About the blog

This blog aims at bringing a clear understanding on how digital marketing works, what strategies and tactics are being employed by the world’s leading companies and how to create compelling strategies and engaging content for digital.

I invite you to leave your own insights and opinions so the discussions can become thorough and relevant.

Welcome!

Firstdirect’s CRM Strategy Review

First Direct is an award-winning UK bank (part of HSBC group) that has consistently led the market in terms of its CRM strategy. First Direct customers are promised outstanding service, great products and a bank that cares about more than just finance.

And they seem to be doing things right, providing a better Customer Relationship Management (CRM) than anyone else. Recently, First Direct topped Which?’s poll being voted Britain’s best company for customer service, beating off all other banks and stiff competition from John Lewis and Waitrose. They’ve also won several awards related to marketing, sales and social.

It just makes sense that First Direct’s brand and market positioning are all about the customer. With the promise to deliver speedy support online and offline and with satisfaction guarantees, the bank is taking banking CRM to the next level. That is directly linked to their multi-channel delivery strategy that recently added a state of the art iPhone app that allows you to access your account as well as make payments and transfers from wherever you might be.

Other innovative uses of online channels include Text Message Banking, Podcasts, Vodcasts and, most impressively, a robust Social CRM strategy. Customers are provided with a number of channels and invited to really become part of the bank’s community, giving “voice to your thoughts”. This includes their Little Black Book, Talking Point and Social Media Newsroom.

However, there is room for further improvement. First Direct was considered UK’s most recommended bank (source: Millward Brown) with 55% of its customers actually recommending the bank. This number can be improved leading to an even greater leadership on the matter of customer service since the closest bank brand had only 40% recommendations.

Possible future CRM initiatives

There are a number of specific sales, marketing and service initiatives that I believe could strengthen and enhance First Direct’s CRM in the future:

1. Incentivize clients to create and share content and link those back to the clients’ profile on First Direct’s social channels. This would help marketing and servicing since clients would also “help” to propagate best practices and reduce enquiries.
2. Leverage Community by better reaching out to external social networks, out of the banks owned environment. Such networks would enable the bank to join the conversation and start developing relationships where potential clients are.
3. Take the “secure banking from wherever you might be” idea of the iPhone app to all mobile channels, possibly also expanding the mobile channels to include tablets.
4. Expand the satisfaction guarantee proposition so it is sharable, and thus visible, on external social networks.
5. Develop a multi-product and multi-channel referral scheme creating incentives for advocacy.
6. Create mobile wallets by plugging the debit card chip into the customer’s actual mobile device. This would really take portability to the next level but requires investment in technology and security.

Unleashing Brand Advocacy

What’s best in Social Media

The importance of word of mouth has dramatically increased over time.  One of the key factors is the decrease in trust of big institutions and companies, and increasing trust in “people like me”.  In addition, McKinsey research shows that consumer purchases are primarily influenced by word of mouth, making it one of the most powerful trial generators.

“A brand is no longer what we tell the consumer it is – it is what consumers tell each other it is.” (Scott Cook, Procter & Gamble Board)

• Social Media amplifies and accelerates word of mouth

It can reach more people faster than offline word of mouth.  For the first time ever it’s possible to observe and participate in conversations that take place in real time.

• Social Media drives advocacy

The best use of social media for marketing purposes is to engage with loyal brand fans and help them become active brand advocates, motivating them to make recommendations and provide testimonials on behalf of your brand.  Advocacy will increase brand loyalty and influence others by increasing credibility (“it works”) and relevance (“it’s a brand for me”).

And here is where it is most useful: it helps convince high-potential customers to try your brand.

How Social Media can unleash Advocacy

1.    Set a clear objective

The main marketing purpose of social media is to use consumer advocacy to influence potential customers down the purchase funnel. So the first step is to set a clear objective focused on how to drive high potentials to try your brand.

Examples:

• Create emotional connection to build awareness (“People like us, but they don’t have us top of mind when shopping.”)
• Consumer education (”Why does it cost twice as much as my normal product?”)

2.    Know who are your brand fans and high-potentials

For advocacy to work you need to understand both your prospective advocates and the group of people you would like them to influence.

Understand each group in-depth: What motivates your fans?  Where and how do they express their opinions?  Where do high-potentials seek category and brand information? Who influences them?

3.    Identify and select the best forums to engage

The sheer volume of conversations in the social media space can be overwhelming.  Realize that not all conversations are relevant.  You need to listen and select the most appropriate forums where you want to engage with your brand fans and high-potentials.  Make sure to start from receptivity insights, if these are available.  When selecting the best forums consider the range of topics discussed, context of the forum, level of engagement, degree of influence and reach.  It’s important to be choiceful, it’s not possible to be everywhere.

4.    Engage and reward your brand fans

To engage your brand fans you first need to establish a presence that encourages interaction.  Your fans already want to engage, but you have to enable this.  There are many ways to do this, depending on the interests and motivations of your fans:

• Ratings & reviews
• Competitions to create content
• Participate in existing forums and communities
• Sponsor or create a community

Whatever you do, start modest.  Make sure to listen first to your fans, before you start any major activities.  They will be happy to tell how you can provide value for them.  Then gradually grow your efforts over time. Be ready to make a long-term commitment to your fan community. By energize your brand fans you’ll develop brand ambassadors.

5.    Unleash Advocacy

Once you have established a strong connection with your fans it is time to make the connection with the high-potentials.  Don’t assume these connections happen automatically – you need to facilitate this.  Make sure to do it with a clear purpose in mind: take down the barriers that hold them back from trying your brand.

Embracing brand fans in innovation or co-creation campaigns is one great way of accomplishing this, since the number of “creators” among brand fans is normally high. This facilitates connections between your loyal brand fans and high-potentials, who will become spectators and ultimately also join the conversation.

 What KPIs to measure advocacy?

The best KPIs to measure success of your social media campaign will vary depending on the objective and strategy you set. It’s important to choose the KPIs that will allow not just measuring success but also constant testing and optimisation. Remember that KPIs must always translate into action! The main ones to consider are:

• Interactions on social media: amount of likes, comments, tagging and shares
• Post impressions, views and % feedback
• Monthly and daily active users
• Amount of unlikes and unsubscribes
• Content engagement and % feedback
• Campaign response rates
• Campaign conversion rates
• Cost per acquisition
• Activity of retained visitors
• Heavy users share

New cookie law impacts e-commerce?

UK websites have been given an extra year to comply with the new cookie law.

The reason, according to ICO’s Christopher Graham, is to enable businesses “to get their house in order.“

Also, according to the UK government, they want to avoid “overnight changes“.

What the authorities don’t say is that they also need this extra period to figure out how to put the new law into practice. Especially how to deal with its flaws, the main one being that if cookies are not used to keep track of the user’s preference of not wanting cookies, websites will have to ask the same question on every page visit by that user. So a tracking ID in the URL would have to be used to stop the question from appearing, which is less secure than using cookies in the first place.

But the idea behind the law is to give consumers more choice about what companies know about them, it is not about ruining users’ browsing experience. So, does a common sense approach suffice the new government requirements? What are the challenges and opportunities for e-commerce businesses? These questions are the scope for this article.

QUICK CATCH UP

About Cookies

Cookies first appeared in 1994 providing a solution to the problem of implementing a virtual shopping cart. From then, they became central for session management, personalisation and measurement. They also started to be used by third parties to track users across multiple sites. In particular, an advertising company can track a user across all pages where it has advertising images.

Today, an ordinary website has several web servers interacting with the browser, and each of these may be setting cookies.

Also, there is a malicious practice currently in use. By setting “zombie” flash cookies, some websites never allow a user to truly delete a cookie and the user’s privacy is never protected.

About the new law

The new requirements to “store or gain access to information stored, in the terminal equipment of a subscriber or user” are that “the subscriber or user of that terminal equipment:

(a)       is provided with clear and comprehensive information about the purposes of the storage of, or access to, that information; and

(b)      has given his or her consent.”

According to the actual Directive, “…where it is technically possible and effective… the user’s consent… may be expressed by using the appropriate settings of a browser or other application.”

Also, there is no need to get consent if the cookie is “strictly necessary” for a service requested by the user. This exception applies for “add to basket”, “proceed to checkout” and similar cookies.

BROWSER-BASED SOLUTION?

The ICO seems to believe that universal browser settings will be an important contributor to the solution. According to BBC, “… the government has formed a working group with browser manufacturers to see if a browser-based solution to the issue can be found.”

Although it does sound appealing for someone else to resolve the issue of complying with the new law, a browser solution would leave out users that go online using mobile or tablet apps. Also, e-commerce sites would miss the opportunity for influencing the law enforcement guidance to better fit their needs.

HOW DOES IT IMPACT E-COMMERCE?

1. Effort to gather users’ consent

The fraction of users that don’t give consent will increase. Hence being able to provide a better experience for those users will become more important. And so will doing an extra effort to get permission from new users. For websites that currently have little or no consent at all from users, this represents a great risk.

Thus, websites should calculate what fraction of their current total number of users didn’t give consent and plan how they will improve this ratio during the year.

2. Value of data

The new law actually works in a way of making data less abundant, thus increasing the value of data. Users might restrict giving away data without seeing a clear benefit in doing so. For e-commerce sites, this might result in additional efforts being necessary to capture the users’ consent.

3. Geography

It is not yet clear to what degree the new European directive is a matter of geography. Businesses in Europe would be in disadvantage if their competition from elsewhere doesn’t face the same restrictions.

If that is the case, e-commerce sites must consider moving away from hosting their websites in Europe.

WHAT ACTIONS SHOULD BUSINESSES TAKE?

The ICO and DCMS have stated that no enforcement action will be taken while solutions are being developed.

So should businesses take any action at all?

Yes, so they can gradually comply with the common-sense aspect of the new law while developing best practices. It is also vital to keep an eye on what the big Internet players are doing and to progressively educate the users on the benefits of cookies.

It’s not about developing a whole new pricey solution, but to identify how intrusive your use of cookies currently is and progressively develop the best solution to obtain consent from users during the extended period that was granted to comply.

Bottom-line, businesses should aim at staying aligned with global industry trends while developing the insights on how to perform better given the new rules.

 

REFERENCES: 

BBC News: Cookie madness or consumer protection? http://www.bbc.co.uk/blogs/thereporters/rorycellanjones/2011/03/cookie_madness_or_consumer_pro.html

BBC News Technology: Cookie law deferred for one year http://www.bbc.co.uk/news/technology-13541250

BBC News Technology: Governments ‘not ready’ for new European privacy law http://www.bbc.co.uk/news/technology-12677534

BBC News Technology: New net rules set to make cookies crumble http://www.bbc.co.uk/news/technology-12668552

Econsultancy: ICO take an extra year to chew on new cookie law http://econsultancy.com/uk/blog/7572-ico-take-an-extra-year-to-chew-on-new-cookie-law

ICO: Advices on the new cookies regulations http://www.ico.gov.uk/~/media/documents/library/Privacy_and_electronic/Practical_application/advice_on_the_new_cookies_regulations.pdf

Internet Retailing: Retailers granted extra time to comply with cookies law http://www.internetretailing.net/2011/05/retailers-granted-extra-time-to-comply-with-cookies-law/

Practical Ecommerce: Abandoned-Cart Remarketing Effective http://www.practicalecommerce.com/articles/2399-Abandoned-Cart-Remarketing-Effective-Says-Ecommerce-Exec

Wikipedia: HTTP cookie http://en.wikipedia.org/wiki/HTTP_cookie

Pringles: social media presence

Why is the Facebook Page a Success?

With about 14 million likes on Facebook, Pringles’ fan page is a social media success. But how did the brand achieve that?

Procter & Gamble’s brand Pringles is well-known and has a large number of brand fans. And the company knows how important word of mouth and social networks are: “A brand is no longer what we tell the consumer it is – it is what consumers tell each other it is”, Scott D. Cook, marketing director at P&G.

In this context, social media becomes an amplifier, accelerating word-of-mouth and adding the sharing power of social networks. Pringles successfully captured the importance of advocacy and actually used its fans as a way to strengthen loyalty and influence others, building credibility and increasing relevance – “It’s a Brand for me!”

Looking at the business side, social media became an important tool to persuade consumers on the path to purchase. Loyal consumers started sharing recommendations and testimonials. Passionate consumers became advocates and even showed a sense of ownership over the brand. Such behaviours generate brand awareness, improving the brand’s top of mind presence. This improves brand consideration and ultimately leads to brand purchase.

The platform is also well-integrated with the website and offline campaigns. Examples were create your own design for the can and the “Jingles for Pringles” campaigns, that users could engage with and share on Facebook. These activities helped generating involvement and a large number of creators attracted an even higher number of joiners and spectators.

But what about the other Social Media Activities?

Except for the Facebook page all the other social media activities are poorly executed. The brand should review its online channel mix:

• Blog and Flickr
  • There is no real benefit from having these channels because consumers seem keener in generating content and engaging on Facebook and video platforms.
  • Should be shut down.
• Twitter
  • Can represent a great platform to join conversations and engage with fans and consumers.
  • The connectors should be identified and the brand should start following them to boost reach and increase the following asset.
  • Publishing on this channel has to be constant and pro-active. It shouldn’t be just for listening to consumers, which is also important, but also for joining conversations and engaging with consumers.
  • The Facebook page should be used to generate awareness and new followers for the twitter account.
• You Tube channel
• The website video page content can help to improve the YouTube channel. There is a lot of interesting UGC there that should also be made available on YouTube.
• Since there are lots of creators and the brand already creates UGC campaigns, the YouTube channel could be used as the main platform for future campaigns.
• The Facebook page should be used to generate awareness and traffic for the YouTube channel.

Pringles: Social Media SWOT Analysis

StrengthsFacebook asset Market share leadership and strong brand equity Huge number of fans and advocates Passionate consumers have a sense of ownership Successful marketing campaigns	WeaknessesLack of clear online value proposition Online channels aren’t consistent Twitter and YouTube channels are poorly executed
OpportunitiesReview online channel mix Use Facebook asset to boost other channels traffic and awareness Identify connectors and engage via Twitter Improve YouTube channel and use it as the main platform on UGC video campaigns Join conversations either than just listening to them and creating campaigns	ThreatsUsers loosing interest and un-liking the Facebook page, which is the brand’s greatest online asset Flickr and Blog channels diminishing Facebook’s success, negatively impacting brand online presence

Voice of the Customer: the John Lewis way

After buying a picnic portable grill from Britain’s favourite retailer, John Lewis, I decided to take the opportunity to look into their way of providing customer service. The goal was to assess the quality of their response and their systems’ coherence and performance in a multichannel context.

Customer Service Channels

First thing to note is that their primarily customer service channel is the website. This way, the customer has to browse through a series of frequently asked questions, which helps reducing the number of individual queries, reducing costs while also enhancing service quality since functionalities like “track my order” are available.

Alternatively it is also possible to call them. This allows clients less comfortable with using the Internet to also receive good customer service.

One important thing to note however is that John Lewis does not allow customers to write reviews or give ratings for products. The downside of this is that clients have less information and could prefer making a purchase somewhere else. The upside is that the store and the online environment are better reflected to each other and managing multi-channel integration is simpler and less costly.

Responsiveness

After sending a product question using their online form, I got a response by email next day. The employee had transferred my query to the appropriate department telling me they would be in touch soon. He also provided a phone number if I wanted to call them.

No need for that, next day I received a phone call from another employee, someone from the supplier side staff, who had great knowledge on the specific product.

Here is a point where John Lewis has to be careful since customers see the company as fully responsible for their order and any after sales issue. If the supplier doesn’t provide a high quality customer service this will have an impact on the customer perception of John Lewis.

Multi-channel integration

Last thing to note is that during my interactions with John Lewis I was always referred by my name and they could seamlessly identity me without the need to retype any information. This was possible because they linked my query with my order number that I was required to type in when sending

Why they are good

There are four key points that enabled John Lewis to “hear my customer voice” and provide a great customer service experience:

• They are easily reachable
• They know who the customer is across all the channels
• The staff is well-trained and has good attitude, even on the supplier’s side
• The flow of the query across different channels is fast and effective

What makes content sharable?

The combined power of social media and publishing

The amplification power of sharing through social networks added a whole new dimension of reach to publishing. Any message has now the potential to get your brand or expertise in front of a potentially huge audience.

As a consequence, making content sharable is critical if you’re building a brand, marketing a specific message or generating awareness of a particular cause. And even though it is not possible to predict with confidence if any published content will go viral, it is possible to control its shareability and optimise it for social sharing and word-of-mouth.

Some best practices (although these are huge campaigns we can still learn from them what makes content sharable):

• Old Spice: the man your man could smell like
• Tippex: a hunter shoots a bear
• Nike: good versus evil

Making content sharable

Address these questions:

1. Is it relevant?

Does it speak to your target audience?

2. Is it helpful?

Is it filling a knowledge gap in a particular area of expertise? Is the content supported by legitimate data or research?

3. Is it easy to share?

Content pass-along should be a one-click action.

4. Does it provoke an emotional response?

Although it is ambiguous how different factors influence emotional reaction, sharable content should evoke a particular emotion related to your message. Does it fulfill a need or create an excitement that others may also share?

5. Is it respond-able?

Is it evocative? Does it ask for a response? Does it allow users to share opinion and contribute?

6. Is it visual compelling?

Is it scannable and easy to read? Is it visually compelling? Below are a few visual elements to consider:

• Title and headlines
• Paragraph length
• Bulleted and numbered lists and tables
• Info graphics
• Photos
• Video

7. Is it optimised for search?

Are the keywords used in the title adequate? Does the content reinforce those keywords? Does it incentive link building (from blogs, twitter, facebook, etc)?

Brand Marketing in the Digital Age

All marketing activities overlap

I’ve come across this very comprehensive and insightful diagram describing how marketing activities are now overlapping in a kaleidoscopical model, shifting dramatically from the old hub model. (Forrester, available on Slideshare)

We can no longer address each channel or activity in the mix separately. All of them leverage each other and it’s essential to keep the brand’s value proposition and  “feel” consistent across them all.

This allows brands to provide a strong and seamless multi-channel experience, taking the most out of Internet’s most valuable brand building resources: interactivity, personalization and social sharing. From there, fans start becoming advocates and awareness leads to brand consideration and purchase.

Forrester called it the world of “always on marketing”. Real changes are required in organization, processes, and technologies to excel in this new environment.

The power of Intelligence

With Digital, consumer interactions and insights come from a variety of new, more interactive and engaging sources: social media, online communities, blogs, e-commerce, mobile apps, etc.

These channels become key for marketers to understand, interpret, and keep the brand “alive” where their consumers virtually are. With all the added complexity of this new landscape, intelligence’s role becomes even more central. Choosing the right metrics and which channels to be on becomes difficult tasks. Constant testing and optimisation is the only way to keep improving and innovating.

An extra-effort is needed to keep the strategy on track without loosing the ability to learn and adapt.

The importance of Publishing

Publishing becomes central in the sense that it allows the brand to portray the right image on a number of different channels.

It becomes essential to all brands and in the near future brand managers will be more of brand advocates. This will happen as a consequence of the increases in interactivity and personalisation.

By providing the right content through the right channels and joining conversations, brands become able to “live” side by side with consumers, learning on day-by-day basis how to become more relevant and what to try or repeat next.

Which models work best for digital?

The Fremium Model

The Fremium Model has proven to be a very good approach for businesses to excel in the Digital era. Now, companies have to operate in a highly competitive environment making it difficult to charge scarcity prices. The Fremium approach uses the Free to attract and lead users to pay for the Premium. This model can take a range of different formats: varying tiers of content, from free to paid; a premium “pro” version with more features than the free version; or other services on top of the content to monetize.

Some of the companies that are excelling based on the Fremium Model are:

• Skype
• LinkedIn
• ESPN
• Flickr
• Pandora
• Webnotes
• Google Adwords

The Peer-to-Peer Model

P2P file sharing began with Internet Relay Chat clients, back in 1995. Apart from being fully functional chat utilities, they also enabled users to share files with each other. I remember browsing among several different servers and channels on mIRC and chatting with other people to find files to trade. There was no formal recommendations system, so it was very common for users to fake files. This was very annoying but part of the game. However, you could already start creating your own trust list and search for files from people you already knew. mIRC was also a social network platform, very popular among teenagers.

Looking at where we stand today, the improvements on P2P platforms and applications is truly remarkable. Probably Napster was the company that really took it to another level, showing how powerful such interfaces can be. Of course it did so through an illegal business model and ultimately had to be shut down. But at that point, everyone had already seen the great potential of P2P. P2P business models that use the Fremium approach are proving very successful online and are allowing new applications of P2P in realms we wouldn’t imagine possible a decade ago: entertainment, banking, publishing, etc. And the possibilities really seem unlimited.

The best model?

I believe that the P2P model in conjunction with the Fremium approach is really the best approach for online businesses. This mix combines the incredible power of social networks with a good solution for sustaining revenue streams and increasing profitability. And, if you plug-in new innovations like crowd-sourcing, or even blend it with old pricing models like ad-based on the free bit, you are starting to achieve a more optimal model for you online business.

Subscription versus Ad Funded Publishing

Digital has impacted almost every aspect of the traditional print media business model. And for mainstream news providers, this impact was even greater. The reason for this is simple: consumers shifted the medium in which they seek and read news. The Internet brought distribution costs to near zero and allowed for anyone to virtually become a publisher. As a consequence, content is no longer scarce. The first reaction of big offline publishers was to also go online, providing content for free. Then they started to monetize through advertising and sponsorships.

The general opinion of experts so far has been that neither the one-dimensional paid-content model nor the reliance on CPM advertising models works on their own for online publishing. Therefore, publishing business models should combine many revenue streams to become successful. But since this is a young medium, what we are seeing now is big mainstream publishers trying different approaches for their next steps online.

How big mainstream publishers are approaching it

The Times have recently tried to change their business model from advertising-funded to subscription-based. By subscribing, users get access to several platforms:

• thetimes.co.uk
• thesundaytimes.co.uk
• The Times iPad Edition
• The Sunday Times iPad Edition
• Times+ Membership Benefits

It is only possible to access content by subscribing and if you choose to subscribe for more than 4 weeks you get a huge discount. The Financial Times uses a similar approach but with some key differences. They use metered pricing and provide some content for free in an attempt to attract users down the conversion funnel.

The Guardian has taken a very different approach by launching the Open Platform. It is a suite of services for developing digital products and applications with the Guardian, offering tools for using Guardian resources on other platforms and for integrating applications directly within the Guardian network. The platform works through two methods:

• Open In: Applications built by partners that are integrated within the Guardian network.
• Open Out: Applications using Guardian content built by partners for other digital platforms.

In my view, what they are trying to do with this approach is to boost traffic to further generate revenue through their advertising and sponsorships funded model. This is a safer road since these models seem to be already working for several publishers.

What to expect?

Well, it is hard to predict how the things will unfold. Everything is changing so fast that what works now might not work in the near future. In my opinion, The Times has taken a very risky step when they decided to change their model to subscription-based only since they provide mainly mainstream content. These types of models seem to work better for more niche-content, where having less traffic is totally acceptable since the value you are providing for users is much greater and so is their loyalty and engagement. But again, this is the time for experimentations, to find out what actually works and what doesn’t. I’m sure we’ll be looking at lots of innovations on pricing models during the next years… and some will prove successful. What we must do is keep an eye on which models are excelling and adapt our models accordingly.

Social Media landscape in Brazil

According to Comscore (05/05/2011), 99% of Internet users in Brazil access social networking sites at least once per month, which places the country only behind the US, where the range is 99.7%. But Americans are not as active as the Brazilians. Sites like Orkut, Facebook, Linkedin, My Space and Twitter are accessed 30.6 times per month in Brazil versus 30.3 in the US.

Comscore also identified that Brazilians are accessing concurrently two or more platforms. Orkut is the number one social network in the country but that behaviour is driving users to explore new territories. And Facebook seems to be the new hype. In February while Orkut remained stable at about 32 million unique visitors, Facebook grew 159%, to 18 millions. It seems that Brazil is going through the same process occurred recently in India. In 2010, Facebook overtook Orkut, which until then was the country’s leading networking website. However, Brazil and India together still represent 90% of Orkut’s traffic. It is likely that Google’s site will disappear if it fails in both these countries.

If we consider Alexa’s methodology, that overtake has already started to happen. Last month, for the first time in the short history of social networking, Facebook’s traffic was actually higher than Orkut’s. Facebook was the fourth most accessed site by Brazilians while Orkut appeared in sixth place.

As for Twitter, the messaging network is still behind Windows Live Profile, which stores information from the popular instant messaging service MSN. On Linkedin, Brazilians represent 4.1% of total users, which puts the country in fourth place worldwide.

I’ll keep looking into how the social media landscape evolves in Brazil during the remainder of 2011. My guess is that we’ll see Facebook and Twitter taking over and becoming even more important digital channels for marketers and brands.