Archive: March 2011

Our partners Jive Software and Alfresco today announced a partnership to bring best of breed content management and social business software together for customers. The release also mentions:

The companies are collaborating with Jive consulting partner, SolutionSet, to deliver an Alfresco-Jive connector that brings enterprise-class repository functionality to Jive content and allows Alfresco content to behave as native Jive content. 

SolutionSet has successfully helped hundreds of enterprise customers sort through the strategic and architectural decisions involved in implementing content management systems.  We have also designed and implemented more enterprise-scale social community and collaboration platforms than just about any interactive agency.  We are leveraging this expertise to help Jive and Alfresco, two market leaders, build the necessary technologies and strategic frameworks to bring the best of social and content management together.

So why do we think this is important?

First, very simply, what is important to our customers is important to us.  Our job is to solve problems.  Virtually every customer we work with has deployed a sophisticated content management system.  And Alfresco has grown as fast as anyone in that space.  In the past two years, we’ve seen social platforms adopted at an unprecedented rate.  Jive in particular has emerged as the clear leader in social business software for the enterprise.  There is a strong overlap in these customer bases, and increasingly they are demanding a best of breed offering.

Second, this best of breed approach is one that we think will increasingly become the norm.  I started building web infrastructure in the mid-90s when websites were nothing more than a set of HTML pages.  As these sites grew and became unmanageable, a new platform called “content management systems” (CMS) emerged.  Fast forward a couple of years and this new thing called “e-commerce” emerged.  At first, e-commerce was simply thought of as a content management system with a shopping cart and a catalog.  But as e-commerce functionality matured, it became de facto to marry your content management system with a full e-commerce platform. Most clients are in a similar position today.

When “social” was just a discussion forum and some tagging features, it could easily be bolted onto the feature set of a CMS.  And many CMS vendors have taken this approach.  But similar to the e-commerce lesson, enterprises are quickly understanding social as an entirely new platform and user experience, with complicated needs demanding a comprehensive platform.

From the beginning, Jive took a platform approach to social business software and has continued to innovate with their apps marketplace and APIs to enable integrations like we are deploying in conjunction with Alfresco.  SolutionSet has developed a series of tools and methodologies to help enterprises understand and take advantage of these new types of best of breed offerings.  By connecting market leaders like Jive and Alfresco, we see an opportunity for customers to realize the vision of truly social content management.

DO POINTS PROGRAMS ADD UP TO RELEVANCE AND ENGAGEMENT?

As one of the sponsors of the Loyalty 360 Expo in Orlando this year, our strategy team was there in force – looking and listening for innovation, trends and best practices.

While mobile, referral, and geo targeting are cutting impressive new paths that cross into this space and customer experience and segmentation disciplines are maturing to gold standards, for me, one of the biggest trends may in fact be a fundamental shift in loyalty itself is taking place. That is that loyalty, when defined as a hard-line program of points building or quid-pro-quo behavior, is not a big growth area for most marketers.

Most of the dialogue and information at the Expo surfaced more debate than conclusion about what Loyalty was, let alone any trends clear growth opportunities. Some themes, however, ran through many conversations – and are areas that have been of great focus for us here at SolutionSet.

Those themes were the ideas of:
1. Engagement
2. Relevance

In essence, companies are running programs that achieve these things under a title of “Loyalty”. GameStop’s program was self described as more “CRM titled as Loyalty”. At Starbucks, points accumulation was is a good component of their program, but really only covers about a third of the overall relevance (monetary value customers gain). Their program also tied in community and recognition, which were arguably more emotional, compelling, and uniquely ownable for their brand.

The innovative new social and mobile developments are also pointing more to the ideas of “people like me” than “earn points to redeem”.

As our CEO, Zain Raj, has pointed out in his blog, traditional Loyalty programs are really just frequency programs. As I reflect on the term “Loyalty”, it also strikes me as a very company-centered, not consumer-centered term. It doesn’t seem to cut it with regard to talking about what this stuff is.

My suggestion is “Brand Fan Programs” – the effort to surface and exploit those attributes inherent in a brand and offerings that resonate with a customer group such that we can drive unique levels of relevance and engagement.

As with facebook, fanning should be measurable – and in a way more in tune with these efforts. Fans should have a lifetime value that can be maxed, referral and influence value that can be tallied, data profile completes that can be totaled, spend for return that can be optimized. The behavior, term and measure seem to fit – and fit with the important activities that make them happen: relevance and engagement.

It could be that the best course for a given brand is a more singular focus on a standards points/rewards programs (aka: Frequency Program), and that’s fine. I believe that there is greater opportunity at the higher relevance and engagement end of the scale, building a “Brand Fan Program” for our clients.

Yahoo! asked me to share key trends for CMOs over the next five years. The challenge, of course, was to do this in 200 words. This got me so excited about the future of our profession that I wanted to give the long version of my answer here. Here are some predictions:

CMOs will Become “Friends” with Data

A lot of us entered this field because we’re right-brained “creatives” who see numbers as the province of left-brained “bean counters.” To be successful, we’ll have to use both sides of our brains. We’ll need to mine the data for the insight it gives into customer behavior, then use our new-found understanding to drive attitudes about the brands we shepherd. We need to develop and implement whole brain capability to be successful. Behavioral insights from data can provide the guidance needed.

CMOs will Lead in Real Time

Gone are the days when we’d launch an initiative and then wait to see what customers thought of it. Now they react instantaneously—and we get immediate feedback. Not only will we have to cozy up to the information they generate, we’ll have to quickly digest and evaluate it. And then we’ll have to use it to strengthen our brand strategies. The velocity of change has never been higher, and we’ll need to act quickly on our customers’ needs and desires to remain relevant.

CMOs will Love Customers—Not Just Prospects

Everyone who knows me knows this is a pet peeve. Marketing in the last century was totally focused on acquiring new customers, often ignoring current ones. And there’s still too much residue of this form of thinking.

CMOs focused on customer acquisition ignore two very important points:

* In the digital environment, it’s never been easier for customers to switch brands. If they’re not getting what they want, another product or service is just a click away. We need to focus on creating brand rituals, not just habits and routines—because these are easy to walk away from. And we’ll never do that if we’re always chasing the next customer.

* Keeping current customers happy is also more profitable: “it’s cheaper to keep her.” It takes $17 of new business to replace $1 of lost business. And the average spend of a repeat customer is 67% higher than a new one.

CMOs will use Ideals to Rally Customers

Powerful ideas capture customers. It used to be about “value”—offering a quality product or service at a fair price. Now a brand must have “values”—ideals its customers share. Being green. Local sourcing. Giving back to the community. Customers are loyal to brands that mirror their values (and this is an important way to build brand rituals).

CMOs will Target Individual Customers

We’ve been so good about reaching homogenous groups: the coveted 18- to 35-year-old demographic, for example. But every customer believes that he or she is unique—and expects to be treated that way. And with the rise of data on each customer, we’re now able to see them one at a time. This has made 1:1 marketing campaigns viable—and they’re another strategy for creating brand ritual. Treat each customer as a distinct person with unique needs. They will appreciate this by making your brand a part of their lives.

Bonus: CMOs will Love Multichannel

I only had room for five trends, but here’s an important sixth. The infatuation with digital will be replaced with the reality of a multichannel approach. Some customers will want to do everything online. Some will want to go to a store. Some will want to speak with a person on the phone. A 1:1 approach will accommodate all of them.

Of course the future already is here. Smart CMOs are using tactics in some if not all of these areas. Make sure you’re among this group—and you’ll be forecasting the direction of marketing in five years!

REACH THE DECISION MAKERS YOU SEEK BY CATERING TO THEM, NOT SELLING THEM.

Reaching the decision makers at small and medium sized businesses seems to be increasingly on the checklists of marketers today.

Not surprising.

Small businesses are where the action is. They have historically led the way in economic recovery. As resellers or high ticket end users, their business also tends to hold significant strategic and/or revenue value. And it bears noting that smaller businesses that have survived the last two years are likely doing something right – and who doesn’t want to do business with winners?

We’ve been hard at work helping our clients embark on this freshly energized courtship with small businesses and their very savvy operators. It’s an exciting time and an exciting challenge – and it is uncovering many interesting truisms and insights.

Perhaps one of the most significant: don’t sell to them, cater to them.

Allow me to wander into an anecdote for a moment…

My grandfather was a mechanic who ran his own shop through the depression and beyond. His library of stories was as good as any Grandfathers, and tended to be nicely adorned with salty language we didn’t get to hear enough of at home. Most were lessons about human character and paradoxical behavior.

One of his shorts provides an important insight into how to reach the decision makers at the business you seek. I’ll leave the salty bits out.

Across from his garage was a feed and supply shop. It was a frequent destination for those out of work and looking for a job. Grandpa said there would frequently be a line of five or so men along the wall outside, waiting to be offered work.

One day, he noticed the owner lugging a delivery of supplies into the shop. The line of men stood, watching. One enterprising guy stepped forward and just started to help – lifting and lugging along with the shop owner. Along with demonstrating an eagerness to work, he used the advantage of proximity to talk with the owner about other tasks he could perform – things the shop owner hadn’t thought of. Not surprisingly, the guy was employed by the end of the day leaving the others to seek a new shop to stalk.

Now, before you attack me about a cliché depression story or the jerk who gave work away for nothing and one time got a job, let’s fast forward to the world of today and a touch of insight.

In our surveys and interviews, we’ve learned the small business decision maker of today shares a lot with the feed and supply owner of yore. Mostly, they too are typically wearing multiple hats – for example, running their own advertising programs for upwards of 5 hours a week. That, along with running the finances, dealing with vendors, providing customer service, managing facilities, doing whatever they really do, and probably lugging some feed sacks now and then too.

Being sold to means effort on their part. They need to spend time researching and thinking through what you’re telling them. This is effort and time they have in sparse supply.

Being catered to means getting help that demonstrates to them the value you offer. It provides immediate benefit and makes their life easier, not harder.

Catering a well-crafted demonstration of value also earns you a conversation and a chance to learn more about this business and the decision maker’s needs.

Our advice is to look to your offering for some of the best “catering” strategies:

- Is it as simple as a free trial?
- If it’s got a complicated ramp time, can you offer a free setup?
- Can you help them see how they’re doing by way of industry best practices or case studies in similar businesses you have?
- Can you help with tailored reports on expected expense and return for a business of exactly the size and type you’re working with?
- Can you help with decision making tools to make it easy to get to a well justified choice?

While giving service and information away may feel like a risk or a stretch, it’s a powerful tool to reach these time strapped people. It’s also a great way for you to stand out from your competition and may be just what it takes to get you “off the wall”.

Over the past couple of years, as postage and other offline mailing costs continued to rise while response rates declined due to a weak economy, prospecting for new customers became an increasingly more expensive proposition. As a result, many catalogers reduced their spending on acquiring new names, which limited, stopped, or even reversed house file growth. Understanding that house file name counts decline over time without continual replenishment from fresh names, catalogers knew that they needed to do all they could to retain their existing active customers. Additionally they sought to identify lapsed customers who could be successfully re-activated to replace more costly new name acquisition programs. The thinking was that the natural decline in house file names could be avoided or at least minimized, if these retention and reactivation efforts were successful, especially in 0 – 24 month recency segments which traditionally provide the margin to run their businesses profitably and provide funding for new customer acquisition.

Perhaps due to the length of this recent economic downturn, many catalogers, who knew they needed to retain 0-24 month house file counts as best they could, placed increasing emphasis on re-activating lapsed customers. While on the surface this looks like an acceptable way to offset the cost of acquiring new names, in reality, re-activated customers do not generally perform as well as new-to-file customers, given a similar cost to acquire, over time. We are now beginning to see the results of that shift in strategy; more single buyers vs. multi-buyers in customer files, declining performance in some multi-buyer segments, etc.

Is re-activating lapsed customers a bad strategy, then? Not necessarily. Is retaining and nurturing current active customers an adequate strategy to maintain house file counts when new name acquisition program results are below break-even? Probably not. So, should we continue prospecting even when results are below break-even? In some cases, yes.

How do you decide on a strategy? How will you know if it’s working? You need to be able to measure and monitor promotion costs and contribution of customer groups over time, based on original source. In other words, measure and monitor your customer’s Lifetime Value (LTV). By observing customer promotion cost and purchases over some time horizon, typically 6-12 months (or more, depending on where you begin to see significant performance differences and/or your tolerance for risk), you’ll know how much you can afford to invest in a name, based on the expected return you’ll receive within your LTV time horizon. If you make decisions about new name acquisition, customer retention, or re-activation investments based only on initial campaign performance, you will likely make some wrong decisions. For example, as a rule of thumb, new customers acquired from your web site (web as original source channel) typically have a LTV much lower than names acquired through an email or catalog original source channel. Catalog original source channel LTV’s are significantly higher than email.

Also as suggested above, the LTV for re-activated customers (those who used to buy from you, but have stopped buying) are typically lower than the LTV from new-to-file customers (those who have not bought before, but have an interest in you now).

Going further, you shouldn’t just evaluate LTV by original source channel. Evaluate LTV of customer groups by original product or product category purchase, prospecting name source, reactivation campaign effort. Evaluate LTV of customer groups based on any special retention offers you’ve made measured against LTV of other customers in the same segments that were not made the offer (assuming you have groups that are large enough for statistical validity).

So, what do you do if you don’t have a system for analyzing customer LTV? In the past, when those of us who called ourselves direct marketers were only concerned about our catalog channels and didn’t have promotion history in our databases, we could estimate 12 month LTV for a single channel from approximations of our advertising costs, margins, segment contact strategy, etc. and could be reasonably comfortable with the results. This approach would give us a good comparative view (even if not a totally accurate P&L view) of different lists, media, re-activation programs, acquisition season, and product group original source performance over time, which allowed us to rank our options for new customer acquisition or re-activation by ROI. However, in today’s multi-channel, multi-touch environment, this approach falls woefully short in providing guidance for decision-making.

Here are a few suggestions for getting solid LTV analyses for your decision-making:

1. Capture promotional activity and costs for all your channels in your marketing database by customer.
2. Make sure your matchback solution isn’t “unfairly” weighted to a specific channel. Use a balanced approach to attributing demand dollars to your pool of potential triggering promotions and their associated costs, so you can create an accurate customer P&L over time.
3. Make sure your LTV reporting tools are “user selectable” by time horizon, date, and the criteria against which you’ll evaluate your name groups (original source, product category, channel, etc) This will give you an opportunity to easily create a series of reports for a progressive analysis of key LTV variables.
4. Keep your data as granular as possible in the database, available for LTV reporting at a detailed level or rolled up in your analysis (i.e. detailed LTV by specific list, rolled up to measure LTV by list category, rolled up further to all response lists vs. all co-op lists, etc.).
5. Make sure you continually review your LTV’s against the LTV measures you used at the time you established your strategies, to make sure those strategies are continuing to support your profit and growth goals.

With the right data and analysis format to turn the data into information about how your customers are performing over time, you can answer the questions posed in the third paragraph of this post with some degree of specificity and confidence. Re-activating customers, using retention programs to make good customers better ones, and investing at a cost below breakeven to acquire new customers could be exactly the right thing for you to do, provided you can identify, through a robust LTV analysis and reporting system, groups of customers and prospect names sources, by original channel, source, product group, etc that generate an acceptable LTV. Using this information, you can then develop an intelligent strategy to re-build your house file counts and return to profitable sustainable growth.

In the past, for most mailers, creating an LTV analysis was essentially an annual or bi-annual major “project”, and seen as a necessary, occasional “audit cost” to make sure your business is on track. If you can execute #1-4 above, doing #5 no longer has to be an occasional “audit project” but instead a useful ongoing analysis to help you in setting and monitoring your customer file growth, acquisition, and contact strategies and your on-going LTV analyses won’t seem much more difficult to pull together than your typical end of season performance reporting exercise.

There’s a serious race underway.

It’s the race to REACH you, Mr/Ms Consumer, wherever you may be. And it is currently being run in your neighborhood whether you have realized it or not.

Successful marketers know that impression building through merely traditional advertising channels such as TV, radio or newspaper is SO 20th century. Times have changed. Today’s consumers are on-the- go, busy people who are glued to their phones and computers. They are so consumed with responsibilities relating to family, work and community, that their distractions are countless. And it is that state of distraction that makes it harder for today’s advertising to break through the mind clutter, make a meaningful impact, and drive response.

Hence the importance – now more than ever – of multiple advertising impressions. Hence the need to find new and creative customer touch points to keep your brand top of mind. And hence the proliferation of such new tools as email marketing, mobile texting and local search engine optimization to leverage the voluminous time consumers now spend on email, smart phones and the internet. But it doesn’t stop there. Marketers are taking to the skies with flying aerial billboards behind bi-planes, immersing themselves in traffic with mobile billboards on flatbeds, posting their ads on the back doors of restaurant bathroom stalls and even labeling the handles of gas pumps with promotional jargon.

Nothing is off limits in this race to target all things local. The phrase “Location! Location! Location!” no longer just applies to real estate. And as marketers continue to not-so-subtly locally target their promotional messages to capture prospects busy surfing the internet or surfing at the beach, checking their email or texts, or filling up at the gas station or their favorite pizza shop, they WILL succeed in growing their brands’ impressions. And that’s a very critical first step to successful advertising.

But it’s the next step that matters most: Driving response. Now that we have their interest, how do we get them to pull the trigger?

Amidst this entire newfound swirl to REACH Mr/Ms Consumer to impression build at the local level, there is still one constant that will not only REACH but PROPEL ACTION. It is direct mail advertising, of course. You can’t get more local than the mailbox.

I know what you are thinking. The mailbox? How low-tech. How un-sexy. But the mailbox is a sure thing. Actually it is the ONLY sure thing we marketers have to bank on. Everyone has a mailbox and everyone picks up their mail. According to the US Postal Service, consumers spend an average of 30 minutes a day reading through their mail, with 25 of those 30 minutes focused on direct mail advertising. In contrast to texting, you don’t need prospects to opt-in before putting a postcard in their mailbox. Unlike email, mailboxes are spam filter free. As opposed to online search, the mailbox is always a routine destination.

Even more important, solo direct mail is the only advertising medium that can be 100% demographically and geographically targeted to the most local unit possible – the household. Moreover, it gets seen, touched and read, even if only for a few seconds. There are no guarantees that an email blast, online ad or billboard will ever be viewed by all targets. And finally, postcards offer the most real estate – not one, but two sides on which to display eye catching photos, compelling promotions and key messaging. Let’s face it, direct mail is the ultimate direct response vehicle.

Direct mail advertising has always been the response-driving workhorse of all cross-channel business marketing plans. And when combined with effective impression-building efforts within the newly- desired local frontier, direct mail is even more powerfully effective. And it makes total sense. Start building impressions with your prospects via email, online ads, and even their favorite social networking sites and break through the mind clutter. Then mail them your hard-hitting, response-driving, promotion-filled postcard and seal the deal. They will buy. Your sales will grow. Nirvana.

We call it integrated local marketing. And it is coming. Your sales will reach new heights as we help to expand your targeted local reach. GET READY to GET IT ALL from GETMEMBERS.com.