I recently spoke with B and T about the future of eCRM. Here’s the full piece, written by Kevin Johns in last week’s edition. Click here for the BandT version.
Will eCRM ever capture brands’ hearts?
Kevin Johns
So you’re looking for a long-term partner to treat you nice, give you plenty of attention and remain unflinchingly faithful. In return for this, you’ll deliver rewards beyond their wildest dreams and a future brighter than the stars. But you’ve got some issues and everyone knows it. You’re widely considered unsexy, difficult to understand and rather high maintenance. Finding serious suitors is going to be tough on you. And to fully understand the challenge it’s probably best to start with how CRM – be it online or otherwise – ended up with such a reputation in the first place.
“CRM is a bit of a dirty word in lots of circles, because for the previous decade it was the holy grail of marketing and it was used and abused; a lot like the word ‘content’ is at the moment,” says Anthony Johnston, head of one-to-one at WPP- owned agency G2.
“CRM sucked up a lot of brand budgets on massive projects that didn’t deliver and there are multiple reasons why that happened. Marketers are jaded and they should be, as brands were over-promised and the term CRM was thrown around in a box where it’s just impossible,” he says.
Perversely, it seems the dot.com boom of the late 1990s actually served to do CRM more harm than good. What should have been the opening up of massive amounts of customer data and a clamour for eCRM activity – given the vastly cheaper media costs than direct mail – in fact proved too overwhelming for many big brands, relationship- management practitioners and technology providers.
That boom saw large numbers of big businesses spend tens of millions of dollars on building technology that allowed, for the first time, marketers to create customised, personalised and highly segmented content and communications. But it also exposed the gulf between the emerging online world of that time and best practice in database marketing, as well as the shortcomings of many big brands when it comes to thinking long term about customers.Events of a decade past have left an impression that is only now just starting to fade.
As Camilla Cooke, head of digital strategy at Wunderman, puts it: “The dot.com bubble bursting took the wind out of everyone’s sails. Some of these big, fantastic web platforms built during the boom sat redundant like huge Ferraris in a garage without any petrol.“And that’s still the case, although we are beginning to see companies getting better about targeting email – there’s some fantastic tools out there that allow you to do it dynamically and make it intelligent. But because we still rely on that basic customer data rather than behavioural data, there’s very little customisation of web content going on.
Obviously you’ve got people like Amazon who do it on a product-by-product level, ‘like that, try this’. They’re using the stats to offer the right product. But that’s not based on the human being it’s based on the stats about their own products.”She adds: “It’s very slow. But people are using basic response data coupled to basic profile data and are beginning to send out far more segmented communications.”But even with the technology in place, there are still myriad issues holding back the possibilities eCRM offers.“With CRM generally it attracts data bureaucrats, who are all control freaks, and a lot of CRM projects tend to collapse – clients tend to underestimate and misperceive the technical investment.
They spend huge amounts on the technology and think that’s the solution. But it’s not. It’s the messaging that follows the technology that’s the solution. And typically all the data integration is so hard it just collapses under its own weight,” Cooke says.“As the head of Honda once said, ‘I used to have 25 databases until I decided to consolidate them all into one.
Now I have 26.”Small wonder the prospect of making the most of eCRM is a little unattractive. Adding a further layer of complexity is the issue of understanding, as it’s difficult to find a clear and commonly accepted definition of what CRM is. The premise is an attractive one: for most businesses it’s cheaper to sell more stuff to an existing customer than it is to acquire a new one. But nailing that down as a marketing ethos and pulling the focus – and budgets – away from tactical sales initiatives is tough.
Bronwyn Galvin, digital strategist at Bring, notes: “A lot of companies don’t get the eCRM side right and it’s often because sales teams aren’t incentivised for it and don’t see its value. Brand and sales and customer service aren’t joined up enough … after all, it’s hard to reward staff for a having ‘a good conversation’ or going to the trouble of providing good-quality feedback.”Moreover, the line between ‘CRM’, sales and brand building are increasingly blurred. “People simply want to be contacted and feel listened to in the channel they choose,” Galvin adds.
For his part, G2’s Johnston says that particularly in the current climate, its best to try and understand CRM as activation. “I don’t think CRM is the right term because it means a lot of things and it can mean nothing, it depends on your interpretation,” he says. “Vendors have a different view to agencies, to clients, to sales teams. For me it’s all around activation. It’s a very brave CMO these days who goes to the chief exec and asks for brand work budget. Even though brands need work, I think it’s all about activation. While some product life-cycles are very long others, like retail, are short, so there’s no reason you can’t sell to that online. You just need to understand the touch points and focus on that conversion pipeline.“
A lot more work needs to be done on what people do when they move through your website or when they touch your various points, and ways to play with all of this and improve it a few percent should be explored. At the moment however, the focus is all tactical, rather than really watching how people move through your pipeline and how to convert them.
”Matt Melik, group business director at Tribal DDB, shares some of Johnson’s sentiment and underscores the value that should be assigned to eCRM. “Brands are not investing enough in this area at all. CRM, especially managed through digital channels, is crucial to developing the relationship, value, loyalty and influence of customers. As well as maximising ROI on all marketing content – from a brand and customer perspective.”Adds Melik: “As customers now have increased control of our marketing channels, moving to a pull not push dynamic, engagement will come from pin-point relevance and targeting. Brands can’t truly identify this relevance on a one-to-one basis without listening to customers … hence the importance of more CRM investment.” In a quest to assess the level of importance Australia’s biggest brands assign to potential online customers, B&T created a telephone-shy, email- obsessed customer-enquiry fanatic named Burt Onslow. Our intrepid fictional eCRM explorer then hopped online to toil away filling in heaps of those annoying forms people are asked to complete when they have a question for a brand. Leaving phone numbers where requested but asking to be contacted via email, the objective was to see which companies responded fastest, as well as which provided the best-quality response and allowed potential to take the conversation further.
By no means exhaustive, but nonetheless covering a whole lot of ground, Burt’s findings from contacting 50 of the biggest brands in the land are outlined across these pages (see box). There are a few big-name brands that don’t exactly cover themselves in glory when it comes to online customer enquiries and, incredibly, there were even one or two that don’t field enquiries online, insisting you post them a letter (or call) instead.Of course, this is the absolute tip of the iceberg when it comes to dealing with customers online, but it’s also a vital place for brands to cover off when prospecting their customer pipelines.
As Johnston puts it: “If you don’t get your online communications right, there’s a massive hole in your channels, you’re routes to market.“I’m not that surprised to hear the first experience (B&T tested) isn’t that bad because at an enquiry level that’s pretty easy to get right. In fact it’s harder to get wrong, because it’s just so simple and most places are set up with some sort of customer service. Where brands are letting themselves down is what you do in response and what you do after that, because at the moment the whole activity needs to be around shifting people to buy.”
While not as single-minded on the shift to buy, when it comes to what happens after that first interaction Wunderman’s Cooke is equally as keen to play up the importance of getting close to the consumer via eCRM.“If you take the ethos of a store with a sales rep into digital, that’s the coal face with the customer now in many cases. And any inaction on your part means they’ll go to the next brand that’s doing well. Consumers now will just flip and flip and flip until they get what they want.“The point is, best practice is a value exchange. If you want the right to talk to consumers what are you going to give them for that? You’ve got to find engaging ways to get more info out of them. You need to analyse your data properly … then when you move closer to the moment he’s in market, hit him with the hard sell.”
From a big-brand perspective, Andy Mallinson, Fitness First marketing director, is tuned in to the value online touch-points can bring to customer acquisition and loyalty. He also points to the potential for tailoring a user’s experience online as vital to the future of eCRM.“It’s all about behavioral targeting. Providing data on a website based on what activity took place on that site prior. We don’t do any of that just at the moment; but there are a lot of business that do overseas,” he says. And Mallinson is instigating an overhaul of Fitness Fist’s own website with that in mind. “Enough isn’t done to make the most of the data you can collect online. We’re completely overhauling our web touch points now, particularly with reference to how useful it can become for existing members. Our site currently is almost totally geared to new members really – there is a member area but it doesn’t use any data; your local club, how often you’ve been, what classes you attend.
All these things need to be front and centre for anyone logging in who is a member.”Of consumers’ interaction with different websites in years to come, he adds: “Absolutely the experience will soon be different for you as a user knowing your information and profile, compared to someone else who may be sat next to you at work but has behaved totally different online when visiting the same site previously.”It’s a point also flagged by Cooke: “If you look at a website often 95% of people have walked in to your shop front and been ignored. My definition of eCRM is ‘you don’t need to know someone’s home address to target content to them’. You know they’re interested if they’ve come in and clicked on this, that, and this … so if I was a shop assistant I’d say ‘sir, can I tell you more about that.’ But there’s a tendency to ignore all that data because the people controlling it come from a traditional CRM background.”From an agency perspective it seems many brands are still stuck in old-school ways of thinking, and lack long-term champions within their organisation who will push through new eCRM thinking. But if that mentality can change, big rewards could follow.
As G2’s Johnston says, too many brands aren’t making enough of using customer data, opting instead to “simply use it as a resource to send out information for the sake of it.”He adds: “If you do that you’re diluting your return and diminishing your return every time you do. And it costs you money to get these enquiries and information in the first place, as you have to attract this traffic.“Instead of relying on talking to customers about things they might not be interested in, I think the extra effort has to be put in to determining what you think they’ll want next and just driving them to either go in-store or re-enquire. There has to be some action out of it. If it’s just an FYI then that’s very inefficient. And that’s where I think brands are letting themselves down, it’s that they’re not as focused on activation as they should be.”But will big brands’ sales and marketing operations ever be able to put their issues aside and form a deep and lasting relationship with eCRM?
Cooke sums up: “The real problem is if you’re a marketing chief, do you want to go and sit with that gorgeous girl from the ad agency on a shoot, or do you want to go and see the data bods? I mean, what would you rather talk about at the party on a Friday night? That’s still a part of the problem; making TVCs is sexy, even some web stuff is sexy, but CRM programs are really boring. People just get bored with them and it’s not appealing.”Tough economic times may though force many businesses to re-assess what they want from their marketing dollars long term – although that will still take a little time, as short-term thinking rules when budgets are tight. Nonetheless, the rules of engagement between brands and consumers are changing so fundamentally that eCRM could yet have admirers queuing up around the block.
