Connecting to the customer: A conversation on the future of direct and digital
Connecting to the customer: A conversation on the future of direct and digital
Today, marketers are grappling with the ways that data analytics and digital technology have changed the speed in which customers communicate with brands and with each other. DMNews editor-in-chief Cara Wood and executive editor Carol Krol sat down with marketing leaders in November 2009 to discuss the future of marketing and how direct and digital channels are positioned to move companies ahead in 2010 and beyond. Thank you to Xerox Corp. for sponsoring this roundtable discussion. Panel participants:
- Christa Carone, CMO, Xerox
- Marjorie Kalter, Academic Director and Professor of Integrated Marketing, NYU
- Dan Hodges, Head of Global Sales, Digital & Emerging Products, Associated Press
- Craig Cooperman, Internet Lead Marketing Director, Prudential Financial
- Beth Anne Kilberg-Walsh, Manager of Worldwide Marketing, Xerox
- Theresa Cloutier, Managing Partner & SVP/Marketing & Customer Experience, DMM
- Chad Ghastin, CRM Manager, WeightWatchers.com
- Barbara Goodstein, CMO, AXA Equitable
- David Strauss, Principal, Marketing by Strauss
- Paul Dunay, Global Managing Director of Services & Social Marketing, Avaya
- Bradford Matson, CMO, Bluefly.com
- Bradley Hunt, CMO, United Healthcare
- Mike Panaggio, CEO, DME
- Scott Drayer, Director of Marketing, Paul Fredricks
How do you define integrated marketing today?
Marjorie Kalter: At NYU's graduate degree in integrated marketing, we define it as a core business process that is dedicated to fulfilling a company's growth strategy or core business strategy. In that sense, marketing consists of direct, digital, brand, analytics and everything in 21st century promotional mix.
Bradford Matson: I wonder if we even need the word integrated in front of marketing anymore. This is just marketing. At Bluefly, we're all online, but what we do in any channel ties into what we do from our e-commerce store.
Barbara Goodstein: We have to call it integrated, because everyone doesn't necessarily understand that all the pieces have to fit together and complement each other. There's a risk if you don't define it as integrated that people will think you have different messages going on in different places. The reality is that you have to be consistent and you have to be repetitive.
Paul Dunay: At Bluefly, Brad, you have one message, but like you, Barbara, I have several brands under my umbrella at Avaya. It's very helpful for me to remind my staff that I want a full complement across a broad spectrum: everything from push and pull marketing and every tactic that falls in between that on any given campaign.
Marjorie Kalter: Consumers don't think in silos, but it is the case that for a lot of companies, marketing is still silo-based and silo-driven. The ideal for marketers is to deliver what customers expect, which is "no silos."
David Strauss: Integrated marketing has to include other elements of the marketing mix beyond direct and digital even. All too often marketers have grown up and somebody else has done public relations, or branding. It really has to be thought of holistically.
Christa Carone: I couldn't agree more. For large organizations, marketing is still very fragmented and there is a practical reality to this term "integrated marketing." It means bringing a lot of resources together even if you're just working on one campaign, and ensuring that the appropriate dependencies are there.
How do you reach that integrated ideal through your marketing campaigns?
Bradley Hunt: Campaigns are always going to be about how does it add up? What's the cumulative effect of all your efforts? As the number of things you can do increases, it's going to get harder to analyze and harder to decide where your budget should go.
Craig Cooperman: With financial services, because there's a lot of regulation, your messaging has to be spot on. You have to set expectations for customers, and you have to be extremely prepared. There are channels that may not suit the huge amount of copy you have to include because of legal. You have to decide what's relevant and what's useful at the time.
Mike Panaggio: What you're talking about is delivering a one-to-one message. We could talk about this subject all day long. You really sometimes have to begin with what you want to end up with and really deliver that relevant experience. How do you do it? That's the micro-level. The macro level is just that: Deliver relevance.
How are metrics and measurement changing in today's environment?
Chad Ghastin: You're always going to have solid metrics: Things like churn rate, opens and clicks, call center volume. Those kinds of metrics are always going to be mandatory. But you also need to dig deeper and see what is going on behind those numbers, such as looking at the experience of the customer and seeing what that is like.
Scott Drayer: Paul Fredrick is a tried and true direct marketer, and it's been a bit of a revelation for us to discover, 'Okay, it's not as important to know how well catalog 1A performed, but it's the sum of all its parts to a customer or customer group.' It's not as important to say, 'This catalog got X sales.' It's more important to say, 'Over the holiday season, X customer set saw this program of creative and it generated X sales.
Bradford Matson: Like you, Scott, I came from the catalog business and am now purely online. Applying that catalog knowledge to the online space has been fantastic. Not a lot of online people have the metrics that we do. And that's exactly what it is: return sales per customer not return per piece. And that's how you have to start to manage it.
Craig Cooperman: There's real opportunity to drive value back to the organization through the analysis of what's happening as the customer goes from being a prospect to a sale. With life insurance, there's a long lead time, and over that period of time we start to look at who generated revenue for us and how each campaign generates business for us.
Christa Carone: In this environment, we spend a lot more time with our CFOs trying to justify every campaign, every dollar spent. We're looking at longer sales cycles. You could have run a 6-week ad campaign and the customer might make a purchase in another 12 months. Actually tracking that cost per sale is a challenge, because you do have to think about how you track all of that and where you attribute it. Integrated marketing becomes very important.
How has the amount of data that you have on your customers changed the way you speak to them?
Barbara Goodstein: To start, it has changed the frequency that we talk to the customer. We've been able to segment them by their needs, and that has determined which customers we spend the most time interacting with. From there, it turns into figuring out the best way to interact with each of our customers.
Bradford Matson: For years, we thought product affinity was going to be the key to unlock product performance, but actually customer quality is the first step and customer affinity is the second. It's much more powerful knowing the customer is going to buy and spend than knowing that they think highly of your brand.
Where does engagement fit in today's marketing strategy?
Craig Cooperman: In the financial services sector, we know some folks are coming to us for education. That determines the types of things that we make available, such as videos, calculator resources and whitepapers. These aren't part of the sales push, but it gives them the opportunity to really engage with the brand.
Theresa Cloutier: As someone from an agency, I can speak to the broad range of things my clients are doing to engage their customers. People are starting to realize that the customized ways of speaking are the most effective. Personalized URLs and e-mail campaigns tied to direct mail and tied to personal preferences. You then have to measure it across media in order to really understand the customer.
Christa Carone: One of the challenging things about communication right now is that if you aren't listening, you will miss who needs you to quickly respond. And you will miss the opportunity to understand the conversations that are happening about your brand. Unfortunately, I don't think many companies are making listening the priority that they should.
Barbara Goodstein: We have found that sometimes people cannot actually articulate what they need. Or they will tell you one thing, but in fact behave a different way. We're just watching them and - through observation - figuring out what's happening, what are the delays, and what are the pain points in the process. We're trying to figure out how to align our marketing to our customers' behavior.
Chad Ghastin: If you look at companies like Apple, they've built a place on their site where people can come and talk to each other about trials and tribulations of using Apple technology. If you create the forum for these conversations to happen in your space, then you've won that battle. But when you try to monetize that or be part of that dialogue in an unnatural way, it is always going to be a challenge. It comes down to an expectation from the consumer. You need to have opportunities for people to talk and the expectation you'll be there when it's appropriate for you to be.
What trends on reaching customers are you seeing?
Dan Hodges: At the Associated Press, we're seeing that engaging the customer based on their mobile phone use is working well. When you're in their hand, it's a great tool to really capture a person's attention. We're using their local data, as well as what preferences they have for content to be very relevant.
Paul Dunay: Local data is an accelerator. Customers are dialoguing with us and they expect a response PDQ. It's changing the way that customers are communicating with us.
Bradford Matson: I think down the road we may see things flipping. We used to push the offer out to customers. In the future, I could see them asking us, "I have this table, and I need chairs to go with it." And retailers will have to respond to that.
Marjorie Kalter: The process has become much more dynamic and the metrics we are used to using in traditional direct marketing come into question. Sometimes you might see something like a response rate or a cost per order and you might not know the response rate. Even with tracking, it's tough to tell because the target customer and your loyal customer are influenced by so many media including other customers. You may not know where you lost the sale.
What impact is social media having on your marketing?
Scott Drayer: We look at social media as an opportunity to become a trusted advisor. At any point, what can we do to get them to ask us for our input? We want them saying, "What tie goes with this shirt? Oh, I'll ask Paul Fredrick." We think that's the only relevance that we have in the social space. And we want to try and gain that trust.
Chad Ghastin: A lot of marketers are really quick to want to monetize social media. How can we take advantage of this and drive revenue? Not as much attention has been paid to the innovation of driving the messaging itself to be more relevant and resonant with consumers. Social media allows the organization to be in the same space as the consumer and to be on that level with them.
Paul Dunay: We've been talking about social media from a marketing sense, and I think social is going to star to infiltrate other areas of the organization and hence become a transformative power around the organization. Our billing department is getting Tweets, for example. For our design labs, social has a huge application. When you look at HR and recruiting, you see that they are recruiting through social media as well.
Should marketers take a role in how every orporate department interacts with customers? Can they control it?
Bradford Matson: You can't control [social media]. It has to be honest, and you have to open it up and I think the definition of marketing changes. I'm going to spend a part of my budget this year on building applications that will create Web site experiences. That's not really a traditional marketing role, but when people share and use those apps, it will contribute to the marketing goal.
Marjorie Kalter: The customer has escaped. We can no longer control the process of how and where they get information. And you can't control how your employees represent your brand either. Your customers are going to hear about your product from you, your staff, other customers, and those who haven't bought your product.
Christa Carone: We recently deployed guidelines for our employees on social media. We wanted to remind them they have an opportunity to represent the company as well as themselves. It's a really important distinction. We said, "I am not trying to control what your are posting on a Facebook page, but I'd actually love for you to tell everyone you know about a new product that we just launched." We have pre-launch demos with our employees and share the release with them so they have the information if they want to share it.