Sunday 15 February 2009

twitter - The Swiss army knife of relationship marketing?

I'm increasingly amazed how quickly new technologies are becoming household names - in years past when I used to use Compuserve (remember that?) and ICQ, you'd never have seen them on the mainstream news, yet in recent years you can't move for updates on new online services.

Last year it was all about Facebook with news channels seeming to talk about it every other week – for 2009 however it has to be twitter - mainly driven by the antics of Stephen Fry (locked in a lift) and Jonathan Ross who are both avid tweeters and have made the service a household name. It is now starting to break out of the smaller eco-systems it has occupied and is becoming mainstream in a big way. DMNews points out that this time last year twitter was ranked at number 22 in terms of monthly web visits – it's now number 3 behind Facebook and Myspace and has just secured $35m in VC funding in the middle of one of the worst recessions.

People will have different opinions about what makes twitter great (or even be thinking "I don't get it") but I reckon the best thing about twitter is that with a maximum of 140 characters you're limited to short messages that are typically about the present – what you're doing right at this moment. You can't sit there and think about your tweet, planning the message you want to get across – its all about being open and telling it like it is – whether it's a status update, a comment on events or a rant, twitter allows you to get it off your chest - immediately.

People seem to tweet about anything and everything, with brands inevitably popping up in people's posts as well. In a recent article on Marketing Pilgrim the question was asked as to why Coca-Cola wasn't on twitter given that their brand pops up in tweets over 1000 times per day.

This got me thinking that FMCG brands like Coca-Cola do have one thing in common with tweets – and that is that the thought process for both is in the here and now – it's all about the present. People don't sit there and think about which brands they are going to buy – at best a customer will be considering categories – I need bread, milk, beer, pizza (you can see why my wife does the shopping) – but very rarely will a brand be strong enough that customers will consider it upfront. For brands the purchase decision is typically instant and emotional – when a customer is browsing a category they will pickup the brand they automatically recognise / is positioned in line of sight / is on special offer (tick all that apply).

The customer won't then give the brand a second thought until the time of consumption which may be days or even weeks later.

If you're a brand manager, you'll know this and so will be doing your best to make sure consumers are aware of and reminded of your product in the hope that when a customer does think about a purchase, your brand will benefit. Building loyalty to a brand though is all about building brand equity and isn't simply brand awareness – Woolworths was a well known brand, yet it still failed. Brand equity is about what consumers feel about a brand – consumers have to understand what it stands for, what it delivers and what makes it better than a competitor brand. If these messages aren't clear then there is no reason for continued loyalty (or initial purchase).

To make matters worse, what is important to consumers today can change over time as their tastes change, their budgets change and competitor products/communications change.

Many brands have no direct relationship with consumers and can sometimes be the last to know of these changes – seeing it first in their bottom line. In an ideal scenario brands would have a relationship with their customers, allowing easy, free flowing dialogue which enables them to understand issues a customer is having and to communicate what makes the brand special. Customer care-lines and websites have helped to open up brands to consumers, but these aren't really available when customers are thinking about a brand – either at point of purchase or consumption. What is a required is a means for consumers to feedback when they want to and when it's relevant – instantly - being able to update a brand on their thoughts – good or bad – or even to rant and to be updated when they want on their terms.

Using that most pervasive of technologies – the mobile phone – seems to be key to this, but services like SMS just don't appear to deliver.

This it seems to me is where twitter really comes into its own. Unlike SMS, twitter isn't charged per message so I'm not thinking "how much is this going to cost me", nor is it such as personal relationship – I'm fine with being a "friend" of Skittles on MySpace or Bebo but there is no way they are getting into my mobile address book.

Opt-in rates for SMS are also typically very low for brands and though this is in part due to perceived costs it is also due to the "interruptive" nature of SMS – when a message arrives I'll look it at almost immediately, but if it's not relevant you'll be sent "STOP" two seconds later. Twitter manages to solve these many issues, combining the immediacy (and increasingly availability via mobile), the "free" cost (normally hidden within overall data allowances) whilst supporting loosely coupled relationships and on-demand consumption.

Could this be the perfect communications channel? - Some brands seem to think so.

In the Telegraph it was reported that Tesco owned US brand Fresh & Easy was using twitter to inform customers and potential customers of special offers and new store openings. However, much more impressive I felt was its use of twitter to build direct dialogue. In one such exchange, a customer is reported as complaining about "sparse stock levels" in his local store, only to receive a reply highlighting "that levels tend to be a bit low at the end of the year due to shipping schedules". Now I know this won't help me with the question "where the heck are the pickled onions" when I'm in store, but answers (or simply acknowledgement) to questions like "why have you stopped stocking Silverspoon Sugar" - a personal gripe of mine last year – would be great.

So it seems to me that twitter offers brands that most elusive of things – a direct two-way relationship with consumers (see previous article of the value of customer feedback).

However I feel it could also offer so much more – the tracking of customer value.

Having followers is one thing and brands like Innocent are renowned for their blogs, newsletters and surprise and delight gifts at Christmas. The issue is a follower doesn't necessarily translate into a customer – sure it helps - but it doesn't tell you how often someone is purchasing your product, or even if they are purchasing it at all. To get this kind of insight many brands choose to run some kind of loyalty scheme or frequency marketing programme so they can get to know their customers – or at least some of them.

More recently many of the programmes I have worked on have been run using unique on-pack codes making the process more immediate though online entry – codes (and more importantly interest) are captured from the first product rather than waiting for someone to stick 20 coupons onto a form and mail it back 10 weeks later! Given that typically 1 customer redeeming can represent 50 customers who started collecting – getting to know the customer upfront can be very valuable for those brands wanting an ongoing dialogue – why talk to 10,000 redeemers when you can talk to 500,000 registrants.

Whilst on-pack collection schemes can work well for products consumed in-home as the label or packaging can be retained to be captured online later, for out of home consumption this can still prove challenging - I really don't want to have to keep an empty bottle and crisp packet (or two) in my pocket for the whole day.

Brands have tried to solve this issue by allowing customers to SMS codes in - think Coke Zone or Budbucks - however it can still be problematic for both sides. For the customer they're not sure of the cost and whether they will then be bombarded with ongoing marketing – for the brand the cost is typically absorbed so each SMS eats into margin which could have been used to reward the customer.

I really think twitter seems to provide an answer here to.

Allowing me to "tweet" my on-pack code means I'm not worried about the cost (and neither is the brand) and it removes concerns about ongoing marketing - I can read it when I want and if you send me stuff I don't want I can simply block it. Not only that but it also has the potential to provide a wider dialogue as messages not sent directly will be seen by all my followers - (@brandname 56G4K62KFIG4V) - letting all my friends and acquaintances know about my purchase (and potentially my Budweiser habit)

I've no doubt revenue models will change with twitter in the future as investors look to get some kind of return, but right now twitter is looking like the Swiss army knife of relationship marketing - providing a means for promoting offers, receiving direct response feedback, building relationships and tracking purchases.

Given the current cash-strapped climate and the phenomenal growth twitter is seeing, I think any marketer would be mad not to be looking at the benefits twitter can offer today.

PS. If you're still trying to get your head around Facebook – go check out the twitter help for a crash course


Christian Egli said...

Interesting post. I believe that twitter can really help any loyalty scheme if it is used in the right way, although I'm not too sure about the value of twitter in on-pack collection schemes. Seems like there are quite some challenges to be faced before a bullet proof workflow could be established.
What makes twitter so influential is that it teaches a valuable lesson: it has become really very easy to listen to your customers (and potential customers).

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