Best Practices — Engaging Customers at ING Direct

Posted on

Established about about nine years ago, ING Direct (the US subsidiary of the Netherlands-originated ING Group) has quickly become a popular bank among tech-savvy and savings-oriented customers.  Much of its success can be contributed to the way it engages and empowers consumers, as described in the book The Orange Code coauthored by ING Direct’s founder & CEO Arkadi Kuhlmann and the branding expert Bruce Philip.

Start with the Brand
As a brand, ING Direct stands out with its distinctive orange dot logo, like the way Apple stands out with its half-eaten apple logo. The color came from its parent company ING Group’s logo — an orange lion.  Considered the most “edible” color, the warm tone of orange conveys a sense of energy and caring. The dot further adds the touch of fun and rebellion.  Together, the orange dot is a significant departure from the usual uptight image of suit and a tie associated with most banks.  This is perfect for ING Direct’s target audience of younger and tech-savvy consumers.

ING Direct Facebook

Social Media Engagement

ING Direct’s social media portfolio consists of a fairly standard set of tools: Facebook page, Twitter, Flicker, YouTube, and a blog called “We, the Savers“.  While any company can establish a presence on these social networking sites, not everyone is able to build them into interactive channels that truly engage the customer. I am especially impressed with ING Direct’s Facebook page (see the screenshot above).  Here are a few things that I think they are doing particularly well:

1. A clear mission: consumers. Instead of trying to sell their financial products, the page has a clear mission: to serve “We, the Saver”.  As the little blurb in the left side bar puts it concisely: “Proud to be a Saver? You’ve come to the right place. It’s where we inspire our fellow Americans to save their money.” This goal of “inspiring” rather than “selling” brings consumers much closer to the company, uniting the savers into one big family. In today’s economic environment, this likely resonates with a lot of consumers.

2. Content from third-party sources that has nothing directly to do with the bank but very relevant to consumers. For example, a recent post on the page is an article from the website getrichslowly.org on how to use a flowchart to evaluate potential purchases. This is information that savers would really be interested in reading. ING Direct then adds a little personal touch to the content by adding in the comment: “We learned about flow charts in 7th grade English class. This is the first practical use we’ve seen since then:” This again reflects a consumer-centered approach and comes cross to consumers neither as pushy nor condescending as one might expect from a commercial bank.

3. Plenty of opportunities for interaction. Oftentimes ING Direct posts little fun questions to consumers on the page (and via Twitter).  Here are a few questions asked recently: (1) “The library, visiting a pumpkin farm & going to the park are three great free fall activities. What are your favorite fall must dos?” (2) “Our favorite “money” movie quote may be from Swingers- ‘You’re so money and you don’t even know it!’ What’s yours?” (3) “Simple tips from everyday people on how to save money on everyday expenses: Got any others?” (4) “Will your next car be new, or pre-owned?”  These questions are things that consumers can easily relate to and answer, which motivate them to participate in the conversation.  I always see at least a dozen responses and comments on such posts, which also translates into potential better understanding of consumers by the company.

Take Away for Marketing Practitioners

Social media give power to people, and to win in this arena, focusing on the people is a must. Traditional mindset of selling is not going to work in this setting. If your business does not have the courage and culture to adapt to this new collaborative environment, it may be worse to pretend to be a social media participant when nothing you do is “social”. The end results will be skeptical consumers and wasted resources. ING Direct’s social media strategy offers good ideas on how to do this properly. For those who want further guidance, I recommend this Smashing Magazine article: “Social Network Design: Examples and Best Practices“. You may also find this report on the top 100 brands’ customer engagement level and its business impact useful.

Take Away for Marketing Academics

While customer relationship management and relationship marketing have gained strong hold in the academic marketing discipline, I think there has not been enough attention paid to customer engagement, especially through the use of social media.  I suggest a few research questions below that I believe are relevant to both marketing theory and practice.

  • How do we properly gauge customer engagement?  Is this a state of mind?  Or is this measured by the number of conversations and/or followers?
  • How should models of persuasion in traditional advertising being modified in the context of customer engagement?
  • Do consumers undergo different processes to form their attitude and satisfaction judgment when they are engaged with the brand vs. when they are not?
  • What metrics should be used to measure the outcome/ROI of customer engagement?
  • With these metrics in place, can we show that customer engagement does lead to visible business benefits?

What are your thoughts about customer engagement?  I’d love to hear your stories and questions about customer engagement.

Word-of-Mouth or Traditional Marketing?

Posted on

Some people may disagree with what I am about to say here: online social networks bring people closer to each other. At least that is the personal impact that they have had on me.  But what does this mean for marketing?  One answer is that word-of-mouth between consumers is carrying more weight in how we choose and consume products. Whether we love or hate a product, now it is so easy to make it known to the public that we are essentially affecting the opinions of other consumers (from total strangers to close friends) every day.

Managers are often hesitant to invest in encouraging word-of-mouth, however, as its effects are notoriously difficult to measure.  This is because word-of-mouth behavior is often unobserved, and it is difficult to tease out the concurrent impact of traditional marketing.  These are the exact problems a recent article by Michael Trusov and colleagues in Journal of Marketing tried to tackle.  Entitled “Effects of Word-of-Mouth Versus Traditional Marketing: Findings from
an Internet Social Networking Site”, this article offers a clear answer to the relative effectiveness of word-of-mouth vs. traditional PR and marketing.

Word of Mouth

What did they look at?
The impact of word-of-mouth, event marketing, and media appearance on the sign-ups for an undisclosed online social network.

Some intuitive findings:
More new sign-ups resulted in more word-of-mouth; event marketing led to more media appearance, and vice versa;  word-of-mouth was not affected by previous event marketing or media appearance, however, suggesting consumers’ relatively independent opinions and actions.

Some not-so-intuitive and very important findings:
The 3-day elasticity of sign-ups with respect to word-of-mouth was .17. In layman’s terms, this means that doubling the amount of word-of-mouth increases sign-ups by 17%. The corresponding impact from event marketing and media appearance, in contrast, was only 1.7% and 2.2%. The gap became even bigger with regard to long-term effects.  In the long run, the effect of word-of-mouth is 20 times that of event marketing and 30 times that of media appearance.  While doubling event marketing or media exposure led to 1.7% and 2.6% respective increase in sign-ups in the long run, doubling word-of-mouth increases sign-ups by a full 53%. Financially, an outbound word-of-mouth referral translates into 75 cents/year increase in advertising revenue.

What does this mean for marketing practice?
Word-of-mouth is a powerful tool for customer acquisition.  With the help of more powerful tracking tools provided by social networks and websites, it is possible for managers to measure the return from word-of-mouth activities. The mathematical approach used in this article (vector autoregressive modeling) further helps tease out the impact of other marketing and PR activities so that the true effect of word-of-mouth can be accurately measured. Together, this should reduce the hesitation to incorporate word-of-mouth into a company’s overall marketing strategy. The findings from this article also provide a strong motivation to better utilize word-of-mouth channel of communication.

Cautions
Readers should be cautioned from taking the results from the above research too literally.  Two things should especially be taken into consideration.  First, the data came from an online social network.  Customers on such websites are usually highly motivated to invite their friends, and those invited by their friends are also very likely to sign up.  If we were to change the context to, say, online banking, both the level of referral and the impact of referral are likely to be lower.  Second, the word-of-mouth activities studied in this article are all organic referrals initiated by consumers themselves. If the word-of-mouth had been stimulated by the company (say, with financial incentives), the referrals may not have been considered as genuine to other consumers and therefore may not have created as strong of an effect as reported in this study.  Although these are real limitations, the findings from this study are still quite powerful indicators of word-of-mouth effect. It is a tool managers should not ignore.

Reference
Michael Trusov, Randolph E. Bucklin, and Koen Pauwels (2009), “Effects of Word-of-Mouth Versus Traditional Marketing: Findings from an Internet Social Networking Site,” Journal of Marketing, Vol. 73 (September), p.90-102.

Where Are All the Teens?

Posted on

Over the course of this year, I kept hearing reports about social media getting older. The largest age group of Facebook users is between 35 and 54, and this once college-oriented social network is now expanding the fastest among people 55+ years old.  Words also got out that teens are not that interested in Twitter either.  Apparently, while social media and social networking are all the rage in the business world, teenagers are not necessarily buying into the same excitement as we adults are.  These reports got me wonder: where are all the teenagers hiding?  I did some research, and these are a few popular teen hideout places that I have found.

teenagers

1. Video Games

Pew Internet and American Life reports 97% of teens play video or computer games, and half of these teens play daily and typically for at least an hour each day.  In a separate report released by Nielsen, video gaming is also found to be one of the major media activities that teens engage in, and teenagers spend an average of 25 minutes each day on console gaming.  While some may see video gaming as an isolate activity, the Pew report suggests otherwise.  It shows that teenagers often engage in video gaming as a social activity, with 65% playing games with others in person and 27% with others over the Internet.  The most popular games?  Guitar Hero, Halo 3, and Madden NFL.

2. Mobile Devices

Mobile devices as a popular teen hideout came as no surprise to me as it has always been a challenge getting my undergraduate students not text message in the classroom.  Nielsen reports an average of 96 text messages sent or received by a teen in merely one day. But the story does not end with text messaging.  Nielsen also finds a higher than average consumption of mobile video by teenagers. The popular genres? Music, comedy, and user-generated videos.  Perhaps as even better news for businesses, an article from ClickZ offers evidence that teens are more receptive to mobile advertising than their adult counterparts.

3. TV and movies

TV is by no means a new medium, but it remains surprisingly popular among teenagers.  The same Nielsen report mentioned earlier tallies the time teens spend watching TV on an average day to be more than 3 hours. In a more in-depth rather than representative look at teenager media consumption, the 15-year-old intern Matthew Robson from Morgan Stanley says that teenagers’ TV watching is often driven by seasonality and scheduling of shows. When popular shows are on, there could be a big spike in TV consumption.  Popular shows among teens?  Nielsen lists Family Guy, American Dad, and American Idol.  Related to TV watching, teens also frequent movie theaters, seeing an average of 10.8 movies per year.  But despite high levels of interest in TV and movies, teens actually trail behind those 18-to-44 year-olds in online video consumption, watching just over 3 hours of online video in a month.  This does not mean teens are completely uninterested in online video, however, as both the number of teens watching online video and the time spent on online video are still increasing pretty fast. Only time will tell where the consumption level will settle eventually.

Does this picture of teenagers surprise you?  Do you have any additional information about teen media consumption?  Your comments are most definitely welcome.