One of the promises of interactive marketing has long been its ability to create intimate relationships with our customers. As a promise, it has been largely unfulfilled. The consumer experience of these relationships is typically lackluster, and the marketers' gains have been on the whole unremarkable.
This begs the question, “What are marketers doing wrong?” The answer is not simple, but it can be readily found with some detailed analysis of the problem.
In general, the harsh situation of relationship marketing today is the result of widespread poor execution rather than a lack of true potential.
The first problem with many relationship programs lies in their misunderstanding of relationships between people, which work best when there is a feeling of reciprocity by both parties. This does not mean that the program needs to be set up to have an economic parity between the marketer and the consumer, but consumers need to feel that they are gaining at least as much as they are giving away in the relationship.
Too often, relationship programs are set up with the arrogant assumption that consumers should be happy in a relationship where they just sit around and receive marketing messages. This is a mistake. Relationships need to be structured around a strong vector of involvement for the consumer, where that vector provides an ongoing consumer-centric value.
A short time ago, I did a quantitative analysis of a relationship program whereby users would register at a Web site and upon their return see ongoing product recommendations personalized to their needs. When I looked at the site's data, it became clear there was a major problem with the program. Consumers would visit once or twice, and then they would never be seen again. (Less than 10% of consumers returned to the site after a week!)
Although consumers found value in the site, the strategist who thought up the concept failed to understand that the vector of involvement for consumers was very short lived. Consumers would visit the site, find out what they wanted and move on. There was no good reason for consumers to stay involved with the site once they were done—a difficult idea to understand for the marketers who created the site.
They found it strange that consumers would not be as involved in the brand as they were. The end result was thousands of dollars wasted to create relationship tools that no one beyond the brand mangers would ever value.
This program showed another widespread problem with relationship programs—an obsession with body counts rather than with the ultimate value of the program. When presented with my analysis, the marketers vehemently defended their program, arguing that it was a great success based on the hundreds of thousands of consumers who registered. I was told that the program had great reach, and therefore the program was solid. So what if they never returned as intended!
This is a classic error of mass marketers who start doing relationship marketing. They fall quickly into the belief that acquisition and retention of relationships is everything, even though those relationships might be doing nothing for the marketer.
A relationship with a consumer is worthless to a marketer as long as he or she fails do something with the opportunity. Body counting within relationship programs quickly divorces the success of the program from measures of marketing gain and latches it onto measures of valueless transaction.
More often than not, body counting is a symptom of the larger problem of the program's lacking well-defined goals and success metrics. Many relationship marketers carry on like compulsive Don Juans trying to seduce as many people as possible, only to find that they do not know what do with success when it happens for them.
The marketer needs to manage and nurture consumer relationships (once they are acquired), which requires a careful balancing act between the selfish desires of the marketer and the fears of the consumer that the marketer is using him or her. This balancing act rests on creating, growing and not losing the trust of the consumer.
As any con artist will tell you, the trust of the mark needs to be developed before they are parted with their money. Relationship marketers clearly should not seek to fleece their consumers, but they would do well to understand how trust is built and used to advantage. It takes time, care and a plan.
Part of that plan needs to be data collection and analysis. There is an old business adage, “If it cannot be measured, it cannot be managed.” This is especially true for relationship programs; however, I am constantly surprised by how many relationship marketers lack the skills to understand and use the data that comes from their programs. There also is a tendency among many relationship marketers to collect, almost at random, data that they might use but probably will not.
Each data collection episode requires a bit of consumer trust to happen, and as such it should be done sparingly or at the very least in the most unobtrusive manner possible. It is best to collect data in a way that appears to benefit the consumer, which both makes that consumer more willing to provide data and makes sure that the data is right.
For instance, if I ask for a consumer's zip code out of the blue, I am less likely to get a truthful answer than if I ask the same question as part of a utility to find geographically relevant offers for that consumer. It is important to know that consumers will fabricate data for any number of reasons unless you give them a good reason not to. Data is the lifeblood of understanding for your programs, so work to collect it well.
Moreover, data should be seen as a means to achieving your goals. Most interestingly for relationship marketing, data is the means for optimizing your messaging: to encourage consumers to do your call-to-actions, to lower costs, to keep consumers loyal to your offering, and to prevent consumers from churning out of the relationship.
The existence of good data will additionally help you to understand your consumer base better and even test messaging ideas to apply elsewhere in your marketing mix. This article is not the place for a full and detailed discussion of data collection and use, but suffice it to say that it is not a part of your program to be taken lightly.
A good application of data can prevent the major marketing sin of investing in consumer relationships that will not return gains to your marketing program. It is very easy when prospecting for consumer relationships to attract the wrong consumers—those who are involved only in your brand's image or giveaways but do not actually buy your product, or those just looking for bargains who cannot be converted to regular consumers of your product without unending discounts.
Why should you put up with a bad relationship? A relationship should be mutually beneficial to brand and consumer, so the trick for the marketer is to tell the good relationships from bad.
A consumer package goods client of mine was recently growing its house database of relationships by running a sweepstakes, which of course attracts both good and bad relationship leads. Many of the consumers entering the sweepstakes could care less about the sponsoring product and only wanted to win the cash offered as one of the prizes. These cash-focused consumers were clearly problematic relationship leads for my client, and to make matter worse they would be intermixed among a slew of good leads who would have actually liked a mutually beneficial relationship with the brand.
The trick was to figure out who the sweepstakes players were, so that we could avoid them, and who the potential product enthusiasts were, so that we could court them.
I proposed a simple data-collection litmus test to separate the wheat from the chaff. The entrants would be asked, in the course of registration, how they would prefer their sweepstakes winnings if they were to win the grand prize: as product, cash or brand tchotchkes?
- Those who wanted to win product would probably be considered the sweet-spot target for my client's relationship marketing.
- Those who asked for cash ran a good chance of just being sweepstake players who would never be brand-involved, and as such would be considered much poorer relationships candidates (except for seeding future sweepstakes).
- Those who wanted to win tchotchkes were obviously brand-image enthusiasts who may or may not have been good relationship leads. Accordingly, they would require some follow-up communication to understand just how they articulate with the brand and the type of opportunity they present.
The preceding should not be seen as an exhaustive discussion of how to do relationship marketing, but it is certainly a beginning. My hope is that we marketers can start doing our relationship work better so that marketing can be more profitable while making it less of a bane on the existence of already-media-taxed consumers.
The only thing holding us back from a brighter future is our own habit of sleepwalking through our relationship marketing initiatives instead of walking the talk. I look forward to a day when the promise of relationship marketing will finally be realized.
I can dream.