Measuring Desirability

DataBase Marketing, Marketing thru Operations, Measuring Engagement, Web Analytics,

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.

Push, then Pull

Brand Management, Marketing thru Operations, Web Analytics,

To summarize, there are significant forces in play that require Marketing folks to realize that optimizing Marketing goes far beyond media, message, response, and all the traditional MarCom stuff.

To take advantage of these changes, there has to be a Strategic admission that Sales, Marketing, and Service are all parts of a customer-centric whole.  Interactivity forces this on you; it’s a Relationship Marketing environment.

CMO’s have an opportunity to step up and take control of this situation.  If they don’t, the job of integrating these disciplines will be handed to a Chief Customer Officer, Chief Experience Officer, or some other needless C-Level fabrication.  And that’s not really going to work, it’s a partial solution.

For those of you with Brand as your current primary focus, it should be easy to make the argument about why this integration matters and why you should be in charge of it.   If you don’t do something about really integrating all the customer facing disciplines, examples abound of the Brand damage that can occur.

No amount of “Advertising” can fix Brand rot, you have to get to the Root Cause, which is probably cross-functional in nature.  It really doesn’t make sense to ignore excellence in execution and then react to the problems caused when you can discover, address, and fix these issues before they happen.

Here are some ideas to think about on the Tactical side:

1.  Don’t use Mass Media to try and build / close Relationships; that’s a waste of time.  Use Mass Media for what it’s very efficient at – creating Awareness and Intent.  The first step of the 2-step, it’s the Push part.  If Push sounds like it’s intrusive, remember people expect Push from Mass Media to begin with.  You have the proper context; that’s why Mass Media can be effective for Push.

Use unique taglines and phrases in the execution, knowing a search on the web is a high probability next step.  Google just released a study on what this looks like for newspapers. Make sure the web team is prepped for the Mass Media, that they have optimized the unique taglines and phrases for Search, both Paid and Organic.

2.  Make sure the copy directly implies you are open for the Brand Promise to be tested in an interactive environment, where Brand Proof will take place.  This will usually be the web, but it could be a call center or other venue.  Invite those with Intent to convert this Intent to Desire through Interaction with you; this is Pull.

Focus on driving curiosity and peaking Interest rather than selling, e.g. “Want to Know More?  Here’s our web site…”

3.  Pull is self-service, it’s about proper execution – consistency with the Mass message, ease of use, transparent, Relationship building.  Potential customer is now driving, you are awaiting response.  Answer the questions raised by the Brand Promise (on a web site or in the call center), allow them to be tested.

Don’t simply repeat the Promise – that job has already been done, it’s a waste of time, it’s redundant, not respectful.

Instead, fully and completely Expose the Brand Promise, let it stand for testimony.  Allow Brand Proof to take place.  This is not the time to be Intrusive; that’s out of context.  Make it easy for the prospect to feed back the experience, and be ready for the dialogue.  Relationship Marketing is an Exchange, a dance, two-way, back and forth.

React and Respond.  Be “Social”, if you want to call it that.

This portion of the program – which might consist of many different campaigns driving traffic into it – is where failure most often occurs, and where you get into this whole “customer is in control” thing.

Like that’s a negative?  What they are in control of is their own process, and what’s the matter with that?  It’s enabling, empowering for the customer; it builds the Relationship.  Hopefully, what you have done here is given control; as opposed to having it taken from you.  There is a very big difference between the two.

If the customer has to “take control”, you’re doing something wrong.  You have broken processes, you have cross-functional chaos, you’re not enabling a dialog.  Or you’ve inflated promises, created false expectations, at worst, told half-truths.  You’re creating frustration.

That’s when customers feel like they have to take control from you.

That covers the Tactics for Aquisition (AIDA), I’ll tackle Retention (S) in the next post.  As always, Comments on are appreciated.

Engagement Defined (for Marketing)

DataBase Marketing, Measuring Engagement, Web Analytics,

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?