CRM - October 2008 - (Page 40)

TOO MUCH MARKETING? seven or more. With so many disparate solutions, it’s no wonder marketers have difficulty managing excess. Internal havoc will impact campaign effectiveness. “Oftentimes, there isn’t a clear objective of what the goal of the campaign is,” laments Michael Jennings, principal at consulting firm Bridge Strategy Group. As a result, marketers launch a variety of messages across multiple channels, waiting for anything to stick. Whether it’s brand-building or demand generation, having a clear idea of the objectives of the campaign beforehand enables marketers to define their target segment, and tailor their media channel and message to optimize return. Online retailer Overstock.com, for example, was struggling to understand its clientele. Customers rarely took the time to update their data on the site’s “preference center,” and were therefore subjected relevant experience. Revenue from email has quadrupled since the implementation in 2006, while the average order has increased from $103 to $120. Meanwhile, marketing spend has decreased from 11 percent of overall revenue to 7 percent. company could only attribute three customers to that channel.“We realized that spending $25,000 on a customer was a bit excessive,” Tony Hsieh, the company’s chief executive officer, told a conference audience this past April. By aligning its marketing with its commitment to customer service, the retailer found that its strongest messages were user-generated. To this day, the company relies primarily on sales from repeat customers and word-of-mouth marketing. Instead of stadium billboards, the company has ads in the plastic bins at airport-security check-ins—a choice medium for shoescanning passengers. WHAT’S TOO MUCH? “Anything that isn’t working is ‘too much,’” asserts Joseph Manos, executive vice president of MindFireInc, a provider of direct-mail tracking software. To the consumer, it’s usually irrelevant messages showing up over and over again. There’s no sense of “too much” when the campaign is seen as having value. Because businesses have mostly focused on the immediate sale rather than nurturing the long-term opportunities, Richard Hren, director of product marketing at analytical-software provider SPSS, suggests restructuring the enterprise based IT’S ALL IN THE RESULTS Marketing values creativity, but it must be driven by results. “The biggest reason marketers continue to throw a lot of media out there is because they haven’t What happens when “5 percent relevant, 95 percent noise” becomes “40 percent relevant, 60 percent noise”? to general email blasts three times a week, explains Paul Longhurst, Overstock’s director of data warehousing. Data was haphazardly shuffled around, copiedand-pasted as needed into offline environments. Worse, data was a day old at best, preventing any real-time decisions. The company avoided system burnout by temporarily shutting parts of the site and having employees work in the middle of the night. Email was an underperforming channel, bringing in just 5 percent to 10 percent of total revenue. Overstock needed a clear view of its internal system before it could ever see a clear view of its customers. It took bringing every iota of information into a Teradata data warehouse before Overstock finally rose above the clutter. Now, 75 percent of employees can simultaneously and securely access data to complete dayto-day tasks. Longhurst can see where ad dollars are being spent—and where they can be spent better. He can track product clicks, purchase behavior, and online activity to provide customers with the most 40 on target segments rather than products. Segment managers at a financial services firm, for example, can then tailor their communication strategies to reach, say, tech-savvy 20-year-olds, or spend more on direct-mail campaigns for wealthy retirees.“If you can look at it from the customer perspective, you can manage the flow a whole lot better,” Hren says. Marketers, after all, aren’t the ones struggling with too many channels. Studies have shown that campaigns valuing frequency of touch across multiple dimensions are more likely to capture attention and be remembered. (For more on this, see “Sense-sational Marketing,” Insight, May 2008.) But with more channels comes more responsibility. The key is to use them wisely, track the results, and make it relevant. Depending on your brand, product, and target, certain channels will be more effective than others. When online retailer Zappos.com took a step into the offline world, experimenting with billboard advertisements in New Jersey’s Giants Stadium, the done a deep dive to quantify which media is working best for them,” Manos says. Luckily, there’s technology to do all the heavy lifting. Your ability to track, monitor, measure, analyze, and report will speak to your degree of customer understanding. In a study by Nucleus Research, 94 percent of customers using SPSS’ predictive analytics software saw a positive return on investment after an average deployment time of 10.7 months—a testament to the power of analytics. “Just keep feeding the technology and keep learning,” Hren says. Analytics also resolves discrepancies between what customers say and what they want. “Sometimes they really don’t know,” Hren says—so actions speak louder than words. That doesn’t mean it’s OK to sneak in a seemingly innocuous message after a customer explicitly declines. You risk infringing on customer trust—and devaluing your brand. Ironically, Scott Townsend, marketing director of Oklahoma-based United Linen and Uniform Services, says that the best way www.destinationCRM.com CUSTOMER RELATIONSHIP MANAGEMENT | OCTOBER 2008 http://www.Overstock.com http://www.Zappos.com http://www.destinationCRM.com

Table of Contents Feed for the Digital Edition of CRM - October 2008

CRM - October 2008 Contents Front Office Feedback Reality�Check Customer Centricity The Tipping Point Sprinting Toward Disaster? SAP�Retains Market-Share Lead in�CRM A�Week of Strong Customer�Service CRM�on Twitter Build a Good Event and They Will Come Required Reading There's No Place Like Home The New Breed of CRM�Consultant The Price is Right...You Hope How Much Marketing is Too�Much? The�Sweet Smell of High-Quality�Service The Next Act! For An Acquisition Some Stories Never Get Old CRM�Eases the Pressure For WIKA�Instruments Secret of My Success Re:Tooling Scouting Report Pint of View

CRM - October 2008

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