Why Customer Marketing Fails

You’ve been reading about it for at least 10 years. It goes by many names: customer marketing, relationship marketing, one-to-one marketing. Place the customer in the center, and focus your marketing programs on delivering what the customer wants, when the customer wants it. It all makes sense. It’s how most of us like to be treated when we give a company our business. And when done right, it can affect loyalty and increase share of wallet.

In August, the American Marketing Association (AMA) announced that it, too, recognizes the importance of customer marketing. It updated its definition of marketing with a new emphasis on managing customer relationships. The Peppers & Rogers one-to-one email newsletter didn’t miss the opportunity to congratulate AMA on joining the 21st century (my words) with the first change to its definition of marketing “in almost 20 years.”

I suspect marketing won’t change one bit as a result of AMA updating its definition. Customer marketing not gaining wide adoption is an issue of organizational structure, strategic commitment, and incentives, not a lack of definitions, awareness, or case studies demonstrating why it makes financial sense.

Four years ago, I wrote a book called “The Engaged Customer: The New Rules of Internet Direct Marketing.” It’s about how to build lasting customer relationships using personal, targeted, relevant email driven by customer wants and needs. The book did well. Readers seemed to like it, yet most email marketing programs still leave a lot to be desired.

How can that be? It seems so obvious and easy to do it right with email compared to the “old” offline media. It’s much easier to personalize and deliver timely email messages than traditional print communications. The cost of communicating offline usually dwarfs online equivalents. Yet most email marketing programs still suck.

Having had a chance to work with companies large and small to develop customer-focused email communications and marketing programs, I’ve developed some theories why:

• Customer marketing is complicated. Customer-focused marketing programs are complex to implement. They often require technology infrastructure support. They’re complex to operate, too. Disparate parts of an organization must cooperate for a program to be successful. If customer service doesn’t know about a very personalized, relevant customer communication from marketing, the company or brand will fall flat on its face when the customer contacts customer service with a question, only to find no one ever heard about that friendly, personal email she just received.
• Complexity requires smart people. You need real leaders to create an effective customer marketing program. As indicated above, the complexity of such a program means it can only be implemented with strong internal stewardship and commitment. Success is predicated on good people willing to lead and to carry the torch. Don’t get me wrong; this is a good thing. Having your best people work on customer marketing and communications programs is a smart investment. My experience is that the leaders who carry the customer marketing torch are often relatively young. The problem isn’t that some of the best people in marketing tend to work on these programs, nor that they’re young. The problem is young, smart people often don’t stick around very long.
• Smart, young people move on. Once a customer marketing program is up and running, those who worked on it get recognized. Recognition and success lead to promotions and career changes. The innovators and leaders who make customer marketing programs happen get promoted away from the programs they create. More often than not, that spells the program’s death.
• Strategic initiatives require executive buy-in. Customer marketing programs are strategic. They require buy-in and support from the executive ranks. Without such support, they seldom happen. If they do, commonly they don’t survive very long. Many important customer-oriented programs don’t carry the one-to-one label, but instead have names like email marketing, customer data analytics, or Web personalization. Too often, executives view email marketing, data analysis, or Web personalization programs as tactical. In short, they don’t pay attention to them (unless their companies are accused of spamming or privacy violations).
• Bit economics are abused. Direct marketing programs are measured on a program-level return-on-investment (ROI) basis. In the offline world of “atoms,” the cost of contact (the atoms, i.e., paper, printing, creative development, postage, etc.) places economic limits on what a marketer can do. In the online world of “bits,” there are fewer economic constraints on contact. Whether you’re blasting 10,000 or a million email messages, the sending cost is low.Though the opportunity and capabilities of the online medium for targeted, relevant, timely communications is tremendous, it’s much more complex than “blasting.” Blasting to a million customers or carefully segmenting and targeting 100,000 customers with personalized, timed messages may yield the same results, but the latter is more expensive. If you have a strategic, long-term, customer-asset-value view of the world, you’ll want to carefully manage customer communications to optimize long-term returns. Or, you could just blast a million…
• Did I mention smart people move on? Once the people who conceived and implemented a sophisticated customer relationship program move on (get promoted or get a new job elsewhere), the new guy may not appreciate why he’s spending so much on email. So he kills or guts the program, starts “blasting,” and gets reasonable results for far less money. At least, for the short term.

Building lasting customer relationships reaps enormous economic benefits. And it’s not easy. Doing it well and reaping those benefits requires a long-term strategic commitment. If you rely on young, smart, ambitious leaders in your organization to light and carry the customer marketing torch, your program will be a blip, then probably fail. Only with strong and lasting commitment from the top and a corporate-wide culture that puts the customer in the center can the customer marketing vision begin to approach reality.

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