Zain Raj, CEO, Hyper Marketing
In 1911, Pierre S. DuPont coined the term “return on investment” (ROI) as a means to more efficiently spend his marketing budget, and we’re still using that metric today even though it’s somewhat outdated as a direct-mail equation. ROI lives in behaviors and transactions. That’s what you can measure. What ROI doesn’t measure is how the customer feels, so ROI isn’t appropriate for today’s or tomorrow’s multi-channel world.
Let me explain. Four years ago, a musician named Dave Carroll checked his $3,500 guitar on a United Airlines flight and got it back broken. When the airline provided no redress after nearly a year of entreaties and inquiries, Carroll made a music video about his experience and wrote the original song, “United Breaks Guitars.” It became an internet sensation, and United Airlines found itself on the receiving end of a rather unpleasant one-to-many marketing program, compliments of Dave Carroll.
Because of his experience, Carroll, in addition to his music career, is a paid speaker on the business circuit, advising marketing departments about customer service, and he’s a budding online entrepreneur with a web site called Gripevine that gives voice to the disappointed and disgruntled customer.
In the 21st century, ROI is an almost antiquated concept. Marketers should be looking at ROE—return on engagement, which leads to return on equity.
The way to do that is for marketing programs to be digital at their core to create a level of engagement virtually so that people want to engage with your brand physically. Once you get them in and engage them, you must not disappoint. If your product or service does disappoint them, and your company does not make adequate compensation, these customers may make their displeasure known on social media or blogs—consider this likely rather than not. So marketers must act swiftly and sincerely to repair the relationship.
If advertising is done right, by 2020, marketers’ ability to analyze the vast amounts of customer data being collected every minute of the day will be so sophisticated and efficient that they’ll be able to anticipate what the customer wants six months down the road. The path-to-purchase will have a far longer lead time as will the marketing messages and the whole process won’t even seem intrusive.
Even after all the ballyhoo about Mr. Carroll’s guitar in 2009, he took another United flight that same year. The airline, which by then should have known everything about Dave Carroll from its many interactions with him, still managed to lose his luggage.
Our industry has its work cut out for it.
What do we need to do now for the future?
It’s not my intention to pick on United Airlines. I only cite them as an example of what can go terribly wrong for a brand when customer service breaks down. Marketers are learning that, and any company worth its salt is focused on innovation—not only in their products, but in the engagement and experience of customers—in order to pull in new ones.
I fly certain airlines frequently for business travel and enjoy VIP status on many. One of them recently lost my luggage (it was later found) inconveniencing me for quite some time. I tweeted the experience. Those 140 characters got me a nearly immediate response and two first-class tickets at recompense.
Young doctors in training are often instructed as follows: “Listen to your patient. He’s telling you the diagnosis.”
The same advice is now and must continue to be followed by marketers. Listen to your customer. He or she is telling you how to innovate. How to retain loyalty. How to drive sales. The customer is doing that through social media, in person, on your web site and over various channels. By listening to what made the customer dissatisfied or happy, or learning what would make the customer even happier, marketers are learning about where they need to innovate.
To listen effectively, marketers must be digital at their core, and the demand funnel looks like this:
What marketers must do in the future is to continue to get even better at what they’ve begun to do in the 21st century: Listen. Listen to your customer. He or she is telling you how to earn loyalty and drive sales, and ultimately how to improve your brand.