November 2017

Like it or not another year is coming to an end. That means along with the coming new year a new marketing plan must be created. Will you dust off last year’s and simply change some of the dates and elements? Or, will you take a step back and really assess what’s happening within your business, identify the key attributes and opportunities that will lead to your success?

Demands on Marketing Outstrip Human Capacity to Manage

One thing I’ve heard in numerous discussions with the marketing community is we seem to be reaching a level of process magnitude and complexity that approaches the outer limits of our ability to manage.

We’re creating a machine-based process with programmed responses and best-fit solutions delivered in a nanosecond to a faceless public. We call it marketing automation and it is progress.

Smaller companies that haven’t embraced a marketing automation system can’t begin to stay ahead of the demands that increasing digital interaction is putting on a traditional system. If you are going to compete in the digital landscape you have to go all in on the tools to be effective.

Remember when voicemail systems were first introduced? I’m dating myself but I remember hanging up with one phone call and finding two or three calls that I missed that were waiting for a return call. You just couldn’t get ahead.

The capacity for our ability to manage has been exceeded in the digital space without a cyber-assistant.

1.   Artificial Intelligence – Your friend in the digital age!

That means that organizations must rely more on Artificial Intelligence and expert systems to manage the influx of requests and resource needs. The artificial intelligence solutions range from smart systems that capture customer service information and learn responses or solve problems, to a simple marketing automation system that programs sales requests and follows up to consummate a sale.

2.   Humanize and Personalize – It’s all about me.

While the world has increasingly become more “efficient” and “process driven” an opportunity to differentiate lies in the ability to humanize and personalize every experience.

When emojis first showed up in the digital space we scratched our heads wondering why they were needed. Now we see we have a tool to convey context and intent in conjunction with a written word. Emojis create smiles and memories well beyond what words alone can do especially with the short attention spans we experience today.

Consumers are expecting to see personalization in use in today’s marketing environment as a matter of course. Rarely do we see a credible provider addressing a customer in an unfamiliar manner.

Print and digital communication can now both deliver highly personalized communications that leverage stored meaningful data.

3.   Write It Well – No Spam on this menu.

The quantity of words being pushed out to the consumer is growing by double digits. In 2011 the US was responsible for over 200 Billion texts per month! We have a deluge of content unleashed upon mankind. More words with fewer people reading them.

In a sea of words, you want to ensure that the quality of your content is at the highest level possible. Content factories are pushing out more low-quality content that’s more driven by SEO than educating or communicating well with the reader.

The result is poorly produced arguments, illogical conclusions, and generally unsatisfying stories. Without a commitment to quality, your brand can suffer as you lose credibility with your customers and prospects. Take a good objective look at your content to ensure it meets today’s more rigorous standards.

4.   Market the Experience – A higher calling for retail companies.

Increasingly, the consumer is replacing many of their shopping experiences with automated ordering, subscription services, and low engagement activities. When you can order an entire wardrobe as a subscription and have it sent to you on a weekly basis, it creates an unmet need for experiential fulfillment to fill that space.

Today consumers want to experience life and events. With extra time on their hands and fewer of the mundane chores of life being handled by autopay subscription services, point and click fulfillment, even car purchasing (being delivered to your door!) – there is little joy left in the act of just shopping. To many, it’s becoming a chore that can be easily completed from your desktop.

That means each interaction with you as a product or service provider must become “an experience worthy of a selfie and a posting on Facebook.” Consumers are loath to engage in the mundane. If your product or service doesn’t deliver a memorable experience they will avoid the interaction.

Build a focus on education, insight, consultative support while you continue to work towards creating a holistic relationship. Examples of this include:

• Restaurants – building more entertainment and uniqueness into the dining experience. It’s not enough to have good food anymore as consumers can order a restaurant quality meal delivered to their home, or even assemble it themselves.
• Banking providers, there should be a greater focus on education and planning support that enhance the consumer’s long-term financial health.
• Healthcare providers should be conducting wellness seminars and providing instruction for better living. When are we going to see a medical facility open a fitness center?

5.   They’re Not Dead Yet – Don’t ignore the Boomer segment.

As the age of the marketing community steadily decreases it’s easy to believe that the world revolves around the Millennial and a declining importance for the Boomer generation.

While the Boomer generation is declining and will continue to do so, they still represent the largest purchasing power in the US today. It’s estimated that the Millennial segment will have a total purchasing power of over $200B in 2018. but the Boomer Generation is projected at 8 times that amount worldwide!

A big focus of major firms today is the question of “Fintech” and how to either better compete with a digital-only provider or how to integrate a timesaving, consumer-friendly financial services platform into your traditional financial services business.

Fintech is a modern day gold rush. The investment capital into the Fintech space continues to grow.

Consumer Digital Solutions –Predominantly High Tech; Low Touch

We know that for most digital transactions, consumers like the efficiency and convenience that are at their fingertips. Simple transactions like picking out groceries, or ordering from a menu really don’t require a heavy lift. We have even become comfortable buying airline tickets, and reserving and paying for hotel rooms and rental cars from the convenience of a website or app.

But What About Financial Services?

From the time that the ATM was introduced in 1969, financial firms embraced technology that extended their service capability and provided user convenience. Today there are over 3.5 Million ATMs worldwide. The ATM replaced the fairly simple activity of withdrawing money from your account, making deposits and simple transfers. These lower-complexity transactions were high tech and low touch, a winning combination for something so straightforward.

In fact, the cast of Saturday Night Live parodied the triviality of bank transactions in the classic comedy spot, “CitiWide Change Bank.”

Click below to see this classic spot:

Winning Fintech Solutions – High Tech; High Touch

As the range of Fintech solutions grows, the barrier to market success will come from trying to solve problems that fail to take into account the human side of this equation. A high tech, high touch service platform will be necessary for those transactions that require conversation, consultation, and coordination with a knowledgeable individual.

Our Experience in a Digital Lending Platform

Over the past nine years, our firm has partnered with a Fintech firm, CUneXus to deliver consumer-lending solutions to the financial industry. This platform is now installed in 65 firms throughout the US at institutions sized from $250MM to an excess of $10B.

In the early stages of The Loan Generator, we identified several things that needed to happen for adoption:

1. Consumers needed to be educated on the new tools that were available (allowing them to select from pre-approved loan offers)
2. Consumers needed an explanation on how to interact with this new process
3. Consumers needed to have ready access to support staff to assist in completing the transaction

With our model, after the completion of the transaction (high tech), the consumer identified the time and method for a follow-up call with the representative (high touch).

In some cases of high-transaction products like credit cards where consumers understand the product and the process more clearly, very little consumer follow up interaction takes place (low touch).

The Role of Human Capital in Fintech Evolution

While we can see that simple transaction activity, like making change, deposits, and even some loans will not require highly-skilled back-end support, other solutions will. Using our experience with the Loan Generator System we have found that there are two primary benefits that have been delivered to those that use our platform: Incremental Loan Volume and Profits, and Streamlined Loan Processing. 

This has been accomplished with little impact on headcount.

It appears that the net impact on the number of people has not changed. The efficiency of the program combined with the volume increases has been a net wash on the human side of the equation.

The program drives loan profit without adding support staff.

However, it does mean that the people now supporting the program will have to learn some new skills in conjunction with the changing environment. For instance, processors might now be talking about their consumer’s current lending offer but may also be asked about the other loans that are available to them. They now may need to be able to discuss these options and alternatives more consultatively and with a front-facing mindset than in the past. In this model, we bypass the loan officer and direct the fulfillment efforts right down to the processor.

While we may be reducing the in-person connection at the start of the loan process, the process itself can continue to be highly consultative and supportive as needed. Different loans will require different levels of support. And, different consumers will likely have a greater reliance on available support.

Any Fintech solution should be flexible enough to provide this capability.

You should expect that some technology solutions will save you both labor costs and deliver transaction savings. However, you should also strive to maintain the important personal (high touch) links and relationships that you have with your consumer and train your people accordingly.

To do otherwise will only push them to your competitors.

Whether you call it one-to-one marketing, individualized marketing, or personalized marketing, the ability to use variable data to connect with your current or prospective clients in a personal way can be rewarding.

Leveraging data analysis and digital technology to deliver individualized messages and products is a great way to connect with consumers. Of course, you have to be careful in the way you use that data. I’m sure we all remember the New York Times article from 2012 that outlined how Target used predictive analytics and data to determine that a high school girl was pregnant before her own parents knew.

Scary or Great Marketing?

The scary part of Target’s personalized marketing effort back in 2012 was the way they used the data to create a coupon book that was composed completely of pregnancy-related coupons thus making the consumer feel they were being tracked. Since that time Target and other companies have learned to create an experience for the consumer that does not feel so intrusive. A coupon book today is usually peppered with a variety of coupons with some targeted towards the intended consumer.

Back in 2011, Coca-Cola used personalized marketing to grab consumer’s attention down under in Australia. Their “Share a Coke” campaign has since expanded to other countries, including the U.S. and now includes college football team bottles, Major League Baseball bottles, and Major League Soccer personalized bottles.

The difference between the 2012 Target personalized campaign and the 2011 Coca-Cola campaign is that one made the consumer feel uncomfortable about the data that had been collected and the other invited the consumer to participate in the experience. It’s the difference between being helpful and being watched.

Variable Data Gone Wrong

In 2015, Nutella tried a personalized labeling campaignwhere they used variable data and allowed consumers to create their own labels. Let’s just say that sometimes you need to be cautious about whom you allow around the computer keyboard. The public decided that they’d have some fun at Nutella’s expense. The images I’ve included here are a few of the labels that are “safe for work.” You can only imagine what some of the other labels looked like.

Personalization and Variable Data Success

Ford Motor Company has seen great success with personalization in their extended service contract sales materials. A recent data-driven self-mailer increased sales 35.7%. Ford included 12 variable data points that increased the relevance of the mailer to the consumer. Some of the data points included:

• Type of truck
• Recipients Name
• Year of vehicle
• Warranty expiration date
• Gender image

These direct mail pieces from Ford Motor Company walked the fine line between “scary” data collection and helpful data usage.

Creative Package Design

Here at Westamerica Communications, we put together a “scary” package to share with our current customers. We didn’t use data to scare our clients with all the information we’ve collected instead we created a Halloween personalized promotional package.

The personalization went beyond the use of our client’s name on the package. We also included information about us. Each candy bar included the sales rep’s name, phone number, and email. That way the client will have the rep’s contact information readily available. So, the next time they’re looking for package design in Orange County the client need look no further than the candy bar on their desk.

Personalization can be used in a variety of ways to engage customers. Creative use of data can be entertaining, helpful, and promotional. Whether used in coupons, direct mail or creative packaging, the use of variable data to create a more personalized experience for your clients will result in a more effective marketing campaign.