Building Social Capital1 Apr, 2012 By: Thomas Haire Response
Patrick McLean's work at Capital One drives DR campaigns through all digital channels, especially — looking ahead — mobile and social media.
DR marketing is just evolving so rapidly,” says Patrick McLean, Richmond, Va.-based vice president of digital brand strategy for financial services leader Capital One. “We’re at the point where arguably everything in marketing is direct response. Even traditional broadcast TV brand campaigns are increasingly direct and growing more sophisticated in reaching and interacting with the target. That’s because people are sitting with another screen, consuming entertainment in broadcast and with either their mobile phone or tablet. That’s a much more direct experience, making consumers immediately accessible from broadcast and mobile.”
McLean, a self-described “ex-pat” Canadian, joined Capital One in late 2011 after leading interactive marketing at Verizon. It was the telecom giant that lured him to the U.S. after a run with a series of smaller businesses in and around his hometown of Toronto and a stint at Bell Canada, but the opportunity to take charge of digital marketing at the financial services company was too strong to pass up.
Capital One, which is based in the Washington, D.C. suburbs (McLean, Va.), has more than 40 million consumer accounts across its portfolio of services. Its 1,000 branch locations operate mainly in six states and the District of Columbia, but its credit card products have made it a household brand across the country.
“From a card acquisition perspective, Capital One is a machine,” McLean says. “And the incredibly sophisticated process of direct response marketing to target consumers continues to be the engine that fuels our card portfolio. But my challenge here has been to take what’s been a heavy broadcast TV marketer with an evolved direct marketing model and move it to the next phase of a digital marketing strategy.”
Taking the vast components of Capital One’s advertising and marketing plans and harnessing them to create and integrate a true digital strategy sounds like a big challenge. But McLean says that leaning on his years in telecom has made the transition to Capital One easier — and his track record of innovative digital strategies is already having a positive impact, especially in the area of social media. “Social media will be at the core of our digital work,” he contends. “Capital One is investing heavily in the area, and if we are able to scale it effectively, it will reach customers and consumers in truly valuable ways.”
Understanding the Journey
McLean says you can look at his career in three phases. “I’m in the third phase now, here at Capital One,” he says. “I joined from the telecom world at Verizon, where I was in charge of interactive marketing. Prior to that, though, I was with Bell Canada and in some smaller, more entrepreneurial businesses, all in the digital media and marketing space. I’ve been in digital for more than a decade now, which is still unique for marketers — especially marketers the size of Capital One.”
McLean clearly finds his time at Verizon and Bell Canada valuable when considering the move to Capital One last year. “Telecom is a very similar dynamic to financial services,” he says. “Both industries are regulated and there’s a constant threat of disruption to the business. But, with both, innovation is truly a big part of the agenda. We had to innovate at Verizon, and we have to do so here. A big part of that is creating dialog with our customers.”
He also contends that Verizon taught him a lot about operating at scale. “In reality, it was a narrow brand, but to be effective as a big brand with those limitations, a unique skill and capability is required from each member of the marketing team,” McLean contends.
And there are few brands bigger in the consumer financial services space than Capital One, which ranked No. 134 on the 2011 Fortune 500. With revenues hitting the $19 billion mark in 2010 (and profits closing in on $3 billion that same year), Capital One is one of the nation’s top 10 commercial banks.
Richard D. Fairbank, who founded Capital One in 1988, remains its CEO and has fostered a culture centered around two key values: excellence and doing the right thing. In a time where many banks have been under fire due to America’s mortgage crisis and the lingering effects of the Great Recession, Capital One has continued to flourish, including the recent acquisition of online banking leader ING Direct (Response, September 2008).
“That acquisition has profound implications for our company and the evolution of its digital branding,” McLean says. “As the steward in charge of maximizing digital marketing for Capital One’s brand, it’s great to see that it’s just one of many investments we’re making to ensure we reach our customers digitally. It’s great to be able to learn from the ING brand and their team’s experience.”
That kind of dedication to learning and growing is a hallmark in speaking at length with McLean. Perhaps that’s one reason he’s had success with such major marketers. “There’s no way to underestimate the importance of understanding your consumer’s journey,” he continues. “Especially with the sales orientation that is such a huge part of DR marketing. Now more than ever, marketers must take a step back and understand what their customers experience to tailor DR campaign to their customers’ goals and needs.”
That attitude also goes hand in hand with another thing McLean began to understand during his time at Verizon. “You cannot be afraid of a culture change internally,” he says. “At Verizon, the industry was undergoing tremendous change, and the same is true at Capital One. Mobile becoming part of the strategy is just part of it. There, I learned to embrace that change while staying focused on reaching the customer with products and services that were right for them. We’re trying to do the same at Capital One.”
“Direct response has become much more of an engagement model for us,” McLean begins when asked about some of Capital One’s more recent campaigns. “There’s nothing more direct than engaging your customer in some form of immersive experience with your brand, which makes social media a great way to build off broadcast and DR campaigns. By telling consumers, ‘Hey, don’t just buy from us, but let us tell your story, and let us reward you for engaging with us,’ we can evolve that into a more of a DR-style customer relationship once they’re engaged.”
Speaking specifically about Capital One’s well-known credit card marketing programs, McLean says that less than five years ago, the company’s outreach was almost entirely through print direct mail. “It’s been our biggest challenge and area of focus: successfully moving to a more balanced approach between direct mail and digital,” he says. “Digital is now the predominant way in which our customers are interacting in DR channels — the paper application is starting to fade away. Digital is just becoming more efficient, and if our customers want to interact that way, then it’s our job to interact with them there.”
As TV, print and digital continue to mix in Capital One’s marketing plans, McLean believes that the natural measurement DR marketing provides will help answer one of the toughest questions. “One of the biggest answers the industry needs moving forward is how do we better attribute to what tactic or execution works,” he says. “Attribution needs to get solved and the only way to do so is to challenge ourselves on our measurement tools. If a consumer watches a TV commercial and then interacts on mobile, which pushes to our Facebook page, where he or she reads review content, and then interacts three days later on our own social website, before later filling out a credit card application back on the mobile device — where is that attributed? Old direct response attribution models are a good place to start that evolution for our customers, but our internal measurement tools must evolve as well.”
Social media is another concept that pops up repeatedly with McLean. He says Capital One is pushing into the area more quickly than ever before. “We’re really starting to layer social content into our mix,” he contends, adding that ratings and reviews of products are becoming very popular on capitalone.com, the company’s consumer-facing website. “We’re actually directing customers there to consume ratings and review content and also to participate, experience, rate and comment. It’s been overwhelmingly successful. We’re really happy with the amount of engagement it’s driving, both positive and negative. But you must embrace it — that’s social media. It allows us to take action on feedback. DR drives them to that response platform, but the interaction is key.”
McLean speaks from experience on social media. He’s seen when a campaign can fizzle out into a puddle of meaninglessness. “When I was at Verizon, we launched a Facebook campaign,” he recalls. “Its only goal was to drive 1 million fans, and we reached it. But, within two months, almost none of our customers/fans were engaged in that environment. I look around today, and I still see that behavior with many companies in social: chasing a number that doesn’t matter. Companies get caught up in the shiny object — a Facebook ‘fan’ — rather than working to the end goal of driving return from engaged customers.”
A New Persona
However, McLean also hopes to apply a positive lesson he learned at Verizon to Capital One’s marketing plans. “Verizon approached DR marketing from a ‘persona’-based method,” he recalls. “Are you the type that likes the best deal? Or are you a social shopper, seeking others’ feedback before buying? We looked for unique sets of behavior from our consumers and marketed to them in ways that would drive their responses.”
What happened? “As soon as we began testing these methods, our results went through the roof,” McLean says. “Before, we used more traditional methods — trial and error, a lot of tests before concentrating dollars where they were working. But when we went toward this persona marketing plan, hitting the customer where they wanted to be reached and with the information they wanted, it became incredibly powerful.”
McLean also says Verizon changed its website, adding tools there to allow customers to personalize their experiences — “Comparison tools for the dealmakers, and consumer forums for the social shoppers,” he adds — making content more relevant. “Our campaigns’ success rates doubled,” McLean says.
He also believes that the right agency partners can make a massive difference in any campaign’s success. Capital One is actually in the process of selecting its first digital agency of record ever, an agency that is expected to be a “strategic anchor” according to McLean.
“We have a large roster of agencies and partners,” he says. “We do have a broadcast anchor agency in DDB Chicago and a media anchor agency with Horizon Media. This new digital partner will become a third anchor for us.”
However, Capital One will still enlist a number of partners outside of those anchors, which McLean says is both good and bad. “The good is we get a lot of great ideas and a broad set of capabilities,” he contends. “The challenge is that sometimes that makes the work a little too tactical and not strategic enough. We’re challenging our entire stable of agencies — and ourselves — to focus on partnerships that are more strategic in nature. There’s no doubt we need to challenge ourselves to be better clients. Aside from demanding strategic solutions, we need to give our partners that space and that opportunity to be strategic rather than tactical.”
McLean sums up what he sees as his role rather neatly. “Marketers should think like a combination of an artist and a scientist,” he says. “Math is very important and data’s role in spending is crucial — Capital One knows that like nobody’s business. But the artistic side of marketing needs to be more embraced. That’s where you ask, ‘What customer am I trying to reach? What’s their behavior? And how do they want to hear from me?’”
And, against the grain, he sees DR as far more than just the math side. He also sees it, going forward, as a key to the art of marketing. “The evolution of social and mobile in the digital space is bringing some incredible new challenges to every marketer,” he says. “Direct response is now a component of all marketing, which inherently challenges the way we think about the role of a direct marketer. It challenges us not to be too ‘sales-y,’ which DR has tended to be in order to close the deal. Evolved from that, DR can also be used to engage the customer, which is what makes it a brand-building experience. It’s what makes social media a DR mechanism. Sure, it’s hard to sell through a direct social media interaction, but that interaction is as DR as you can possibly get. And once a customer is engaged with you, they will be more comfortable transacting with you.”
Vice President of Digital Brand Strategy, Capital One, Richmond, Va.
- Hometown: Toronto
- Resides: Richmond, Va.
- Family: Wife, Kelly, and a son, Michael, 4
- Education: Bachelor’s degree, commerce, Queens University, Kingston, Ontario, Canada; M.B.A, University of Toronto
Defining Moments: “One is becoming a father. My wife and I have a 4-year-old son. But in addition to the life change involved and how important he is to us, from a career perspective, every day with him is a living, breathing insight into what we need to continue to do as marketers. He’s more savvy at managing the iPad than I am. He doesn’t understand why he can’t touch the TV and move the screen to the next piece of content. I see the future in him. Professionally, when I joined Verizon and moved to the United States, it was a challenge. But it also gave me an opportunity to operate in a business at a scale I’d never experienced.”
Greatest Career Accomplishment: “So far, it has been doubling online sales for Verizon in a year. Really, it took a wholesale reengineering of the way digital marketing worked, creating an integrated digital marketing function that addressed and created the customer experience that consumers were craving. It also took building a really great, very integrated digital department. Yet, that accomplishment is something I hope to beat here in my time at Capital One.”