Thursday, December 20, 2012

Using Social Input for Marketing Decisions

Should likes result in price cuts?

The impact of social media on commerce may be in consumer feedback rather than direct commerce.   A recent article in the Chicago Tribune outlined a number of retailers - large and small - using the communal media as a way to inform their decisions.  From what colors to stock to what prices to charge social networks provide a means for either conducting market research or letting consumers decide.

The use of natural communities for research is by no means new - but the quick ask and answer paradigm of social media does raise some questions to consider.   If we give consumers such a visible role in the process, then as a business...
  • Do we care what the decision is?   
    • Colors, assortments, and other merchandising decisions are good places to test the waters.
  • Can we deliver? 
    • In essence, asking for opinions is on the path to building trust and that outcome should not be put at risk.
  • Can we afford to be wrong?
    • Certain topics, e.g. pricing and new product development, may result in unintended consequences that impact other parts of the organization.  
Strictly speaking, market research is a tool used to confirm or reject a hypothesis so there are some limitations to consider.
  • Selection and sample bias -- no one ever said those who participate and respond are 'representative consumers'.  Can the results be applied broadly or into the future?
  • Classification and segmentation - verification of the interests and demographics used to analyze the results is tough when at a click of a button I can change, include or exclude things.  There is truth to adage - 'on the Internet, no one knows you're a dog.'
That said, there are clearly innovative market research, data collection and analysis opportunities to explore.  This area is important for marketing since it is the data of self-expression that holds the keys to context and intent and thus purchases. A few examples..
  • ChatThreads combines a bit of market research methodology, technology and social behavior to track where and how a recruited panel of consumers interacts with a brand.
  • ThinkVine creates a virtual world of consumers by building personae from all types of data in order to understand how the online and offline mix of marketing spend impacts sales.
  • itracks focuses on mobile focus groups so they can interact in the real world instead of the conference room with one-way mirrors.
So, since there is no reason to believe these trends are simply fads it is time to rethink how we go about figuring how to learn what we need to know.  

There needs to be some amount of experimentation in the generation of insights.  Suggestion for the new year: set a budget limit to which you simply say "Yes, let's try it."

Tuesday, December 18, 2012

Mismatching Brand and Expectations

What if your stucco repairman drove a BMW?

We recently had some work done on our house to fix some cracks and chinks in stucco.  The crew did a good job, communicated well and earned a strong review on Angie's List (in exchange for a discount).   What was interesting was the question that the contractor asked at the end:  "Did you mind me driving to the job in a BMW?"

To be sure, I did have pangs of being overcharged.  But upon reflection, it was "just" a 3-series and I've seen enough pick-up trucks to know they can cost just as much - if not more.   So, it wasn't the price that caused the twinge but something else.   Maybe it was a case of branding at work.

BMW is (was) an aspirational brand; the 'ultimate driving machine' is something to strive for, a reward for success, a pinnacle of perfection.   It is very personal.  A truck on the other hand is there to get the tough jobs done - just consider the Chevy Silverado winning Super Bowl ad that reinforced it's message as the longest lasting.  Even Viagra uses solving challenges as part of delivering their brand promise.

In Simon Sinek's TEDx talk he makes the point:  "people don't buy what you do but why you do it".  So, my twinge came from a conflict in the why side of the equation.   The problem a BMW solves has to do with personal needs; the problem an F250 solves has to with the job. 

So, yes I would have preferred that he drove up in a truck.

Monday, December 17, 2012

The Rise of Native Advertising

Will something replace display ads?

As click thru rates for display ads continue to slide into the abyss - now estimated at less than 0.2% - advertisers and publishers are looking for alternative ways to take advantage of consumers' use of the web as a source of information.    

A recent (and probably welcome) trend is toward 'native advertising' something that Solve Media has defined as "a specific mode of monetization that aims to augment user experience by providing value through relevant content delivered in-stream."   In general, they're talking about custom content associated with the context and intent of the consumer - things like sponsored stories, web videos and interactive graphics.  

Given that these assets are delivered as part of the experience, as opposed to simply occupying the 65,520 pixels of a leader board, a lot more care and feeding in their creation and publication is required.  Bidding for eyeballs, whether in real-time or thru fixed line-item bids, typically focuses on impression attributes such as the characteristics and behaviors of the visitor along with page/section information and often has a short-term payback based on conversion. Since the highest-bidder wins, there is no guaranteed link between the subject of the ad and the consumer context.  (I still see ads for things that make no sense anymore - like a pressure cooker (got one) and an online MBA (don't need another one.))

So, while it is an interesting trend particularly in light of mobile and tablet usage, figuring out native advertising requires answering 3 questions:
  1. What content are different people or segments interested in?
  2. How do various content types impact sales?
  3. How do we optimize the creative and content mix across the journey?
The answers to those require a different approach to generating insights than applied historically.  To allocate budgets, we'll have to develop some set of 'content attributes' in order to answer them.  

In short, we need to figure out how content works.

Thursday, December 13, 2012

3 Levels of Identification: Consumer, Segment, Context

How do we move along the touch points of a consumer's journey?

Media fragmentation and interactive touch points results in media plans that probably look more like a 3D chess board than Candy Land.  So, how do we plan our next move?

Recognition is the key to the personalization and customization of consumer experiences.  But, there are clear issues revolving around privacy, governance, and permitted use that may prevent us from doing as much as we would like or even can.  Zappos has had to find the right balance between privacy and targeted ads because too much of a good thing is a bad thing.

There are several ways in which we can approach the need to help people choose.
  • Consumer: the ideal scenario in most cases is the the explicit permission to market with an identified individual.  This typically relies on a preexisting relationship where opt-in has already occurred thus naturally focuses on retention.  Cookies, because of their ephemeral nature, are a substitute (sometimes good, sometimes poor) of actually knowing a person and bridge to acquisition programs.
  • Segment: in lieu of identifying the individual, it is common to identify and track behaviors and classify them into segments.   Sessions of ecommerce sites might have 'researchers', 'tire kickers', and 'category buyers' for which different combinations of content and offers are presented.
  • Context: there are cases where even anonymous tracking should be avoided, e.g. medical, pharmaceutical and health information.  In these scenarios it is the behavior of the content that drives segmentation, and thus the business rules. 
Given the need to cover a wide spectrum of the consumer journey, the challenge and thus opportunity becomes the design of scheme that simultaneously leverages all three levels of recognition.  To do that it seems we need three things:
  1. Identification Linkages - a means to link individuals, identified or not, as deep into the journey as possible.  For example using a match service to link email and cookies, or even cookies to Prizm clusters.
  2. Portable Segments - a structure to behavioral segmentation that can be applied across touch points in order to deploy common business rules.
  3. Content Archetypes - a classification scheme (meta tags) that allows us to look at how similar content works across multiple scenarios.
  And to become a grand master we'll have to experiment and test a lot. 

Tuesday, December 04, 2012

Playing Poker with Big Data

Is finding insights a skill or just luck?

In Forbes' "Big Data News of the Week" several points were raised about the insights side of the equation.  
  • Machine learning requires a human touch.  We can't just implement a silver bullet because the problems require either business domain or technical knowledge in how to address the problem in the first place.
  • More doesn't mean more. There are marginal returns to more data.  In fact, the proportion of value derived probably decreases rapidly the closer we move to the realm of self-expression. Drawing the appropriate line in the sand requires judgment.
  • Entrepreneurs love scarcity.   The lack of 'data scientists' is leading to the funding of companies that will do the job analyzing the data for you.  Even the reporting platforms are embedding analytics into their offerings.  Clearly a disruptive innovation in the making.
All this suggests knowing when to hold 'em and when to fold 'em is the critical skill.   In an article in the Economist, skilled poker players had an ROI of 30% while the unskilled were down 15%.  Victory was based on the ebb-and-flow of in game decisions, just like in the world of big data.

Applying Big Data Philosophy To Silos

Can we use big data architecture to solve big company problems?

One of the most significant challenges to overcome in any organization is silos - those technological, political and budget-driven islands of activity.  Email is here; ecommerce is there; social is in another department; and display is managed outside.  Each produces data that might be useful in achieving objectives, but they are locked up.

We know, or at least believe, that we need to deliver a seamless experience based on a 360-degree view of the consumer.  What we do not know a priori is what tactical campaigns or even strategies might be appropriate.  Since insights change how we market, rather than just tweak a plan, we need to explore and test first.  And that's the rub - I can't define a complete data architecture because I don't yet understand how I'll use it.

The typical, big company approach is to kick of a project lead by IT to design an integrated solution based on structured data models and ETL (extract, transform and load) processes.  The vision is a common company database that can be shared and leveraged appropriately through-out the company.  I've worked on those projects throughout my career.  But is that the right approach in light of the realities of today's needs?

When data management sources were scarce, ie expensive, then it paid dividends to design the solution first. In the early data warehouse days, we'd estimate building a marketing solution at nine months and $1,000 per gigabyte.  Today, I'm not so sure we have that much time due to the volume, velocity and variety of data. 

Because we're dealing with a data fire hose, we can't design first because the sources will change before the ink dries on the umpteenth version of the Visio diagram.  In fact the whole notion of applying structure to unstructured data is somewhat of an oxymoron.  We need to get the data together first, start working with it and finally apply some structure.  Since Big Data architectures put the data design at the end of the process, maybe they're appropriate for more pressing tasks - like looking at the integration of silos.

The design stage needs to shift to focusing on the environment rather than the contents.  The key marketing questions actually become technology ones: How will we stream data into a useful place?  How can we reduce the time to get answers to questions?  How will we marry on and offline data? How do we deploy insights? 

So, I think it is time to jump in and see what I can learn from email and display data.

Sunday, December 02, 2012

2013 Trend Season Has Begun

What's on the horizon?

'Tis the season to start publishing trends for next year.

The first set is from trendwatching, a global trend spotting organization.  Three of note:
  • Data Myning: the reversal of data ownership from businesses to the individual consumer.  The challenge for marketers will be to find the right balance between anticipating needs and watching. 
  • Full Frontal: changing the mind set from saying 'we have nothing to hide' to proving it.  The discussion needs to move toward permitted use and governance and away from privacy.
  • MobileMoments: using digital snacks to maximize experiences.  Apps like 'snapchat' allow images to be shared for seconds before self destructing.  The half-life of interest just got shorter.
And those macro trends seem to be wrapped up in content trends from D Custom, an agency out of Dallas.  Summarizing, content will be...
  • Tailored to the Consumer - I want what I want, not what you want to send all of us.
  • Placed above the Channel - I am a cyborg, my life is more social and rich because of seamless mobile interactions.
  • About the Experience, not the Word - I can dedicate all my senses for a brief moment of time, so please stimulate them
Other sources reflect the same theme of experimentation to get it right; some with examples of technology rather than exploring the trend itself, others focused on key marketing disciplines.
  • EBrkiks Infotech's slideshare on digital trends.
  • From a brand marketing perspective, Brand Strategy offers this view
  • It's back to basics; less tricks as control continues to shift toward consumer. 

Tuesday, November 27, 2012

The Path from Black Friday to Cyber Monday

How did the weekend stack up?

A collection of factoids, stats, benchmarks and insights on the recent shopping weekend - estimated at around $59 billion or 10% of the holiday retail season. 

First, it is probably incorrect to classify it as discrete day or two - it is becoming a season which ebbs and flows as people transition from one mode to another.  That said, it does make for good theatre to debate and illustrate the differences.   Here are some comparisons between Black Friday and Cyber Monday.
  • Sales and traffic were up with a record 227 million people shopping and spending more.  Here's what we learned:
    • The large gain may simply have been a case of time shifting.  Time will tell whether we robbed Peter to pay Paul.
    • Consumer confidence suggests that the 'fiscal cliff' may be a speed bump; if Washington can get their act together.
    • Holidays aren't sacred and online isn't a stigma.  Turkey-day sales were up 32% as people shopped in the evening before (or while) moving online.  Black Friday topped $1 billion in online sales for the first time.
  • Mobile accounted for a larger share of online sales on Black Friday than it did on Cyber Monday, (16.3% vs. 12.9%).  Guess showrooming is real when out and about and the desktop is better when sedentary at work.  (Other good information there.)
  • The tablet, and by that I mean iPad, established itself as a unique shopping venue - at least at Mall of America.  Sales of iPad - 11 per hour; sales of Surface 0 - per hour.  
  • Direct sales from social networks were below nascent, registering just 0.2% of sales.
  • In the middle was Small Business Saturday - which has been pegged at $5.5 billion or 10% of the weekend's retail sales.   Transactions up.
  • In an interesting look, the social graphics of followers of six retailers suggests a difference between how people think of where to go for deals and gifts.
The implications of the end of BF/CM were summed up by Chris Copeland of Group M Next.  Paraphrasing...
  1. This is a communal activity at its finest; social technology isn't at play when we're in the mood to buy.
  2. The product isn't what's in the box or on a hanger.  Ancillary features, advantages and benefits will distinguish retailers from sellers.
  3. Yield management, i.e. changing pricing patterns, will emerge as consumers have access not only to real time but historic data. 

Thursday, November 22, 2012

The Making of Small Business Saturday

How did the day between Black Friday and Cyber Monday come about?

Drew Neisser, CEO of Renegade published a two-part interview with Scott Krugman, Director of Communications at American Express about the origins of "Small Business Saturday".
  • Part One: talks about the creation of the event in 2010 in a matter of weeks.
  • Part Two: covers the evolution of the program in its second year.
The summary points:
  • Big Ideas can happen fast. It shouldn't take two budget planning cycles to get approval from stakeholders and implement.  In fact, if you're getting resistance then either the idea probably isn't quite right or the timing is off.
  • It's about their brand.  This is a case of using your strengths to help your customers achieve their goals; in this case the growth of small businesses.  If you see and talk about the problem thru your organization's glasses, change them - or at least clean them.
  • Pay to get talked about.  While s**t might happen, social and viral exposure need to be activated and that means paid media.   Advertising stimulated the conversation - and in this case partners like Facebook added inventory to the mix for small businesses.
  • Doing good can't be about control.  "Shop Small" is a rallying cry that resonates well with a lot of potential partners, audiences, and even competitors.   Even so, there is the potential for commercial success - a fair amount in AmEx's case if you like to see transactions up 23%.
Given even the political support it has, the idea can best be described as a movement creating a life of its own.   And in honor of turkey-day, paraphrasing Arlo Guthrie's "Alice's Restaurant" seems appropriate since I'm sure she participated.
They may think it's an organization.  And can you, can you imagine fifty (million) people a day, I said fifty (million) people a day walking in singin' a bar of Alice's Restaurant and walking out.  And friends they may thinks it's a movement.

Actually, the number last year was over 100 million.

I've enrolled my cards for this year....looking forward to meeting small business owners passionate about their craft.

Wednesday, November 21, 2012

Black Friday Notes

With less than 48 hours to go what is it with Black Friday anyway?

Recent research explains why we like Black Friday; it is biological.
  • Coupons relax us, make us happy.  They release a hormone associated with trust and love.
  • Line waiting: Ritual, not pain. It "constitute[s] a collective consumption ritual"
  • The possibility of fighting over goods is exciting.   "perceived competition ... creates positive emotions and induces hedonic shopping value."
OK, I won't be there with my close friends jostling with the crowd singing kumbaya.  So, here are some things retailers are doing to make it interesting:
  • Oops, it started 48 hours ago. Black Friday isn't a day anymore with deals spreading out before and after the 4th Friday of the month.  "Magical Friday", Disney's attempt at hijacking a brand, actually started two days ago on a Monday.
  • Black Friday isn't just for retailers anymore.  Brands are leveraging borrowed interest to get into the act.  For instance, Di-gel - a stomach remedy - is establishing a comfort zone in NY with phone charges, seats and restrooms. 
  • Walmart is introducing a food subscription service to get consumer reaction to potential products.   Samples are sent to people who sign up at - currently by invitation.
  • Target is facilitating showrooming, the practice of checking online prices in store that impacts 80% of retailers, by installing wi-fi and encouraging people to consult their phones/tablets. Their Black Friday web site offers deals via text message campaign. 
  • Macy's is putting store-only items on the mobile device by passing online in an attempt to "figure out the best way of offering merchandise to customers and satisfying demand."  They hope to have it figured out by 2014.
  • The strong get stronger, if you search for "Black Friday" you are quite likely to include "Walmart" or "Target" in the query.  
Ready, set, shop....

Tuesday, November 20, 2012

Street Address vs. Facebook Profile

Which would you rather have a consumer provide?

In the review of a web site, we asked the typical question:  Which elements lead to a purchase?

The category is lifestyle - pure and simple; consumers are social and share their stories; the site is filled with content and user experiences.  The profile form is simple - asking only the minimum required information (email and phone), the rest of the contact information is optional. 

The available data covered all types of behavioral activity, search processes, web page paths, content interactions and social referrals.   All good stuff and all best practices.

Question:   What is the most important activity related to future purchases?
Answer:   Providing a street address in an optional field.

Of the 100+ variables evaluated - the fact that a consumer had provided his/her home address was the a significant predictor of a purchase by a wide margin.   Not what they had looked at, watched, configured, downloaded, or shared.  Not whether they came from social networks, organic deep links, or paid search.
While we have often several email addresses and multiple phone numbers - we usually have one street address.   This analysis suggests that if I'm willing to provide the one form of contact that I can't ignore - I'm engaged and on the path to purchase.  

So, just because we're thinking digital don't overlook the terrestrial. 

Monday, November 19, 2012

Connecting a Consumer Centric Platform

What does it take to satisfy consumers?

Thanks to the smartphone and digital interactions, shopping today is often completely different than the systems we deployed in the past.  Retail Systems Research recently concluded a three-part series on an overarching cross-channel architecture based on a presentation at the RIS News Cross-Channel Executive Summit entitled “Becoming Omni-Channel Ready for 2017″.

All the components needed to create a consistent consumer experience across shopping channels is like the old children's song: Dem Bones.
The leg bone is connected to the knee bone;
The knee bone is connected to the thigh bone;
The thigh bone is connected to the hip bone;
Now shake dem skeleton bones!
The individual components read like a government procurement contract with all those three-letter acronyms (TLA).
  • CRM - customer relationship management is responsible for a 360-degree view of the consumer (also referred to as Master Data Management (MDM))
  • PIM - product information management covers not only the physical information about the product, the various merchandising hierarchies but also the communal content found in reviews and ratings
  • DAM - digital asset management deals the classification, control, storage and distribution of content to all matter of channels and devices, often simultaneously  
  • OMS - order management system responsible for ensuring inventory supports demand; no sense promoting something you can't deliver
  • POS - point of sale captures the transaction and includes both in-store and ecommerce platforms, at least for this discussion
The glue that connects them together has the unfortunate techy name of "Service Oriented Architecture" (SOA).  These techniques are most common in supply chain functions where retailer systems talk to manufacturer systems.  In the case of consumer experience, cross-channel marketing along the shopping journey requires this type of thinking as well.  Whether it is one platform or a collection, this is where it all comes together.

Some key points:
  1. This isn't something you can buy today from any one vendor.
  2. This won't happen overnight; it is a 3-5 year plan. 
  3. Marketing is now a line, operational function with P&L responsibility.
  4. It will take a market-leading vision to get there.
  5. Insight-driven changes in marketing plans is the only way to justify this.

Wednesday, November 14, 2012

Campaign Analysis

Which party was the better marketer?

It has been a week since the election and the results been sliced and diced a myriad of ways looking for insights as to why the results turned out the way they did.   Here's a view of how various pundits fared in terms of predicting electoral votes.

Each dart represents the estimate of a prognosticator; blue are democrat or 'left' thinkers while red are 'right' or republican.  The three in the center nailed the outcome precisely, those outside the dart board missed by over 100 electoral votes.  Since there are only 538 votes to divide into two piles, one would think that the predictions would be a bit closer.   I guess there was a lot was analysis without analytics (those aren't the same thing). 

In addition to the results themselves, stories are emerging on how each campaign used data which are quite illuminating.

Obama had a data crunching team focus on integrating everything possible and then testing idea after idea to optimize their marketing efforts to not only raise $1 billion but also mobilize GOTV (get out the vote) initiatives.  As with many marketing data projects it took 18 months to get the disparate sources under control and organized appropriately.  In the end, there were 40 million people that were segmented and targeted appropriately.   At the one end were the contest-loving, dinner party crowd who bid on "Dinner with Barrack" hosted at Sarah Jessica Parker's home.  At the other was the use of ranked contact lists texted to your phone based on the probability of persuading voters.

Romney had data too.  But from the sounds of the stories it was a case of GIGO - garbage in; garbage out.   The working assumption that republicans were more motivated than democrats proved to be wrong so the polls weren't balanced.  The email database is reported at 4 million and contact rate 1/20th of the democrats.  There was little evidence that the campaign leveraged outside lists for acquisition, a common marketing tactic.  When it came to GOTV supporters were sent a 60 page pdf to print out and turn in; no digital solution there.   For the trials and tribulations of one volunteer read this story.

It seems the secret to winning 8 of 9 swing states was marketing best practices:

Tell No one

Tuesday, November 13, 2012

10 New Rules of Sales and Marketing

What has changed in the turn of the century?

A recent presentation by Mike Lipkin highlighted his ten new rules of sales and marketing.  This was given in the context of a sales meeting so the commentary was biased toward that audience.   That said, the 10 trends are:
  1. The Future is Flat:  refers to the fact that expected economic growth (GDP) and the related advertising spend is anemic at best.  We can't ride anyone's coattails anymore.
  2. Older is the New Young: the aging population doesn't mean we feel any older; 60 is the new 40 (if not 30) so design for age but package for the 'mature youth'.
  3. The Mosaic is the Message: touch points are everywhere and not very well organized, get used to it.
  4. The Data are Overwhelming: like an extra large supreme pizza, micro focus on one slice at a time
  5. The Customer is Smart, Well-Informed & In-Control: re-frame the conversation based on insights.
  6. It's Becoming a Woman's World: think feminine,while staying safe for me.  The Dyson vacuum cleaner cleans OK but reminds men of the robots of their youth.
  7. Media are Personal: 'nuff said.
  8. The Time is Now:  people pay us to make choices and we're human, so we're likely wrong sometimes.  As Seth Godin would say: Ship the product.
  9. It's a Matrix Out There: There are very few degrees of separation between anyone.  Social networks make it possible to reach out and touch anyone.
  10. Motivated People Win: 'bring your own growth' ties it back to #1

Friday, November 09, 2012

Strategy Development for Different Markets

What's your strategy for your strategy?

A recent article in Boston Consulting Group's "perspective" categorized strategy according to two dimensions.
  • Predictability - how well you can glean foresight from the crystal ball.  Household Products and Beverages predictable.  Transportation Infrastructure and Marine are unpredictable environments.
  • Malleability - how well you (and your competitors) can change the rules of the game.  Tobacco and Office Electronics are well structured, defined spaces.  In comparison, Health Care, Food Products, and Diversified Consumer Products can be invented as we go.
The intersection of these two dimensions creates four all good consultants do.
  1. Classical:  Predictable; but can't change it -- so it is about managing resources
  2. Adaptive:  Unpredictable; and still can't change it -- so agility is key
  3. Shaping: Unpredictable, but can change it -- so influence it and occupy a sweet spot
  4. Visionary: Predictable; and you can change it --so be bold and create a market
It is interesting to note where some of the industries I work with sit in this matrix.
  • Internet & Catalog Retailing:  completely unpredictable, but reasonably malleable (shape)
  • Media: a little more predictable and malleable (visionary)
  • Food & Staples Retailing: quite predictable and a little less malleable (visionary)
  • Internet Software & Services: unpredictable and malleable (shape)
So, marketing in these spaces means a) we can (should) change the future and b)we need to balance the risks associated with unpredictable AND predictable industries.   

The intersection could be quite interesting to invent.

Tuesday, November 06, 2012

Evolution of Brand, Digital Marketing

Where do brand and digital marketers meet?

Not only is the sales funnel not really a funnel anymore, but the process by which we do things has flipped around.  In the days of costly distribution channels, analog content, and limited consumer choices we needed to Plan > Execute > Track.   Today, digital interaction means we have to change things up.  The idea behind agile marketing is: Execute > Track > Adapt.

A three-part series by Simon Ward of Ayzenberg outlines the agile marketing side of the equation focusing on the intersection of brand (long term) and digital (short term) marketing. 

A collaborative relationship between brand managers and digital marketers begins with addressing key questions:
  • Where should brand management and digital marketing meet?
  • Can marketing activity creation, approval, and implementation get more efficient and effective?
  • How can digital marketers see brand management systems as a help and not a hindrance?
  • How can brand managers strike the right balance between brand guidance and control and the marketer's freedom to iterate, innovate, and implement more effectively?
  • How can brand managers "get" digital?
As an example of the new world order:
"Heineken CMO Lesya Lysyj recently referred to their real-time marketing. She said, "We use Facebook as a research platform…we just put stuff out there and learn from the response.""
That learning has to come from leveraging the underlying data.  And to borrow a line from another article "Effective measurement and analysis are the keys to making money in {your} industry." 

Capturing, analyzing, and acting on relevant data to optimize the customer experience and increase online revenue is easier said than done. Here are some important questions to ask:
  • How can you capture real-time data based on user engagement and use them to build personalized experiences that take into account user context?
  • How do you determine which data points provide the most accurate picture of the way users are consuming your media content across all channels and touch points?
  • How do you integrate data from multiple .. systems in a way that allows you to draw connections between disparate customer experiences?
  • When is the collection and use of personal data useful for consumers, and when is it an invasion of privacy?
It seems that those digital questions are very brand oriented. 

In the future there will just be marketers.

Monday, November 05, 2012

Marketing Behavioral Targeting Like Botox

What can on line marketers learn from injections?

Brands based on innovation often result in a good guy, bad guy debate as a result of trying to resolve the contradictions inherent in nature vs. technology.  "Cell phones keep me in contact" vs. "Cell phones cause cancer."

To develop this thinking further, Botox was this subject of a recent article in the Journal of Marketing focused on the evolution of the brand in light of doppelganger, or contrarian, imagery. The lessons learned could apply to not only brands buy whole categories as well, like "behavioral targeting". 

According to the study, four different contradictions emerged thru the first decade of the brand's life.  On the one side was the brand promise; on the other was the opposing view raised by critics. 
  1. Pleasurable Play vs. Poison
  2. Miracle of Medicine vs. Frozen Face
  3. Expression Enabler vs. Frankenstein
  4. Performance  Booster vs. Junkie
The last brand image reported, "Weapon of Liberation", had yet to have a strong counter point. At each stage, the brand evolved its position to combat the negative position.

The author recommends four steps to address such conflicts that can be applied from either side of the fence:
  1. Write a story line that puts the normally ambiguous nature-technology relationship into sharp focus. We need to make the brand indispensable in our lives, not an abstract thing.
  2. Establish authority to validate the position with 'socially sanctified' sources that are difficult to challenge be they facts and figures or authority figures.
  3. Demonstrate the brand value thru a network of sponsors with concrete consumer experiences such as testimonials and credentials.
  4. Spread the word, i.e. advertise, publish, encourage conversations and sharing.
With behavioral targeting, and the broader issue of consumer tracking, it is easy to see the same kind of nature-technology contradiction:   Help me find something vs. Spying.

From a brand perspective, the Botox lessons are clear for the marketing of behavioral targeting.
  1. Take a strong stand: it is good for your well-being, makes life easier, or saves time.
  2. Get someone we already trust to back up the position (saying 'self-regulation' won't cut it, nor will saying it creates jobs.)
  3. Focus on successful consumer use cases (a better ROI for the advertiser isn't the answer).
  4. Find a way to make it sharable and engaging:  "How it helped me...."
 And get ready to inject new life into the evolving saga as the critics take the same advice.

Wednesday, October 31, 2012

Promotional Offers as Brand Icons

How should we think about offers?

A colleague recently wrote a good piece that describes with facts and figures the evolution of the consumer into a "Value Shopper".  This goes along with the idea of Dealer Chic, one of trendwatching's Trends for 2012.

The discussion around promotions is typically about short term effects such as incremental sales or margin erosion.   But if consumer psyche has shifted to deal hunting and the smart use of money then the offer is no longer just a temporary inducement but rather a part of something new and different.

This shift raises questions that at first appear to be odd and out of place.
  • How do coupons support our brand promise?
  • How do offers support the reason to believe?
  • How do we leverage promotional content to build loyalty?
Offers may in fact be addictive.   When asked, consumers are often quite willing to have their personal information used for "deals, freebies or offers in the future".  This sacrifice of anonymity allows for a relationship to be built and again that is brand territory.

So, it seems that merchandising tactics merged with marketing strategy, and we might not have even noticed.

To paraphrase Prince Hamlet, 'the offer's the thing.'

Tuesday, October 30, 2012

Segmentation and The Joy of X

Just what are trying to figure out with all this data?

"The right abstraction leads to new insight, and new power."

This idea is in the beginning of "The Joy of X" - a guided tour of math from one to infinity.  It is made in the context of explaining that addition is the creative shortcut for counting by anything.

In marketing we are inundated with talk about garnering insights from the data being collected, but rarely do we hear about the abstraction or problem side of things. So, before we go digging around in the dirty data, it might help to define a shortcut marketing is looking for based on two perennial challenges.

  1. Efficient and effective allocation of scarce resources
  2. Aligning solutions and needs to the mutual benefit of consumer and company
Segmentation represents the most powerful level of marketing abstraction that works in both areas. By transcending the peculiarities of individuals, segments scale easily and quickly.  By recognizing differences it eliminates the potential waste of broadcasting.

As a definition, a market segment is a desirable set of homogeneous entities that can be communicated with efficiently.  Notice, I didn't say consumers since we can segment web visits, digital promotion sessions, distribution routes, etc. as well for marketing purposes.   This point is quite important in the digital realm where consumers are and often wish to be anonymous.  In fact, segments offer a basis of recognition when integrating offline behavior and online activity.

The job of segmentation requires a thorough understanding of the business and data realms. Segmentation approaches can be...
  • strategic thru the use of descriptive attributes or tactical based on behavior, or better yet, the combination of the two.
  • focused on a business outcome, e.g. sales or conversion, or discovered based on natural combinations attributes, eg. technology adopters or "pets are my children".
  • static where migration between segments is important or dynamic in cases where group behavior is likely to change rapidly

And there is no reason why there should only be one segmentation scheme.  In fact, most companies view consumers in a set of different lights. Nor do they have to be exhaustive, there are always some outliers - it is okay to ignore them.

So, before trolling in the data exhaust for that single nugget start with understanding what segments might be found and assess whether they're likely to respond to marketing. 

Friday, October 26, 2012

Brand Fans: Anonymous or Revealed?

Should a brand reveal its fans?

Continuing the theme of the impact of communal content on consumer perceptions, recent research from the Journal of Marketing looked at the question above. The study looked at whether the demographics implied by pictures of supporters influenced purchase intent and related brand metrics.

The answer depends on the overlap between our target market and our fan base. 

Here are the two summary points:
  • Reveal the identity when the  profiles are similar to your target audience.
  • Maintain ambiguity when the fan base is different than your target audience.
The research makes more nuanced recommendations, but it seems that 'birds of a feather' and inclusion works: if people like me support a brand, then my perception rises.  Conversely, if I sense either a different or very mixed audience then my perceptions may be dampened. 

This thought clearly has implications when a brand is running contests or extending into new demographic markets.   For the latter we'd likely want to run a targeted acquisition program to enlist support from the new demographic group first.

So, what can we do to determine whether the groups overlap?
  1. Augment our customers and CRM data with both social and demographic indicators.  Three key social metrics are presence, engagement with the category, and influence.
  2. Ask your supporters for permission to look at their interests and profile.
  3. Develop two personae or detailed profiles, one for each group, and then determine the degree to which they overlap.
Not only will this approach help with the tactical question about identity, it might reveal some other useful insights about the brand promise and whether the target matches reality.

Wednesday, October 24, 2012

Two Perspectives of the Purchase Pretzel

Just what is a 360-degree view of the consumer?

The shopping journey is now best described as a "Purchase Pretzel" a term used by Jessica Angell, head of marketing for PayPal's Media Network at the recent DMA conference. In the smart phone era there is no reason to believe in an orderly or linear progression from awareness to advocacy.  It all kind of happens simultaneously, or at least in a circle, especially in retail.  And since my interactions are likely different than yours the result for marketers is a bag of pretzels. 

So, how to make sense of it?

We often talk about the desire to have a 360-degree view of the customer. Most often this is relationship to the interactions with a brand or retailer along the path to purchase. There is also the broader view of 360-degrees that looks at the consumer, rather than customer, in terms of shopper marketing - across the space top to bottom trying to understand how she comes to a decision.   Consider one view 'horizontal' and one 'vertical'.

The retail shopping experience is often depicted as a timeline, or horizontal activity.   And in this case we want to remove the impediments to purchase, i.e. reduce transactional friction.   To achieve that we tend to focus on the identification of the individual in order to serve the appropriate content to satisfy the needs as we see them.  This is the genesis of 1:1, CRM and other personally addressable programs. 

Yet, if we look at the world from the consumer's needs, there are a multitude of options that she could choose, including doing nothing.  So a publisher or media company might take an informational approach and ensure interesting content, of all types, is available where she might turn. In this world, we don't know the consumer, and probably won't since they tend to prefer anonymity until a relationship is established.  In fact the vagaries of digital technology means we're dealing with what can only be described as guessable media.  Thus, we need to recognize segments of behavior - a staple of behavioral targeting and ecommerce optimization.

The new marketing opportunities come from connecting the two views.  To do so we need to marry identification with recognition and develop the means to traverse two different sets of operating guidelines.  

For identification purposes, the email address is the leading candidate to work with. It satisfies not only the identification issue but also fits well with campaign objectives because the consumer has opted in for something.  However, we need to think not only in terms of communication, but also what can be linked to the email.   From social influence to web visits to ad impressions the digital landscape is full of potentially valuable information for use in 'relationship targeting' (a term Responsys focused on in their view of New School Marketing.)

For segmentation purposes, each visitor, visit or session needs to be classified according to a set of common dimensions that can be deployed across various properties and networks.   Those dimensions are apt to focus on the likelihood of the visitor trying to achieve some task, e.g. research, browse, buy, etc.  Once we have a handle on their intent we can think about what to serve.   Mapping segments to offers is old hat for the CRM crowd, the difference here is that they are aligned based solely on propensity rather than identify. 

By combining the two disciplines we can at least attempt to follow the logic of the pretzel as we link offline sales with online activity.

Tuesday, October 23, 2012

Changes in Retail Marketing

Where is retail headed?

The folks over at Retail Systems Research (RSR) recently summarized a conference focused on the next generation of retailing.  The key take-away is the blurring of what is retailing, or marketing in general, and what is technology.   With the smart phone now the de facto decision support platform, shopping has a decidedly cyborg nature to it.

The article lists 16 different themes in the emerging storyline.   Some that caught my attention:
  1. "Consumers don't 'see channels" - the sooner we stop thinking in terms of channels (multi-, cross- or omni-) the better.   The appropriate device, channel combination will be determined by the consumer, the context and the intent at the moment.
  2. "retailers need to understand the path to purchase" - given the interactive nature of digital, the path is only evident in the rear view mirror.   The implication is that we have to design programs that provide different types of content at different times.  Thus, we're moving from 1:1 to Many:One communication planning to cover pre-to-post shopping.  
  3. "Big Data is often 'dirty', and ...  more exploratory in nature ('tell me something I didn’t know before')" - suggests a complete rethinking the role (and funding) of analysis functions.   For the advanced companies, it will be just like a phone system.  You don't ask what the ROI of making phone calls, do you?
 The rest is also worth a read....particularly around transparency and the social aspects of shopping.

Wednesday, October 17, 2012

Guidelines for Developing a Big Data Strategy

Where should we begin?

Yesterday the DMA was bookended by two well-attended sessions on Big Data.   In the morning Bruce Biegel of Winterberry Group covered the flow of ad spend and the trends they are seeing.  In afternoon Yahoo and Acxiom collaborated on a discussion of linking display ads to offline sales.  In combination they provide some structure for developing a big data strategy for marketing.

An organization must address the following areas.

  1. Use Cases: defining your area of focus within the marketing landscape helps not only navigate and prioritize the business requirements but also highlights organizational alignment challenges.   Calculating ROI via cross-channel attribution in order to make media mix decisions to reach audiences based on their behavior in real-time while staying compliant needs a fresh perspective. 
  2. Acceptable Use:  the most critical step is to articulate the boundaries of permission, tolerance, risk and privacy by each combination of channel and audience.   Three distinct lenses need to be applied to each area - consumer, marketer, and publisher.   For some use cases safe harbor functions need to be created and probably from scratch since firms aren't typically organized across such large gulfs. Communication of your intentions must be transparent along with sufficient choice mechanisms given to each of the other parties in the system.  
  3. Integration: the alignment of anonymous behavior with personally identifiable information requires a new way of thinking about data structures, management and analysis that is neither digital nor direct to consumer focused.   The current key to linking sales and activity is the email address since it satisfies both requirements marketers have - recognition and activation.   The data architecture must start from a much higher level than any delivery mechanisms used today as well as cover new forms of content that typically were beyond the remit of the data team.
For example, while the idea of replicating direct mail online sounds simple the governance and integration issues are vastly different.

Still a good time to be a marketing technologist.  

Tuesday, October 16, 2012

Styles of Campaign Management Platforms

How should we approach campaign planning?

Here at the DMA I watched three vendors address the same retail campaign scenario - use multiple channels to invite customers to an event, follow-up and track their responses.  At one level the pltatforms are very much the same.   They use templates, flow charts, and allow for a variety of data integrations.    What struck me though was the underlying philosophies of these companies as well as those in the exhibit hall.

First, some grew via acquisition while others grew internally.   This is similar to the HR policy of hire the best talent or promote from within.   Neither approach is inherently good or bad, but they do indicate the kind of relationship and challenges you will have with any integration.  With the acquisition path the portfolio will likely have the functionality but integration may only be perceptual.  With home grown, what you see is what you get and it will be tightly linked to one point of view; often the vision of the founder.   Early adopters and risk takers may prefer the lateral thinking of the horizontal tools.   Those looking for consistency and less technical risk may like the vertical stack.

Second, there are two philosophies circulating as to how to build a campaign.  In one camp are the "build to rules" platforms.   In essence these allow someone to implement what others have decided.   In the other camp are the "explore to build" platforms that provide the marketer with the ability to take action directly as part of the planning process.   This functionality comes from the genesis of these tools - they were analysis platforms first.  

Both of these differences impact the adoption of campaign management within an organization because they tie directly to the skills, roles and responsibilities of the user community.

So, what are we trying to accomplish and what we will empower the team to do?

Monday, October 15, 2012

DMA 2012 Overview

What's in store this year in Las Vegas?

The tag line for the 3-day annual conference is: big data, customer engagement and marketing accountability. The nine tracks give a sense of how the direct marketing association views the world. Here's a snapshot of the sessions starting today.
  • Aquisition and Lead Generation - although in this day and age where consumers have more control the idea that we are "leads" doesn't seem to strike the right balance.
  • Brand Content and Social Marketing - still unchartered territory for most of us, particularly in terms of connecting all the dots.
  • Creative and Production - a focus on both the online and offline worlds to ensure a consistent and seamless message.
  • Cross-channel Strategy - asking us to rethink the design of campaigns in the light of channel blur.
  • Data, Measurement and Attribution - focused on the changing velocity, volume and variety of data. Hope the sessions shed light on dark data.
  • Direct and Digital Fundamentals - it wasn't too long ago that the DMA had the Interactive Pavillion in a separate hall on the other side of a dark tunnel in San Francisco. Glad to seem them merge.
  • Connected Customer Straregy - all things mobile. As the new, personal decision support platform the path to purchase is getting interesting.
  • Real-time and Triggered Marketing - clearly need to rethink the role and place for analytics. No longer are they projects done by the folks in the back room; they embedded into marketing operations.
  • Retention and Loyalty - given that 40-70% of customers never repeat this topic should foster loyalty among attendees.
Looking forward to learning what others are thinking. I'll be posting more throughout the conference.

Wednesday, October 10, 2012

The Evolution of Marketing Channels

Where does a channel lead us?

At one time channels were divided between sales channels, e.g. brick 'n mortar, catalog, and ecommerce, and marketing channels, e.g. email, direct mail, advertising, and search.  Over the years the term 'channel' has taken a lot of twists and turns as it has coursed its way through the marketing landscape.  The evolution has gone thru several stages.
  • Channel: when used in the singular it refers to an isolated, uncoordinated communication; the term eblast or catalog sales sums up this thinking.
  • Multichannel: implies the coordinated publication of a message to reach consumers through several individual channels; the use of preferences reflects this period as does varying assortment by outlet.
  • Cross-Channel: refers to a sequence of integrated messages delivered based on a single view of the consumer and her journey; understanding the path-to-purchase is characteristic of this era.
  • Omnichannel: exists when both marketing and buying platforms each have not only awareness of the others but are in fact hard-wired together; this is the future and a hot topic of discussion in the retail conference world.
In their Retailing: 2020 report PwC describes one characteristic of omnichannel marketing as the notion that consumers are channel-agnostic.  While directionally correct, it misses the larger point - consumers don't think in terms of 'channels' at all. What they want is a frictionless (and enjoyable) experience commensurate with their own expectations where information flows and transactions happen seamlessly.

Because of this blurring, the sooner we demote "channel" to a minor, technical decision based on consumer intent and context the better.   As a marketing term it is past its sell-by date. 

Tuesday, October 09, 2012

Four Opportunities to Leverage Data

Why is the interest in leveraging data rising so quickly?

Marketing is awash with a deluge of dark data and needs to figure out how to utilize it.

Yet data-driven marketing isn't new.   In fact its been around for decades ever since we used shoe boxes of customer records, profiled postal areas with census data or looked at bi-monthy audits of sales data.  But the interest in 'big data' took off in the last twelve months as reflected in search traffic on Google Trends.

"Three technology trends — media fragmentation, addressability, and interactivity — are converging on the world of marketing and advertising. .... analytical strategies grounded in deep audience knowledge will rise to predominance."

That was written in a Forrester report entitled "Left Brain Marketing" back in 2004.  Based on newsletters, conferences and posts it appears that convergence is accelerating.  And that change in pace is likely because digital technology has reached critical mass - not to mention having a simple moniker that sounds cool. "Big Data" has a ring to it and conjures up the kinds of imagery that technology marketers just love to leverage.

From a marketing perspective, digital technology...
  • moves the decision point about what to deliver to late in the planning cycle because things can be assembled based on business rules utilizing a portfolio of assets.  Content can now be seamlessly repurposed to create new packages that are served to consumers.  Social aggregation strategies like Flipboard and are new forms in the delivery of personalized content.  For a synopsis of twitter see the "The Brand Strategy". 
  • changes our thinking from Plan - Execute - Track to a world of Execute - Track - Adjust based on refining rules. The emergence of trading desks and real-time-bidding in the digital advertising world exemplify this shift.  An unintended consequence of real time is the increased reliance (not to mention relevancy) of using first-party data as opposed to traditional third-party data which has a natural lag time associated with it. 
  • represents a major environment for the consumption of information.  From smart phones to ipTV the delivery platform is addressable.  Thus, the power of targeting will extend to formerly broadcast or published media.
  • leaves breadcrumbs that need to be handled differently. The volume, velocity and variety of data is so different than traditional marketing data that it requires a regime change in thinking.   Aggregated and anonymous behavior of segments is a better approach than trying to guess at the identity of a consumer.  And the use of personal information in targeting is likely a non-starter for most companies.
What is truly different however is that marketing now owns the processes that spawn 'big data'.  In the past data were borrowed from other areas of the businesses or licensed from suppliers and thus provided a supporting role to 'solving needs profitability.'   The rise of digital marketing changed all that.   We now generate our own data and thus are responsible for figuring what it means and what to do with it.  There is no curtain to hide behind anymore.

So, where are the opportunities?

In a recent white paper Winterberry Group (reg required) explored four avenues.
  • Audience Optimization - identifying who is (could be) interested and reaching out to them appropriately
  • Channel Optimization - leveraging the touch points along the path-to-purchase to reduce friction
  • Advertising Yield Optimization - maximizing value of inventory thru identification and alignment with high-value audiences
  • Targeted Media Buying - purchasing media based on common interests and implicit/explicit behavior 
Since those topics can be viewed as variations on the same theme, the insights need to be drawn from a collective, holistic point of view.

Monday, October 08, 2012

Using Mobile to Pay for Parking

Is there an app for that?

My colleague Brady Murphy at TC Media recently did a webinar on our solution for using mobile technology to pay for parking in Montreal, Canada.

Key learning:
  • Adoption driven by iTunes, QR and SMS in that order
  • Be ready for feedback (positive and negative)
  • User Experience compliant with PCI (credit card) is a must
  • Avg. Revenue per User unlocks support and further investment
  • Use push messaging to improve consumer experience

The PSA for Stationnement de Montreal is from YouTube.

Using Lenses to Segment

How can we align segmentation with the business view of customers?

We know that segmentation, targeting and personalization are the right thing to do - well most of the time anyway.  And we know that this logic can ultimately lead us to potentially segments of one.  And we know all too well that we can't manage the business at that level.  So, where do we start along the path of segmentation?

In marketing 101 we should have learned that a segment is simply a group of consumers with common needs who can be reached efficiently via marketing tactics.  And if we make the assumption that behavior is a reasonable substitute for needs then we can leverage purchase history (or digital breadcrumbs) as the basis for segmentation.

Now comes the challenge of sorting that data into useful buckets in order to fuel the targeting of campaigns as well as understanding their impact.   A good place to start is to identify the ways the business currently views customers and use these lenses as the basis for straight-forward segmentation.

Here are some typical ways a business could look at a consumer:

    •    Value and transaction history
    •    Product and category usage
    •    Interaction and engagement

Each of these lenses reflect two separate dimensions resulting in a classic 2*2 matrix that is easy to explain. For example, the Value - History pair results in a variant of RFM segmentation (recency, frequency, monetary) and it looks like the following:

In this example, the break points are typically the average/median values for each metric, i.e. above and below the average spend plotted against above and below the avg. number of orders.  We typically trim the outliers so as not to skew the results too much. 

The "Best" customers spend more and shop more frequently whereas the "Uncertain" are literally that - too few transactions and too little revenue to know where they are heading.  While sounding a bit like "duh" it is amazing that few companies actually design their campaign tactics around the simple economic value of their customers.  

For the second lens of Product and Category usage, the variables might be the number of categories shopped vs. the number of individual products bought per visit.

    •    Multi-category:  high categories, high products
    •    Cherry Picker: high categories, low products
    •    Intensive Buy: low categories, high products
    •    Top Up Staples: low categories, low products 

And the list can go on.  

A set of simple segmentation schemes that cover the basic business points of view can result in a large number of potential segments.   A recent project using a similar approach using four different stakeholder views resulted in 256 possible ways that a consumer could be classified.  In this case, that was plenty of variations to drive the initial communication blueprint and creative needs for starting a 1:1 program.

A "Frequent - Cherry Picker" would likely get different offers, incentives than a "Spender - Top Up Staples".

Thursday, October 04, 2012

Understanding the Customer Journey

Why are analytics important?
For merchandising and channel operations, a transaction is the end goal - either the purchase or delivery of products, or the sale of products.
For marketing, the transaction is where their work begins.
The above quote came from a recent research report among retailer marketing executives conducted by RSR and highlights why marketing is a different breed of animal.  Marketers are paid to change history, or at least improving the odds of a consumer choosing the products they're charged with growing. 

As such, marketers are in the business of influence.  And to do that they must understand how consumers come to buy a product or service in the first place.  Today's shopping experience consists of a myriad of ways and places that might lead a consumer along a path-to-purchase.  And those paths are probably very different across the major marketing campaign objectives.
  • Acquire: how do people become aware and put us in the consideration set?
  • Retain: what convinces them to stay with a brand?
  • Migrate: why are they willing to give us a larger share of wallet?
  • Convert: at what point do they consider themselves loyal?  how do they show their loyalty?
  • Win Back: given they have a history with a brand, what entices them to return?
In a digital world where everything is interactive, all of the above happens pretty much haphazardly.  In fact, the path-to-purchase is only evident in hindsight via the breadcrumbs consumers leave behind. 

To provide structure to this fragmented landscape, it is helpful to think about four specific things a marketer can leverage.
  • Touch Points - where along the path-to-purchase is the decision made?
  • Content - is it brand stories or promotional offers that trigger the decision?
  • History - how does previous experience with the brand change the way decisions are made?
  • Social - what role does influence and self-expression have on the decision?
These questions are precisely the kind of things analysts get excited about.  We are adept at breaking complex things like the consumer journey into composite parts in order to understand them.

Because, if we understand we can influence.

Friday, September 28, 2012

Football Metrics and Marketing KPIs

What's wrong with ranking on simple metrics?

A common way to rank things is based on a straightforward metric.  For example, football teams are ranked on their total, offensive and defensive performance.   Consider the Tampa Bay Buccaneers; they are currently ranked 1st in the NFL in terms of being the stingiest defense based on the yards allowed per game - a measly 47 yards per game or about 2 feet per minute played. 

Are they that good or is that the result of something else? 

In contrast, when viewed in terms of pass defense they rank dead last giving up more yards per game than any other team.  This ranking in turn comes from two contributing factors: the opposition completes both longer plays and a higher percentage of attempts.  The result is 353 yards given up by passing.

So, could it be that they are ranked so well in terms of rush defense simply because other teams know they can be successful passing the ball?  It turns out that opponents run the ball 32% of the time (5th lowest). So, yes the numbers are skewed based on the distribution of the events themselves.  They have good run defense metrics in part because teams don't run the ball.

We tend to like simple numbers, but they can be hiding something important or possibly misleading.  Consider typical marketing metrics:
  • Conversion rate
  • Response rate
  • Attribution
  • Market share
All are highly summarized metrics, just like 'yards per game' that attempt to roll up the details into a comparable key performance indicator.  Thus, they all run the risk of hiding the important insights; and it is the insights that drives changes in marketing plans.

The trick to communicating insights is to find the right way to present the information; and that usually comes in story book form.

And by the way, Tampa Bay does give up the fewest yards per attempt in the league so they may be that good. 

UPDATE: Stats found here

10 Different Kinds of Shopping Trips

Why do we go shopping?

A recent white paper by Jim Barnes of BMAI Strategy describes 10 different scenarios for shopping at the mall, each with different goals.
  1. Recreational: where the outing and entertainment choices are what's important
  2. Purposive: planned and with a goal in mind to buy something specific
  3. Social: spending time with others is more important than actually buying things
  4. Reconnaissance: looking for inspiration or 'what's new'
  5. As a Treat: driven by a mood and desire to reward oneself
  6. As a Quest: looking for a 'great find' is the end result
  7. As Entertainment: people watching and window shopping
  8. Word-of-Mouth: following up directly on the advice of others
  9. Event-Based: a subset of 'purposive trips' where an occasion drives the search and purchase
  10. "Going-to-the-Mall": the place itself is the attraction.  Like Starbucks, it is the "third place"
Many of these types also relate to individual retail stores and on-line shopping.  And in all cases the information needs of the consumer are very different. As a result a mix or blend of content is required to help them decide.  For those trips where transacting is actually the goal some are emotional (Reward) and some are promotional (Quest) while others are informational (Purposive) or communal (Word-of-Mouth).

So in addition to thinking about channel and device as part of our communication blueprint we need to look how we can serve the right blend of content in these situations.   And yes, we have to figure out intent and context first.

Thursday, September 27, 2012

Marketing Ecosystem: Direct-to-consumer

What does the landscape look like?

The marketing landscape is cluttered.  Just look at any of the Lumascape diagrams (here is their one for social) and we're astounded by the sheer numbers of players involved and thus the complexity of it all.   A spate or recent discussions about partnerships, competition, positioning, and offerings all led for the need to put some sort of structure together that covered the major types of players as well as their respective offerings as it relates to direct-to-consumer marketing.  

Here's a synopsis of where we ended up...

The offerings were divided into consulting versus implementation and the players were allocated to one of four types.
  • Management Consulting - focused on crafting unique solutions based on a practice
  • Business Consulting - delivering the infrastructure, including organizational, to execute
  • Agency, Boutique Firms - charged with taking a brief and transforming it into campaigns
  • Platform Providers - providing the execution and tracking tools
Now it is clear that a given company may span up and over in order to grow and increase its own value proposition, e.g. enterprise platforms adding professional services.  And it is likely that start-ups will look at one of the deliverables from a fresh perspective as a way to define their white space. 

The implication is one needs to understand the core business itself when looking at a company from the outside, either as a potential client or a competitor/partner.  Depending on the frame of reference, there will be trade-offs and distinctive points-of-view.   Certain options provide unique or exclusive solutions while others provide economies of scale.  

There are a few dimensions missing from this view, maybe another post...

Wednesday, September 26, 2012

More Cowbell is Not the Answer

Is the best way to understand consumers to collect more data?

The idea for this came from note sent by a colleague who spoke at the CMA "Evolution of Direct Marketing Conference" this week.  The closing keynote was on the future of marketing where the answer is not more data, but rather the algorithm.  Alex Leavitt talked about the need to tell stories with data so what you do with it, and how, is more important than the amount of data on hand.

The digital world leaves an unimaginable amount of breadcrumbs that we should try to use to infer intent and context in order to improve consumer engagement.   Yet the vast majority is what can be considered "dark data" - we know its out there but have no idea where or how to use it.   So maybe we should be asking ourselves some qualifying questions first:
  • Where along the journey are we likely to have the most impact?
  • What decisions can we operationalize and embed in the appropriate touch points?
  • What do we need to know as opposed to what could we know?

To contradict Christopher Walken in the famous SNL skit the prescription isn't more cowbell (data).


Monday, September 24, 2012

Targeting vs. Personalization

What is the difference between targeting and personalization?

Last week we got into a discussion over whether the mantra of CRM - right person, right channel, right time, etc. - was a question of targeting or one of personalization.  It is clear both ideas resonate in any consumer-centric marketing:   What do they actually mean?   Here's where I netted out:
  • Personalization - the use of content that the consumer should recognize as 'hers'.   This runs the gamut from contact information and preferences to product purchase history.   It is a subset of the whole idea of customization that includes selection of content that she might not recognize as hers, e.g. up-sell opportunities. 
  • Targeting - the identification of a group, and that includes the idea of a group of one, that should be managed and addresses as a single entity.  It offers the ability to alter the content delivered while still maintaining the ability to scale the solution.  In short, this is what one does with segmentation. 
Personalization is about content; targeting is about selection.

Now implementing either or both personalization and targeting requires an increase in dedicated resources to figure it out and implement.  So, it is still a matter of analysis as to whether or not this produces sufficient return on investment to warrant the costs involved.  

Wednesday, September 19, 2012

Customer Strategy - Get Emotional

Where should the emphasis be in the planning cycle?

Yesterday Jim Barnes, author of Build Your Customer Strategy, came around after a customer advisory event to share his thoughts.  His emphasis on understanding the emotional reason for shopping as well as the mechanics of developing a marketing plan was a good reminder to remember what marketing is all about - satisfying needs to everyone's mutual benefit.

His three oxymoron points were also worth a note or two.
  1. Planned Spontaneity - the idea is to recognize a consumer problem that she doesn't know she has and then solve it.  Customer service stories abound around this topic but there is merit in thinking about how intermittent reinforcement as a strong motivator actually transforms into word-of-mouth.  We tell everybody about these events.
  2. Future Memories - this is often the real reason we buy, particularly when it comes to disposable income.   That $50 jar of squid ink wasn't just used to make fresh pasta with octopus, it was for a dinner party with friends. 
  3. Proactive Hindsight - by understanding what a consumer will think about after the purchase we can orchestrate the present help to avoid bad decisions.  This often involves providing advice and guidance as much as a product, e.g. financial services.
 In the end, it is about understanding context.

Monday, September 17, 2012

The Marketing of Beef

How does muscle become marketable meat?

In "The Art of Living According to Joe Beef: A cookbook of sorts" the owner relays a story about beef.  The restaurant is proud to serve local products and when their 'Alberta Beef' is revealed as Australian heads role.  While a good restaurant story, a key question emerges from a marketing perspective:  How did Australian beef go from obscurity to being served as a unique product at one of Montreal's best restaurants?

In the last century, beef, as a category, has gone from the tragic world of Upton Sinclair's The Jungle to specialty breeds like wagyu that command a significant price premium. This journey started as a means of protecting consumers when the US passed the Meat Inspection Act over 100 years ago.

Today, the processing of the muscle into meat has to meet minimum requirements which includes on-site inspectors and voluntary grading. The high fixed cost of inspection and the creation of minimum standards has led to an industry focused on supply chain and cost efficiency as a means of producing as much acceptable beef as possible.  There has been little in the way of differentiation until recently with the rise of ranch brands - often based on how the cattle are treated and fed rather than the meat itself.

Australia took another path to market.  While they have stringent quality control, they also focus a lot on consumer preferences.  In fact they have an Eating Quality Assurance program that strives to understand what consumers want to experience when eating meat.  An ethereal quality like tenderness can't be reduced to a formula based on age and marbling (although it can be measured by sheer force).  The other preferences they focus on include juiciness, flavor and overall liking.  

It is likely that it is consumer focus (and its 1,000,000 interviews) more than hard rules that has helped Australia become a major exporter of beef.

Wednesday, September 12, 2012

The Impact of Other Online Reviews on our Own

Do online product ratings reflect only our own experience?

As social creatures, online reviews and recommendations certainly influence our decisions.  Recent research in the Journal of Marketing goes beyond confirming that "what we read shapes what we write" to focus on the interaction between existing reviews and our own rating of a product experience.   Using a highly-rated category - hotels - the authors identified scenarios where we might increase our rating and ones when we might decrease them.

So, imagine the product has a positive rating and you go to write yours.   Here is what is likely to happen based on your experience:

Thus, it appears that social influence of existing reviews mitigates or accentuates our own ratings creating a self-adapting system.   The implication is that we need to understand the context in which the rating was given and act accordingly.   Clearly we should reach out in the event of bad experiences; it has a good chance of correcting overly strong reactions while at the same time building goodwill.

The surprise is that we should be communicating with those who are positive - because their desire to use self-expression to be unique can bring down our rating.

Our contribution to communal content is just that, a reflection of the community.

Paper is entitled: Social Influence Effects in Online Product Ratings by Sridhar and Srinivasan

Tuesday, September 11, 2012

What CMOs Should Learn from Chefs

What chef-like attributes are worth adopting?

First, just like launching new products restaurants may be one of the hardest markets to exist in.  The urban myths are that 90% of restaurants and 80% of new products fail. The reality is that the success rate in both categories is well above 50% for the first year.  So while the odds of success are longer than those in Las Vegas, they are still worthy pursuits and quite possibly have things in common. 

There seems to be a common set of characteristics that chefs bring to the table...
  • Clarity and focus - the passion, single mindedness and very often the standards are what makes them leaders.  
    • This is no different than insisting on a clear, crisp brand promise.
  • Consistency - eating is a ritual, we come back for the memories, we don't want to be rudely shocked and have to reevaluate our choice.  
    • This is no different than guaranteeing a consistent message and experience along the shopping journey. 
  • Customer satisfaction - the best have a relentless goal of ensuring guests are enjoying themselves.  
    • This is no different than being the voice of the customer. 
Some of the most interesting thinking and inspiration (not to mention food) comes from those developing street food or running food trucks.  Here are two videos of chefs talking about their craft.
  • Richie Nakano of  Hapa Ramen talks about goal driven and focus based on the love of his craft.
  • Roy Choi of Kogi BBQ embodies the mixing of emotion into the product and exudes a passion for what he wants to eat.
What is clearly different is that this is very personal for the chef and possibly only a day job for the CMO.