Always an interesting look at where the internet has been and where it’s going.
Always an interesting look at where the internet has been and where it’s going.
Digital Marketing Coach, Consultant, Consigliere
Always an interesting look at where the internet has been and where it’s going.
I recently posted this re-cap from the #NetFinance conference in Miami on how Digital is Rocking the Financial Services world. Let me know what you think!
We just returned from wonderfully warm Miami and the Net.Finance conference – a gathering of 500 banking, financial services, credit union and technology vendors discussing the challenges of understanding and leveraging digital in one of the oldest industries known to mankind.
In listening to the dozens of presentations and having some great conversations with folks in the industry, I came away with the following major themes:
1) Established companies require visionary and bold leadership to make bets on integrating digital into their organization. Decades of relying solely on traditional marketing tactics, local business relationships and physical bank branches result in an entrenched “prove it to me before I try it” mentality. I spoke to people who expended a lot of effort just to get a website built and have presidents who believe mobile is “not quite there yet.” I also spoke to leaders who embrace digital as a way to understand the customer better.
It’s 2014. It’s time to get in front of the digital wave. Data leads to customer insights. Customer insights lead to ideas for communicating with customers. Relevant communication leads to loyalty. It’s not that hard to comprehend.
2) Incrementalism vs revolution. Incrementalists try to integrate digital in a way that enhances the branch experience while piling on technology to improve the customer experience IF they have forward thinking leadership (see point one). Revolutionaries are banks like Simple and Moven with digital as the ONLY option. These types of new banks are clearly aiming at the mobile-centric Millenials and tech-forward Gen X and Y’s with a completely new way of providing financial services.
We need to find a way for incrementalists to be more revolutionary. I get that you can’t erase the past, get rid of all your current customers and start over – but to keep patching things here and there with a bit of digital won’t work forever.
3) Legal and compliance is a drag on innovation. Any organization needs to be concerned about legal exposure and industries like financial services and insurance have a higher burden than ever, after the financial crisis of 2008.
However, companies that are proactive about working with legal and compliancy teams in a cooperative environment are able to stay within the law and innovate. I spoke to one person who has an agreement with their legal/compliance team on social media communication that has clear outlines on what can/can’t be said in different situations (standard social governance best practice) but ALSO has a two-hour SLA on turnaround time for unforeseen issues. Internal partnerships can solve problems.
4) It’s a service, not a product business. The financial industry thinks in terms of products which drives siloes within an organization. The rise of social media and the shifting of power to the consumer have brought brand communication and interaction back to the forefront of the customer engagement.
Collaboration is absolutely essential. Consumers expect you to be consistent in your communications. Tear down those walls!
5) Everyone struggles with data. Whether you are trying to connect marketing engagements across devices, harness the unbelievable amount of data available or figure out what the right KPIs are to put in a dashboard to your CMO – data is hard. Big, small, smart – whatever. I heard a lot of different models on how to think about data and I met some vendors with ways to harness data, but unless you’re a pretty data/tech savvy person, it’s going to go over your head. I feel sorry for the smaller organizations that have a digital vision but not the funds or personnel to dig into the data issues.
Not to sell ourselves too hard here, but you can buy expertise. We work as partners with our clients. And our counsel and strategy more than pays for itself.
6) The importance of good design and UI can’t be overstated. Consumers expect their interactions with brands to look good, be intuitive and just work. It is just as important in the banking and financial services business as it is in the telecom or entertainment business.
Again, if you don’t have in-house expertise, get a marketing partner. Make sure that your partner understands both design and strategy, though. A beautiful mobile site that doesn’t sell or a pretty app that no one wants is a waste of your resources.
Presenting a unified customer experience across all touch points is hard work, but pays off handsomely with increased loyalty, greater share of wallet and more advocates promoting your brand. Building an environment of collaboration and innovation – starting with leadership – is critical in making this happen.
The financial services sector has similar challenges to everyone else with an industry history longer than 10 years. Digital is here, social is changing the nature of customer interaction and mobile is driving vast behavior change in the millennial and Gen X-Y demographics. The opportunities are huge and the companies that put customer centricity and innovation at the front of the conversation will be the ones who survive.
Here’s the first post on The Hacker Group website located here. I think it sets a good foundation for making the argument as to why direct response agencies should be more successful than pure digital agencies in using digital marketing.
We view marketing in two distinct modes – Brand or Direct Response. While both communicate the value of a product, service or company, the key performance indicators and core drivers of success are different. Brand marketing focuses on improving the awareness, perception and likeability of a product, while direct response marketing is about generating a measurable sale or consumer action. Both are important.
Digital marketing can be either brand or direct response. But digital has much more in common with data-centric direct response than brand marketing.
Why? Direct response marketing is built on the following four core capabilities:
It takes massive amounts of data to build response models, understand user preferences, deliver media, attribute sales and optimize performance in direct marketing. The ability to process, store, analyze, report and execute campaigns based on data is core to successful direct marketing. Data provides transparency, results discussions, progress metrics and accountability.
Data as a Digital Imperative – Digital marketing is at its most powerful and effective when data is captured, analyzed and used for optimization. Understanding how data is created, how it is transferred from one organization to another, how to store the data, how to report data and, most important, how to use data to improve performance, is core to digital marketing.
Selecting the right prospect profile to target is critical in direct marketing due to the cost of producing mail packages, print ads, and TV and radio commercials. The overlay of analysis and predictive modeling to determine the right group of people to mail, email or show direct TV spots to with the right message is critical for achieving a positive return on investment.
Segmentation and Targeting in the digital world is also critical to improving ROI on marketing spend. In the online world targeting can mean anything from serving ads against specific keywords to real-time optimization of display ads to a specific action on a website. The advantage of segmentation and targeting online is how fast you can collect data and optimize campaigns – many times automatically – vs. waiting for weeks or months for the sales results of direct mail. The discipline of targeting campaigns up front in the direct marketing world when applied to digital marketing gives us a better starting point for optimization.
In direct marketing, testing and optimization requires setting a control group that gets consistent treatment against test groups that get new treatments, in order to quantify lift. You optimize by repeatedly incorporating winning elements into the control and striving for new champions. It is iterative.
The digital version of testing and optimization can happen with much smaller data sets at greater speed and a lower cost since you don’t need to print and mail anything. Many digital-only companies fail to incorporate this discipline into their DNA.
Direct marketing creative is built to elicit a response – including special offers targeted to specific segments. Combining successful targeting with a compelling offer is 80% of the success or failure of direct marketing, as a rule of thumb.
In the digital world, specific offers are also a critical piece of a test matrix. Determining which offer performs best both in immediate response and on-going lifetime value requires the data, targeting and optimization to all work together.
The high cost of planning and executing a direct mail, DRTV or other campaign creates accountability and precision in direct marketers. That ethos drives a higher level of execution excellence in digital campaigns as well. The cost of failure is much higher with direct marketing campaigns given the cost of production and extended lead time needed. Companies raised purely on digital don’t have this type of discipline because of the inexpensive flexibility to test, pause and optimize in-line.
Wrap it up!
Digital marketing benefits more from the core capabilities of direct response marketing than brand marketing. Data-centric digital channels easily lend themselves to the response and optimization nature of direct marketing. Digital excels when data, targeting, testing and specific offers come together to meet a specific audience.
I recently posted this on the Optify blog here. I modified the P.O.E.M. model to be a resource for digital marketing agencies to help explain digital to their clients so take a look and let me know what you think!
There are a LOT of strategies and tactics for using digital marketing to acquire, nurture and retain customers online. We find it effective to explain the various digital marketing activity to clients using the P.O.E.M . media model which gives us a framework for discussing the costs and benefits of the various strategies. Nokia was an early developer of this model and used for digital media planning. We have evolved it for digital marketing agencies and the types of services you can offer.
This blog post is geared towards explaining an extended version of the P.O.E.M. model so that you have a method for discussing the channels and where they fit into the overall digital marketing programs.
P – Paid Media Programs – aka: outbound marketing
O – Owned Media Programs – aka: nurture and retention marketing
E – Earned Media – aka: Inbound Marketing
M – Managed Media – new segment for digital marketing agencies
Paid media is a great way to enhance and amplify current acquisition programs. Paid media should not, however, be the main acquisition program for you or your clients unless you are well versed in the paid media channels and have a VERY strong grasp of ROI. Paid media like Google AdWords, affiliate programs, web banners, sponsorships, etc. become more difficult when the distance between the paid placement and the revenue generating activity gets further apart based on time or steps.
Here are five tactics to consider providing for your clients within paid media
Expertise in each one of the paid tactics is required in order to be effective. Before promoting these tactics to your clients, make sure you have done your research, have experience or can partner with someone like a vendor for success.
We have all heard that is it less expensive to keep and grow your customer base than it is to acquire new customers. This is particularly true for small companies with limited resources. As a digital marketing agency, if you can help your clients do a better job communicating to their current customers and known prospects, you will be able to show success in a relatively short period of time.
Here are six tactics to explore and sell related to owned media:
1) Website development. Everyone needs help with their website, no one is 100% happy with their site and as a digital marketing expert, you can bring a customer acquisition/retention perspective to the website development process even if you or your agency don’t do the work itself. Creative shops are great at doing creative sites, but tend to be weaker on the SEO elements or conversion and nurture elements.
2) Website conversion. Look at the clients site from the point of view of a prospect and try to understand the following:
3) Customer newsletter. I’m constantly amazed at how many companies don’t have a regular newsletter for their customers. This is a huge lost opportunity to alert them of new products/services, promote educational content, deliver offers, highlight other resources and keep your brand in front of them.
4) Nurture email program. This tactic is particularly important for B2B clients who don’t have an immediate sale on their site. Setting up an autoresponder when someone signs up for some educational material and drip campaigns that deliver multiple emails over a span of time that will help the end user understand the value and see the client as an expert are excellent services for you to offer.
5) Customer advocacy program. Just having the conversation with a client about how to get their customers to advocate for them opens a whole series of potential strategies and tactics including referral programs, thank you offers in Facebook or Twitter for those that are following you or your business or other simple thank you programs.
6) Merchandising, cross-selling and up-selling programs. Again, this is a strategic conversation with the client on ways to increase the average order size or leverage a purchase to cross-sell additional products or services. The strategic conversation leads to test programs, specific tactics and a deeper relationship.
The big benefit of focusing in on owned media is that you have the ability to contact people directly who are already aware of and, hopefully, a fan of the business. Moving those customer to repeat visit/purchase and become advocates is a critical need for every business.
Earned media is a perfect complement for owned media as earned media supports both nurture/retention tactics as well as acquisition activities. At the core of earned media is showing the world that you are an expert in a particular topic and/or field. This is accomplished through the creation and curation of high quality content that shows your customer knows their stuff. This content is then used to build the website, generate conversions, create organic search visibility, provide interesting posts for social media and give people a good reason to link back to your site.
I mention curation as well as creation because one of the biggest challenges with earned media is creating compelling content. In reality, there is a lot of great content on the internet and many sites do a great job with acquisition by putting their own spin and perspective on studies, reviews and presentations by other people. The trick is to make it original, show that you understand the subject and have an opinion that gives your client authority.
Here are five tactics to consider helping your clients with for earned media
1) Content creation and curation. This is the #1 challenge of most businesses who have taken on earned media. You don’t have to be an expert in their field, but you need to be able to find people who can write and other sites that have good content for review and commenting.
2) Search Engine Optimization. There are lots of guides for this, but all websites need to have an SEO strategy and be optimized as much as possible for this high quality traffic.
3) Social Media profile management and content syndication. Social media is changing at a rapid rate so updating profile pages, responding to comments, using these channels to promote content you have created can result in a bigger audience and activity.
4) Public relations and influencer marketing. Finding the people who are already authorities in your clients space and strategically engaging them can lead to a faster boost of your clients authority, more links and more visibility.
5) Link building. While traditional link building is on the wane, helping your client identify content that would be compelling and helping them to syndicate the content can generate website referral traffic and hopefully links that will support the search engine optimization program.
Earned media is not a one and done type program, you and your client need to be committed to this for a minimum six months. This includes optimizing the site, creating content, measuring traffic and sales performance monthly (not daily or weekly) and being clear about the time frame required to be successful. Once you start to see the benefits of this program, it can be a long-term relationship with the client.
Managed media is specific to agencies that will manage specific channels on behalf of their clients. Often times, an agency will partner with client on specific channels because they have the channel expertise – website development, paid search, email, social – but not the industry or subject matter expertise required to be believable and effective.
Instead of giving you specific tasks, here are two questions to ask to determine if shifting to a managed media model is appropriate:
1) Does your agency have the channel specific skills to execute a campaign in either the B2B or B2C client channel. The skills necessary for B2B and B2C are different with unique sales cycles, offer types and audience communications. If you are growing into a channel, make sure you have the time to invest in educating yourself and have enough testing budget (time or money) to learn and work your way into success.
2) Does your agency have the subject matter expertise to completely take over a channel for a client? In some cases, you may have great expertise from personal experience, a hire you’ve made or work you’ve done with others in the industry. If you can help the client with the content, channel management and reporting without relying on them to provide materials – you don’t need the managed model
I hope this post has been helpful in giving you some tools to use in order to talk to current and prospective clients about digital marketing programs and how you can help. The expertise you can bring to any of these tactics on behalf of your clients depending on their needs should help move you from a vendor to a trusted partner. As always, we look forward to your comments and questions!
More P.O.E.M. Resources
I was checking out the Google mashup – What Do You Love – www.wdyl.com – this morning and one of the widgets is Google Patents which had an image of the document I submitted with Tommy Unger, Erez Barak and Paul Brown on a way to research and recommend finding links. This became the link tool in Optify and was a fun project as well as some different approach thinking. I knew we had submitted the application, but never received a notification that it was accepted and through. Here’s the patent if you want to look it up http://www.google.com/patents/US20110302145 – and the pdf US20110302145-Link-Opportunities-Optify – pretty exciting find this morning!