What's New in Marketing - Issue 66, February 2008

http://www.wnim.com

Do Your Customers Trust You?
And What is That Worth To Shareholders?

By Don Peppers and Martha Rogers, Ph.D.

As all marketing goes digital, marketers will be deeply affected by the increasing electronic connectedness of customers who go online now to share with each other their opinions of products, their experiences with different brands and firms, and advice on customer service issues.

Over and above all the tactical implications that this trend has for marketers, the increased connectedness among customers makes customer trust more important than ever before. Today, when you violate a customer's trust, thousands or possibly millions of other customers may soon learn of it. Far from inhibiting businesses, however, the increased importance of customer trust has sucked some of the friction out of commerce, creating many new businesses that simply wouldn't have been possible before. Think of the hundreds of thousands of small businesses that have grown up under the e-bay umbrella, for instance, based solely on the fact that customers can now buy from sellers that other buyers are vouching for - and all of these players are technically strangers.

Trust means having both a commitment to play fair and the capability to carry it out. To be trustworthy your company must become a kind of advocate for the customer. This doesn't mean that shareholder value takes a backseat. All it means is that you know that customers who trust you are likely to create more shareholder value than customers who don't trust you. They are more likely to prefer to buy from you, both now and in the future. And importantly, they may communicate their support of you to other customers who don't yet have any direct experience with your brand.

Conversely, if you don't treat customers fairly, they may communicate their dissatisfaction to others - and it's a fact of life that most people will spread bad news much more energetically than they spread good news. There is a big warning here for businesses that make their profit through consumer error or inattention. It's not at all hard to find examples of this kind of business behaviour, but we have our own favourites:

• Mobile phone operators. Do you know whether the pricing plan you signed up for is the right plan for you, based on your calling patterns? Pricing is extremely complex in this industry, and wherever there is pricing complexity, there is plenty of room for customers to make mistakes in their choices. Actually, someone does know exactly what the most economical plan for you is, and that's your service provider. But don't wait for them to take the initiative to save you money, because they won't, unless they can do so as a way to lock you in to a longer-term contract.
• Credit cards. Think of the consumers who are so financially strapped, undisciplined, or naive that they get themselves trapped into carrying large, rolling card balances, on which they pay exorbitant interest rates ranging from 15 to 25% or more (not even counting punitive monthly late fees). Get the picture? These consumers are actually the credit card industry's very best customers.

But before casting too many stones at other businesses, now that we are all marching into the age of digital marketing and connected customers you might want to ask yourself some hard questions about the degree to which your own customers actually trust you.

Most firms will find that their market situations (and their customers' expectations) evolve a good deal faster than the sales policies, marketing tactics, and service standards they use. For instance:

• Does your company make special deals or extra-low "introductory" prices available exclusively to new customers? Very bad for trust.
• Do you pay sales commissions based on the profit margin of the product being sold rather than the profitability of the customer being sold to? In other words, do you encourage sales efforts focused on individual transactions, or on relationships?
• Does your company sell some products or services to customers that your own managers or employees probably wouldn't be willing to pay full price for, or hate selling?
• Do you make a large percentage of your profits from fees for services customers use only because they make a minor goof—such as turning in a DVD rental a day late, or overdrawing a current account by a few pounds?

To earn and keep the trust of customers, you want employees at all levels constantly to take the customer's point of view. What's it really like to be your own customer? What is the day-in, day-out "customer experience" your company is delivering?

• How does it feel to wait on hold on the phone? To open a package and not be certain how to follow the poorly translated instructions? To stand in line, be charged a fee, wait for a service call that was promised two hours ago, come back to an online shopping cart that you filled carefully but that's no longer there an hour later?
• Or what's it like to be remembered? To receive helpful suggestions? To get everything exactly as it was promised? To be confident that the answers you get are the best ones for you?

Acting in the interests of your customers at all times is an excellent general guide for creating a business with lasting value, but it is more essential than ever in the age of digital marketing. And when you look around at how cutting-edge businesses operate today, you'll find more and more examples of companies putting this kind of philosophy into practice.

• If you shop at Amazon and put a book into your shopping cart that you've already bought, before simply accepting your money and shipping you the book, Amazon will remind you that you have already bought it.
• In the US, Progressive Insurance runs television and radio commercials encouraging prospects to shop around and compare prices. In television spots, the firm's agents check the policy premiums of its competitors, and if someone else's fees are lower, the agent lets the customer know.
• At John Lewis department stores, the advertising slogan coined by John Spedan Lewis more than 70 years ago is "Never knowingly undersold." Sales employees of the firm, known as partners, each participate in the company's profits and will monitor other stores' advertising claims to ensure that no customer ever pays more for an item in a John Lewis store. According to competitive retailing executives, the John Lewis group "has become the new measure of trust and honesty."
• Discover Card is launching a new credit card in the US that will rebate interest charges to customers who pay their bills on time. The Motiva Card will reward any customer paying on time six months in a row with a rebate that, over a one-year period, is about equal to a full month's interest.

Southwest Airlines, the discount carrier in the US, is the only major airline that does not charge a service fee if you have to change your flight. If they goof, they apologise with free flights. In other words, they play fair. Their customers see them as playing fair. Oh, and by the way, Southwest's stock market value is higher than all the other major US airlines combined. Coincidence? You decide.

Don Peppers and Martha Rogers, Ph.D. are the founders of Peppers & Rogers Group, a customer-based management consulting firm that is a division of Carlson Marketing Worldwide.

Tips for e-marketing success

Andy Powell, Creative Director at Mabox, runs through some top tips for e-marketing success

Many companies will be taking the plunge into the world of online marketing this year; harnessing the power of the internet and databases to achieve a more direct and targeted approach to reaching their audiences.

Online marketing is a very powerful way of capturing much more specific information about markets and customers. However, anyone undertaking a campaign should be aware of some of the pitfalls to avoid - there are many!

Technology

Firstly, it is important to understand the technology you are using to undertake your campaign and to be aware of the limitations of the technology of your target audience. The worst thing to do would be to send out an email campaign only for it to be blocked by firewalls, or worse still, for your email address to be blacklisted by your potential customers' PCs. This is particularly important when conducting business-to-business campaigns where you are selling to corporate customers who might have stringent IT policies in place.

To avoid this, run a series of compliance checks to ensure that your email will run on different platforms and software. One of the ways around this is to continuously test the email before you send it out - send it to people within your organisation and trusted partners. You can also use compliance checking software such as Spam Check which will reassure you that the email will work.

Images

Beware of the overuse of images or think twice about using them at all. Many companies have their email set up to block images, so any content contained within them will often not be seen. It is vital to keep important messages, calls to action, and contact details, as text, so that they will always be seen. You can also add in links to external sites from the email, directing your customer to a micro-site or another web site for more information.

Your data

Before you launch headlong into the campaign, first interrogate your data. No amount of creativity can make up for a piece of communication with incorrect personal details. Stringent data clean up will maximise the power and response rates of your work. This should be the starting point for any campaign.

Your messages

Personalising your communication has the power to cut through the clutter of other messages in the market. What's more, it has never been easier to produce stunning work on a rigid budget.

However, you need to make sure you are breaking down your data and communicating effectively to everyone. We recently ran an online marketing campaign for a loyalty card scheme promoting its card rewards. We broke down the data and personalised our message to target three distinct groups included in the database - from new customers, to those who had used the card once but not for six months, through to those who were regular users. Drilling down into your database in this way is critical because it shows you understand and empathise with your audience.

Before sending any personalised content, you should question how your brand fits into your customer's lifestyle. Are they already warm to your brand? What do they think of your brand?

Often the best personalisation doesn't even seem personalised. Look at the last travel agent email you received; it probably only featured the sort of holidays that would interest you. Intelligent use of the available data can seamlessly tailor your product offering to your audience.

If you want to incorporate details such as a person's name, make sure that it's used in a positive and relevant way. This may be one striking instance, such as their name spelt out in flowers, or several instances such as their name being woven into a fairy story. Again, it is imperative to ensure that the content is relevant. If you want your audience to forward something on to their friends, it needs to be interesting. Few people will forward a sales message, but if it's wrapped into a story, game or video then the viral possibilities are endless.

Timing

Timing is critical - think about the times when you would most like to receive a sales email and when you would be most likely to respond favourably.

Monday morning is probably a bad time to launch a hard-hitting sales campaign as emails could get lost amongst other more urgent emails. Instead, such an email might work better on a Thursday afternoon when people are more relaxed and starting to think about the weekend. Research has also shown that on Thursdays, people are more open to making sales decisions. Conversely, if you are running a charity campaign, Monday might be a good day to send a targeted email when people are feeling guilty about a weekend of excess. It's important to talk to your audience, not stalk them. Don't assume total access. One well-crafted piece of communication will have a greater effect than numerous crudely personalised messages.

From monologue to dialogue - changing the marketing approach

Nick Evans, consultant, Jaywing, talks about moving marketing from monologue to dialogue

Today, traditional direct marketing faces many hurdles, including consumer apathy, cost, and the growth in digital channels. And regardless of whether activity is consumer or B2B focused, there is increasing concern that direct marketing as it stands is nothing more than 'monologue marketing'.

The Oxford English Dictionary defines the word monologue as 'a long, tedious speech by one person during a conversation' - a description you will probably be able to apply to much of the direct marketing you receive. Whether the communication is relevant or not, simply bombarding people with marketing messages isn't indicative of forging a long term, two-way relationship.

Perhaps what's most disappointing is the way that many brands have invested in the newly emerged digital channels such as the internet and email. The potential of digital technology makes it well placed to be at the vanguard of a change in the way direct marketing is executed. It is disheartening then to see that so many brands are using the internet and digital channels in exactly the same way as they have the more traditional channels - embodying a low cost, high volume mentality with their digital marketing investments.

So how do brands change their current monologue mentality, whilst at the same time harnessing digital and other channels to their fullest potential?

If traditional direct marketing was about pushing messages onto potential and current customers, evolved 'dialogue' marketing needs to focus on making sure the customer can 'pull' information and messages where they want, when they want, through the channels they want.

The internet is clearly the perfect tool to deliver this 'pull'. The key to making this work is to present the hooks to make it easier for visitors to find the information they're most likely to be looking for, by predicting what they want. The real opportunity for the brand comes at this point. How intelligently a brand interacts with customers and whether it makes the most of these buying signals is critical.

Digital channels, unlike traditional offline channels, generate data on customer activity as it occurs. This data can be used to build dialogue. When a consumer requests information through a website, the organisation effectively knows immediately, and through appropriate decisioning and analytical technology, can instantly set the wheels in motion for a relevant, personal and targeted response.

For both customers and suppliers the speed at which information is assimilated, analysed and acted upon has grown ever faster. With applied use of digital channels, organisations can finally match their response to the pace of customers - a very different proposition from the all too frequent examples of blanket emails to everyone who provides details to a website; an act which will do little to move the relationship beyond a monologue.

Although this forms the foundation of evolved marketing that talks 'with' customers rather than 'at' them, a true dialogue needs a joined up view of how all channels work together. This means tracking consumers as they move from off to online, across media and into stores, whether virtual or high street. A customer sees a brand as a single entity; they do not differentiate between 'Company A online' and 'Company A at the call centre' - to them it is one and the same. Therefore, the same relationship is expected wherever and whenever they interact with the brand.

Staples, for example, has a dedicated business-to-business offering, which its customers and prospects can access in-store, by phone, fax or online. To evolve its own marketing in this manner, it is essential that customers can be identified and presented with individual offers at any point in their interaction with a brand. To do this, digital behavioural data needs to be made available throughout the company. Furthermore, integrating online and offline data will build a full picture for a brand of its customers, based on all available and relevant data. The challenge for the brand is how to use this changing insight at any given point, through decisioning technology, to improve the customer experience.

An example of this is to take consumers' purchasing behaviour offline and match it with data from their website searches. Bringing this information together allows a brand to develop offers that are entirely personal to the customer, which can be presented straight away. In the case of Staples, bringing together the customer's previous purchasing history (perhaps generated when they were last in-store) with the behaviour they're displaying online (whilst researching new products) can generate a response that's totally relevant to their needs, and which acts to solidify their relationship with the brand.

Dialogue marketing is incredibly powerful. Not only does it enable brands to develop personal conversations with customers, it truly makes the most of digital channels. Most importantly, it renews trust in direct marketing and in turn re-establishes its effectiveness.

Multilingual SEO

Greig Holbrook, of Oban Multilingua,l argues that multilingual search engine optimisation is vital to any business looking to market their products and services in the global arena

What is multilingual SEO?

Marketing a business is tough work. Trying to market a business in different languages takes that work to a whole new level. For this reason, there is a new process called multilingual search engine optimisation (SEO).

Multilingual SEO is the process of improving the volume and quality of traffic to international web sites from search engines.

Why use multilingual SEO?

Today, over 50% of online transactions start with someone typing a word or phrase into a search engine like Google or Yahoo.

Half of all online advertising spend now goes into search marketing, and in the UK it's an industry that's grown by over 60% in the last two years.

A well-optimised site can increase the traffic to your site immensely.

But why multilingual SEO?

If your website is English only, you will overlook 95% of your potential market.

According to the International Data Corporation, only five percent of the world's population speaks English.

Everyone searches differently and surroundings and culture will often play a big part in determining what people search for and how they search for it.

It's not about translation

Businesses in international markets should not be simply translating their English site into the native language of a particular country, believes Greig Holbrook, owner of multilingual SEO company; Oban Multilingual.

What businesses need to look at is key phrases customised to each individual region, he says.

People prefer to search in their own language. And they don't use a dictionary to translate.

For this reason, keywords typed into search engines may be written according to regional spellings, which vary enormously. They may be misspelled, or they could be words we might never have associated with the topic.

It's all regional.

"The secret in multilingual SEO is that you have to understand what users are looking for," says Greig.

This could be you!

For example, imagine a company becomes so well known by its brand that people in the UK begin to search for its products by its brand name.

The UK company has an international presence through its website and hopes to repeat its success in other key markets.

However, its research shows that the brand is not a popular search term in its other markets.

In some countries there are up to seven key phrases that have high search volume, all of which relate to common noun phrases directly relevant to the company.

Those are the phrases to look at more closely.

The trick is that only native speakers of those countries' languages will be able to identify these phrases.

Once those phrases are identified, they can be used in the company's website content. The result will be a higher ranking on search engines in the target countries.

Beware of search engine prejudices

Most people don't realise that in many countries, the vast majority of search is conducted using search engines other than Google. In China, for example, the most popular search engine is Baidu. Leading the pack in Russia is Yandex, a private search engine.

It is therefore crucial to have a local understanding of the search engines in each country and how best to optimise searches in those countries. Simply relying on Google or Yahoo search in many countries will not deliver the best results for your international search campaign.

It's not just for B2C businesses

The case for both B2B and non-profit organisations is as relevant as it is for B2C organisations. Whilst the volume of search is often not as high as for B2C, the relevancy of the search is much higher because B2B searchers tend to be much more specific about what they are looking for.

Getting your brand top in search results is crucial, but how people search your brand will vary by country. For example, people may search 'Brand' plus'country', so 'Brand' UK, or they may simply associate the brand with another purpose than in the UK. As brand search often provides the best Return on Investment and conversion rates, multilingual SEO is a must-do for any international company.

Many local businesses around the globe are less familiar with the benefits of search, so competition tends to be less for both paid search and natural search. |A B2B organisation is targeting the Middle East and is getting leads and enquiries for as little as 10p - some of these enquiries have led to deals worth several hundreds of thousands of pounds.

Multilingual SEO do's and don'ts

In the past, international companies merely translated their existing English SEO or paid campaigns into the language they were targeting. The problem with this strategy is that many relevant phrases are not included as part of the translation.

Keywords are the foundation of a successful campaign. A keyword, in internet search, is a term that captures the essence of a document or a search query. These terms can vary considerably in each country.

For example, French web surfers searching for travel agencies use the keyword 'holliday' (holiday spelled with two 'l's). If a travel agency attempting to market themselves in France knows this, they will be able to capture a much larger portion of their target page visitors. German searchers use the term 'kinder diaper' for nappy, mixing both German and US English.

Writing good copy is another essential which is both effective for SEO and customer conversion. This is a highly skilled exercise. For optimum results, copy should be written from scratch.

If the visitor feels that the text has been specifically written for them, for example, because it includes particular cultural nuances, the conversion rate can be up to seven times higher than directly translated copy.

Online Customer Service

Neville Upton, CEO at The Listening Company, looks at how important customer service is for online retailers and which areas are essential to get right

Customer service has long been the foundation on which thriving retailers have built their businesses. One only has to look at the success of John Lewis to see this. The company's unique promise to customers of 'Never Knowingly Undersold' is one of the main factors in the department store being named as the UK's favourite retailer for the eighth consecutive year. However, as consumers are increasingly shunning the high street in favour of online retailers, what do brands need to get right to meet consumer's expectations in the virtual world?

The Listening Company interviewed 1,000 UK consumers aged 18+ in conjunction with The London School of Economics (LSE), to identify the role and importance of customer services and communications for online businesses.

Interestingly, the results reveal significant gaps in the communication channels provided by online businesses. Despite the growing popularity of email as a communication tool, 53% of those interviewed still prefer to communicate with businesses over the telephone, particularly for service enquiries, compared with 48% for email and 16% for traditional mail.

However, the results also show that many online retailers risk alienating their customers by not making their contact details easily accessible, with a surprising number of sites not including telephone numbers at all. Indeed, when asked about their experiences, three out of ten UK consumers stated they found it difficult to locate contact details on websites.

In today's economic climate the competition between online retailers has never been tougher. Consequently, if a consumer cannot communicate with a potential retailer they will simply take their business elsewhere. Significantly, the majority of the people interviewed confirmed that they have made negative purchasing decisions (decided not to use or abandon a business) on the basis of their communication with companies in the past.

Clearly, online businesses have a lot to lose if they cannot provide an adequate level of customer service, so what can be done to improve customer service?

Across all communication channels, the desire for a quick resolution to a query is a key factor in customer satisfaction levels. As a result, online businesses can build stronger relationships with customers by employing skilled contact centre agents and ensuring that they are empowered to deal with customers promptly and efficiently.

The results highlight that 53% of consumers consider three minutes waiting time a satisfactory period to speak with an agent over the telephone. In particular, there is nothing more frustrating for a consumer than ringing a contact centre only to be met with a computerised answering service. Partly why people favour the telephone over other channels of communication is because they can speak directly to a real person.

Replacing a skilled operator with an automated service might save money in the short term, however, in the long term companies risk losing brand advocacy and sales. Additionally, customers believe 24 hours is a respectable amount of time to wait for a response when contacting a business via email.

Overall the research shows that in this era of multi-communication, consumers are no longer allied to any particular mode of communication. They will select the most convenient or appropriate channel even if the retailer trades solely online.

As a result, brands need to provide their contact centre agents with the tools to seamlessly combine different communication channels such as telephone, email, vmail, web chat and SMS to communicate with the consumer and meet their expectations of service.

Agents also need to have real-time access to all past interactions with a customer. This should include text transcriptions of conversations and emails, scanned copies of letters received and despatched, as well as call recordings, comments and outcomes, ensuring the agent is fully briefed on the existing relationship that the customer has with the brand. Importantly, this information can be further used to tailor all future contact with the customer, delivering greater levels of customer satisfaction.

By employing the customer's preferred channel of communication which has been identified using the data from real conversations with individuals, it is possible to meet customer expectations, and as a result maximise retention and brand advocacy. Indeed, an advocate is a company's most important and profitable customer and its best sales force. This is certainly true in the online arena where consumers are increasingly turning to blogs and other virtual communication tools to air their views about their experiences with certain brands.

In conclusion, the level of customer service can be the difference between a one-off purchase and life-long loyalty between the customer and the brand. Customer expectations will continue to rise and online retailers need to understand that every communication that takes place with customers is not a cost but an opportunity. Those that embrace this ethos will have a greater chance of ensuring their customers' expectations are not only matched, but more importantly, exceeded.

Online Lead Generation

Simon Wajcenberg, CEO of Clash-Media, explains how to use Online Lead Generation to extend the reach of your B2C marketing campaigns

Marketing campaigns are most effective when they integrate different techniques to gather, qualify and convert customer data into potential new sales. And that can mean combining offline, indirect methods (such as television advertisements), with online, direct tools (such as web banners and Search Engine Optimisation).

To this mix can now be added the latest and fastest growing form of web-based direct marketing - Online Lead Generation. More and more retailers, including top multi-channel UK retailer, Next, are using this new and exciting form of online marketing to harness targeted and timely customer information, and rapidly convert it into new sales opportunities.

The internet is a critical part of multi-channel marketing

Businesses need direct marketing. Direct marketing is targeted, easily measured, and can often generate rapid results. Some forms of direct marketing, such as postal and telephone campaigns, have been around for many years but they do have their limitations - most notably the preference services that automatically opt consumers out of uninvited contact.

The steady increase in broadband subscriptions means there are now more consumers on the internet than ever before and online retailers are succeeding in taking business off the high street. In July 2007, online sales were 80 per cent higher than the same month the previous year. By December 2007, online sales had hit £15.2bn, up from £9.61bn in 2006. Christmas 2007 saw some stores reporting that their online sales doubled over the Christmas period. In contrast, high street stores last year reported their worst December sales figures for 13 years - with like-for-like sales increasing just 0.3 per cent over 2006. This means that the web is now, more than ever, the ideal place to gather marketing data and capture leads.

The Internet has established itself as an effective marketing tool, and that is reflected by the fact that 71 per cent of businesses have established multi-channel sales and marketing operations - using multiple forms of advertising and contact media. Of these multi-channel businesses, 74 per cent gather online leads with the intent of converting them offline (E-consultancy.com, Online Lead Generation [B2C] Report, 2007).

Search Engine Optimisation is a popular internet marketing tool with over 70 per cent of organisations using Natural Search or Paid Search techniques. Affiliate marketing is also a key online tactic for retailers as it enables them to market themselves through complementary sites in order to generate new sales - referring clicks, leads, or sales to the merchant.

The use of Online Lead Generation will double over the next two years

The newest and undoubtedly fastest growing form of B2C direct marketing on the internet is Online Lead Generation. The Online Lead Generation industry is expected to double in size between 2007 and 2009, and it is proving successful in enabling retailers to use the internet to contact consumers who express an interest in their product. It also enables them to set up and launch campaigns that quickly capture and qualify leads, so retailers achieve higher conversion rates compared to most other direct marketing activities. Advertisers can specify exactly what leads they wish to receive - for example, they may only be looking for customers who are women living within the M25 and earning over £30,000 a year.

Online Lead Generation uses a Lead and Data Network containing thousands of website publishers to host a consistent campaign, reaching further across the internet. They will generate the leads and then pass them back through the host's central system for cleansing, verification and forwarding to the client.

Instead of a database sitting at the back of a company's own website, collecting the data submitted by visitors, Online Lead Generation proactively drives traffic to the site to automatically capture consumer details, qualify them, and send them through for sales agents to convert. This approach also sends leads directly to a client's CRM system or contact centre where agents are ready to follow up with the customer within minutes of information submission. The lead is very hot when it is contacted, which enables retailers to increase their conversion rates, and subsequently the value of Online Lead Generation within the overall marketing budget.

Online Lead Generation offers a one-stop-shop for the gathering and management of large volumes of high quality B2C sales leads. The unparalleled speed of start-up and delivery means that Online Lead Generation campaigns can be switched on or off very quickly, in line with its success or a company's marketing budgets.

Campaigns reach a far wider audience without adding extra management or quality processes for the end customer. Because each lead is put through an unincentivised opt-in process, it is qualified for relevance and then automatic verification ensures the information meets pre-set data quality guidelines.

A successful multi-channel approach

Next, one of the UK's most successful multi-channel retailers, operates one brand with three ways of shopping: 460 high-street stores, a high profile website, and the popular "Next Directory", which offers consumers the option of shopping by post or by phone.

Using Online Lead Generation, Clash-Media were able to provide leads for its "Next Directory" catalogue. By targeting the most responsive audience, in this case females, and using only the latest registrations, the data was as relevant as possible, and all the leads generated were fully opted-in and unincentivised, optimising their quality.

The result was just under 10,000 brochure requests for the "Next Directory" last year, including over 2,000 for the Autumn - Winter catalogue alone. Sales from the Next Directory performed extremely well, rising by 2.2 per cent in the last six months of 2007, whilst Next's high-street sales figures dropped by 0.3 per cent.

An essential part of the online marketing mix

No one marketing tool will ever fulfil the goals of an entire marketing campaign on its own. The way to achieve the best results is to realise that many methods have their own individual benefits, and create an effective mix for a genuinely holistic marketing campaign.

Marketing campaigns become more effective the more they can integrate different techniques to gather, qualify and convert customer data. The key to success is finding the right blend of activities - a blend that will increasingly include Online Lead Generation.