Ernan Roman on Voice of Customer Marketing
Ernan Roman is one of the leading authorities in Voice of Customer-driven Relationship Marketing and I’m pleased to share my interview with him.
Ernan is President of the eponymous marketing consultancy, Ernan Roman Direct Marketing, (ERDM) which works with innovative Fortune and Growth companies such as Microsoft, NBC Universal, Reliant Energy, and IBM.
I’ve known Ernan for many years and have learned so much from his expertise and thinking. His latest book will be published next month by McGraw-Hill: Voice of the Customer Marketing: A Proven 5-Step Process to Create Customers Who Care, Spend, and Stay.
In the interview you will learn about:
- treating customers the way we want to be treated
- the difference between passive permission-based marketing and active opt-in marketing
- why brand matters in VOC marketing
Unfortunately the quality of the audio in the first half of the interview is really bad, so I’ve transcribed that portion below. The second half of the interview is available in the podcast.
Denise: Let’s start at the beginning. I don’t want to be too basic but I think it would be helpful to hear what is Voice of Customer Relationship driven Marketing and why is it important.
Ernan: Good question. The premise for the methodology and the years of work I’ve spent in developing the methodology is the realization: What if we treat customers the way we want to be treated? So all those things that are logical and right like relevant, timely, effective communications and offers — what if we could in a disciplined way deliver that high value to consumers and treat them they way they want to be treated — but at the same time achieve such a level of efficiency and scalability that it would serve as a truly replicate-able process.
And in doing right for consumers we would be improving the efficiency and efficacy of marketing so that on a consistent, replicate-able basis, double-digit response would be the norm; not the fractions of the responses we see now. That makes an incredible statement indicating the obscene levels of waste in our industry.
Then there is the 5-step Voice of Customer Relationship driven process. It starts with the absolute belief and commitment that without the wisdom of the customer to guide us, we will not be doing effective and relevant marketing. So we start in step one doing in a disciplined way in-depth one hour-long interviews to understand and probe relationship, relevance, value, uniqueness, issues with prospects. With that we are able to understand the parameters of relationships and use that to develop the strategic plan and action plan for ideal relationship-building strategies. So that’s the foundation for everything that’s done.
Step two says there’s no database that is particularly accurate, whether it’s a customer database or a transactional database. So therefore we need a higher level of intelligence and accuracy so we can target and communicate effectively. That can only come from primary, first-person-generated information. So step two is to engage people to give information so we can profile a tremendous amount of information about their expectations and preferences about their communication so that from a data-capture point of view we have the machine, the data to drive the use of this information.
Step three looks at the reality that the highest levels of response are achieved through a multi-channel experience. So step three is a preference-driven deployment of multi-channel marketing to engage people in the media or channels that they prefer. If they prefer to be communicated with strictly offline, with offline and online, or online… — that can only be relevant if it’s based on their individual preferences.
Number four which is so often absent from a marketing process says that the level of post-sales support is significantly low. There is still too much courtship and romancing before the sale, but once the sale is done and if somebody has a problem or question, they’re relegated to trying to reach a resolution on their own. So we have to improve the quality of the post-sales support.
The fifth point is recognizing the power of digital and social media now and saying we need to better understand how to deploy digital and social media around the expectations of customers — and also understand the transformation that says in social media, selling is a by-product of the quality and benefit of the conversation, selling is not the object. So those are the 5 steps that define the Voice of Customer Marketing process.
Denise: I really liked what you talked about at the very beginning because it sounds like the process is not only a real benefit to your business, as a businessperson employing this process, but also there’s a benefit to the customer because we are treating customers the way we want to be treated. So it’s kind of a win-win situation because both sides benefit.
Ernan: That’s exactly right Denise. I think the world has forever changed from where the marketer at times truly was at the center of the universe and then later on came the customer — and then marketers believed that they were at the center but they weren’t anymore.
Now the customer is so clearly at the center of the universe that they are controlling all aspects of the relationship and we must truly believe that we are there to revolve around their preferences and that is how we’re going to engage. Anything but that will only be a short-term strategy, but it will not be a long-term relationship which will drive much greater number of responses, order size, sales…
Denise: Now what happens when sometimes customers are either unaware of their needs or may not represent them correctly or may not be aware of new possibilities? I remember when, and this is going to date me, but when email first came out. I would not use it because I just didn’t believe in the value of it. But now it’s my lifeline. How do you introduce new possibilities to customers that they may not be aware of or don’t think that they need, but you as an expert are looking at this new development and thinking this is an area that would be right for them.
Ernan: Great question. This also touches on something and I don’t know if you were going to go there or not, but some companies also have the view that, gee, the customers don’t always know, whether they are B2B or B2C — do they know what they want or can we trust what they say they want? You know, that very paternalistic point of view.
We’ve now done 97 of these Voice of Customer development research efforts over the last 27 years and the ultimate proof of the efficacy of this information is when our clients take our strategies, put them into a marketing campaign, and then we measure the results. And in these 27 years, we’ve not once had a situation where a client has failed to achieve double-digit increase in response and revenue as a result of understanding and doing a very humble in-depth probe into what customer expectations are. So trusting in engaging the customer has proven to be consistently effective in increasing response.
Now to go to your opening question, you could look at that question and say that challenges us strategists and researchers to say: let’s make sure when we’re doing voice of customer research, we’re diligent about coming up with a representative sample. We might talk to the leading edge, or in the IT world we call them bleeding edge folks, the ones who are so far out there in their willingness to adopt, they are getting truly cutting edge technology. Then behind that could be the innovators, then the mainstream, etc., and then you and I, it sounds like, we would have been the laggards in adopting email.
We would have been part of that sampling so that our voice would have been there, but we would have been balanced by the bleeding edge or innovators so that the marketer could develop that full profile that says how do we develop a message for Denise and Ernan and how do you talk to somebody who is truly bleeding edge or innovator with a different message. And also how much money do you spend on Denise and Ernan. Say you don’t spend a lot because you’re focusing on the leading edge/bleeding edge innovators to get them to build up the critical mass.
Denise: So that speaks to the importance of targeting and knowing who are your target segments and being focused on them.
Ernan: Absolutely so, yes. You know, consumers are getting more irritated and tired of the spray and pray email blasts of irrelevant communications. The importance factor of listening, as an ingredient in your marketing effort, is now in the 70% effectiveness of a direct program is that list which is why step #2 of our process, the opt-in database, is an essential driver of the go-to-market methodology.
Denise: That leads to one of the questions I have for you because I remember reading in some of your materials about the difference or distinction between passive permission-based marketing and active opt-in marketing and I was hoping you could explain that.
(Ernan’s response and the rest of the interview can be heard in podcast file below.)