It’s a simple online banner ad, and not even a very creative one. It shows a hot-air balloon with the motto “”Secure Your Future,”” offering a link to a retirement planning specialist. But there, in the lower left-hand corner, is a picture of a traffic light.
Hovering over the light brings
up a menu with the following options: “”Too young for retirement planning,”” “”already have an investment planner,”” and simply “”Don’t like this advertisement.”” It’s all negative feedback, and according to Dave Schrader, it’s the missing ingredient in most marketing campaigns today.
Schrader, Teradata’s director of e-mail marketing, features the mock-ad in a slide presentation he uses to explain machanisms for finding out why some Internet surfers tune the banners out. He calls his approach “”green marketing,”” and says it can create a cleaner, more appropriate online environment for potential marketing targets. Teradata is the datawarehousing division of NCR Corp.
Schrader spent some time with Pipeline during a recent visit to Toronto to discuss his ideas in greater detail.
Pipeline: You use the term “”green marketing,”” which implies there is a lot of garbage being sent to people’s inbox in the guise of legitimate advertising.
Dave Schrader: This is all perception — you have to move from something being perceived as an advertising to being perceived as a message. For people that are avid hobbyists, like say a mountain biker, information about the latest and greatest mountain bikes is not perceived as advertising. It’s perceived as news. We start crossing the boundaries.
Pipeline: A lot of companies have invested in CRM. Why hasn’t more of the pre-screening happened at that point?
DS: I give a lot of talks on CRM, and certainly our company is helping educate people. I’m here in Canada and just spoke with the Royal Bank of Canada, Bell Canada, Hudson’s Bay — people that are in this world and trying to get their product messages out to considerable numbers of people. Marketers are getting smarter and smarter, and the way to know they’re getting smarter is to take a look at the conversion rates. At one end of the spectrum you’ve got spammers who don’t do any targeting at all. And they’re really, really annoying — they don’t use any information other than an e-mail address to just blast out their message. They’re conversion rates — one example is an herbal stimulant I know about. A guy mailed out 10 million e-mails, and he got a whopping 36 responses. That’s a 0.00036 per cent rate. That’s like, a thousand times worse than just the banner ads. When you don’t target at all, you just annoyed 9 million. You can do the math.
Pipeline: Is anyone getting e-mail marketing right?
DS: For people that do a good job, even with the banner ads — it was reported in the spring time that people were seeing a 21 per cent click-through rate. So one in five people were responding affirmatively. I think this is all still in what I would call the world of push marketing. You’ve got the marketing people and they’re trying to get the message out by pushing it at people, and that includes some of our customers like Royal Bank of Canada. They may be the pure Canadian one, but there’s the National Australia Bank, Union Bank of Norway.
Pipeline: What are they doing that tech companies could learn from?
DS: They’re also doing event-based marketing. What they do is they watch the clues as customers transact business with the bank, doing withdrawals and deposits, and other activities like opening and closing accounts. And they wait until they see an event. So all the activity around the transactions gets pulled into the Teradata data warehouse, and then there are what are called “”event detectives.”” At National Australia Bank the have 370 of these programs that are watching for interesting events or combinations of events. And when event detectives find something, then they decide to interact with the customer. Based on the nature of the customer and the relationship it could be a banker gives you a call to find out why you closed an account and took out $10,000, or it could be an e-mail. Or it could be when you come in to do a bill pay on the bank’s Web site they’re ready with some kind of offer for you. For example, if you made an unusually large deposit and it’s in a non-interest bearing account, they may have some offer to put that in an investment that would give you some kind of return. So when they do event-based marketing, the number that they’re reporting range from 25 to 60 per cent.
Pipeline: So if you were going to try to start green marketing, so what is the best technique to start?
DS: I think you begin with taking a look at all the channels and all the ways people interact with your company, just in the course of doing the transactions, the buying activity. Then you have to figure out where do people tend to want to learn about new product offers? I don’t think there’s one answer — a large part of what we do is help people get down to the individual account level. It could be that you want e-mails about new product offerings but I hate e-mails, because I’ve already got 100 a day and that’s not viewed as interesting. It could be I’m much more interested in seeing things when I go to the Web site, where I’m already thinking about the bank, or Hudson’s Bay. Paying attention to what people are doing, what interactions they have, and taking them at that customer level and bringing them through interactive channels, that’s where you have the opportunity for the green marketing idea. It’s not on all channels, it’s only on the channels where you can provide that feedback.
Pipeline: What kind of metrics can you apply to all this?
DS: We did a little survey after we did this video piece last year and asked people, “”Would you bother to give negative feedback or do you not trust the person?”” The answers were kind of interesting: 53 per cent of the people said yes, they would do it always or sometimes. Forty-one per cent said they would never do it. So it’s kind of polarized. I find it an interesting result because it indicates the nature of the relationship. If you have no relationship whatsoever with somebody, chances are you might not give negative feedback. In fact, many people in the popular media are recommending you respond to an e-mail, because then they know they’ve got a live one on the other end of the wire? I find that sad, but it’s much like personal relationship. Just walking up to someone and starting to have personal conversations — if you have no relationship whatsoever, chances are very high that people are going to turn you away.
Pipeline: How do you finesse that relationship a little more intelligently?
DS: The other big thing that’s happening is for the marketing people to treat every interaction with the customer as an opportunity to get to know them better and then to launch what I think of as “”graceful dialogues.”” Much like a human relationship, the first time you go on a date with someone there are questions that are appropriate that may be quite different from maybe the 50th time you’ve gone out. It’s all about information disclosure incrementally, gathering the clues as you interact with customer. Paying attention to timing — not just picking the right customer and making the right product offer but doing that at the right time and over the right channel. A lot of companies are getting better at picking the right target, but not getting better at getting the timing right.