Income Protection: Securing Donor Loyalty During the Downturn

The old adage ‘charity begins at home’ is beginning to look frighteningly accurate for third sector organisations. Increasingly gloomy economic forecasts are forcing consumers to re-evaluate their regular outgoings, and they appear to be leaving charities out in the cold.   The announcement that the government has created a ‘recession fund’ for the voluntary sector totalling £42.5m adds weight to recent surveys that have highlighted the impact of the downturn upon charity giving.     Research we carried out among a UK-representative panel of 30,000 consumers revealed that 14 per cent of people have already axed regular direct debit donations to charities because of the economic downturn, and the pace at which donations are continuing to dry up may well have taken some by surprise.   Even though household wealth has doubled over the last decade, overall donations to charity have not kept pace with inflation, or increased at the same rate as disposable income.   And it gets worse - research by Charities Aid Foundation shows that, typically, six per cent of donors contribute almost half of all money raised, meaning many charities are dependent on a small group of high-value donors.   Consumers are clearly making tough choices in the face of global financial uncertainty. What’s interesting is that potential reductions in disposable income, as prices go up and salary increases look less likely, mean people are reconsidering what is essential in their everyday lives.   It’s a worrying time in the third sector, but an opportunity for those charities that have donor databases to implement effective donor retention strategies.    Donor segmentation, where value, potential, channel preferences and motivations are identified, is a key route to communications optimisation.  Allocation of scarce communication funds into retention strategies can be implemented according to the recency, frequency and value of donation, plus delivery of relevant communications that support each donor groups motivations are key steps.    The threat of cutbacks in regular donations is a harsh warning for charities, and they would do well to look again at their customer databases to make sure they are doing all they can to avoid being the first on people’s chopping blocks.   Of course, it would be foolish to completely ignore donor acquisition, but at a time like this the greatest value lies in your most willing and responsive givers, so be sure you understand the techniques needed to nurture them.

A targeted approach should be a prerequisite for all coupon schemes

Many of the recent articles I have read have discussed the possible pitfalls of a badly engineered coupon campaign. However, all of them also failed to outline the possibility of targeting customers on an individual basis. While blanket schemes can be effective in raising customer spend in some cases, the smart retailers will be taking the time to identify their most valuable and loyal customers and undertaking activity to make sure they remain loyal in the current climate. Catalina Marketing recently conducted an extensive study in the US looking at shopping habits and customer retention, which found that, far from an 80/20 divide, for some brands, a mere 2.5 percent of shoppers are responsible for 80 percent of sales.  This demonstrates the need for detailed analysis around the customer base and not relying on mass activity.  By directly targeting these customers, retailers will be taking a crucial step to maintaining market presence during the recession, and importantly taking market share when spending picks up.  I would therefore strongly recommend that detailed customer analysis is undertaken before planning a coupon strategy. By delivering coupons at the point of sale, retailers can individually analyse basket content, and issue the customer with a coupon that is relevant to them. This not only raises redemption rates, but also gathers crucial data about what customers are buying, without the need to register personal details. By using this approach, a coupon scheme can work with, and compliment existing loyalty schemes, while adding value for both customers and retailers at a difficult time.

A grave concern for uk charities

The Institute of Fundraising’s new initiative urging its members to report DM campaigns that contravene its code of practice is good news for the sector.  Its concern that poor direct mail could erode public confidence in charities is well placed.

However, it is worth remembering that it isn’t just be the content of a campaign that can offend, but also the actual targeting. The bereaved receive over 60 million pieces of direct mail addressed to loved ones that have passed away each year and such an inconsiderate error from a charity could mean the difference between a monthly direct debit donation and nothing ever again. It is estimated that the third sector makes up 11 per cent of the direct mail market.

If this percentage applies also to deceased direct mail, that’s a staggering 6,600,000 items being mailed unnecessarily by charities. Or put another way: over £3.5 million of wasted marketing budget – a figure not to be sniffed at, particularly in today’s pressurised economic climate. It is impossible to escape the “credit crunch” and as a result marketing budgets are being reined in. Accountability and return on investment are the “watch words” of the year, which play to the strengths of direct mail.

It is therefore essential for budget allotted to direct mail campaigns to work as hard as possible. In its simplest form this means ensuring that as many communications as possible reach the person to whom they are addressed. As a result last year we introduced Charity Suppression Service (CSS), a bespoke suppression and retention product for the third sector. The product encompasses all the major suppression files in the UK covering 95 per cent of deaths and goneaways.

Additionally it tracks the movement and behaviour of donors making it an important retention tool for charities as well. It is only available to registered charities and enables such organisations that might have become price3d out of the market to increase response rates. Sending mail to the deceased is not only a waste of precious budget, but it can be damaging for the brand, with 87 per cent of consumers saying they would not be associated with an organisation has sent a piece of mail to a family member that is deceased. 

With the number of British donors falling every year by an estimated 2 per cent as reported in the Financial Times and the fact that mailing the deceased continues to be the number one complaint received by the Information Commissioner; charities have to ask themselves can they afford to alienate existing supporters by inadvertently targeting their deceased friends or family?  

Chris Worsley, Product Director, Mortascreen

 

Microsoft’s new search engine – no need for Google to worry – just yet…

Manchester City might be one of the richest football clubs in the world but they’re still in the bottom half of the league table proving money can’t always buy you success. However, it’s a good starting point and in several years time the story may be very different.

 
Similarly, Microsoft is one of the richest companies in the world, but in the UK is relatively unknown for its search engine. The Manchester City of search marketing you could say! But is all this about to change with the imminent launch of its new search engine? The rumour mill is in overdrive with regards to its name. Bing, Kumo - whatever it’s going to be called should we all be getting excited about it?
 
Well, it’s not everyday that one of the world’s richest companies launches a new search engine and surely with all the investment, brains and talent, if anyone can challenge Google’s dominance, maybe Microsoft can.
 
We should certainly be enthused about companies looking to push the quality and relevancy of search engines, especially as we all use them and rely on them so much for researching, learning and purchasing. But Microsoft’s new search engine isn’t going to dramatically change the landscape of the search market straight away. It won’t wipe Google off the face of the earth and it’s not going make a huge impact on Microsoft’s current UK search query share. AskJeeves.com has proved that through ingenuity and marketing you can increase query share, if only for a short while. It can be done..And Microsoft has realised it can take it to the next level as quite simply it has the cash to do so.
 
It’s no secret that buying Yahoo! would be the quickest way for Microsoft to gain search query share. This could still happen. In the US this would give it around 30% of the search market – a decent slice of a huge market. All of a sudden things look more favourable for Microsoft. The UK market is slightly different though, especially as doubts over the quality of Yahoo’s search traffic seem to be increasing.  
 
So what can Microsoft’s new engine achieve? It’s rumoured to have lots of cool new functionality, devices and gadgets to help improve and enhance a user’s search experience. Backed by an above the line marketing campaign throughout the UK it should definitely get enough attention for people to try it and realise that there are search engines they can use other than Google.
 
Consumers can expect more relevant results. Microsoft improved its algorithm greatly with ‘Live Search’ and has clearly made relevancy a focus with the way its paid search offering has developed. Its new search engine is likely to build upon this further and with the likelihood that it is going to be indexing more and more web pages, it would be a sure step to providing the consumer with better results and a better experience. This means Microsoft could not only attract new users, but keep them too, which is ultimately the bigger challenge.
 
Image search is predicted to be superb. This is one thing that Google will definitely be looking at with interest as it’s an area Microsoft is really pushing – the scratch pad idea where you can store images and change sizes is something no other search engine can do quite as well. Let’s hope we see more of this from the new engine as it’s a great element of what Microsoft is bringing to the search market.
 
The results filter should also be great. A few years back there was talk of a ‘Search Macro’. This never quite took off, but the idea was very interesting and it looks like with the results filter Microsoft will include something similar in their new engine,. which is exciting. The idea with Search Macro was to add more context to what the user was searching for thus providing more relevant results. For example, if a user searched for ‘soup’, the macro would quantify whether they wanted information on recipes on soup or to buy soup. The ‘results filter’ appears to be an uncomplicated method for the user to add more context to their search. This would be an interesting feature for advertisers to test in the French market for example where users tend to use less keywords within their searches. It could potentially help advertisers to get cheaper clicks as the user can refine their search before clicking on ads. 
 
However, what’s disappointing about this launch is that only the US version will have these cool new features. The UK is a highly sophisticated market, second only to the US with a high level of early adopters eager to test new services. If they’re not going to get the full fat version, they won’t be recommending it to later adopters. So any kudos gained from the launch is lost and as we all know, the Internet world is very unforgiving to services that don’t cater to individual audiences and markets.
 
How will this new engine affect your search strategy? Will your customers care or even notice? It might see a boost in traffic off the back of the advertising but will it breed brand advocacy? Microsoft needs to weary of ‘reinventing’ itself (as it did with Live Search – which didn’t move any mountains) with, for non-US customers, no USP. As far as the consumer knows, it’s just another search engine. AskJeeves has reintroduced their butler character to breed an increased sense of brand empathy but how, crucially, will Microsoft differentiate this new engine?
 
Will it gain market share? Not until it does something spectacular, or buys Yahoo! Do you have to adapt your search strategy? We’ll have to wait and see. For those expecting great things, we’ll have to watch the US and wait. It might change the search world, but Bing wasn’t built in a day.

Author: Tim Cook, Group Account Director, CheezeDMG

www.cheezedmg.com , www.cheezedmg.com/blog, www.twitter.com/CheezeDMG

CSR as the new 'branded content'

Today’s reality consists of multiple media channels, new technologies and consumers who have a short attention span. Traditional communications are no longer sufficient at creating loyal fans and lovers or bringing the brand to the forefront. This new reality demands a new approach to engaging consumers; this is where CSR as branded content comes in.

CSR offers solutions that are required by modern branding in order to deal with the new digitally enabled interconnected business environment of the 21st Century.  This involves taking the message of a brand and using it to produce entertainment that consumers are interested in and want to engage with. By producing these new entertainment experiences brands gain significant publicity. When brand entertainment is based on the things that really matter, consumers volunteer their attention. It is a move from interruption to attraction.

Using CSR in branded content allows companies to demonstrate their approach to CSR and address sustainability issues that are important to both the organisation and their consumers. This allows consumers to engage with brands. Take the Dove Evolution of Beauty video as an example. The portrayal of women in the media and self-esteem are ultimately sustainability issues. Many women feel strongly about these issues, and because of this, women will listen to what Dove has to say. By responding to women’s concerns, Dove is building the social value of their brand and in so doing, enhancing emotional value and brand identity. This strategy has only worked for Dove because it is part of their long term therefore credible commitment to CSR.

Events that encompass CSR are another example. Innocent Smoothies, a brand underpinned by their overall approach to sustainability, host an annual festival in London, the Innocent Village Fete. The event is a physical and authentic representation of what the brand believes in: community, sustainability, healthy living and, of course, fun. The annual event has helped to turn customers into supporters by hosting memorable brand experiences that aim to make people’s lives better, while raising money for a good cause. The event allows Innocent to promote its new smoothie flavours to festival-goers, while giving them the opportunity to wander around the farmers’ market, visit charity stalls and enjoy the music.

The benefits of using CSR as part of branded content are endless; foremost it helps to build a brands reputation and is a point of differentiation. It also encourages consumer interest and helps to build consumer trust and loyalty.  If consumers see that brands are addressing the issues that are important to them, it follows that they are likely to continue to buy their products.

CSR provides a goldmine of stories that can form the basis of branded content. However, companies are often doing good work behind the scenes through CSR initiatives that brand marketers don’t even know about. At the same time, these brand teams are desperately looking for meaningful stories to create engaging messages and capture their consumers’ attention.

Businesses must make the relationships between the CSR team, marketing team and advertising agency seamless, to bring their sustainability stories to the forefront of branded content. The brands of the future will be the ones that integrate sustainability into their vision and communicate this effectively to consumers.

FOLDING THE PAPER

As with most traditional media, sales of national and regional newspapers are in decline as consumers now readily obtain news and other information on the web, and increasingly on mobile phones. Yet despite the proliferation of blogs, social networking sites and other online news sources, the brand value and credibility of newspapers remains high.

In the digital world, newspaper publishing groups have a fantastic opportunity to drive new revenue streams, grow their share of audience and increase reader loyalty - but key to this is the ability to successfully commercialise their product offering.

Media Challenge

The steady decline in newspaper readership and revenue has accelerated dramatically over the past 12 months, with publishing companies seeing upwards of 80% of the value wiped off shares. As the recession hits advertising revenues, particularly the classified car and property ads, there is growing pressure on publishers to fast forward their forays onto the web and mobile to drive significant incremental value. And following the UK government's recent announcement that all homes should have broadband by 2012, the writing is clearly on the wall for the printed page - both national and regional publishers need to take a radical look at business strategy.

One strong point in their favour is that newspapers have strong brand value and a trusted product. But even for those publishers that have built up a strong online user base and brand, turning that audience into revenue remains a challenge for organisations still entrenched in the cultural attitude of the printed medium.

Classified Opportunity

One of the key changes is a shift in model - most notably the move from paid to unpaid classified advertising. Rather than charging the advertiser to place a classified ad in the paper, publishers can now deliver classified ads to consumers via mobile phones - with each responder paying a small charge. By offering this free advertising model, publishers can reinvigorate the classified advertising market to deliver incremental value to the consumer audience.

Taking this approach, sellers can create adverts using their mobile phones, including a photograph or video. Buyers express an interest by sending a text message to a short code number which then prompts the release of contact information from the buyer to the seller. The seller also receives real-time alerts whenever someone responds to the advert.

With a flexible, scaleable mobile platform that can handle hundreds of connections and messages per second, publishers can manage numerous classified ads and connect hundreds of buyers and sellers simultaneously. This real-time, two way communication between buyers and sellers encourages greater audience interaction whilst also driving brand value and loyalty. It also provides publishers with unprecedented access to customer information which can be used to support complementary product and service advertising around the main advert, maximising revenue opportunities.

New Model

Mobile classified advertising, however, does not require the large telesales force associated with the print model. Instead, organisations will become increasingly reliant upon technology platforms to manage and automate the sales process and the remaining sales staff will have to be retrained to deliver the new services offered online and via the mobile.

Furthermore, publishers need to recognise the need to leverage technology to co-ordinate both Internet and mobile advertising, to co-ordinate marketing across every platform and to maximise the strong brand and existing online traffic. Operating increasingly in an international market creates new opportunities to grow the audience but also presents challenges in delivering relevant promotions in different markets, undertaking affiliate marketing programmes and identifying new advertising partners across the globe. This organisational and cultural change will undoubtedly be a major - probably the major - issue to address if publishers are to successfully tap into new revenue streams.

Local Demand

It is also important for publishers to recognise the growing demand for local information. Local portals providing up to date information on towns, even villages, are becoming increasingly popular. They are also enjoying a huge increase in user generated content, thus minimising the operational overheads for publishers. This localisation trend provides a new opportunity to offer location based services for local advertisers, enabling them to exploit the location of the mobile user or the use of local IP identification with the provision of real-time, personalised offers. These simple services can deliver a significant revenue stream, with the additional benefit of using the strong customer data to drive further revenue in the future.

Indeed, there are opportunities to provide advertisers with richer data and richer marketing using online and mobile media than any publisher could ever offer in a printed environment. Furthermore, while the demand is for increasing localisation, publishers also have a far greater opportunity to leverage the massive global audience to drive significant revenue streams through global advertising and content syndication.

Conclusion

The shift in customer behaviour and attitudes to seeking news has been dramatic - and it is a global phenomenon, even in counties with low Internet penetration. From watching rolling news information online to the growing demand for local information, the old habits of reading the daily newspaper and watching the six o'clock news are dying out.  

With huge competition for advertising spend, the ability to offer a free advertising model to a strong user audience is compelling. Combined with in depth customer information, the provision of simultaneous advertising and strong location based services, this creates a powerful publishing model. It is now up to the publishing companies to make the staff and operational changes required to maximise the new media marketplace. But there is no turning back: if publishers don't make organisational changes today and embrace new opportunities for driving mobile and Internet revenue they will see further steep decline and may well end up out of business.

New Marketing Rules

It seems that just about everywhere I turn some marketing guru somewhere is offering me the definitive way to beat the recession through marketing salvation. My in-box is stuffed with offers for courses… free downloads… podcasts and just about everything in between. Having studied most, ignored some and chortled at others, I have decided to throw my own two-pennies worth into the advice jar.

1. Invest more time and effort into listening

That means conducting more research and responding faster to your findings. When the market moves, you are ready to accommodate. Speak to your customers, show empathy and be ready to adapt by proving your products or services are supportive. Customers will still spend – but in different ways. Retain existing customers by offering long-term value. Increase your range and reach of value-added products. Test new markets with trial offers rather than cheap instant discounts.

2. Think more

That doesn’t mean have endless marketing meetings; it’s about becoming more adaptable. Don’t be myopic. Plan in terms of months and weeks, not quarters and years. The days of dusty ‘best practice’ are all but finished. Use your initiative and encourage others to use theirs (providing their ideas are not irresponsible). Don’t fall into the trap of being another fad brand by copying your competitors. Customers are trading down, sideways and, believe it or not, some even up! Show differentiation by exploring solutions throughout the value chain. Rip up the old guidelines and start making your own strides to take you several leaps and bounds ahead of the competition.

3. Don’t cut marketing – re-engineer how you market

If you stop marketing people may conclude that you are next in line to become a recession victim. Competitors will increase their presence – simply by you not investing in yours. Shake up your traditional marketing mix by becoming savvy to new ways of reaching niche markets – even extending to radical approaches such as guerrilla marketing. Spend your money wisely and allocate your budget shrewdly. Stop separating PR, marketing, sales promotions, the web and so on. Test new media in stages. Include your end-market through Web 2.0 initiatives such as blogs and marketing through social networking sites. Stop pushing people away. The ‘us’ and ‘them’ culture is dead. Be inclusive. Make the most important people in your chain –customers and clients feel valued by being part of a bigger brand experience. Like you, they want to be heard and acknowledged. Everything is possible – providing it doesn’t compromise your brand’s sense of integrity.

4. Prove that you are not full of hype

Too many believe that marketers are simply over-paid, over-hyped and over caffeinated cappuccino drinking sales people and manipulators. That is so ‘yester-year’. This is the age of reasoning and responsibility. Make your innovative advertising messages more direct and intelligent. Produce creative work that draws a smile of satisfaction in people’s mind. Customers have neither the patience nor inclination to put up with self-indulgent messages full of great puff and little substance. If you have a strong product or service – don’t rely on ‘fluff’ to sell the ‘sizzle’. Don’t treat people as mass herds; make the feel like shepherds of their own destiny.

5. Do – show - act

There are many sincere marketers who are concerned with ‘do’, ’show’, ‘act’ … rather than ‘promise’. If you are an agency dealing with a client, be brave, become pro-active rather than reduced to being passive artwork producers or cut and paste ‘monkeys’. If you are a brand, revisit briefs. Do they need more pep… a different direction? Are you delivering discernable value? Work with sales teams – not against them. Get more people involved with your ideas, but assassinate with full vim and vigour committees that mercilessly kill creativity. Make your employees brand ambassadors. Talk to them as people – not a workforce. Start acting and they (both external and internal customers) will appreciate that you – unlike your competitors are ‘doers’ – not ‘hype-merchants’.

6. Get people involved by rewarding their talents

Use this opportunity to train your best people to become even better. It’s more cost effective than a pay rise. Training shows you care about career development, and in the mid-to longer term you will have a marketing team which is better placed to turn creative campaigns into convincing returns.

7. Don’t fantasise about slashing prices

More than cutting costs alone, most businesses want to reduce risks – you can help. For example, the recession has turned too many retailers into obsessive paranoiacs craving the chance to slash prices with unrestrained glee. Barely a week passes without yet another Sale. We are turning into ‘20% off UK’. Whilst last moment Sales keep competitors on their feet, consistent Sales affecting your bottom line margin will in fact bring you to your knees and turn perceived premium brand services into discounted bland servants. Worst still, hasty price cuts today affect cost sensitivity tomorrow. Your products and service are truly magnificent. People will pay for that standard if they believe that they deserve it. Give them greater reasons to want to buy. For example, lower emissions, easier payments, better design, greater after-care… Show that they deserve the best and needn’t regret settling for cheap second-rate bargain buckets fought over by wild savages rather than intelligent consumers.

8. Improve distribution

Get to market quicker and smarter. For example, publishers need to ensure that books are on front shelves not back-order. Incorporate new technologies to ensure that as soon as demand spurts, products can be in people’s hands. “He who distributes fastest wins!”

9. Surround yourself with wise people

This is a recession. People need work and great people want to work with you. You can now afford to work with them. Don’t compromise by settling for second best or calling in favours. Get rid of the rotting dead meat. You honestly cannot afford to keep on clutching to driftwood in a sea of uncertainty. Recruit the very best people in the business – Can’t afford long-term commitment? Get freelancers who have to work for their Marks and Spencer TV dinner. Speak to the best creative agencies… the best project managers and so on. Surround yourself with people who have seen recessions come and go. A few grey hairs around a table will add tone to the fresh roots straight out of college.

10. Get back in the driving seat.

Don’t mope around in despair. Get your hands back on the wheel of your company’s destiny. Be honest with yourself, sincere with your teams. Care about your market and how your efforts can actually improve people’s lives. Implement high standards of integrity and ethics in all you do and say. You are no longer selling just a product or service – you are pioneering a cause for people to follow and believe in.

Drive hard and with determination. For example, get the media to offer deals that aren’t even on the standard ‘menu’. Demand that they deliver those deals on time and below budget. Steer people by inspiring them with the prospect of personal development gains rather threatening them with the fear of loss. Think of this time as the start of an entirely different kind of marketing with a completely distinct kind of highly ‘savvy’ customer.

According to a McKinsey study of the 1990/91 recession, the companies which increased their spend during a recession were the only ones whose profits rose substantially when the economy recovered. According to the Chartered Institute of Marketing, a Hillier analysis of 1,000 companies from PIMS (Profit Impact of Market Strategy) database after the 1990-91 recession showed that companies increasing spending in a recession recover three times faster.

Be a Recession Pioneer by becoming the change you would want to see in others. When we eventually all come out of this slump on the other side (and we will) take pride in the knowledge that the steps you take today will give you the advantage you and your brilliant brand justly deserves tomorrow.

You can find me on Twitter or check out the website for my new book exploring the world of big marketing promises and too few redemptions.

Sympathetic personalisation – an inhuman approach?

The term ‘sympathetic personalisation’ has been used to describe the technique by which call handlers can supposedly present customers with a more human and personal experience, through the use of a range of phrases and expressions, designed to soften the conversation and generate an empathetic relationship.  But the very fact that this is a standardised process driven by pre-defined language and constrictive scripts means any sense of humanity is lost the moment the conversation begins.

The simple fact is that every customer wants to feel like an individual when they interact with a brand.  But this feeling needs to be based on the brand having a real understanding of them, their needs and circumstances.  For arguments sake let’s assume at this point that the words, phrases and way a call handler deals with a customer are irrelevant.  To generate a positive, two-way conversation, and subsequently to benefit from this relationship, the interaction must be entrenched in a real and relevant understanding of the customer.

Call centres already use customer data to help direct the conversations they have.  But this process can be further improved by not only arming agents with up to date information on the customer, but in allowing them to use this insight at their own discretion.  Using data to map out a scripted conversation may be useful, but empowering an agent to go off script and embark on a more natural and empathetic conversation with the customer can reap far greater rewards.  This is perhaps more reliant on using well trained and experienced agents, but especially during high value transactions or with high value customers, choosing the elite troops to advance in this way is a major step in improving the customer’s experience.

Of course, language and the way the call handler interacts with customers are relevant.  But imposing fluffy phrases and applying softened wording will have a negative effect, and be extremely damaging to the way the customer views the brand and its ability to deliver on their needs; customers quickly see through superficial and unnatural attempts such as these. 

Aiming to create a ‘positive interaction’ every time a customer communicates with your call centre - one which both brand and customer benefit from – can be achieved through greater understanding and from an empathetic and, most vitally, a human approach.  The real acid test of course is to consider, and even ask, whether the customer ends the interaction feeling good, with a positive view of the brand.  Defining success from the customer’s point of view can help to refine further this new philosophy of communication, and subsequently build on its success.

The pathway to South Africa 2010

The 2010 football World Cup in South Africa is just over a year away and it is reaching the time that brands traditionally panic. How do they reach their target audiences during one of the world’s most high-profile sporting events? Is it too late? How much will it cost? Even at troubled economic times like the present it is a given that brands will want to be involved with the World Cup; sponsorship is a proven communications vehicle capable of creating relationships between brand and consumer.

Sport touches our emotional core like no other pastime or activity. Our hopes and dreams rest on the shoulders of athletes and teams as people pray for success. Sport creates loyalty and this in turn creates a powerful reason for marketers to buy into it as they seek to formalise a relationship with consumers. South Africa has a large and diverse population; succeeding in winning the attention of these groups of people is the difference between success and failure for brands.

So what makes a successful foray into this new market? Brands must be aware that they cannot decide to jump on the World Cup bandwagon and infiltrate South Africa for the month of the tournament and then be gone. The very personal nature of the relationship between sports and its consumers means that strategic sponsorship is the only way for brands to successfully reach their target audience.

Sustainable, long-term development programmes are the most effective way of creating a successful sponsorship. Programmes must give something back to the local communities that they are trying to become a part of and it goes without saying that they must give something back. Sport is an inextricable part of the South African culture but brands cannot expect to just arrive in a country and succeed.

Charlton Athletic Community Trust was brought in to South Africa to work alongside British Airways and the Metropolitan Police in 2001. Since the commencement of our involvement we have core sustainable community engagement programmes involving schools and community organisations in place in Johannesburg, Cape Town and Durban. There is also the possibility of national roll-out once the World Cup has ended.

British Airways is a fantastic example of a brand looking to put something back into a community and one that has a right to exist in the South African marketplace and how to get it right. The airline has a long-term programme of community investment and its goals and priorities give it the credence to exist in South Africa. Key aims for the company are youth development, heritage, tourism and the environment. As the airline has been operating scheduled services between Britain and South Africa since 1932, there is reason for its existence in the country. It is a successful tie-up because of the longevity of British Airways’ commitment to the country and its South Africa Twinning programme has become a flagship project for the airline. By creating a community football project, based on a sound and successful business model. brought across from experienced UK partners, British Airways was able to cement itself as part of a long-term development programme giving something back to the local community. This involvement at such a grassroots level has helped the airline steadily increase its services to and from South Africa as its reputation grew.

So what’s the conclusion here? There are opportunities for brands to be involved with the South Africa 2010 World Cup. However, it is not just a case of a brand deciding to jump on the proverbial bandwagon and slap a logo all around a large sporting event. The most successful partnerships are born out of a long-term strategy and a credible reason to exist in a particular space. There are many opportunities out there as South Africa 2010 draws ever closer but brands must think carefully and sensibly before they act. There are existing partners already within the South African market with the expertise to help a brand understand the market conditions and the positioning needed to be a success. It is just about finding the perfect fit for the right reasons.

Taking your customers on a journey

Spotify – another one-hit wonder or a sustainable player?

Spotify’s founder Daniel Ek spoke on Friday (15 May) at the Great Escape festival in Brighton. He told the conference how Spotify had come to be and shared his vision for the future.

Spotify is the current star in a succession of well documented and debated on-line music offerings purporting to offer the solution to the holy grail of the next business model for music.

Any such service has to overcome some early hurdles in order to make an impact and enjoy success most notably:

• sufficient content to be attractive to the broad base of consumers with a wide array of musical taste;
• an easy to use interface
• most importantly a balance of revenue and licensing cost that makes it a viable business.

Spotify would seem to have the first of these sewn up, for now at least. Having successfully negotiated licensing deals with the major labels, Spotify’s repertoire is wide enough; albeit with some familiar absences (will the Beatles ever make the jump to digital?)

However, others have cleared this path before them, right now with the major labels money talks, and licenses are now easier to come by than a couple of years back when QTrax famously jumped the gun. The real tests however are perhaps yet to come. Current industry whispers are that the majors may change their position on licensing going forward and perhaps more importantly in the future it is unlikely that the relative completeness of Spotify’s repertoire will be maintained through a small number of large licenses as the shake out of the artist/major label relationship takes shape. Will smaller labels and artists individually see enough upside in the Spotify business model for them?

Spotify certainly believe there is. They are promising, down the line, the launch of an upload facility where content partners can control the availability of their own material and artist page; and there is much talk of facilitating the development of new revenue streams (downloads, ticketing etc) in addition to the share of the perhaps meagre advertising revenue which individual artists will enjoy. Time will tell as to whether the numbers add up for all parties.

On the interface Spotify have got the balance between familiarity and simplicity about right. The downloadable interface is intuitive (especially to those familiar with iTunes) and easy to use without too many gimmicks. Perhaps more could be made of the homepage which currently looks a little bare – a marketing opportunity which iTunes currently make good use of.

The statistics imply that a large population of music fans are already switched on, over 1 million across western Europe alone; but just think though what Spotify’s service would look like if bolted onto Facebook or MySpace. If and when launching Spotify becomes a default access point in the way these social networking sites have – then it will really get interesting. One senses, with the launch of Facebook connect, this is not that far off.

The recently announced mobile version of Spotify should add another dimension. Ease of use and reliability across networks will be critical.

Finally, and most importantly, revenue. Arguable the old saying that 'Content is King' should be replaced with 'Revenues are Royalty'. Spotify’s current model is simple. Advertiser based, shared between the platform and label/artist. In a nutshell the key challenge is the correct balance of adverts. That debate is nothing new however – perhaps some advice on advertising inventory strategy from the commercial radio sector would be valuable?

Many artists however may find that there’s not a lot in the pot. At current advertising rates a million hits is unlikely to generate more than £15,000 gross revenue to be shared between all parties. However we are in a recession and advertising is not the hottest market. If Spotify can deliver the ultra-targeted audiences to advertisers, perhaps they will be the first to benefit when growth returns.

Fakester, Friendster or Fraudster -Tools for effective social networking

Twitter has the badge of distinction of the first mass protest from members at a change it has implemented - thousands of people objecting to a change it has made in replies. At the same time it has been subjected to an amusingly wrathful blog post from rapper Kanye West, who is incensed that the service allows people to impersonate him.

This highlights a strength and weakness of the service. Seven years ago, Friendster was the social network that everyone was talking about. It made a virtue of the fact that it discouraged members from pretending to be someone they weren't. That meant no "Fakesters" --people pretending to be Homer Simpson or God or Harvard University or a dog. It also meant no "Fraudsters" -- people pretending to be someone else,such as Britney Spears or their cousin Billy. "The whole point of Friendster is that you're connected to somebody through mutual friends, not by virtue of the fact that you both like Reese's Peanut Butter Cups," Friendster founder Jonathan Abrams told the San Francisco Weekly at the time.

However, the "No Fakester" approach violated one of the Internet's central tenets -- anonymity -- best embodied by a Peter Steiner cartoon in the New Yorker from 1993 showing a dog in front of a computer screen with the caption, "On the Internet, nobody knows you're a dog." To many, the power of anonymity is not a luxury but a necessity, the essence of freedom.

By gathering online anonymously, people are free to find others who share their political views or their sexual orientation without fear of repercussion. As a result, many of Friendster's users revolted. They decried the "Fakester Genocide" on Facebook and vowed to start a "Fakester Revolution." They wrote a revolutionary document, the "Fakester Manifesto." The first declaration: "Identity is provisional. Who we are is whom we choose to be at any given moment, depending on personality, whim, temperament, or subjective need.

No other person or organization can abridge that right, as shape-shifting is inherent to human consciousness, and allows us to thrive and survive under greatly differing circumstances by becoming different people as need or desire arises. By assuming the mantle of the Other, it allows us, paradoxically, to complete ourselves. Every day is Halloween."

MySpace and Facebook subsequently took all of Friendsters users. Twitter is in an interesting situation of being praised by certain celebrities -- Stephen Fry and Ashton Kutcher most famously – for letting them bypass pesky journalists who are liable to twist their words, and speak directly to those who are interested in what they have to say (and then have the media report it later).

However, there is little barrier to fakesters setting up Twitter accounts and gaining vast numbers of followers before anyone can confirm that it is actually a phony account. Is this a major problem for the micro-blogging site? Not really -- Kanye West's somewhat frightening rant aside. James Kirkham, Managing Director of Holler www.hollerdigital.co.uk

The art of data extraction

The use of data to drive more targeted and efficient marketing has never been more in vogue in the b2b sector.  Whether or not this is a direct symptom of the recession, with marketers driven by the need to invest in marketing that can deliver and prove solid ROI, it is positive that so many organisations are recognising the benefits they can enjoy.

Be Brave

The huge quantities of data which lurk inside any online business can appear quite threatening to the Marketer who glimpses this apparent monster, but Speed-Trap argue there can be big rewards for those prepared to harvest this information from their online systems and visitors. Consumer insight is a marketer's best friend but imagine having the answers to any question about your customers' behaviour or objectives at your fingertips even if you hadn't even thought to ask them first! It may sound a bit far-fetched but this is not science-fiction. Those marketers brave enough to capture every click and key stroke, and then delve into the mass of data swilling around their web channel, are the ones who can react most quickly and effectively to customer behaviour. Revenue can then be maximised through passing the data directly to business processes and marketing applications, allowing for improved customer retention.

Due warning

When you consider that UK consumers spent more than £26.5bn online in the first half of 2008, a jump of 38% from the last year, it becomes obvious that analysing data, and lots of it, is crucial to improve the online experience and retain and acquire customers. Looking at the effect simply of loyalty cards (like the Tesco Clubcard in terms of its ability to collect customer data and inform targeted marketing and product merchandising strategies), consider how much more information can be gathered from the on-line channel. Loyalty cards only know about what your customers actually purchased, whereas from the on-line channel you can see what they looked at and searched for but did NOT buy (aspirational data)... how much more powerful is that? This data provides your customers' intentions, motivations and aspirations, all classified by demographic and/or source.

Information revolution

No marketing department has extra-sensory perception, which means that only by being in possession of accurate detailed, structured data are they ever going to understand what their consumers will want, whether that is in the hours or even years ahead. Moreover, this extra sensory perception problem extends to not knowing precisely what data they need. This becomes a monster of major proportions when you discover that you will need to add tags to your website to acquire the data - an inaccurate and time-consuming process. And if you don't know what you need to know and where on the site to get it from, then how do you know where to put the tags? However, the latest development in data acquisition systems harvests data about absolutely everything and anything a person does, sees, or experiences when he or she visits your website, all without a single tag. You have access - whenever you need it - to every element of their interaction with you. It is only with the complete picture of their activity, rather than second-guessed elements that marketers can hope to use the insight to boost conversion rates, deliver better experiences, optimise product mix, increase loyalty, lift share of wallet, reduce churn etc...

The Saint is in the Detail

This is all about ensuring nothing is wasted. Often the most innocuous piece of behaviour can tell a brand something insightful about a consumer's needs. It might appear to be a seemingly random click on a particular image, but when this action is combined with other data, a more tailored offer can be developed and issued. One financial services comparison site claimed it doubled the effectiveness of its advertising spend by attaching behavioural data to its campaign. An online book store saw a six-fold increase in conversion rates once it had a better understanding of how visitors were using its search functions while a use of the data that Christmas offers should be started a month earlier than originally thought to catch the more prepared consumers proved eminently powerful and profitable for an online travel company.

So what IS a lot of data?

There is no doubt that we are talking about a lot of data - terabytes of data for a large retailer, but that is no reason to shy away. The technology is working to help you. Today I see that Maplin is offering terabyte disk drives for under 100 pounds, and single modern blade server can handle and structure all the information you will collect - so marketers who are worried they will have to then analyse this mountain of data themselves can rest easy. The software available means that as well as receiving standard reports from suppliers, the data analysis can be fed directly back into the marketing team's own computer systems and applications to drive marketing programs, personalisation, business intelligence, optimising etc....

Spot the gaps

Online marketing often suffers from a lack of relevant data. Without the insight afforded by detailed and comprehensive records of interactions, a company will be permanently unaware of its potential. By capturing every last piece of data, a company can not only solve usability issues, but more importantly, can interact proactively with its visitors - its image shapers and brand influencers. For example, analysis into a building society's website noticed their mortgage calculator was unsurprisingly the most popular area of the site. However, deeper analysis showed that a proportion of customers used it up to 15 times a day, even five days in a row. These customers, and all their details, were prime to be passed onto the call centre - in real-time - so that they could be called immediately to discuss mortgage options - a targeted, immediate and effective CRM approach.

Providing answers

The days when marketers and IT experts barely acknowledged each other are over because both departments must appreciate that in a digital world they need each other.  Marketers should understand they cannot ignore potentially valuable data and the technical teams must realise there is an end purpose to the current and historic data they are being asked to process. It is true that in the past some marketers have been scared of data or undervalued it because it was presented to them in a language they did not understand. Presented in anonymous and generalised graphs, it did not give them the insight into individuals that they really needed. But now, companies that have been brave enough to collect data on all their customers and drill down into it have seen their knowledge of their customer base virtually explode overnight. They have discovered what motivates people to visit their website, what their likes and dislikes are when they arrive, how they navigate their way around and why they choose the paths through the site that they do.

The potential results speak for themselves. Go on - be brave.

Twitter me this, Twitter me that

What are you doing? Brands on Twitter take note: content is key  

The phenomenon that is Twitter despite being over two years old has recently exploded into the media landscape. It seems you can’t open a newspaper, consumer mag or trade publication/site without some reference to tweeting- Ashton Kutcher, for example, collecting over 1,000,000 followers or top tips from digital experts on twitterquette.
 
Whilst early adopters are moving on to create the next big thing, the rest of the web population is converging on the site in their droves and with people, inevitably comes brands. Starbucks, Amazon, ASOS, Coke, eBay, Compare the Market et al have embraced the channel in order to communicate with their target audiences and B2B brands are also jumping on board with many using Twitter as a way to disseminate news to their industry and trade journalists such as Ogilvy, TBWA, AMBV BBDO, Proximity and Wunderman, who are all regular tweeters.
 
However, like blogs before them, there is a real danger for brands that they’ll jump on the bandwagon with a first flourish of enthusiasm not really thinking through a strategy. For some, the glitter has already worn thin and tweets have dried up resulting in consumers opting-out and ultimately feeling let down by the brand they wanted to engage with.
 
The real hazard is that tweets need only to be 140 characters – how hard is that to maintain? Actually, in reality very difficult. Building a profile and communicating a brand personality on a word limit is firstly tricky, but maintaining it is even trickier, as Search Marketeers will attest to. Editorial strategy is key and I am seeing brands making the mistake, that because a tweet is so short they’ll do it themselves and everything will be fine  - but its not. With no strategy in place brand tweets are ad hoc and boring, moreover there are a few where you can tell more than one person is posting tweets as the tone alters and the brand image becomes confused.

I believe that Twitter is a great platform for brands to engage and communicate with their customers. But it is fundamental for companies that want to flourish in this environment that they work with specialists like customer publishers, who are experts in producing branded content across different media. This will ensure that Twitter activity is an integrated part of the marketing strategy but also and most importantly that the branded tweets are entertaining, ongoing, relevant and informative for their followers.