Retention and Relationships : Marketing Thoughts by Michael Greenberg

Every marketer wants to keep a finger on the pulse of their target market.  I’ve long followed job openings to study how marketing organizations change over time.

But SEM data is a direct pipeline into the minds of your target audience.  Watching how specific keywords grow or decline in importance around a particular topic is fertile ground for spotting changes in your business.  For example, I’ve seen a significant shift in the interest in “loyalty” in relation to “CRM” in the retail world.  So it appears that retailers have figured out that CRM is a technology, while loyalty is a strategy.

Something to keep and eye on and ask your analysts to look at every once in a while.

Yes, I know…way too long between posts.  Here’s my latest article for Chief Marketer on the best investment you can make as a marketer.

In a nutshell, its investing in a true in-house analytics resource.

I’ve been lucky enough to moderate a number of webinars on the subject of implementing loyalty and relationship marketing programs.  There are two interesting ones on my company’s website.

Keith Lauver, a tech entrpreneur turned artisan food CEO who is the star of the July webinar, is particularly interesting to listen to, as he has the entire perspective from high level strategy to doing the implementation work himself.  I think the most interesting point he makes in this webinar is that sucess can be traced back to the fact that he chose open and extensible systems to run his operations.  This made it easy to attach new systems without requiring custom development and integration.  (Visit his company at www.montanalegend.com.  Good stuff.  Disclosure: Yes, they are a client.)

In this Web 2.0 world, integrability is becoming more and more important to the long term success of an organization, especially one that needs to use disparate data sources to understand the whole picture of customer relationships.  Stay tuned.

I’ve noticed that many companies still try to figure out the exact best way to do something in advance.  In some cases there is no other option, but nowadays its much easier to adapt to customer response or market conditions.  Better yet, test multiple ideas simultaneously, and let the market pick the winner.

That’s the premise behind my latest article for Chief Marketer, which I encourage you to read.

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.

I grew up on the East Coast, and have lived on the West Coast for 18 years. So when I spent 2 1/2 years commuting to Indiana, it was a great experience for a marketer to see another view of the American consumer. I was left with a greater appreciation for the role of Wal-Mart in the typical consumer’s life, as well as a deep appreciation for the diversity found in my current city of residence, San Francisco.

Why the reminiscing? Because I just spent an hour wading through marketing materials from the Fred. Newell CRM Conference that took place earlier this month. Suddenly all of the database marketing/email/campaign management providers sound very, very similar, all promising more loyalty, more sales, higher ROI, more insight, etc. It reminds me of the ads for apartment buildings in Indiana, where everything had a pool, workout facility, clean units, a new kitchen, parking, and easy access to freeways. You had to filter based on location, then visit everyone in a region to figure out the differences. I quickly began using price as a proxy for quality to cut through the clutter.

Clearly there is a major challenge for marketing execs at retention marketing solutions (i.e. me) to better differentiate from competitors. Feel free to comment or send me feedback directly on the topic.

I’ve seen a flurry of metrics-related articles recently that generally show direct marketers and other data driven marketers don’t track their metrics closely enough.  They don’t follow lifetime value, or don’t measure churn, or don’t know conversion rates of email, or one of a million different KPIs that we could manage our businesses with.

Well, that’s OK.  As long as you track something that relates to your basic assumptions about why your customers care about your company, you’re ahead of the game.  Don’t get me wrong…all of the metrics mentioned above are incredibly important (especially the changes over time) but ultimately they are resultants and trailing indicators.

Have a point of view about why your customers care about you and do business with you, then measure the things that tell you the most about your point of view.  Anything else is nice, but not the end of the world if you don’t track it.

One company I know was very interested in average sales per customer in various relationship marketing programs.  Some programs worked better than others, and their efforts were focused commensurately.  However, it wasn’t until months had gone by that they realized the underlying cause of the sales differences was the presence of certain big-ticket category purchases.  Suddenly their understanding of the business changed, and they tracked % of activity in key categories by program, plus which campaigns drove the big ticket purchases.  This focus has transformed their business and their metrics now focus on the long term drivers of value, namely activity in a select few categories that best predict larger lifetime value.

Here’s an excerpt from my latest article for Chief Marketer.  The article in its entirety is here.

Quick, list the objective for the next marketing dollar you spend. Is it quantifiable and time-bound? Is it something other than “increase revenue”? I talk to dozens of companies about improving their business through relationship marketing and find that developing clear financial and marketing objectives is the most productive step in the discussion.

Read more.

There’s a fascinating study going around from the CMO Council that looks at how marketers are interacting with their customers.  To summarize, they’re not.

49% named CRM or database systems as their main information source on customers.  75% don’t have advisory boards or online communities.  30% don’t develop their own customer segmentation.  Plus, there are plenty of other insights on the CMO Council website.

From my perspective, every marketer should talk or listen to customers every week.  Whether that means walking onto a sales floor as a retailer, reading customer satisfaction survey responses, listening in to a call center, or participating in weekly account manager conference calls, keeping up to date on customer needs, concerns, and input is crucial.  Qualitative input helps balance the tendency to rely solely on quantitative input, which many of us practitioners have tended to fall back on.