Blow Up Silos!
Build your marketing strategy around the customer's perspective.
Not long ago, when you drove through the American countryside you saw tall, windowless buildings, usually attached to barns. They are called silos and farmers used them to store grain.
You don't see many grain silos anymore. They disappeared because there are better ways of storing silage to make it more accessible. But silos do still exist in offices: vertical organizational structures—fiefdoms, really. These silos need to go, too. They're too inaccessible, and silo A never has the foggiest idea what silo B is up to.
Recent Silo Experience
A few weeks ago, I spoke to seven different groups within a large financial services company in seven different sessions. Each group wanted to pick my brain about its direct marketing challenges.
The first group mentioned it would like to get first dibs on new customers in the database. Apparently, each group hits the customer whenever its programs mail, and there isn't any real coordination of the programs.
Then the group told me it didn't do solo mailers. Of its mail, 100 percent of the programs are either postcards or self-mailers. The tiny type face (too small for me to read, and I wanted to read it) is necessary so it can fit in all the copy it needs, plus the lawyers insist on the complete set of legal disclaimers. Visuals? Just pick-up photos from a limited library.
"What should we do?" the group asked. "We know these things won't appeal to the target audience, but management insists we do things this way."
Each group said roughly the same things, but didn't know the other silo groups had the same problems.
How Can They Improve Results?
I recommended they tell management they want to test against the current control packages. It will be a step in the right direction, creatively, and they will be able to prove their results (in response rates). Hopefully then they'll get more money for additional testing by measuring the improved response.
The real problem is much deeper. The company needs to recognize its customers, acknowledge what they've purchased in the past, determine their lifetime value, and work on new retention strategies so it will keep those customers for life.
The company should speak with one voice to customers, and project a powerful and compelling brand with a relevant personality.
It also needs a CRM program to guide ongoing communication with customers—treat the best ones really well, get the right offers into the right hands at the right time, earn the maximum share of the customers' spend, and increase loyalty and referrals, too.
I brought this issue to our CRM whiz, Dwain Jeworski. Dwain has a passion for applications that change the way things are done and has assembled a few, to create one that I call the "air traffic con-troller look at your business." He calls the program Engaging Your Customers.
So, I ask Dwain, "If you stepped into this company, how would you get those groups out of their silos?"
"Blow up the silos," he says, "just like the farmers did. They're expensive, inefficient, and they drive customers crazy.
"The only way out is to create a company-wide, long-term marketing strategy that isn't driven by each silo's short-term needs. It needs to be built from the customer's perspective.
"It sounds simple, but the reality is that each division is trying to sell more of its product line, and will do everything it needs to succeed. That can be good, but only when it's coordinated. The way [the silos] do it now, the poor customer gets all kinds of confusing and poorly executed communication too often. Most of the time, they're not sent to the right target audience.
"Turn it around. Talk to customers in a progression that makes sense as they get to know you. Nobody is going to buy all your services at once! Look at the top 20 percent of customers and you'll see the logical progression."
How Can We Escape Silos?
"It takes buy-in from the top down, and a change in thinking," Dwain says. "In the end, everyone participates in the success and the brand because it creates a synergy across the whole company," he adds.
How do we get all silos together? Start by stepping back and creating segments. Spend the time to find out who the customers are, and break them into tightly defined groups. Give each silo a set of segments that align with its product and a channel to test. This way it is speaking to the ones that are likely to be interested, and you're not overloading any one channel. You benefit by being able to test smaller quantities, and you have a better chance of getting the message to those who will buy. Once the silos see the results, everyone will be on board. When the focus is on the segment, the tone automatically changes to the benefits, and that's what we, as marketers, sell.
How do we work customer retention strategies into programs without committing to expensive points or reward programs? Sometimes just saying thanks or sharing something about the product purchased will do the trick. Customers want to belong, and talking to them about something they've purchased is a great way to keep them loyal. Retention doesn't need to come in the form of a freebie or a sale. I love getting tips on how to use software more effectively or receiving an invitation to be part of a user group. It makes me feel special.
What about cost? Dwain says that knowledge of data always pays for itself. Tying all your silos into one program keeps everyone on the same page, and lets you expand each customer's data each time he is in contact with the company. Increasing response by even just a little can cut costs by half or more. You send out less to do more. Ultimately profit lies within the customer base, not in the acquisition.
How do creative and brand fit into this whole matrix? Creative comes easy when you know what the offer is, who you're talking to, and why you're talking to them (what they bought before, etc.). Plus, the more defined the segment, the better the brand can be served. Customers measure brand by a few factors—likability, uniqueness and relevance. Personalized communications are the quickest way to build these traits.
Marketers who are not in silos are nimble enough to talk one on one with customers all the time—recognizing them and talking to them like real people.
Lois Geller is president of Mason & Geller Direct, a direct marketing agency in Hollywood, Fla. (formerly in New York City). You can reach her at email@example.com.