Monday, August 31, 2009

A SPECTACULAR email promotion

One of the big challenges in email/digital marketing is the disconnect between brand marketers and direct marketers. Each group is usually separate and often leave lit bags of dog poo on each others' doorsteps.

The sad thing is that this doesn't have to be the case - email and direct can exceptionally reinforce the brand, by delivering knockout content that engages the consumer's sense of connection with the brand.

It's a synergy that does not happen often. So when it does we need to pay attention and give credit.

The other day I received an email from Wynn Hotels. I'm by no means a whale (casino parlance for rich people with a penchant for leaving behind large sums of cash), but I have stayed at the Wynn a couple of times. I think that two of the neon bulbs in the hotel have a plaque with my name on them. I like the Wynn - except when I have a $500 blackjack bet and one of their guests sticks on a 16 with the dealer showing a face card - but am (honestly) not what I would call super-loyal.

One of the great brand promises of the Wynn is that it's special - that Steve Wynn had a vision of gambling perfection, then built it. The question is, how do you fulfill this sort of high-end brand promise in an uncertain economic period ? Many brands resort to sales (long live the direct marketers!), which works in the short term but only cheapens the brand in the long term. On the other hand, not doing something to engage consumers besides fancy words, nice images and promises (hooray, brand marketers!) during a challenging time does not add much value to the brand.

Here's the email. Simple, but a powerful subject line.



It's a very simple email. It doesn't try to sell anything. It doesn't allow you to know the promotion directly from the email itself. Yet it entices you with an exciting and dramatic message - it's actually a great marriage of email and brand. The email doesn't try to do too much but instead completely reinforces the brand's promise of "special."

But the fun part comes next, when you click on the button. You can click HERE to see what's next (and totally screw up the total/unique open rates).

For those of you who didn't click, shame on you. I'm not going to send you to places you don't want to go! You would have seen a fabulous offer of private jet and hotel shuttle service from LA/Burbank to Las Vegas - all at a price that is more expensive than commercial jet service, but far less than private jet service (I know, I've checked). The Wynn took a special/unique service and made it reasonably affordable to "the masses". Rather than resort to straight discounting, they raised the ante for all hotels in Vegas by showing that - despite the economy - they are maintaining their brand identity of special.

This is a fantastic synergy between the power of brand ("special") and the muscle of direct marketing ("special to YOU".) One that we should see much more of, but often don't due to intramural squabbles and fear.

The marketers at the Wynn are to be commended. Even if they can't keep people out who screw up the blackjack tables!

Tuesday, August 25, 2009

I Hate Twitter - Part II (Revenge of the Twitterati)

Wow. Never quite expected the level of discourse that has popped up around Twitter...it's been an interesting search for Twitter-led results. The Twitterati don't take kindly to you telling them that their baby is ugly.

One of the recurring, yet subtle, responses to the initial post is "you're just an old-school marketer who doesn't get it..." - which, as a dyed-in-the-wool direct marketer, seems similar to saying "neener, neener, you're a wiener." It's a strategy that wasn't all that clever in grade school and does nothing to help advance the cause. As a marketer, I "get" what drives cost-effective revenue to my company. If the value of Twitter is undetermined, just say so! It's a lot better to position it as a tool of experimentation rather than an unknown "next wave."

The other strain of response is that Twitter is a listening device. Not to sound totally crass, but so what? Businesses have (at least in their minds) done just fine without leading-edge listening devices. What's the value of listening to your customers? If it's so great, then why are the research people shoved so far in the back of most companies' marketing departments?

The third line of response is that "it's new...", which is kind of funny when you consider that most social media decks talk about the amazing speed with which social media has been adapted. Kind of like having it both ways. You're right - it is new. And the face of these communications will probably change dramatically in the next 12 months.

To sum it all up, the jury is still out on Twitter. Way, way out in terms of effectiveness as a marketing vehicle. There are some successes, but they're small. People point to Dell and Jet Blue, with good reason - they seem to have Twitter programs that generate revenue. What both of those programs have in common is the releasing of cheap inventory...so itseems that Twitter does have a marketing use for unloading distressed inventory at the last minute.

It looks like the problem with Twitter is in positioning. People keep talking about it like it's the be all and end all of marketing. It's not. It's a tool. A small one, as compared to all the other existing marketing channels. One to keep an eye on...but one that - if you're not in the right position to make it work (cheap, last minute inventory and/or interesting news), will end up causing you to waste a tremendous amount of time.

Don't let your senior management bulldoze you into investing more in Twitter than you should...Twitter is like a 5 year old who can hit a golf ball really well. It might turn into the next Tiger Woods...but it's unlikely.

Monday, August 17, 2009

I hate Twitter

I hate Twitter. There, I've said it. I actually feel better. Better yet, I didn't tweet it - you had to come an earn this bit of insight.

There's a million reasons to hate (or maybe even love) Twitter. But I have only one reason - for the most part, Twitter just doesn't work for marketing. In fact, it's an incredible time and resource suck. I'm amazed people dedicate any time and resources to it at all.

I'll give you an example...

Ticketmaster has somewhere north of (conservatively) 20 million email addresses and has (drum roll please)...6,650 people following on Twitter. So for every 1 Twitter follower, there are 3007 emailable addresses out there, just waiting to be marketed to.

Now you could say (a) people HATE Ticketmaster, so why follow them, (b) Ticketmaster doesn't put any effort behind Twitter, so why follow or (c) both. Point taken.

Live Nation - another company in a similar industry - is actively encouraging people to sign up for Twitter. In fact, they have a contest running that is entirely fulfilled via Twitter. They also have more than 10 million email addresses. The number of Twitter followers (once again, drum roll...) 19,986. 1 Twitter follower for every 500 email subscribers. Oh yeah - how are they publicizing Twitter? Via email, of course.

The question is why...why do so many brands fail to deliver on the uber-promise of Twitter? How can Ashton Kutcher have millions of Twitter followers, yet Live Nation (who gives away free concert tickets!) have under 20,000? Here's a few thoughts...

(1) Twitter is not a marketing vehicle, but a news vehicle - Marketing messages (generally) are not news. However, the latest musings from celebrities/athletes/musicians are coveted by the popular press. Twitter allows people an unfiltered method of getting data. The more unique the data, the more appealing the tweet. Most marketing communications are not all that interesting. You may have an intern sitting there banging out "interesting content" for your followers but it's nothing you can't get from other, more ubiquitous sources.

Take a look at Zappos - over 1 million Twitter followers. Yet most of their Tweets have almost nothing to do with Zappos. Because the Twitter page isn't dedicated to Zappos at all, but to the tweets of Tony Hsieh, CEO of Zappos.

(2) Your brand has much less tactical value than you think it does - One of the big issues with brands is that - after a time - the brand itself becomes strategic. In effect, the brand gets separated from the product. Twitter is - at its best- an exceptionally tactical tool that exposes the lack of tactical power of your brand. Companies with "strategic" brands could spend as much time as they want building their Twitter presence. It won't matter. Open the window and throw out your money. Then Tweet about how you're throwing money out your corporate windows...that might work.

(3) Your customers are not as connected as you are - This is where marketers always, always, always get themselves into trouble - they don't market to their customers, but instead market to a small sub-segment of customers who resemble the marketers themselves. Let's face it, from a personal standpoint Twitter is a huge investment/waste of time. If you're in an environment where your customers are (1) addicted to their internet/mobile devices, (2) have serious pockets of time to invest (like people who travel a lot) and (3) are looking to consumer what you have to spit out (news, last minute inventory, etc) you might find some value in Twitter. Just because YOU can't wait to read Shaq's latest Tweet (and he is hilarious), doesn't mean your customers do.

(4) The number of Twitter followers you have means nothing - MC Hammer has over 1.2 million Twitter followers. So why isn't Hammer tour and selling out venues across the country? Because - much like their MySpace predecessors - followers don't mean buyers. Fallout Boy (a fine band) had over 4 million MySpace friends in 2007. The Police had about 20,000. Guess who did better on tour.

(5) Social Networking is Over-rated - The unifying factor in social media is just that - it's a social effort shared among people with at least some passing knowledge of and/or connection to each other. It may just be me, but people don't spend a lot of time in conversation with corporations. If they do, they are usually not the most friendly of chats. The goal is to get people to talk about you - not to talk AT people. Corporations are much better at talking "AT" rather than conversing "WITH" customers.

(6) People can sniff out fakes - Last year there was a campaign by Southern Comfort to build buzz around "So Co" by having a bunch of actors pretending they were being super cool and having a grand old time via drinks made with "So Co." Like "So Co" was their buddy or something. It was (in my opinion) one of the most aggrivating commercials on the radio last year. This year it seems to be gone - people sniffed out the fakes for what they were. Much like "So Co", it's kind of easy to spot when your marketing department is trying to build hype via Twitter. The excessive use of exclamations points are a dead giveaway!!!!!!!

(7) Twitter users suffer from early burnout - There seem to be two types of Twitter users - addicts and the exhausted. Addicts are easy to spot because they're the ones (like a junkie) telling you how great the Twitter high is. Exhausteds are people who have tried Twitter, gotten tired of it, and left (about 60% of new Twitter users become Exhausteds in the first month.) They're more from the "I tried (Twitter) in college...it just wasn't for me." As we all hopefully know, there are a lot more Exhausted than there are Addicts. Thankfully. The question is, do you want to spend that much time marketing to the addicts when they are probably going to find out what you have to say anyway?

I'm not saying that Twitter is completely useless...just mostly. If you have the magical combination of elements, you might make it work. But for most of you, it's time to put down the Twitter and back up slowly from your mobile device.

Tuesday, August 11, 2009

CRM - You call this a relationship?

I recently had a discussion with a marketer. They wanted to change the way they marketed from an "advertising" approach to one that centered on maximizing the relationship they had with their customers. That's right - from direct marketing to CRM marketing.

It got me to thinking...is this the right nomenclature for us as marketers to use? What about our interactions with consumers has led us to believe that we've got a relationship with them? Does the fact that they bought something from us launch them into relationship land? Can we even exert any control over the "relationship" using only communications? Couldn't our "relationship" have been a one time thing where everyone gets what they want then never talk again?

Rather than sit and have a talk about semantics for which I was ill-prepared, I decided to do some research. Not about vendors or what the industry thinks about CRM, but the source of all things true, the Internet. I Googled (side note - when you type "googled" into Blogger, it comes up as spelled incorrectly...that's hilarious) "Keys to A Successful Relationship". I looked through the first 10 or so articles.. here's the collective wisdom. I've narrowed it down to 4 because I'm long-winded enough.

(1) Communication - You have to have a strong, two way flow of communication. The problem is, marketing organizations have a distinctly one-way flow. If your organization does not have an active way to get your customers' preferences into your marketing decision matrix, your relationship is going to have communication issues.

(2) Honesty - You ever buy something, then find out there was something that just wasn't disclosed that made a big difference in your perception? Is your organization prepared to give customers all of the facts, both good and bad?

(3) Trust - Again, this is a door that has to swing both ways? For many organizations, this is just not the case. They spend millions of dollars proving their company is trustworty...but then won't let you return an item without a tremendous hassle - they want you to trust them, but they don't trust their own customers. Nordstrom is a great example of trust that has been built with customers. Walmart has built great trust that they will have the lowest prices. Live Nation's ticket guarantee goes a long way towards building trust into what has sometimes been a shady business. If your customers don't trust you, then they're ripe for the picking.

(4) Forgiveness - This is a hard one for many organizations to follow. Customers screw up - they buy a plane ticket for the wrong day, they're late on a payment, they may write a bad review about your company. You don't have to forgive them. But if you don't, you're essentially telling people that you'll have a relationship with them as long as they're playing by your rules...which is a pretty jacked up relationship.

When you look at these four keys, it's pretty clear that most organizations don't have the infrastructure to support true relationships, let alone relationship marketing. You can sit there and call your customer communications group a CRM practice, but it's a bit like putting lipstick on a pig - the lipstick is wasted and the pig ain't no prettier.

To have a true CRM practice takes an enormous amount of organizational commitment. If your organization is new to the idea, then be prepared to spend some money. Not just for the systems you'll need to put in place to drive honesty and communication, but for the additional costs you'll need to start trusting your customers...and maybe even forgive them.

Wednesday, August 5, 2009

The Mythology of Modeling

Time to take on one of the sacred cows of database marketing...the statistical model. Or - in the words of Mark Twain (or Benjamin Disreali, depending on who you believe), let's talk about "lies, damn lies, and statistics."

I've been involved with marketing models for more years than I care to remember. What I've learned is that modelers - even if they're not very good- seem to go unscathed when looking at the success or failure of a marketing program. Chalk it up to what I call "The Mythology of Modeling," where modelers are the equivalent of modern-day Merlins. Nobody seems to understand their "magic", so it's impossible to criticize them or hold them accountable. OK, maybe that's a bad analogy...here's another one. Modelers are like Rasputin, marketers like the Tsarina. All they have to do is stare at you and talk about KS Stats and you're done.

While I could not develop a model if my life depended on it (aren't you glad those situations never occur), I have come to recognize when you're about to be bamboozled by science. Here's a few things to keep an eye out for in evaluating models.

(1) Ignoring macroeconomic factors - most current day models use the "past predicts the future" logic in determining a modeling strategy. You take a sample from a (recent) period of time, then try and glean knowledge and predict the future. The inherent assumption is that the macroeconomic conditions during your observation period will hold true for the future. Problem is, that's not often true.

A while back I had a modeling company come in an build a model for me, on spec. Their logic was "this model will be so awesome, you will BEG us to sell you more names." I mailed the file (as a test, of course). The model fell on its head. To which the modelers said "you must have a bad sales process and screwed up the implementation." While blaming the client is usually the first choice of modelers everywhere, the fact is that the underlying economy was changing - rapidly. The model was build upon a series of economic assumptions that were simply no longer true. The model was DOA, due to the failure of the modelers to recognize that times they were a-changin'.

(2) Statistical correlation isn't everything - Modelers are in love with correlations. There are a great number of variables that are highly predictive, but so tiny in size as to be almost irrelevant. If you allow these variables into your model, you'll end up with a highly predictive model that maximizes efficiency at the expense of size. While that's nice, size still matters to most marketers. Plus, variables are sometimes too big to have "high" predictive power, so they're eliminated from the model - again at the expense of actual business.

I had a team try to build a statistically predictive music model...when we ran the model, it came up with roughly 75,000 names...problem is, I needed about 200,000 to make the program work. They were quite satisfied with their work and quite surprised when I thought it was sub-standard. Being the client, we know who was to blame...

(3) Interactions are ignored - Data points are great, but the interaction between those data points can contain real value. For example, if you drive an SUV, that's good to know. If you drive an SUV and have 4 kids, that can have a different statistical impact than someone who drive an SUV with only one kid. The 4 kids are about room enough to get everyone everywhere at once. The 1 kid is (more likely) about safety.

The easiest way to figure this out is to run a CHAID (or your favorite interaction detection technique) analysis, then dump those variables into your favorite statistical program. If at least one of the interaction variables does not appear in your final model, your statistician should have some serious explaining to do.

(4) The wrong goals are in mind - More often than not, statisticians will deliver models that deliver the maximum statistical advantage. Problem is, you know -as a marketer - that in the "imperfect" universe there are still a whole bunch of sales. Think of it this way - in most models there is a pretty steep curve. But if you only did, say, the top 20% (because the model told me this was the maximum point of efficiency), chances are you would be cutting out about 50% of sales. That's a bad thing. Your goal as a marketer is not to deliver maximum statistical efficiency, but to deliver maximum business efficiency. So a model should tell you - in business terms - where you really cost yourself in terms of target measurement. Where does your cost per acquired account (or whatever your key variable happens to be) go so far underwater to make the whole effort not worthwhile. THAT's a starting point for where you want to cut off the model...

(5) Using modelers who are inexperienced at business - Statistics are hard. Hard to create, hard to use, hard to understand. As a result, models have fallen into the hands of not the most socially ept people in a company. Not everyone, of course, but in all probability the one who is working on your model. The aggravating thing is that - the less experienced in business a modeler is - the more arrogant they are about clinging to statistical correctness. Sometimes close enough is good enough...but it takes business experience to figure that out. You may get lucky and find a youngster who is good at math, good at business and good at accurately communicating results to management. Then again, you might have a pony in your yard when you get home today.

Which leads to...

(6) Marketing is not deeply involved with the process - As a marketer who is about to use a statistical model, if you're not invested in the development of the model it's your own fault. You're the one responsible for the results - you need to roll up your sleeves and dig in. You don't need to know jack about stats - you need to be able to lend business guidance to the people developing the models. Many of the people I know who develop models do not think like marketers - they're not trained to. That's YOUR job. If you abdicate it and the model fails, bad on you. It's not all that hard to understand the basic concepts. Get in and dig around.

Statistical models are not bad. In fact, they can be quite helpful. But you have to view them with the same vigor you would look at other aspects of your marketing programs. That way you can see your modelers not as someone whose stare can paralyze you, but someone with an interesting way of looking at you...