A New Marketing Model for IM

Friday May 17th 2002 by EnterpriseAppsToday.com Staff
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Consumers who use instant messaging are usually farther removed from marketing messages than Web surfers. Learn how 'Neighboring' can bring advertisers and IM'ers closer together.

By Todd Tweedy

For many marketers, the explosive growth of real-time communication isn't raising questions about whether to advertise on the Web using instant messaging (IM), but how.

A major barrier marketers will face when using IM as a marketing tool to acquire new customers will be how to penetrate an individual's private network of contacts or buddy lists, which is created by that user when an IM tool is personalized.

I believe these private IM networks will create two degrees of separation from advertisers, and prospective new customers. In order to reach a private network advertisers will need to utilize a new marketing model. I call the model Neighboring.

Neighboring will change the context of product and service recommendations by encouraging individuals to express their own views and voice about a product or service to their own private network of personal contacts.

Getting Connected: Turning Buddies into Neighbors

It's a simple tenet that individuals in our lives are more capable of effectively communicating product and service recommendations than businesses are. Remember when you moved into a new apartment or house, and your neighbors told you about the "best" dry cleaners, pizza place, grocery store, electrician, painters or yard service? Neighbors can have an extraordinary influence on purchasing decisions.

Unlike most marketing campaigns, Neighboring uses dialogs that are initiated, modified, and terminated by individuals within an IM network -- not by a corporation or marketing firm. Neighboring, in contrast, lets advertisers gain access to closed-social networks by using real-time communication tools, such as IM, so that advertisers can communicate product and service recommendations from neighbors to individuals across small groups. The power of the Neighboring model lies with the influence an individual has in an established small network, as well as the strength of the relationship an individual has with an advertiser.

Instant messaging has already become a powerful relationship tool for individuals, but since businesses are prevented from becoming involved in a networked community, they will be forced to rely more on their current customers to initiate and distribute product and service recommendations.

Neighboring: A Preview of How it Works

So how will marketers make connections with their existing customers and find new customers using IM?

Special notification messaging -- IM alerts -- is a start, and I believe will lead to more meaningful marketing based on interest recognition.

For businesses to grow, they can increase average order sizes and the total number of orders, as well as cut costs. Businesses must use IM to increase the number of customer networks they are engaged in. Neighboring is designed to solve the problem of communicating product and service recommendations across closed groups.

Why Neighboring? Businesses can't be everywhere online. Businesses need connective marketing strategies, like Neighboring, to drive cost-effective online acquisition activities, deepen customer relationships, and to expand reach online.

Here are four easy steps to follow so that you can initiate a Neighboring marketing model:

Step 1: Gain IM client and alias names of your most valuable customers
Step 2: Invite customers to support your business and offer incentives for them to refer your services or products across their networks
Step 3: Acknowledge their support
Step 4: Be committed to being of service, and leverage customer permission to request opportunities to reach out to customers in their network

Neighboring is instructive and service-oriented, and will tell others how and why to become a customer of a business based on a neighbor's persuasive interest in a product or service offering. Marketers will need to ask individuals to have conversations with their networks of contacts. These word-of-mouth referrals -- new marketing conversations -- will take place during real-time online communications.

Here are the four biggest benefits of marketing using the Neighboring marketing model:

  • The ability to transform personalization techniques into scalable systems that support mass marketing objectives
  • Providing targeted and permission-based interactions
  • The ability to detect whether someone is online and deliver just-at-that-time communications
  • Distributed referrals through small closed-networks of private contact lists or buddy lists

A Simple Start: Building a List of IM Customers

Alias Name Registration: Register an IM alias name(s) on each of the public IM networks for your corporation, services or product. Ideally, secure the same alias name on each of the three principle public IM networks -- AOL, Yahoo and MSN.

Revise your Privacy Policy: Update your privacy policy to reflect how you will use IM contact information as part of your overall customer contact activities.

List Building - New Data Fields & Revenue Sources: Enhance your registration fields to include the type of IM client, and the alias name information your customer is using. And if your firm is already using an enterprise IM application, encourage your customers to register that name on your system.

For customers who successfully complete a product registration on your site but do not register an IM name, provide opportunities for your customer to obtain an alias name from one of the public IM networks. I recommend exploring partner or affiliate relationships with one of the major public IM networks as an additional source of revenue for your business.

Expand Customer Permission: Add opt-in messaging within your registration process to capture IM data as well as communicate clearly to invited customers that you intend to send them instant messages. Please feel free to copy and paste this text for use on your site:

Please include me on your private list to receive e-mail updatesand instant messages -- IM's -- for product and servicerecommendations.

Reaching Mass Audiences: One Neighbor at a Time

The idea of targeting goods and services to people joined by common interests or demographic characteristics isn't new. In 1972, both direct marketing technology and your Sunday morning newspaper were forever changed by George Valassis when he invented freestanding inserts (FSIs) -- newspaper coupons -- which allowed advertisers to target newspaper readers by city and neighborhood. However, in recent years people have received more than enough "targeted" communications.

According to a Jupiter Media Metric report, by 2005 the average person is likely to view 3,000 ad exposures daily, with nearly 30% of these exposures from online sources. With so many voices trying to be heard, people have learned to ignore mass marketing messages, especially blatant commercial messages.

The lack of productivity from too many marketing messages flooding e-mail in-boxes, and social networks closed to businesses will require marketers to rethink mass marketing. The way to make mass marketing work again is to give individuals the power to be of service -- to become a neighbor -- as selling agents who testify to the value of your product or service. In fact, as ad clutter increases, I believe advertisers will seek out Neighboring -- a new marketing platform that is cost-effective, can sustain revenue and acquire new customers.

However, many businesses appear ready to exploit the unique economies of scale of IM as an inexpensive direct marketing channel. Major brands and IM name speculators have already moved quickly to secure alias names -- the identity individuals create on public IM networks -- in preparation for future marketing programs. If your new Internet business plan was to resell IM alias names, you're too late: BurgerKingBuddy is gone; CheeriosPal is taken; VWBuddy is registered; and GeicoBuddy, BacardiBuddy, and CitibankBuddy are gone too. Regardless, even if a mass marketer is able to temporarily penetrate a closed network by using an interesting alias name, attempts to broadcast traditional mass marketing messages will be ineffective when individuals have the power to permanently block future unwanted messages.

The use of alias names has spawned a new type of automated mass marketing agent, which provides search functionality within an IM window. Think of these bots - software applications serving so-called "smart" interactive agents that are programmed to deliver content to instant messenger windows -- as the "Ask Jeeves" of IM marketing. Bots, as well as spam-generated IM marketing messages, have already begun reaching millions of households and offices based on sending a single predetermined fictitious conversation. While this functionality is certainly clever, these keyword-triggered "conversations" are nothing of the sort.

Public IM networks have also begun providing advertising positions to support mass marketing activities, including customized "skins," or creative units, which are served as part of an application's presentation layer as well as simple banner ads.

Companies Likely to Get Neighboring

Initially, businesses will use interactive sessions like IM as a foundation to establish relationships with product loyalist. Similar to what Matt Reese did with creating grassroots organizations to support political campaigning, public affairs and issue lobbying. Simply, businesses will start asking for support and reward those customers that support them.

Here are a few organizations and businesses to watch:

Farmers Insurance Group - Farmers Insurance is the country's third-largest writer of both private passenger automobile and homeowners insurance. Farmers' operates in 41 states supported by nearly 18,000 employees servicing more than 15 million customers. Recently, the insurance giant provided each of their sales agents a personal computer. Imagine the combined network effect of 18,000 sales agents actively asking their customers in real-time for sales referrals.

National Associations - Trade associations, in particular, run highly effectively grassroots mobilization campaigns supporting one continuous unified message.

Imagine the "pass along" power of a campaign when someone knows you are online and present at your computer, and asks you in real-time to communicate to a legislator? Watch out Washington! This simple framework is likely to be mimicked by political campaigns as a tool to support GOTV (get-out-the-vote) activities.

Bacardi - Instant messaging is unique from other communication vehicles in that it has the power to detect whether someone else is online, a quality known as "presence." I believe Bacardi is likely to use IM as an event support mechanism to send notifications to individuals to drive people to show up at promotions, events and parties. Don't be surprised when more people just start showing up!

Building Neighborhoods: The Next Step

To reach mass audiences effectively through IM, corporations will need to rely on the power of their customer's influence over individuals in small groups. When these small networks are combined, Neighboring becomes a mass marketing tool for marketing professionals to use to create networks of smaller marketing organizations with disproportionately high market shares.

I believe marketers will continue to uncover new ways to use IM as a mass marketing vehicle, however, successful instant messaging marketing strategies will include Neighboring-based customer interactions.

Invitations will be expanded beyond the individual as corporations begin asking for support across small groups that will be only accessible through a neighbor's IM buddy list. The neighbor will be the link that initiates interactions, builds awareness and supports education objectives of a marketing campaign by allowing individuals to establish collaborative dialogs across small groups within IM sessions.

Marketing is a contest for people's attention, and there's a lot of competition. Corporations that empower their customers to use their own voice will be the ones that succeed.

Neighboring marketing model author Todd Tweedy is president of The Tweedy Group LLC, a Washington, D.C.-based marketing consultancy. The Tweedy Group works with marketing executives in small and large firms to support performance-based product and service recommendations using database-driven and technology-enabled marketing tactics from e-mail communications, online media planning, search engine marketing and messaging. Clients have included America Online, The Motley Fool, Rolex, Ticketmaster.com/Citysearch.com and Network Solutions. Todd was born and raised in Alaska, and has caught fish "that big."

Todd's AIM alias is todd1im, or you may reach him via e-mail at todd@thetweedygroup.com.

Reprinted from InstantMessagingPlanet.

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