February 21, 2012

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Building Brand Relationships I have more relationships that I can handle. I do a so-so job, managingup, down and sideways at the office. I do a little better with my gorgeouswife, great kid and lovelorn dog. I struggle to manage relationships with dog-walkers,doormen, dry cleaners, tech guys, postmen, next door neighbors, visiting cousins, finance guys, college pals and professional peers. I am maxxed out. I really don’t have room for relationships with my fabric softener, myshoes, my dishwasher, my news agent, HBO, The Mets, each of the 65magazines I regularly read, my iPhone, Verizon, my toothpaste or my TV set. And even if I did, I am not sure I’d do any better relating to them. I guess I should be thrilled that hundreds of corporations have decidedto take this burden off my shoulders by investing in Facebook pages, Twitter Feeds, Wikipedia entries, e-mails, text alerts, loyalty cards and CRM programs. I am flattered that somebody out there is trying to keep up with me, keep track of me and keep selling me. The problem is I’m an odd duck. So are most people. We don’t really dowhat we say we do. We can be distracted and rerouted by deals and offers. Wechange our minds easily and frequently. We take advice from strangers at cocktail parties. We can be sidetracked by slick design. And for large categories of goods and services just don’t care. When all the hype, tech talk, bells and whistles are stripped away, CRM rests on threefundamental direct marketing principles. Birds of a Feather flock together. If you can find the demographic, psychographic lifestyle or workflow patterns that define your most valuable or most frequent customers – you can find them easily and serve them better. RFM Rules. If somebody takes an action, it’s easier to get them to doit again. The sooner; the better. And if you watch how much they spendyou’ll get a feel for how much they could be worth to you as a customer.It’s all about recency, frequency and monetary value. 80/20 is Real. 20% of your customers yield 80% of your volume. Ideallyif you can identify the 20%, you can communicate with them much morecheaply and thereby maintain volume while increasing margin. After all this, when a marketer gets it right it’s a beautiful thing. When they blow it, it’s a colossal waste of money. Allow me to site a few examples from my relationship-rich life. They are not statistically significant or projectible. But I have a hunch they reflect the state of the CRM art. Norm Thompson: Fifteen years ago I saw an ad in The Wall Street Journalthat read “I make the world’s most comfortable socks. If you doubt me, sendme your card and I’ll send you a free pair”. Being younger, poorer andmuch more gullible (I thought there was a real guy named Norm in Oregon). Idid it. So did ‘Norm’. ‘Norm’ sends me a flyer about my socks twice a year. And like a lab rat I buy 3 pairs twice each year. Do the math. For the wholesale cost of a pair of socks and thirty 50-cent mailers Norm has built me into an annuity with a present lifetime value of $570 and a future value worth at least $38/year. It’s an ROI you or I would kill for. American Airlines: I am a mile whore. But American seems to know whenand where I fly even though they’ve never asked me a ton of nosey questions.They post my new points quickly and offer me deals on the routes I fly.They upgrade me much faster than their competitors and generally make mefeel like a big shot. On most flights I get automatic upgrades oftenpresented with handshakes from smiling gate agents. I’ve repaid theirlargess with frequent use, several incremental vacation packagepurchases, light mileage redemption and positive word-of-mouth. And I'm not so worried about their bankruptcy filing. Amazon.com: The home of the original predictive filter bedevils me.I purchase an average of 40 printed books each year using that magical, demonic ‘1 click buy’ feature. I haven’t grasped the Kindle yet. But they aren’t very grateful. They never write or call. Even the stodgy old BOMC celebrates my loyalty better. Brooks Brothers: I have worn Brooks Brothers Oxford cloth buttoned-downshirts since I was eleven. I used to buy them with money from my paper route. Since they’ve gone cyber, I have benefited from some great discounts. But, I can’t tell if they’ve sorted me into a “value buyer” category or if it’s just a...
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The Pinterest Success Formula Pinterest, the virtual pin board, tickler file and scrapbook, has come out of the woodwork two years after launching and captured the attention and the traffic of 10 million unique users and generated approximately 1 million pins almost overnight. The average user is a woman who spends 15 minutes per session on the site. According to RJ Metrics, Pinterest engages users two to three times more efficiently than Twitter did at a similar point in its history. Eight weeks after signing up, 40-60 percent of users are still pinning. This is counter to the usual cycle of sign-up, test and abandon that plagues so many sites and niche social media properties. In an arena of social media phenomena, it’s the latest skyrocket that sent start-up CEOs and VCs into a state of jealous lust. How has Pinterest done it and what is the formula? Newness. We’ve been doing Facebook and Twitter and the others for a while. As we become complacent about social networking or burnt out on cat videos and baby pictures, it’s a shiny new object. Familiarity. Pinterest uses technology to do what most women already do – clip, pin and save stuff. They tapped existing scrapbooking behavior and it’s muscle memory with a new twist by adding the ability to share and see other women’s pins. Petula Dvorak called Pinterest “digital crack for women” arguing that “the site’s churning cycle of interest, hope, inspiration, jealousy, desperation, despair and depression keeps them coming back. Add easy functionality. You sign-up and hit the “Pin it” button. It requires no investment of time or learning and accelerates behavior many women were doing anyway. Etsy is the most pinned site followed by Google, Tumblr, Flickr and shelter sites like Martha Stewart, Better Homes & Garden, Houzz, Apartment Therapy, Real Simple and others. Pinterest takes flipping through magazines and clipping them out of the bedroom, the nail salon or the waiting room and puts its online and on public display. Over 80 percent of pins are actually re-pins. Women see stuff other women like and virtually endorse it by passing it along or re-pinning it. Strong Visuals. Pinterest is about pictures. It is a visual cornucopia reflecting personal tastes, choices and aspirations. Women vie to pin the most interesting and arresting images because what you pin says something clearly and definitively about your taste, aesthetic, class and lifestyle. It’s a fantasy look book and an on-going social competition that everyone can rally to. Press. Pinterest has become a media darling. And each story or link brings new traffic and new users to the site. The volume of coverage has created a spike in registration, even though newbies may be less committed or engaged than users who found Pinterest before it was cool. Add the usual woman-to-woman WOM to this press gusher and you have serious inbound momentum.

Danny Flamberg

I am a veteran marketing consultant working with leading and emerging brands

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