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By nickjohnson - June 17th, 2013
One of the CMOs we spent time with was Chris Krohn, who is both the CMO and president of Restaurant.com. In part one of our interview with Chris, he covers the blurring of internal boundaries between different job structures, multi-channel marketing and effective measurement of social impact.
What does your role at Restaurant.com entail?
I’m the President and Chief Marketing Officer, so I wear two hats.
In the role of CMO, I oversee all the revenue-producing programs here at Restaurant.com. About 70% of our revenue is b2c e-commerce. The other 30% is b2b, where we sell our product at wholesale as incentives and loyalty-solutions for other b2c retailers.
That’s a wide variety of revenue-producing programs. Everything from traditional online b2c marketing programs in paid search, SEO, affiliate-based, email marketing programs, PR, social media, branding, and even our sales force in B2B sales and marketing functions.
In my hat as President of the company, I oversee our partner management function (which is the management of the relationships with our restaurants partners, and our IT and product management functions). The IT and Product Management function is the operational side of the ecommerce business..
I had a look at your LinkedIn profile before we spoke. I noticed a recommendation that said you’re responsible for both marketing and IT. In our experience, that's a very rate combination - at least at the moment.
One would expect that combination offers some formidable opportunities for Restaurant.com.
Do you feel that your two hats bring some unique benefits?
Yes. Frankly, the distinction between what is a purely technical role and a purely marketing role is starting to blur - especially in eCommerce. There’s a lot of overlap between the work the team in the ‘traditional marketing function’ and that the team in IT function are doing.
Look at areas like data analytics and CRM. To have a successful CRM program, you have to have a strong data integrity function, a strong ETL development capability, and the data governance functions in addition to the database management functions, and the campaign management functions.
You've got a mix of programmers, data analysts, database architects, and marketers all in the scheme there.
Is that function inherently marketing? Yes. But it’s inextricably linked with the IT.
You can’t have one without the other.
Increasingly you’re going to see eCommerce companies, and eCommerce operations within larger companies, that are run by people that have a strong backgrounds in both IT and sales/marketing.
I think that’s the inevitable outcome of where business is headed, where the two together are what drives the value. You can’t run them separately.
One of the things that we've found in the research that we've done is that the marketing function and the communications function, which have previously been relatively distinct, are beginning to converge.
Lines are beginning to blur because of need to share data internally, and the increasing need for a unified external voice too.
Is that something that you've seen at Restaurant.com?
Definitely. All of our communications functions are within the marketing area. Both external communication and internal communication.
The PR and the communications functions, and the community relations efforts, support the brand goals and the marketing programs. Then, the internal communications help bring employee alignment with those goals and programs.
So we really found that centralizing the communications in one group has been very beneficial for us.
A core area for concern for many CMOs is a shift into a far more fragmented marketing landscape. You've already mentioned several channels you use to get the Restaurant.com message out there.
How has your approach to multi-channel changed? How have you taken on board these new opportunities - things like social media - to provide a more effective marketing strategy?
Social media is a really great example of an emerging set of channels we can use to connect with our customers.
It’s very exciting. It’s an excellent channel to deliver cost-effective brand engagement, and that's the number one goal in terms of our use of social media.
We drive that engagement by providing engaging content whereby there can be a two-way dialogue between the brand and its customers.
We also find that there are social channels that are really good in telling an aspect of the brand story in a really rich, engaging content way. That can be everything from a company blog, to using rich content over Pinterest/Instagram. So there’s a lot of brand engagement opportunities out there that are really quite cost effective relative to a lot of ‘traditional’ publishing methods.
Many companies make a mistake when expecting different results. Those that see social as primarily a revenue channel have struggled, because the monetization opportunities within social media tend to be fairly indirect.
You can drive direct revenue from social media, especially if you have really good tracking mechanisms in place.
You can also estimate the financial impact of social media interactions that don’t drive directly revenue today, but influence customer brand relationships and behaviors over time. The challenge for most companies is that they simply don’t have those data tracking capabilities in place right now.
With social media in particular, brands often find it a challenge to track progress effectively. Companies have often used metrics that are too simplistic - and that aren't able to measure the brand engagement that is such a core benefit of social.
What do you do to accurately track the impact of your social media strategy?
I would say that we’re not very good, frankly, at what I would call, ‘hard metrics’ in the social media space.
We certainly track all of the simpler metrics in terms of whether we’re getting likes and shares on Facebook and Twitter, repins on Pinterest, that sort of thing.
Shares, by the way, are much more important in our view than likes - because when customers are sharing content, it means not only is the content compelling, but they’re helping you tell your story.
To tie all that in to a customer behavior model is a lot harder, and something that we are currently working on. We do not have that in place today.
We are able to estimate the value of a share on Facebook, or that of a customer who is routinely repinning on Pinterest. But we're not at the stage where we can use that information to predict future purchase behaviour, or quantify the dollar value of the referrals from their shares or repins.
One of the big changes she highlighted in terms of marketing at Sears was the increased ability to target marketing. Where previously, they were able to focus on particular audience segments, they're now increasingly able to deliver truly personalized messaging - right down to the individual.
Is that something that you've begun to do?
Absolutely. In that area we've made a lot of progress.
We’ve invested significantly over the last couple of years on a CRM infrastructure including a 360-degree customer database where we’re tracking all types of customer behaviors - whether that is email engagement or browser engagement, mobile engagements or purchase behaviors, contact with our customer service department, and more.
We’re collecting a greater and greater amount of behavioral data, and we marry that with demographic data that’s either self-reported or third-party generated.
Once we pull those things together in our customer database, we’re able to provide much more targeted and personalized marketing communications and offers to individuals. We use things like restaurant preferences, shopping behaviour, where they are in the customer lifecycle, and then demographic information too.
Once we bring all of these aspects together, one is able to create a much more personalized relationship between consumers and our brand.
And have you begun to see results from this increased targeting and personalization?
Absolutely. Customer lifetime value overall has increased, as well as revenue per active customer.
But one has to bear in mind that there is a HUGE amount of work to do to get there.
You have to make major investment and commitment. It’s not just something you can say “let’s try and see” – you have to invest time and money into the data collection and data management, put data cleansing processes in place.
You've got to have a system built where you can keep all that, a ‘customer data warehouse’ if you will - and then you’ve got to have campaign management tools on top of this - otherwise this isn’t scalable.
So it requires a lot of infrastructure.
But it's worth it. A typical response rate for a triggered, personalized campaign, versus a generic, ‘spray and pray’ (where you send everyone the same message, and hope all will buy) is about 8 times better in terms of revenue.
On a per-campaign basis, if you can make it personalized, tapping into the targeting we've done, we have some campaigns with 40x, 50x the response than previously.
On average its an 800% improvement in response rates/revenue depending on metric.
A lot of work. A lot of thought, a lot of investment, a lot of infrastructure. But the payoff is very much worth it!
There's a risk with personalization though - the risk of coming across as 'creepy'. Individuals realizing quite how much you know about them.
Is that something that you have found?
I think that privacy concerns are real, it is not that that’s an imaginary issue.
But I think that you just have to think about it in the context of your brand, and how the customer views your brand. If you are a healthcare provider, obviously customers are going to be far more concerned about the extremely personal nature of their medical records. Far more so than their preference for Vietnamese cuisine!
From our point of view, customers are remarkably willing to share their personal information - because the service becomes better for them if they do.
If you have more kids in the house, you care about what restaurants are family friendly. It’s useful to have that distinction happening. If you regularly travel to San Francisco on business from Denver, you want Restaurant.com to know that, so we can send you information on the new restaurants in San Francisco, as well as Denver.
Fundamentally, if it’s relevant to the brand experience in the customer’s mind, they’re happy to share their information - in order to receive a differentiated level of service. That’s the key. If there’s a value to customer in sharing their info, they will share.
Chris Krohn, CMO at Restaurant.com, will be sharing further experiences and insight at the forthcoming Incite:Marketing Summit. Check out the agenda and full speaker list - and download a brochure here.