Customer Experience Design

Today, more and more products are connected, in the sense that they have some kind of communications capabilities to provide their location and other telemetry such as health, usage and other key datum.  These connected devices include smart phones and TVs, home automation and security products, and innovative new devices that are becoming increasingly common.  And, this is happening both in the home and at the office.

One of the most innovative of these products is the Nest learning thermostat (and now the new Nest Smoke Alarm).  This beautifully designed device is gaining rapid consumer acceptance, and is now even distributed by energy companies as an incentive to manage energy more responsibly.  Nest is a wireless-enabled device.  From the moment it is turned on, it searches and connects to the wireless network within the home, and even calls back to a cloud-based server to notify the company that it is on, at this location, and working. 

While this is all well and good, the designers of this product took everything a generational leap forward.  They designed the customer experience into the product itself!  Even prior to rollout, Nest executives seemed to know that they had to deliver a world class customer experience that included easy installation, quick and accurate problem resolution, and most importantly an army of independent yet certified Nest technicians wherever Nest was sold.  Through intelligent design and implementation of a contractor strategy, they have succeeded in mobilizing an entire field force, none of which are on the payroll, to become enthusiastic Nest evangelists.  Nest owners have their own digital place to report problems, open cases, seek out these technicians and even rate them post service call.

Most product manufacturers have little experience in a direct-to-consumer relationship, having been removed from the actual customer by retail channels, both on and off line.  To contemplate a direct-to-consumer experience, manufacturers must consider the following five key areas of that relationship:

Registration: How do you get customers to register their product(s) with manufacturers?  This involves everything from package design and in package forms, code-based on device registration.  Regardless, the manufacturer must have a carefully designed incentive to drive higher registration rates.

Engagement:  Once registered, how do you drive engagement with those customers?  Key here is the notion of strategic lifecycle messaging.  Contrary to accepted batch and blast emails strategies, lifecycle messaging is a formal and well thought out program that involves triggered, data-driven messages at key points in the lifecycle with a customer.  This can include post-purchase, at registration, pre-warranty expiration and any other event where an opportunity exists to provide highly targeted and relevant messaging.

E-Commerce:  At every point of the lifecycle, manufacturers have the opportunity to drive additional, hidden revenue streams through the complete integration of ecommerce.  This can be during the registration process, within each lifecycle message, and within an owner center, set up specifically for each individual customer.

Service:  With registered customers and within owner centers, manufacturers have the opportunity to provide self-service solutions to both increase customer satisfaction, as well as deflect service costs.  This requires having the knowledge and support assets ready to be delivered on-line.  Additionally, customers should be able to log support issues and initiate service cases directly from their owner center.

Support:   Should a problem occur, how does a manufacturer effectively deliver an in-field service experience that enhances the overall brand experience, and solidifies the customer relationship?  This is made harder when the manufacturer must rely on independent 3^rd parties for support.  But even with fully owned support, quality, reliability and customer satisfaction must be continually managed and monitored to deliver that experience.

Customer Experience Design involves weaving each of the above functions appropriately into the overall customer experience, in such a manner that the experience is optimized for each customer.  It is important to note that this experience must be considered in terms of many customer “flows,” with a flow being defined as the steps and process by which a customer accomplishes a specific set of tasks with a targeted goal in mind.  For example, there is a registration flow designed to minimize drop-off and maximize registration.  There is a service flow for each identified potential support issue.  And there are multiple purchase flows that result in add-on sales of both ancillary and related products based on current customer holdings.

The art of Customer Experience Design is to identify each customer goal, design flows for those goals and define and implement the content that is dynamically targeted for each individual customer, including the specific events and messaging strategies to support optimizing the results of each flow.

The benefits of Customer Experience Design are significant:

Direct, High Margin Sales:  By providing the ability to buy additional products and services, manufacturers can define new sources of high margin revenue, outside of margin crushing retail channels.

Enhanced Customer Satisfaction:  Giving customers the tools they need to have a direct relationship with the manufacturer only enhances customer satisfaction.  This leads to customer advocacy in the form of reviews, recommendations, social sharing and many others.  Turning customers into advocates also increases the value of that relationship.

Decreased Support Costs:  By designing service and support flows into the experience, brands realize a significant decrease in support costs, including fewer phone calls and reduced return rates.

Designed right, Customer Experience should become a true profit center for the manufacturer, and pay for itself in just a few short months.  Also, this can be done as an enhancement to the retail channel, and not a threat to it, as that channel itself can be designed into the overall experience.  Today, every manufacturer, whether product be connected or not, can benefit from proper, strategic customer experience design to achieve significant and lasting benefits in the overall customer relationship.

Making Optimization Work

It wasn't that long ago that direct marketers were a breed apart: data-obsessed spreadsheet jockeys who were constantly tweaking the knobs and dials of campaigns to yield incrementally better results.

Now, of course, everybody's data-obsessed; everybody's busy tweaking the knobs and dials. If you're marketing digitally, you're a direct marketer -- period.

Think about some of the hot trends in digital marketing -- from behavioral retargeting to real-time bidding on ad exchanges -- and they're all about direct marketing to individual consumers. Even image-burnishing branding campaigns that don't have an e-commerce component (i.e., they're not specifically designed to prompt a consumer to click through and make a purchase) are deployed using cookie-based data to target, in real time, consumers as they surf the web.

What direct marketers have known for years is that more data means better targeting, and better targeting means better results. And the best results are all about optimization. Of course, "optimization" means different things to different people. That's the problem with industry buzzwords: they tend to get diluted and distorted. So let's start with a couple of conventional dictionary definitions:

1. Making the best of anything.

2. A mathematical technique for finding a maximum or minimum value of a function of several variables, subject to a set of constraints, as linear programming or systems analysis.

When most companies talk marketing optimization, they mean the former (basically, Let's give it our best shot!). But the "mathematical technique" approach to optimization isn't necessarily complicated either, conceptually speaking. For instance, in key marketing areas such as email- or website-optimization, the most common techniques used to optimize are A/B testing and multivariate testing.

With A/B testing, a marketer will deploy two versions of an email, or two versions of a web landing page, and watch how each performs. The difference in metrics -- e.g., open rates, click-through rates, conversion rates, etc. -- might be subtle, or they might be dramatic, but either way the goal is to pick a winner and then keep on testing with new A/B sets.

Multivariate testing simply expands the number of elements that can be monitored at once. Essentially, though, A/B and multivariate testing are sort of a general version of "making the best of anything." They're old-school, see-the-forest-not-the-trees approaches in that they look at consumers as relatively monolithic groups; the underlying characteristics of individual consumers are ignored. The goal may be to try to get as many trees as possible in the consumer forest to sway a particular way, but the focus isn't on any individual trees within that forest.

The traditional response to the underlying weaknesses in A/B and multivariate testing approaches has been to customize content based on individual data elements - e.g., location, age, sex, etc. - or by delivering different content versions based on statistically determined segments. But in no case has specific content been statistically and mathematically optimized for each specific consumer according to their relationship at that point in time (i.e, "in real time") with a brand.

Optimization only gets really interesting when individual consumers are regarded as, well, individuals. Consider, for instance, a 34-year-old working mother, an existing customer of a brand, who visits a brand's website. Cookie-based data can tell an incredibly rich story about her that can allow the brand marketer to, you might say, hyper-optimize. The idea is to "see" the website visitor as a specific consumer with a relevant past - meaning she has a transactional history with the brand consisting of all her past purchases, as well as a track record of reactions to marketing campaigns (e.g., emails opened, clicked, etc.).

Wouldn't it be cool if the next email sent by the brand contained references to the content she's just consumed, as well as suggestions about a next logical purchase based on past purchase history? Imagine if the email also contained messaging specific to her psychographic characteristics. And then suppose an offer included in the email had been tailored specifically to her needs and desires based on real-time analytics.

That's the potential of optimization. When optimized campaigns work, they can be incredibly powerful for brands, and heartening for the consumer, who no longer feels like just another face in the crowd.

Read more: http://www.mediapost.com/publications/article/150752/what-you-need-to-know-about-real-time-optimization.html#ixzz2fMJkxud1

Behavioral Personas In the Mainstream

In the world of omni-channel offer optimization, we tend to devalue those who tout their demographic-based marketing plans. Why? Because they are based on a system developed before the data-rich consumer world of digitization. And more still because personas are far better indicators of consumer subsets and thus a statistically superior methodology for crafting content and messaging that moves the bottom line. After years of learning and unlimited means for parsing and making data actionable, we are dying for the big marketing machines to “get it” -- and even more so, to “implement it.”

So it was with a cheer that I read this recent article from the savvy Joe Mandese of MediaPost who explains how NBC News Digital is switching from a demographic-based ad targeting method to a persona-based one -- in a system that uses consumer behavior within the digital news stream, no less.

In that post, Kyoo Kim, vice president-sales NBC News Digital, explained that “focusing on behavior versus demographics gives our customers better insights into the tendencies of our viewers.”  Instead of parsing content experiences by traditional class-gender-race-location-based data, they were making the moves to deliver experiences based on these personas:

·         “Always on”: Consumers who are constantly connected to news feeds across multiple devices.

·          “Reporters”: “Digital natives” who grew up consuming news via online and mobile media and who disseminate news.

·         “Skimmers”: Consumers who are not passionately connected to news.

·         “Veterans”: Consumers who primarily rely on traditional media as a trusted source for news.

As we have deployed behaviorally based personas for years, we were thrilled, of course -- but not completely satisfied. Why? Because this move alone is not sufficient to optimize the objective of NBC News Digital, which at the end of the day is to sell all ad space at the highest price possible. 

Let’s break that down a little further.

Personas must be developed with a purpose

Any persona scheme to be developed and deployed must have a solid business objective. Two different business objectives could end up with two wildly varying persona schemes. Personas are a textured output of rigorous statistical analysis of data, colored in with domain expertise. They should quickly emit data points with every transaction -- your customer is not a number. 

In order for the process to work, the statistical analysis must be guided by an objective, which may be to “register,” “purchase,” “sign up,” “open,” “vote,” or “donate.”  In this case, NBC News Digital has developed its personas based on historical digital news consumption. Does this provide a true differentiator to advertisers who want those personas to buy something from them? Not necessarily.

It seems that the NBC personas are useful in helping to optimize the timing and frequency of display ads, as well as the actual construct of the ad, but not necessarily the content of the ad. Combining purchase and intent data in the development of the personas would be a great next step.

Demographics can still play a role

Once behavioral personas such as these have been developed, demographics still play a key role. First, if there are any demographic consistencies among the behavioral personas, those demographics can be used to help physically describe the personas to be more understandable to advertisers. For example, the “Reporters” above would seem to trend younger since they grew up with digital media, but are they statistically younger than the “Always on”? And the messaging of marketing content is always a key consideration. Suppose that you are selling the benefits of Product A.

Wouldn’t it make sense to message those benefits differently to a family than a single renter -- although they both reside in the same persona, based on digital news consumption? Adding a demographic edge to the personas would greatly also enhance this effort for advertisers.

Personas must be narrow enough to provide real value

In this case, NBC News Digital has developed four personas. Generally, successful projects have between 8 and 12 personas in order to provide enough focus to enable successful differentiated content strategies.  We have found that schemes with five or less are simply too broad to be successful. There is too much diffusion in a few large personas to provide real value in targeted marketing efforts. Adding in purchase and intent data would certainly help advertisers in media buying across the NBC News Digital properties.

Despite these issues, NBC News Digital must be applauded for taking this important first step in moving from demographics to behavioral personas. It is the only way to engage consumers with differentiated content, but more progress must be made in order to sharpen and refine these personas. As test results begin to pour in, NBC News Digital must use these results to continually improve their personas in order to achieve their objective of maximizing ad revenue.

Trends, Implications and Solutions In Engagement Marketing

Over the past 12 months, we have seen a significant rise in interest surrounding “engagement” marketing, in direct correlation with the rise in interest surrounding Social Media Marketing. In continuous discussion with marketers and consumers, I have noticed several trends that are worth discussing.

 

Trend : Most marketers are continuing to use a “blast” email strategy. Essentially, this involves doing the minimum amount of work to get the same email out on a daily or weekly basis to every registered email user in the database. With the recession and all of the economic issues surrounding the rising cost of direct mail, marketers have significantly increased the use of the email channel. The marketers that I have spoken with do this email blasting with the knowledge that they would like to do something else, but instead continue this strategy because email is “free” and doing something else will be too much work. These same marketers readily admit that the effectiveness of those emails is continually decreasing, yet their email database is growing quickly enough to offset declining performance per email.

 

Implication: We are killing email as a marketing channel. Consumers rapidly disengage with our emails knowing that each email is not tailored for them, nor speaks directly with them. This is particularly worrisome when you consider that the increased use of Social Media and Mobile among consumers is causing a decrease in the use of email as a communication mechanism. Friends are more likely to post status updates or use text messaging to alert each other to things they consider important.

 

Solution: Analytically Driven Email. We spent years building powerful models to improve direct mail performance. Now that we have the capabilities to inexpensively communicate in an engaging way with our consumers, we throw those teachings away because email is “free.” By marrying off-the-shelf technologies, such as content management and an offer catalog, we can vary email content to engage our consumers based on their interests, channels, social site membership, transactions with us, and any modeling element that we find value in using. Think of an email as a canvas upon which you can drop highly customized content blocks to drive consumer engagement. Now, how do you get those emails opened? Vary the subject line by developing and targeting personas that occur naturally within your consumer base. If you engage by interest, you have a real chance at standing out in a crowded inbox.

 

Trend: Marketers are adopting social media by creating Twitter accounts and Facebook fan pages, and then using those media for promotions such as couponing or specials. Again, this strategy is similar to the blast email strategy where every follower or fan receives the same promotion. Additionally, most marketers have no ability to measure the effectiveness of promotions in Social Media other than by follower or fan count, so they turn to Social Media Monitoring services .

  

Implication: This use of Social Media will have the same effect as blast email. Consumers will not be excited about the promotion posted every day at 11:30a.m. It becomes advertising akin to traditional print advertising, only the medium is different. Do not accept the Sunday Circular mentality when advertising digitally. Also, most niche marketers do not generate sufficient attention in social media to make effective use of a monitoring service. A typical mid-market retailer might generate a few hundred mentions per month across blogs, micro-blogs, forums, comments, etc. These comments are typically positive or neutral in sentiment. Social Media Monitoring is better suited to large brands with avid audiences, such as Xbox, or brands that have a significant and ongoing dialogue with their consumer base, such as DirecTV or Comcast.

 

 Solution: Use Social Media Best Practices Derived From Direct Mail. If your company has dived into Social Media through a Twitter account and Facebook Fan Page and you are using those media for promotional activities, here are a few best practices to improve your social media effectiveness:

 

1.  When you do a promotion using Social Media, create and store campaign metadata about that promotion as you would in direct mail. Save the date, time, specific promotion and targeted audience (your followers or fans). Having done this, you can then start to analyze the effects of that promotion on store or web traffic.
2. When you make an offer in Social Media, ensure that the link in that offer actually goes to the offer. Sounds simple but I am amazed at how many times the link is to the home page of the specific branded web site and not the actual offer, forcing me to either search for it or simply leave.
3. Ensure everything is trackable by source. For example, if you are going to advertise a mobile promotion on Facebook, Twitter, your branded web site and in-store promotions, ensure you use different sign-up messages to track the source of the consumer. Similarly, if you are doing a coupon-based promotion on Twitter and Facebook, use different offers or coupon codes to track redemption by source.

Trend : Those who are doing targeted direct mail are seeing year over year improvements in results because mail box clutter has been significantly diminished. In fact, many niche catalogers are seeing surprisingly high performance results because the pendulum swung too far the other way. Many direct marketers have reduced catalog prospecting to zero as well, due to expense.

 

Implication: The implication of the reduction in direct marketing as a viable prospecting tool is potentially quite large. We have directional evidence that new consumers coming in from online sources have significantly less potential for lifetime value than those who are traditionally sourced from direct mail. This may just be a sign of the times as consumer loyalty may be down when any offer made by a company can be quickly price shopped in real time. Despite this, direct mail still has a valuable place in the marketing mix.

 

Solution: Cross-Channel Contact Strategies. Develop a plan to vary contact cadence by consumer. To do this effectively, you need to tightly integrate email promotion history and web behavior into your analytic environment. You need to know those who don’t open 99% of your emails versus those who open 25%, and for those who clicked through, where did they go and did they convert? What is the right mix of direct mail, email and social? Techniques such as simulation and scenario analyses are effective in guiding contact strategy development. If you can track promotions down to margin generated, you have a great start in designing effective contact strategies.

 

The times are certainly changing and changing rapidly. It is a fact that our consumers will always be ahead of us, always trying new things to enhance their lives. Have you seen FourSquare? We have a chance to engage them digitally, but we must be smart about it and we must continually evolve. Investments in marketing technology must be made with one requirement firmly in sight. We don’t know what we need, but when we know we need it, we need it now.

 

 

 

The New Multi-Channel Marketing Database

In a session I hosted at last week's DMA Annual Conference & Exhibition in San Diego, I examined traditional marketing databases and how they've been designed and built to support traditional marketing, primarily analytic-driven direct mail. Email has provided marketers the ability to leverage digital technologies to render custom content on an individual consumer basis. Yet many marketers haven't taken advantage of this, instead performing blast email strategies — i.e., sending the same email to everyone, regardless of profile, segment or buying behavior. Additionally, many companies haven't even taken the step of integrating email promotion history into their marketing databases, instead keeping separate email databases at their email service providers of choice. Add to this mix the explosion of social media. Consumers are participating in social media, especially Facebook and Twitter, and while marketers are beginning their early social media efforts, none of this has made its way into marketing databases. In fact, marketing databases in their current states are outmoded and based on a model of campaign management that simply doesn't apply anymore.The new marketing database must be designed to support marketing to consumers where they are, through their channels of preference, be it mobile, social or more traditional channels like email and direct marketing. To do this, marketers must rethink their approach to databases in several fundamental areas:

1. Operational and real time. The new marketing database must be updated whenever necessary, be it daily or hourly, rather than more traditional cycles of monthly or weekly. This requires a fundamental departure from the classic data warehouse architecture. Additionally, the contents of marketing databases must be accessible in real time to the various points of interaction that can be used to drive consumer engagement. You must use individual-level data to create custom and personal URLs for better engagement — and do this on the fly.
2. Messaging and content management must be integrated directly, not over the wall. No longer should marketers cut lists to send to messaging partners. Messaging technologies such as email delivery can and should be integrated in real time to provide full marketing tactical control, as well as reduce overall cost of ownership.
3. Extend the data model. New data must be stored. Our company, for instance, has to be able to take on transactions with no more identification than cell phone numbers or Twitter IDs. Using custom persistent ID systems, we're able to store those transactions and then piece together the picture of the consumer as we learn more. If, for example, a consumer redeems a mobile offer, we're able to retrieve an email address at point of sale.
4. Integrate social media. Follow best practices from direct marketing, and track all social campaigns through the addition of social-specific campaign metadata. If you post a Facebook coupon, for instance, add campaign metadata about that coupon and attach promotion history to every follower from your Facebook fan page.

Consumers always move more quickly than marketers at adopting new technologies. A new approach to your marketing database as outlined above can help you keep up with consumers and market to them where and how they want.

Social Media and Direct Marketing, Part Deux

OK, after a very lazy summer, I have decided, with the leaves turning, to re-dedicate myself to blogging and to do that at least once a week. It will be my Friday chore before I can leave for the weekend.

Over the last several months, I have been intensely studying Social Media, by trying various social media monitoring platforms, notably those from Techrigy and Radian 6. Without trying to be a product comparison blog, I have currently settled on Radian 6 due to its data analysis capabilities. I have been using the tool to track the social media posts for several of my clients and prospects.

At the end of the day, I am trying to determine the role of social media data within the marketing database, and have arrived at several conclusions.

1. Similar to everything else we do in email and direct marketing, it is imperative to track and maintain campaign meta data. For example, if you were to post an offer on your Facebook fan page, maintain all the relevant data within your marketing database. Start date, what the coupon was for, etc. In this manner you can then tie this campaign meta data to actual transactional data to determine order curves (frequency of redemption over time versus total redemption), spikes in retail traffic by time, etc.
2. Social media monitoring using a platform like Radian 6 is also imperative. Every time you engage socially, you can determine what base effect that caused within the social community, and exactly where.
3. The Twitter network is a powerful force. One of my clients, who has an account on Twitter, only has 385 other Twitter accounts following them. However, when we look at the followers of every Twitter account that mentioned them in a Tweet over the month, the potential number of people that saw that tweet rises to over 135,000, a very large network indeed.
4. And finally, harness the power of the bloggers. A competitor of one of my clients uses blogger promotions (giveways and contests) very effectively. They generated a significant spike in social activity every time they released a new promotion to their blogger community. And, that spike was immediate (literally all day during the day of release).

I have not yet figured out exactly how to tie all of this together into the marketing mix, but new insights are dawning every day. Let me know what you think and have a great weekend all.

Social Media and Direct Marketing

Being forced to write this by my twitter friend @balemar :), I will provide some thoughts on social media and its role in direct marketing.  First, though, we need to define direct marketing.  While many exist, I chose the following "marketing via a promotion delivered to the individual prospective customer."  This definition fits perfectly because it doesn't preclude any direct media - digital or otherwise.

Classical direct marketing, which really became big in the 1990s, has historically had a very "campaign management" approach.  Here, marketers would design their campaigns, perhaps as much as a year in advance.  These campaigns were defined in terms of budgets, objectives, time frames, etc.  For example, a typical catalog company may run 12-18 campaigns per year.  These were costly, expensive processes, designed to deliver the message (in this case the catalog) to exactly the right customer or prospect most likely to respond.  (I junk the customer/prospect triage for the remainder of this post, preferring instead the generic consumer).

Many companies made lots of money figuring out how to help marketers optimize these types of campaigns, including consultants, service bureas, lettershops, etc.

This approach seems quaint and laughable just 10 years later,  Simply, digital media has done two things. First, it has expanded the addressability of consumers from a house to many locations (think multiple email addresses, social media profiles, sms, set top box, you name it).  Second, is has highlighted the need for speed in marketing.  Simply, campaigns planned months in advance to an audience of 1 (not talking brand marketing but direct marketing) have no chance of success anymore.  Today, it is not about which consumers you do not talk to, but how you do engage with each one with which you would like to engage!

So back to the question, how does DM take advantage of social media, and evolve?  I believe that one can blend the best of old and new concepts in an integrated approach that works.

So what works from the old direct marketing?

1) Advanced and sophisticated modeling works.  For all the real time recommendation engines deployed by Amazon or Omniture et al, nothing beats a detailed historical review of all consumer data to determine the optimal offer to present to that consumer.  While real time web visit behavior is an important element to blend in, the overall view of that consumer from a behavioral perspective must be incorporated.  Without that, too many offers are ignored by that consumer, and these recommendation engines fail to engage those same consumers.

2) Data is key.  And this is the good news.  All (or most) social media sites generate mountains of data.  Their APIs are generally clear, and accessible to even the most novice Javascript programmer.  Combining these types of data with more traditional off-line data (transactional history, promotion history and individual level demographics) makes for a powerful combination for our analysts to mine.

3) Good copy wins.  I believe that this will never change.  From writing multi-page direct mail letters to short Google ads, good copy wins.  The next time you search something on Google, see what catches your eye from the available ads.  What is interesting to watch will be the ability to tailor the message more and more to the individual as the semantic web unfolds.  We can message at the segment level today, and are eying more real time construction of messages to individual consumers.

So next up next time is a discussion on B2B uses of social tools, and I will follow with a discussion on B2C implications for direct marketing.

Thanks for listening.