In Latin, quid pro quo means “something for something.” As English speakers, we use the term to refer to a more-or-less equal exchange of goods or services. But that definition has severe limitations in the world of interactive promotions, where one of the “somethings” is likely to be neither goods nor services but, rather people’s personal information.
Of course, companies have often managed to cajole consumers into divulging bits and pieces of information about themselves, including their names and addresses, in exchange for a discount voucher, a sweepstakes entry, or a rebate check. But in the age of interactive promotions and data-driven customer relationships, the notion of value exchange takes on new meaning as the frequency of these exchanges—along with the volume and types of information being collected—can increase dramatically over time.
Most major consumer brands are only now waking up to the power of data-driven customer relationships. And while numerous companies have tested the waters of interactive promotions, collecting mountains of basic customer data in the process, few companies have set their intentions toward leveraging the data, by enhancing them with psychographic and behavior attributes. This means painting a “high definition” picture of each customer—what at Fair Isaac we call CustomerHD—that captures their individual preferences, interests, and situations and can be used to drive highly relevant, context-sensitive communications.
A notable exception is Coca-Cola. Speaking in November to the Marketing Science Institute’s board of trustees, Alison Lewis, Coke’s senior vice president of integrated marketing communications, explained that the company’s new consumer-centric strategy is “to connect, collect, and perfect.” An initial manifestation of this strategy is the My Coke Rewards program, launched early last year. It was recently extended due to its “overwhelming popularity” and its effectiveness in driving increased product consumption.
More than merely converting anonymous consumers into registered “members,” the goal is to learn about consumers’ individual passions—from sports to music—and then segment them based on that understanding to deliver not only relevant communications but also brand experiences and, of course, rewards (more than 1.5 million at last count). The value exchange is clear: relevant content and prizes in exchange for product consumption and a willingness to say a few things about what you like and how you spend your time and money.
In general, the approach to any customer-relationship-building program should be to collect as little personal information as needed during the initial registration process. You can request additional information later on, as the need arises, using dynamic surveys in conjunction with various analytic techniques, such as discrete choice analysis, to present the most appropriate question to each consumer based on his personal profile and previous responses as well as the specific campaign objectives.
A data-driven relationship should mimic an interpersonal relationship to the extent that it should evolve as a series of repeated interactions that accumulate over time into a positive memory of experiences. The temporal aspect is important. To deepen its understanding of customers, a company needs to build trust. In part, this means asking questions at various iterations, over the course of the relationship, and making sure that the responses to the questions result in meaningful conversation–positive brand experiences–along the way.
Motivating human behavior
The need to motivate specific human behavior is a key component of interactive promotions, according to Josh Linkner, CEO of ePrize, the nation’s largest agency dedicated to interactive sweepstakes, points-based reward programs, and chance-to-win promotions. “Games, contests, and sweeps tend to be the single most powerful tactic to drive that behavior,” he says, calling it a “magic moment” when an anonymous consumer converts into a registered member, setting the stage for a permission-based, data-driven relationship.
“As advertisers,” says Linkner, “we all want our audience to do something: Take a test drive. Tell a friend. Buy product A instead of product B. So how do you motivate that behavior in a what’s-in-it-for-me-society and an instant-gratification world?” The answer, he says, is to put the right incentives in place. “We ask our clients, quite simply, ‘What do you want your audience to do?’ Then we try to wrap the right incentives to motivate that desired action.”
Linkner suggests that companies embrace a new phrase: action marketing. “It’s all about moving people to take specific actions,” he explains, adding that it’s not so hard to do, given the right tactics. He points to a 2002 Jupiter Consumer Survey, which found that 82% of online consumers were willing to provide various forms of personal information to shopping Websites in exchange for something as modest as a chance to win $100 in a sweepstakes.
“If you hold a big enough carrot out there, you can get people to convert to a data-driven relationship,” Linkner says. “You can then take that relationship in lots of different directions. The data becomes marketing gold. It allows you to deliver personalized and relevant offers, which is very different from the one-size-fits-all, least-common-denominator marketing of the past.”
Linkner agrees that not only should the value exchange be equitable but the amount of personal information requested during the initial stages should be minimal to avoid turning a customer off. “Advertisers can’t say, ‘Win a Bic pen, but first give me 200 fields of data,’” he says. “They need to learn more about consumers over time.”
Linkner also agrees that a dynamic survey engine can be a key enabler of that learning. “It allows companies to route people in different directions,” he says. “If you played promotion #2, skip to promotion #8. If you’re a male heavy user of a product, go down track A of questions. If you’re a female nonuser, go down track B.”
In designing a dynamic survey, marketers should ask themselves: What don’t we know about our customers that we need to know in order to interact with them in a more relevant and compelling manner? What are the missing data fields? Does program success hinge on knowing their food allergies? Their long-term career aspirations? Whether they practice yoga? After that, it becomes a matter of backing into an effective strategy for persuading people to volunteer those missing pieces of information.
“The idea is to learn just a little bit about the customer up front,” says Linkner, “and to then encourage them to come back by providing outrageous value.” Whether the value needs to be truly outrageous or merely sufficient, it’s clear that interactive promotions hold the key to capturing a vast array of customer information—and, ultimately, building data-driven customer relationships. And that, in itself, is outrageous.
Jeff Zabin is coauthor of “Precision Marketing” (Wiley, 2004) and a director in the Precision Marketing Group at Fair Isaac. He blogs at www.paretorules.com and can be reached at email@example.com.
Previous articles by Jeff Zabin: