In the first half of my dis­cus­sion with Scott Olrich, CMO/CSO of Respon­sys, we talked about email and the power of this chan­nel. As a fol­low up to that dis­cus­sion, I wanted to share Scott’s insights on how mar­keters can lever­age email to work with other dig­i­tal chan­nels to cre­ate a mar­ket­ing cul­ture focused more around cus­tomer rela­tion­ships ver­sus cus­tomer acqui­si­tion, and ulti­mately drive even more ROI.

CP: Mov­ing beyond acqui­si­tion, if folks are overly focused on acqui­si­tion mar­ket­ing today, what should they be focused on going forward?

SO: I love that ques­tion. There are two types of mar­ket­ing: “acqui­si­tion first mar­ket­ing” and “rela­tion­ship first mar­ket­ing.” Most com­pa­nies are acqui­si­tion first com­pa­nies and are focused on the first pur­chase. The rela­tion­ship first com­pany is focused on the third and fourth pur­chases because the life­time value of the cus­tomer isn’t very high if he or she only buys once.

The acqui­si­tion first com­pany gen­er­ally mar­kets based on price and pushes prod­uct. It has to sell every­thing itself and relies on dig­i­tal to drive traf­fic. On the other hand, the rela­tion­ship first com­pany cre­ates a great expe­ri­ence and then mar­kets that expe­ri­ence. It uses dig­i­tal to build rela­tion­ships and to tie every­thing together so that in the end the brand’s cus­tomers are sell­ing and telling the story for it.

Domino’s Pizza is a great exam­ple.  Every pizza they deliver has the pizza maker’s name, a QR code or URL on the box so con­sumers can rate and review the prod­uct and pizza maker. Reviews are sent to a dig­i­tal bill­board in Times Square, show­ing the cus­tomer reviews and feed­back on their pizza. It is not about dri­ving traf­fic or pur­chase but about build­ing rela­tion­ships with their cus­tomers based on avail­able data, and cre­at­ing such a great expe­ri­ence that cus­tomers ulti­mately become advo­cates for their brand and tell their friends and other peo­ple about them.  The best com­pa­nies are not reliant on paid media because their cus­tomers are sell­ing and telling the story for them.

I believe the biggest shift in mar­ket­ing in the next 5–10 years will be from acqui­si­tion first to rela­tion­ship first, where mar­keters will lever­age the rich data from their cus­tomers to inter­act with them in open, mean­ing­ful and trans­par­ent ways.

CP: There is cer­tainly no short­age of really rich data today; not only with respect to sub­scriber record but from a bunch of other data sources as well. I’ll throw web ana­lyt­ics and dig­i­tal behav­ior into that mix. How are you help­ing com­pa­nies or see­ing com­pa­nies uti­lize ‘big data’ and dif­fer­ent inputs to fuel bet­ter end-client engagement?

SO: I think this is the next fron­tier of mar­ket­ing, espe­cially rela­tion­ship mar­ket­ing where com­pa­nies actu­ally know some­thing about their cus­tomers and mar­ket to them in a known way.

 The first data source we see our cus­tomers lever­ag­ing is web behav­ior.  For exam­ple, if a user is brows­ing a site, the com­pany can seg­ment and ver­sion con­tent based on that web behav­ior. Next it can use con­ver­sion data if it knows that a user has pur­chased before ver­sus browsers who have not. Web behav­ior can trig­ger all sorts of event mar­ket­ing as well, such as shop­ping cart aban­don­ment pro­grams where emails are trig­gered based on incom­plete trans­ac­tions. How­ever, even with these pro­grams, which most peo­ple are famil­iar with, there are still 30–40% of com­pa­nies that are not doing it well. This applies to quote aban­don­ment and down­load aban­don­ment as well, not just e-commerce.

The next pow­er­ful tool we are look­ing at is how to lever­age the social media cloud and tie it back to a company’s email pro­gram. Take a trig­gered birth­day pro­gram for instance. We know that for every indi­vid­ual who receives a birth­day email, com­pa­nies make $1.50 per year; but most mar­keters have very lim­ited data on birth­days. How­ever, if mar­keters are tap­ping into the social graph, they can have that infor­ma­tion on their cus­tomers’ birth­days and mes­sage to them accord­ingly. Mar­keters can also opti­mize mes­sages based on cus­tomers’ inter­ests, which is data that they might not have based on pur­chase or web behav­ior. The social graph can help com­pa­nies bet­ter under­stand which com­peti­tors their cus­tomers are fol­low­ing and also opti­mize their mes­sages not just across email, but mobile and dis­play ads as well.  In this next fron­tier of mar­ket­ing, I believe we will see social data being lever­aged in the same way web behav­ior has been used over the past five years.

CP: Social is cer­tainly hot and packed with appeal, but mar­keters need to make sure they are using the data prop­erly.  With respect to social data, how can brands engage sub­scribers based on their opt-in preferences?

SO: Mar­ket­ing is headed to a more permission-based approach; and the use of social data is com­ing in based on the affil­i­a­tion of a social user lik­ing a par­tic­u­lar brand and agree­ing to let the brand use some of their social data. For instance, a com­pany offers a pro­mo­tion to enter into a con­test via Face­book Con­nect, and by doing so, con­sumers give the com­pany per­mis­sion to access their social graph pro­files. Now that com­pany has more infor­ma­tion about its users based on the pro­file infor­ma­tion to which it has been granted access. The com­pany can in turn use this infor­ma­tion to opti­mize its mar­ket­ing mes­sages with the con­sumers’ con­sent and drive rel­e­vant cam­paigns that engage con­sumers in the right way.  We are see­ing a high per­cent­age of con­sumers pro­vid­ing per­mis­sion via Face­book Con­nect. As an emerg­ing chan­nel, mar­keters can apply the same prin­ci­ples to social that they learned from lever­ag­ing email and Web behavior.

We are also see­ing social as a chan­nel not just for brands to sell their prod­ucts, but ulti­mately have their cus­tomers sell for them. For exam­ple, if I have friends who have pur­chased or ‘liked’ prod­ucts from a par­tic­u­lar brand, by lever­ag­ing the social graph, that brand can mes­sage to me accordingly.

CP: Scott, you’ve sur­faced some great insights around email, big data and social.  Any­thing to add that we haven’t covered?

SO:  Mar­keters can’t for­get mobile and need to under­stand how to truly enable their mar­ket­ing for all dif­fer­ent form factors.

Hav­ing one coded email tem­plate that auto-adjusts to screen size and OS on any given mobile device, deliv­ers an opti­mal expe­ri­ence so con­sumers can per­form and accom­plish tasks on their phones and tablets. Web­sites need to opti­mize for mobile devices as well. Com­pa­nies have a long way to go, but there is a huge oppor­tu­nity for them to opti­mize mobile appli­ca­tions and use this chan­nel to cre­ate a great expe­ri­ence, not just push prod­uct. And again, by doing so, cus­tomers will spread the word and pro­mote brands based on the expe­ri­ence. Mar­keters need to be invest­ing to mar­ket across the mobile chan­nel – effec­tively mobi­lize the whole con­ver­sion funnel.

CP: Great point, in fact Wolver­ine World­wide did just this and saw an increase in mobile rev­enue from 5% to 11%.