Why You Need Human Data For Real Customer Engagement

Article by Ernan Roman
Featured on Forbes.com

A cataclysmic shift is occurring in BtoB and BtoC marketing. Customers are ignoring generic messaging and demanding personalized and relevant communications based on their individual preferences.

Based on research findings, the good news is that customers and prospects are willing to provide personal or business information in exchange for more personalized offers, communications and experiences.

Marketers must meet these consumer demands by transitioning from impersonal transaction-based marketing to highly personalized, preference-based, experiences.

The Reciprocity of Value Equation

A profound finding has emerged from more than 12,000 hours of Voice of Customer (VoC) research our firm has conducted for companies including MassMutual, IBM, Norton AntiVirus, QVC, NBC, Microsoft and Songza. Notwithstanding privacy concerns, BtoB and BtoC customers are willing to provide detailed information in exchange for increased value and relevance.

To satisfy these demands, marketers must adopt transformational strategies that recognize the value of human data; true personalization of communications, offers and experiences driven by deep opt-in individual preference information provided by customers in exchange for receiving unprecedented levels of preference-driven personalization.

We call this the Reciprocity of Value Equation.

Customer Reciprocity: Recognition by customers that to receive more relevant and personalized communications and offers, they need to provide marketers with personal or business preference information.

Plus

Business Reciprocity: Recognition by marketers that they have to provide significantly more personalized communications and offers. To be truly personalized these have to be based on more than just transactional, overlay and inferential data.

Plus

"Human Data:" BtoB or BtoC opt-in self-profiled information regarding key issues, needs and expectations; decision-making process, messaging and media preferences; self-described personality types/attitudes/life stages.

Equals

Customer Experience Transformation.

But, Marketers Have to Earn the Right to Request Human Data

By earning trust through value propositions that motivate customers to opt-in and provide deep preference information, marketers will create a high quality database of responsive customers who truly want your messages.

Based on the VoC research findings, customers (BtoB and BtoC) confirmed that human data has to be earned by going through specific steps that comprise a Pyramid of Trust:

•	Do what you promised: Deliver on your fundamental brand promise.
•	Treat me fairly: Fair pricing and customer service policies.
•	Protect my information: Explain the reasons for the opt-in information requests and assure me of the privacy and safety of my data.
•	Improve my experiences: Use my stated preferences and aversions, to significantly improve my experiences.

Gilt Earns Trust and Engagement

Gilt, a top internet retailer, has used high levels of personalization to deliver relevance and drive engagement for both new and existing customers. Results of these efforts have included increased orders, decreased email and mobile push notification unsubscribe rates and boosted higher repeat-purchase rates.

According to Welington Fonseca, VP of marketing and digital analytics, “Gilt’s commitment to a personalized experience is evident when customers return to the home page of the web site or mobile app. Sales within the store (men, women, kids, home) with the highest affinity to a consumer’s past behavior and preferences (browse, purchase, favorite brands, wish list) are presented at the top of their home page with all other sales ranked according to relevance based on previous shopping behavior and collaborative filtering.”

Another example of personalization is “Your Personal Sale,” which displays the most relevant brands and products based on shopping patterns and self-stated preferences and provide Gilt with another way to interact with the customer to understand preferences in order to further refine their personalization algorithm.

According to Fonseca, “All communication is personalized, with the company sending [more than] 2,500 versions of personalized emails and mobile push notifications on a daily basis, eight times per week. Results have been a double-digit increase in orders and reduction in email and mobile push notification unsubscribes.”

Five Takeaways:

1.	Differentiate your business by providing highly personalized communications, offers and experiences.
2.	True personalization must be based on preference-based “human data,” not just traditional inferred or transactional data.
3.	The right to ask for increasingly deep levels of preference-based information is not a “given.” It must be earned.
4.	Deliver clear and obvious value based on preference information.
5.	Customers see reciprocity as a valuable exchange of information that improves their experience.

5 Emails Which Drive Value and Response

We all struggle to create emails that are worthy of being opened.

We have to overcome the instinctive “Delete” reflex by our customers and prospects.

Following are 5 opportunities for emails that provide value, engagement and drive response.

1) Triggered messaging

Triggered messages (meaning those that are personalized, real time, or event related such as confirmations that are sent to subscribers in response to a specific action,) outperform generic emails. One of the reasons these types of emails are so effective is because they are relevant and personalized.

Ideas for triggered emails include:

• Cart abandonment reminders
• Order confirmations or shipping confirmations that include a personal thank-you with a time frame based thank you discount on their next purchase.

Additionally, according to eMarketer, for retailers, triggered emails enjoy an open rate nearly 75% higher than nontriggered emails, while clickthroughs more than tripled.

2) Transactional Messaging

According to the Experian’s “The Transactional Email Report, transaction-related emails, [prompted by] customers’ buying behavior, can provide marketers with great opportunity for improving customer service, gaining repeat sales and deepening customer engagement compared with standard bulk mailings…the average revenue per email is two to five times greater and can be up to six times greater than the all-industry average of $0.13.”

But don’t send “off the shelf” impersonal sales-based emails. Today’s transactional messaging, according to the survey is “branded, relevant and engaging...to take full advantage of the high level of customer interest and brand engagement that naturally follows a purchase.” Ideas for incorporating personalized Transactional Messaging include:

• Re-order reminders, accessory replenish reminders, or sales alerts on products or accessories that obviously relate to a previous purchase.
• Win-back emails for lapsed customers with personalized incentives based on buying history and preference data.

3) Engaging Email Subject Lines

Being engaging is more than just using your recipient’s name. Be relevant. Be “to the point” and deliver on what was promised within the body of the email. These, according to Christopher Lester, VP of sales at Emma, an email marketing platform, are the keys to successful and engaging email marketing.

Ideas for engaging email subject lines:

Lester advises that, “The email subject line is probably one of the most important pieces of a campaign... It's the beginning statement of the story… The email subject line is just a…way of giving the user [a] quick analysis... what is the value of the email compared to the amount of time dedicated to opening and reading the message? ...You're building relationships and making full connections... If you deliver [on] the value consistently, you will never have to beg for an open.”

4) Mixed Media Emails

Mobile is changing many of the rules for email. Marketers must now create messaging that is delivery-friendly to traditional email inboxes as well as those on mobile devices.

Ideas for mixed media emails include:

• Today’s consumer is multi-screen and multi-device. Make sure your email messaging provides a mobile device experience that is as good as your desktop experience.
• Be sure your landing pages are also dynamic so that mobile or tablet users can view your messaging clearly, get to forms, or be able to click with ease.

5) Personalized Emails

There is nothing more engaging than a truly personalized email that is all about you, the individual customer.

Don’t reinvent the wheel. Learn from Amazon how they have taken personalized emails to a new level. The company has the ability to analyze and personalize both online and email content based on preferences, search history and previous purchases. Amazon sends its customers personalized product recommendations that entice a recipient to purchase a previously viewed item.

According to an in-depth white paper from Amazon, “The click-through and conversion rates - two important measures of Web-based and email advertising effectiveness - vastly exceed those of untargeted content.” Recommend that you read this report to gain thoughtful insights on sophisticated and effective personalization.

Preference Centers: Are CMOs Overlooking Their Importance?

A good preference center is akin to a good first date. It is all about initial appropriateness, understanding, and communication. Once accomplished, you have earned the right to a second date and deeper levels of discussion.         

“Is Your Preference Center Hurting Your Customer Experience?”--the first article in this two-part series--discussed why marketing executives should be concerned about the role of preference centers in enabling their companies to capture the deep customer insights necessary to drive personalized communications.

This article focuses on recommendations from CMOs and senior execs regarding preference center functions and experiences that are critical--whether you are about to build a new center or make improvements to an existing one.

Before You Invest. . .Research When Thomson Reuters decided to build a preference center, research was its first step. “We did market research ahead of deploying our new email preference center,” said Diangelo Tyler, Thomson Reuters’ director of online marketing. “Our objective was to determine what was most important to the customer.”

Tyler offered the following tips:

• Do your homework prior to building the preference center. Refined requirements are the key to success.
• Seek answers to the tough questions.
• Keep in mind that the preference center is for the customer, and they hold the power of voice.

Don’t Be Afraid Of Opt-Outs
Tyler went on to discuss a topic noted by many of the CMOs who my company, ERDM, interviewed while preparing this article. “It’s better to be transparent and open about your intent. It was critical that we make it as quick and simple as possible for our customers to manage their preferences and [for] marketers to get access to their permissions,” he said.

Many marketers shy away from creating truly customer-focused preference centers because they fear mass opt-outs. However, giving customers the ability to provide you with their preferences regarding communications and experiences actually provides you with a powerful competitive advantage.

Per findings from our Voice of Customer Relationship (VoC) research, customers and prospects consistently stated they were willing to provide trusted brands with deeper levels of information in exchange for more personalized information and experiences.

B2B and B2C consumers cited that willingness so frequently we gave it a name: the Reciprocity of Value Equation. Following are some key VoC findings regarding Reciprocity of Value:

• Consumers recognize that to receive or access relevant information, they must provide preference information.
• If they trust the brand and receive a useful value proposition, then consumers will opt-in to sharing increasingly detailed preference information.
• Reciprocity is seen as a valuable exchange of information. This information will constantly change, grow, and be enriched through ongoing interactions with consumers.
  
• This customer-driven information exchange results in uniquely accurate databases that consistently achieve 25 percent to 50 percent increases in revenue.

“The key is to establish an ongoing dialogue with the customer. As they give personal information to you, they are building a relationship with your brand,” said Jennifer Downes, director of direct response marketing at Lenovo NA. “Critical to the learning process is the level of engagement that a customer has with your preference center. The customer must perceive value in your preference center so they proactively update their preferences as they evolve in their journey.”

Another issue marketers face in this space is compliance. “We have to comply with telemarketing regulations and the new cell phone rules, so we’ve used this opportunity to build customer preferences for phone contact,” explained Jane Bulman, VP of telesales at Comcast. “We ask them and are transparent about the benefits of future calls--special offers and notifications about new products, for example. Over 70 percent who purchased previously said, ‘Yes, contact me again.’ If we ask how customers want to be contacted--and for what purposes--we gain marketing efficiency, customers welcome the call, and we follow the law.”

Preference-Based, Not Transaction-Based, Data Is Key It is important for executives to realize that transaction-based spray-and-pray blasts are causing significant damage to their brands. Irrelevant communications are training customers to associate their e-mail and direct mail with “delete” or “throwaway” behaviors.

Per our VoC research findings, consumers believe that transaction-based data is inadequate and an inaccurate indicator of their true preferences regarding future communications they would consider relevant. They stated repeatedly that they want brands to treat them “as more than just a sale.”

Rather, they want relevant and engaging communications:

• “I want more than just buying history-based e-mail.”
• “With today’s technology, I expect the experiences and e-mail to reflect my preferences.”
• “I think being able to select just what I’m interested in would be very helpful. It would mean a lot less searching on the Web site and a lot less email I don’t usually open anyway.”

Key Takeaways

Following are recommendations regarding what you need to consider in order to develop a high-quality preference center. These were provided by Scott Frey, a preference management innovator and president and CEO of Possible Now, which provides enterprise preference management solutions.

Tip 1: Account for all of the systems currently in use to collect and store preference information from customers. There are multiple touch points--e-mail, mail, point of sale, social, and mobile--that must be taken into account to ensure the preference center is as comprehensive and effective as possible.

Tip 2: Understand the business rules and needs of the business owners. An effective preference center must take into account all of the existing business rules and needs of the business owners who are impacted by the data collected by the preference center. Bringing those parties together early and keeping them informed throughout the build of the preference center is crucial.

Tip 3: Start with the end in mind. Creating a plan for how the information collected through the preference center will impact marketing campaigns and customer correspondence assures that all of the right elements are accounted for in the preference center and provides a guideline for reporting.

Tip 4: Viewing from the customer’s perspective. Companies must think about building preference centers from the customer’s (user’s) perspective. Avoid internal language and make sure the preference choices are clear and descriptive. The content within the preference center is important to the center’s effectiveness in decreasing opt-outs and increasing opt-ins.

In conclusion, keep in mind that preference centers enable you to deliver truly personalized offers, communications, and experiences. These, in turn, will drive significant increases in response to cross-sell offers, new product introductions, and loyalty-building initiatives.

“As our markets become increasingly fragmented on interests and needs, delivering the right message at the right time in the right way will be impossible without a solid preference management practice,” said Denice Hasty, Comcast’s SVP of consumer marketing.

How Viral Emails Can Drive More Sales than Promotional Emails

The Challenge: Viral emails can often generate greater response and revenue than sales-focused emails. Following are examples and tips for sending engaging/interactive emails that do not contain sales pitches or feature products.

Airbnb Case Study

The holidays are an important time for the travel company Airbnb. They recognized that holiday greeting emails are very common and devised a unique campaign. They developed a way not just to send a holiday message, but an interactive campaign that encouraged customers to send a thank you note to travel hosts that assisted Airbnb’s travelers during the year. The email was sent with the purpose of getting the audience to engage with one another, not to drive revenue.

Response and engagement rates were very strong:

• 52.3% open rate — up from the previous average of 27% to 30% on regular marketing emails.

• 26.5% click through rate — increase over the 8% to 12% on regular marketing emails.

• The subscribers who used the tool sent an average of 7.5 emails.

• Airbnb increased sales with 600 bookings as a result of this non-promotional email.

Career Builder Case Study

Career Builder tied in a very successful viral email campaign to their widely acclaimed Super Bowl ad featuring chimpanzees performing common office duties. The campaign was named Monk-E-Mail and uses personalization to engage email subscribers and ease of use to ensure follow through of customizing and forwarding emails.

The engagement and increase in the site’s popularity as a result of the campaign was staggering:

• CareerBuilder was rated the #1 career site.

• 29 million unique users visited the site within the first four months (25% increase in traffic); more than 55 million total visitors.

• More than 150 million Monk-e-Mails have been sent and played.

• 22% of message recipients went on to send their own messages.

5 TAKEAWAYS:

1. Timing is important. Airbnb is in an industry where travel is not an everyday event; the holiday email campaign was good timing because December is a time for travel or planning future travel.

2. Personalization is key. Airbnb pre-populated the emails with each customer’s bookings from the previous year and included images of each user’s profile, making it easy to send the message.

3. Be Humorous. As CareerBuilder showed, a viral email is your chance to lose the serious sales attitude.

4. Ease of Use is essential to enable a high volume of viral actions.

5. Do Not Muddy the Message. Once you decide to go non-promotional, do not include any promotional content. Concentrate on the focus of engagement.

70-75% of Email Subscribers are Inactive: Tips for Improvements

The Challenge: Per recent guidelines, you will be penalized if your emails do not have adequate levels of deliverability and “engagement”. Consider the following options to optimize your lists to increase open rates and engagement.

New rules regarding deliverability and engagement

Per our previous blog, recently most email service providers converted to a new algorithm that calculates deliverability using a combination of the original email delivery rules plus new “engagement” factors: open rates, clicks, unsubscribes, and complaints. With these new human behaviors factored into the equation of deliverability, future emails that you send may be considered SPAM or not delivered at all, even to subscribers who signed-up to receive your emails.

70-75% of most email subscribers are inactive

List hygiene is not just about removing undeliverable emails, bounces and unsubscribes. It is also requires re-engaging inactive subscribers and the tricky task of asking subscribers if they still want to receive your emails. It’s scary to think about getting people to unsubscribe, but is necessary in today’s email climate; especially when you consider that 70 – 75% of most email subscribers are inactive. It becomes a waste of resources, money, and hurts the overall deliverability of your list.

When you remove inactives and non-responders there a number of added benefits to your email campaign. In addition to a better delivery rate, you will have lowered costs and increased ease of segmentation and analysis. Not only are you paying to send to these subscribers, you are wasting time managing a larger email list, and then you are penalized for sending too many emails that are left unopened and unengaged.

Re-engagement campaigns

Instead of just purging inactive subscribers, you should first test a re-engagement campaign. Pulling one off tactfully requires finesse. This is easier when you know your audience and run test campaigns to see which tactic performs best. Some ideas for re-engagement emails are to include catchy subject lines such as:

“Are You Breaking Up With Us?”

“Are we still friends?”

“Are You Mad at Us?

The body of the email should explain the message and provide multiple options: opt-out, and various ways to opt-in: subscribe to only some topics, adjust frequency, or connect on different platforms and social arenas.

TAKEAWAYS FOR EMAIL MARKETERS:

» Start your email relationship effectively: capture attention and invite engagement with a quality welcome series.

» Test to determine the most important areas of interest. This should drive engaging content and subject lines.

» Segment and personalize your emails so you deliver the greatest relevance to each individual subscriber.

» Analyze inactive users and begin sending re-engagement emails as soon as possible so that inactive users do not remain on your list for too long.

Spike in Email Undeliverables: 5 Tips for Increasing Delivery

The Challenge: Major email providers such as Gmail, Yahoo, Hotmail and AOL have implemented new algorithms for email deliverability based on “engagement”. If your emails are not triggering sufficient interaction, they are likely not to be delivered.

Recently, most email service providers have converted to a new customized algorithm that calculates deliverability using a combination of the original email delivery rules plus new “engagement” factors: open rates, clicks, unsubscribes, and complaints. With these new human behaviors factored into the equation of deliverability, future emails that you send may be considered SPAM or not delivered at all, even to subscribers who signed-up to receive your emails. Email marketing service MailChimp explains an even more damaging point “if enough recipients click the ‘spam’ button on your email, the providers assume that no one else would want that email either.” Read Google’s white paper on deliverability and the Priority Inbox.

What can you do to improve engagement? Here are 5 tactics:

1. At a minimum, follow basic list management best practices, such as keeping your list opt-in only, honor unsubscribe requests and remove undelivered emails from your list. MailChimp suggests using a double opt-in method to further improve engagement metrics.

2. Motivate new customers to engage with you. Silverpop recommends a quality welcome series.

3. The strategists at Econsultancy suggest “Combining behavioral data and RFM (Recency, Frequency, Monetary value) creates Engagement-RFM (eRFM). Using this methodology can improve the accuracy of segmentation, strengthen influence and engagement, and lead to an increased ROI.”

4. Use personalization and dynamic content. Leverage this information to deploy personalized communications for significant events such as customer appreciation messages, unexpected “surprise and delight” communications, birthdays, post purchase “thank-you’s”, and dropped cart messages.

5. Reward email actions like opens, clicks, and shares. Marketing Profs highlights how companies like GameStop and Southwest Airlines are experiencing success with engagement by tracking subscriber’s interactions and awarding loyalty program points.

Key Takeaways:

1. Sending “spray and pray” emails will damage your brand, hurt your reputation, and compromise future deliverability of legitimate emails.

2. Provide value-added information. Per recent findings from recent Voice of Customer research conducted by our firm, customers are willing to provide in-depth information in exchange for receiving value-added information. For consumers, the rationale for providing preference information is to receive increasingly relevant offers, communications, and experiences.

3. Segmentation is more essential than ever. Develop increasingly specific customer and prospect segments so you can send highly targeted emails that are of interest to each recipient in your sub-segmented groups.

E-Mail: 3 Best Practices for Driving Engagement

The Challenge: Email is an essential element of almost every marketer’s multi-channel mix. But, it needs to do a better job of engaging readers. Here are 3 best practices.

Per the CMO (Chief Marketing Officer) Council, 67% of marketers worldwide rated email as the most successful digital marketing tactic. In today’s competitive marketing arena, however, the key to that success hinges on being able to engage your customers. According to ExactTarget, engagement and customer revenue are directly connected to the relevance of your content. RealMagnet holds a similar view, stating that relevant content is fundamental when it comes to maximizing the lifetime value of your customers.

ExactTarget’s research has shown that as marketers increase the level of relevance, the potential to drive revenue increases exponentially as marketers begin to utilize more personalized, one-to-one marketing tactics. Our own Voice of Customer research indicates a similar finding; the value consumers receive in exchange for providing their information must be obvious and compelling. To overcome the legacy of receiving untargeted and irrelevant communications, consumers must see an obvious increase in relevance.

The following 3 best practices about engaging your customers via e-mail will help you deliver obvious value and relevance. Remember: if the value is not obvious, consumers will assume you have betrayed their trust and expectations.

3 Best Practices for Engaging Customers
via E-mail

1. Segment your communications.
Use every piece of relevant data you have about your customers. Their gender, job title, hobbies, interests, purchase history, browsing habits, and social media presence all provide essential insights. Use this information to create messages tailored to their daily needs and expectations.

2. Integrate your e-mail marketing and CRM (customer relationship management) systems.
Instead of spreading customer data across multiple third-party and in-house CRMs (staff-compiled databases), you should consolidate your customer data into one integrated system. Doing so makes it easier to personalize your marketing to create precise segments, acquire new leads, and nurture leads through your sales cycle.

3. Test to discover what works.
Run an A/B test each time you create a new marketing piece, so that you can maximize your level of engagement. Test various subject lines and content - such as sales copy, promotional offers, and calls-to-action - to see what performs best. Simple tests like these are easy to perform and guarantee that you’re delivering the most relevant content that you can offer. You can also give consumers the ability to hear from you through multiple channels by sporadically testing the promotion of other channels within all of your social networks.