Air New Zealand understands. So do Coca-Cola Amatil, Television New Zealand, Telecom, the Westpac Bank and the Labour Party.
Increasingly, the success of using new e-channels – the web, email and text messaging (SMS) technologies – in corporate marketing and communications has reached the point where managers who fail to follow suit are considered naïve or disadvantaged.
“If businesses today don’t consider using electronic channels, then I think they have to be able to justify why not,” says Will Hippisley, mobile channel business manager for Telecom New Zealand.
Hippisley says in the past 12 months Telecom has seen surge in the number of business customers interested in using e-channels for marketing and improved internal communications. This is not surprising; not only are most managers aware their staff and customers are increasingly turning on and tuning into range of electronic channels, they can see it happening in their own homes.
According to Nielsen NetRatings survey for the first quarter of 2004, more than 70 percent of New Zealand homes now have internet access; 22.6 percent of New Zealanders use the internet to find information online, and 19 percent had purchased goods or services online in the past 12 months.
Beyond e-tail and the world wide web, the sexiest electronic channel of 2003 and 2004 has undoubtedly been text messaging or SMS. Again, this is to be expected; 73 percent or 2.8 million New Zealanders now have mobile phone and text messaging is no longer considered the domain of teenagers with OOS thumbs.
According to Telecom’s Hippisley, 25 percent of New Zealanders aged between 40 and 50, and 14 percent aged between 50 and 59 have entered or thought about entering SMS competitions. And New Zealanders now send more than seven million text messages each day.
Nor is email on its way out. In October 2003, survey sponsored by Calcium Communication Software, the NZ Direct Marketing Association, and MessageMedia asked 3000 senior or middle business managers how email was being used at work. The responses, from range of industries, revealed email still carried 45 percent of all daily business communications despite the spam problem and 58 percent of respondents said they would still use email for marketing.
The exciting message for advertising, marketing, HR and communications managers is that plethora of new mobile devices connected to ever-evolving and more cost-effective wireless networks mean target audiences can now be reached through e-channels no matter who or where they are. Whether or not they want to be reached is another matter – more on this later.
Targeted and relevant
Keith Norris, president of the New Zealand Direct Marketing Association, says marketing and communicating through e-channels, and particularly SMS, is still quite civilised here compared with other countries.
“In the US, the UK or Japan you turn your mobile phone on and are instantly assailed with messages. In New Zealand, SMS marketing has been largely limited to competitions,” he says.
Norris says e-channels have an instant advantage over traditional marketing and communication channels because they tend to prompt an immediate response.
“There is no question in my mind that there is future for technologies that link email with the mobile phone,” he says.
Norris says the DMA endorses email marketing by its members only where there is relevant existing relationship between the customer and the business. Asked to define ‘relevant’ Norris responds: “If you have mortgage with BNZ and they email you about their mortgages, that’s fine. If they email you about their wine club that’s not.”
e-Channel brakes
Norris raises an issue that is often the make or break of e-channel success.
An email launched into cyberspace, however snazzy, is likely to be considered spam by the recipient unless it is targeted very, very carefully. Worse, negative impact can result if business deliberately or unintentionally spams someone’s personal mobile phone.
Then there’s the web. While local e-tail sales and site advertising is on slow upward curve, how effective are websites for most businesses? How can business use its website for marketing or communication?
Among other ‘e-channel brakes’ are imposed barriers such as internet service providers tagging email as spam, and newly mooted government anti-spam legislation which, if passed in its current form, will affect the freedom of businesses to use e-channels as they see fit.
Norris says if anti-spam legislation is introduced it is likely to affect the use of e-channels at all levels.
“We hope the Government will instead support [the DMA’s] code of practice which has been recognised by Internet NZ as world-class model of self regulation.”
Making e-marketing work
If they get past ‘the brakes’ how can managers ensure they are getting the best from their e-channel investments? Which channels work best and when? Where, if at all, should SMS communications be used? And does emailing customers still work?
Fortunately, there are several examples of businesses that have used e-channels with considerable bottom-line success. There are also few examples of mis-steps and lessons learned. (See box stories.)
e-Channel experts spoken to for this feature say the key is to know and identify important details about individuals or target groups before e-channel contact occurs. For example, what are the individual needs, history, interests, budget, location, preferred method of communication, best time of day to be contacted and so on?
Businesses that devise ways to extract the answers to these questions in the first place then use them wisely in e-channel communications, are often able to extract permission from their target audience for re-contact in the future.
If the business makes these subsequent contacts on permission-by-permission basis, the customer eventually moves from being stranger to friend, and from friend to business advocate.
The problem with this so-called ‘permission marketing’ is just one false step can throw the process into reverse. So consistency, attention to detail, smart software, smart people and darn good customer database are vital to successful e-channel marketing and communication.
David Crown, general manager of Advanced Business Solutions for Vodafone New Zealand, says the business return from permission-based e-channel communication can be significant.
“For fast moving consumer goods companies [e-channels] create an opportunity to gain rapid awareness. You use competition as the pull and then keep asking for more permission.”
However, not everyone realises the need for e-channel communications to be permission based.
“About 50 percent of our clients understand permission marketing and the other 50 percent don’t,” says Crown.
Leena Wood, online advertising manager for Telecom New Zealand, says good communications campaign should have complementary and integrated channels; and while e-channels are excellent for one-to-one contact, communication content must be targeted, relevant, useful and permission based.
“SMS has time and location neutrality. So if I am travelling on flight and the flight been delayed, do I want the airline to send an SMS to my mobile phone to tell me that? Yes I do – that is absolutely vital, useful information. But to book the flight, I’d use email or the web.”
Of key interest is Telecom’s observation that target audiences are consuming more media – they are not defecting to e-channels from traditional channels.
“We are not snatching money from the pie [in advocating e-channels]; the pie has grown,” says Wood.
Competitively intelligent
If you ask Television New Zealand to describe its e-channel efforts, it will answer some questions and politely ignore others. Why? The way e-channels are used is considered powerfully competitive.
For its recent NZ Idol hit show, TVNZ used SMS, email and its website, together with print and radio adver
