The Customer Is in Control -- Resistance Is Futile
Why am I thanking a group of cheap, unprofessional marketers for screwing up a potentially great marketing medium? Because what they are really doing is accelerating the evolution of e-mail toward how it should be used -- to build customer relationships. And this is just part of a much larger shift in how companies will communicate with customers and prospects in the future.
The negative reaction to intrusive, poorly targeted marketing (national no-call list, CAN-SPAM Act) is a sign that consumers have finally started to take active control of the buyer/seller relationship. They always had the control -- it has always been the buyer's decision whether to listen to marketing messages and whether to buy -- it's just that now they have the means to apply that control directly back against the marketers themselves. They have gone from passive to active control.
The problem is that marketers are simply unprepared to deal with this change in consumer behavior because they have been trained to think that their job is to manipulate the consumer.
In each major marketing trend of the past 50 years, there have been dramatic successes in new channels and techniques. And the people leading the charge in each of these success waves have fallen into the arrogant trap of thinking that they had figured out the way to control the buyer. But they really hadn't -- they were just exploiting new techniques to reach consumers.
In the 1950s and '60s, marketers were able to reach very large audiences with messages that now were "alive" with the magic of TV. And this, combined with huge baby boomer demand, resulted in some very effective marketing and advertising. Thus, the geniuses of Madison Avenue were born, at least in their own minds.
Then came the evolution of direct mail and telemarketing through the '70s and '80s, and database marketing through the '80s and '90s. Targeted, more personalized messages appealed to consumers, and response rates were high. Direct marketing surpassed mass media advertising in total marketing spending. More companies began to build databases and practice targeted marketing.
But the direct crowd fell prey to the same conceit as the mass advertisers -- that they were actually so good at what they did that they could cause people to buy their products -- that the marketer was in control.
The 1990s saw the advent of the Internet, and advertisers salivated: a new advertising channel! E-mail addresses became prevalent, and the direct crowd cheered: almost-free mail! But a funny thing happened on the way to nirvana. As the number of marketing messages proliferated, customers started to say "no" -- everywhere.
They avoided TV ads by channel surfing; they read the newspaper without even seeing the ads; they sorted their direct mail at 100 mph over the wastebasket; they bought software to block pop-up ads; they installed spam filters and opted out of everything. In other words, they took control.
But marketers still labor under the old belief set. They still think they control the seller/buyer relationship. As a result, their logic works something like this: "Since we can make customers buy when we want them to, let's design our marketing programs in the way that is easiest and most convenient for us."
And what is easy and convenient for marketers is to have an annual plan of marketing initiatives that ignores variations in customers' preferences and behaviors. Thus, we get the "big spring mailing" of 500,000 identical messages instead of individualized messages tailored to a customer's needs and wants.
And because most of the messages aren't relevant and timely for the consumer, results are not very good (does anybody really think a 1 percent direct response rate is good?). So the marketer is forced to increase frequency to achieve the desired revenue. With the resulting increase of irrelevant messages, customers are driven to say, "Enough! Take me off your list!"
What are marketers to do? The only logical response is to give up. Seriously. The customer has won. They are in control. Resistance is futile. Companies that recognize this now and adapt the fastest will win. Companies that fail to listen to consumers and keep blasting high-volume, one-way messages will lose.
So what kinds of changes are required in this customer-controlled marketing world? There are many, but two stand out:
1. You must give up control of the relationship to the customer! I mean real control. Not "pretend" control, where we pre-check a permission box and hope the customer doesn't notice. I mean being very direct and upfront with customers, asking them how often they want to hear from you and what kinds of information and communications they want. And then honoring that control that you gave them.
It also is about providing them relevant, timely information and offers. Not offers that you want to send because you want to juice the quarterly sales numbers for a product.
And because your messages must be relevant and timely:
2. You must know what customers are interested in and when they might be interested in buying. Without this knowledge, your communications with customers will not resonate and you will have poor results. Worse than that, your customers will see that you don't care enough about them to make the effort to figure this out. They will begin to look to your competition as an alternative, especially if your competition is doing a better job addressing their wants and needs.
The first of these critical success drivers -- yielding control to the customer -- is difficult to make happen because it goes directly against marketers' natural inclinations to try to control the relationship. The best way to start is to split off a cross-section of your customer base and practice "buyer-controlled" marketing.
Then measure the difference in performance between the buyer-controlled and seller-controlled groups over the course of a year (this will be a long-term strategy). Measure not only revenue but also ROI (marketing costs should decrease for the buyer-controlled group) and customer satisfaction.
The second driver, knowing what customers are interested in and when they buy, is relatively straightforward. First, you need to build an integrated, cross-channel marketing database that consolidates all buyer and seller activity into a 360-degree customer view. Then you can use this customer marketing database to determine customer preferences and purchase patterns from their past behavior with you.
You also should begin to ask customers for their preferences directly when you communicate with them. This information gets compiled into a section of the database that handles profiles and preferences, and it drives the communication timing and content for that customer going forward.
Look, most of us don't like to give up control because we think that it increases risk. But in this case, it will be far riskier not to give it up.
"A recent Yankelovich survey reveals that American consumers, for one, 'have had it up to here' with unsolicited advertising and marketing messages. Some 60 percent of consumers have a 'much more negative opinion' of advertising and marketing today than a few years ago. In other words, consumers are telling businesses that it's getting worse, not better. The striking ferocity and sheer size of the Do-Not-Call referendum and CAN SPAM regulations in the U.S. attest to the fact that relevance is the only way to cut through the clutter." -- Peppers & Rogers, "CRM in a Growing Economy."