history.

Where are our risk-takers and visionaries today? Where are the really new ideas?

Word of Mouth Marketing Conference Panel Discussion

If you are interested in hearing what you missed at the "From Mass to Grass" Word of Mouth Marketing Conference held in Toronto a couple of weeks ago, I have just posted Episode 16 of The Client Side podcast that captured the panel discussion around "How to Market in Social Media and Virtual Worlds".

I helped moderate the discussion with an experienced panel that shared their advice and insights including Rob Cottingham of Social Signal, David Jones of Flieshman Hillard, Steve Osgoode of Harper Collins Canada.

Admittedly it is a bit of shameless self-promotion re: linking to my podcast from this blog. However, the panel session is really worth a listen.

The conference was a big hit and congratulations go out to my fellow organizing committee and the wonderful staff at CMA for putting on such a fabulous event (again!).