Retention and Relationships

Remember when we used to think of the web as an interesting place to read what a company wanted to tell us?  Now we can watch movies, get real time feeds from many sources simultaneously, buy practically everything, manage companies, and entertain ourselves for hours (or days or weeks) on end.

Social has that same feel, doesn’t it?  Where the user base has entered the late majority, where there is a critical mass of interesting content, and where the apps growing up in the fertile soil of social foundations (Facebook, Twitter, OpenSocial, etc) are finally getting interesting.

To me, its clear we’ll look back on these last 2 years of the social boom as just the beginning, just as browsing brochure-ware sites was in the mid-late 90′s.  The ideas coming out of retail, CPG, manufacturing, financial, and travel make it obvious there will be an explosion of new ways for people to interact with people or companies.  Wish I could share what I hear but an NDA is still an NDA.

Pandora Radio logo

I love Pandora.  Pandora rules.  I wish everything was like Pandora.  I don’t really have to think or do much, and an incredibly accurate stream of stuff I want to hear just appears like magic.  I can tweak it to get it dialed in to my tastes.  And I now buy MUCH more music than I used to, discovering new music and buying on Amazon so Pandora gets a little affiliate revenue.

The closest we see to this ideal today is Amazon and a few other online retailers.  Borders appears to be using my purchases (finally!) to tweak the email they send me, which is great.

This is the next frontier for retailers and manufacturers.  A whole generation has had their priorities reoriented, much as the Great Depression did 70 years ago.  Consumers will think a bit more before buying and will be much less willing to use credit to finance their lifestyle.  So selling will need to move to a more relevant, customer-specific mindset if a retailer wants to succeed over the long term.

There are already many companies focusing on this space, but it will be a long time before clear winners emerge.  I think the winners will likely be those who can distribute the experience wherever customers want to consume it – which means we still have a ways to go.

I try to help a non-profit ”international neighborhood micro-center for artistic and intercultural life in San Francisco” with operating and marketing advice.  They put on 120 events a year and I’d always advocated getting the word out about individual events.  We looked at email, and while it would probably work, the overhead for so many was relatively high.  (Almost everyone is a volunteer and resources are scarce.)

Enter Facebook Events.  Set up the event, send an invite, and voila, there’s your email notifications.  Its timely, professional, and useful.  Now I know what’s coming up and can make quick decisions to change my schedule.  It doesn’t feel obtrusive, since I joined the group of my own volition and can control messaging.  It shows the intersection of time-based content, opted in peer to peer communication, and user-controlled media streams (i.e. I still choose email over text) can and will be incredibly powerful.

I expect to see attendance max out going forward.

I’m completely biased, of course, but the release of Virgin America’s point purchasing capability for Elevate members is a truly exciting step forward in customer retention.  Customers can use points to buy flights, with point prices based directly on the underlying flight price.  Just think about what that could mean to the traditional yield management approach for the airline industry.

Check it out: http://www.virginamerica.com/va/home.do

If you haven’t already, its time.  Every marketer should be living and breathing life with an iPhone, now that Apple has opened up to 3rd party software developers.

Download a few apps from the AppStore.  After a couple of weeks, you’ll wonder why anyone needs a website anymore.  (Ok, that’s overstating slightly.)  Yelp, for example, is perfect for the iPhone.  As a new interaction medium, its the best thing to come along since the browser.  The ideas are already starting to percolate…

My latest at Chief Marketer.

I see 7 key elements in best customer management.  This first column focuses on the 3 basic ones:

Identify – Understanding who an individual customer is and what they have done and bought.

Communicate – Messaging an individual customer with relevance to their needs and prior actions.

Reward – Providing and promising incentives and benefits based on their activities.

I’ll spend time over the next few weeks exploring each of these areas in depth before the second column is published with the other four elements.

Word of Google and Salesforce.com’s discussions on incorporating Salesforce.com’s offerings into Google has much of the CRM industry buzzing.  Its not really a surprise, but any time two elephants start dancing, the mice start to scurry.

While Salesforce.com’s SaaS approach dovetails nicely with Google’s web based applications, adding the Salesforce.com SFA apps could be the piece that moves small and midsize businesses to the Google application set.  With Microsoft pushing Dynamics, everyone else is cooling to the idea of deep integration with the Office suite.

Should be interesting to see how this plays out.

Walk over to your email marketing manager today and give them a pat on the back, because unless its your job, you have no idea how hard they are working these days.

Ever since reputation monitoring and spam traps became the main component of filtering technology, email marketing went from “segment and send” to a complex dance of response tracking, recency filtering, authentication services, and ISP relations.   Those 500,000 email addresses you had a year ago may be down to less than 100,000 mailable, low-risk customers.  An address that has not responded in 90 to 180 days may now be a spam trap in one of the many monitoring networks that most ISPs use to filter individual messages as well as IP addresses.

Behavior-driven relationship marketing tends to cut through this problem.  So before its too late (and you’ve been blacklisted, your IPs flagged, and dynamic blocks slammed in place with every mailing), start planning on how to shift most or all of your email to a relationship driven approach.  It may take some time to match the prior level of revenue generation, but until you start, you’ll never get there.

Odd how sometimes there’s something so obvious in front of you and it takes months or years to recognize it.  Like a faucet in your kitchen that’s pretty ugly, and one day you realize its a simple task to change it and improve your entire kitchen’s appearance.

I’m seeing this in the technology world as well, where companies suddenly realize they’ve been using crappy technology for a while and there are better and cheaper alternatives.  Most people are familiar with this in the email space, where many companies existed in the early days that were pretty terrible.  Once someone took look around and saw there were plenty of better options, there was a shakeout of bad technology and the good companies took off.  I went through this exact realization in 2003 and switched from a really terrible legacy email service to a top notch one, and cut my costs by 70% at the same time.

Its amazing to me that more companies take more time to select a new application or service than to evaluate their existing capabilities.  In many cases they’ve already moved up the learning curve, know exactly what their business needs, and can move to a more modern solution that provides only what they need.  Instead of focusing on perceived gaps in their capabilities, changing out existing capabilities usually will produce a much greater ROI.

Latest article for chiefmarketer.com, talking about planning for dynamic content and personalization before the next site redesign.  With web services, the possibilities for embedded dynamic content and personalization are now within reach.  The biggest problem I’ve been seeing is a lack of flexibility in the current site design of larger companies.

You can read it here.