Marketing Productivity Blog

Why do we want to do a 2-Step acquisition?  Because the conversion rate is going to be higher per dollar of media spend.  It’s the equivalent in Online of the difference between buying single words and buying phrases in PPC.  The former generates a lot of traffic, but the latter gets higher conversion and is much more Productive.

In other words, a 2-step customer comes into the Relationship with higher Potential Value and higher Momentum.  And that’s important, because it means you spend less in Marketing over the longer term as the customer will, on average, keep interacting for a longer time.

If you’re not sure what that all means, perhaps it will become clearer as we dissect Desirability (Satisfaction), the last component of the AIDAS model.  Here’s the core issue:

Offline, we know people come back to Brands or Businesses “by themselves” because they like the Product or Experience.  We also do Advertising to these same people, as well as those less likely to come back or not likely to come back at all.

So how do we know what percent of the resulting activity is due to people just coming back because they enjoy the business, and how much is due to the Advertising?  How do you calculate ROI? 

A Very difficult task.  Even if you could identify the “likelies”, you generally can’t exclude them from offline media.  So this whole issue of “likelihood to come back” offline has been completely ignored, because there’s no way to act on it.

Online, and in much of Offline Database Marketing, we don’t have this problem.  It’s a pretty straightforward and common analytical task.

We can measure quite accurately how much of “coming back” is from Advertising and how much is from “Experience” or the more global concept of what Forrester calls Desirability - the fact the customer simply enjoys interacting with the business, and wants to interact again.   And, online we can target specific individuals with specific messages based on their likelihood to come back.

But, most people in Online marketing are not acting on this intelligence or targeting capability; they’re ignoring the idea largely because it didn’t matter offline.  Are these the same people that keep saying “Interactivity is Different”? 

I hope not, because they’re certainly not acting like it is!

Why should this concept of “likelihood to come back” really matter to Online Marketers?  Because it is much, much more powerful than you think it is.  Orders of magnitude larger.  However, once you screw up, the downside is also quite powerful - “not likely to come back”.  This brings up two important and powerful areas to consider:

1.  Over-spending to get people to come back who would have come back anyway
2.  Under-spending to get people to come back who are less likely or unlikely to come back

In most cases, you will find the budget mis-allocated in this way.  To optimize, you will want to reallocate budget from #1 into #2.

Online, there is a powerful ”Pull” that brings people back, over and over - without needing to provide incentives or begging them.  This Pull is the very fabric of Interactivity. 

What’s more, you can measure this Pull quite precisely and take action where appropriate.  Here is how:

1.  If you don’t try anything else new this year, do a controlled test with your e-mail program.  This is the simplest, most direct way to prove to people you’re not (I’m not?) crazy about how powerful this Pull idea is.  Please do not use whatever demo / product segmentation you normally use with e-mail for this test.  If you want to analyze this Pull behavior, you have to segment using behavior.  

Most of the big e-mail vendors can do this for you, tell them you want to do a “Recency Test with 30-day segments and a Control Group for each segment”.  The most universal “last interaction” (the base for Recency) for many folks will be “last open”.  You could also use “last click-through”, but of course you will have smaller active base.  If you’re in commerce, use “last purchase date” if you can, since that is what really matters.   Just send whatever your default creative is so you keep a baseline with prior campaigns.  You will probably end up with results that look like this.

If you want to know more about these ideas or set the test up yourself, there are detailed explanations  in this series and this series.  Questions?  Just comment below.

2.  Perhaps more importantly, you can measure the decline of Pull, the absence of Pull, and take action on that as well.  Pull is your measurement of Desirability.  Where you find lack of Pull, you will find un-Desirable experiences you can take action on. 

Now, a lot of people talk about being “customer-centric” and customer experience and all that.  Makes perfect sense, and has made sense since probably the first barter transactions, right? 

What you don’t hear people talk about is how to measure the profitability of a customer experience or Desirability effort.  How to identify Desirability problems - even if the customer doesn’t say a word about them.  How to isolate and fix these Desirability problems.  And how to measure the increased profitability directly attributable to fixing these Desirability problems.  Wouldn’t you like to identify these un-Desirability problems before they go Social on you?  Why be reactive when you can be proactive?

That would be a pretty neat trick, don’t you think? 

Here’s how you do it.

Once you have proven how powerful this Pull (come back by themselves) concept is with your own data - and it is especially powerful among your best, most Engaged customers (is that a surprise to you?), start asking why, for other groups, Pull is declining or absent.  What is the commonality among visitors or customers with the lowest “”likelihood to come back”, where Pull is declining or absent?

Here’s what you will find:

a.  They bought the same product or products
b.  Products bought were from the same vendor or category
c.  Responded to same campaign / traffic from same source
d.  They talked to the same salesperson or service agent
e.  They were formally Engaged with the same kind of content

and on and on.  Behavioral segments. 

Visitors or customers who “did the same thing”.

Basically, you will find out where Desirability is lacking, literally, what you are doing every day in Sales, Marketing / Product, Service, or Operations to drive away customers and prospects.

And then you can decide what you are going to do about it.  That’s a whole other challenge I will address in the next post.

Your feedback and questions are appreciated.

Before we move into the Tactical stuff, I would like you to think about something, and if you could, give it more than a passing thought.  Here goes:

If you stopped all Advertising to customers today, what would happen to customer activity in the next 90 days?

In some businesses, Sales / Visits from customers would slow down a lot.  These are typically offline, low-Engagement businesses, the kinds of businesses that require a ton of advertising to drive Sales.  People don’t really care much about the products one way or the other - they’re not Engaged with the business.  Many packaged goods products are in this camp, for example.  They need Advertising.

In other businesses, and in particular many web businesses, Sales / Visits from customers would slow only a little.  This is because the customers are Engaged with the product, the site, the community, and so forth.  They come back anyway - regardless of whether you Advertise to them or not.

This is Engagement, folks, from a Marketing perspective.  The emotional bond, the Desirability, the Delight.

This is why Interactivity is different, and why Interactive Marketing should be treated differently.  The customer has always-on, 24 hour a day access to the business, and they are Delighted by that access, stimulated by that access, enjoy that Interactivity.  Many customers will come back even if you don’t Advertise to them.

That is, if you have Engaged them.  Engagement is more powerful than Advertising, in many ways Engagement replaces Advertising, Engagement IS Advertising.

Is that so hard to understand in a Web 2.0 world?

Personally, when measuring web site activity, I don’t think it’s really appropriate to create a box of Actions called “Engagement” and declare ”if a visitor does this, they are Engaged”.  What I care about is they came back at all.  People have all kinds of reasons to visit an Engaging web site / business; they are in different modes and do different kinds of things.  As far as I’m concerned, they can take whatever action they wanted to take, as long as they came back.  To me, that’s Engagement.

And the idea of them deciding not to come back, well, that’s dis-Engagement.  As a Marketer in an Interactive business, that’s what you have to pay the most attention to.   Follow the dis-Engagement cycle, and for highest ROMI, use the right messages at the right times.

Because when folks are Engaged, well, they come back all by themselves, and I don’t need to do any Advertising to them.  That’s not to say I shouldn’t do any Marketing with them.  For those Engaged folks, what I am doing on the site as far as Products, Usability, Features, Service, unique / special Messaging, etc. - that’s what keeps people Engaged, that’s what I should focus Marketing skills on.  Spend some time in Customer Service, for example, and figure out what Marketing can do to help.

I only need to put the Advertising hat on when they start to dis-Engage, and then it’s all about knowing why.  Which segments are dis-Engaging?  Do they have a Service problem in common?  A Product problem in common?  A Content problem in common? 

What’s the Root Cause?

As an Interactive Marketer, I now have to try to fix that problem - even if it’s not in my silo.  Why?  Because it’s causing people not to come back, and that’s a Marketing problem, because it impacts Sales / Visits, and I’m responsible for generating Sales / Visits.

Now, I realize many web analytics folks want to specifically define Engagement for their sites and that is fine.  Define it any way you want, whatever way makes the most sense for the site.

But then, pay most attention not to the achievement of Engagement, but to dis-Engagement - when the previously Engaged, using whatever definition you like, no longer qualify as Engaged.  That’s the secret sauce of Interactive Marketing, that’s what makes Interactivity different from all other types of customer relationships.

Tip: dis-Engagement is a process.  It’s a movie, not a snapshot.  The question is not “What percent were Engaged last month?”  The question is “Of those Engaged in month X, what percent are still Engaged?”  Reason this difference is important: Newly Engaged customers / visitors will mask dis-Engagement by current customers / visitors in a % Engaged snapshot view

You can answer the question I first asked above about shutting off Advertising to customers.  Without creating a lot of disruption.

Test it like this.  I’m sure you will be surprised by what you find.

And then you can start spending more of your time and budget on fixing dis-Engagement rather than trying to create Engagement that in many cases is already there. 

Unless, of course, your site / product / service delivers a lousy customer experience, fails the Desirability test.  Then you’re going to need all the Advertising you can get your hands on.  Just keep pounding ‘em with e-mail, that should fix the problem, right?

Does that approach really make any sense to you?

I didn’t talk about Satisfaction, the 5th component of the AIDAS model, in the last post on Desirability.  That’s because it’s the most difficult for folks to get a grip on and I wanted to treat it separately.   There’s a reason for this difficulty: Most Marketers (and many analysts) think they’re “done” when they get through the Action part of AIDAS. 

They achieved Engagement, don’t you know.

So even though Interactivity is different, these folks are still using the old offline models to run their Marketing programs.  “Satisfaction” isn’t their problem, Action is.  Satisfaction is somebody else’s problem, a longer-term issue.  Marketers have no control over it.

Now, I’m pretty sure most folks reading this know Marketing plays a big role in Satisfaction and have seen live examples of it.  Everything from over-promising in the Sales pitch to Products with known faults that are still sold to Service Policies that don’t make any sense. 

And most Marketers say, “That’s not my problem, my job is selling.”

This attitude is so old school, offline thinking again.  Interactivity is about the Exchange, it’s not a one-way, always Outbound kind of thing.  Interactivity, by definition, says there is a Relationship.  So if you are going to be an Interactive Marketer, you have to be in the Relationship business.

And this means Satisfaction is part of your job. 

You’re not only responsible for creating Engagement, you are responsible for managing / correcting Dis-Engagement as well.  Because that’s how you have a Relationship, that’s Interactivity - you analyze, and react.  If you don’t, this is what can happen.

You wanted Interactivity, right?  What part of the Interactive premise says you can walk away from the Customer Relationships you have created?  That you’re “finished” after the Relationship is created?  That attitude is so old-school Marketing.

For many Marketing folks, what this all means they need to change from understanding “who the customer is” (demographics) to “what the customer does” (behavior) as being the primary segmentation concern.   Understanding Desirability means understanding how people use or consume products over time.  It’s about the behavior of consumers, regardless of how old or young, rich or poor, or what their zip code is.  

What’s happening at a higher level is this:  There are business models that are truly customer-centric, and there are those that are not.  People prefer dealing with a model that is customer centric - and they always have.  But over the past several decades, they have not had much choice in this matter.

Insert your favorite “Corner Grocery Store” tale here.

Then came the web.  The web represents interactivity on a mass scale.  People like interactivity.  But it’s a different kind of relationship, and demands a customer-centric business model to be really successful.  You can’t just put a topping of interactivity on the old mass Marketing model most folks are using online and expect it to work for you.

That’s called a Meatball Sundae. 

In the past, the number of companies in the “not centric” category dwarfed those in the “centric” category.  Then the web happened, and companies that never had contact with the end customer before, and were insulated from interactivity, now all of a sudden had to open contact centers.  Interactivity was forced on them.

It’s not that customers did not want direct relationships, and the web somehow gave them “power” or put them “in control”.  It’s just now people have experienced these kind of relationships with more companies than they ever could before, and they want this kind of relationship with every company they deal with.  So the environment at companies not used to the customer-centric idea feels like customers are taking control.

The customer is only in control if you are using the wrong Marketing model in an interactive world.  If you are using the right model, there should be no reason customers would want to take control in the first place. 

This is what customer-centricity really means.

Ladies and Gentlemen, Choose Your Marketing / Business Model.

Update:  See this post from Alan on why Marketing might need to Analyze and take Action on dis-Engagement.

———

Now that we’ve powered through the Strategic landscape, on to the Tactical “OK, so what do we do now?” part of the program in the next couple of posts.

Comments on these ideas?  Or are you all waiting for the Tactical stuff to jump in?

Forrester’s Marketing Forum this year covered Engagement, but not the kind of Engagement so often discussed in web analytics. 

Nope, Engagement from a Marketing perspective, you know, surprise and delight leads to better customer experiences leads to better customer retention and higher profits.

The presentation came complete with some nifty offline Engagement examples, e.g. the more a patient is Engaged in their healthcare the better the result.  The improved results came from, get this, “improving doctor usability”.  And yes, there was a test on this business optimization effort with tangible results generated.

You can get a good feel for where this conversation is headed from Jeremiah Owyang’s blog by listening to the 2 Forrester keynotes, each about an hour long.  For those short on time, pick one, depending on your interest:

Strategic Level: platforms, frameworks, etc. from Brian Haven

Tactical Level: examples, “how to” etc. from Kerry Bodine

No time for a video? 

For a bulleted list of the key points you need to understand in order to optimize your Marketing model, see the “Five Fundamentals of Integrated Marketing” ClickZ article here.

I’ll have more to say on why these ideas are so important in the next couple of days.  For now, I will leave you with this:

If the customer is taking control, it’s only because you’re using the wrong Marketing model, maybe one like this one.  No customer wants to have to “take control” in the first place. 

The more Engaging you are, the less old-school “pray and spray” Marketing  - online or offline - you should have to do. 

That’s the whole point of Engagement.

Comments on the videos or article?  Anything ring a bell for you?

So, what would a universal cookie across both Display and PPC give us?  What could we look forward to, what’s the wish list of the online “ideal marketing world” we could live in when we really understand how Display and PPC interact? 

I’ll give it a start, feel free to add to this wish list…

1.  From a macro web advertising perspective, all available Google-Click “space” is capable of being optimized for performance - whatever your definition of “performance” is.  That means an end to the idea of the space being attached to a pricing model - for any given space, you might see either a PPC ad or a Display ad. 

Hopefully, the advertiser would have some control over this allocation, deciding if / when which pricing models are used in which spaces, similar to the controls over pricing model existing in AdSense today.

I realize running Display units in Search inventory may seem counter-intuitive, but the key is pricing control.  The web desperately needs a more effective way to expose people to ideas they have never heard of in context.  Running random display units across opaque networks is not a particularly good way to do this; running targeted display units based on search history - a more advanced form of behavioral targeting - would do the trick.

Likewise, running PPC ads in tightly segmented display spaces can lead to big payoffs, as it did in the Lab Store example.

2.  A real gift would be some cookie-based sense of where the visitor is in the funnel, probably based on the search phrases they are using. 

“Level 1″ would be no prior interest, “Level 2″ would be “uses single word searches” on the topic, “Level 3″ would be “uses multi-word phrases” on the topic, and so forth.  Visitors in the unknowing or shallow knowledge Levels would be exposed to cheap Display units - both in Search and in Display inventory.  Those expressing active interest (Engaged, if you will) would be exposed to PPC units, again, both in Search and in Display inventory.

You’d need some kind of history control on this, because the data set would probably get too huge.  Say for example, trailing 30 days interest, so you make sure the visitor is still Engaged with the topic.  As active searching on the topic dropped off, you’d kill the data off, because it’s no longer relevant.  If it starts up again, so be it, but a restart is a new profile.

Other ideas from the crowd?

Given cross-site tracking already exists for Display, do you think there will be any Privacy problems if Search History was used to target outside of Search?  People are pretty used to seeing ads based on searches in the search space…why not bring that over to Display?

Do you think Google-Click will give us a “universal cookie”, or will they keep the Display side in the dark for the sake of Brand-oriented folks who only care about impressions?

If you are interested in some of the broader Marketing issues that have come up in this romp through Display Advertising in Social Media, the Wharton School recently published a couple of pieces.

This first one talks about the Engagement Value of snail mail versus e-mail.  Some of the interesting quotes:

“In marketing [terms], email is transactional; paper is relational.”

“It seems like a person sending a written note vs. a person sending email is investing more of himself or herself in that communication. It takes more effort to write a letter, and people often equate effort with how much a person cares.” 

In other words, an electronic relationship requires very little investment on either side, so the level of Emotional Impact it creates versus print is lower.  I have seen this in action, for example, using post cards to re-activate (sorry, re-Engage) lapsed online customers. 

Here’s a link to the article: ‘Dead Tree’ Medium No Longer: For Many Marketers, Print Outperforms Digital

Related to my examples of Social Media that Works, and especially the Moms Tampa Bay project, we have an article on mixing and balancing professional with amateur content and the Trust issues there. 

Couple of quotes:

“Some things that look amateur are professional and vice versa. You never really know what’s going on. And it’s hard to track these things down without cross checking. The digital environment is putting an enormous responsibility on the consumer.”

“It’s amusing that two of the examples the Newsweek article cites as examples of the ‘revenge of the experts’ — Mahalo and About.com — are what I would call amateur sites. They don’t use professional journalists or researchers; they use knowledgeable enthusiasts to serve as human filters. The fact that those human filters get paid doesn’t change anything. What makes someone an amateur isn’t the absence of money; it’s the absence of traditional credentials.”

Here’s a link to the article: Experts versus Amateurs: A Tug of War over the Future of Media

Have a good weekend!

PM Update:

See also User Generated Magazines and The Future of Advertising for additional thoughts in these areas.

P.S.  Speaking of offline verus online Relationships, Engagement, and Trust, if you’re going to the Toronto eMetrics Marketing Optimization Summit, I’ll be teaching the WAA BaseCamp session Monday and speaking on Tuesday - see ya there.

So what kind of social media really works for display advertising?  I have 2 examples.  They’re not poke-me, friend-me, follow-me kind of apps, so perhaps some will tell me they are not “social media”.  But they are successful in a Wiki way, and have some interesting lessons to teach us, I think.

Wisdom of Crowds

Angie’s List is an interesting example using multiple revenue models.  Over 600,000 members pay (yes, pay) about $50 a year (differs by city) to belong to a community of people looking to hire the best service companies in their area.  Members post their experiences with every local company from plumbers to auto repair shops into a database searchable by anyone who is a member.  Companies are graded and ranked by their performance, with testimonials (no, make that UGC) posted by each user (sorry, customer).  There’s a few more twist ands turns, but you get the idea.

On top of that, they send a very nice slim-jim monthly magazine to all members, which if you think about it is an super-targeted local ad vehicle for these service shops.  I talked to one guy I hired (re-modeler) who said 1 year of advertising in that Angie’s List mag generated more closed sales for him than 5 years in the Yellow Pages - and a year costs 1/20 of what an annual Yellow Page ad costs for the same size.  Yikes. 

That’s display advertising done right.  All you have to do is look up the company in the Angie’s magazine ad on Angie’s List.  The companies with Ratings of “A” and lots of glowing testimonials say their magazine ads work like gangbusters.  I imagine companies with “C” ratings and UGC horror stories say their magazine ads suck.

Go figure.

Then the companies who fall to a ”C” get barred from advertising in the main part of the magazine any more due to poor ratings on the list.  New companies not on the list can attract Attention to themselves by advertising in the back “classifieds” section, in hopes of getting “A” ratings and the opportunity to advertise tin the main part of the mag.

Self-policing, continuous quality improvement.  The Attention improves in quality over time.  Sure, “ratings” are very e-Bay-like.  But the online / offline approach to maximizing Marketing Productivity for all sides is fully integrated and just very smart Marketing, they are working the model to full potential.

This community, though small by MySpace standards (that is, if all those MySpace members are active), has a very valuable, tangible reason to be working together on this shared database.  And because they put so much value on this relationship (they pay to participate), there is a lot of value in the relationship. 

You see this same pattern time and time again in display media; the more people are willing to pay for the content surrounding the media, the more valuable advertising in the media is.  It’s that fashion magazine thing again, the ads are part of the content. 

We know how much people are willing to pay for a membership to MySpace or FaceBook…

Offline Front End

Moms Tampa Bay is a very basic chat board idea - mothers in the Tampa Bay, FL area post questions and provide answers on family and child care issues.  It was built by a local TV station and soft launched in May of 2007, currently at 2700 members or so.  Just recently, they have started heavier promotion of the board on the TV station itself.

Now, it’s not hard to understand the display advertising opportunities on a site like this, this display model is a proven one because the members have well-defined interests and needs.  They’re paying Attention.  The fact they are all local people drives further targeting capability and some unique social opportunities.

For example, the TV station is going to launch an “issues show” based on the topics discussed in the community, with members from the community as the talent.  This kind of exposure is sure to cement the relationships and drive further participation.  YouTube local on real broadcast TV. 

“Mabel, I could be a staaahhhh…”

The station / members could do all kind of things to expand on this core idea - publish guidebooks, produce educational videos, hold events - all of it sure to attract advertising dollars. 

No brainer for many categories.

Now, TV is not known for being very good at one-to-one, and this board is far from perfect.  There are risks the station could screw this up by pushing the group too hard or far, and I’d bet they would benefit from an experienced online community manager / more resources.  But they seem to be doing pretty well at it so far, and to me, it’s quite ironic to see the old broadcast model going vertical using online, just as the onliners are trying to do broadcast…

Both sides can’t be right.  My bet is the media itself defines what you can so with it successfully, and you can’t simply decide to “break the rules” and get the result you want.  FaceBook and MySpace are devoted to people who want to create a free media platform for themselves.  Just like GeoCities and Tripod. 

With similar results on the display ad side.

I want to make it clear I’m not dumping on MySpace or FaceBook as being “useful” or even essential to certain groups of people for specific purposes.  What I am saying is while the utility to the user might be extremely high, the value of the space surrounding this content is quite low for display advertising purposes.

Other than display ads targeted to the specific needs of people in that group with those media platform goals, there is no reason to believe general display advertising will ever be successful in that environment. 

There’s No Attention to spare.

Looks like Red Envelope is Hitting the Wall.  What they need now is a Relationship Marketing Strategy based on understanding dis-engagement.  It’s the only way to dig out of this. 

They need higher Marketing Productivity.

Check out this statement:

“We hoped that our renewed creative statement would drive an up-tick in performance in fall and holiday, but unfortunately this was not the case” - CEO John Pound

Got some old schoolers there.  That’s a “pray and spray”, offline Customer Marketing approach, not an interactive customer strategy.  They have to understand why the behavior is different. 

You know, the difference between Brand and Branding.

They have the data.  But they didn’t do the analysis, because the effects of dis-enagagement were masked by new customer acquisition.  They thought everything was just fine and changing creative could “give them an uptick”.

Not.  I’m just guessing, but it seems to me this business model is a case where the Catalog - as they are implementing it - is only driving incremental business in very small segments, and is a loss overall.

In other words, a prime candidate for a Controlled Test to resolve this matter of catalog incrementality quickly by avoiding the “matchback” problem so common when one takes an old school approach to an “always on” interactive medium.

I’m not saying the catalog is a bad idea.  I’m saying it matters more than most folks understand who you send it to and when.

So, have you ever shopped with Red Envelope?  How was the experience?  Did you purchase again from them?  What’s your Net Promoter Score with respect to them? (giggle)

More details on what Hitting the Wall is all about are here.

It’s been over 10 years since I left Home Shopping Network, so I’m pretty sure I can tell this Relationship Marketplace story without enraging the Gods.

The mail order channel had a jewelry-only catalog that did quite well, in terms of mail order ROMI.  This book generated the majority of the profits in the mail order division.  What we wanted to know was this: if you looked at the book from the company perspective - across all channels at the customer level - what was the contribution to profits this book made?

When we started using Control Groups on the book and looking more deeply into the Relationship Marketplace, here is what we found:

1.  The book actually lost money versus control.  It virtually had zero impact on sales at the customer level, meaning it was almost completely cannibalistic to TV.  That means the entire cost of the book, plus the cost of discounts, was a net loss on every book mailed.  The more they mailed, the worse the losses were.

I remind you this book generated the majority of the profits at the mail order divisional level.  This revelation was not pretty.

2.  Like the good Marketers they were, the mail order folks had tested all kind of segments across the entire customer database, and found brand-spanking new TV jewelry buyers to be the most productive target.  In other words, they were mailing to the folks with the highest level of Engagement.  This is why the book was very productive at the divisional but not at the company level.  The “always on” nature of the TV channel demand was pulling in buyers all by itself, and the book was essentially just getting these sales that would have happened anyway to switch channels.

3.  Further, and perhaps even scarier, the mail order division was involved with a list exchange that had a “hotline” (new buyer) component.  That meant as soon as TV acquired these highly Engaged jewelry buyers, their contact info was rented by the mail order division to competing jewelry catalogs if they became mail order buyers.  That’s OK for the mail order division, which gets to keep the list rental income.

I should also say list exchanges of this type are standard practice in the catalog business.  So the catalog folks were not doing anything “wrong”, from the catalog division perspective.

But I think we could all agree that situation sucks for the TV channel, which deployed assets to acquire the customer in the first place.  Not only is TV getting hosed on the (company perspective) non-incremental sales stolen by the catalog division through this book, TV is not getting a piece of the list rental income from selling the contact info of their best customers to the competition!

Further, as one might guess would happen with highly Engaged customers, when we held back a control group from the list rental process, those folks who were not rented out delivered higher profits to the company overall than those rented out. 

Just makes sense, right?  Relationship Marketplace, indeed.

What to do?  We simply re-configured the targeting of this catalog to dis-Engaging TV jewelry buyers.  As they stopped buying from TV, this very well-executed book was able to extract another purchase or two from the customer and actually maintain some of them longer term.  Sales for the book dropped dramatically, but these sales were truly incremental versus control, and the book was still profitable.  This also affected list rental, but since the buyers had already dis-Engaged from TV, this issue was not nearly as critical.

Got any multichannel misallocation stories of your own you can share?

Cisco’s passage to the new world of customer-driven marketing

I tried to explain the importance of measuring dis-Engagement from the Analytical side and from the Marketing side.  Didn’t seem to get much traction with all of you.

So now I think I will let somebody else explain it - Cisco.

From Target Marketing Magazine, we have this article about how Cisco is measuring and using Engagement to drive higher close rates on leads.  There are some really interesting phrases spoken by the marketing folks in this article you should pay attention to:

In the old world, a campaign was temporal in nature.  In the new metaphor, the campaign is always on 

need to shift from disruptive model to an engagement model

moving from a monologue, where we just send e-mails to people and they respond when they can, to a wave, where we are actually creating a dialogue with that customer

customers will self-propel through the buying cycle

self-serve themselves into the buying experience as they need to

be more responsive to customers when they’re leaning forward

listening to your customers is an ‘old world’ phrase, and it means something different in the ‘new world’

empowering a customer to move through the sales process on his own

new type of evangelist to do marketing this way versus doing marketing in the disruptive manner

All sounds pretty familiar, if you read my last post.  This is the way you optimize Interactivity, the Strategy of Relationship Marketing.  “Interactive” means continuous two-way exchange, right? 

Not outbound sledgehammer to the head every week?

It’s a story of using the LifeCycle, of measuring Engagement and dis-Engagement, in action.  When the customer is Engaged, you leave them alone.  When they start to dis-Engage, you open a dialogue .  It is really as simple as that.  It’s a dialogue based on behavior.

This marketing team took Cisco’s lead quality from 13% of leads expected to close to 75% expected to close.  “Expected” here means so darn likely these leads get added to the sales forecast.  That’s my kind of “expected” - 90% actually close.

Gotta be some smiling folks in that Sales department.  And those kinds of numbers are common with Relationship Marketing, in both B2B and B2C.  It’s just a better model.

Here’s another link to the article: A Paradigm Shift

So a question for you: Have we forgotten the essential premise of the web - Interactivity?  What’s the word “Interactive” mean to you?