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15 Minutes With...Loren McDonald

The very role that Loren McDonald fills for Silverpop Systems, a marketing automation provider specializing in “Engagement Marketing Solutions,” exemplifies in large part what engagement marketing is all about.

“My role is full-time thought leadership,” he says. “I do webinars, speaking opportunities at conferences, blog, write articles and columns, do press interviews and conduct research and studies – which are all components of where marketing is headed, what I call Marketing 3.0. It’s more about engagement and content than it is about promotion.”

Old-School Push

McDonald notes that old-school marketing – what he calls Marketing 1.0 – was all about push: “It was about companies reaching out trying to acquire customers through list rental, direct mail, mass media – going out there after customers.”

Marketing 2.0, on the other hand, has emerged in the last several years with the Internet, digital technology and other tools, giving consumers the ability to find a company or a product. “It’s not just companies trying to grab consumers,” he says, “but consumers saying, ‘I’m going to go out and do my research and go to all these sources in the digital world to find the product or the company that I want to do business with.’”

With the explosion of social networks, social media and other forms of user-generated content, marketing has undergone yet another evolution – what McDonald calls Marketing 3.0 or “engagement marketing,” which goes consumer to consumer to company. “Now,” he says, “marketing is about people posting on Twitter, LinkedIn, Facebook and other online communities and saying, ‘Hey, I travel a lot, and I’m looking for a lightweight laptop. What do you guys recommend?’ Consumers are talking to other consumers, who then lead to the product and the company.”

What this means for marketers, McDonald explains, is that “you can’t just push out your message. You have to go where the consumer, the customer, or the prospect is and reach out and engage them with content that helps educate them and helps make them fans and fanatics about your brands and products with content that helps them make that buying decision in a less promotional context.”

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The ‘Social Graph’

In addition to looking at things like customer lifetime value, McDonald says you have to raise the level of customer engagement through an emerging concept that people call the “social graph” – the idea being that it’s not just the dollar value of a customer that’s important, but the value of their social influence. In other words, if a customer is fanatical in promoting your brand and spreading the word, they may be more valuable than a customer who simply buys more.

With this in mind, Silverpop was one of the first marketing companies to add a “share to social” feature that allows recipients to share an e-mail with their social network, thereby allowing clients to measure “social influence” to some degree. “We can now actually pull in not just purchases and opens and click-through rates, but also customers’ social graph – what they’re doing and saying about a product and how many followers and friends they have,” says McDonald, “allowing marketers to look at that influence as part of their behavior to determine how to treat them, segment them and market to them.”

McDonald adds that a company’s external marketing efforts have to align with its internal efforts in order to make it work effectively. “At the end of the day, a company is made up of its people – people in your call center, people serving coffee on the airplane, people responding to you on Twitter,” he notes. “And the reality is that employees are your most avid fans – or they need to be. Whether it’s on a personal level or in the official role of employee, they have to be on the same page, they have to know what to say, they have know how to respond and engage in a human, personal way to customer issues and not just say, ‘Well, we’ll let corporate communications take care of that.’”

And you have to assume that employees are out there engaging with real or potential customers and clients through multiple channels already. “The role of the CEO or management is to communicate a customer-focused vision or message of engagement throughout the employee base,” McDonald explains, “creating a message and a culture in which employees know intuitively what’s appropriate, how to respond and what tone to use.”

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Set Your Fanatics Loose

Of course, it’s not always easy. “If your culture is more the command-and-control type, where there’s little transparency and you feel you have to control the message, then it’s going to be tough for you to really succeed externally in this kind of social environment,” says McDonald. “But if your internal culture is based on engagement and customer-focus and is aligned with an engagement marketing strategy, then you won’t have to wait for corporate communications to respond the next time someone calls your company “a bunch of a**holes” on Twitter. “Your fanatics, your most avid customers, will do the responding for you.”

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Winter 2010

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