Fighting marketing fatigue: Perceived relevance is the key to increasing message frequency and revenue

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1 Fighting marketing fatigue: Perceived relevance is the key to increasing message frequency and revenue Empirical research findings challenge traditional perspectives on marketing fatigue and revolutionize outbound marketing strategies Table of contents 1: Introduction 1: Re-thinking the concept of marketing pressure 3: From theory to practice: 5 rules for managing marketing pressure 4: Taking Action Marketing fatigue is not measured by actual communication frequency, but perceived frequency leading to a revolutionary finding: marketers can safely increase the number of communications without fatiguing a target audience if communications are uniquely personalized at an individual level. Introduction Recent research* published in the Journal of Advertising (US) analyzed the marketing behavior of nearly 15,000 consumers over a three-month period. Among the key findings, the research revealed that the number of messages delivered by marketers can be safely increased if recipients perceive communications to be personalized and relevant. The study found that the recipients recollection of message frequency was lower when subject lines and copy were perceived to be relevant by the recipient even when the frequency of communications was increased over time. It seems marketing fatigue is not measured by actual communication frequency, but perceived frequency leading to a revolutionary finding: marketers can safely increase the number of communications without fatiguing a target audience if communications are uniquely personalized at an individual level. Increased relevance also minimizes the likelihood that more frequent messaging will result in a negative perception of the brand or communication; as well as reduce detrimental outcomes such as opt outs or worse, spam complaints. This white paper will contextualize these research findings for marketers and reveal key insights and recommendations for maximizing conversion and engagement in campaigns and minimizing damaging outcomes from these communications. Re-thinking the concept of marketing pressure It is every marketer s dream to communicate nonstop via all available channels. In theory, this could guarantee maximum exposure to messages and boost conversion rates to peak levels. In reality, things are different. Since the inception of digital marketing, the marginal cost per communication has decreased significantly leading to economies that gave birth to mass communication techniques like batch-and-blast campaigns. In a foreseeable pendulum movement, consumers embraced SPAM filters, junk mail buttons, unsubscribe links, and complaints to ISPs, which gave them significant power over marketing outcomes. Two thirds of consumers say they receive too many messages, whether via , call centers or direct mail. Consumers are overwhelmed, and they have the more control than ever before; using all available privacy tools, they re dramatically restricting the number of communications that actually make it to the inbox, much less get opened and read by consumers. That s why response rates are decreasing and database erosion continues to grow. Marketers are under increased pressure to find way to get in front of target audiences. These trends present challenging dilemmas for marketers. On the one hand, selling more seems to require more communications. The widely accepted Rule of 7 suggests that marketing messages must be seen seven times on average before a person will make a purchase. While this is a general concept, it strikes at the core of the challenges marketers are faced with in the age of digital channels. Target audiences are bombarded with * Andrea Micheaux is Associate Professor at IAE, Lille University, France and Associate Director of A.I.D., Versailles, France, an Omnicom company. Her research was published in the Journal of Advertising in December 2011 in the USA ( Managing Advertising Frequency from the Consumer Perspective / #40, N 4, Winter 2011 p 45-66, Publisher: American Academy of Advertising). The article can be purchased online: The study uses an actual prospect database belonging to a credit consumer company. Andrea Micheaux targeted close to 15,000 people over a period of several months. The test is based on the delivery of multiple s with different properties: subject, content, colors, message type and sender. All combinations were tested taking into account the repetition of messages in time (up to 6 messages per person). The quantitative test protocol was backed up by qualitative surveys taken by the recipients. Forrester Research, Inc., Marketers: Stop the Abuse! Adopt Preference Management, July 22, 2009

2 messages and increased communications eventually leads to frustration and anger. For many marketers, the solution is to communicate less, but in a highly engaging and personalized way; earn relationships with double opt-in practices; and value them by carefully weighing the frequency and volume of communications. Marketers then turn to marketing technology to implement and automatically enforce communication throttles on the frequency of communications to ensure recipients are limited to a finite number of messages over a given period of time. While this may reduce unsubscribes and complaints, it does little to maximize revenue. This research actually suggests these traditional tactics are leaving money on the table! Marketing fatigue and communication frequency are certainly core challenges for marketers. How do you communicate value propositions without overtly offending your target audience by sending too many messages? How do you make sure they have been exposed to the brand enough times to maximize the potential for a sale? How do you deal with pressure from the CEO to communicate more often and get more out of the same budget? In the context of critical pressures marketers face, message frequency would be top of the list. And most marketers would define the challenge of message frequency by the number of messages sent to a consumer. Unfortunately, many marketers are also under incredible pressure from internal stakeholders, the board, and shareholders to increase the volume of marketing messages in order to drive more revenue. In a sense, marketing pressure could almost exclusively be defined by the need to manage communication cadence and minimize fatigue. More money can be thrown at all kinds of different channels, but as soon as the volume of messages becomes too high, contact lists start to shrink, customers opt-out, and even an unlimited marketing budget can t fix the problem. But, the research actually revealed that consumers don t measure fatigue exclusively by message volume or frequency; they measure fatigue based on perceived relevance of the communication. As such, the real pressure for marketers need not come from internal stakeholders, but from consumers themselves. This research shatters traditional thinking on marketing communication and reveals message relevance plays an integral role in how consumers perceive messages to be desirable or irrelevant. Analysis on tens of thousands of s over three months revealed that when recipients judge messages highly relevant, they were less likely to complain about message frequency and volume. Indeed, perception is in the mind of the beholder. But this poses a challenge for marketers because each individual will evaluate relevance differently. The one consistent theme in the research showed that marketing fatigue was linked to the level of effort required to read messages rather than the actual number of messages received. Figure 1: How relevance impacts consumer perception. With the permission of M.E. Sharpe. Inc. 2

3 In the above scenario (adapted from Micheaux 2011*), there are two critical milestones for shaping consumer perception. Consumers evaluate the subject of an first, to determine if the message is worth reading. s that are not deemed relevant tend to be forgotten and left unopened, with no significant impact on the brand. But, if the is classified as relevant by the consumer, there is a second and far more critical milestone to overcome. Once the consumer has invested effort into reading the content, the content must be perceived as relevant. This leads to outcomes in the green box and, based on the findings, consumers have little to no fatigue with respect to these types of communications. However, if the consumer invests time into opening an and the content is not relevant, it is more likely to have a negative impact on the brand and even the perception towards the channel (the red box). Ultimately, the sum product of these outcomes influences how the consumer will react to future communications. From theory to practice: 5 rules for managing marketing pressure Taken a step further, the findings can be translated into a handful of golden rules that, when mastered, allow marketers to send even more communications with a high chance of increasing revenue and little risk of fatiguing target audiences. Figure 2: 5 rules for managing marketing pressure These five rules allow markets to gain consumer respect and maximize conversion rates: Individualize the approach. In order to minimize marketing pressure, it s critical to manage relevance on a consumer-by-consumer basis. Think of it more like a detailed contact management strategy whereby communications are optimized using consumer purchase date, behavior, demographics, preferences, and any potential source of online or offline data about a particular individual. It s offer optimization at on a one-to-one level. Traditional practices would apply a generic communication threshold to all customers and prospects, business rules that generically define how frequently any given individual could receive a message. But, individualizing communication would define communication thresholds on an individual basis to maximize sales. For some prospects or customers, increasing message relevance may allow marketers to increase communications by 2 3x the standard rate, leading to increases in sales and customer satisfaction. 3

4 Focus on message relevance. Figure 1 underscores the fact that after a consumer has determined an subject is not relevant, there is little impact, negative or positive, on the brand or consumer perception. But, if a message is opened that the consumer thinks is relevant, and it s not relevant, these actually damage the brand and decrease future chances of success. So, step one is making sure communications are highly targeted and personalized. Keep in mind, research has already suggested that personalization and 1to1 messaging increases conversion and response rates. According to Gartner, Inc., A well-crafted, targeted (i.e., one that is better targeted and sent in smaller lots to specific segments) can receive a 10% to 15% response rate, which is higher than non-targeted, stand-alone mass mailings. This new research shows that personalization also decreases marketing fatigue. It s a win-win scenario. Increase message volume. In practice, once the relevance condition has been met, marketers can increase (to a certain extent) the volume and frequency of communications, but only if those communications are designed to continue delivering highly personalized and relevant messages. The research also shows marketers can send relevant messages multiple times to maximize results. That means, more relevance doesn t mean the level of complexity has to rise exponentially for marketing. Provide guidance. Don t leave it up to the consumer to guess if messages are relevant. Rather, make it explicitly clear through subject lines that will help them decide whether or not to open the message. Remember, there s no penalty for helping consumers classify messages as irrelevant before they open them. Having said that, it s critical to maintain the same messaging from the subject to the actual copy. The goal is not to fool them to open an based on an appealing subject and then disappoint with a non-relevant message in the body. When in doubt simplify. If a marketer doesn t know if a message is relevant enough, it s best to use a simple, graphical or fun message. In this instance, the less you say, the less likely you will create a negative outcome. By adopting the customer s point of view, intelligent marketing pressure management is guaranteed to increase the number of impressions, in turn increasing conversion. Taking Action Today, consumers actually expect a very high level of personalization, much greater than what is currently provided. In a recent Forrester Research study, 90% of consumers indicated the messages they receive aren t suited to their needs or expectations. Drawing on the conclusions of the Andrea Micheaux study, it could be possible to conduct content relevance scoring. This approach could leverage a relevance indicator for each recipient/message couple. The indicator could be calculated using all the information available on recipients (channel behavior, demographics, profile information, preferences, etc.). Communication strategies could then be uniquely assigned and tracked based on the value of the relevance indicator, much like a scoring engine uses thresholds and business rules to optimize targets for marketing campaigns based on buying behavior. High indicator: the message is very relevant Message format can be whatever you want and message doesn t count from an ad frequency perspective Average indicator: relevance is uncertain We need to captivate the recipient, either via form (images, animations) or content (important announcements) and to minimize the effort required to read the message Low indicator: the message has very little chance of being relevant We need to be brave enough not to send the message. Figure 3: Relevance indicators. Forrester Research, Inc., Marketers: Stop the Abuse! Adopt Preference Management, July 22, 2009 Gartner, Inc., Hype Cycle for CRM Marketing Applications, 2012, July 27, 2012 A. Micheaux, Getting to the bottom of Pandora s Box Three ways data driven marketing can go off the rails and three ways taking the consumer perspective can get it back on track, Journal of Direct, Data and Digital Marketing Practise, Vol.14 N 3 (Jan-March 2013), doi dddmp Forthcoming. 4

5 To do this, marketers would need to assess the relevance of every single communication before personalizing each message on a one-to-one basis. Today, conversational marketing technologies can help enable this type of intelligent and individualized management. Thanks to cross-channel campaign management, inbound and outbound communication fusion, and real-time personalization and recommendation engines, marketers are provided with all the necessary capabilities to create and capitalize on customer knowledge and calculate a relevance indicator to automatically adapt message form, content, and frequency. Conversational marketing technologies can actually start to provide the level of automation and personalization necessary to make this type of research actionable. Here are a few of the ways these technologies can help: 360-degree view of the customer Customers don t think in terms of channel or function. Every interaction with a brand shapes the overall customer experience. That requires one system of record for customer data that includes every marketing, sales, and customer service interaction. Conversational marketing platforms can help collect and aggregate a core system of record for customer data in order to drive highly relevant and personalized messages. Analytic and predictive functionalities Data forms the basis for improved analytics. While that may seem like an obvious statement, the problem for most organizations is not a shortage of data, but a lack of actionable data in a tool that can be used to optimize the customer experience. A conversational marketing platform helps centralize and align critical information for optimized product recommendations, marketing communications, and offers. Seamless integration between customer knowledge & campaign execution Relevance is determined by two factors: timeliness and personalization. This goes back to the whole notion of the right message, at the right time, in the right channel. It s the ideal marketing execution model, and it can be like chasing a mirage in a desert. But, a conversational marketing platform can help link what you now about an individual (and other like-minded individuals) with the messages that are most likely to result in a conversation or predictive behavior. That requires a single platform or vehicle to build upon over time. Real-time recommendation and personalization engines For years, marketing was about making bets. Websites were largely static sources of content that generically mapped to a brand s broader target audience. But dynamic personalization has changed the digital marketing channel. Conversational marketing platforms power dynamic personalization based on current or past behavior, in real-time. This realtime recommendation engine will be critical to optimizing a relevant experience for customers and prospects. Cross-channel capabilities A centralized conversational platform provides a centralized preference management and message execution engine for all customer communications. Many organizations struggle to manage multiple disparate investments in channel-specific marketing technologies. As such, the multichannel marketing strategy consists of multiple individual campaigns across multiple channels. What is actually needed is a single platform to orchestrate and measure. For now, this exciting new empirical research is limited to the channel, but managing the customer experience demands similar disciplines across all channels. Social networks, web, mobile apps, direct mail, call centers, SMS and so forth are also channels for which intelligent marketing fatigue management is crucial, profitable and possible! For more information Solution details: Adobe Systems Incorporated 345 Park Avenue San Jose, CA USA Adobe and the Adobe logo are either registered trademarks or trademarks of Adobe Systems Incorporated in the United States and/or other countries. All other trademarks are the property of their respective owners Adobe Systems Incorporated. All rights reserved. Printed in the USA. 11/13 5