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Market Movers Best Marketing Campaigns and the Importance of the Marketing Budget Since the Outbreak of COVID 19

In this edition of Market Movers, Al Lalani, Co-Founder and Chief Strategist at Annex Cloud, chats with Michael Trapani, Senior Director of Product & Partnership Marketing at Acoustic, about the data and analytics that have come out since the COVID-19 outbreak, what this data shows in regards to the effectiveness of the various marketing campaigns and the importance of having not just one marketing budget for the upcoming year, but to have multiple plans with multiple market sensitivities in mind.

Transcript

Al Lalani:

Welcome to Annex Cloud market movers, where we bring in experts and luminaries to help us with the current times and navigating 2020 and helping us plan for 2021. Today, I'm very, very excited to bring in Michael Trapani. Michael is the senior director of product and partnership marketing at Acoustic. Michael, welcome to Annex Cloud Market Movers.

Michael Trapani:

Thanks for having me great to be here, Al.

Al Lalani:

Wonderful. Michael, if we start off with you giving us a little bit of an idea of what Acoustic is. I know the company evolved over many, many years, and so maybe we start there, and then we'll dive deeper.

Michael Trapani:

Yeah. So Acoustic is a brand new company. We started about a year ago to the week spinning out of a part of IBM. So Acoustic as a platform used to exist within IBM Watson, we were called IBM Watson marketing. We were a marketing automation and marketing analytics technology platform. Since then, about a year ago, we broke away from IBM and became a standalone company, which currently makes us the largest independent marketing platform in the world. So really excited to be here.

Al Lalani:

Well, great to have you. And I think that's a great introduction kind of kick things off now in as being sort of one of the largest or being the largest independent marketing sort of cloud provider out there. You have had access over the last five months to a ton of data I assume. A ton of data around marketing automation, around emails, around other messages, as well as for analytics around those marketing activities that marketers have done. It'd be great to kind of kick things off. I mean, what have you seen in the last five months in terms of metrics that would be either different or similar to what you were seeing before COVID?

Michael Trapani:

Yeah, that's a great question. One of the things that we do part of our heritage is doing a significant amount of research. We think that marketers are hungry for data and want to benchmark themselves against their competitors, their industry standards, and the best performing marketers in their industry so that they can improve and even maybe celebrate wins that their teams are executing. So every year we do what we call a marketing benchmark report, which is a look across our entire 3,500 enterprise customers and look at the performance of various campaigns by industry, by geography and by metrics. So we look at things like email, open rates, and click-through rates, and conversion rates. We look at mobile metrics like push notification, open rates, and SMS deliverability and things like that. And we do this every year and this year, like many other parts of our work is significantly different, and marketing is no exception to that. And what we decided to do this year was to look very specifically on the few months period when COVID really began to sink into all of the geographies around the world. And what we found was some really interesting things that happened in the earlier days and then things that happened shortly after a few months in. So the first thing we noticed was a huge drop in messages that marketers were delivering to customers send rates were, were, were plummeting in the first month, especially when hit the US we were seeing drops of 10%, 20%, 30%, even over the total volume of sense from marketing platforms. And at that point, we sort of weren’t sure what the future of that was going to look like. And I think marketers all over the world were thinking about what their communication strategy should be.

And around that time, you saw a lot of emails from the CEO messages, blog posts, things like that. And I think everybody was trying to figure out the best way to approach what is our first communication to our customers in what is a generational event at the very least, a huge drop in communications as it was. We think everybody was trying to figure things out. After about a month or so, we saw that pick back up in a really significant way, really right back up to where things were. In fact, it actually increased from that point. And we attribute that increase between 5% or so increase in message volume that was sent by marketers to their customers, to this idea of moving into a more digital world where digital communication, communication with your customers, especially for folks like retailers or retail bankers, or people that are used to having an in-person interaction now have to rely on those digital channels to communicate with customers. And so we're now seeing an increase of that volume, both on email and mobile messaging that was sent.

Al Lalani:

And that's fantastic. And I think you're absolutely right the first month was that shock period whereas marketers, we didn't know whether we could promote as we were before, because obviously there was a lot going wrong with the world. And after that, as we all adapted and sort of went past it now, we're seeing sort of the same thing on our side is it's actually gone above and we're tracking between 10% and 20% above before because now marketers are now starting to ... they've adapted to the sorts of the new normal in a way. And they've adapted to the new normal, which includes a significantly higher digital communication then, because some of the other channels of communication have taken a back seat, especially in certain verticals like retail and what have you in this sense.

And so as you start thinking about planning for the future as if you were a marketer, I mean, how should marketers plan for the next six months or even 2021 considering what's up in front of them? I think they have an idea now more so than ever what's going to happen. There are certain verticals in my opinion, that are still challenged, whether it's travel and hospitality and entertainment, maybe in some cases, but then there are certain verticals that are sort of what we call covert beneficiaries that are seeing an amazing uplift, whether it's e-commerce for example or others. And so if you're a marketer, how do you start planning given there's still some uncertainty, but we've seen some of the things that have happened already?

Michael Trapani:

Yeah. I think that's really important for all of us to think about. And I think the first thing that we always have to do is sort of reminding ourselves of the weight of the moment that we're all in right now. And that this is something that the folks who are both working on the receiving end of marketing communications are going to remember to tell their children and their grandchildren. And it's a moment that while fascinating to look at, at the time, there's a real human aspect to this that we all need to be aware of. So I think the first thing that I would suggest in planning for the future is to always be conscious of that to never assume things are just because the news cycles are passing, that that people's lives are no longer affected by it.

So I think always keeping that in mind and taking a ton of empathy and endurance is always going to be important. Empathy was a huge theme in the early days of COVID from a messaging standpoint. And I think just as a human being, that's always a good thing. And then endurance is something that we're starting to see more prevalent now. And I think your point that you made around industries that are being impacted, we saw something very similar in the types of engagements that we saw in the data. So it wasn't necessarily indicative of what industries were impacted based on results going up or down. So for example, in transportation, we saw the largest increase in open rates, really like jumping 10% in a single month. And we look at these, we look at these open rates, which frankly don't change a ton year over year by industry.

They start to trend upwards or downwards. And we see that happen year per year because we've been doing this report for about eight or nine years. But what we never see is a trend year over year, that's like more than 5%. What no one expected was a trend of a 10% increase in 30 days. And what we attribute that to folks who needed to travel, or who were concerned about travel, that they might've had planned to check all of their ... and opening all of their messages that they received from airlines and transportation companies and hotels and just how disruptive everything was. So that's the first piece around empathy, focusing on the industries that you work in and making sure that your message is tailored to those industries and, and keeping in mind that the real world life that your customer is living outside of the messages that they receive from you.

And then the last thing I would actually put is around the budget. I think while we have at least a sense of what the impact or we can sort of getting the order of magnitude of COVID-19 in our heads. Now, at least in this current state that we're in what I think we may not see just yet or at least have a full picture of is some of the financial implications of companies that exist today and marketing teams that have budgets today. And those things may change. And sometimes the financial impacts take several months to actually be felt. And so my recommendation for marketers who are trying to plan their next fiscal year or calendar year, especially as we go into the fall, which is when a lot of marketing teams work on their budgets and plans, I would say that flexibility is going to be the key.

And one of the things I always recommend to marketing operations or COO folks who actually are responsible for drawing up budgets is to not produce a budget but to produce three. And what I would always recommend is you have your ideal budget. That's the one that you have right now that backs into your goals. And it's a work of art. And you're really excited about that budget because it's going to be the one that gets you to where you want to get to then get to one that's lower than that. And then, which is really just your budget that you're going to try to achieve, plan A goals with plan B money, right? So it's still an attempt to get to where you're trying to get to, but it's basically the minimum that you would need in order to achieve those goals.

And then think about plan C, which is if someone walks in and says, we got to cut 20%, we've got to cut 30% just numbers that you wouldn't really want to think about that much. The important part about creating a plan C budget as I call it is setting plan C goals, right? So don't try to execute on a goal or make a commitment to the goal that you were going to make with plan A money with plan C money. And it's something that's really important for marketers to keep in mind. So I think flexibility creating those tiers of budgets because your CFO is going to ask for them if anything happens and that'll save you a lot of in-flight work that you'll have to do later in the year.

Al Lalani:

Absolutely. And I really love your points around both around empathy, the flexibility piece, as well as, at the same time, having different budgets. We've had several conversations over the last few months and we're calling it sensitivity models in finance, right? So you've got different sensitivities as you called plan A, plan B, plan C, and you've got your base model, you've got sensitivities up and you've got sensitivities down. And one of the things that we're sort of telling these CMOs is in the past, we were setting a budget and we stuck to it, right. We stuck to it for a while until we really saw things were really drastically changing. And then we would sort of usually change it annually, but maybe sometimes once more in the middle of the year, but not sort of quarterly and definitely not monthly, but many marketers over the last few months have literally had to look at their budget on a monthly basis.

Now it's getting a little bit more, kind of calmer and smoother. And I hope that in Q3 and in Q4, that's going to be the case, but for some industries where Q4 is really big, they're looking at this and saying, I have to adapt very, very quickly. So those sensitivity models allow you to adapt in that sense as well, fairly quickly, and adapt to your plan. So that's really great. I want to come back to a little bit around planning because I really love one of your other points. But before that, I do want to sort of pointing out one of the other things that we do talk to marketers about and get your viewpoint on it's around retention and loyalty. One of the ways and one of the resurgence that we've seen within the marketing umbrella beyond sort of that digital marketing stack is how they can sort of focus truly on retaining their customers. Now it's getting a little bit more, kind of calmer and smoother. And I hope that in Q3 and in Q4, that's going to be the case, but for some industries where Q4 is really big, they're looking at this and saying, I have to adapt very, very quickly. So those sensitivity models allow you to adapt in that sense as well, fairly quickly, and adapt to your plan. So that's really great. I want to come back to a little bit around planning because I really love one of your other points. But before that, I do want to sort of pointing out one of the other things that we do talk to marketers about and get your viewpoint on it's around retention and loyalty. One of the ways and one of the resurgence that we've seen within the marketing umbrella beyond sort of that digital marketing stack is how they can sort of focus truly on retaining their customers.

One of the studies that we shared before was back from 2008 when through the last great recession, Alina marketing and CMO council put out this research where they said they analyzed in 2009. So it was right after the recession year, 2008, they analyzed about 685 top brands, including the Cokes and Pepsis of the world, the Samsungs and Apples, and everyone else for about 32 million customers. And they essentially came up with this massive study saying about 52% of your customers that were loyal to you in 2007 defected in 2008. And of that 52% that defected more than about half of them went to a competitor, maybe a low-cost alternative, maybe an alternative that you may not have considered. And this defection is higher than any other year. Most companies would have seen between 10% and 20% in a year, not 52%. And so our theory was this may happen again. And it probably is sort of happening again, as consumers look for options in this case. What's your take on the loyalty and retention aspect as it comes to marketing from your perspective?

Michael Trapani:

I think it absolutely will happen again. I think that's an astute point around consumer changes and even business changes depending on things that are happening on the outside. I think that consumers, whether they end consumers, people in their lives, making their own purchases or businesses who are buying things will use and fall into just a habit cycle. It is easier for everyone to keep doing what they're doing and not make a change than it is to change. It takes a lot of pain to make a change. And that is the reason why when any marketers trying to sell something, they're not just selling against their competitors, they're selling also against doing nothing or taking no action or making no purchase. So I think that when we go through our daily lives when consumers are making decisions about purchasing, it is because it is so easy for them to just do what they did the last time because it's something that they at least know the outcome of it.

It is more common than they will, then they won't. What things like COVID do and major financial crises, especially things that impact employment and income is they are great inflection points that consumers and any buyer will use to disrupt their decision making. There is something that is happening that is calling into question every decision and bringing scrutiny to every decision that involves spending money and getting a return on that investment that's being made for every single thing, because it is now more sensitive to ensure that, that's a good decision. And that's something that every brand is going to be impacted by. So as a way to combat that, what I would suggest marketing teams and brands to always look at is one of the things that I was saying earlier is one of the reasons people keep doing what they're doing is because it's easy.

And I think it is difficult to put a price on a consumer who might be stressed, whether that's just mentally through work or trying to work from home, whether that's trying to educate their kids on the side, or whether that's financially stressed as a business, it is hard to put a price on ease and making things easy. And there's the saying, we toss around a lot, which is easy as the new loyalty, which is a great way to get people to stay with you. Because if you make things easy for them, you are one less thing that that person has to worry about. If you can add on top of those additional value things that don't involve selling somebody something, but you're making their day better. Somehow that's going to really build on and preserve a lot of that loyalty that I think a lot of brands are always looking for.

Al Lalani:

Yeah, definitely. And, as marketers, look at this retention marketing as a skill that is unique and it's very, very appropriate for the times where looking at ease of use, as you said, but at the same time, also looking at the entire customer experience from the first touch to the last touch and what steps in the journey they're taking, and not just on a couple of channels that you might be directly associated with them on. But if you're a brand, you have touchpoints across social, and you have touchpoints across your retailers, even though you're not selling directly, but someone else is selling your product. Or if you are a B2B company, then you have several other touchpoints, right? So it really depends on the industry, but Ithink the customer experience touchpoints from start to the end and touching sort of measuring those becomes very, very important. And at the same time, I think, going back to your previous ... go ahead, sorry.

Michael Trapani:

Oh, no. I was just going to add to what you said because I thought that was a really good point. And the challenge is that all those things cost money, right? When you want to ensure that you have a great, easy, loyalty-building experiences at every touchpoint like that's expensive. And, we live in 2020, where if you want to get eyeballs on something, you have to pay for it in a lot of cases, especially when we're talking about channels that aren't owned by the brand like email or mobile push or SMS or their social channels, but it might seem like a paradox like we're saying, make everything easy and loyal, which costs money, but then preserve your budget because every budget decision is really important. And what I would say to that is if you have to eliminate things, or if you have to reduce spending in certain areas for financial reasons, then, in my opinion, it is better to try to avoid reducing everything across the board to a lesser extent and removing things from your strategy completely and focusing on the things that you do to be done really well.

So you're still delivering the experience that lives up to your brand promise, but you're not sacrificing what people are used to seeing you because trying to peanut butter things all over the place versus trying to actually focus and getting results a lot of times, it's really strategic spend in certain areas and trying to sort of reducing that across the board is not going to be as effective. And it may just make everybody unhappy about the experience versus having a few people who just don't get the experience at all. And others that get the same experience that they're used to. And to your point, focusing that on actual existing customers is going to be really important to do.

Al Lalani:

Yeah. And it's the old sort of adage, right? To cost significant lasting to keep your customers and to go acquire a new customer. And now it's even sort of more important. And then to your point on spend, I mean you've got own media, which is email, SMS, whatever your own media is. You've got earned media around social and mentions and so on, and you've got paid media. And I think the paid spend is where expenses might drop over time, but your own media is where the focus can still stick and be able to kind of amplify that from a marketing perspective, which brings me to my next question.

Kind of parlaying from your point before around skillsets, doing more with less, as we just talked about. That the paid media expenses may be reduced, maybe there are some bodies in marketing that may have to be reduced depending on the type of company and what have you. But at the same time, we all know as marketers, our goals never usually go down. We're always having to do more with less. And so in that sort of paradigm of doing more with less, one of the key important parts is up-leveling your skills. Your advice to marketers around thinking about what kind of skillset they should acquire an adopt over time, or any business processes that they should think about putting together so that they can do more with less essentially.

Michael Trapani:

Yeah. I think it's important to think about the best places to look because those types of projects can get unruly. Especially if you're talking about things like digital transformation. I think Satya Nadella, the CEO of Microsoft said something in the last week or so, like, we've seen something like X number of years of digital transformation in the last four months. Right. So that is a significant change that we've seen in a lot of that as a result of not just making better use of the folks that we have, but also making sure that our customers can still purchase from us and buy from us and we can still engage with them and create those experiences that they want, or that they used to get in stores. I think from a skills perspective, obviously, we're talking a lot about digital, so making sure that we have the right folks on the marketing, within the marketing organization that has those digital skills, right?

So this is an obvious one, right? So if you don't have your web team stationed within your marketing organization, that might be something you want to consider at Acoustic. That's what we have the folks who run our website or within the marketing organization, but in a lot of companies, there's a separate digital team or experienced team or web team, or even part of the IT organization, or maybe even managed externally by an agency. That's something to really take a look at because the marketing team, as you think about your website, not only as your digital presence and footprint but now as your primary storefront, in some cases, you're your only storefront. So I think making sure that you have those skills to be able to manage those digital properties is going to be important and be able to make the updates that are required at this time, right?

We're making changes to our website almost every day. And many others are doing the same as products come in stock out of stock, supply chains change, that's really important. So the digital skills are important and then using technology to automate some of that work. So there are simple examples like taking, instead of having a marketer create three or four separate email campaigns that are sent at different times that you have to plan for. It's much easier to create an automated program within a marketing automation platform, a digital marketing platform to easily trigger those based on behavior to personalize, too, instead of taking three separate campaigns to three separate audiences using technology that can allow you to create one campaign to three different audiences that can personalize the content based on the audience that's being segmented. So things like that can be a really helpful skill set.

And then I think organizing the team for now. Organizing the team that you have and making sure the organization that you're running, whether that's your group around comms or demand generation or product marketing or partnership marketing and marketing operations, making sure that those teams are set up for what we see as the way businesses are operating right now. So it's always a good idea to take, especially now in the planning season, to take a look at your organizational structure and to see if you have the right skills to meet the needs that you have as a business and to work backward that way, right? It's always better to start with the gaps that you have, the skills that you need to accomplish your goals, and then to fill those gaps with people. And so that would be my advice around filling skills gaps.

Al Lalani:

Perfect. Getting the team together, organizing them together, figuring out the technology automation, all leading to agility and speed, which is very, very important during these times. Michael, a fabulous discussion. Thank you so much for coming here today and spending some time with us. If people want to reach Michael, I'm sure you can reach him on LinkedIn or through Acoustic's website. And for other videos like this, if you want to go listen to other experts and luminaries like Michael, go to annexcloud.com/marketmovers. Thank you again, Michael. Great having you.

Michael Trapani:

Thanks, Al. Thanks for having me.

Featured Speakers

Al Lalani

Al Lalani

Co-Founder, Annex Cloud

Acoustic-profile

Michael Trapani

Senior Director of Product & Partnership Marketing, Acoustic

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Since 2010, Annex Cloud has provided industry leading loyalty solutions to more than 250 leading brands and retailers, including Jenni Kayne, Hewlett-Packard, Bed Bath & Beyond, e.l.f. Cosmetics, Olympus, Sugarfina, Mizuno, MacKenzie-Childs, VF Corp., with the ability to engage tens of millions of their customers one-to-one at scale.

The Annex Cloud platform provides fully integrated Customer Loyalty, Referral Marketing, and User Generated Content (UGC) solutions that seamlessly work together to optimize the customer journey and deliver a unified customer experience that is designed to accelerate revenue growth, retain valuable customers, increase average order values (AOV) and drive repeat order frequency.

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Acoustic is reimagining marketing technology by lessening the burdens of repetitive tasks. By connecting it all in one single view, and by giving marketers more time to do what really matters: thinking bigger and putting themselves back into the work. Their goal is to bring humanity back to marketing. They stand for marketers, and help them aim higher.

To learn more about Acoustic, visit https://acoustic.com/