*supercollider

I blogged about Walkers “Do us a Flavour” campaign just last month, and was at the time I was excited about both the idea and the massive marketing support they were putting behind it.

And as Iain Tait points out, they have now tallied up nearly 800,000 entries from the crisp eating public.

800,000 photos. 800,000 flavour names. 800,000 inventions. And they have a decent chance at hitting 1 million submissions before entry closes October 10th.

That’s an incredible number. Off the top of my head, I can’t think of an online UGC competition that is anywhere in that ballpark.

Beyond the online participation, the amazing thing is to think how many conversations this promotion has sparked around their brand back in the real world.

Iain relates excited conversations he’s gotten into and debates had around flavours, which speaks to it’s sheer brillance as a word of mouth device: it’s a pub conversation topic from heaven, and it’s both on brand and about the brand.

It gets people considering the product, engaged with the product, and co-creating on behalf of the brand. I’ve heard stories from co-workers of entire families brainstorming and submitting together.

The other point to be made is around the investment. Walkers put £10m across PoS, radio, online, and television, their biggest investment ever. And the prize is massive, one-off prize of £50,000, as well as 1% of all subsequent sales of the flavour going to the customer.

Walkers didn’t slice off a token digital and sales promotion budget at the opportunity, they saw it could work both as a brand campaign and a way of engaging the customer and invested accordingly.

How’s this for a set of opt-in engagement stats to drool over?

Kids virtual world Club Penguin has 6.7 million monthly users. Of those, two-thirds visit their weekly “newspaper” the Club Penguin Times. And they get 30,000 daily content submissions from their users, on everything from questions to a fictional advice columnist to poetry and essays.

That makes their e-newsletter more widely read than the New York’s Daily News or the Chicago Tribune.

Club Penguin clearly gets both CRM and community, two of the reasons they were recently sold to disney for $750m.

Where brands go wrong with “CRM”

In many circles, CRM has somehow become another word for direct marketing. The execution of the “CRM strategy” is simply e-newsletters filled with brand spam. This is completely missing the point.

If a person has taken the time to opt-in to receive communication from you, this is a rare privilege to be rewarded with value, not an invitation for junk mail.

When brands repay their loyal customer’s interest with ads for the latest product they’re trying to push, or random brand messaging just because they “have to get a newsletter out”, it’s hardly a wonder why those emails have anemic open rates and abysmal click-through rates.

Your customer was expecting something of interest to them, not to you.

Why Club Penguin’s newspaper is so successful, and what brands can learn from them

1. They put their customers first

Club Penguin could make significant revenue from advertising in the newspaper, but they don’t. They focus on simply making it a place of value, a primary means of building deeper engagement with the community.

That’s taking the long-term view, and really thinking about what relationship management means.

2. They recognize a brand’s role in the community.

Whether it’s a village, Manchester United, Club Penguin, or Harley Davidson owners, people want to belong to a community to feel part of something bigger.

To really feel that, communities need a voice. Members need to know what’s going on in the community, what the news is, who the players are, what’s important to know. They need this to feel connected. And if brands don’t provide that voice, it leaves a vacuum and weakens the community.

In the old days, it was the town crier that provided this service. Now, it’s satellite TV and news aggregators. This service is still deemed so essential that nations like the United Kingdom and Canada underwrite the broadcasters BBC and CBC respectively.

In brand communities, it’s often left to the brand to fulfill this role. And if they don’t recognize or fulfill the need, they leave a vacuum that ultimately weakens the community.

Club Penguin gets that, and give their community shape and voice through a true community herald. Their paper both engages the community and demonstrates it’s engagement, both vitalizing properties.

3. Value in CRM comes from the opportunity to deeper engage with customers, build loyalty, and learn from them.

Club Penguin get that CRM is called Customer Relationship Management, not Direct Marketing.

They use their newspaper as a tool to bind the community closer together and to spur more engagement within the community, which ultimately leads to better metrics: more time spent in the community, higher retention rates, higher referral rates.

Loyal advocates, and more of them. In this age of fickle consumers and word of mouth influence, that’s worth it’s weight in gold. And certainly worth much more than whatever 0.001% of your loyal customers buy something from the spammy newsletter you send them, which they probably would’ve bought anyway.

Which leads to the final point…

4. They invest for success

Many brands treat their CRM activity not as a valuable opportunity to be tapped, but almost an obligation. A tiny fraction of the marketing budget is sliced off to send out a few product announcement newsletters. And all the cost of gathering contacts, maintaining the databases, and producing and distributing the communications is essentially wasted.

Club Penguin has 3 full-time staff and one part-time staff working on the newspaper. That level of commitment allows them to produce fresh, interesting, valuable weekly updates. And taking it that seriously is what pays all those dividends.

Loyal, engaged customers or potential customers turned off by your product spam. I know which I’d rather have.

Via LSVP.

So you’re past looking at the web as just another broadcast advertising channel, and rather a place to connect and engage with people interested in your brand, and offer them something of value. What’s next?

How about not just extending your product or service into the digital space, but enhancing and profiting from it?

While the RIAA were off litigating their consumers and watching their business model erode, another major content owner saw digital not as a threat, but as an opportunity.

Major League Baseball has also faced threats to its business model from YouTube and P2P TV services, but rather than turning to their lawyers BusinessWeek tells how they instead looked to innovate and use the power of digital channels to provide a truly enhanced product offering to their hardcore fans.

How did they get there?

Focus on the customer

MLB started with a vision of what they could provide to their fans that would be of significant value.

They stream games live via the web, so you can follow your team whether you’re in Boston or Bangalore.

They package clips for mobile, so you can check video highlights wherever you are.

And they provide in-depth data about the games that you simply couldn’t get anywhere else:

An obsessive fan could get lost in all the data in the MLBAM archives. There are video clips of each major event in the league’s games this season. Statistics are available on how particular players have done against a starting pitcher. The site has final standings for every season back to 2001, too. “It’s much more than what you can get on television,” says Jupiter’s Tulsiani. “It taps into the base by offering multiple camera angles, stats, and on-demand video.”

Rather than thinking about how to simply rebroadcast the exact same content and squeeze a few more dollars out of their audience, they thought about how they could use digital channels to offer an enhanced experience that fans would appreciate and be happy to pay for.

Spending money to make money

Next, they invested in the technology and people to make the vision real:

The key to the operation’s success is video editing software the league designed from scratch. The program lets employees produce highlights in just a few minutes, which is important because the group is sending out about 200 highlights a day during the regular season.

They’ve also built a 60-strong division, Major League Baseball Advanced Media, dedicated to producing and driving the service forward.

That’s a major investment, but it reflects the scale of the opportunity and what’s required to make the most of it by doing it right.

Results

MLB’s decision to provide a valuable product for their fan base and investing to go after the opportunity is paying major dividends.

MLBAM pulls in $450 million a year, half from customers paying for extras, and half from advertising along free content. Other sports leagues are paying to use MLB’s infrastructure to stream their own content. And all audience metrics are up, including rights fees, attendance and viewership.

As Bob Bowman, chief exec at MLBAM says “If you serve the fans, you take care of your business.”

See the full article at BusinessWeek, and credit to Levi Sumagaysay at GMSV for pointing it out.