Use page breaks.  I had wondered about that for a long time, but it makes sense.  Headlines sell.  Cram as many headlines as you can onto your real estate and don’t make people scan (like they are going to do that, right?),

Having a blog provider that supports categories could help a bit too.  That way you can run themed pages.  As far as I don’t, WordPress still doesn’t.  WTF are they thinking…

Then, that’s about it.  Anyone else have other  ideas?

One of the keys to implementing a customer relationship marketing – CRM(k) – strategy is enabling the process with both tactical and strategic metrics.  Where the tactical ones tie to specific behaviors or events like clicks, downloads, ratings, etc. while the strategic ones will correlate the activity to performance.  For emphasis, again, correlate the activity to performance.  To be relevant.  To be meaningful to the organization, the marketing metrics need to be tied to the success of the business.

So, how do you internalize this to the organization – how do you structure your marketing organization to be performance driven?  Start by establishing:

1.  Clear Standards
2.  Aligned to resources, policies, and practices
3.  Results tracked and reported
4.  Data is used to drive continuous improvement
5.  Fact based decision making

In combination these give a quantifiable base for making decisions.  If you choose drivers that are not quantifiable, they in turn are not really measurable, and do not give the foundation needed to make improvements.  This strips the marketing organization of referencable metrics or proof of performance.

Metric – a numerical measure the represents a piece of data; can be activity based, operational, outcome based, leading indicators, or predictive
KPI – a metric that is tied to targets
Benchmark – something to compare against

While there are many, hundreds of various metrics that can be used, management should be tied to a handful of key numbers.  Again, with the key understanding, they should be tied back to performance. 

**** The largest hurdle for most organizations to drive these type of intiatives is the people.  On average, a lot of marketing organizations are not ready to implement continuous improvement because they do not have the internal skill sets.  Specifically, a lot of marketing organizations can be skewed toward communications – creative, writing, etc. with little emphasis to data and measurement.  Marketing, on the whole, needs to seriously ramp up quant skills.

First, you have to start by defining a relationship. There are different types of relationships most of which can be defined by the time orientation of the partners. Short term orientation is driven by transactions with very little fidelity between the two. A “One-Night-Stand”. Long term is defined by numerous inter-linkages, formal and informal communication, and both parties are concerned with the benefits for both sides.

Walking into a situation its also important to understand how industry structure can impact the valuation of a relationship. In a transaction orientated industry, with low switching costs, focus is on price and fixing on lowest price. Another consideration is the “exposure” of the product. How aware is the end consumer of the supplier’s role in the service. If awareness is low, then there is a greater chance for modularity – or the ability to easily move. Portable cell phones, common CPU chip layouts, etc. are all examples of modular concepts.

Understanding the relative bargaining power between supplier and buyer is also critical. For example, is the product a key part of the value proposition for the buyer. Is the product strategic. For example, dating back to the early 80′s when Nutrasweet (an artificial sweetener) partnered with Coca-Cola. Not a complicated product, nor sexy, but initially gave Coke a strategic advantage in the market.

After relative power it then becomes an alignment of buyer / supplier desires. Does the buyer want a long term relationship when you are office short term? This isn’t a right or wrong, but simply acknowledging how things are. If you both want a relationship, then focus on value added relationship marketing, when you don’t then focus on transaction marketing. The hard part is when these two don’t align. In this case its like the prisoners dilemma and your best alternative is to treat the relationship like a transaction.

In the lucky scenario where you are either in, or have the opportunity to forge a value added relationship there are a few things to keep in mind. Be credible, authentic and do things to signal you are committed to the relationship. One way to signal commitment is by delivering goods or services that have very low transfer value. Examples could include giving fresh flowers to your spouse, or say, doing a market study or concepting for a customer with bench hours.

At the end of the day, driving a value added relationship is about interdependence while a transaction market is all price.

To kick off our conversation, let’s start by abstracting the CRM(arketing) diagram to focus on the marketing processes.

At this level, things should look familiar. Channel, brand, and direct are all common parts of the marketing organization. What may be somewhat unfamiliar, and where we will begin the detailed analysis, is the corporate information factory.

Corporate Information Factory

At its heart, the information factory is a database. This shouldn’t be alien to many marketers, as databases already play critical roles on both sides of the house divided, brand and direct. Albeit the metrics and usage are different between the two, there are often similarities if not overlaps in the data sets. The intent of centralizing the databases is to begin eliminating multiple customer versions and start focusing on one version of the truth.

Switching to a consolidated approach has operational benefits as well. Quality of data is critical to any campaign. Bad data translates to bad lists and flawed approaches. One area very vulnerable to data corruption is the extract, transform, and load (ETL) process that addresses moving and shaping data into useful views. Minimizing the ETL process across disparate systems, therefore, goes a long way toward promoting data hygiene.

For a much more technical description of the corporate information factory visit the site of its father, Bill Inmon.

Once a cleansed, detailed view of a customer is derived from the myriad data inputs, the factory can then supply rich source information to the downstream brand and direct activities.

Direct

Historically, the area labeled direct would correspond to the daily activities of a direct response marketer. List development; applying treatments; managing the execution of a digital campaign through an online marketing automation tool; all of these would be typically associated to normal, daily activities.

In context of the CRF, however, things are slightly different. Previously messaging was all about call-to-actions which typically culminated in a purchase. Now, however, the ambition is to use existing relationships to send desirable content via a pipe, as opposed to funnel, to known recipients.

Some marketers, such as the notable Seth Godin, have referred to this as “flipping the funnel.” Conceptually similar, but I find the pipe to be a better analogy. From an organizational standpoint messages are being passed linearly, directly to a customer on the other end. In turn, this advocate (hopefully) will spread the message like a slow leak building into a pool. I think this is an important distinction to make because it more clearly articulates to whom and what a marketer needs to do to create compelling content.

Executing, therefore, in this new channel will require brand and direct marketers to band together to create compelling experiences. For success will require the addressability skills of the direct marketer in combination with the story telling of the brand marketer.

Brand

Although not always at the forefront, okay almost never, databases have also played a central role for brand advertising. Unlike with direct, where the technology is a direct part of the marketing execution, however, with brand it is more like a consumed service. In large part this is a function of scope; analyzing the vast quantities of data (e.g., Nielsen, USPS, Census, etc.) involved with macro trending requires specialized analytic tools coupled with deep statistical skills.

In a certain light, these processes of brand marketing will remain unaltered. The core tenets of driving customer insights and creating compelling experiences remain paramount. Given the incursion into the direct space, it could be argued the role has even expanded. This, however, is not the complete story.

As technology has created the possibility of dialogue through addressability, it has also severely undermined the traditional concepts of reach and frequency by enabling consumers with unparalleled ability to opt out of messages.

Change is afoot. The preeminence of the 30 second television spot has come to an end. This is not, however, to say that it is dead. Broadcast as advertising will remain an important element of the marketing plan for is awareness, and even still reach and frequency, abilities. What needs to change, however, is the balance between direct and brand spending.

Incremental Change

While I hope this framework brings some clarity, do not be fooled in its simplicity to think it’s a roadmap for change. Each organizations path to CRM(arketing) will be different. The key is to find an incremental approach. Have your direct and brand marketers worked together before? If so, maybe try a viral, episodic story (this one has a tragic ending, but could have been shortened and lengthened…) targeted to your “in” crowd, if not, maybe refine the practice of geotargeting the 15 second spot. Either way, the three principle rules of move incrementally, strive for failure, and always try real, real hard are the keys to being successful at your CRM(arketing) efforts.

It’s comical in a way. Recently my wife reported back the kids on the soccer team had taken to calling one another baba ghanoush (think hummus, or… chick pea salsa if you’re really desperate); we mused if they knew it meant pureed eggplant whether they’d still think it was funny?

To me this is analogous to how CRM has been adopted by the non-marketing world. What began as a philosophical approach to maximizing lifetime value of customers became a catchall for any technology, process, or wayward breeze that came in contact with a customer. Yet, somewhere along the line the one group that stepped away from it has been marketing!

In part this is attributable to the digital revolution. Although this has certainly impacted all parts of the organization it has basically rewritten parts of the book on messaging to customers. I’m afraid though the current impact of digital on marketing is akin to the subprime lending market. For a time the novelty pumped out great returns, but that has masked problems that trace back to the core philosophies that have driven marketing since the 70’s.

This is not to say the old ways are wrong, or flawed, but rather what digital (catchall for the myriad new technologies) has also done is spawn a c-change in the way consumers engage with companies and messaging. People are no longer as open to messaging and now have unprecedented ability to opt out. Compound this with recession fears and a general belt tightening and you have tremendous pressure amplification on the marketing organization. End game, today’s marketers are under siege to deliver greater results and to become more accountable for their performance.

In a way, digital could even be viewed as the siren wooing you to the rocks. Digital is powerfully attractive, and for good reason, but this is not an issue of channel. This may seem paradoxical given all the recent conversation of channel explosion, but what is coming next is a nova effect as channels collapse back in on themselves. The iPhone offers a great example of this, in the palm of my hand I can now watch movies, take calls, surf the net, blog, text, send emails, and shop from wherever I may roam (Black album anyone?).

For long term performance, marketers need to get back to their roots and re-establish the conversation with the customer; no, not to the customer, but to the people. Tomorrow is going to be more about making friends than winning customers. Truly. To be successful in this aim organizations will need to be genuine and to have fidelity to their commitments. It won’t be so much about the products you sell, but the audiences you serve.

To engage tomorrow you need to start today. Most marketing organizations are not structured for, nor have the tools to drive two way conversations. Now is the time to reclaim CRM and redefine it to what it has always truly meant – building valuable relationships with people.

While its demise has been widely trumpeted, and for sure the old measures of frequency and awareness are not as powerful as they once were, I would argue the funnel, however, still retains some relevancy.

The king is dead (what will change)

Still many things, even possibly the majority, will change. To begin, two things that certainly will are Channel and Segmentation.

Channel

This will be the area that will bear the brunt that for sure is slated to quickly fade in the rearview. Revolutionary technologies will continue to push product integration to the point the notion of a television merges with a computer, to a radio, to a newspaper, and on and on.

In his address at the 2008 AAAA Leadership Conference, Irwin Gotlieb of GroupM described this wonderfully. Let me Cliff Notes some of his words: “Today’s definitions for media become irrelevant. Devices that were previously un-joined will now be joined in a common ecosystem with data streams that can be consolidated. What will be relevant is the form of media consumption, and there will be three variations: lean forward, lean back and mobile. Lean forward – the way you do into a keyboard with a computer screen and keyboard. Lean back – the way you do when you sit on a couch and watch a large screen TV. And mobile, which is self-explanatory.”

Channel will give way to message and relevance.

Segmentation

Outwardly this may seem controversial. However, what I hold is that conceptually the idea of tailoring messages and contents to groups may remain the same, but it’s the way we will go about it that will be so different. Traditional approaches, given enormous gaps in interaction data were forced to make extrapolations of intent, motivation, and ultimately what is of greatest interest to the consumer.

Two key technology changes will dramatically alter this. First, the enormous flood of transactions moving to digital channels is filling in the former voids. The problem now, like grains of sand at the beach, is figuring out ways to process and learn from all this new data.

The second piece, also wrought by the ubiquity of digital is addressability. To define, addressability describes the ability to deliver a specific message to a specific consumer at a specific point in time. In large part the technologies needed to drive this are already in play, but are being hampered by the data issue above, and the exponential need for new content that personalization will require.

In combination these two factors, complete data and addressability, form the corner stone of my Customer Engagement Factory and hold the promise of truly delivering 1:1 experiences. I cover this in much greater depth in my other postings.

Long live the king (what will stay the same)

At the core, regardless of how turned on its head, one thing that will always be relevant to a marketing plan is the message.

Message

Intelligent brand design has always centered on the user experience. Product placement and differentiation has its place, but ultimately it’s the ability to build a connection to the consumer – to reach them at an aspirational or emotional level that cements a meaningful exchange.

In the end having the right message trumps reach and frequency. One sterling example of this has been the tremendous success of Method Products at penetrating the home cleaning products space. As a startup there was no way they could compete in traditional space. As co-founder Eric Ryan the Goliath’s spend more on going to the bathroom (for toilet paper) than they did on their entire advertising budget.

Moral of the story here is more time and resources need be focused on cultivating dynamic, relevant content.

Looking to the future, the hold over value of the funnel will be based upon the learned processes of connecting to customers. After all, it’s still brand that builds wealth. Building brand, however, is now all about finding ways to incrementally improving exchanges and driving perceived value to the customer.

Curing the Pain

Luckily the case is not terminal, but the road to recovery is going to be long and trying. At a fundamental, c-change level the way consumers engage with companies has been irrevocably altered by the creation and adoption of a host of new technologies. At the very core, therefore, marketing organizations are going need to change their approach.

Approach

Those most effective at addressing this will be those who can attack the issue at a strategic, tactical, and execution level. Not just in a generic sense, but in a way very specific to the pain of the CMO and the marketing organization.

Best in the World

The end goal of the strategy phase is to develop an understanding of how to be world class to someone as opposed to at something. To do this right, to be really customer centric, it starts at the top by looking at how the organization is structured. Is it setup in a way that facilitates focusing on customer need?

It will also, for sure, entail a detailed analysis of segmentation valuation, identification of critical value propositions, and the creation of a scorecard with metrics used to evaluate loyalty and relationship performance. It can’t be stated enough though, the goal here is to live a day in the shoes of the high value segments and figure out how to make yourself indispensable.

Successful Habits

The fabric between strategic direction and practical application is often overlooked and as a result is frequently a missing ingredient from failed customer centric efforts. Part of the problem with this is definition. People understand at a strategic level the need to identify and target their valuable customers, and they know how to reach out through myriad touch points to deliver a message. What is missed, however, is the centrality of the message. Well, not just the message precisely, but the micro, incremental improvements that need to come thereafter.

Tactical planning, therefore, has everything to do with developing a deep understanding of how, where, and when the customer interacts and then figuring out ways how to listen to the customer during these interactions to garner new insights.

Building Relationships

As with the strategy, the overriding objective of the execution phase must also be on delivering value to customers. In practice, what this translates to is the need to not only leverage brand and direct advertising, but to do so in such a way that is beneficial to the customer and generates data that improves future interactions.

This diagram intentionally abstracts the technical detail behind the execution of the two campaigns to instead focus on the centrality of the customer and the notion of leveraging data to drive segment prospects of the funnel into the revenue generating customers accessible via the pipe.

Although the marketing community tends to be polarized around brand or direct they are both relevant and impactful. The successful CMO will find ways to leverage both while crafting strategies centered on the customer. The cumulative output of which will be a more customer centric marketing organization (CCMO).

Conclusion

CMOs are under siege and need help finding new ways to craft meaningful exchanges with their customers. Marketing is still the key to business’ long term success, but the approach needs to be altered – from the top down structure, to measurement, to executing through multi-channels the CMO needs to redefine value in terms of the customer’s perspective.

]]> http://tewksblog.wordpress.com/2008/05/20/cmos-dilemma/feed/ 1 tewksbum advertising environment http://tewksblog.wordpress.com/2008/05/06/case-for-ccmo/ http://tewksblog.wordpress.com/2008/05/06/case-for-ccmo/#comments Tue, 06 May 2008 03:38:01 +0000 tewksbum http://tewksblog.wordpress.com/?p=7 ]]> Stop the presses (I mean for the print circulars)! Marketers and advertisers need our help. A deluge of new and maturing technologies like video on demand (i.e., Tivo), streaming video (TerryTate), ubiquitous broadband access, interactive web 2.0 applications, and digital social networks are absolutely clobbering the returns of marketing campaigns. Not just traditional campaigns mind you, all campaigns – this isn’t just a channel issue.

<Insert heat diagram>

In culmination what these technologies have wrought is an overall c-change in the way consumers engage with advertising. Attention spans are shorter; it’s much easier to opt out; interactions are occurring through many more channels; and everyone is more adept at tuning out the noise. “Going digital” isn’t going to solve these problems. They are too deep rooted in the fabric of the way marketing has gone about its business. No, to address these issues something more radical is needed.

Enter the Customer Centric Marketing Organization (CCMO). To be customer centric an organization must hold the customer, not themselves (we are a great company), or their products (our stuff / brand is the best!) as the central tenet of all subsequent activities. Value must be framed into context of value add to the customer.

Understanding what a CCMO is can be more easily understood by understanding how one is built. There are three, layered upon one another, pieces: the roots – Customer Loyalty Management (CLM), the trunk – Customer Experience Management (CEM), and the branches and leaves – Customer Relationship Management (CRM).

<Insert foundational triangle / tree>

While it may sound like buzz word bingo, each piece plays an integral role without which the whole thing falls apart. Since there are so many variable definitions for each term, let’s take a moment to define what they mean in context of the CCMO.

CLM

Like roots, the strategic oversight provides the stability and foundation for planning and executing meaningful interactions. Principally, the CLM effort must address organization structure, and establishing customer experience KPI’s (e.g., NPS, C^3, etc.) that are correlated to financial performance.

<Insert customer org structure>

The next step is then to take the KPI’s and perform a rigorous data analysis to extract insights and identify key segments.

CEM

Once segments have been established, the experience map can grow into shape. During this phase a combination of user experience and analytic resources are charged with mapping behavioral patterns. This isn’t a lifecycle or valuation exercise, but a very granular focus on the channels of engagement. The intent is to not only optimize the interaction, but also to bury analytic sensors, or listening posts throughout to help drive future micro improvements to the experience.

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It cannot be overstated how difficult, or how critical to the success of the CCMO is this behavioral mapping process. Without good maps, the heavy investment, execution driven CRM piece is bound to fail.

CRM

Talk about the leaves on a tree. There are more definitions than you can shake a stick at (ouch – my puns hurt). In terms of the CCMO, however, let’s constrict this to tools that address channels of interactions, or that facilitate marketing decision making. Better, but still a lot of vendors and not a lot of shape. To help further form this, let’s frame it context of the Customer Information Factory (CIF).

<Insert CIF map>

Building a CIF is certainly not for the faint of heart. Doing so requires disparate skills from across the IT and marketing organizations as well as an ultra-unique hybrid that can float across both. Hopefully you’ve been avoiding saturated fats, because for sure, to drive profitable relationships today the CIF is a prerequisite.

Another important concept the CIF diagram captures, that actually is also addressed during the CLM and CEM phases is the notion of concept of brand versus relationship (an evolution of direct response) marketing.

Brand advertising has been around for a long, long time and it has been king. A preponderance of the dollars, energy, and acclaim has been dedicated to it and for good reason – brand has consistently delivered results. A lot of customer centric approaches (or practitioners) trumpet its demise. However, I think this is reactionary and ignores the strategic role, while maybe somewhat diminished or shared, that brand advertising still plays.

<Insert pipe in the funnel>

The concept here isn’t to flip the funnel, but focus on the pipe within the funnel. It’s the pipe, where the current runs deepest and fastest, where you fattest (pretend you’re selling Krispy Kreme) customers swim, and where you can find the highest ROI for today’s marketing and advertising dollars.

In conclusions, today’s marketer’s are at a crossroad. The tried and true approaches for building brand and wealth are returning diminishing returns and the extension of the status quo into digital can only stave off the inevitable. Change is hard and it can be painful. Ultimately, though, the visionary organizations who commit to building a CCMO, who commit to serving their customers, and who learn to define value through the eyes of their customers are poised to steal the lunch of their less nimble competitors.

Bold. Brash. You bet, and I agree. At least in part. You look at the campaign metrics Rick is discussing, and they resonate with Seth Godin’s 1964 in his Meatball Sundae. “Get retail shelf space; Use every penny you’ve got left to buy TV time. Sell as must as you can. Repeat.” Unfortunately, this tried and trusted approach is no longer strategically sound. The channels and consumers have radically changed and in so doing have dramatically drained the insights garnered from the old ways of measuring.

This is not, however, in my opinion to say that the value of metrics has been obliterated entirely out of the equation. Rather that we are using the wrong metrics. If done right they can play a vital role in building and sustaining customer relationships. As opposed to focusing on campaign impressions or conversions, however, what needs to be done is targeting the quality of a customer’s interaction.

Today we are still telling stories about ourselves or our products and volleying messages from the fat toward the skinny end of a funnel. We need to flip this funnel. Instead of focusing on what we want, we need to focus on the wants of our customers. As iconoclast Carnegie tells us (paraphrasing here) people want to discuss themselves, or their own interests.

The question then becomes how do you operationalize this and build the funnel into a two way street? In future posts, POV’s, and even ebooks I will explore this in much greater detail, but to start you need to clearly map out where and how you are interacting with your consumers. The map is key because in turn it will be used as a blueprint for not only where, but how you build your listening posts.

By listening post, I mean a place of interaction (regardless of channel) with the customer where you have the opportunity to listen to the expression of their interests. Of the numerous possibilities, a couple specific examples of ways to listen are: Surveying (without straying too far into Net Promoter land); or rewriting and tagging content with action words or phrases that are correlated into behavior patterns of key segments.

This latter point gets at the crux of the new role metrics and measurement can play in the customer centric marketing organization (CCMO). Again, to Mr. Webb’s point there is definitely a squishy aspect to modeling motivations and behavior patterns. There is no doubt intuition, and a nose for a good idea is essential. What can turn good to great, though, is the series of micro improvements you can make to your relationship value props by finding ways to measure and gauge interactions.

Although it may not always sound it, at the core I am very much a technologist. When I got my start into researching and authoring in the CRM space it was initially based upon my understanding of the interactions of a series (e.g., marketing automation, personalization, email execution, etc.) of related technology products built to serve marketing organizations.

As I became exposed to more and more products I began to craft a vision for an integrated platform, now known as the Customer Information Factory (CIF), which could be used to drive a customer centric marketing organization (CCMO). The overriding precept being, that through this platform and approach we could help companies take ownership of, and really drive profitable relationships with their customers. In many respects, we were teaching them how to fish.

Fast forward ten years, and now as I work for a digital agency, I am now being forced to adapt my thinking. And as my wife will tell you, that is no easy task.

Building a CIF is not for the faint of heart. There are a lot of moving parts. There are many points of integration and translation. And it requires a fairly rich and deep number of interactions. In sum, if it’s not built and executed by an expert with intimate knowledge of your business there is significant risk for failure. (While not the topic of this post, let me also say in the past couple of years the ubiquitous movement to everything digital has significantly reduced these hurdles).

Enter the digital advertisers to fill this need. If you really get into a product like Atlas, or the like from Double Click, what you’ll find essentially is a rentable CIF. They’ve built all the pipes; they are funneling in data from numerous sources, and have you removed the risk of having built it yourself. Most importantly, they can also provide you with the o so important segmentations, behavioral insights, and campaign performance.

So… why do I still have such an aversion (I’m moving, slowly) to them? Because I don’t think the tools are being leveraged to their full benefit. As opposed to a well executed, integrated component of a CCMO these 3^rd party platforms are being chiefly treated as a broadcast surrogate for the same old unidirectional messages. Companies aren’t using the tool to have a more informed conversation with their customers, but rather just to pump out the same messages via different channels.

Whose fault is this? Maybe nobody’s (how’s that for a non answer – next question!) Maybe it’s just an issue of time before the economics decide the matter. Across the board, I don’t think anyone would argue the reach, frequency, and CPM of traditional broadcast tactics whether print, TV, or online is trending hugely negative.

To complete the cliché, the days of buying fish are nearing an end. This is not, however, to say the relevance of external solutions is, but rather their service and usage needs to be adapted to fit into the strategy of a larger CCMO.