Disappointment is… when I buy something from an online store that’s got brilliant products and brilliant service, a fantastic website and a sign-up form that asks me loads of questions – but which then sends me generic emails I have no interest in whatsoever. I mean, I bought some Merrell trainers from this place, Javari, and now they bombard me with stuff about how kitten heels are the next big thing. Read more on Javari’s wasted birthright…
Author Archives: Felix Velarde
How do you, as a brand, engage me, as a disengaged person with what I’d consider to be better things to do with my social time than talk about your brand? I’ve been thinking about this…
Wired, The Wall, The New York Times and the Huffington Post have all pronounced the web on its last legs. Wired appears to believe that because there’s a popular new way of interfacing with the internet – apps – the web has had its last hurrah. Huff’s Josh Silver bases his pronouncement on the news that Google and Verizon have done a deal that may make it possible to have a privileged access scheme for content providers disseminating video to customers. Read more on The premature announcement of the death of the web…
A perspective on Ben & Jerry’s decision to end its regular email newsletter, observations about social media and eCRM and their respective roles
The client is the most important person in the world. Person.
I work for an agency that’s made some sort of name for itself in eCRM. That’s Electronic Customer Relationship Marketing. It’s not CRM, which is Customer Relationship Management if you’re into sales management software, or …marketing if you’re a DM agency. If you’re a DM agency, that’s direct marketing, thanks for all the principles, but your industry’s buggered. Read more on Acronymtastic – SCRM, ECRM, CRM and the death of DM…
Not often I take issue with something someone has written about direct marketing (you, stop laughing at the back!), but the Direct Marketing Association’s outgoing Robert Keitch, in responding to an observation by a colleague, has set me off.
Charles Grant-Salmon, the chair of 4DM Group observed (in this article) that financial firms may be easing off on using direct mail, and that this may have been a factor in the demise of the (very) short-lived Blackburns DMS. Keitch, until today chief of membership and brand for the DMA, added that he felt that overcapacity wasn’t limited to the direct mail industry – indeed in a tweet by the DMA earlier today they implied that the web had a worse overcapacity problem.
What they ignore, in their entirely sunny, happy way, is that while overcapacity may well be a feature of each, one does not equate to the other. Overcapacity in the direct mail market is down to production cost, waste, time-to-market, and broadcast cost, not to mention inability to reach outlying segments for the same reasons.
Overcapacity in digital is down to exactly the opposite – its abundance is down to its miraculously low cost (imagine sending a million mailing packs, call it £500,000. That’s £1,000 in emails). It’s down to its demonstrable and comprehensively auditable effectiveness, and the number of players diving in with innovative ideas to service the rapidly growing market.
It is categorically not down to a lack of marketers desperate to get to grips with it. Direct mail’s in decline (though it has its brilliant uses – Mercedes has used DM beautifully). The dodos are dying – yet there’s an abundance of bue sky. Don’t fall into the trap of relating the two.
The age of eCRM is upon us. Well, to be fair, the age of Electronic Customer Relationship Marketing is upon the commercial world. Companies can double their revenue from digital by engaging with their existing customers in a structured, highly commercial way. They love it (who wouldn’t love a 93% increase in digital sales in three months?); eCRM’s a hot subject for all sorts of household name brands – we’ve been doing it for six or seven years and can prove its commercial effect. You would imagine that, given the commercial successes and incremental profits it drives, it would be a straight port to charity. But it isn’t. In my view, eCRM isn’t a universal fit, and it needs a slightly different approach when it comes to applying its highly tested principles to fundraising and donor engagement.
Let me take a step back and explain the general principles behind eCRM and then how I believe it can and should work for the third sector.
ECRM starts with data. This data comes from, in essence, existing customers. The data consists of things like when a product was bought, what its value was, whether it was bought following a sequence of events, or driven by a promotion, or facilitated by a third party. That kind of observed behavioural and motivational data can be layered with information about the customer herself – family size, age, location, whether others they know are also customers, whether they belong to this, that or the other social group. Integrating and analysing this data often shows up connections and trends. We may find for example that a customer is likely to spend more if they’ve seen a TV ad within hours of being emailed a voucher on a Tuesday, or that if they’ve got young children they’ll respond better to new offers on mornings when they have childcare. We derive series of insights, and we create a plan that segments audiences by value, frequency, recency, and motivation. We come up with a creative hook, attach email, SMS, web touchpoints, and off we go testing and optimising campaigns to see which work most effectively. It’s pretty logical, and it’s entirely oriented towards increasing a customer’s value.
In theory, you could apply the same highly commercial approach to charity eCRM. In fact, Direct Marketing and Direct Response Television (DRTV) do exactly that, and in general it works extremely effectively, at least for a short while. It relies on continuous volume being fed into a funnel, because using these kinds of methods you can burn through huge numbers quite quickly. And it is of course very single-minded. It allows little for the emotional attachments people have with causes that actually very often span lifetimes and generations. It’s mechanical, in essence. Commercial eCRM creates an equation that takes customers and uses data and psychological techniques to maximise the revenue that can be gained during their lifetime as a customer. That’s business, and it’s not personal. I think that charitable giving, on the other hand, is personal. Charity is not, or should not, be a machine (stick charity on top of problem here, turn handle, problem solved) because I think charity is about solving problems unaddressed by the machine of society.
All of which is a little grandiose. ECRM for charity does automate inasmuch as it allows organisations to use techniques and principles to increase engagement between a cause and its supporters. If by using eCRM we can provide genuine value and fulfilling engagement then as a consequence support will deepen and charities will be able to operate more effectively. The essential truths of eCRM do apply: eCRM is about delivering information to a supporter that is timely and relevant, that doesn’t confuse, that increases the bond rather than distracts from it or irritates. Data is still at its heart. Understanding what your audiences are motivated by, where they live, what their attitudes are, what they are prepared to do on your behalf, all of these are critical. But while commercial eCRM is about facilitating a value transaction (I give you entertainment, you increase your purchase frequency), not-for-profit eCRM is about building and delivering trust, and allowing an opportunity for this to be returned.
ECRM for causes works most effectively when it provides a call to understand rather than a call to action. The same methodology applies – we still analyse all the data we can lay our hands on, we understand what motivates people, we work out what people are likely to want to do, and we segment them accordingly. But the strategy is much longer in view. Building relationships over long periods of time builds trust and cut-through. It gives something back to the supporter, and in turn this means when we do have something we need to say, if it’s delivered in an appropriate manner to the right person at an appropriate time, it is listened to. VSO learned this early on in its forays into eCRM, when at a certain point it found it needed to recruit a large number of primary school teachers – using email and a microsite to engage it found over 6,000 new, qualified contacts all through referral, because of the relationships it had created.
ECRM, that is to say properly researched and segmented long-term contact strategies delivered digitally, is a means not to an end, as it is in the commercial world, but to a beginning. Worked well it delivers relationships that last not just lifecycles, but lifetimes.
This is my first blog post for a few weeks, because I’ve been busy. I’ve actually been busier with pitches than I’ve been for more than a year. And quite evidently I am not alone. There’s something in the water I think.
It’s generally at this time of year that the pitches for the new year are well out of the way. We used to win our big accounts either just before Christmas or just before the other financial year starts in April. This year is different for us, and we’ve seen a surge in pitch work for eCRM actually happening in January. We think there’s a logical explanation for this, and it comes down to the great typographical recession debate that’s been going on for the past few months: is this a U, V or W-shaped recession?
If you are a marketer, then the past year of austerity has probably been quite trying. Selection for auditable marketing – eCRM and DM while a no brainer for some, has been held up by (respectively) lack of experience and expense. ECRM is cheap and responsive, works beautifully for retail and FMCG, and generates monetary returns, but very few companies have done it so in times of restriction and risk aversion new forays were rare. DM is proven and runs on the same principles as eCRM, but it’s extremely expensive and lumberingly slow (not to mention impossible to port directly to digital because it requires native digital community experience). The most logical path for marketers has therefore been difficult to take.
But a year without engaging consumers with either big budget media or small budget retention marketing is dangerous. Smaller nimbler brands can operate with startup mentality and gain a disproportionate step up. A year after budgets stopped, a year during which eCRM has proven itself with spectacular achievements for foresightful adopters, marketing budget holders are facing a situation where we’re either in recovery having reached the other side of the V or U, or at the very least on a temporary island in the middle of the W.
It’s time to re-engage with customers and at the very least reinvigorate relationships with them. If it’s the W then there’s a window of opportunity. If we’re out of recession (and personally I find it difficult to believe there won’t be a backwash from the debt that’s been stacked up to facilitate quantitative easing – let alone the poke in the eye that repairing the country’s potholes is about to deliver), then it’s time to spend. And clients are doing just that. Cautiously to be sure, and only on things that can be proven to work.
Marketers have been dabbling in eCRM. It’s now time to take the plunge. The worst that can happen is that it does turn out to be W-shaped, but brands will have reconnected with customers at a critical time to ensure they stay brand loyal during the next leg of hardship. The best that can happen is that the process of spinning up extraordinary loyalty early means a spectacular resurgence in sales.
It seems to be time for change around here in our little digital world. First we have the transmigration of Revolution, one of our industry stalwarts. Then, today, another – Juliet Blackburn, head of digital for the past nine years at agency selection and management gurus AAR, has taken the plunge and is off client-side. It’s a pretty bold step as it happens, as I think everyone thought that Juliet would either cave in and join an agency one day or remain at the head of the table of digital agency selection forever.
Personally I think it’s a good move – and Skype will make the best of her ability to cut through the bullshit to get to the real thing. Many of us will be sorry to see her go. Some won’t… I’ve heard various agency heads over many years vent their frustration at Juliet’s sometimes disconcerting ability to navigate past flimflam. To be honest, and no matter how we’d all love to have been put forward for more (and here I’m speaking as AAR’s digital agency for the past five years: we’ve had no special favours) it has meant AAR’s client-to-agency matching process has been unimpeachable. Kerry Glazer, AAR’s CEO, will have a challenge on her hands finding a replacement who is half as good.