Ernan’s Insights on Marketing Best Practices

Monday, January 31, 2011

Lessons From Ford’s Brilliant Use of Social Media

You may have heard the news: Ford reported its biggest annual profit since 1999. That's a huge accomplishment for a company that was on the ropes in 2009, a symbol of a once-great American industry in seemingly fatal decline.
Many factors contributed to Ford's shift from the breakdown lane into the fast lane: the sale or retirement of underperforming brands, the dramatic decision to close a quarter of its plants, and the aggressive reduction of its labor and health care costs.
But, there is something else they did right, something that has been lost in the recent discussions about its comeback: Ford has been engaging in unprecedented dialogues with consumers.
Today, success in marketing is achieved as a result of personal conversations and points of engagement with customers and prospects. As discussed in my recent book, Voice of the Customer Marketing, Ford designed an unprecedented social media–driven plan to create such engagements.
In 2009, Ford spent roughly one-quarter of its marketing dollars on digital and social media. This was more than double the amount spent by its competitors. Ford was clearly out front in the social networking arena, and its efforts paid rich dividends. As Ford’s chief marketing executive, James Farley, put it: “If you are trying to communicate, as we are, that you have been reinventing the company, you can’t just say it. You have to get the people to say it to each other.”
Say it they did! They posted 11,000 videos, 15,000 Twitter messages, and over 11 million social networking impressions as part of an American Ford Fiesta prelaunch social media campaign called the Fiesta Movement.
Add your comments below -- we would love to hear from you about using social media for your company!!
The results were remarkable: 4.5 million YouTube views, 3.5 million Twitter impressions, and 80,000 “hand raisers” who asked to be kept up to date on the U.S. launch of the Ford Fiesta. Of those hand raisers, 97 percent did not own a Ford vehicle.
The Fiesta campaign inspired tens of thousands of people, not merely to listen passively to Ford advertising, but to engage in an ongoing dialogue with the company through channels of their own choosing: to post videos, to share feedback, and stay engaged and in touch with “The Ford Story,” very often via multiple feeds. For some great insights on Ford's ongoing cutting-edge social media campaign, check out this link.
Ford's results remind us that social media represents one of the most sophisticated forms of selling. The sale is the by-product of the quality and mutual benefit of relationships and trust.
Try This:
Re-think how you view customer acquisition. View it as the building of trust and engagement with an empowered group of people, (not targets). Engage them to tell you their stories with your product, make it a personal experience for them and you.
Provide them with multiple channels-- Facebook, Twitter, YouTube, e-mail, and other media -- by which to engage with, contribute to, and respond to, your company's ongoing story.

Monday, January 24, 2011

Lessons from My Chimney Cleaner About Service and Marketing Best Practices

Last week Ginger Conlon, Editorial Director of 1to1® Media posted the following Guest Blogger article which I wrote for them.
We thought you would enjoy reading about impressive service and marketing best practices.
A few weeks ago I called a local chimney-cleaning company and set up an appointment for a cleaning. When the workmen arrived, I asked them to remove their sooty shoes when walking around the house. Despite this request, the workers left an ugly trail of black soot stains on our basement carpeting.
So began a fascinating opportunity to experience how some companies are mastering the integration of marketing and customer service. My problem was turned into a marketing opportunity by the company -- but only because the person I spoke with to file my complaint understood that customer service is actually a marketing opportunity. That person happened to be the owner of the company.
Viewing customer service and marketing as two sides of the same coin is the first step in turning service disasters into marketing opportunities. This can only occur if marketing and customer service teams work together based on the recognition that customer retention is essential. Marketing can no longer afford to view customer service as a labor intensive "operations" function. In this era of empowered consumers with social media megaphones, the ability of dissatisfied customers to voice their opinions worldwide is astonishing and frightening.
Back to my chimney-cleaning saga: The owner listened carefully to my complaint and acknowledged his company's responsibility for the problem. He said, "On behalf of our company, I would like to apologize for what happened. I would also like to thank you for taking the time to call. We will do what it takes to clean up the mess we created."
The owner and I reviewed the details of the damage and the follow-up action, which was to have a professional carpet cleaning company come to my home within a week, at no charge. I then asked why he had thanked me for making the call. His reply was the essence of both great marketing and great customer service.
Add your comments below and share your thoughts about great customer service!

He said, "I want to be able to go to your home next year and the following year and the year after that, to clean your chimney. By calling our company, you provided me with the opportunity to prove to you that, while we made a mistake, we have the professionalism and integrity to take care of our customers. I want to prove to you, that even though we have already been paid for this job, we are not just looking for the bucks. I want you as a long-term customer."

I was intrigued. What he had just said was in line with one of the most important, though often overlooked tenets of innovative marketing: One of the most important metrics for identifying the success of a marketing initiative is its capacity to generate repeat purchases.

I asked about the company's customer service team. Was I getting a good outcome simply because I had been lucky enough to speak with the owner of the company? Or was this approach really part of the organization's service culture?

My call, as it turned out, had been no accident. Customer service reps at this firm were empowered to resolve customer problems; they worked closely with the marketing department to ensure that customer acquisition and retention were tightly integrated.

This was a fairly small company, a fact that intrigues me on two fronts. First, smaller organizations (which are likely to have fewer problems with "turf and fiefdoms"), may well have the inside track when it comes to seamlessly coordinating marketing and customer service efforts. Second, those companies that do manage to integrate these departments successfully find themselves in a position to significantly improve the customer experience and increase customer lifetime value.

Here are seven tips to help you improve your customer experience:

1. Do not view customer service call centers as cost centers. These are revenue centers.

2. Customers' post-sales experiences have significant impact on repeat purchase likelihood and willingness to recommend the company. Companies must consider the financial ramifications of losing customers due to poor post-sale experiences.

3. Do not cut back on training, quality control procedures, and related investments in customer service call centers.

4. Remember that it's seven to 10 times more expensive to acquire a new customer than to sell an existing customer.

5. Mistakes happen. Make sure that, when they do, your frontline people are empowered to take responsibility for those mistakes, and propose a solution that is fair to the customer.

6. Customers expect high-quality post-sale support. If it is lacking, they will not only be inclined to go elsewhere, but they will also be inclined to use the power of social media to let others know about their dissatisfaction.

7. The big question is not whether we can get a customer to buy from us once, but whether, after a customer service problem, we can get him or her to buy from us a second time. What kind of experience will make a customer decide not only that he or she isn't going to demand a refund, but that a repeat purchase is in order?

The owner of that chimney-cleaning company knew that I, as his customer, considered the marketing and customer service experience to be inseparable -- so he made sure that he and his entire team operated under the same assumption. As a result, I am now a satisfied customer, a committed candidate for repeat business -- and an evangelist for his firm.

Monday, January 17, 2011

'List Fatigue'...Or Just Strategy Fatigue?

The Problem: My database is delivering steadily declining response rates. How do I overcome "list fatigue"?
The Solution: Take the time to find out what your customers and prospects really want to receive from your organization, and how they want to receive it.
"List fatigue" is often a euphemism for the customer and prospect fatigue that results from marketing that's largely untargeted and undifferentiated. I call this "spray and pray" marketing.
When the same kind of generic message goes out to tens of thousands of people at a time, it's inevitable that interest, and response rates, will drop. When economic times are tough, the decline usually occurs at an accelerated pace.
If customers or prospects feel that your marketing is not relevant or exciting, they are likely to forget that they opted in to your list (a common occurrence), and will consider your emails to be spam. In a recent MarketingSherpa survey, 74 percent of respondents defined "spam" as "e-mail I did not sign-up to receive."
The solution is to stop "spray and pray" and adopt opt-in/preference driven communications.
Have an opinion about "spray and pray" versus opt-in/preference driven marketing? Comment below and share your thoughts on this post!
However, we must explain exactly what information we’re asking for, why we’re asking for it, and the customer benefit of targeted and relevant communications. When customers have a compelling reason to self-profile and share detailed information, they will opt-in in significant numbers.
Forbes.com highlighted our article Target That Marketing as posted by Investor's Business Daily.
Microsoft’s online Business Resource Center is a best-in-class example of an opt-in/self-profiling relationship strategy. By creating a Voice-of-Customer driven opt-in relationship marketing program, Microsoft generated opt-in rates that ranged between 45 to 95 percent -- the opposite of "list fatigue"!
Try This:
Learn more about Microsoft's targeted opt-in relationship program. Then conduct research to understand what value proposition would be required to motivate your customers and prospects to self-profile their preferences and opt-in to a deeper relationship with your company.

Monday, January 10, 2011

5 Pre-conditions for Obtaining Detailed Opt-In Preference Information

The Myth: Consumers are no longer willing to share in-depth information with marketers.
The Reality: There are 5 prerequisites that, if addressed by marketers, have proven effective in engaging consumers, (BtoB and BtoC), to share detailed Opt-In self-profiling information.
In a previous blog, we discussed the critical consumer decisions that take place within what I call the Reciprocity of Value Equation. Insights which identified the Reciprocity of Value Equation and the following 5 preconditions are based on numerous Voice of Customer research efforts conducted for companies such as Microsoft, Hewlett-Packard, NBC Universal, and HMS National.
Read Ernan’s article in Sales and Service Excellence, titled: “Do You Trust Your Customers?” The article provides 5 steps to help you re-think your marketing.
Research findings indicate that decision makers in both the B-to-B and B-to-C realms have 5 pre-conditions for sharing in-depth information:
1. Consumers have to trust that the company will adequately safeguard their information and use it in a responsible way.
2. “Responsible” means that consumers must believe that their information will not be rented or sold to third parties.
3. “Honor my preferences” reflects the expectation that their Opt-In self-profiled preferences will be used to drive increasingly targeted communications and offers.
To overcome the legacy of receiving untargeted and irrelevant communications, consumers must see an obvious improvement in relevance. If the value is not obvious, consumers will assume you are sending “more of the same old” and feel you betrayed their trust and expectations.
4. The value consumers receive in exchange for providing in-depth information must be obvious and compelling.
To overcome the legacy of receiving untargeted and irrelevant communications, consumers must see an obvious improvement in relevance. If the value is not obvious, consumers will assume you are sending “more of the same old” and feel you betrayed their trust and expectations.
5. Consumers must see proof that the company will be able to deliver on requirements 1 through 4 above, not just once, but consistently over time.
If this occurs, they will be motivated to update their ever-changing interests and preferences and thus, ensure that your Opt-In database remains fresh.
Try This:
Ask your prospects and customers how they would define “relevant and targeted” communications and offers from your company…and what information they would be willing to share with you in order to receive that value.
Also, check that you have the support to create the “clearinghouse” function to evaluate all the various communications that different divisions and business units want to send...and that you will be granted the authority to suppress those communications that are not relevant to the expressed preferences of individual customers.

Tuesday, January 4, 2011

Will They Still Love Me Tomorrow?

We just returned from a lovely vacation in the Caribbean. As we've done for the last 30 years, each year we find a new place to relax and recharge.
These properties take pride in providing exceptional service. The staff quickly learn our names, food and seating preferences, and ask about the interests of our family members, so they can recommend the appropriate activities and outings. This level of personalized attention is always impressive and adds greatly to the quality of the vacation experience. However, once we leave the properties...all the love and attention vanishes!
How is it that these wonderful properties, which value personalized engagement on-property, do not sustain the engagement once we leave?
We know from our previous experience with hospitality clients such as Starwood’s Luxury Collection and Orient Express, that customer retention is critical. Once a guest crosses a certain threshold, such as 2+ visits, they are very likely to return multiple times. Many of these guests will often bring additional family members.
So, given the importance of retention, why isn't all the customer information they have gathered during our stay used to drive highly personalized communications per our preferences?
Please refer to the Investor’s Business Daily “Target That Marketing” article which provides voice of the customer marketing tips and guidelines.
They know our names, the names and ages of our children, our interest in adventurous sea and land excursions, and our love of art, foods and wines. Imagine the exciting and targeted communications, updates and offers which could be sent based on what they know about us!
With all this rich information, all we receive after our stays, if anything, are generic newsletters and generic offers.
It's not just the many Hospitality marketers that are missing the boat. Think of all the millions of Retail purchases just made during the holidays, with all those opportunities to ask customers their interest in receiving future information related to the items they purchased.
It makes you wonder why so many companies still don’t “get it”. It seems that as we enter 2011, the goal of building the relationship and earning the repeat purchases still lags behind going for the short term "quickie sale".
So how about a New Year's resolution to value your customer today…and continue to love them tomorrow?