Irritation Free Marketing
By Tom Ryan
As the parent of any toddler knows, the easiest way to get information sometimes is to ask them. But as the parent of any teenager knows, it’s not always easy to get an answer.
The same holds true with communications between retailers and their customers. Largely due to the arrival of the internet, most retailers are now able to reach consumers across multiple channels in a multitude of ways.
This has significantly expanded the number of touch points where information can be gathered from customers or potential customers. And all this data potentially enables marketers to personalize communications and perhaps even customize products and offerings to them.
The problem comes when all this gathering and collecting of customer data starts to feel more like plunging and hoarding. Feeling stalked and needlessly bothered, customers often clam up and start acting like those sulky teenagers.
Brian Carpizo, co-founder and CEO of Junction Solutions, an enterprise software services firm, wrote in an article on destinationCRM.com that the clinical term for this customer withdrawal process is “psychological reactance.”
Often unintentionally, retailers irritate consumers because they can’t differentiate between useful and the irrelevant customer data. Fearing further intrusion, some retailers have become reticent in exploring the full possibilities of interactive marketing.
But Mr. Carpizo believes smarter customer data gathering tools and the sharing to data across channels can lessen many of these customer-intrusive situations. A more friendlier give and take exchange – which he terms “personalization” – will evolve as marketing shifts from “mass” to “conversation” marketing.
“Conversational marketing is a proxy for an actual discussion about what customers want and what you are able to offer to meet their needs,” Mr. Carpizo. “Retailers must know just enough about their customers to make friendly suggestions about what else they may like to buy without crossing the line where an interaction gets so personal that it makes them uncomfortable.”
Adequate customer data, according to Mr. Carpizo, is the key to making conversational marketing work, particularly the ability to share customer data across channels. This includes sales-oriented and specific customer information as well as specific marketing information, such as how a consumer responds to particular marketing offers.
“Without data that can be accessed across channels, customers cannot be analyzed and segmented according to RFM (recency, frequency, and monetary value) or other characteristics for future orders,” Mr. Carpizo wrote. “In many cases the problem is old-fashioned data segregation. Data obtained from different channels gets stored in different silos or databases with no ability to integrate or access data across the channels.”
Mr. Caprizo says sophisticated personal communications software can sort through the data pile. An enterprise system can analyze a common set of data across channels within a single data schema no matter where it originated. Any changes made in one section can be replicated throughout.
Sophisticated data sharing can make conversational marketing a reality and lead to cross- and up-selling opportunities and loyal customers.
“Conversational marketing and personalization, when done correctly, make the shopper feel special,” Mr. Caprizo concludes. “People like being taken care of in this manner. If you provide this type of service people will start having conversations about you.”
Discussion Questions: What are some key ways to capitalize on customer data without irritating customers? What hurdles need to be overcome in reaching the goal of “conservational marketing?”
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17 Comments on "Irritation Free Marketing"
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It’s unfortunate that most retailers communicate with shoppers as if the shoppers were born yesterday with limited intelligence. The combination of absurd assertions and astounding repetition results in “tuneout” and excessively high ad budgets. If the marketing message is reasonable and presented appropriately, there’d be a lot less waste.
As described in this article, cross checking data among different channels is nothing more than a technology in search of a use. It might find some “lost” customer demand, but it may have more harm than good when its use is discovered. It’s just plain dishonest.
A better approach is the one RetailWire uses here. It gives the customers (you and me) an interesting, short, well written idea, then asks our opinion both as poll and comment. We actively say what we want.
It’s the retailers job to help customers get what they want from suppliers, not to help suppliers find niche markets amongst consumers.
I agree completely with Brian Caprizo. How to do it? Well, as reported by AdAge, Procter & Gamble is shifting from “telling and selling” to starting conversations, solving consumers’ problems, and establishing relationships. This requires a major shift of culture and mind-set.
I would argue that the same sort of approach is required to extract information from consumers; show them that providing this info will redound to their benefit. This means being authentic, trustworthy, generous and human.
Relationship-focused thinking is the key. And the building of trust will pay off in the expansion of income, profits, market share, loyalty and long-range competitiveness.
There is so much abuse by organizations “requesting” information from consumers as the entrance to a sales pitch, that consumers have a high degree of cynicism regarding attempts to “begin conversations.” Trust between consumer and company is not any higher than trust between companies. Someone has to “give something” first to initiate trust-building and it’s not likely to be the consumers. In general, consumers in the US are often given information in return for something. What are you offering to your consumers in return for giving information? Anything personal? Anything they need or want?
I think there is danger in assuming that this “conversational” approach would work for all types of stores and that all target customer groups are receptive. This is not a “magic bullet” and not a tactic for mass marketers and is best used in the “better” specialty shop environment, where there is knowledge about specific target groups and tactfulness and judgment used in creating respectful and productive communications.
I think part of the problem is that too many marketers equate personalization with targeting. Targeting is simply determining WHO will receive a promotional message. Personalization involves not only who receives the message, but also the CONTENT of that message.
Simply targeting your standard marketing message to a select group of customers doesn’t make it more effective. To engage customers, you need to deliver relevant and meaningful content to each customer.
Creating dynamic, relevant content and giving customers control is not easy, but that’s the challenge that P&G has taken on and it’s also the best way to create an effective dialog with your customers.
First let’s face facts: We are stalkers of the elusive consumer. Some of us are more sophisticated about it than others, but when we profile and target prospects and track them right to their email in-boxes, we walk the fine line of perception between helpful and hateful.
The one-to-one marketing, CRM world has always lived with tension between privacy and personalization. They are two sides of a coin. I want my offers to be limited only to those that are relevant and personalized, but when you collect too much data about my life and habits it creeps me out.
Apologists who predict the solution lies in more and more sophisticated personalization engines, larger and slicker databases, and other technology are missing the point, in my opinion. The enduring answer will come as we stop stalking consumers and shift the relationship power and control into their hands. Customer-Managed Relationships (CMR) are the answer.
Loyalty cards, customer service recording, data drilling, scanner data, register analysis, coupon redemption rates, product SKU and category analysis, velocity impacts and shelf movement are all ways for retailers to better determine their customers needs and customer service issues. Most retailers easily have access to all of the records which contain this information, but simply do not have the focus or tools to properly discover, manage and use this information. It is unfortunate that with all of the information available to retailers, without having to ask their customers (directly), that more retailers haven’t put together a customized data mining and data drilling procedure to improve their analysis and customer feedback loop.
I’m in agreement with Ken Wyker with respect to his “targeting vs. relevancy” comments. EXAMPLE: About a year ago my household started receiving piles of completely non-relevant sporting goods catalogs from companies I had never heard of. The emphasis was on camping, hunting and fishing. I imagine the culprit was either the ultra insect repellent we bought at Uncle Dan’s before a vacation cruise on the Yangtze, or the birdhouse we purchased from Orvis that got us to this waste of paper, ink and postage. And, since I’m not sure who sold the mailing list I’m feeling sort of ticked at both the “suspects.”
When I was growing up, my parents always reminded me that “knowledge is power”. This guideline could not be more true in this case: Brian Carpizo could not be more correct when he comments that “smarter customer data gathering tools and the sharing to data across channels can lessen many of these customer-intrusive situations.”
The key to touching customers often, but not too often, is to understand how to react to their behaviors as accurately as possible. Managing such metrics such as retention, product conversion, upsells and cross-sells, etc. is a perfect example of one way (at least from an IT standpoint). This allows retailers to know exactly what to say, and what not to say, top as potential or existing customer.
Some people are using BI for this task, others use a simple CRM solution. Whatever the way, the golden rule still applies: knowledge is power.
It’s really about how to apply CRM techniques with a rifle instead of a shotgun (so to speak) so the customer feels that the retailer is talking to her instead of spamming or being otherwise intrusive. Amazon is the classic example of an online retailer who has used data mining to communicate on a personal level with its best customers. A great object lesson not only for other online retailers but especially for bricks-and-mortar retailers who are (for the most part) curiously behind the times communicating with their best customers in such a targeted manner.
In a word, “permission.” Make sure you have permission to talk to your customers, make sure you ask them what you have permission to talk about and make sure you give them a way to opt out or tell you if you’re moving too quickly getting too friendly too fast. Integrated data is of course a critical part of executing but so is being sensitive to your customers as people, allowing them to control the pace and content of the relationship and giving them easy non-threatening ways to let you know if you’ve crossed a line. Like any relationship trust must be built and reinforced and it’s vulnerable to being lost if you make the wrong move.