There is no shortage of companies that claim a customer-centric corporate culture. Wall Street notwithstanding, it’s very common to say an organization is customer oriented. Yours probably does, and it is at once trendy and wise to say so. Corporate strategies and case studies, marketing mantras and mottos constantly demand that we focus our organizations on the customer—or at least the service delivery process part. Bookstores fill whole aisles with books on how to do this; if you are at the office, you may see some from where you are sitting right now. Of course, it’s an effective strategy. It is, after all, all about the customer. Without customers, we are sunk. But who are our customers? How many of us even know anymore? Moreover, what are we saying to them? What should we be saying? And how should we be communicating with them across all of our media channels?
It is past time to acknowledge that it is not just the customers who are changing. Aside from the economic challenges we all face, the whole concept that we call “marketing” is changing, and we can easily attribute a lot of this change to the influence of the Internet. The type of data that we collect, the temporal expectations of our outbound marketing efforts, the conversations we have with our various audiences, even the profile of the marketing executive are all changing. Indeed, the very premise of marketing is changing.
Let us begin with the Customer. (Yes, a capital C, because we all believe in their importance, and we should acknowledge it up front). Undoubtedly, customers as we knew them even five years ago have changed, regardless of whether you are marketing business-to-business or business-to-consumer. Chances are that the person—or even job description—that you were communicating with five years ago no longer exists. Setting the new economic woes of the last several months aside for now, let’s simply consider the expanding influence of the Internet on the generic, un-profiled, un-segmented retail consumer customer base (although much of it will also apply to the B2B world as well).
The macro demographics of the domestic American population alone are clearly changing in response to the hub of connectivity that is the Internet. It has spawned a new universe of virtual worlds within it that thrive on customers … or members, profiles, avatars, bloggers, tweeters, etc. These individuals, in whatever form they choose to show up, bounce around the Internet, leaving all kinds of useful information behind in blogs, comments and Wikis, not to mention social networking sites with the sole purpose of generating personal content and connections. More than that, the Internet is where these individuals go for information from any source, as well as to participate in conversations of their own choosing.
This user-generated content (UGC) is a strange new phenomenon that is fast becoming the most trusted source of consumer decision-making. Remember the credence brought with word of mouth (WOM)? This is WOM on steroids. In fact, 40 percent of Generation X and almost 60 percent of all customers conduct online research to guide them in their purchasing decisions.1 Software packages now exist to monitor these virtual comments and conversations, providing “chatter metrics” to help us gauge the gossip about our company or products. And whether you are a marketing executive or work elsewhere within the organization, it must be clear now that organizations will adapt to the new customer expectations or they will fall behind. Some will fail. Therefore, how we identify and communicate with the most valuable of our resources—our customers—needs to change if it hasn’t already. In every essential way that organizations position themselves with the customer, the relationship is changing. The very paradigm of the business-to-consumer conversation needs to be revisited and so, too, the requirements of the marketing resources within the organization.
Arguably, the traditional marketing channels as we knew them—advertising, direct mail, sales/sales support, media, public relations, etc.— are now effectively non-critical activities. In the past, the various channels of marketing, count them how you will, have essentially operated on the periphery of the actual customer purchase. Decision theory notwithstanding, we talk to customers from the moment they think about purchasing until they think about purchasing (or visiting) again. We influence, we entice, we seduce and we even buy customers with promotions, coupons and giveaways. We talk to them right up until they get to the checkout stand (virtual or real, as the case may be), and after, too, if we are on our game. No one here is suggesting that missing an insertion deadline or a drop date has no impact on revenues; plenty of circumstances can be found where it does—a perishable product or service, for example, or when an offer code (and redemption) can be integrated into the customer behavior can all produce quantitative results. The point is, however, that the guest will still check in at 3 p.m. today and the sale can still be made at the register if the ad misses the magazine or mail piece posts tomorrow. The customer can still consummate a purchase regardless of most marketing achievements occurring on any given day. Moreover, marketing is removed from that real-time set of events with the customer. Without the Internet, marketing dances around the customer but is not present at the most critical point of the customer life cycle, when they are handing over the money. We can’t think that this is OK. We are marketing. We want to be everywhere the customer is—particularly the moments when they are spending their money with us.
Indeed, quantifying the achievements of marketing efforts has perennially been an issue … presuming we even have corporate governance for branding efforts. We are all familiar with the circumstances in which executive management considers marketing as simply a necessary evil—the expendable cost center. Much of this is due to a limited capacity to directly correlate marketing spend with revenues. Tracking customer acquisition costs in terms of revenue generated is a messy and sometimes fruitless process. How does one associate an ad directly to a purchase? How much new revenue does one attribute to the print ad versus the television ad? And how much to the billboards? A direct mail piece with a coupon in it may prompt a purchase, but how do you ascribe the rest of the array of marketing endeavors to the same purchase? Consider even the difficulty in inserting a redeemable offer into the customer’s purchase process. But these are old dilemmas. If anyone needs to hear the arguments as to why these subjective marketing efforts are necessary, I am happy to oblige, because they usually are necessary. Most marketing executives, however, or at least most good ones, would prefer to have tangible benchmarks and accountability expectations—what is sometimes referred to as “performance marketing.” Well, now we have it. Enter the e-marketing channel, which is destined to change the entire marketing department paradigm. We all knew it would, and we all think it is. But did you know it that it is actually happening now? No, it’s not too late, though it is time.
No doubt, the spectrum of opportunity is immense as the Internet universe continues to expand at nauseating rates—presuming we can even comprehend them. (How big is a petabyte anyway? Can you distinguish between a social gamer and a virtual world resident?) Although the Internet has been in the mainstream purview for a couple decades now, it is still changing—some would argue increasingly so. The Millenials are first-generation computer literates, and virtually all of them are computer literate. Thus, the whole paradigm of marketing, including the impact of marketing efforts and responsibilities throughout the organization, are adjusting to accommodate the morphing influences of the virtual world. Specifically, the volume of data (much of it transactional), the analytical implications throughout the organization, and the timing of decision-support expectations have changed. Business intelligence no longer implies the Ivory Tower strategic reports or the marketing analysis that influences next week’s direct mail dropping.
You may have heard about “active data warehousing” or “pervasive business intelligence.” These terms are used to ascribe an arising expectation on the part of organizations to insert real-time, data-based decisions throughout the enterprise, operationally, strategically and, specifically, during the customer’s experience with the organization. We are no longer just talking about outbound communicating with the customer; we need to return to considering the real-time instances when marketing can and should impact the customer. What do I mean by that? After we determine the offer, create a pro-forma, place it in front of the customers, gain their attention, get them to decide to redeem it, and get them to actually redeem it, we now have to influence that transaction at the moment it is consummated, in reservations, at the player’s club desk, online or at the front desk. In the gaming industry, we even have the unusual benefit of obtaining an address during the normal course of business.
The new paradigm of marketing preempts the kind of temporal flexibility marketers have enjoyed up until now. Presuming the technological capability (the active data warehouse paradigm), it follows that organizations should use that information at critical points throughout the operations. And they are, both operationally and through marketing efforts. To that end, marketing is becoming part of the hub of operational activity, simultaneously charged with the directional strategic implementation and the immediate influence at critical customer touch points—what marketers call “moments of truth.” For many organizations, bricks-and-mortar and virtual alike, this means that marketing executives must emerge with the unusual requirements for both the beast and bear of marketing minds. Marketing now requires the expertise and insights of both left and right brain activities—the creative and analytical dimensions of marketing are, at once, equally important. Need we broach the subject of predictive modeling? It intimidates many of us. Analysts tend to be a special breed of marketers. Some executives are more comfortable with the analytics, others with the creative. Indeed, a new executive marketing profile is emerging where both skills are required.
Not only are marketing expertise requirements changing along with the purview of marketing within the organization, but the customers are changing, too, as are the conversations we must have with them to be successful. The content of what we communicate must change. This means that the profiling and segmenting of the customer also needs to be adjusted, as does the message, the exposure and duration of the message, the cross-channel placement of the message and so on. Brand and message consistency have a whole new meaning now because the medium is expanding. Ads on billboards have always been different than ads in magazines, television commercials and direct mail messages … and Internet advertising is completely different altogether. Furthermore, when this real-time transactional data referred to above is not available, profiling Internet customers proves to be a little tricky. They are a rather nebulous bunch, as they cannot be identified by their location or appended with elements that mirror their neighborhood’s average income or tax bracket, home value or cultural background—though we may still presume to market to them in that way. How would you profile [email protected]? What, exactly, can you tell about him … or her? Because we know so little for sure, what you say to him (or her) necessarily is different than what our traditional messaging techniques are set up to address. How big of a net can you cast out into the web?
Those ahead of the curve find themselves performing cutting-edge Internet marketing analyses with innovative software that combs the ether, assessing the unstructured content of blogs, profile pages and comment listings—and their attributes, such as positive or negative context.2 Based on the words and phrases used, counts and contextual information, companies can “listen” to the online chatter about their products and services—and participate in the conversation. Eventually, anonymous browsers may someday be segmented by gender, relative age, tech-savviness, etc. There are already initiatives that attempt to identify browsers based on their level of engagement, for example, “creators,” “contributors” and “lurkers.” This is reminiscent of the “early adopters” and “influencers” of previous marketing techniques. Furthermore, the unstructured nature of non-transactional data makes it hard for marketers to demographically profile these unknown Internet customers. But we can engage them in conversations. And this opens a whole new element of the emerging cross-platform and Internet-savvy marketing executive.
Collaboration with the customer will be the key. Monitoring the conversation is difficult enough, and managing the conversation is going to prove challenging indeed. It’s a complex affair, this monitoring of customer behavior. When do you prompt conversation? How often? When do you respond to negative feedback? Every single exposure is critical, and yet, typically, none alone can turn the tide. Or can it? And note, too, the interesting implication that requires customer service understanding and public relations finesse of equal measure.
Engaging online customers, however, will explode WOM opportunities. This is, and will always be, the most effective form of advertising available—the personal referral. If nothing else, all marketers can agree on this fact. It’s been true through the ages. A 2007 Nielsen Global Internet Survey measuring “trust in advertising” found that 78 percent of those surveyed worldwide placed their highest trust in the recommendations of other consumers.3 In the 2009 survey, consumer opinions posted online were trusted by 70 percent of the 25,000 respondents from 50 countries; and 90 percent trusted opinions of people they knew.4 This is yet another customer touch-point along the decision-making process that needs managing.
But all in all, these are very exciting times for marketers who enjoy the conversation with the (capital “C”) Customer. I believe we marketers must inherently enjoy this conversation; if we don’t, we will inevitably lose customers, be it their loyalty or their business … which many of us are simply buying anyway, are we not? This affection is something we cannot fake anymore, if we ever did. Personally, I find customers to be imminently interesting and frequently entertaining. It is, after all, all about the customer. I say welcome to the new paradigm of marketing. It wasn’t so long ago that the game was very different. We just talked and hoped the customer heard us. In this volatile and pulsing economy, it is difficult to find reliable predictors of anything, much less customer loyalty. But perhaps this helps with the lay of the land: They want to talk to us, and they expect us to listen. Are you already rising to the occasion of these new pervasive business intelligence expectations? Are you ready for real-time marketing to complement your messaging? Are you communicating to the customer properly through all of the media channels available? Or are you just getting ready to jump in? In these competitive times, if you don’t, someone else will.
Footnotes
1 Tanner, Jeff, and Morris, Deepa. “The Empowered Customer.” https://www.teradata.com/t/assets/0/206/276/b3a52acf-c1a3-41a2-b429-f5a5…
2 There are many of these. Endorsing none, here are a few: Alterian, Vocus, WebTrends Powered by Radian6, OneRiot, Tinker and Twitterfall.
3 http://asiapacific.acnielsen.com/site/documents/TrustinAdvertisingOct07.pdf
4 http://www.adweek.com/aw/content_display/news/e3i0a5fa05df2f2bdcfe08f71d…