2. Radically Proactive Marketing – The New Name of the Game
The old rules of the game - Advertising, shelf space, retail presence.
The new rules of the game - Predictive models, one-to-one offers, outbound
campaigns.
65% of product launches fail. That’s means that the millions of hours and millions
of dollars in resources invested into developing two out of every three products is
a complete waste. Visit an electronics store, a bank, or a telecom dealer, and odds
are that two-thirds of the products and services you see there won’t be around
the next time you visit. Rather sad, but rather avoidable as well.
Poor planning and lack of truly understanding what the marketplace desires are
some of the root causes of such failures. But an overall inability to move such
products and services falls on marketing and sales. The passive culture that
permeates within these two groups – particularly in marketing – is inexcusable.
For too long, marketing teams have been allowed to pass the buck, by blaming
sales teams, by blaming executive management, by blaming anyone but
themselves for the failure of a given product or service to sell.
In actuality, no one but marketing is to blame. A passive attitude whereby sales
are somehow mythically driven by just increasing advertising or retail presence
doesn’t cut it anymore. It’s time that marketing teams make a radical shift to the
world of proactive marketing.
Proactive marketing, in all aspects, is the opposite of what’s done today by most
companies in B2C sectors. Anything and everything around selling more to
customers, making them more loyal, or even acquiring them is done on a one-to-
one level, never on a mass-scale – be it in the form of individual offers,
customized products and services, or outbound contacts , it’s about winning
customers over one-by-one. It’s done below-the-line, it’s personalized, and it’s
relevant – again, all characteristics that are radically different than business as
usual.
Proactive marketing is not, however, an end-all solution. It does not mean an end
to traditional marketing; rather, it’s a complementary effort. It’s the extra push
that gives companies the edge against their competitors, it’s the little bit more
that makes or breaks a product or service, a relationship, a company.
Companies ready to take the leap and begin their own proactive marketing efforts
need to follow a set of steps to build the base for conducting such activities, steps
that can be summarized as follows:
1. Get to Know Each Customer: The first step is to truly understand the
differences among the customer base, with each customer having his or her own
set of behaviors and needs, not to mention potential value. The goal here is to
3. take the mass base of customers and at least segment them into several dozen
actionable groups.
Some of the key factors that help define and differentiate these groups are
around demographics (age, nationality, gender), product usage (recency,
frequency), spend (existing, potential), and needs (in terms of products and
services). Companies in certain sectors traditionally have such data on hand (i.e.
telecoms and banks), others need to build mechanisms for getting it (i.e. retailers
through loyalty programs).
2. Build the Offers: Proactive marketing in its essence is sales, by making a
relevant offer to the right person at the right time. Based on the defined target
groups, products and services that are relevant to them must be identified, and
offers developed around driving uptake. It is critical that the offers be relevant,
otherwise, it’s no different than business as usual – trying to sell ice to an Eskimo
as the saying goes.
Not only should the offer be relevant, but there should be an additional
enticement for the customer to pull the trigger. A couple examples of smart and
relevant offers with enticing additional benefits should make this clear:
Financial Services
Scenario: Mary Smith is one of our credit card subscribers, but does not have her
salary deposited into our bank. Rather, she pays her credit card statement
through another bank.
Objective: To get her to open a checking account and have her salary deposited
with us each month rather than have her keep her savings elsewhere.
Behavior: An analysis of Mary’s credit card usage behavior shows that she makes
numerous airline ticket purchases every quarter, and spends a great bit overseas.
Mary also spends the rewards points she earns from using the card, which she
earns on a “one point to one dollar” ratio.
Customized Offer, via Phone: Mrs. Smith, if you set up a checking account with
our bank and make automatic salary payments into it each month, instead of one
point for every dollar, you will instead earn two points for every dollar you spend
on your credit card for all airline ticket purchases and overseas spend – a benefit
you will enjoy as long as automatic salary payments are made each month.
Electronics Retailer
Scenario: Bill Reynolds bought an HP laptop three years ago from us, a transaction
recorded via the fact he used his loyalty card when he made the purchase.
Objective: To get him to buy his next laptop with us, as analysis of similar
customers has shown that it’s now time for him to replace his old one.
4. Behavior: Bill is an iPhone junkie. He bought two iPhone 3Gs from us the week it
came out, and one iPhone 4 from us the week it came out as well.
Customized Offer, via SMS: Exclusive for you, buy an HP laptop from any of our
stores this week, get $50 off your next iPhone purchase (iPhone 4 or next year’s
iPhone 5).
Telecom
Scenario: John Doe used to top up on average $50 a month each of the prior 18
months – the last 6 months he has been averaging $20.
Objective: To get John back up to $40 or $50 spend per month.
Behavior: The decline in spend has come from a complete cut-off of international
calls – John used to call the UK and would generate us $20 - $30 in revenues each
month from this behavior. His current revenues are comprised of data and local
minutes usage.
Customized Offer, via SMS: A special offer just for you – top up $50 within the
next week, enjoy half price calls to the UK for one month afterwards.
It cannot be stressed enough that for every offer that is designed, a solid business
case must be built, in order to ensure the effort makes sense financially. In the
above scenarios, it is assumed as such. Ultimately, any effort that generates
revenue that normally would not have been realized (regardless of dip in gross
margin) is an effort worth undertaking (assuming all else is equal, such that the
actions are not offered to the masses and are targeted, are not made to the
wrong customers, etc.).
3. Pick the Channel: There are many channels that can be used for reaching out
to customers. Each has a different effectiveness rate based on the offer to be
made, and obviously each has a different cost associated with it. In certain cases,
making calls will make sense, in others, sending an SMS. Other alternatives such
as email, mailer, and auto-dialer also can be used.
We recommend companies play around with this aspect of proactive marketing,
mixing and matching offers to various channels, to determine the best blend of
channel usage. Small-scale pilots with different customer segments, offers, and
channels will get the job done here.
4. Gain Momentum: As daunting as it may seem to get the whole effort up and
running, it has to start somewhere, and we recommend it start small. Pick a
couple of hundred customers to be contacted with one or two offers to begin
building momentum, to gain some visibility across the business. Successes should
be shared, failures learned from, modifications made as needed. The truly hard
part around shifting to a proactive marketing mode is getting the first three steps
5. listed above completed, yet it’s often this step where things fail. Building up
success by success should help ensure a full-scale rollout is ensured.
In this day and age when competition is fiercer than ever, margins are down, and
customer expectations are sky-high, companies need to find an edge, that extra
advantage against their competitors. We are confident they can find it in
proactive marketing, a practice that will proliferate across companies and sectors
over the coming years.
6. About Forte Consultancy Group
Forte Consultancy Group delivers fact-based solutions, balancing short and long term
impact as well as benefits for stakeholders. Forte Consultancy Group provides a variety
of service offerings for numerous sectors, approached in three general phases –
intelligence, design and implementation.
For more information, please contact
info@forteconsultancy.com
Forte Consultancy Group | Istanbul Office
www.forteconsultancy.com
