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The triage marketing death trap

marketing strategy trap

The road to extinction is paved with shortsighted thinking that neglects your customers.

One of the greatest marketing challenges for businesses large and small is to balance short-term tactics with a long range strategy. If you’re not mindful, you can get permanently stuck on shortsighted priorities.

I call this triage marketing.

It’s like triage in the television program M*A*S*H. Many a calm moment was cut short by the sound of approaching helicopters and Radar O’Reilly announcing, “In coming.”

What followed was managed chaos.

Outside the operating room was a doctor in triage, whose role was to examine the wounded to determine which needed immediate surgery. The rest were patched up temporarily and helped later. It was the epitome of a short-term strategy.

The marketing equivalent is to focus on quick hits: generating immediate leads for the sales team, running a promotion to spike direct orders, or other scattered activities. The trap is sprung when short-term strategy becomes the constant mode of operation.

Marketers walk a fine line here. To win at content marketing and online customer responsiveness requires real-time execution or you miss opportunities. Who wouldn’t want to be the next viral marketing or newsjacking success story?

Related: The case for getting a journalist on your content marketing team

However, in the heat of battling day-to-day priorities, it is easy to lose sight of the important long range vision for growing the business. In many cases short-term thinking is ingrained in the corporate culture.

A triage culture

I first observed this as a front line marketer in a large company years ago. There were two aspects of the culture that perpetuated a short-term mindset and shortsighted behaviors.

The first was the budgeting process and learning to game the system.

See if this sounds familiar. Your marketing budget was set in January, after a month long planning process. In April, senior management and the finance wizards would make the first of quarterly adjustments. This meant they were looking for unspent money to take back. This evolved from quarterly to monthly exercises.

triage marketingHow did marketers adapt? You spend or lock in everything you could in Q1. If you phased your budget to customer purchase preferences – in this case, they spent most of their budgets in the last quarter – you lose large parts of your marketing budget. It fostered a mindset that said ‘Responsible planning be damned; use it or lose it.’

A second, equally powerful culture driver was the compensation plan.

Like most companies, bonuses were paid out for reaching ever more aggressive revenue targets. The targets were based largely on new sales revenue. Since compensation drives behavior, this resulted in activity focused on acquiring new customers and new product sales.

I’m not opposed to bonus incentives or driving growth. Not at all. In my time, I made the company tens of millions of dollars and earned some great bonus checks. I also witnessed some chaotic, shortsighted and nonstrategic behaviors in the race for revenue.

Related: Don’t think about innovation like a CEO

One example was the pricing policy behind some of the year-end automatic shipments to subscription customers. All products were sold on subscription with the agreement that updates would be automatically shipped and billed. Want to guess where this is going?

Pricing for updates were set by the finance wizards based on the revenue needed to make revenue goals. That meant some customers where charged an exorbitant amount for very little value. In the process of meeting the short-term goal, we incurred high cancellation rates. This alienated customers and set us back for the upcoming year.

customer relationship marketingRemember me? I’m your customer

It’s too easy to forget the customer when in triage marketing mode. In the short-term, there is no incentive to invest in customer relationships critical to sustained business growth. You give short shrift to:

CUSTOMER RETENTION
Triage marketing focuses on acquisition over retention. One study at St. Joseph’s University in Philadelphia found that retention pays dividends. If your business has a 70 percent customer retention rate, every revenue dollar today will be worth $4 in ten years. And an 80 percent retention rate will increase today’s revenue dollar to $6 in ten years.

CUSTOMER LOYALTY
Triage marketing focuses on promotions over customer loyalty. Promotions sell a product trial, but not ongoing brand loyalty. They may even attract the wrong customers, who never become loyal. It costs six-to-ten times as much to acquire a new customer as it does to keep an existing one. Conversely, a Harvard Business School study found that an increase of five percent in customer loyalty can increase overall profitability from 25-80 percent.

CUSTOMER LIFETIME VALUE
Triage marketing allows little time to create deep relationships with your best customers. Relationships continue to grow, encounters do not. For example, an automobile dealer once calculated that a lifetime of cars sold to one customer would be worth $322,000. The 80/20 principle, where 80 percent of your business comes from 20 percent of your market (i.e. your loyal customers), literally takes a lifetime.

In the past 10 years, there has been a fundamental shift in the balance of power in the marketplace from seller to buyer. Customers have greater access to reliable information on the Internet. Social networks give them unprecedented power to talk about your product and service. They don’t care about your short-term objectives.

Marketing strategies based on short-term thinking won’t win you customers or sustain your business in the long run. Back in 1973, Peter Drucker said the purpose of business is to create a customer. If you’re in triage, you need to get back to the basics. Your survival depends on it.

What are you doing to combat the perils of short-term thinking in your organization?

Are you on a journey to marketing awesomeness? Let’s travel together!

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The paradox of scarcity on the social Web

social networking-scarcity

When is scarcity the wrong persuasion tactic for social networking?

Maybe it’s more a paradigm shift than a paradox, but scarcity as a persuasion technique seems to have lost some of its luster in our social networking age.

At least where exclusivity in wielding social influence is concerned.

This observation began with something I experienced on Twitter the other day.

I was checking out new followers to decide if I should follow back. I was pleased to see one of them is a former associate who I haven’t heard from in a long time. What a great opportunity to reconnect!

That opportunity was thwarted when I tried to follow back. I was notified that the account is locked, the tweets are protected, and my follow is pending approval. I’ll take a pass.

It seems to me this approach is anti-social. It runs counter to the fundamental idea behind social networking. The message it sends is “I don’t trust you and what I have to share is so awesome, you have to qualify to see it.”

That might work for selling luxury items, but it doesn’t make sense on social networks.

What does work on social media is accessibility, sharing, connecting and responding. Trust and generosity are the underlying values enabling that.

RELATED: Going the extra mile activates the butterfly effect

The paradox of scarcity is that its power lies in limiting those things in order to create desire for them.

I have an ongoing story arc in my own home that illustrates this paradox.

A tale of two kitties and social influence

social networking - cats

Bela & Uma, social influence coaches

I have two feline housemates that allow me to share living space with them. If you are a cat owner, you know what I mean.

One is a Russian Blue named Bela. A characteristic of that breed is they are very shy, untrusting and only bond with one human. I didn’t learn this until I brought him home.

I’ve had him more than 10 years and most of my friends and family have never seen him. At the first sign of a stranger he hides in the basement. My mom refers to him as my imaginary cat, since she’s come to doubt his existence.

Because of his limited access, he has succeeded in generating curiosity and desire to see him and experience his presence. He is anti-social, but esteemed from a distance.

My other cat is a Siamese named Uma. A characteristic of that breed is they are very talkative and social. She makes her presence known in every situation, constantly underfoot, demanding attention and engaging in every conversation despite the language barrier.

Because she has greater trust, she is accessible to everybody. She connects with a wide variety of people in far greater numbers than Bela.

Social success belongs to connectors

Connectors are critical to spreading word-of-mouth epidemics on social networks. Malcolm Gladwell describes them as:

  • Gregarious and intensely social with a knack for making friends
  • Knowing a lot of people
  • Knowing a variety of people from different worlds and subcultures

Bela, with his limited access, will never have the social influence or reach Uma does.

Another example of this is Amanda Palmer, performance artist, musician and social media innovator. In a recent TED Talk she told her story of building a tribe through connection and extraordinary trust. It’s a great message. What do you think?

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Marketing lessons I learned from one referral

October 31, 2012 7 comments
Referrals start with relationships

Relationship marketing seeks to create a partnership that results in word-of-mouth referrals.

In the pursuit of sales and market reach, it is easy to overlook the human factor. This is especially true in digital marketing. This story is a reminder to me of the power of building relationships that create value, loyalty and a lifetime of referrals.

Mom was in trouble. Through a series of events beyond her control, she lost her house, her job and most of her life savings. Six years prior, she had begun a harrowing and heroic battle with cancer. Now, at the time of life when she should be looking forward to retirement, she was faced with starting life over from scratch.

The first step to rebuilding her life was to find a place to live. Given her financial situation, this was a source of great anxiety. I referred her to Jeff Anderson, a realtor who had done a great job helping me get into my first home. I figured if anyone could solve this puzzle, he could. I guessed right.

In short order, Jeff found an affordable townhouse in a safe community where the value of the property was sure to increase. He helped her get financing that qualified her to buy it. On moving day we were thrilled and relieved to close that chapter.

If the story ended there, it would be a great testimony. But there is more.

At the closing, Jeff told mom that in a year she would be eligible to refinance her mortgage to get a lower monthly payment. Good news.

Fast forward 12 months. One day mom got an unexpected phone call. It was a friendly reminder from Jeff that she could now refinance. He offered her advice on how to initiate the process with the lender. The result was a streamlined refinance that gave needed relief to her monthly budget.

That happened more than 15 years ago. Jeff has become a family friend and trusted advisor on any type of real estate question or transaction we might have. He succeeded in creating a true business relationship where each side works to serve the other. Guess who I would recommend if a friend asks me for a good realtor to work with?

The power of relationship marketing

This is a great illustration of the power of building relationships that result in mutual benefit. The principles apply to several areas of business, such as referral sales, social media and influence marketing. I have thought about this story many times in my years as a marketer. Here are some of the lessons I learned from this referral experience with Jeff.

1. Clients are happy when you meet their expectations. They become loyal when you exceed expectations. They turn into word-of-mouth advocates when you create memorable experiences.

2. You build strong relationships with clients by taking a genuine interest in them. Gain an understanding of their frame of reference. Mom’s frame of reference was more than the immediate need to buy a house; it was to manage a limited budget.

3. Listening is the most important relationship skill you can practice. Listen for the reason your client is seeing and feeling the way they do.

4. Give and you will get. Our society operates on the law of fair exchange. When you give extra, you activate the law of reciprocity.

5. Look beyond the initial transaction to the lifetime value of a customer.

6. The close of the sale is not the end. Relationship marketing seeks to confirm the sale, confirm the beginning of a relationship and confirm the beginning of a partnership.

7. Turn your relationship-building mindset into action. Follow up with added value, even if it’s a year later and the sale is closed.

8. Turn the relationship into something more than what brought the two parties together in the first place.

9. Referrals are the most powerful, cost-effective form of lead generation. They give you third party credibility and open the door for a receptive conversation with a warm lead.

10. Each time someone gives you a referral, you have an opportunity to make them look like a hero.

The human factor

The reason this story has stuck with me these years is because it was personal and it was tied to strong emotions. Whether in face-to-face interactions, social networking or content creation, it is important to remember that we are dealing with real people and real emotions.

In The Psychology of Relationship Selling, Orv Owens said the primary reason for sales resistance is fear. People are either afraid of making the wrong decision about you or your product or their fears are stronger than the reasons you have given to act. Your job is to help them conquer that apprehension.

Relationship marketing is not a persuasion technique so much as a mindset. It takes the human factor into account when doing business. David Ogilvy is famous for saying “The consumer is not a moron, she is your wife.” Humans are hard wired to respond with the emotional brain, even in business situations. That is where we connect to create word-of-mouth loyalty.

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Is enchantment the new influence?

October 16, 2012 7 comments

Guy Kawasaki showed how to take influence to enchanting levels at the MIMA summit in Minneapolis.

Guy Kawasaki has a new calling.

The former chief evangelist for Apple is preaching the virtues of enchantment to bring personal and online influence in the digital age. On October 10, he delivered the luncheon keynote to the Minnesota Interactive Marketing Association (MIMA) summit meeting in Minneapolis. Attendees were treated to highlights from his book, Enchantment: The Art of Changing Hearts, Minds & Actions.

What is enchantment?

When Kawasaki talks of enchantment, he means more than customer service. It is more than traditional persuasion, influence or marketing techniques. It holds a deeper power to motivate voluntary, enduring change in others, interpersonally or on social media.

He has taken Dale Carnegie-inspired principles for building relationships and influence, and updated them for today’s culture. “If you want to change the world,” he said. “You need to convince people to dream the same dream you do.” Tapping into peoples’ passion to get behind a cause – social, personal or brand – is a key to creating enchantment. It is built on three pillars:

ACHIEVE LIKEABILITY

Likeability is a much-discussed concept for both personal and social media success. Kawasaki laid out fundamentals of likeability starting with the importance of a genuine smile for making a favorable impression. A genuine smile shows by the crease in the eyes. “Ladies remember,” he said. “If you have crow’s feet, you are enchanting.” Likewise, online marketers can also put on a social media smile by establishing a likeable tone in content for the Web.

Other likeability factors he emphasized are to create an environment of acceptance and to default to “yes” in dialog with others. Having an attitude of helping the other builds goodwill and trust.

I'm enchanting. Resistance is futileACHIEVE TRUSTWORTHINESS

Building trust begins with trusting others first. Kawasaki gave examples of Amazon, Zappos and Nordstrom as companies who have earned the trust of customers by their trusting business policies.

A second element of trust is to apply a philosophy he described as “bake, don’t eat.” Don’t approach your business situation as a zero-sum game, rather be generous in creating value for customers up front.

The last point he made for building trust is to find something to agree on when you meet resistance. Starting on a point of agreement, you begin a dialog that builds rapport and receptivity to your cause.

HAVE A GREAT CAUSE

People will be inspired by a product, service or cause when you give them a reason why. It goes beyond the financial benefits of engaging to an emotional connection to something that matters. Kawasaki said the key to achieving this is to do something DICEE:

  • Deep
  • Intelligent
  • Complete
  • Empowering
  • Elegant

Launching an enchantment campaign

With those pillars in place, he outlined how to launch an enchantment campaign around your business cause. He covered these high-level points:

1. Tell a story using salient words that involve customers; sell your dream

2. Overcome resistance with social proof and reach out to all influencers, not only end-users

3. Invoke reciprocation by making it easy for others to pay back

4. Use technology to touch people; remove the speed bumps to engaging

5. Provide value in the form of information, insights and assistance

6. Follow 3Fs of engagement: Fast, Frequent, Flat (person-to-person)

7. Enchant up the leadership chain by prototyping fast and delivering bad news early

8. Enchant down the ranks by empowering staff and providing vision

With social media, marketers today have a phenomenal way to engage, influence and enchant customers and prospects. A final takeaway from Kawasaki’s presentation is the principle of endurance. An enchantment campaign must be viewed as a process, not an event.

Building a relationship takes time and effort, but the rewards can endure. He used the example of The Grateful Dead allowing fans to video record performances, thus allowing the concert experience to live on beyond the event. Guy Kawasaki’s call for enchantment takes influence to a new level of brand loyalty.

Below are the slides from Guy Kawasaki’s presentation to MIMA.

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Lester Wunderman’s vision for interactive marketing

October 2, 2012 9 comments
Lester Wunderman's vision for interactive marketing

The roots of Interactive Marketing can be traced to Lester Wunderman’s vision for a system of interactive transactions between consumers and manufacturers he named direct marketing.

Before interactive marketing, there was Lester Wunderman.

He is an advertising legend who pioneered direct marketing. He defined it, named it and launched it into a new marketing discipline that transformed modern advertising. For that, he is recognized as the father of direct marketing.

His accomplishments and contributions to the marketing industry cannot be overstated. In the decades that preceded the Internet, he envisioned a degree of consumer engagement and interactivity we are realizing today.

Defining a new marketing

In the early 1960s, Wunderman conceived a new approach to what was then known as mail order marketing, or direct mail marketing. He observed a shift in consumer preference for having a personal, direct contact with the manufacturer of products, and a shift away from intermediary channels of distribution. He described this as a “system of interactive transactions that would restore a measure of dialog and human scale to the way we made, sold and bought things.”

He viewed this system as more than a direct mail channel. He began calling it direct marketing.

In a historic speech at MIT in 1967, he outlined his ideas and gave birth to a new industry. He tells the fascinating story of preparing and delivering the presentation in his book Being Direct. He made the case for a new direct marketing that is comprised of several broad-based characteristics:

  • It is a strategy, not a tactic
  • It is where advertising and buying become a single affair
  • It eliminates intermediaries in distribution and communication channels
  • It creates dialogs between buyer and seller
  • It builds dialogs into enduring relationships
  • It is personal, relevant, interactive and measurable

In the decades that followed, he oversaw the advent of the direct marketing industry and put these principles into practice.

Inventing new media

While working with clients whose appetite for media couldn’t be satisfied by conventional direct mail alone, Wunderman pioneered new media to reach consumers directly. Some of these innovations include:

  • The now-ubiquitous magazine subscription card
  • Preprinted newspaper inserts
  • Inbound 800 phone numbers to sell magazine subscriptions on TV and radio
  • Introduction of the ‘virtual store’

All of these were revolutionary approaches for interacting with consumers directly as they moved further upstream in the buying process. These ideas were limited only by the technology of the time. However, the concepts hold true for interactive marketing today. In his book, Wunderman said of that time:

I was certain that consumer-initiated advertising was going to work in the future as more interactive media became available.

Technology has caught up with his vision. We can now interact on the Web in many ways: websites, social media, email and mobile. In anticipation of these new media platforms, Wunderman created “The Consumer’s Communication Bill of Rights” for the second edition of his book. It offers his time-tested wisdom for online engagement.

Lester Wunderman's guides to interactive marketing success

The vision for digital marketing

Wunderman’s vision is still aspirational for interactive marketers. We have powerful new media to reach customers and prospects, but continue to work through the challenges to deliver on their expectations. His “Bill of Rights” points to many of those challenges:

  • Being transparent and authentic, and letting go of controlling the message
  • Capturing data that enables more relevant, valuable exchanges without invading privacy
  • Understanding the acceptable frequency of communications
  • Telling relevant brand stories that inform, not self-promote
  • Having conversations with consumers that establish respect and likeability
  • Building relationships through meaningful engagement, not wasted activities
  • Making it easy for consumers to interact and buy
  • Keeping communications succinct

These are worthy pursuits rooted in the fundamentals learned in the decades that came before. As he has throughout his professional life, Lester Wunderman has provided a blueprint. His vision for creating the direct marketing industry extends all the way into today’s digital world.

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