DirectConnect interviews Ernan Roman, president of Ernan Roman Direct Marketing, about the power of “voice of the customer marketing.”
DirectConnect: You have a book coming out in the fall called Voice of the Customer Marketing. How did you come to the topic and title of the book?
Ernan Roman: We have a more empowered consumer decision maker than ever before. Consumers are better informed, and our marketing continues to be spray-and-pray blasts. We’ve evolved from direct mail and telemarketing to e-mail. We have bright companies still engaging in these horrendous blasts, causing not only low response and yield, but also high levels of brand damage. People are predisposed to opt out. There are 191 million numbers on the Do-Not-Call list. We have 50% more people opting out of marketing in this country than are exercising their constitutional right to elect a president.
Customers, particularly today, don’t want to be managed. Marketers need to embrace, adapt and respond to customers. It’s CRM vs. CMR (customer managed relationships). That’s not a cute turn of words; it’s a fundamental mindset that has to recognize the customer is in control.
Social media has taken the customer to a new level of power, and thankfully so. Traditional marketing makes money, but it is on a decline. We have a more empowered and educated consumer, and we have the mechanism to listen to and engage in real time the voice of that customer. Let’s turn the thinking around and recognize that at the beginning of a strategy, the first step is to get the voice, or the wisdom, of the customer in a disciplined way and use that to drive the rules of engagement. That’s what led me to that title of the book. It’s the absolute recognition that the voice of the customer drives marketing.
DC: How do voice of the customer campaigns perform?
Roman: Programs have consistently run at double-digit response rates for our clients when we practice customer-driven marketing.
With Microsoft, we got 45% to 95% opt-in rates in a recent campaign. It’s intuitive to say we need to engage and listen to the customer, and we’ve created a five-step process to do so. It’s the way we would like to be treated, and it goes straight to the bottom line in consistently documenting double-digit response rates.
DC: The subtitle of the book is “A Proven Five-Step Process to Create Customers Who Care, Spend and Stay.” All of this sounds like loyalty marketing, repackaged. What’s distinct about your approach
Roman: If you look at what happened to CRM, it is one of the highest-failure undertakings in marketing history. Whatever research you want to use, it has anywhere from a 40% to 70% fail rate. The difference is voice of the customer marketing is not a technology-driven statement. It is not about managing the customer. It is a process that focuses on engaging the voice of the customer, trusting his or her wisdom and trusting your brand and value proposition. It is trusting that if you ask people to opt in and tell you the rules of engagement, they will do so in large enough numbers that it will prove economically viable.
DC: How do you measure success in loyalty programs?
Roman: Is it loyalty or is it spending through bribery and seduction? There’s no loyalty among airline customers, for example. They’re in a hostage marketing relationship, as in ‘I’ve got you by the points, you’re going to put up with a high level of pain to rent me, stay with me or drive me because of the points.’ The relationship between true loyalty and our feelings toward an airline, car rental company or cell phone or Internet provider, I can’t think of a word further away from loyalty. Loyalty programs work if you say the metric is getting consumers to spend, but it’s a grudging, self-serving spending. It’s not one where people feel a sense of a relationship. They wouldn’t spend if they didn’t have to. That’s different from a relationship where I’m in control and defining value.
DC: Can you explain the five steps?
Roman: Step one is to conduct voice of customer relationship research. The methodology we use entails one hour, in-depth interviews with prospects, customers and stakeholders. The goal is to understand how they define the value they expect, how they define relationship, and how they define the behavior that the marketer needs to provide for them to engage.
Step two is to create voice of customer-driven opt-in relationship strategies. What’s key is learning from the VOC research, and understanding that if you’re going to pay off the process of relevance and relationship, you need to learn how to create engagement at the level of the individual. It’s much like dating. On date No.1, certain conversations and questions are appropriate and some are not. Companies that ask a ridiculous amount of questions in the beginning are going to be unsuccessful.
Step three is to create a voice of customer driven multichannel mix. In that opt-in process, I’m going to be ask consumers what media channel is appropriate. I’m going to ask them what might be okay in terms of e-mail, what might be okay on a social network, and what makes the most sense by direct mail.
Step four entails creating a customer-driven social media presence. You need to determine what kind of social media presence is appropriate for your company and how the presence should be conveyed based on the message and perception of the brand.
The fifth step is recognizing that customer service is an essential part of the marketing process. This is not an operations issue that marketers don’t have to worry about. The post-purchase experience is an essential responsibility for marketing.
