Derek Holder, Founder and Managing Director of the Institute of Direct Marketing

THE NEW MARKETING VISION OF CUSTOMER ENGAGEMENT

In the beginning

“There is” said the Preacher “no new thing under the sun”1. To a generation raised on the ubiquity of the computer, the invention of the world-wide web, the advent of the mobile phone, and the rise of social networking, this may seem a foolishness. But wait. These artefacts, which have now become the shiny new toys of every sub-teenage tearaway, are inert things. They are tools (or toys) merely. We can accomplish nothing of value with them, until we have first articulated a purpose, and defined a methodology by which we mean to pursue that purpose; then, and only then, can we use those tools in the context of our methodology and in pursuit of our purpose.

In the present context, our purpose is the age-old activity of marketing. The “new” methodology which we are being urged to use is Customer Engagement. That is, the marketing industry (or those members of it who write books and give lectures) has decided that the focus of marketing effort should no longer be the Product, or the Advertisement, or the Promotion Campaign, but the Customer, who must be Engaged.

This is hardly a new idea: marketing was always about a buyer and a seller, a prospect and an offer, a need and a solution. In simpler times a shop-keeper would know every customer by sight and could keep a record of her purchases, on paper or in his head. RFM (recency, frequency and monetary value) is not a new concept. From its earliest days until quite recently, marketing was always a one-to-one proposition; remembering  and engaging a customer was its first requirement. Advertising – dominantly in the Press and on television - was about brand-building; retail was about customer engagement.

And now

It was of course the arrival of the computer that first gave marketers the opportunity to collect and store, on a large scale, data about customers; to analyse and sift it and turn it into actionable information; to do for a mass audience some of what each shop-keeper had always done for the few. Over the decades since, direct marketers (alone as it sometimes seemed) have kept the faith.

Now a vision is emerging of a new direction for marketing2, based on old principles, one capable of engaging millions of prospects and customers – one-to-one - in personal, real-time dialogue which is fully accountable and measurable. This vision is made possible by the fusion of the disciplines of direct and digital marketing.

To-day Customer Engagement means dialogue - as it did for the Victorian shopkeeper, for the medieval merchant crying his wares in the marketplace, and, no doubt, for the Stone Age flint miner. The ultimate form of dialogue, not available to all, is company/customer (or customer/company) co-development of product or service3. But there are plenty of other stopping points along this road.

The first commercial users of the world-wide web built websites which were little more than extensions of outdoor advertising. The best websites to-day are those that encourage dialogue: the customer – the consumer – has a voice, and if she can’t express her views – and get a response – through your website, she may just set up another (probably hostile) one of her own, which will be seen by hundreds, perhaps thousands, of her peers. Talk to her; encourage her to talk back; respond to what she says.4, 5

Companies have learned the necessity of monitoring the entire web to see what is being written, by increasingly vociferous consumers, about them. And whether that is agreeable, or disagreeable, there is a need to respond. And quickly.

E-mail is cheap to send (if not necessarily to write). There is nothing to be gained by flooding your customers’ in-boxes with too much, or too predictable, material, but well-designed infrequent e-mails, which really contain what the customer wants to hear – not just what you want to say – can be fun. And with a little bit of ingenuity they can go viral, to your great benefit.

Mobile marketing is as yet in its infancy6. Even more than with other media, the need is to communicate only that which your audience wishes to hear: people’s mobiles are very private space, and permission marketing in this medium is a must. The most interesting use of this medium so far is location-based marketing.

The jury is still out on the marketing uses of social networking.7, 8 Of course social networks, like the rest of the web, should be monitored and comments dealt with, but whether there is value for a company in creating its own Facebook or Twitter entry, and how, remains an open question.9

Gradually, with the growth of direct marketing, the traditional advertising media – Press and television – have responded to the changing market-place. Off-the-page ads brought direct marketing to the heart of the newspaper industry, and spawned the first Sunday colour supplements. Advertisers in the Press and on television learned to include in their ads (however much their primary function might still be brand-building) first a telephone number, and later a website address, to open direct channels of communication with consumers.

And that is no longer enough. Not only are to-day’s consumers not just the passive recipients of messages distributed by advertisers, they want, many of them, to contribute, positively or negatively, to the brand image. A wise advertiser will give them every opportunity to do so, and listen and respond to what they have to say because they will say it anyway, and if not through channels which the advertiser provides, then in less immediately visible and perhaps more damaging ways.

With the explosion of new technology over the last twenty years, marketers have found their way onto one new platform after another – database, website, email, mobile, social networks. What they are now learning – too often the hard way – is that it is not enough to set up advertising programmes for each and every medium, old and new, or even to open channels of customer engagement in each. Consumers who have something to communicate will use whatever channel is most conveniently (from their point of view) to hand. Therefore the first requirement of every advertisement in any medium is to present a brand image that is consistent across all media, and to offer options for customer engagement that will facilitate a seamless (i.e. media-neutral) dialogue.

The much-heralded convergence of technology and of media (computers and television, news media and websites) will make this both more obvious and simpler. But there will always be advertising in print media and on television; there will always be a place for direct mail. The one essential is that these ‘old’ media recognise the need to co-operate with each other, and with the new kids on the block, in integrated campaigns and in integrated contact with customers and consumers.

Summary

So, brand marketing conveys what manufacturers want people to know about products and services. Direct marketers use behavioural and transactional data about their customers and prospects, their interests and preferences and willingness to engage in a continuing relationship. Advances in data processing, analytics, list compiling, data mining, digital asset management, have turbocharged the direct and digital marketing process with powerful new tools for executing marketing campaigns to achieve the highest returns.

Today, marketing spending is clearly shifting into direct and digital, and within direct marketing, the migration from traditional addressable channels, such as mail, to new digital channels, such as mobile, is accelerating. An integrated10, one-to-one approach to marketing in online and offline channels uses many of the same fundamental principles as direct marketing: testing response variables, analysing marketing data, and adjusting to improve effectiveness, especially in ongoing relationships. 

Each step in the evolution of direct marketing — from mailbox to telephone, to personal computers to mobile devices, has broadened the scope and economic impact of direct marketing. Proven direct marketing tools — addressability, personalization, and direct response — add value in every channel, from email and postcards to catalogs and websites, from text messages and television to online video, social  networks, mobile, addressable digital services, and beyond. From online to offline, digital-direct marketing is all about one-to-one.

Just as the most effective marketing has always been.

Derek Holder,
Founder and Managing Director of the Institute of Direct Marketing


References:

1Ecclesiastes 1, 9
2See S. Barratt et al ‘Connected Commerce: The intersection of e-commerce and e-communication’ in the Journal of Direct, Data and Digital Marketing Practice (JDDDMP) Vol 10 No 3 pp.249-261
3See A. Freen writing in The Times 31/8/09, p.39 ‘The company behind a domestic cure-all asks…’
4See M. Chui et al ‘Six ways to make web 2.0 work’ in The McKinsey Quarterly 2009 No 2 pp 65-73
5See M. Benjamin ‘Customer feedback’ in Customer Strategy Vol 4 No 1 pp 23-26
6See I. Phau et al in Direct Marketing: An International Journal Vol 3 No 2 pp.97-108
7See Neil Woodcock at http://j.mp/c19WQv, but also the posts following this blog.

8See A. Freen, writing in The Times 3/12/2009 p. 9 ‘In your Facebook’
9See D.L. Hoffman, ‘Managing beyond Web 2.0’ at mckinseyquarterly.com July 2009, especially postings in response.
10 On the need for channel integration, see Michael Peterson et al in JDDDMP Vol 12 No 1 pp.10-15
11Also B.Caemmerer  ‘The planning and implementation of integrated marketing communications’ in Marketing Intelligence & Planning  Vol 27 No 4 pp. 524-538.
12Also P.Chatterjee  ‘Multi-channel and cross-channel shopping behaviour…’ in Marketing Intelligence & Planning Vol 28 No 1 pp. 9-24