Thursday, June 28, 2012

Creating Paths to Purchase

Do we follow a path to purchase?

No, we create one.

The path to purchase is actually not much of a well trodden path followed by people as it is the unique set of activities taken by an individual.  Given the interactive nature of the digital age, it is only a path when we look in the rear view mirror. 

From search to purchase to evangelism there are numerous stages and both Forrester and McKinsey have described the journey.   However, not all steps are necessarily involved.  I may or may not do feature comparison or price shopping, even though it seems rational to do so.  In fact if you can get me from discovery to purchase without the intervening steps so much the better.  

It is likely that if we documented the path a person takes it would make perfect sense to her and quite possibly to no one else.  This suggests:
  • Each potential activity merely has a probability of occurring rather than a certainty; our marketing plans must count on consumers skipping steps.
  • While the steps taken may be sequential in time; they have no order and do not adhere to a calendar.   I can research after I decide. 
  • The path doesn't really have a final destination as my recommendations can play a role long after disposal. 
So rather than a touch point being for a single purpose, it needs to support a variety of goals.   Figuring out someone's intent when they come to a stone in the path becomes the challenge.

If we are indeed creating paths, then the key planning questions for designing the content for a touch point seem to be: Why are you here now? Where have you been and where would you like to go?

Tuesday, June 26, 2012

Segmenting Like a Journalist

What can analysts learn from writing good stories?

Besides having a beginning, a middle and an end the basic tenets of journalism include addressing the key questions of Who, What, Where, When, Why and How.  A story isn't complete if any of these go unanswered.  The same can be said of segmentation schemes.   In the age of channel blur and interactivity we need to know more than the fundamental of who did what.  In fact, we need to know a whole lot more.  

The key questions from Journalism 101 serve as a good guide:
  • Who - this may in fact be a set of segment schemes rather than a specific individual; particularly in the digital realm.  Site visitors may be browsers or purchasers; customers may be loyal or not. 
  • What - while typically framed in terms of products, it can be categories or characteristics, e.g. sustainable or value-priced.
  • Where - the location of activity often provides insights into intent.  Consumption habits 'at home', 'at work' or 'on the move' form a basis of segmenting consumers but so does what sites, publications, messages were hosting the content served.   An informational product review site  could have very different influences on the speed and direction of the consumer journey than an aspirational magazine site. 
  • When - this is both temporal, e.g. hour of the day, but also can refer to life-stage changes and where the consumer is in their journey to a decision.
  • Why - this is likely the most difficult since there isn't explicit data relating to intent.  Things to think about: What is the individual trying to accomplish? Why are they consuming content or doing things?  Are they conducting research or are they seeking support?
  • How - content consumption habits by device is the final piece of the puzzle.  Which screen is involved for what purpose?
The goal of segmentation is to identify a homogenous group of people whose needs or behaviors are similar enough that we can satisfy or leverage them.  In classic segmentation schemes like RFM and path analysis we try to understand the behavior of people typically along two or three dimensions outlined above using existing data   The digital world continues to create new opportunities.  First, we need to think in the six dimensions of a consumer's journey.  Second, we must work more with clues, breadcrumbs and inference than deterministic facts.

The order in which the segments are implemented probably depends on the nature of the business, but the story isn't complete without them.

This suggests we hire journalists to develop personsae along with traditional database marketers for our digital teams.

Friday, June 22, 2012

Privacy Concerns Result from a Lack of Trust

Are we looking at things backwards?

In a recent discussion on privacy, PII and what we can/cannot do with data the question arose as to what would lead to a privacy issue in the first place.  There are reams of things written on the principles for dealing with privacy from data protection to permitted use to means of redress.   However less seems to be written of what could we do in the first place that is of value to the consumer that might be preventative.

Our roundtable led to the idea that privacy becomes an issue when we violate the trust consumers have placed with us when they shared information.   In his book Loyalty Leap Bryan Peterson, CEO of LoyaltyOne, makes the point that we give up information in hopes of a better relationship, experience, product or service.  In short, we entrust brands to make our lives better - violate that and the walls of privacy quickly rise up.

Since a brand is in the business of satisfying needs, the better job we do on that front the more likely we'll be trusted to do it in the future.  In this sense trust equates to a form of predictability.  When I know what I'm going to get the more willing I may be to share things that make it better or easier. The shroud of privacy arises when I don't know because I have no experience with a brand or our history is erratic and I simply want to protect myself from abuse. 

Trust results from a series of consistent experiences over time.  So rather than just discuss the constraints of consent, limited collection and openness we also need to discuss in the same meeting how information helps us help the consumer in order to minimize his defenses.  

Wednesday, June 20, 2012

Baking in Insights to Avoid Fatigue

Where is analysis headed?

The current trend among reporting and analysis tools is to build in more robust processes that handle the heavy lifting of analysis.   Adobe introduced a few ideas at the Adobe Summit earlier this year and a recent video on Google's Content Experimentation hints at something called "Market Insights".  

As with the democratization of any highly skilled function, this has implications on how we work.   In the past heavy-duty analysis was done in the backroom by the propeller heads, and I've done my fair share so that isn't an insult.   In that scenario a fair amount of time was spent on explaining the data and the process itself.  When it is baked in that all disappears and we're left naked asking the question:  What do we do now?

Well first, we have to pay attention since we're now looking at what is vs. what should or could be.   It is that gap that generates action.  

This trend also may overcome the common issue of report fatigue that Gary Angel wrote about recently.   The reality:  Everybody wants reports, but nobody actually uses them.  The reason is simple; if things are running according to plan then there is no reason to look at them since they answer old questions with new data.  This is why KPIs represent a paradox: they are critical, but they don't change much.

One of the advantages of baking in insights, or at least deviations from expected patterns, is the chance to build alerts that notify us only when we need to pay attention.  And intermittent reinforcement is a much more powerful motivator than the weekly batch of sameness. 

While the purists may argue that 'modeling is an art', the benefits of baking the science in out weigh that one. 

Thursday, June 14, 2012

The Conundrum of Scaling Marketing

Why is driving growth the wrong CMO priority?

In  'the surprising math of cities and companies' on TED Geoffrey West wonders about why companies fail and cities survive.  He relates companies to patterns in the natural world where things grow fast for a while then slow down as they reach a plateau.   This occurs because of economies of scale; as we grow we need less resources to maintain ourselves and end up at a steady state.   The result is the s-curve of marketing 101.  While we think we can extend the growth stage by being good marketers, the reality is that there are limits to the size of the firm. 

While probably originally drawn on a napkin in a pub, the fates of 23,000 firms suggest that there is something fundamental going on here. And that is: companies, like mammals, have a scaling factor of less than one and therefore there is a finite limit to how big they can be.  Companies striving to be efficient will stop growing at some point. 

West goes on and shows that while a city's infrastructure scales the same way as biological systems certain aspects appear to scale at an ever increasing rates implied by networks.  In fact he has a 15% rule; if you double the size of a city you end up with more than double the number of socially driven outputs like  'supercreatives', R&D employment, and inventors (as well as serious crimes and AIDs).  All the while using 15% less resources like electrical wires, gas stations and road surface.   If there are scarce resources and cities certainly face that scenario that kind of growth is unsustainable.

So, what happens? 

Well every couple of decades we reset everything and start growing again along a new trajectory.  And it is likely the knowledge workers, a concept first described by Peter Drucker in 50+ years ago, will create such sea change.  Rather than continue along an ever increasing path to precipice they reinvent the way things are and we head off in a new direction.  Think what transportation, communication and the Internet changed in terms of marketing.  

Two things are apparent in a world that has a scaling factor of more than 1.  First, something must change to avoid collapse.  Second, those changes have to happen faster to sustain growth. 

For marketers this poses a conundrum, how do we continue to grow something destined to flatten out in an increasingly networked world destined to transform itself?
  • Year-over-year growth is wrong for the long-term.  The fact is as we become more efficient growth will be harder and harder; the economy of scale argument that we're all trained to rely on actually retards growth.  Sales of the paragon of operational efficiency, Walmart, are beginning to plateau.
  • Socially driven markets will invent ways to change themselves in order to survive.  Any attempt to fight these changes and maintain the status quo is a recipe for disaster.  One might consider 'disruptive innovation' to be a showcase for how creatively we can change things up. 
Thus, it seems that a CMO's priority should be reinvention where growth is the measure of success.  

Monday, June 11, 2012

Peeling Back Layers of Interest

Are all members of a community the same ?

Last week I wrote about Communities of Interest and how they could potentially replace demographics as a means of identifying an audience.   This post looks at the depth of the bond within a community and how that relates to marketing. 

There are three layers to this onion:

  • Interested
  • Involved
  • Passionate

In the outer and loosest layer people can been tagged with an interest in a topic.  Typically sourced from attributes, lists and inferred activity these individuals may not know each other and it is the marketer's role to leverage them accordingly.  These consumers would be appropriate for awareness and acquisition programs where reach is most important.

In the middle layer consumers did something explicit thru either self-selection or self-expression to join a community.  In short, they have knowingly raised their hands as members, e.g. signing up for a newsletter or posting a recipe.  These individuals would be appropriate for feedback and opinions as well as the foundation for loyalty programs and word of mouth.

The inner layer represents the truly committed where personal relationships between brand and individual are sustainable over the long term. They participate in the conversation over time. These consumers are your most likely ambassadors where you are requesting credentials and need influence.

This suggests that there are three steps to take advantages of communities:
  1. Determine the appropriate topics for your brand.
  2. Identify the levels of commitment related to a topic and assign each individual to one of them.
  3. Deploy role-appropriate marketing programs that align with topic and commitment.
A market is defined as a homogeneous group with a common need that can be reached efficiently.  So is a community.

Friday, June 08, 2012

The Transformation of Marketing

When will we drop the adjective digital?

Much has been written about digital marketing, but the trends suggest that at some point the qualifier will be gone and we're just doing marketing.    So, what has to happen to be just a marketer rather than a specialist?   Here are some thoughts:

Digital marketing works on a consumers internal clock not the external calendar driven by business plans.  To be a marketer we need to...
  • Understand pull as well as we understand push
  • Allow the communication cadence to be dictated by the individual
  • Abdicate control and trust the systems to serve what the consumer needs
  • Subordinate the media calendar to a supporting rather than guiding role
  • Migrate our thinking from we know 'when' to adapting to cues whenever they occur
Digital marketing functions in a guessable rather than the addressable world of name, address and phone number.   To be a marketer we need to...
  • Act with incomplete and uncertain visibility
  • Know the nuances, strengths and limitations of technology
  • Think more about context and intent
  • Focus on the persona not the person
  • Shift from knowing a person to understanding behavior
Digital marketing applies to a world where people are the media.  To be a marketer we need to...
  • Actively participate and be diligent about it
  • Leverage what people actually care about
  • Think more about the types of help we can offer
  • Recognize that we won't always know what is said
  • Move from placing messages to facilitating sharing
Digital marketing is the world of interaction; and everything is interactive.  To be a marketer we need to...
  • Ensure our message is consistent and the experience seamless
  • Surround consumers in order to help them choose
  • Rethink how and where messages work
  • Organize around goals, not channels
  • Play 3-D chess, not checkers when developing strategy
Digital marketing is about engagement, relevance, and experience: and those are all driven by content.   To be a marketer we need to....
  • Develop a framework for understanding how content actually works
  • Document how need states vary by channel, device and location
  • Model content consumption habits not only media
  • Optimize content serving, not just channel attribution
  • Tell superb improvisational stories 
Digital marketing is about data, lots of it.   To be a marketer we need to...
  • Associate all data for a consumer in order to find the 'ah ha' and 'oh no' insights
  • Deploy data-driven business rules rather than debate them in a meeting
  • Work at the compressed time caused by seamless interactions
  • Reduce complexity by defining what we're trying to achieve first
  • Sense and respond based on probability, not certainty
It seems that the good digital marketers do all of the above, and probably a lot more that I've missed.   They are likely to be the CMO's of the future not just the CDMO.

Each of the above points could be the subject of a chapter in a book and maybe there is a something in that idea....

Tuesday, June 05, 2012

Leveraging Communities of Interest

What will replace demographics?

Since the first paid placement of a message advertisers have wanted to reach their audience.  They will pay a premium for access the right set of eyes, ears and sometimes noses.   When cross-tabulation of surveys and diaries was the norm the lowest common denominator across all potential advertisers was the use of demographics: things like age, gender, household status formed the basis of allocating media dollars.   For years the target for consumer package goods companies was:  Women Age 18-49 because they controlled the spending.   And to use the oft-repeated analogy, if they were a country they'd be twice the size of Facebook.  As a means of defining an audience, broad demographics are not terribly useful. 

So, in the current world of shared experiences and self-expression the question arises:  What is the right audience?   It is likely that the answer lies in either understanding one's interests or his needs.
  • Interests form the basis of connection and thus result in natural communities.   Communities of Interest are defined by a shared bond or entity that spans time and is indifferent to space.
  • Needs form the basis of support and thus produce help via recommendations or solutions to a problem. 
Clearly the two can overlap as in the case of support forums where it is likely that a few passionate participants help a lot of 'newbies.'

Defining a Community of Interest can be done externally - group all the people who cook - or internally - group people based on their content consumption and connections.   Both methods have their strengths and weaknesses.   In the former case, we know precisely why a person is in a community - but they don't.   In the latter case, we know these are communities - but we're not precisely sure how it relates to our brand positioning and promise.

If we had identifiable communities of interest that could be linked with our own customers, imagine what we might do as marketers.
  • Develop personae based on the joint behavior of shopping and interaction in order to better understand.
  • Develop communication strategies based on content consumption and product usage in order to be relevant.
  • Develop product features and offers that resonate with the job that needs to be done in order to be more successful.
All these ideas require rethinking our markets.  As a case in point General Mills is calling for the end of demographics for media buying based on the integration of media consumption and actual purchase behavior. 

Common interests are the new demographics.