Tuesday, May 28, 2013

Get Closer to Customers

What is being taught on the conference trail?

I heard from the attendees at the recent Optimization Summit a couple of interesting points; one very tactical and one strategic.
  • "Get" may be the most powerful verb in the English language, at least from a conversion point of view.  Seems that the term entices consumers to act a whole lot better than the IT-centric "Submit"
  • "Data-driven" is the wrong message.  We should be consumer focused, and it is data that gets us much closer to an understanding.
 Good points to remember....

Off to RampUp and the integration of on and offline data this week.

Friday, May 24, 2013

Reports Don't Produce Opportunities

How does 'data-driven' actually work?

In a post on All Things Digital, Ben Elowitz of Wetpaint makes the case that it is the phobia of being shown up by the data that contributes to the slow adoption of data-driven {marketing.}   In fact, he quoted a friend's dirty little secret. 
"Nobody wants to use the data."   He goes on to argue that collecting data is the safe AND easy part.
Re-imagining the world is the prescription for the problem, not justifying a set of HiPPO decisions.   To that end Ben offers five great questions to consider:
  1. What does my audience love?
  2. How do they want it?
  3. How can I best relate to them?
  4. What secret signals is my audience sending?
  5. Where is my sweet spot? 

So, how does a marketing organization get to this point?  Tools and humans - split 10% and 90%.  Too often we hear of technology as the saving grace to the problem; it isn''t.  Creating new solutions that satisfy consumer needs is a high-risk business (just look at the failure rate of new products).  Data and technology are enablers that allow exploration to happen.  In both the NetFlix and Target examples, there was a general direction stated by business executives:  "Should we buy the rights to the British series House of Cards?" and "can we identify pregnant women?"  These questions provided the compass by which people found the answers - 'yes' in both cases.

Note that none of these questions have to do with metrics, conversions or optimization; nor are they the kind that can be programmed into a report or dashboard.  They are the best kind of question:  ambiguous and in need of human thought.    This is where opportunities are found.

Wednesday, May 22, 2013

The Influence of Revenue Producers

Which is more valuable an 'influencer' or a 'revenue producer'?

When introducing new products there is a temptation to find influencers - those consumers with the capacity to spread the news, either by direct contact through their network or via inference and reputation.   The question becomes: Is this a better strategy than seeding new products with revenue leaders, i.e. those who already are valuable customers?

Recent research in the Journal of Marketing focused on that very question and found the following:
  1. Given that Customer Lifetime Value (CLV) is often skewed toward Pareto's world view, revenue leaders can have the dual benefit of producing revenue AND influencing others like them.
  2. The number of consumers used in the 'seeding' process makes a difference.  At low levels of introduction (think 'I hope it goes viral') there is a strong social influence; however, as the number of people you tell increases (Big Seed Marketing) there is a plateau or saturation point reached.  
  3. As a side effect, considering both social influence and direct revenue production widens the natural divide in CLV.  The leaders are more valuable and the laggards are less valuable than one would think based purely on dollars-to-date.
So, as with many aspects of marketing - the old and the new come to provide new insights and approaches.   The tried-and-true method of RFM provides a decent basis of estimating customer value while interests and social graphs offer a means to estimate the contagion effect.  

The introduction of a new product is a very risky business since most fail.  This research suggests that internal data be overlaid with socialgraphics in order to improve the odds of success. 

Friday, May 10, 2013

In An Experience Emotions Trump Price

How do you avoid the race to the bottom?

Over on YouInc I had my first post of a series on marketing for entrepreneurs, small businesses.  It talked about satisfying emotional needs to overcome the temptation to compete on price.
To the extent that you can satisfy emotional needs and express them in a way that resonates with your customers, the more value you provide.
Any choice or decision to buy ultimately comes down to the value perceived by the consumer - a typical cost benefit analysis made in the mind as opposed to a spreadsheet.

In retail, there is a definite trend to offset promotional discounting with a 'better consumer experience'.   And to deliver that we need to think very differently about how people decide.  To help us try to understand what is going on we're beginning to tag content with various typologies to see if we can find out what works in what situations. 

There are two different questions we're looking at:
  1. What kind of stuff does marketing leverage?   emotional, promotional, informational and communal content
  2. How do consumers use content? to inspire, educate, entertain or inform
I'm sure there are others.... 

7 Types of Digital Marketers

How is the industry segmented?

Optify released the following visual for classifying digital marketers.   Me, I'm a cross between old-school (based on demographics) and data whiz (based on career interests).

What kind are you?

The 7 Types of Digital Marketers