Minds Over Markets Interview:
John Kahan of Microsoft
MarketBridge CEO Tim Furey recently spoke with John on a variety of relationship marketing topics, particularly the challenges and trends he sees within the marketing community.
John Kahan, General Manager, Global Relationship Marketing at Microsoft, leads Microsoft's Customer Relationship Marketing efforts across all product and customer segments worldwide. Kahan oversees all direct and interactive marketing including Microsoft's CRM agencies (Young and Rubicam Brands/Wunderman, and McCann Erickson/MRM Partners); Microsoft.com, Microsoft's corporate website (the largest corporate and fourth largest website worldwide); the worldwide customer databases and customer analytics team for Microsoft's commercial business units.Tim Furey: We've found that successful relationship marketing is more pull marketing than push marketing. How do you integrate pull marketing with other customer touches?
John Kahan: Marketing is not an island by itself. It's got to be related to other touches. For example, when I was with IBM, we had to educate the assistants in Lou Gerstner's office because people would pick up the phone and call Lou's office when they'd see an advertisement. It's not much different today: Every single touch point has to be covered. If messages aren't consistent and aren't strengthened from one message to the next, no matter what the channel, you'll look fragmented in the eyes of the customer. In today's environment, customers can get on the Web and do anything they want, anytime they want. All channels must be integrated tightly so that customers look at it as one big value-add.
TF: What are some of the indicators that marketers should take into account when thinking about changing their relationship marketing model?
JK: The better customers are engaged with you—particularly inbound engagement—the happier they are and the more they'll buy from you in the long-term. Although that sounds basic, it has really been proven through the work we've been doing. We know that statistically, if within six months customers are not engaging with us—in email, sales calls, events, etc.—we will see a double-digit reduction in satisfaction. Customer satisfaction leads to loyalty and loyalty leads to higher revenues and profits. If you have unhappy customers, it falls in the other direction. The more customers are engaged with you, the happier they are.
TF: It goes back to push vs. pull. In traditional marketing you're pushing a message out to the customer. What you're saying is that when the customer comes to you it's a heckuva lot more valuable marketing experience than when you're pushing it to them.
JK: Yes, and marketers need to be studying their existing customers online and off-line and make sure that customers are engaging. If they are not, they need to find out why. It doesn't matter where you need to engage—in support, in a financial area or in a marketing area—it's the engagement that's important.
More customers are wed to companies that they do business with, and the more time they spend with them the longer they will stay with those companies because they've got a vested interest. You can quantify that and see it happen. It's a matter of studying all the data, which is more difficult today because you have a lot of anonymous prospects and a lot of direct customers, particularly with the Web. But you have to look for the signs, and look for customers who are falling off that engagement curve.
TF: How do you apply your relationship marketing model to channel partners?
JK: Partners are part of your ecosystem and are also another extension of your messaging. The challenge is, depending on the size and type of partner, they want their own branding in the marketplace. In some cases that's a good thing, in an OEM environment you may not care. In any environment, partners need to be treated like part of your staff, regardless.
Partners also have to be treated like customers. If they are not engaged with you, then you've got the same problem you have with a customer. They need to be educated and delivering messages in a consistent format around the globe. It shouldn't be an after-thought; you must have an overt partner strategy.
TF: What are the trends regarding integration of marketing channels coupled with customer engagement?
JK: We've known for years that prospective customers rely on other customers for references or testimonials, and manufacturers rely on current customers to provide evidence, but how do you connect those things together? With blogging and social networking this is happening faster than anyone could imagine. It's also a trove of information if mined properly. You can see what a customer thinks about a product, its strengths and weaknesses, and that knowledge can be applied directly into the lifecycle of a product. Look at the recent faux pas at Apple—cutting the price on a premium product two months after its launch. The rebates were issued because of social networking feedback. From monitoring emails and blogs, they realized they weren't supporting their existing customers. They knew they'd better do something or it would be a disaster.
I believe social networking enables 'customer intentions,' allowing insight into what customers are intending to do. What are they searching on? Who they are getting information from? What trends you can spot? The Web gives us a lot of instantaneous data. Even if it's competitive information—it gives you a good base to fine tune your own marketing messaging.
TF: What advice would you give to marketers as they consider their customer engagement model?
JK: Marketers also must carefully consider channels of engagement. It's all about the Web, but on the other hand it's more than the Web. Traditional channels are still powerful. In fact, while customers are heavily migrating much of their communications to the Web, they will also open traditional mail, go to an event, and read a physical newsletter. So, 1) Don't forget about the past; 2) You can cut through the clutter via tradition mechanisms, so don't ignore one vs. the other. Having the right mix is what is important; and, 3) You have to be everywhere and on at all times. It's a competitive disadvantage in today's world if you're not available 24/7 365 in some shape or form for customers to engage with you.
TF: What will it take to do what you're suggesting, and in what areas of marketing do you feel need upgrading and more investment than in the past?
JK: I think product marketing is a big area—the technology side of marketing. In the past marketers relied on others for the technology and separated themselves from these decisions: Marketers did great segmentation, they looked at data, figured out target audiences and they hit them with traditional media, etc. The blurring of lines between digital and marketing is becoming the norm. So the more you understand about the technology that drives the engine, the more competitive you'll be.
The amount of technology you need to understand in order to be competitive has been eye-opening to me, particularly in the last four years. It can be database technology, content management systems, workflow, search engine optimization tools, business intelligence, etc. The bottom line: what goes into the building of the technology and how that supports your marketing efforts is critical today. In the past you handed it over to an agency or an IT department and away you went. Now, a lot of that work has to be directed as part of a program design.
TF: Here's my view of the future: The marketing world now needs a 'technology agency'. When most companies try to bring technology inside their companies, they don't have a full complement of marketers that know how to use it. Current agencies have the knowledge in terms of what works and what doesn't work, but they have no technology base. What's missing is the technology agency—one that comes in and slaps all the technology together.
JK: There's a lot of truth to what you're saying. We're already seeing the future—WPP buying 24/7 Media, Microsoft's purchase of aQuantive and Atlas, its technology arm. It's not just about buying media. If you don't have the technology to both manage and deliver communications, it won't work.
John Kahan, GM, Global Relationship Marketing, Microsoft