The Marketing Consortium

Bandwidth costs going to zero

As bandwidth costs decline to nearly zero, you can expect a proliferation of communication vehicles that are marketing supported. Company called Futurephone now offers FREE international calls from the US. You have to dial an Iowa area code, 712-858-8883, then pick your language, then dial 011 (for international), then country code and number – and it is absolutely free, no charge whatsoever. No credit card, nothing. I used it. Called the UK (lived there until two months ago).  Great connection - normal connection, no complications. It was fine.

And then there’s Xero, the cell phone service that is FREE provided that you also accept relevant, targeted advertising and marketing messages. Another service like that is launching now in Europe, too.

Online services and communications media – the cost of everything interactive is plummeting, and the abundance of bandwidth is creating terrific opportunities for marketing communications.  Go to Futurephone.com and take a look at the FAQs and you’ll find this explanation under “What's the catch?”
    There is none. We do not require any information from you at all. We respect your privacy and want you to utilize our services without concerns about confidentiality. We simply want you to use this service, tell your friends about it and soon we will have some other amazing offers for you on this site.

Other amazing offers.  Really?  I can hardly wait, I’m so excited!

Capturing Customer Feedback

At the Gartner CRM conference in

Scott Nelson of Gartner said in his keynote that companies were still woefully inept at harvesting and using feedback from customers to improve their marketing.  I believe the words on his slide were something to the effect that  “Organizations continue to fail to understand the value of customer feedback, discarding most information collected from customers.” (Actually, I’m sure those were his words, because I have see his slides on the CD that was provided to conference attendees.)

Later, in his talk on customer experience, Gartner’s Ed Thompson, one of my very favorite commentators on things CRM, quoted a 2005 study by Respond that proved Scott’s point. This study said that while 95% of surveyed firms collect customer information, just 45% alert their staff, and only 35% use the insight in any way. Only 10% actually “deploy” a change or policy based on customer feedback, and only 5% of firms tell customers that they used their feedback.

Sorry, folks, I don’t think life is ever going to get simpler than it is today for businesses using customer data. As time goes on, there will be more and more customer feedback either to discard or to use, and more and more customer insight either to ignore or to act on. 

Thompson’s message was that what we should be doing, to get hold of this monster now, is inventorying all the possible sources of customer feedback at our firm. He said that a Fortune 500 company might have as many as 200 different sources of customer feedback, ranging from different types of actual market research to inbound emails, over-the-transom comments and complaints, and sales meetings. We’d suggest adding a feature to that inventory. For every form of customer feedback or input, try applying a rating for (a) the cost-efficiency with which it is accurately captured, and (b) the effectiveness with which your company actually uses that feedback.

Chicago

Proliferation and Marketing

A new book from McKinsey, “Profiting from Proliferation,” appears to have been authored one chapter at a time by a series of authors, rather than being the product of a single author or author team. Nevertheless, several of its chapters make some very interesting points with respect to the implications of the remarkable (and increasing) proliferation of products, services, and channels complicating the lives of all marketing professionals. 

For instance, while all marketers want to make their offers available in a multiplicity of channels, there are data that show customer satisfaction is negatively correlated with the number of channels that any particular customer uses. That is, if you are a multi-channel customer, you are more likely to be dissatisfied with the company you are dealing with – probably because many companies still have a difficult time with integrating all the channels they offer to their customers. The book also contends that at many firms, “proliferation is breeding inconsistency,” because organizations assign new people to focus on new segments, products, channels, and so forth, and these new people often end up crafting their own brand visions, their own service standards, and even their own Web sites. A proliferation of brands, each designed to deliver a different promise to a different set of customers, complicates things immensely – but one reason for this incredible proliferation is the simple fact that the “barriers to entry” for creating and publicizing a brand have fallen, largely because of technology.  The book is definitely worth a read. 

Life is Complicated (and so is Marketing)

Marketing is a complex process, and getting more so. As technology permits us to track more customer data and to interact more cost-efficiently with individual customers, the choices open to marketers has skyrocketed. Tesco, the UK supermarket chain, began a frequent shopper program more than ten years ago, and today they have fairly good records on the grocery shopping habits and preferences of some 11 million customers. Their quarterly newsletter goes out in 5 million different versions, which is about as close to individualization as anyone can get. The quarterly mailing generates a response rate among members in the 25% to 30% range, which means there is an awful lot of additional information created with each campaign.

Evaluating this kind of interaction data has also become more complex and difficult. In the world of direct mail campaigns, the way you decide what offer to make and whom to make it to is by testing. Send out 10,000 mailings of Offer A to one group of folks, and 10,000 of Offer B to a different, but statistically identical, group. Then wait for the responses to decide which offer is best, and by how much. But when you have, say, 2 million registered users, each with an individually specified profile, checking your Web site every week or two – how do you use testing to learn which offer makes the most sense for Customer 3675-J? 

As if this new dimension of customer-specific marketing isn’t complicated enough, just running a traditional advertising program is more complicated than ever before, as well. I talked to one ad manager at a big-brand US retailer who told me that four or five years ago his company would run 30 to 50 campaigns in a year and they thought they were doing very well. Last year, however, they ran over 2,000 campaigns, and he expects to be running several thousands of “campaigns” aimed at mini-segments and smaller and smaller markets in just a year or two.

Add to that the increasing sophistication of statistical analysis that has become possible with information technology, and traditional research data takes on a new complexity all by itself.  Graham Hill’s comment elsewhere in this blog (http://unicashare.typepad.com/share/2006/09/is_customer_ser.html#comments), for instance, suggests that in evaluating customer attitudinal data such as satisfaction, researchers must now use statistical tools designed to track measurable levels of interaction among the data – because a single customer’s attitude changes through time based on his previous attitude, and also because one customer’s attitude can sometimes influence another customer’s attitude. Call it what you want, but as Graham comments, “Life is complicated.”   

The obvious question here is how do marketers keep all this straight. How, in fact, do we marketers assess results and prioritize efforts? I’d be very interested in hearing from people how they deal with this increasing level of complexity…

Is Customer Service Going Downhill?

Last week I gave a talk on innovation at the Gartner conference in Chicago.

During the question and answer period, one of the audience members asked me if I thought customer service was heading downhill. It seemed to the questioner that all around him were examples of deteriorating customer service, and he wanted to know my opinion.

This is an excellent question, and I’ll wager that many of you out there would agree with this gentleman: customer service does seem to be declining in quality. After all, when was the last time you dialled some company’s customer service toll-free line and actually got to speak with a human being without jumping through a bunch of interactive voice response prompts first? And when the system first answered your phone call it probably asked you to key in your account number, but if you held on to talk to a live person, what was the very first question you were asked? Right. They wanted to know your account number again, correct?

Well, in answering this question I said it was my opinion that customer service has not, repeat not actually deteriorated in the last few years as much as we might think. In fact, it may actually have improved somewhat. Our expectations as customers, however, have advanced even more quickly. That is, every time you go to a Web site with great online service, your expectations of other Web sites increases. Every time any company treats you to great service on account of, say, the volume of business you’ve been doing with that firm, you expect other companies with which you do a large business to recognize you, also.

Everyone now is much more attuned to what decent customer service looks like. We are therefore, as consumers, much less forgiving of the slow or incompetent service person, the rigid and unfriendly company policy, or the corporate computer system that just doesn’t connect all the dots. It’s analogous to why we all think we have so little time today, when the truth of the matter is we each have way more time to do what we want than our parents or grandparents ever had. But there are now so many choices of things to do, it just seems like we have less time.

The higher-expectations theory of customer service is supported, also, by the fact that marketers and sales people, as a race, tend to be optimistic, and are often guilty of over-promising.  I don’t think it’s any secret that most sales-and-marketing types are prone to hype – or, should I say, they are more prone to hype than IT people, engineers, or accountants are prone to hype. So customer expectations have been inflated not just by their experiences at a smattering of great service firms, but also by the tendency of marketers to suggest greater benefits than can actually be delivered.

This, of course, is only my theory. There is an alternative explanation for why we all seem to think that service has deteriorated. It is certainly possible that service actually has deteriorated. For real. Too many costs have been cut out of two many company offerings. Competitive pressure has focused on cost control rather than on value added. Whatever.

I’d really be interested to know what you think. Do you believe that customer service has really deteriorated in the last few years, or does it only seem that way? If you think service has actually regressed, can you give us any concrete examples?

Welcome Don Peppers!

Unica welcomes Don Peppers, noted author and founding partner of Peppers and Rogers Group, as our guest moderator.