The Engaged Customer

The New Rules of Internet Direct Marketing

Hans Peter Brondmo

• Publisher: HarperCollins e-books
• Year: 2009
• ISBN:
  9780061741708
• Topic: Business
• Subtopic: Marketing
• Index: Business

In the age of the Internet, how do you keep your customers coming back--again and again--when your competitors are always just one click away? How do you turn casual, anonymous surfers into profitable, "engaged" customers?

The answers to these questions can be found in The Eng@ged Customer, written by Hans Peter Brondmo, one of the Internet's best known and most successful direct marketing experts. In this new marketing classic Brondmo introduces readers to the new rules of Internet direct marketing and shows them how to use email to build service rather than marketing relationships.

A visionary in both the technology and marketing arenas, Brondmo has shown more company executives than anyone how to build lasting, profitable, one-on-one relationships with customers on the Internet. His client list includes such household names as Palm, Hewlett-Packard, Victoria's Secret, Amtrak, Wells Fargo Bank, OfficeMax, Wegmans Food Markets, as well as such Internet leaders as CDNow, E-Trade Women.com, Petopia.com, Sparks.com, and eBags.com.

The Eng@ged Customer makes Brondmo's expertise available to executives, managers, and marketers in both Old and New Economy businesses. The book combines a strategic perspective with tactical guidance, showing where and how to invest in order to build an Internet direct marketing program, and how to plan, develop, and implement your program for maximum success.

While sending email messages to customers may sound like a simple process, retailers and marketers all over the world have discovered just how difficult it is to do it well. Let Brondmo show you how to

• design email communications and marketing programs that have your customers complaining if they don't hear from you
• understand and manage customer information so that you can "get to know" each and every customer--even if you've got millions
• avoid spam and the potential nightmare of privacy violations
• anticipate the organizational impact of customer-focused Internet direct marketing
• define, measure, and track your success.

Whether you are an executive or a manager, The Eng@ged Customer will show you:

• how to keep your customers coming back
• how to rise above the increasing Internet clutter
• how to become the trusted voice that your customers rely on.

PART III

IMPLEMENTING CUSTOMER DIALOGUE

CHAPTER 6

ESTABLISHING A FOUNDATION FOR INDIVIDUALIZED CUSTOMER COMMUNICATION

THE BEST EMAIL MARKETING PROGRAMS deliver very different messages to long-time customers than to first-time prospects. This may seem obvious and intuitive, but you’d be surprised how difficult it can be to implement.

It all starts with getting to know your customers. Simply put, you can never know them well enough. The more you know their interests, preferences, and personal profiles, the better you’ll be able to deliver timely, relevant, and interesting information and offers. The more timely and interesting your information—in other words, the more value you provide—the more your customers or prospects will look forward to hearing from you. That all makes perfect sense, but what does “getting to know your customer” really mean? Let’s take a look at a wonderful example.

N2K’s MyMusicBoulevard (MMB) program encouraged users to sign up and tell the company a little about their musical interests and preferences. In exchange, MMB sent individually tailored, weekly emails with information on new releases from favorite artists, concert announcements, special deals, and industry news. A customer I know signed up for the program in the fall of 1998 and quickly began looking forward to his weekly emails. He actually wanted to buy a CD from MMB every week and was disappointed if a mailing didn’t contain an offer or personalized recommendation that matched his interests. Price didn’t matter (within reason). What did matter was convenience and assistance with his music selections. For the entire time he was signed up for MMB he didn’t buy a single CD in a traditional retail store, nor did he make any purchases from other music-related web stores. And why should he? MMB knew him, they knew what he wanted, and they made it extremely convenient and fun to do business with them.

Giving your customers a structured forum for sharing their interests and listening to what they tell you is only part of the process of getting to know them. You also need to observe their behavior. As I’ve mentioned earlier, before N2K developed MMB it carefully analyzed six months of customer purchase behavior to determine which categories customers bought in, how often they bought, how much they spent, and when it had made their last purchase. This enabled the company to figure out what types of customers it had and helped it develop an effective contact strategy that would allow it to offer valuable, individualized services to each customer segment. (Please review Chapter 4 for the discussion about contact strategies.) This knowledge became the core of the MMB service. Once the service was launched, N2K was able to observe its new customers in order to promptly deliver relevant and timely communications. It was also able to identify potential defectors and use special, targeted offers and incentives to encourage them to stay.

BUILDING A RELATIONSHIP WITH YOUR BRAND
THROUGH ONGOING COMMUNICATION

While you’re building a relationship with your customers, who are they communicating with? Is it your CEO? Your VP of marketing? Is it the product team? Or is it the company itself? Actually, it’s none of the above: Your customers are communicating with your brand. And as was discussed earlier establishing that relationship is a little like going out on a date. Imagine showing up for a first date and being handed a three-page form that asks for everything from your name, address, and income to your medical history and how many children you want to have. What are the chances that you’ll want to go out with that person again? Pretty slim. But you’d be amazed at how many companies run their websites exactly like that. Instead of keeping the first date friendly and low-pressure, they drive potential customers away by asking all kinds of overly personal and seemingly irrelevant questions.

When striking up a relationship with a new customer or prospect, keep the following guidelines in mind:

• You’re not their best friend. Nothing is worse than the used-car salesman type who pretends to be your best friend before he even knows your name.
• Keep it short. Don’t go probing for all kinds of personal information right away. When asking questions, indicate why you are asking and what value your customer will get in return.
• Listen. Online customers expect to be in control, and if you listen, they’ll tell you what they’re interested in.
• Deliver immediate value. Start with a short email with some relevant information or a special offer.
• Show them you heard. Make sure that your follow-up contacts reference the information you received. This reminds your customers that you’re actually using what they gave you. It builds trust and establishes permission for the next level of contact.

If you follow these simple guidelines for basic polite behavior, you’ll quickly establish a solid foundation for a meaningful, committed customer relationship.

MANAGING THE CUSTOMER RELATIONSHIP CYCLE

Customer-company relationships go through a predictable four-stage cycle, and it’s essential to keep your communication appropriate to the stage they’re in. Let’s take a look at these stages.

ATTENTION

You can’t have much of a dialogue with someone if you can’t get his attention. So you have a number of choices: You can be loud or friendly, or you can even try to buy his attention with money or prizes. As you consider your alternatives, think about the type of relationship you want your customers to develop with your brand. Do you want them to expect free gifts and special offers every time they hear from you, or do you want them to consider you a high-quality source of top-quality products and carefully considered advice and suggestions?

If you use sweepstakes or special promotions to attract prospective customers’ attention you’ll need to consider how those incentives impact your chances of engaging them further and taking them to the next level of the relationship. If a home supplies website is offering new registrants a chance at a free trip to Paris for two, are people signing up because they want two-by-fours or is it the prospect of eating crêpes on the Champs Elysées?

PERMISSION

Now that you’ve got their attention, you need their permission to move to the next level and begin communicating. This, in effect, is the actual “first date.” Your goal during this stage of the relationship is to begin to convince your prospects that you are indeed the right brand for them to have a relationship with. You want them to opt in to the program or service you believe will provide them with convenience and value. Listening carefully at this point is critical. What are prospective customers looking for from you? How can you deliver service that makes them start thinking of you as a brand they would consider having a long-term relationship with? Go easy at this stage; a few questions are all you should expect them to answer.

INVOLVEMENT

When a customer makes a first purchase, she’s showing that her interest in your brand is more than simply casual. She’s gone from being a polite listener to being an engaged buyer. This is the point where you begin laying the foundation for a service relationship, which you’ll do by delivering tangible value in the form of information, news, entertainment, and promotions that match your customer’s interests.

LOYALTY

Moving from involvement to loyalty is like moving from a casual relationship to true commitment. Loyal customers or members are fully engaged. They are dependable, predictable, and valuable. They give you their business on a repeat basis and they’re your avid and vocal advocates, telling their friends and colleagues about you at every opportunity. Your challenge, then, is to make sure your customers stay engaged with you.

A loyal customer has developed an emotional bond with your brand. The way to build loyalty is to continue doing what you did to get their commitment in the first place: Listen to what they tell you and respond with service and value. Once your customers begin buying from you, most likely they trust you enough to be comfortable sharing much more detailed information than they would have on your first date. Therefore you should gradually capture additional information that you can use to increase the level of individualized communication and service you offer.

ESTABLISHING INDIVIDUALIZED
CONTACT STREAMS

Now that we have the relationship life cycle down, let’s see what it takes to develop truly individualized communication with thousands, or even millions, of customers.

FROM PERSONALIZED TO INDIVIDUALIZED CONTACT

Personalization and individualization sound as though they could be the same, but they’re really quite different. Personalization includes things like addressing a customer by name and including items such as music reviews and special offers that are based on what the customer has told you and what you have observed about his or her browsing and purchasing patterns. Individualization, which supercedes personalization, goes much further by including a “strategic layer” that looks at each contact from a combined interest, lifestyle, timing, and event perspective.

To individualize contact you need to understand how each customer segment differs from the others and what each one’s needs are. Within each segment you then drive contact based on where each individual customer is in his or her life cycle with your brand. You continuously track your interactions with your customers and prospects so that you can monitor their individual responses and react interactively, relevantly, and in real-time.

THE THREE DIMENSIONS OF INDIVIDUALIZED
CUSTOMER CONTACT

Individualized customer contact is the function of three separate dimensions:

1. Targeting. Using data on your prospects’ or customers’ interests and actions, you can select subgroups of individuals who are “eligible” to receive a particular message or sequence of messages. A home gardening supply store, for example, may send a message to everyone who has bought a lawn-mower from it in the last three months. It may refine the group to target only those who bought a particular model. Or it could target every customer who buys any kind of mower and automatically send a personalized thank-you note ten days after purchase.
2. Personalization. Once you’ve targeted the recipients of a message, you need to determine what the message will say and how you’ll personalize it. You may choose to address the recipient by name: “Dear Bill.” Or you may refer to something Bill has done: “Thank you for your recent purchase of our Turbo III Deluxe Lawn Mower.” You may focus on something that Bill has asked for: “You have asked us to notify you about new products we think might be of interest to you.” You might even mention specific regional or seasonal events or attributes: “Fall is upon us, and time has come to begin to prepare for another winter of snow and ice.”
3. Timing and sequencing. When should individual customers be contacted and how often? Events are leading indicators of a person’s likelihood to respond. But the same events don’t usually happen at the same time for everyone. Some, such as major holidays, are common to large groups of people. Others, such as purchases, birthdays, anniversaries, graduation, births, or moving to a new house are far more individual. Having bought a Turbo III Deluxe Lawn Mower ups the chances that I’ll pay extra attention to news and information about gardening and landscaping. Since you know that I bought the model with all the special gardening features, you may want to notify me about the annual gardening show that’s in town next week.

INDIVIDUALIZING CUSTOMER CONTACT

Table 6-1 presents a summary of the most common tools and techniques Internet marketers can use to communicate with their prospects and customers on an individualized basis.

Table 6-1 Tools for Individualized Customer Contact

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	Tools and Techniques		How They Help
	Surveys: Ask a sample of your customers to tell you their opinions.		Although only a small percentage will participate, surveys can help you gain greater general insight into your customers’ and prospects’ opinions and attitudes. Appending survey data to customers’ profiles can aid in follow-up communication and reporting. Online surveys can be performed quickly, gathering almost immediate results.
	Self-reported interests: Use live profile pages and active subscription forms to capture each customer’s interests and preferences.		These are core mechanisms for letting individual customers describe their personal interests and preferences, so that you can deliver relevant communications.
	Web-tracking and profiling: Track known individuals’ interactions with a website over time.		Knowing how often customers come to your store without actually identifying themselves has real value. So does knowing which parts of your site they spend most of their time on.
	Purchase data integration: Integrate product (SKU)-level information about each customer.		Keeping track of customers’ purchase history down to the product level tells you a lot about their wants and needs. You can use that knowledge to make highly relevant suggestions and recommendations and after relevant advice.
	Global anonymous prof...

Table of contents

• Cover
• Title Page
• Dedication
• Contents
• Foreword
• Acknowledgments
• Introduction
• Part I: Using Email To Engage Your Customers
• Part II: Taking A Strategic Approach
• Part III: Implementing Customer Dialogue
• Part IV: Looking Ahead
• Searchable Terms
• About the Author
• Praise For The Eng @Ged Customer
• Copyright
• About the Publisher