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I will
discuss the digital revolution in marketing.
The first part of my presentation is on marketing and sales, where
the future is very different from the past.
Marketing
has become very complex: marketing people now have to create good
products; build strong brands – brand image is growing in importance;
find new customers; up-sell and cross-sell their customers;
and create customer loyalty. This
all has to be done cost-effectively. Marketeers tend to be efficient people, but in measuring
customer contact we now want to know the cost of each customer acquired.
Boards want more control: they want to know what percentage of
their advertising budget was wasted.
The result is neurotic marketeers.
This
is Wall Street’s mission statement: we want more of everything, and to
do everything better. There is no mass marketing any longer: we have to market one
customer at a time, and do it in real time – very interactively.
That all makes marketeers’ lives hard, so change is happening.
Change is very difficult. Marketeers
must have excitement, adventure, something new, untried, and different.
Our challenge is to change our industry and company’s marketing
habits.
That
means shifting from customer-product management to a customer
management focus. A car
manufacturer who develops products for small and big families, for cities
and the countryside, is product focused; one who is customer focused would
consider how they can sell more to those customers, selling different
products such as insurance and assistance – deepening the relationship
with the customer. The value
of your brand is in the relationship with your customers.
It is
no longer about product communication, but about events in the
customer’s lives. A new
purchase needs a different communication from a product bought for an
anniversary a year ago. New
events in the customer’s life – not just the product’s life –
determine communication. Brand
marketing aims to alter perceptions, which is different from simply the
facts and figures; it is important and is about creating a story for your
brand.
Imagine
a perfectly-squared meadow: on three sides are pavements; on the
other is a lane with trees. Every
day, a man walks his dog around the meadow – he takes 80 seconds to walk
around the pavement side, and one minute and twenty seconds to walk around
each side with the trees. There
is no actual difference in time but the perception is different because I
told it differently. That is
what branding is about: creating a story that alters perceptions of your
brand. One‑to‑one
relationships are becoming increasingly important in interactive
marketing. The facts may be
the same but the perception can be altered.
In
one‑to‑one marketing, we aim to alter perceptions through
experience. One-on-one
marketing uses an event happening in the life of your customer, such as
your car supplier using your car’s warranty expiring to start a
communication. Create
differentiation through experience. Think-on marketing is focusing
on the product, shouting to the customer what you do, pushing the
customer: how can I convince you to stay with my products?
1.
Permission Marketing
What I
call ‘permission marketing’ requires a different mindset: it is about
focusing on the customer – listening not shouting.
What business are you in, dear customer?
How can I help you operate your business better?
How can I create a profitable solution to your problem?
Permission marketing is complicated for many companies, but is the
way to survive on the internet. It
is about shifting from acquisition to retention marketing, where we focus
on satisfied customers because we believe they are loyal customers.
III.
Satisfaction and Loyalty
However,
that is no longer true: satisfied customers are no longer loyal customers
because we need to convert them to enthusiastic customers.
We studied the relationship between satisfaction and loyalty:
satisfaction is a feeling or attitude; loyalty is behaviour, which is very
different. You can have a
satisfied customer who is not at all loyal; if you convert them to an
enthusiastic customer they become very loyal.
It is about emotions, bonding with customers.
You need to create emotions about your products.
It is
important to do that because loyal customers are profitable customers –
I call that the ‘wheel of fortune’ of a company.
Loyal customers are more profitable because to win a customer you
invest money: if the customer does not repeat their purchase, you have
lost that investment. You need to spread your investment over repeated purchases.
Additionally,
if you do your job well and build a good database, you can increase your
turnover by cross-selling and up-selling additional services
– because you know your customer well.
You can do that at a lower cost, which means a higher margin.
An enthusiastic customer will give referrals about your company,
which bring more business to the company – they are the best salespeople
you can have, and they do not cost anything.
You can also earn a price premium because you have emotionally
bonded the customer to your product.
IV.
Smart Marketing
I call
this ‘smart marketing’, which means making your marketing more
accountable. Like accounting,
you can measure the return on your advertising and sales investment.
This requires more selective targeting; measurable interaction;
being able to track everything you do with your customers; thinking of the
lifetime value of your customers; and building tailor‑made
communications with your customers.
V.
The Four ‘I’s
1.
Imagination
a.
The digital revolution
To
achieve smart marketing, you have to open your eyes to the digital
revolution. To survive the
digital revolution, you need the four ‘I’s – imagination is the
first. The digital revolution
is the chance to express your creativity; the limits of your mind are the
limits of your business. The
internet is about, not just technology, but also community, people,
relationships, emotions, and bonding.
Virtual relationships can be much stronger than real-life
relationships. The internet
is to communication what electricity was to manufacturing: it is a
fundamental and rapid change in our business, a complete shift of the
model.
b.
Think outside the box
We
have to break out of the patterns; changing habits is very difficult.
Think outside the box; broaden your view. The solution is in front of you but you have to see it.
Imagination is so important. The
internet is a new medium, a new business, a new environment.
It is not just: how do I reach my target group?
It is about how your target group reaches you. It is about two‑way communication.
c.
Joseph and Jesus
An old
man knocks at the door to Heaven and asks for St Peter.
The old man has forgotten his name, so St Peter looks him up on his
database. The old man says he
is a carpenter but Peter is expecting 200 carpenters that day, so he asks
for more details. The old man
says his son is very famous; Peter finds Joseph on the database, so he
tells Jesus his father has arrived. When
Jesus comes out and says, ‘Daddy!’, the old man says, ‘Are you
really Pinocchio?’ Things
are not always what they seem.
d.
Repositioning God
God
has an image problem: He has an old‑fashioned brand image; He is
dictatorial, authoritarian, difficult to talk to, unapproachable, and
unwilling to listen. How can
we reposition God in people’s minds, from a killjoy schoolmaster to
someone you could invite out with your friends? Eighteen churches in Singapore decided to do that.
The big idea was: give God a personality, make Him somebody who
speaks to you directly in his own voice.
God is witty; God has humour, is someone you enjoy having around;
God loves life; He is now attractive.
We
could start by advertising in the media: the first advert says, ‘of
course I have a sense of humour – I gave you baboons with bright red
bottoms, did I not? God.’
The second advert: ‘it is not the end of the world – not until
I say so, anyway. God.’
The third: ‘I was thinking of making the world in black and white
but then I thought, ‘Nah, give man colour.’
God.’ The fourth:
‘I hate rules – that is why I only made 10 of them.
God.’ The fifth:
‘do not forget your umbrella, I might water the plants today.
God.’ God is
everywhere – in the subway, on buses: ‘Please do not drink and drive;
you are not quite ready to meet Me yet.’
I love that one! They
created the same message in all the media: God is everywhere.
You
could only reposition God by using your imagination and creativity.
2.
Identification
a.
Identifying Customers
Identification
is the second ‘I’. In the
Beatles song, ‘Penny Lane’, the barber has a photo of every customer;
he knows every customer and identifies with them.
Some companies have a telephone system for dealing with complaints;
it says, ‘thank you for calling customer services.
If you are rational, press ‘1’; if you are a whiner, press
‘2’; if you are hothead, press ‘3’’ – that identifies the
customer!
b.
Mr and Mrs Jones
Mr
Jones enters a hotel he has visited before.
The receptionist says, ‘Hello, Mr and Mrs Jones!
Would you like a waterbed and champagne, as usual?’
Imagine the expression on Mrs Jones’ face!
That is the danger with identifying the customer; you have to use
the data correctly. Beware:
never assume you have the right information – that is how you embarrass
yourself and your customer. Check
and double check. As well as
a company’s facts – turnover, staff numbers, etc – look for the
people behind the turnover. Identifying
customers means building a database; having the data makes the difference. Try to identify the relationship as early as possible; start
the relationship off on the right foot.
c.
Tom Jones
This
is a real example: ‘Dear Mr Jones, come and dream at Club Med, in
Ibiza.’ It was sent to Tom
Jones, State Prison, Church St, Kent!
Nice idea; wrong targeting. Databases
are great, provided we target correctly.
It is not optional.
d.
Promoting to printing companies
Targeting
is difficult – it is not simply about building a database but also
developing customised messages for the customer.
How do you promote digital printing with printing companies around
Europe? One company hired students from art academies and asked them
to take pictures of the companies they wanted to mail to.
The company integrated the pictures into the direct mail to the
companies. The first mailing
pictured a globe and just the detail of the company’s building; it
asked, ‘what is the position of field packaging?’ The next mailing zoomed closer to the country, with another
detail of the building integrated into the mailing. The third mailing had the building in front and the globe in
the background. It wooed the
customer by using images of their building.
Pictures are very powerful.
e.
Promoting Flanders
In
Belgium, the Flanders tourist board uses the same techniques to promote
Flanders as a holiday destination. There
are two people – Bart and Helmut – who love different things.
The database tells us Helmut loves culture, Bruges, and greenery. So they can send him a mailing saying, ‘Bart, wake up 160
miles from Antwerp’ because he lives there.
The distance is adapted to the place we are selling in the mailing.
Helmut loves the coast, so they can say, ‘Helmut, wake up 55
kilometres from Ghent’ Helmut
lives in Ghent and Ghent is 55 kilometres from the coast.
The message is tailor-made.
Bart receives a mailing about Bruges, and the pictures offered are
adapted to his situation. Helmut receives a different mailing with adapted pictures and
text, with print and digital media integrated.
That is customised personally – according to the information in
the database.
f.
Permission‑based marketing
You
need permission-based marketing strategies.
God distributed leaflets in the street and the churches, asking
whether people wanted a one-on-one with God.
He asked them to give him their phone numbers so He could SMS them
and their friends. So you collect your and your friends’ telephone numbers,
and you receive confirmation of subscription.
Your friend then receives a message inviting them to enjoy God’s
SMS messages if they confirm by sending a message with the letter ‘s’
for ‘subscribe’ – so it is permission-based information. Your friend says ‘yes’.
3.
Interaction
a.
The media mix
It
grows increasing complex because there are many different media on which
to interact, and different stages in the sale: the pre-sale, the
sale, and the after-sale. It used to be easier: the sales force covered everything.
People then said the web would cover everything as things became
more complex, mixing different media with the consumer having more impact
on the type of media they want to use. The consumer is then directing the media mix.
By
integrating digital and print media, perhaps with no permission, companies integrate different media to stimulate emotional engagement –
by targeting what they know you like.
If you are sent a link and you follow it to a website, the company
knows you have received their marketing materials and have followed it up.
When you visit the website, perhaps that generates an automatic
confirmation email; the company may then telephone you – extending the
media mix still further. It
is very effective.
On
Friday, God says, ‘thank Me it is Friday!’
On Saturday, He says, ‘are you coming over to my house
tomorrow?’. On Sunday, He
says, ‘even I rest on Sunday.’ At
any stage, you have the opportunity to unsubscribe from the communication
by sending an SMS. This is a
great example of thinking outside the box, of integrating different media,
making the digital revolution happen.
4.
Integration
It
is not just about technical integration, but also having the people to
support the wheel of fortune. Integrate
customer
focus into the mindset of the company.
You need enthusiastic people to generate enthusiastic customers.
All the technology means nothing if your staff do not have a
customer‑focused mindset. Companies
have no success without ‘u’. Every
company has two kinds of people: the energisers, and the negative people.
People make it happen.
Questions and Answers
Trevor
Fenwick
President,
EADP
We
have had the left side and the right side of the brain from our speakers:
the emotional and the scientific.
Participant
Professor
Picard, you mentioned the negative aspect of pop-ups, etc.
Have you tried to measure the irritability or brand aversion these
can cause people who are continuously interrupted by these intrusive
adverts from different companies?
Professor
Picard
I
have not seen any research on that directly, but it clearly has a negative
impact. It is primarily a
function of slow-speed telecommunications; with broadband, people do
not seem to get so upset – but waiting for those adverts to appear on a
slow‑ speed connection seems to cause the problem.
I have not yet found data referring to actual harm done to a
specific brand or advertiser, but it is likely the recipient will buy the
software that prevents the pop-ups.
Participant
Professor
Picard, have you looked at,
or are you planning to look at, interactivity relating to search and
retrieval on the internet? Many people in the room are considering the differences
between relational database mechanisms which most yellow pages use today,
and the competition, Google, which has created an advertising model around
full-text searching. What
are your thoughts?
Professor
Picard
The
different processes there do not allow you to search as specifically on
the internet as has happened elsewhere, although they are growing closer
and better, and starting to use software to reduce the number of answers
to a certain question. There
are questions to be answered; people perceive in different ways what they
are searching for and how they use different indexing services in
different ways. One expects
they would have a different online presence in relation to print or
another specific setting. People
tend to have a different expectation when searching online or on mobile or
smaller devices. We have not
yet conducted full studies on the differences between those perceptions,
but we will in the future.
Trevor
Fenwick
Professor
Van Vooren, besides your God example, how do you inject emotion, humour,
enthusiasm, and interaction into the type of products this audience is
comfortable with? Do you have
other examples?
Professor
Van Vooren
It
is certainly linked to products – a banker could not necessarily do
this, although I do think we tend to take certain industries too
seriously. Other industries
could use this kind of humour. However,
I do not have another example.
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