Category Archives: Permission Marketing

Is the 1-to-1 future here yet?

1-to-1_book_coverFifteen years ago a single book changed the course of marketing. The 1-To-1 Future had been released by the consulting duo of Don Peppers and Martha Rogers. I was fortunate to hear Martha speak in 1994, as she toured heavily to promote the book’s revolutionary paradigm.

(Although we never met, I am to this day indebted to her for inspiring me to move my career from a direct response to a digital marketing focus. She also, during her talk, introduced me to the jargon-y word paradigm. For that I’m not so grateful, and do my best to use this MBA-scented doozy of a word only with heavy irony.)

The book, and the new “paradigm,” quickly generated its detractors. But much of the book has withstood the test of time.

Remember, 1994 was practically the digital stone ages. The year the book hit the marketing mainstream, was a time when frequent flier programs were still in their infancy, and the concept of “free, advertising-supported email” was one of the few internet developments worthy of mention in the first edition of the book (Hotmail was founded three years later — and went viral shortly thereafter — gobbling up market share until purchased by Microsoft).

Pioneers are often criticized for events beyond their control. I suspect that Peppers and Rogers felt more than a little queasy as they watched one corporation after another buy into large, expensive, and mostly doomed customer relationship management (CRM) initiatives. Most of the initiatives were predicated on grossly unrealistic expectations.

I predict that current and future investments in this type of marketing intelligence will deliver on the vision of this seminal book.

The truth will bear out, and we’ll see that the problem with the “one-to-one future” wasn’t the vision itself, but a dearth of analytical vigor coupled with poor training for the people actually expected to use the systems.

What will be different now? I see three things:

  1. Post-boom sobriety — If Pepper and Rogers had been doing business in a less explosive business environment (read: abundant venture capital mixed with what Greenspan aptly called “irrational exuberance”), their message would not have been so quickly and rudely out of fashion.
  2. The growth of small business — Good CRM must be wired into every part of an organization. That is nearly impossible in large, hide-bound companies. Expecially if they have two dozen databases that need to talk to each other. (Yes, two dozen. I wish I was kidding.) Thanks to the phenomena of SaaS (Software as a Service), cloud computing and good ‘ole Moore’s law, powerful business intelligence is now within reach of small and mid-market businesses. But that just the technology. Here’s the biggest difference:
  3. A truly plugged-in workforce — By far the largest barrier to successful implementation of automated systems is getting the workforce to recognize them as their friends. This is happening more today, as a new generation is becoming more familiar with the vast world within their web browser. It’s an entirely new way that small organizations are growing into bigger ones that I wrote about in my post on networked leadership.

For these reasons I’m optimistic about a future that fulfills Peppers and Rogers’ promise.

No, it won’t exactly be “one-to-one.” Even Peppers and Rogers conceeded that economies of scale call for more of a mass-customization of contacts and segmentation than the portfolio-based management they first discussed. But this “future” will bring us to the same destination.

It will be a scalable way to extend a business into niches as narrow the miriad reasons we choose one brand over another. Fifteen years ago I thought this book might be on to something. In spite of the economic jolt we’re experiencing (or maybe even because of it! ), the last year has assured me I wasn’t wrong after all.

B-to-B Viral Marketing Case: Powerboat sales as a window to our current economic squall

Let’s say you’re a company that mines data in a quiet niche — one not known for analytic vigor. You’ve been doing it for years and do it wonderfully. For clients who appreciate your chops, you’re a godsend. But these clients are exceptional in the traditional retail business sector you serve.

How, how do you spread the word about your super-segmented lists and dead-on business intelligence services? Intuition says you find something to “go viral” around. But that requires some degree of topical relevance, if not outright sensationalism. How do you enliven something as dry as, say, boat purchase behavior (pun intended), to give it the life necessary to grab headlines?

The answer is what Info-Link does. They periodically publish one of the more pedestrian metrics they track: Quarterly sales in bellwether states. Below is their latest Bellwether Report, available on their site and distributed via a simple but effective opt-in email:

Info-Link Bellwether Report

You can explore various sales statistics by quarter (use the pull-down). Yes, the news is depressing. But it’s undeniably informative. And share-able. What information can your business repackage in such a way that people will want to share it?

You to your cell phone: I’m feeling lucky

If you want to watch your friends hyperventilate, just suggest that someday soon marketers will be monitoring their behavior on their cell phones, both in terms of buttons pressed on the device, and places the device is carried. Be kind, though. Resist the temptation, and don’t add that it may already be happening. Right now.

And so you don’t freak out right along with your friends, let me reassure you of two things:

  1. I am not doing this monitoring. No way. Honest.
  2. Those who are don’t care about you. They use totally anonymous data.

They have no interest in what you’ve been up to — if it doesn’t involve legal commerce. Ultimately, all they want to do is make your cell phone more valuable in your pursuit of the next purchase.

Mediapost recently interviewed GoTo CEO Lee Hancock about the future of behavioral targeting in the mobile phone space.

He talks about a world where your cell phone serves up relevant ads and opportunities the same way that (for example) Gmail, the email account from Google, serves us ads based on keywords embedded in our messages. In both cases, an automated process eavesdrops on you to a certain extent, but only in the service of customizing the user experience. It’s a good thing. And, I’m sure, this cell phone behavioral profiling will be something consumers can opt out of once it is refined and deployed for real.

How would this particular type of monitoring improve a cell phone experience? Here is Mr. Hancock’s example:

One way [that] interest, behavior and location [data] could work seamlessly together is: Say someone has downloaded Madonna song ringtones and goes to the movie menu frequently. An entertainment company promoting a new Madonna movie can target based on that content and behavior, but also focus on the specific movie theater near where that user is. Then a Starbucks nearby having a special Frappuccino offer can target their promotion or a Barnes and Noble nearby the theater can promote a new Madonna coffee-table book. Very powerful stuff, but obviously something that needs to be done responsibly.

My take on this is that it shows promise, but I wonder how these messages will be presented to the user. We know that cell-based ads are not drawing strong responses when they are embedded in a phone’s web browser. And I, for one, would not want an SMS (text message) ad showing up on my cell phone every time I pass a Starbucks or music store. No, I need to initiate the suggestion process and be ready to consider the opportunities it presents.

A Modest Proposal

What if my cell phone had a single, additional button. When pressed, it “rewards” me. The reward it sends my way would be customized, as Hancock describes, based both on my behavior and where I am physically.

Please bear with me a moment. I’m going to make another Google comparison to illustrate my point.

When that search engine was new, it usually delivered more relevant and correct search results than competing search engines, including the goliath Yahoo! directory.

Google was boastful. The search page ballyhooed this advantage by providing two “Search” buttons. These buttons remain to this day. One delivers the top ten results, as most other search engines do. The other button is called, “I’m Feeling Lucky.” It takes you to the top result. Period. If you’re disappointed, you always have the “Back” button. But more often than not — especially back then, when the web was a smaller and simpler place — you got what you wanted.

That Google button is not something I use, but I’m sure for many it is like the food lever in Skinner’s classic box we learned about is Psych 101. That lever delivered a pellet of food each time it was pressed. It trained lab mice to associate a reward with this action.

Now imagine I’m the mouse — er — consumer. I’m in a mall, let’s say, and I’ve got a few minutes to kill before my wife returns from a shopping sortie. And I figure: What the heck. I press the button on my phone … the “I’m Feeling Lucky” button. And I receive via SMS a list of offers that I am likely to welcome. I may even act on one or two of them.

Will this be a game-changing feature on my phone? No.

But like Dr. Skinner and those lab mice, the behavioral targeting geniuses will have caused me to associate the gathering of this type of data with a positive outcome: The delivery of customized goodies that I truly welcome.

The “Lucky” button will connect me in a far richer way with my surroundings. I’ll receive merchants’ offers, yes, but also, possibly, news about nearby friends who have also opted into the system, or even tips on events in the neighborhood that may have passed my notice.

I like it. The button feels right to me.

How about to you?

Would you press such a button? Are you feeling lucky?

In b-to-b marketing, fear and greed are all you’ve got

Years ago a mentor told me that in consumer advertising, there are many motivations for someone to act. But when you’re talking to someone about a product or service for their business, the motivations are less varied. In fact, they boil down to two:

  • Fear
  • Greed

Period.

That was nearly 20 years ago. A lot has changed, but I cannot see any evidence that this has changed at all. Your thoughts?

Data mining: Finding an arsenal in a bunch of dry bones

In the classic Stanley Kubrick film 2001: A Space Odyssey, based on Arthur C. Clarke’s book of the same name, prehistoric Man has a good day at the office when he realizes how to use an animal femur as a weapon. The implication is that this moment of invention bestowed upon our ancestors a competitive advantage.

What I love most about my job is being a part of a team that has these same “Aha!” moments. Quite often we make newer, better tools that enable us to go out and kill our suppers. How cool is that? 

Even cooler is how the lines between disciplines blur, and we have invention mash-ups. Because we are involved in direct marketing and research as well as interactive projects, we get to invent in those areas as well.

Next week I’ll write about just such an invention involving geomapping. But today it’s analytics, one of the more fertile areas for innovation — and improved ROI — in business today.

I interrupt this story to recommend a free webinar on gaining a competitive advantage through analytics, put on by the American Marketing Association and Aquent (thank you, James Gardner, for the head’s up!). It takes place on October 31 and covers topics every marketer should be familiar with.

3D BarcodeThe analytics “invention” I describe below came from a conversation I was having several years ago with Mike Czerwinski (a co-worker in a prior life), who is one of the smartest people I’ve ever met. Too bad he squandered all that brainpower by getting a PhD in mathematical physics. I joke of course. His scientific background and ceaseless curiosity help him mine data in ways that are sometimes quite unexpected.

Over a beer, Mike and I were contemplating the barcodes on the back of Wisconsin driver’s licenses. They contain all the written information on the front of the card — far more than name and mailing address. The information contains height, weight — even eye and hair color. As Mike might put it, many data points.

This led to the discussion of nightclubs. It’s a very competitive industry, where your profitability hinges on the caprices of a community’s young and social. Significantly, Mike and I had both just read Malcolm Gladwell’s The Tipping Point.

I can’t speak for Mike, but I certainly know that I was looking with a fresh set of eyes, seeing everywhere the social epidemics that Gladwell describes. More importantly, I was ever-wondering how to find Mavens and Connectors. These, according to Gladwell, are the few who influence the many. They can be found at the head of most consumer stampedes, and are to be courted and coveted by marketers — if they can be identified.

How to identify them in a nightclub? If you could see these vectors of influence, and offer them free stuff (drinks, a party room for a special occasion, etc.), they would reward you by drawing their many friends with them back to your club again and again. And if you owned a number of nightclubs instead of one, you could find Connectors or Mavens who frequent one of your clubs and coax them and their loose posses to another, on a night when that club needs the business.

Most importantly, you watch the frequency of their visits. Your club could be packed, but if these influencers (as they are often called in word-of-mouth advertising) have stopped attending, your business is about to plummet. Their departure can be a leading indicator, which can help you make decisions about advertising, staffing, purchasing — every part of your business.

But how to find these valued customers? The answer, as it occurred to us, was the scanners that nightclubs use to document, upon entry, the legality of their patrons. Because being caught with under-aged drinkers can shut a club down, entrants are often handing over their licenses to an attendant who runs the card through a video scanner. I suspect that the typical scanner just takes a picture. It doesn’t actually capture the data. But it could. Patrons give up this piece of privacy for the privilege of partying at a club, and in so doing hand over an opportunity that Mike and I suspected was being overlooked, like a pile of dry bones.

What if the database of patrons was analyzed daily? We wouldn’t be looking for the most frequent patrons (necessarily), but for those loose groupings of people — those clusters — that show up frequently in the line of ID cards. Each cluster would be like a solar system in a nightly star map of patrons. And each planet in these solar systems would invariably orbit the same recurring Connectors and Mavens.

And guess what? You’d have these people’s mailing addresses. Once you identify these influencers (or suspected influencers — you can afford to be wrong occasionally), you’d mail them offers that really matter. A mailing to a few hundred people could potentially move a thousand or more partiers to your establishment when you need them the most.

If you know of anyone applying this idea, please let me know. It’s a concept that still needs to be tested, but I think it could have tremendous potential. Click to view a larger version of this mapIn the meantime, here is a social map that charts the frequency that bands play at certain nightclubs. The clubs are colored according to type (blue=cover, red=original). Lines between clubs represent the number of bands that played at both clubs over the 18-month time period. The size of the clubs’ dots indicates sharing of bands. To get the full effect, and to read the whole story, check out this report with a time-lapse animation. Although the report suffers from lack of clarity, it does have some interesting observations.

Review the graphic and you’ll notice that the cover clubs don’t book the same bands as each other (the blue nodes are smaller) while the original clubs do share the same talent (the greater sharing of bands over the period increases the size of the red nodes).

I think you can infer from this that cover bands, which tend to play genres of music (e.g., Disco, Grateful Dead / Jam, Modern Country), tend toward a few clubs that fit this style of music, while a greater “genre” is new, original music. This material needs to be played in more of a circuit of clubs, ala vaudeville. Back to Mike’s and my invention, I think it would only work in the red clubs, because sharing of bands also means sharing of patrons, who follow the bands. Or, of course, the idea would work for nightclubs featuring no live music at all.

Like much in academic studies, I see little immediate business value to this Boston College study, which in some ways states the obvious. But it makes for an interesting view of the nightclub scene. And who knows … it might fuel your own beery inventions.

A message to Mike: We really need to go out and get a beer sometime. I miss the shop talk and rambling inventions of the four of us — you, Kevin, me and Guinness. Call me.

You have no excuse with these new ways to read RSS feeds, from Microsoft and Google

Once adopted by a critical mass of internet users, RSS feeds will change interactive marketing permanently and in a big way. I predicted that the phase shift would happen when Microsoft releases the new Vista operating system, in the spring. Published reports suggest that the sea change begins much sooner, as in today. That’s when Microsoft’s new version of Internet Explorer (IE) begins distribution through free downloaded upgrades.

Here’s how Steve Rubel of Micro Persuasion reports this news in his blog yesterday (The Day the Entire World Gets RSS):

As more people around the world start reading RSS feeds, big things will happen. [The orange RSS button on the new IE toolbar] will force everyone to begin integrating feed communication initiatives in their marketing and PR programs. News and blog posts are just the beginning. Couponing and all kinds of other communiques will go into feeds, as well as ads and more. That little orange button might look small, but boy is it big.

If you’re a marketer who (1) hasn’t started using RSS yet, and (2) doesn’t use IE regularly, you can still experience what RSS can offer. And you really must! Try the new, free Google Reader. That’s what I use and it’s terrific. Gina Trapani in the excellent blog LifeHacker.com compares this new feed reader to Bloglines, and she agrees that Google, although sometimes criticized for lackluster product introductions, really got it right with this recent product upgrade.

I have a theory that more people today will be setting up a new Google Reader account than ever before. Why? Because Microsoft has officially entered the RSS arena. As usual, Microsoft’s involvement will change everything. And that means that many who use Firefox or other IE competitors will realize that they can no longer sit on the sidelines and had better see what this RSS stuff is all about.

The odds are stacked against this podcast advertising pioneer

I admire what Podbridge is attempting to do. They seem to have taken the lead in monetizing podcasts. I doubt they will succeed, though, unless other conditions change and change fast. Podbridge has created a podcasting advertising network, one that promises to match audio ads to podcasts that you download via iTunes (and, eventually, elsewhere).

Ads would be fed to you randomly along with podcast content. The ads, which would be dynamically stitched onto the podcasts, are served up based on your age, gender and location (such as ZIP code). Nice idea, but …

My skepticism has to do with whether people will volunteer this information (age, gender, location) to receive something that they are currently accustomed to receiving for free, and mostly free of ads.

Much more logical (but logistically challenging) is to follow the ad model that Podbridge claims to be mimicking — that of magazine advertising.

In this alternative, each major podcast producer would receive ad insertions and interweave those ads with their content. This wouldn’t provide the flexibility and customization of regional-, age- and gender-based targeting, but it would talk to people based on their enthusiasms. For instance, DVD rental ads would be placed on podcasts such as Filmspotting (as they are now, for PeerFlix).

These ads could still include Pay-Per-Call ads supported by Ingenio, as Podbridge is currently planning. It’s a brilliant use of this phone-based ad concept, which was first introduced and tested in limited Yahoo sponsored listings.

This alternate business model also allows for the strength of product placement, something that started with the early days of radio and television, and has found a new life as a way for advertisers to get their products in front of viewers who use DVRs to blaze past television progamming’s commercials.

True, this lack of scalability makes it a less-profitable business model, since podcasts are typically today such a Long Tail phenomenon.

But the dearth of consumers willing to opt-in to receive ads makes the Podbridge concept fatally flawed in my opinion. At least until there is a critical mass of premium content podcasters who will only distribute their product with Podbridge-provided advertising. That day is a long way off.

Lessons learned about RSS feeds

What are the lessons to be learned from Facebook’s recent dilemma? This college online social network has struggled this week to quickly deal with an unprecedented backlash against their new RSS distribution of profile changes.

Lesson #1: People can’t be trusted to think through the consequences of posting things about themselves on the internet (big surprise!)

Lesson #2: RSS feeds are a powerful new information distribution channel that we — as an online society — will need to better understand, in the same way we needed time to understand email and web sites.

The power of RSS will someday soon be harnessed, and that power will further propel and advance marketing technology. Until then, prepare, as Facebook did, to be surprised by unintended consequences.

Email newsletters still excel at customer retention and cross-sales

With all the recent noise about new online communication tools such as user-generated content and pushing content through RSS, we shouldn’t forget that some tried-and-true tactics aren’t going away any time soon. Take the the opt-in newsletter, particularly one that is customized to a recipient’s specific interests and tastes.

I challenge you to name an online tactic as powerful as a well-done opt-in email newsletter to draw visitors back to a web site or drive sales across a company’s complementary product offerings. This technique truly has legs.

Sure, it’s easy to see where email newsletters work in categories such as online fashion apparel and leisure travel. After all, is there anyone who hasn’t opted-in at one time or another to a travel site’s “hot deals” email?

But a truly enduring marketing tactic has the ability to surprise us — to show up and shine where we’re least expecting it. The email newsletter certainly has done this for me.

To my knowledge, one of the most effective opt-in newsletters around is in a category of services that no one ever wants to use. That category is healthcare.

Private Health News provides private labeled emails that a hospital or other care provider can use as a way to deliver news about its own offerings. What makes this newsletter so effective is the the fact that consumers truly appreciate receiving it. That’s due to theses two factors:

  • The content is customized
  • The content is trustworthy

Consumers sign up for it by visiting the site of the provider (let’s say it’s “General Hospital”), and then selecting topics of interest. This customization makes the newsletter unique to each households’ needs, with a selection of over 25 health topics from Blood Pressure to Breast Cancer, Sleep Disorders to Stroke Rehabilitation.

When the newsletter arrives, it reports the latest research, originally seen in articles from over 350 prestigious healthcare publications. The publications include the Journal of the American Medical Association and Lancet. Interspersed with the news — which, mind you, is tailored exactly to a recipient’s current health concerns and interests — are brief bulletins and ads about General Hospital events and offerings relevant to that topic.

For instance, along with a Men’s Health article there might be a notice of a free prostate cancer screening held at the hospital in three weeks, along with a link to the place on the General Hospital site where you can sign up or get more information.

I first met Dan Ansel, the president of Private Health News, six years ago at a healthcare marketing conference in San Diego. When he described his fledgling product to me, I immediately saw how this was the part of the puzzle I was struggling to deliver to my healthcare clients.

Dan’s product was a way to ensure that the valuable minority of consumers who visit my clients’ sites — and care enough about their families’ health to be proactive — can receive, every month, several excellent reasons to come back for more information. In other words, it was a way to retain prospects and patients, and to cross-sell to them wherever appropriate.

Has it worked? My experience and those of my clients says it has. What’s more, Dan has made sure to periodically survey newsletter readers, to get the user’s perspective on its effectiveness. Here are a few of the results of his latest survey, which had a sample size of 10,157 newsletter subscribers:

  • 99% consider the health information in their newsletter valuable, with 25% saying it was “very valuable”
  • 75.6% have the health issues to which they subscribe or are making decisions for loved ones with those health issues
  • Respondents are making healthcare decisions for an average of 3.3 people
  • 67% indicate a new awareness of the provider’s services as a result of receiving their newsletter
  • Over 13% have used these services because of that awareness

That last metric is the one that always blows me away. Every time the survey is conducted, more that one out of every ten people surveyed said they used a hospital’s services because of awareness they gleaned from the newsletter.

If only half of those people are telling the truth, that means over 600 individuals in this relatively small sample went to the provider of the newsletter for a possibly very profitable high ticket item, all thanks to an email newsletter.

I’ll be returning to the wonderful marketing double whammy of customization and credibility in future examples of online marketing excellence. But I’m not sure any other online technique I’ve encountered has the same high level of ROI as this surprising opt-in newsletter that sells people services they would prefer to never think about getting in the first place.

Girding for the looming battle for subscription space

Thank you, Seth Godin, for again saving the day. In early 2007 the next major upgrade of Internet Explorer (IE) will be released. Among its features is an easier way for IE users to subscribe to sites via their RSS feeds. I’ve struggled with how to explain to clients (and many of my readers) the urgency of acting now. If your site warrants it, immediately set out to begin adding an RSS feed that announces your new content, and then promoting this site feature like crazy before the competition for user subscriptions really heats up.

In my attempt to find the right metaphor to illustrate the situation, I’ve been reminded of a comment that Al Gore made in a pre-election interview in 2000. The interviewer asked this clearly very studious politician what he has lately been studying. “Semantics,” he said. He explained that this digital age has left us with a dearth of ways to communicate its concepts. Survival hinges on our society retooling its language to fit this new reality. A group of people, whether they are a corporate board or a national electorate, cannot affect change on something that they can’t discuss accurately.

The best I’ve been able to do in my attempts to set the scene is to quote those who have predicted that RSS — this lower-risk (from a privacy perspective) permission marketing alternative to the opt-in email — will quickly trump that tactic in user popularity and marketing effectiveness.

Forget about “bookmark this page,” I’ve stated, “the RSS subscription is a more aggressive bookmark — one that hollers when the ‘book’ it is ‘marking’ has added a ‘page.'” Notice the metaphors. They are all dusty; descriptively hidebound. They are semantically crude, mostly because they lack the dynamic element that push technology delivers.

Mr. Godin found a better metaphor. It was hiding in his iPod.

He calls it “shuffleworld.” Seth points out that the shuffle feature means that the muchness of a hard drive bursting with songs empowers the listener, but also makes it difficult to listen to a favorite song, or even artist (he mentioned Elvis Costello — Mr. Godin is a man of good musical taste!). If I weren’t tiring of comparisons that are soooo last millennium, I’d say that this shuffleworld phenomenon has hidden any particular song like a needle in a haystack.

His point: Web sites are hidden in a similar way, and can only rise to the surface when they are voted worthy of attention on sites like digg, or when a new headline is pushed into an RSS subscriber’s consciousness.

So many sites, and so little browsing time!

Subscriptions help. But any particular user can only subscribe to so many feeds before being overwhelmed with their new content announcements. IE will make subscribing easy for the typical user, but it will also make unsubscribing, or not adding new subscriptions, just as easy.

Okay, web marketers. You’ve got a metaphor to grasp the problem. And you have a deadline. Wake up now. Add and promote those RSS feeds before your best prospects are too overwhelmed with other feeds to consider adding yours.