CHAPTER 6

Marketing Communications for the Connected Consumer

Mary hardly ever looks at the newspaper and her attention while watching TV is divided. But she loves social media, where all her friends are. How have communications changed to target people like her?

There is a revolution in marketing communications. Though mass media remains the vehicle for reaching a large number of people, the fact that people prefer to interact with their own little screens is changing the rules of the game. Can companies elbow into this personal space and introduce their messages? Or create compelling reasons for people to visit their sites and thereby become loyal to them?

To achieve this, companies have to align their messages and ­content with what people are doing online at a specific time. If either the ­message or the timing is inappropriate, people will see it as intrusive and ­irritating. The unwanted tweet or an unwanted friend request will most likely be blocked out, and sometimes will invite a consumer backlash as well. That is why online communication has to be used with great care and understanding.

A Better Way to Advertise

The idea, therefore, is to send relevant messages at the right time, rather than sending unwanted spam messages hoping that someone will see them. The benefits—in terms of reduced wastage in advertising expenditure—are huge. But then companies have to engage customers when they are most receptive, writes Rayport (2013). In his article, Advertising’s New Medium: Human Experience, he writes that big data helps advertising to engage consumers in four spheres:

• Public sphere: The sphere in which a person moves from one place or activity to another. Ads in this sphere have to be relevant in context, help people, and be compelling.
• Social sphere: Activities in which people interact with each other; ads in this sphere must address a social need or ­facilitate interactions.
• Tribal sphere: The sphere in which people connect with groups. Ads in this sphere will provide means to empower consumers for self-expression, status, or affiliation.
• Psychological sphere: In this personal sphere, companies try to link brands to a personal value or emotions.

In his blog post, Rayport gives the example of Diageo, which ran a pilot program on Father’s Day in which consumers could scan product codes on individual bottles of spirits by their mobile phones and ­create videos for dad and upload them. The recipient dad could ­download the video, thereby leading to increased personalization of the brand ­experience. Such activities redefine advertising in at least five ways:

1. The advertising message is placed into everyday social life.
2. The gift giver creates a message which also serves as a crowdsourced advertising for the firm.
3. Users can personalize products through unique codes.
4. Products become smart to deliver dynamic ad messages.
5. It builds consumer relationship with the brand both online and through physical products.

Two methods, dialog marketing and programmatic ads, represent great strides in communicating effectively with consumers.

Dialog Marketing

Data analytics help to place focused ads to consumers that they find ­interesting and deliver at a time when they most need them. This is done through a computer-based model called dialog marketing. Kalyanam and Zweben (2005) explain that dialog marketing considers not just when to communicate but also how to communicate.

Through dialog marketing, companies continuously track ­loyalty indicators by traditional recency, frequency, and monetary value (RFM) scores in real time. The system tracks a transition in this score the moment it happens and launches a dialog with the customer. Data is collected at all touch points, which is then used to customize marketing messages and personalize the experience. It is an interactive model that tracks many communication channels, following each customer’s interaction with a company. Kalyanam and Zweben (2005) describe how new methods of tracking customers as given below can generate dialogs with them:

• Intelligent process engines: These engines track individual states of a consumer, that is, a consumer’s relations with a company at a point in time. Action is initiated based on changes in these states.
• Event-driven computing: Intelligent engines continuously listen and track what customers are doing, and decide when to react, initiating dialogs when the customers are most likely to respond.
• Scalable web architecture: Scalable web architecture makes it possible to track volumes of dialogs as they increase.
• Web services: Multiple data systems must talk to each other. This technology makes it possible to connect dialogs and to listen to customer activity in real time.

Programmatic Ads

Programmatic ads link real-time data to ads based on what a person is doing at that time. The platform allows companies to participate in split-second auctions to be able to present an ad to a customer on the basis of data from various sources such as his or her browsing ­history, ­purchase behavior, social media usage, sociodemographic profile, ­location, and other criteria. Many variants of ads are created and the one matching individual customers are displayed on their screens through dynamic variation.

Apart from advertising, companies have to become adept at using social media, where the customers are. Its importance has increased in recent years.

Importance of Social Media Communication

Social media is where consumers are. Companies eye clusters on social media spaces because they want to be with their customers. Today, ­customers flock to social media sites and companies flock after them, trying to get them involved with their brands. It is the dream of every marketing manager to get the attention of millions of people who log on to such sites everyday to listen to their messages.

But the task is not easy because of two reasons: first, they have to understand what people do on social media, and second, they have to deal with different screens and platforms. As pointed out in a report by Nielsen (2014), in many countries, people spend an average of 60 hours a week consuming content across multiple screens—that is about eight hours every day. Two-thirds of the people surveyed said they used social media sites at least once a day. Indeed, social networking is somewhat of an addiction. Increasingly, people use two screens at a time, showing the importance of a multichannel approach.

Companies thus struggle to understand how to get people involved with their brands on a platform which is essentially social, not commercial. They try to understand things like:

• What do people do on social media? How to get people on social media engaged with brands?
• Why do people seek out a company or brand on social media?
• What makes a customer willing or reluctant to interact with brands online?
• Does social engagement really result in increase in sales or loyalty for a company?
• How can social media be used to assist marketing strategy of a company?

Answering these questions helps companies to facilitate ­collaborative experiences and dialog that are relevant to customers. Simonson and Rosen (2014) write that communication must match the consumers’ influence mix, derived from the sources of influence on the consumers’ decisions—prior experiences, influence of other people or of companies. There are two mistakes made by companies while using social media: first, it is treated as a persuasion tool, like other media, and second, it still uses old concepts of marketing. Online executions, however, must be done with a different purpose and intent.

Online Communications

Many companies make the mistake of trying to add numbers online, and this is often useless. For instance, campaigns to get viewers to see a video on YouTube, to get visitors to a website or to get likes on Facebook may do nothing for a brand. Such traffic can also often be manipulated. Similarly, online advertising is often blocked or directed to spam folders.

Traditional ways of thinking about advertising campaigns do not work. Piskorski (2011) writes that most companies do not succeed on online social platforms. Though they try to use social media, few ­companies succeed in generating profits on social platforms, despite collecting lots of friends and followers. The efforts by companies to connect with consumers on social media are rejected because their main goal is to connect with other people, not with companies, he writes. Though there are many firms giving advice on digital marketing, little of it goes beyond building traffic and getting people to “like” brands.

Campaigns encouraging likes will only go that far; people may like a brand on social media for its content, but continue buying another because it better suits them. Many companies have started me-too pages on popular social sites and even managed to collect a large number of fans, but converting them into paying customers remains an uphill task.

Digital marketing suffers from the fact that few people combine data skills with marketing skills. Knowledge is divided into two distinct camps:

1. On one side are advertising and marketing professionals who understand advertising, marketing, and branding, but are clueless about incorporating social media with their brands.
2. On the other side are the social media enthusiasts who know everything about sharing content and collecting fans but are completely lost when it comes to branding, marketing, or developing consumer loyalty.

That is why most social communication media strategies fail. Stauffer (2012) writes that social media are at odds with the traditional campaign mindsets that are still used in many planning models. As a result, too many marketing and communications programs on social media are social in name only, with the vast majority of resources spent managing the flow from brand to consumer and little or no meaningful consumer insight affecting the way the business operates. Most brands lack a process for ensuring a balanced mix of social media-led planning both downstream to consumers’ lives and upstream to business objectives.

Big data offers a way to send targeted communications, integrating online and offline requirements of consumers, as summed up in Table 6.1. The idea is that online communications should drive online sales or store sales, while store visits by customers are made more informative and ­profitable by providing real-time information and offers.

Table 6.1 Online executions of different communications tools

Communications tool	Online executions
Advertising	Programmatic ads, ads that take into account a person’s location and need, virtual storefronts and displays
Selling	Sales persons as information providers through tablets; real-time tracking, identifying opportunities to engage and sell, virtual sales staff
Sales promotion	Based on customer’s location and needs, offering online incentives and rewards, loyalty schemes, below-the-line (BTL) activities in the physical world
PR	Online editorials, e-zines, newsletters, discussion groups
Sponsorship	Sponsoring online and offline events
Direct mail	Focused e-mail and web response
Exhibitions	Virtual exhibitions
Merchandising	Virtual interfaces, shopping malls, e-tailing
Packaging	Displays QR codes, links to product information
Word of mouth (WOM)	Enabling customers to share experiences through free Wi-Fi in stores; viral, affiliate marketing, links, social media
Social media	Customer engagement

It is seen from Table 6.1 that communications have to take the best of online and offline methods. Big data enables companies to get inside the lives of their customers, figuring out what problem is sought to be solved. Mobile moments help companies to figure out what is beneficial for the consumer at a particular moment and, thus, gain relevance.

Several companies have been successful at combining customer needs with online communications.

• Uber connected people wanting a ride to drivers who were in that area and could carry a passenger.
• Bank of America allows customers to deposit a check in their accounts by taking a picture of it.
• The Delta app lets people rebook flights while standing at the gate.
• In some countries, McDonalds lets people to place their order while walking to the restaurant.

Companies have to get over their habit of one-way communication with customers. Instead they have to embrace social customer relationship management (CRM), which facilitates collaborative experiences that engage customers.

Social CRM

Social CRM is the CRM built by communication with customers through social networking sites. It is social media that is the engine for users, which is used by organizations to get people engaged through strategies that encourage social CRM (Figure 6.1). Greenberg (2010) explains that social CRM is the ability of a company to meet the personal agendas of customers while, at the same time, meeting the objectives of its own business plan. It is aimed at customer engagement rather than customer management.

Figure 6.1 Engagement strategies through social media

Social CRM is based on the understanding that:

• People do not look for brands on social media: Social media is not used as a search engine for brands. It is a social platform where people engage with each other. They may also look for product opinions and reviews. Only engaging content that fits into customer needs can get them engaged with brands.
• People use social media to connect with friends and family: Social networking is about personal connections with friends and family. These personal connections are trusted and valued. Merely pushing products through them will be rejected.
• Companies need to develop passion for brands: Companies hope that people will talk or comment positively about their brands or experiences with them, but people who feel passionate for a brand will only do so. Marketing activities encouraging brand passion must be clubbed with online activities.

Successful Strategies

Social strategies only work when consumers can connect the marketing effort to their lives (Exhibit 6.1). According to Piskorski, companies’ intervention in the social space should help meet some social objectives such as:

1. Reduce costs, or solve customer problems by helping people meet and connect;
2. Help connections, establish or strengthen relationships, and thus increase willingness to pay or to reduce costs; and
3. Encourage customers doing free work for company, such as WOM communications, assisting in product development, and so on, by instilling a sense of achievement for them.

If done properly, social media communications can fulfill several ­objectives of businesses and lead to engagement strategies. The brand manager tracks sites to spot and mitigate negativity, while the community manager encourages engagement to get people talking about brands and products. Webmasters look for referrals and try to get people ­sharing ­contents and links that lead to their website. Product ­development ­managers use social media to understand and analyze shifts in purchase behavior and try to involve consumers in the product development ­process. Using social media, consumers are linked to manufacturing in real time.

Major Shifts

There are five major shifts that have occurred in marketing communications due to the connected nature of consumers and companies.

1. From campaign management to social CRM;
2. Help consumers find brands;
3. From selling to engagement;
4. Relationships between touch points and
5. Building brand communities.

These strategies are explained in this section.

From Campaign Management to Social CRM

Traditionally, communications are thought of as campaigns which ­provide leads to sales. Social CRM goes beyond managing campaigns to building engagement and relationships. The strategy focuses on engaging customer in collaborative conversations. This is called social CRM. Along with advertising in the mass media, companies have to focus on getting customers involved with brands online.

A Nielsen report, How Digital Influences How We Shop Around the World (2012), says that companies still have to learn to use social media as it is a two-way communication medium and they must engage in the dialog to stay in control. The report describes how social CRM can help companies to do the following:

1. Focus on the right shopper. Companies can first focus on the active users of social media. Nielsen found that about 25 percent of ­shoppers can be considered as trendsetters, or people who love to keep ahead, try new things, and tell others about them. Focusing on such shoppers will build opinion for others to join in.
2. Engage shoppers with the right message. The message should fit in with a consumer’s need to be relevant. Companies have to determine activities that are important to core shoppers and customize their messages.
3. Connect with shoppers via the right medium. Companies have to ­communicate via the right medium: Physical stores have to be matched with mobiles and apps, salespersons are to be armed with tablets, and shopping has to be made easier. Companies today ­cannot limit ­themselves by medium since people move between their devices seamlessly.

Help Consumers Find Brands

Today consumers find brands, rather than the other way around. The efforts of companies have to be on getting into consumers’ Moments of Truths. This represents a paradigm shift in marketing practice: shifting from targeting customers to engaging them. Berger (2013) has given six key principles (STEPPS) that can help customers find brands, talk about them, post comments, and include them in the decision journeys. Note that there is no distinction between online and offline worlds when the objective is to get people talking.

1. Social currency: Social currency describes communications by people
   to create positive impressions about them. Talking about cool ­products or ideas, posting pictures with them, and getting likes on their posts make people feel good. Companies have to try to get people talking and posting about products in their social posts. They have to create social currency through quick attention and responding to queries or by giving them exclusive deals. Customized ­products also make people feel that the company is giving importance to them, which helps in sharing products in social communications.
2. Triggers: Triggers are things that get people talking. WOM is ­triggered by what people see or experience. Triggers have to be built in communications so that people associate brands with experiences and share them. They have to be repeated frequently, but the danger is that too many reminders may put off customers.
3. Emotion: Berger says that information alone does not get people to act; emotions do. People share experiences if they feel emotionally moved or highly aroused. So, companies need to arouse them by linking emotions such as awe, excitement, amusement, anger, or anxiety with their brands.
4. Public: People tend to copy others. Called the mirror effect, it helps brands spread virally. As people see others using brands or ­products in public, they get influenced to buy or talk about them. Brand ­managers, therefore, have to find ways to make people use their brands and products in public. Or, if they cannot be used in ­public, creative labeling helps to spread the word, such as labels put on ­luggage of guests when they check out of a hotel, or the famous Intel Inside sticker on laptops and computers. Amazon offers share your purchase button by which people can post purchases made on its site on social media sites. Online companies send their products in distinctive packages so that others see them and get influenced to buy from them. Flipkart encourages people to use its packaging for other uses such as making dustbins so that they are visible to others.
5. Practical value: Another way of building social currency is by offering value: People like to help others or show off brands if they think they have got exceptional value in buying them. Major triggers are saving money, personal achievements like losing weight or looking good, or planning a vacation to an exotic destination. Group purchasing sites like Groupon are built on the assumption that people like to share value with their friends and buy in groups to avail discount.
6. Stories: Stories are another way to get people to participate and feel important. Great stories are shared by people, especially if they feel a part of it. Companies thus create brand stories or share unique ­customer experiences to get people talking. Instances of quick response to customer comments are of solving customer ­problems, amplifying referrals and recommendations, and fostering ­communities help spread stories.

From Selling to Engagement

The efforts of companies have to be on getting consumers engaged with brands, rather than selling. Customers can be engaged by contributing to firms in many ways beyond transactions. Companies have to encourage nontransactional active interactions with their customers.

Customer engagement is being recognized as a more strategic way of looking at customer and stakeholder relationships according to the ­Economist Intelligence Unit (2007). Whereas earlier, engagement was limited to developing better CRM, now the relationship is sought to be deeper and more meaningful.

If a brand can develop an emotional connect with its users, ­engagement via social platforms becomes easy. However, because brands are not ­people. It has to be done with a genuineness of purpose, by ­listening and responding to consumers, and by involving them. As Greenberg (2010) explains, “Human beings love to participate and create.” It is up to companies to harness this desire of people. Successful companies understand that the customer is not just a source of sales, but wants to actively participate in value creation with business. Technology provides a number of ways that companies can join with their customers to co-create value.

The framework for engagement includes a four-step approach:

1. Plan—The communications plan must specify what is to be achieved. The objectives have to be specified in terms of key performance indicators in the social media space.
2. Listen—Companies have to track in real time what is being written and talked about on the Internet. Conversation hotspots give clues about when to intervene in conversations. Listening also helps to know changes in loyalty parameters so as to initiate dialogs at just the right moment.
3. Analyze—Conversations are analyzed to understand consumers, their emotions and motivations, and their response to brands.
4. Engage—A creative approach is needed to engage customers and to form the best platform and medium upon which to build relationships.

Above all, the engagement has to be based on trust and ­sincerity. ­Commercial messages do not work because the engagement is seen as ­artificial. If social media users perceive a company’s messages and ­intentions as sincere, they will engage with brands. Care has, therefore, to be taken that the communications do not become one way or are ­blatant attempts to sell, because people are quick to block such attempts on their phones, e-mails, or feeds on social media. Social media is not about ­driving sales, but about making emotional connections, exceptional ­service, and engaging conversations.

Prahalad and Ramaswamy (2004) write that companies that want to succeed in this new era need to experience their businesses as consumers do, and through experience networks, they can co-create ­better ­products and opportunities. This cannot happen without bringing about deep changes in how managers and leaders think. The ­marketing ­paradigm, which thus far was focused on company or brand, is ­outdated and needs to shift to customer think, which leads to a difficult but ­necessary sharing of information at all points in supply chains right up to customers.

That is to say, brands have to operate like interesting people whom their customers would like to know. Since friendships in the real world are based on sincerity and trust, companies too must develop these qualities in all their communications.

Relationships Between Touch Points

Companies have to look for specific relationships between touch points, and find out how users flow from one point to another. Today ­communication strategy has to track changes in consumers’ feelings as they move between touch points and initiate dialogs. Dialog marketing, which tracks changes in RFM scores and triggers dialogs with consumers, has been described earlier in this chapter.

Dialogs are designed to guide the customer to new transactions or to develop a deeper level of engagement. Since dialogs are initiated when the customer is in a particular mood or transition, attention is guaranteed. For instance, a consumer looking at cooking devices in a store can be guided to particular brands or sections by sending a personalized message.

Marketing managers today have the means to initiate dialogs with lightning speed to capture the mood of the audience with split-second accuracy. Consider the following examples:

• When there was a brief power blackout at the Super Bowl in 2013, companies responded with alacrity—Oreo tweeted, “Power Out? No problem. You can still dunk in the dark.” Tide tweeted, “We can’t get your #blackout, but we can get your stains out.”
• When London had a hot summer, Wall’s used the ­opportunity to send advertising messages to city residents about its ice cream. In cold weather, Kleenex used Google ads to target areas where people were most likely to catch a cold.
• Microsoft sent e-mail offers for its search engine Bing, which gets tailored to the recipient in the 200 milliseconds when it is opened. When a person opens the mail, the user’s real-time information is used to tailor the offer. As a result, conversion rates improved reportedly by 70 percent.

Such messages not only got smiles from the audience, but also resulted in high brand recall. They encourage consumers to engage with it because they are relevant.

Brand Communities

Brand communities are built on the understanding that people who ­consume a particular brand have affinity with each other and share common interests. A brand community is a group of consumers that shares social relationships based on usage or interest in a product, and is ­therefore a means of building engagement. Sometimes it is made by consumers themselves; at other times, it is made by a company. It is based on attachment of consumers to a brand—the stronger the brand, the stronger is the brand community. Events and get-togethers are organized so that consumers meet others who share their enthusiasm for the brand.

Customers seek variety, entertainment, and belongingness through brand communities. If they are passionate about the brand, they will join such communities, online and offline. The secret is to make people feel valued. They are also based on honesty. Communications must, ­therefore, include authenticity and trust, on all devices, all the time. Hudspeth (2012) writes that the secret lies in two simple philosophies—engage ­people through relevancy and provide them with value, while being transparent and authentic. These objectives are met through brand communities.

Brand communities encourage C2C communication. Fournier and Lee (2009) explain, “In today’s turbulent world, people are hungry for a sense of connection; and in lean economic times, every company needs new ways to do more with what it already has.” A strong brand ­community, they write, increases customer loyalty, lowers marketing costs, authenticates brand meanings, and yields an influx of ideas to grow the business. Strong brand communities result in better returns through commitment, engagement, and support.

Beyond social interaction, communities encourage passion. Evidently, consumers will interact only with brands they know and love. McWilliam (2000) writes that for brand relationships to be cultivated over time, companies have to devise communication that:

• Customizes messages for individuals;
• Rewards the individual for fostering the community; and
• Strengthens the relationship between people and brands.

Sometimes brand communities evolve into movements and ­encourage creation of tribes. Consumers make communities themselves—as the ­creation of fan pages and chat groups on social media sites. Many websites are integrated with such communities, so that people can share things they like on them on social media sites. Indeed, many brands, such as Starbucks, Coca Cola, and Ikea, have used brand communities to engage consumers through social networking. But this is not the rule: A study by Socialbakers, which gathers social media statistics, found that 95 percent of posts to brands’ pages on Facebook went unanswered. Any ­interventions by the company that are not natural or are commercial in nature will be squarely punished.

Love–Respect Axis

Social media has resulted in redrawing the business communications for firms. The lines between producer and consumer are today blurred: The company and the customer are operating in conjunction with each other.

The second aspect of the new business model is a change in thinking from campaign-specific to customer-centric approach. Different metrics are required; instead of measuring traffic from social media sites, ­companies must learn to look at how social performance helps to shift key performance indicators, such as brand value and sentiment, customer retention and satisfaction rates, apart from sales and profits. The ­campaign-oriented thinking of the past cannot be used in media which is essentially controlled by consumers.

But does this imply a change in approach? For years, brand managers have known that great brands are built on love and respect of consumers. CEO of Saatchi and Saatchi, Ken Roberts (2004) described a love–respect axis—which he wrote worked “best in conversation: conversations about product and brands … conversations about successes, conversations to spark insights.” Brand equity was built on emotion, optimism, quality, trust, and stories. By building on passion points—music, fashion, sports, celebrities, entertainment, and technology, brands could earn the love from their consumers.