Trends, Implications and Solutions In Engagement Marketing

Over the past 12 months, we have seen a significant rise in interest surrounding “engagement” marketing, in direct correlation with the rise in interest surrounding Social Media Marketing. In continuous discussion with marketers and consumers, I have noticed several trends that are worth discussing.

 

Trend : Most marketers are continuing to use a “blast” email strategy. Essentially, this involves doing the minimum amount of work to get the same email out on a daily or weekly basis to every registered email user in the database. With the recession and all of the economic issues surrounding the rising cost of direct mail, marketers have significantly increased the use of the email channel. The marketers that I have spoken with do this email blasting with the knowledge that they would like to do something else, but instead continue this strategy because email is “free” and doing something else will be too much work. These same marketers readily admit that the effectiveness of those emails is continually decreasing, yet their email database is growing quickly enough to offset declining performance per email.

 

Implication: We are killing email as a marketing channel. Consumers rapidly disengage with our emails knowing that each email is not tailored for them, nor speaks directly with them. This is particularly worrisome when you consider that the increased use of Social Media and Mobile among consumers is causing a decrease in the use of email as a communication mechanism. Friends are more likely to post status updates or use text messaging to alert each other to things they consider important.

 

Solution: Analytically Driven Email. We spent years building powerful models to improve direct mail performance. Now that we have the capabilities to inexpensively communicate in an engaging way with our consumers, we throw those teachings away because email is “free.” By marrying off-the-shelf technologies, such as content management and an offer catalog, we can vary email content to engage our consumers based on their interests, channels, social site membership, transactions with us, and any modeling element that we find value in using. Think of an email as a canvas upon which you can drop highly customized content blocks to drive consumer engagement. Now, how do you get those emails opened? Vary the subject line by developing and targeting personas that occur naturally within your consumer base. If you engage by interest, you have a real chance at standing out in a crowded inbox.

 

Trend: Marketers are adopting social media by creating Twitter accounts and Facebook fan pages, and then using those media for promotions such as couponing or specials. Again, this strategy is similar to the blast email strategy where every follower or fan receives the same promotion. Additionally, most marketers have no ability to measure the effectiveness of promotions in Social Media other than by follower or fan count, so they turn to Social Media Monitoring services .

  

Implication: This use of Social Media will have the same effect as blast email. Consumers will not be excited about the promotion posted every day at 11:30a.m. It becomes advertising akin to traditional print advertising, only the medium is different. Do not accept the Sunday Circular mentality when advertising digitally. Also, most niche marketers do not generate sufficient attention in social media to make effective use of a monitoring service. A typical mid-market retailer might generate a few hundred mentions per month across blogs, micro-blogs, forums, comments, etc. These comments are typically positive or neutral in sentiment. Social Media Monitoring is better suited to large brands with avid audiences, such as Xbox, or brands that have a significant and ongoing dialogue with their consumer base, such as DirecTV or Comcast.

 

 Solution: Use Social Media Best Practices Derived From Direct Mail. If your company has dived into Social Media through a Twitter account and Facebook Fan Page and you are using those media for promotional activities, here are a few best practices to improve your social media effectiveness:

 

1.  When you do a promotion using Social Media, create and store campaign metadata about that promotion as you would in direct mail. Save the date, time, specific promotion and targeted audience (your followers or fans). Having done this, you can then start to analyze the effects of that promotion on store or web traffic.
2. When you make an offer in Social Media, ensure that the link in that offer actually goes to the offer. Sounds simple but I am amazed at how many times the link is to the home page of the specific branded web site and not the actual offer, forcing me to either search for it or simply leave.
3. Ensure everything is trackable by source. For example, if you are going to advertise a mobile promotion on Facebook, Twitter, your branded web site and in-store promotions, ensure you use different sign-up messages to track the source of the consumer. Similarly, if you are doing a coupon-based promotion on Twitter and Facebook, use different offers or coupon codes to track redemption by source.

Trend : Those who are doing targeted direct mail are seeing year over year improvements in results because mail box clutter has been significantly diminished. In fact, many niche catalogers are seeing surprisingly high performance results because the pendulum swung too far the other way. Many direct marketers have reduced catalog prospecting to zero as well, due to expense.

 

Implication: The implication of the reduction in direct marketing as a viable prospecting tool is potentially quite large. We have directional evidence that new consumers coming in from online sources have significantly less potential for lifetime value than those who are traditionally sourced from direct mail. This may just be a sign of the times as consumer loyalty may be down when any offer made by a company can be quickly price shopped in real time. Despite this, direct mail still has a valuable place in the marketing mix.

 

Solution: Cross-Channel Contact Strategies. Develop a plan to vary contact cadence by consumer. To do this effectively, you need to tightly integrate email promotion history and web behavior into your analytic environment. You need to know those who don’t open 99% of your emails versus those who open 25%, and for those who clicked through, where did they go and did they convert? What is the right mix of direct mail, email and social? Techniques such as simulation and scenario analyses are effective in guiding contact strategy development. If you can track promotions down to margin generated, you have a great start in designing effective contact strategies.

 

The times are certainly changing and changing rapidly. It is a fact that our consumers will always be ahead of us, always trying new things to enhance their lives. Have you seen FourSquare? We have a chance to engage them digitally, but we must be smart about it and we must continually evolve. Investments in marketing technology must be made with one requirement firmly in sight. We don’t know what we need, but when we know we need it, we need it now.

 

 

 

The New Multi-Channel Marketing Database

In a session I hosted at last week's DMA Annual Conference & Exhibition in San Diego, I examined traditional marketing databases and how they've been designed and built to support traditional marketing, primarily analytic-driven direct mail. Email has provided marketers the ability to leverage digital technologies to render custom content on an individual consumer basis. Yet many marketers haven't taken advantage of this, instead performing blast email strategies — i.e., sending the same email to everyone, regardless of profile, segment or buying behavior. Additionally, many companies haven't even taken the step of integrating email promotion history into their marketing databases, instead keeping separate email databases at their email service providers of choice. Add to this mix the explosion of social media. Consumers are participating in social media, especially Facebook and Twitter, and while marketers are beginning their early social media efforts, none of this has made its way into marketing databases. In fact, marketing databases in their current states are outmoded and based on a model of campaign management that simply doesn't apply anymore.The new marketing database must be designed to support marketing to consumers where they are, through their channels of preference, be it mobile, social or more traditional channels like email and direct marketing. To do this, marketers must rethink their approach to databases in several fundamental areas:

1. Operational and real time. The new marketing database must be updated whenever necessary, be it daily or hourly, rather than more traditional cycles of monthly or weekly. This requires a fundamental departure from the classic data warehouse architecture. Additionally, the contents of marketing databases must be accessible in real time to the various points of interaction that can be used to drive consumer engagement. You must use individual-level data to create custom and personal URLs for better engagement — and do this on the fly.
2. Messaging and content management must be integrated directly, not over the wall. No longer should marketers cut lists to send to messaging partners. Messaging technologies such as email delivery can and should be integrated in real time to provide full marketing tactical control, as well as reduce overall cost of ownership.
3. Extend the data model. New data must be stored. Our company, for instance, has to be able to take on transactions with no more identification than cell phone numbers or Twitter IDs. Using custom persistent ID systems, we're able to store those transactions and then piece together the picture of the consumer as we learn more. If, for example, a consumer redeems a mobile offer, we're able to retrieve an email address at point of sale.
4. Integrate social media. Follow best practices from direct marketing, and track all social campaigns through the addition of social-specific campaign metadata. If you post a Facebook coupon, for instance, add campaign metadata about that coupon and attach promotion history to every follower from your Facebook fan page.

Consumers always move more quickly than marketers at adopting new technologies. A new approach to your marketing database as outlined above can help you keep up with consumers and market to them where and how they want.

Social Media and Direct Marketing, Part Deux

OK, after a very lazy summer, I have decided, with the leaves turning, to re-dedicate myself to blogging and to do that at least once a week. It will be my Friday chore before I can leave for the weekend.

Over the last several months, I have been intensely studying Social Media, by trying various social media monitoring platforms, notably those from Techrigy and Radian 6. Without trying to be a product comparison blog, I have currently settled on Radian 6 due to its data analysis capabilities. I have been using the tool to track the social media posts for several of my clients and prospects.

At the end of the day, I am trying to determine the role of social media data within the marketing database, and have arrived at several conclusions.

1. Similar to everything else we do in email and direct marketing, it is imperative to track and maintain campaign meta data. For example, if you were to post an offer on your Facebook fan page, maintain all the relevant data within your marketing database. Start date, what the coupon was for, etc. In this manner you can then tie this campaign meta data to actual transactional data to determine order curves (frequency of redemption over time versus total redemption), spikes in retail traffic by time, etc.
2. Social media monitoring using a platform like Radian 6 is also imperative. Every time you engage socially, you can determine what base effect that caused within the social community, and exactly where.
3. The Twitter network is a powerful force. One of my clients, who has an account on Twitter, only has 385 other Twitter accounts following them. However, when we look at the followers of every Twitter account that mentioned them in a Tweet over the month, the potential number of people that saw that tweet rises to over 135,000, a very large network indeed.
4. And finally, harness the power of the bloggers. A competitor of one of my clients uses blogger promotions (giveways and contests) very effectively. They generated a significant spike in social activity every time they released a new promotion to their blogger community. And, that spike was immediate (literally all day during the day of release).

I have not yet figured out exactly how to tie all of this together into the marketing mix, but new insights are dawning every day. Let me know what you think and have a great weekend all.

Social Media and Direct Marketing

Being forced to write this by my twitter friend @balemar :), I will provide some thoughts on social media and its role in direct marketing.  First, though, we need to define direct marketing.  While many exist, I chose the following "marketing via a promotion delivered to the individual prospective customer."  This definition fits perfectly because it doesn't preclude any direct media - digital or otherwise.

Classical direct marketing, which really became big in the 1990s, has historically had a very "campaign management" approach.  Here, marketers would design their campaigns, perhaps as much as a year in advance.  These campaigns were defined in terms of budgets, objectives, time frames, etc.  For example, a typical catalog company may run 12-18 campaigns per year.  These were costly, expensive processes, designed to deliver the message (in this case the catalog) to exactly the right customer or prospect most likely to respond.  (I junk the customer/prospect triage for the remainder of this post, preferring instead the generic consumer).

Many companies made lots of money figuring out how to help marketers optimize these types of campaigns, including consultants, service bureas, lettershops, etc.

This approach seems quaint and laughable just 10 years later,  Simply, digital media has done two things. First, it has expanded the addressability of consumers from a house to many locations (think multiple email addresses, social media profiles, sms, set top box, you name it).  Second, is has highlighted the need for speed in marketing.  Simply, campaigns planned months in advance to an audience of 1 (not talking brand marketing but direct marketing) have no chance of success anymore.  Today, it is not about which consumers you do not talk to, but how you do engage with each one with which you would like to engage!

So back to the question, how does DM take advantage of social media, and evolve?  I believe that one can blend the best of old and new concepts in an integrated approach that works.

So what works from the old direct marketing?

1) Advanced and sophisticated modeling works.  For all the real time recommendation engines deployed by Amazon or Omniture et al, nothing beats a detailed historical review of all consumer data to determine the optimal offer to present to that consumer.  While real time web visit behavior is an important element to blend in, the overall view of that consumer from a behavioral perspective must be incorporated.  Without that, too many offers are ignored by that consumer, and these recommendation engines fail to engage those same consumers.

2) Data is key.  And this is the good news.  All (or most) social media sites generate mountains of data.  Their APIs are generally clear, and accessible to even the most novice Javascript programmer.  Combining these types of data with more traditional off-line data (transactional history, promotion history and individual level demographics) makes for a powerful combination for our analysts to mine.

3) Good copy wins.  I believe that this will never change.  From writing multi-page direct mail letters to short Google ads, good copy wins.  The next time you search something on Google, see what catches your eye from the available ads.  What is interesting to watch will be the ability to tailor the message more and more to the individual as the semantic web unfolds.  We can message at the segment level today, and are eying more real time construction of messages to individual consumers.

So next up next time is a discussion on B2B uses of social tools, and I will follow with a discussion on B2C implications for direct marketing.

Thanks for listening.