SEPTEMBER / OCTOBER 2012 | PDF | Subscribe | Home

Consumer Commandments
Today's consumer could be tomorrow's media director.

Back in the day, when I was at Ogilvy and we were trying to understand how to use scanner data from the point-of-sale systems that captured what customers bought, our legendary media director, Jules Fine — one of the pioneers of marketing — asked us what we were going to do with all of that data.

We said we were going to use it to analyze what customers bought and match it up against the advertising that customers watched, listened to, and read. Then we’d have the Holy Grail.  Here we are, years later, and what we have looks more like Spamalot.

After all this time, the famous John Wanamaker quote from the early 1900s still applies: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” (I think it was Wanamaker; it might have been Yogi Berra. But it doesn’t matter because it’s still true.) 

Billions of dollars are being invested in systems to determine what you clicked on, opened, scanned, linked to, responded to and redeemed, but unless you have an online or retail business with a loyalty program, you have no idea who your customers are or what they bought.

As technology continues to fracture the marketplace, it is becoming more and more difficult to track customers as they move through texts, emails, instant messages, Twitter, online television viewing, DVR viewing, and so forth. As consumers add apps to their smartphones and devices to their hardware collections, marketers are getting further away from knowing what customers watch or do. As they gain more control and move from device to device or app to app, we’re spending most of our time chasing them down the street trying to find out which app they’re using at that moment.  

When they watch video, which device are they using? When they listen to music, which device are they using? When they talk on the phone, which device are they using? When they buy a product, which device are they using?

In today’s marketing world (as opposed to the larger reality we live in), the frenzy surrounding new media (new technology?) is not unlike the dot-com and real-estate frenzies of the past. The perceived value is often much higher than the retained value. This can happen when solutions seek problems.

David Pogue, for example, recently wrote a story in The New York Times about a new technology that uses facial recognition to allow customers to pay for their purchases, provided the merchant uses an iPad as their checkout device. This is being used mostly in small operations like coffee shops and local pizza restaurants. If merchants use an iPad and customers register with the service, retailers can identify their patrons by matching their faces to their pictures on the iPad screen.

Imagine the potential. Customers who naturally look like Bill Gates can get a lifetime supply of lattes. Or, a whole new industry of make-up artists will crop up around coffee houses and pizza joints to fool the facial recognition software. It’s unlikely that this technology will find its way into Kroger or Nieman-Marcus. (“Excuse me ma’am, can you turn to the right? According to my iPad, you have a mole behind your left ear.”)

It is unlikely to find its way into the future at all because all trends point toward a balance of power that favors the consumer. In a recent issue of The Wall Street Journal, Doc Searls, of Cluetrain Manifesto fame, excerpted an article from his latest book, The Intention Economy (see page 46). The article, entitled, The Customer as a God, offered the futuristic projection that, by 2022, consumers will have total control over the marketplace. That future may be closer than we think.

More than 50 percent of people no longer watch TV ads that they DVR. (Who are the other 50 percent?) Let’s assume that, over time, the percentage who don’t watch ads continue to become the overwhelming majority. At that point — except for news and sports — the ads will continue to diminish in importance.

The Retailer’s Advantage

In this emerging marketplace, retailers who aren’t collecting and using data are squandering an advantage. They have their own Grand Central Terminal, where their customers gather and come and go. While the rest of the marketplace is running down the street trying to figure out what their customers are looking at on their phone, the retailer has a
built-in “app.”

 Email response and open rates are at their lowest level since God created email. (I think it was God; it might have been Yogi. It wasn’t John Wanamaker.) The reason is that, in the age of Big Data, every business is emailing everyone instead of emailing relevant messages only to the right customers.

Too many businesses look only at cost instead of efficacy, long-term brand-building or customer satisfaction. If I’m a really good customer, I might prefer to get paper coupons instead of having to view them online. While it’s nice that I can bring my phone and get it scanned, the scanner often doesn’t work. If I have seven items that require a coupon,
the line could get very long while I fidget to open each coupon attachment.

Also, what do I do when there are connection problems or when the app won’t open and I have no access to your coupons? Have you seen what happens when the scanner doesn’t read the airport check-in barcode? The passenger rushing to catch a flight is ping-ponged to multiple TSA agents and finally whisked away to an undisclosed location and put into witness protection.

You might say that this is a temporary situation, and that successful phone scanning will eventually be solved because phones are ubiquitous. Let me call your attention to the television remote, one of the most ubiquitous devices of all time, which hasn’t worked right in 40 years.

We have the opportunity to engage with customers wherever they like to be engaged, as opposed to endlessly inflicting irrelevant messaging into the palms of their hands. Pretty soon all they will want to do is wash their hands. When you are reading consecutive tweets from onsite reporters on the collapse of Adam Scott at the British Open, do you want that interrupted by a tweet from McDonald’s about fries? 

Really good customers will be interested in partnerships that make their lives more convenient and that take advantage of the best offers. Why not ask customers where they would like to receive marketing? There is an opportunity to get a dialogue going with customers as to where they’d like to engage.

We work with a grocery chain that offers customers the option of receiving their circular by email, or receiving highlights about the circular by email with the option to peruse the rest of the circular on the website. As an incentive, there are additional offers to convert customers from paper delivery to email. This client also offers customers the ability
to use Facebook and Twitter to receive information and offers.

Another retailer, who has an older customer base that is not as comfortable with technology, offers customers the option of receiving once-a-month amusing phone messages that also include sales and offers.

Why not give people goddess-like powers to self-select media, devices, time periods? Offer other content in addition to coupons, discounts, and offers — it could be recipes, or nutritional information, or weight management programs, or games, or whatever is relevant to the customer and consistent with the brand.

Who knows? Maybe the customer would prefer to be a media director than a god (the pay is better anyway; not sure about the long-term benefits).



SPENCER L. HAPOIENU is president and co-founder of Insight Out of Chaos, a database and direct marketing company. He can be reached at spencer-@-iooc.com or (212) 935-0044.

SEPTEMBER / OCTOBER 2012 | PDF | Subscribe | Home