Quick Takes | Trends Changing the Tides


Tidal Change in Marketing Fundamentals

We’ve all noted the 2012 Trend forecasts:

  • More digital marketing– Forrester research reports $41million will be spent in interactive marketing in 2012, up 2% over 2011.
  • More mobile usage and apps –38% of mobile phone usage is spent in email, triple that of social media, News/Current events, Search, Portals and Entertainment. With Near Field Communications(NFC) you’ll transfer contact info, or money between two accounts with the gentle tap of two smartphones together.
  • More social – 2011 research from the Pew Internet & American Life Project found 65% of online adults use social networking sites, and 23% of US adults, use phones to get directions or recommendations based on their immediate location. Leveraging their Facebook(FB) popularity, Aeropostale has put an e-commerce store within the FB network, for shopping, sharing or just liking without leaving FB. Social shopping should increase with proliferation of social sign-on.
  • More Local, and Local/Social – the same Pew Research found that 9% of internet users set up social media service to automatically include their location in their posts. Meanwhile, Walmart has added a “MyLocalWalmart” app to their FB page so customers can get their local deals, and daily deal sites like LivingSocial have added current location-based couponing.

Undeniably, the convergence of digital content, mobile applications and social sites is:

  • changing customer behavior and elevating expectations for sales and service, and
  • changing single source brand messages into multi-participant conversation, and
  • empowering customers with control of the terms of engagement.

The strategic by-product of these trends is a tidal change in two fundamental marketing constructs of the last 25yrs. — the Sales Funnel and the Customer Lifecycle. Each concept has to be redefined to function as a framework for formulating tactics and budgets, because it’s pretty clear companies and brands, no matter the industry, are not leading customers through the purchase decision process any longer.

Sales Funnel or Whirlwind?sales funnel chart

The interplay of digital communications in email, social and mobile channels, means vocal, networked customers share brand experiences immediately and broadly to their Facebook friends and on services like Baazarvoice. Prospects compare products, read reviews and seek recommendations on the web long before they ever seek any brand communications – digital or face to face. Perhaps the historical sales funnel, where the majority of sales and marketing resources were once invested in generating quantities of leads resulting in a fraction converted to customers, should be upended. Email Service Provider (ESP) Constant Contact recommends shifting sales and marketing budgets and resources away from Lead Gen into engagement with current customers to generate:

  • Profitable repeat sales
  • Cross-sell and a broader brand positioning
  • Referrals and qualified leads for new business.

Reconfiguring the funnel into a branching tree seems appropriate as lines between Sales, Marketing and Customer Service blur further by the incorporation of marketing automation tools like Net-Results, SilverPOP or Eloqua into the drive for profits. Triggering messages and incentives to individuals based on their online behavior will speed the realignment of Sales, Marketing and Customer Service for greater ROI. In sum, “lead nurturing tracks that take a common inquiry through several stages of qualification across the buying cycle—instant email acknowledgement, 24-hour human contact, and rapid escalation of hot revenue opportunities to sales teams and partners for fulfillment. This sort of approach will become the norm in the not-too-distant future. Revenue will depend on it.” –Kristin Hambelton, Vice President of Marketing, Neolane.

Customer Lifecycle…Interrupted

“Customer loyalty has been identified as the top non-financial challenge facing companies in 2012” stated a report by Loyalty 360, the loyalty marketing association. Perhaps the customer lifecycle – the heart of CRM- hasn’t been obliterated by daily deal sites, its added new dimensions. Recently, Joe Cordo, CMO for Extraprise , a leader in database marketing, described the new customer lifecycle as different levels, such as the engaged stage, where the customer raises his or her hand to say they’re interested becoming a Facebook fan, and interacting with the brand and people by sharing their experiences and soliciting opinions before making a decision.

Marketers are adapting by deepening new and existing relationships through more direct, one-to-one communications of relevant content, like the Kraft’s iFood app that gives users access to Kraft recipes, building shopping lists from recipes and scanned pantry bar codes,sharing recipes on Facebook, and linking mobile coupons to their grocery loyalty cards. Sephora’s mobile app integrates customer product reviews, product demos and e-Commerce. Other tactics that reflect marketers focus on relationships in broader terms than trial and repeat are:

  • increasing use of testimonials, and
  • encouraging brand reviews,
  • requests for recommendations, and referrals
  • refer-a-friend promotions.

Next Steps

To re-evaluate how we use the Sales Funnel and Customer Lifecycles concepts to plan and budget we should:

  • Redesign performance analytical milestones to encompass social indicators –“likes/shares”, reviews and referrals as well as trial, repeat and cross-sell
  • Rethink the alignment of sales, marketing and customer service to execute efficiently across multi-channel platforms, for greatest ROI
  • Rethink compensation so that sales, marketing and customer care are committed to retention, and organic growth of the customer base on par with business development.