Voice Marketing: Peppers and Rogers? Oh Dear

Other than a Door-step salesman, can anything be more intrusive and well, annoying than so-called "voice marketing"? Yes, its another label for a marketing fad likely to end up as innovation scree at the foot of the slowly-crumbling marketing mountain. What is it? Well it’s the practice of leaving answer machine advertising messages when people are out of the home of course...

Imagine the disappointment - you get home from work, notice that there are 3 messages on the answer-machine, put your feet up, press play and then listen to your three new "friends" –

BEEP – Hi its Bob from Bob's Double Glazing… you know we got a terrific offer for you if you just try us again,,,,,

BEEP Hey, Al and Jake's Funeral Cover Plan here – if you increase your premiums you can get a mahogany casket……

BEEP Afternoon, its Mary from Mary's Home Baby Proofing Service here (yep, I’ve seen The Simpsons) –

Exasperation!!! No real friends just a bunch of delusioned marketers - each wanting to build or extend that special relationship with YOU..

But what is most surprising is that I found out about this latest “panacea to cure marketing's ills” from an unlikely source - that one-time pillar of marketing respect and bastion of one-to-one customer learning relationships, Peppers and Rogers. Since their sale to Carlson Marketing Group a couple of years ago, they seemed to have lost some of their values (or the plot perhaps) as this extract from a white paper, co-authored with the US's "leading Voice Marketing specialist" would appear to suggest:

Retail marketers have a range of interaction tools to choose from to get the job done. An emerging option is voice marketing. Voice marketing helps retailers strengthen brand and communicate with customers more effectively by combining pre-recorded, telephone messages with professional voice talent. Designed to connect with existing customers, voice marketing allows retailers to accelerate their relationships with individual customers and capture higher value. By incorporating voice marketing into their initiatives, retail CMOs can reduce costs by eliminating ineffective campaigns and reallocating marketing resources. At the same time, they can make relevant and timely offers that increase revenue via improved response rates and a higher average transaction level. (whilst really annoying the other 99 % of customers - CL)

And then this:

The Mechanics of Voice Marketing

A voice message is typically a 35-second pre-recorded audio message that sounds like a live call.The messages are left on answering machines or voice mail systems. The retailer can determine the content, style, length and even gender of the voice for each campaign.To make connections, voice marketing relies on a combination of hardware components, including routers, dialers and servers.A typical campaign is launched between 10am and 4pm (when everyone is out- CL) and can be targeted at a focused customer group or expanded to reach millions of customers. Two differentiators are the realism of each call and the ability to differentiate between an answering machine and a live person.Through the use of voice talent, each message is “professionally unprofessional” (come again? CL) and sounds like a live person-to-person phone call. If the customer “picks up,” the technology recognizes the algorithm of a human voice and switches from a 35-second message to a shorter message that sounds like a simple alert.Typically, 20% of calls placed are picked up by a live customer, and results among customers receiving a live message versus an answering machine message are similar. On average, two in one thousand call recipients opt-out of future messages, in which case an inbound, automated calling system immediately processes the request.

Quite frankly this is so wide of the mark from Peppers and Rogers, it is almost funny - if it wasn’t so corny. Voice Marketing represents the worst excesses of ROI Marketing gone extreme. OK it is meant to be used for existing customers only and is trying to stick to FCC regulations. But even so, I cant help but squirm at the thought of answermachines being clogged up with ad messages as well as doormats etc..

But strangest of all is the title of this paper itself : "At the Eye of The Storm: How Retail Chief Marketing Officers can Deliver the Optimal Customer Experience". Where did that come from? What is obvious is that the Voice marketers have taken some Peppers and Rogers thinking on customer experience management and then tagged their rather desperate and tactical marketing method alongside it. The juxtaposition is odd to say the least - how can VM even hope to deliver an "optimal customer experience"? (By the way, I am loathe to give this a link - if you really want it, you can search for it on the P&R web site)

OK, Voice Marketing has been around a while but surely, endorsed by Peppers and Rogers?!! I dont believe it.

Comments

[Eric Holmen]

Voice Marketing is not your father's telemarketing... I was shocked to see the number of blogs and articles responding to the Peppers & Rogers Group’s “fateful demise” in their recent white paper: “At the Eye of The Storm: How Retail Chief Marketing Officers can Deliver the Optimal Customer Experience.” I am one of the referenced sources in this paper (Eric Holmen from SmartReply), and I feel an obligation to address the legitimate concerns of the blogging-marketing community.

You can find this comment at http://holmen.blogspot.com/

To start, we have to step back a number of years, back into the era of retail globalization, a battle that the American consumer simultaneously won and lost. No matter what you think about Wal-Mart (a subject of vastly more blogs for certain), the facts are pure: Wal-Mart delivered to America exactly what America wanted - the ability to buy items that made you feel good at rock bottom prices. Those of us reading and writing these blogs are probably much less likely to be Wal-Mart shoppers, and we are on the hole much less likely to set foot in a Wal-Mart store, however, as the world’s largest retailer, the numbers don’t lie. More than enough Americans want Wal-Mart.

Wal-Mart created a new paradigm – low cost, high efficiency retailing. All of those retailers trying to build a service brand, or a merchandise story, or a “high touch” business have been impacted. Shy of Barney’s and a handful of boutiques that have yet to earn a dollar from a customer with less than six figure incomes anyway, Wal-Mart has made an indelible mark on American retailing.

Meanwhile, many of us in the industry tend to believe deeply in the principles of relationship marketing as a competitive advantage. We not only believe it, we know it in the very fabric of our being. For any good retailer to compete against Wal-Mart, they must know their customer, dialog with their customer, and respond to the customer’s needs and wants. A modern US retailer has three choices in this world:
1. Close up shop, or merge with a competitor, then close shop a few years later (Wal-Mart does not acquire other retailers),
2. Cater to the high-income snooty crowd that won’t be caught dead in Wal-Mart, or
3. Develop profound customer relationships such that Wal-Mart’s threat is significantly mitigated.
[The option of competing on price is a prelude to Option #1.]

The good news is that Wal-Mart does not invest in customer relationships – other than by providing their merchandise at the lowest price, which isn’t bad when you really think about it, because that is what their customer wants. However, their brand is built around price, not service, selection, fashion, etc.

So, you’re the CEO of a major specialty retail store. Wal-Mart is eating your lunch, dinner, and dessert. You strategically determine your market position and decide to communicate with your customers in the most meaningful, direct, and personalized manner. You start by creating the perfect store environment – bright customer service people in every department, bright lights in every ceiling panel, and bright ways of displaying your differentiation to every customer – everywhere in the store. Naturally, this means that you launch direct mail and email communications (not to mention all of the technology and database infrastructure and processes required to support such a strategy) so that your customers can have a brilliant experience and buy things from you, happily. You see a lift to store sales following a campaign, supporting your strategic ingenuity.

As you continue to execute these campaigns, you begin to realize some flaws. First and foremost, direct mail is not breaking even. Even when you drive the cost down on a two-color postcard and eliminate all of the branding and personalization, direct mail isn’t paying out. Aye – and email response rates – what’s that? Not only will fewer than half of the customers provide an address, 15% of them are out of date every 45 days, and the other 85% have filters – the message isn’t getting through among the hundreds of advertising communications that a typical consumer is receiving each month.

Then you realize it. Your CRM communications plan is simply noise among noise. The marketing department has turned it into a ‘traffic generating’ program, and the lofty ideals of CRM, customer dialog – they’re gone out of pure pragmatism that your business needs revenue to compete with Wal-Mart.

At this point, some retailers initiate “store calls” where store associates are required to call 100 customers each week and tell them about the great merchandise and sales at the store. Others simply reduce their offers, or kill direct communications and drive up special event weekends on TV and radio, aka, “the 50% off sale”.

In the first, customers get just about the worst experience possible. A store rep is taken off the floor (unable to serve customers), and leaves a rushed/confused or highly-scripted message with the customer base. So, the brand that the CEO wanted to convey is not only lost, but the customer is alienated. “Some kid at the store calls and mumbled something about a sale, or did he say ‘fail’?”

All the CEO wanted to do was tell the customers, “Thanks for shopping with us when you could have shopped somewhere else. We will do whatever we can to continue to earn your trust and your patronage.”

This is the essence of voice marketing – deliver a personal recording that is professionally written and recorded for a fraction of the cost of direct mail, with better results than direct mail. Sure – there are companies that abuse voice marketing. They won’t be in business too long, and I can’t wait until they’re all gone. However, voice marketing is bound by the highest levels of legislative scrutiny of any direct medium. Higher even than live-agent telemarketing. Voice marketing can only communicate with existing customers (making it by default a loyalty communications platform), we can only call during very specific hours, and we have to follow a very strict guide of when to say what (store name, opt-out phone number, purpose of call), we must opt anyone out – and keep records of this transaction, and we must make it easy. (Consider: how easy is it to opt out of direct mail, and do you really have to be removed – because there is no law for direct mail op-out or even a reason for the communication.)

Never mind that – lets look at results. Did any blog-critics notice the startling results that voice marketing is producing? For the skeptics – did you notice the opt-out rates? A typical voice marketing message is 35 seconds long, and about 5 seconds is dedicated to giving instructions on how to opt-out. In that case – if so many consumers are offended by this, then why would only 2 tenths of one percent opt-out, consistently? And for 20% of voice marketing calls, the caller merely has to “press-1” to opt out! It doesn’t get much easier than this, and if voice marketing is so intrusive, shouldn’t the opt-out rates be at least in single, if not double digits?

Lets be real. The reason why so many bloggers were offended that the Peppers & Rogers Group would consider voice marketing a valid medium is simply because it leaves a bad taste in our mouths. I’m not going to tell you that I like telemarketing. I registered on the do-not-call list back when they were taking pre-registrations. Old-school telemarketing is intrusive, offensive, fraudulent, aggressive, and abused. This is very different that voice marketing. Voice marketing is not your father’s telemarketing. We attempt to clearly differentiate that SmartReply’s voice marketing is not telemarketing, because the way that telemarketing is defined is not the experience that we provide with voice marketing. If you want to treat your customers like “objects with wallets,” then go somewhere else. If you want to build and support a good brand and treat customers with dignity, personal appeals, and respect then we can help. Thanks to legislation, voice marketers that abuse the phones are being shut down rapidly.

The fatal flaw of a poor marketer is letting personal experience and emotion conflict with results. In this case, the Peppers & Rogers Group documented financial results, strategic results, and customer preference results. I applaud the risk they took and I urge anyone reading this to take a second look at their initial response. We’re beyond the archaic days of running marketing strategies on a gut feeling – consider all options, test, look at results then make decisions.

In fact, we just held a webinar last Thursday discussing “Customer Loyalty and the Do Not Call List”. A video and audio recording will be uploaded to www.smartreply.com by February 23rd (2005), and if you send an email to me I will be sure to notify you of upcoming events. My email is eholmen at smartreply.com (written long-hand to avoid email SPAM spiders). You will also find a link to the notorious Peppers & Rogers Group white papers at our website, too.

[jennifer rice]

welcome back to the blogosphere, Chris! we've missed you.