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...

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).

  

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.  

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.

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.

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

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.

Marketing Must Deal with Turbulent Times

Why is marketing getting harder?

There is an underlying implication behind media fragmentation, social expression, and digital interactions that it is tough to be a marketer these days.  A recent report by Boston Consulting Group on how to deal with turbulence confirms this trend at the macro, industry level. 

Change is happening faster.

Over the past several decades four measures of financial performance have become  more volatile.

1. Demand is increasingly unpredictable
2. Positioning is more unstable
3. Profitability swings are larger
4. Market expectations are over/under-stated

The report goes on to highlight firms that have done better than average during turbulent times and describes five potential success factors.  Two of the five, recognizing signals and experimentation, are clearly marketing functions.   The other three, organizational, systems and ecosocial, are more likely the responsibility of the CEO.

Identifying market-changing signals can either be at the macro-level or individual level.   Services like trendwatching offer insights into how consumers are changing.  And internally, customer behavior can often be used to isolate shifts in life-stages, as Target's work on identifying pregnancy illustrates.  The function responsible for bringing insights to the table is typically in the marketing research, consumer analytic areas of the company.

Taking products to market that leverage insights is clearly a marketing function.  However, coming up with ideas to take advantage of those insights in the first place should not just be a marketing function.  It should be in the fabric of the corporate culture.   3M and Google are known for their allocation of 'think time' so that people can work on problems that interest them.   This then becomes a social exercise.   And supporting that claim, McKinsey just reported that the majority of the value of social technologies will be found in facilitating internal collaboration.  

An interesting approach would be the creation and use of 'human libraries' where the business can check out an expert.  Originating as a way to discuss prejudices, the idea easily extends to the corporate environment where new perspectives are valuable in solving challenges.   A recent viewpoint in Marketing News (not yet online) described several cases of using subject matter experts from varied disciplines - including jazz musicians to discuss improvisation with a multi-product manufacturer that had several sales people calling on one retailer. 

While marketing may be harder because what used to work might not work now, it is still filled with opportunities to help both consumers and thus companies.

Vendors Need to Think Beyond the Report

Where does a vendor's value lie?

One of things we do at work is to distribute our clients' promotional content thru a number of channels and platforms.  And a recent project we were requested to work on was simply entitled 'extract business insights'.   Since we already produce reports on activity, this left us wondering just what that might mean. 

A bit of brainstorming left us with three potential questions that could form the basis of the analysis.

• Tactical:  What worked and what should I do next?
• Acquisition: Who is a good customer and where do I find more of them?
• Strategic:  How do I compare to other players in the category?

Each of these questions could produce answers that change how we market, and thus qualify as 'insights'.  Plus, they seem to cover the potential range of interests a marketer is likely to have.   And if we can answer them satisfactorily then we have the opportunity to be a consultative partner rather than just a vendor.

Since we're a 3rd party, one of the advantages we have is to look across the market as consumers interact with various brands.   This normative view, even without identifying brands by name, is one of the key things of value we can bring to the table. 

The data requirements and time horizons are likely to be quite different than traditional reporting solutions provide.   For tactical questions - it is granular, short term and requires financial knowledge.  Did last week's offer of 'grapes' generate store traffic and sales?  Would it be better to promote 'lettuce'?  At the other end of the spectrum, strategic questions take a longer term and higher level view.  Is our merchandising strategy engaging customers better than other approaches?   In between lies the acquisition work - what consumer characteristics appear to be associated with events generated by digital content? 

Each of the questions is framed to foster discussion.  And in the end, that should be the goal of any vendor with a professional services staff.

Yet, there are still things to consider and work on:

• How does consumer behavior change over time?   (this requires a means of identifying someone across time and space)
• What is the ROI of not only the promoted item, but the basket? (this requires linking from the offer all the way thru to the basket)
• Are deal sensitive consumers valuable in the long term? (this requires both of the above fixes)

Pine Creek Fire

What happened on my summer vacation?

Usually this blog is about my day job - marketing, technology, data, etc.   Today it is a bit more personal.  

Just south of town a forest fire started on Wednesday and has grown from 20 acres to 12,000 in less than 48 hours.   Not only did the fire run up the drainage toward the tops of the mountains, but it also ran south as the winds shifted around.

Livingston Enterprise Photo

And when you know the people who live in the house in the picture and they're planning on evacuating their horses, possessions and memories this kind of news takes on a whole new perspective.  

We had a barbecue last night and it offered a respite to a few of those who couldn't return home and didn't yet know when they could.  Glad we could offer a small community of support to our friends.

Speaking of community, the news of the fire spread quickly on social media - particularly on Facebook - with support, best wishes, and offers of assistance coming from all locations.   The 'chatter' as it was called by officials unfortunately had many inaccurate statements about the burning of particular buildings and the loss of life.   While some structures were lost no one perished in the blaze.   The lesson is to take such news with a dose of skepticism. 

Hopefully the cooler weather with slow this beast down.

Seven Things Marketing Should Know About Big Data

What are the key points to remember about Big Data?

1. The migration to a digital and interactive world creates breadcrumbs of all types everywhere; this in turn dramatically increases the velocity, variety and volume of data.   We need to rethink just what it means to be data.  
2. Big Data is so big that our historic view of processing it - requirements, capture, analysis - just doesn't work anymore.   For those of us who grew up in the marketing database era, we have to completely rethink our relationship with IT.  And IT will have to rethink its role.
3. The idea of Big Data will go thru the typical hype-cycle where it becomes the topic of conferences, technology pitches, and bloggers (including me).  Thus, it will mean different things to different people and that requires patience and a steady hand to navigate.
4. Like all large, complex, and fast moving worlds the best approach is to have a clear objective in mind before you start.  Set the goal first to help deal with the really messy aspect of Big Data - access and transformation.
5. Since the majority of the Big Data is now created 'out there' rather than from just buying stuff from us we have the ability to understand the path to purchase much better than ever before.  New understanding of what happens at each step in the journey will be required thru 'moment' or 'value' mapping exercises.
6. Given that we want to derive insights from Big Data, the deployment methods will have to change.  We can't assemble in a conference room to discuss changes in offers and messaging - we must learn to trust the data and let it decide within a framework.  Predictive analytics will be operational, not project-based. 
7. Your brand promise will have a strong guiding hand on how you leverage Big Data. Understanding what benefit consumers takeaway from your product or service will help you decide how best to facilitate their journey and choice.

The New Face of Database Marketing

Where is database marketing headed?

In the beginning database marketing was defined as

"Database Marketing is an interactive approach to marketing, which uses the individually addressable marketing media and channels ... to extend help to a company's target audience; to stimulate their demand; and to stay close to them..."

That was written just about 25 years ago and still resonates today.   What has changed dramatically is what it means to be 'individually addressable'.   The newest Facebook feature, Page Post Targeting Enhanced, allows messages to be posted to the news feeds of specific segments of people based on a wider variety of demographic information, but not 'likes' at the moment.   Before this the best we could do to narrow the audience was by language and location.  Thus, the FB news feed, once a broadcast tool, now qualifies as a database marketing tactic.

But that's not all.

On the flip side is the opportunity to serve different content at different frequencies to different segments.  So, rather than thinking linearly about who should receive our offers, we need to think in terms of a matrix - which segments get which offers?  This is beginning to sound like how we think about other digital marketing tools where offers or ads are dynamically generated based on context, consumer, and intent.  The implication is that database marketing skills should be combined with digital marketers in a direct-to-consumer function.   Their responsibility is to place offers along the shopping journey that help, stimulate, or connect with the target.

Now, if we combine the legacy of database marketing - using a customer's transaction history to do it 'right' - with the new digital capabilities some new ideas emerge.  Imagine a news feed of

• Recipes augmented by offers based on your previous purchases and content consumption
• Books or music recommendations based on interests, current collection, and friends' lists
• Exclusive content and promotional tie-ins from sponsors of events

For any brand considering these ideas, they should have a large fan base.  Thus, an integral part of the social media plan should be on acquisition - just like database marketing. 

Relevance vs. Incentive

What are we trying to achieve with relevance?

The typical phrase used to describe content is 'be relevant' but what is discussed around content tends to be offer-related.  A lot charts that appear in retail research and presentations suggest that consumers want offers, deals and promotions.  But is that all we mean by the phrase 'relevant content'? 

Some definitions first:

• Relevant refers to being 'pertinent to the matter at hand'.  
  
• Incentive refers to 'stimulating action or effort'.

It is likely true that as consumers we prefer retailers that apply business rules to the potential offer pool to ensure we find things of interest, i.e. personalized coupons based on transaction history.  And it is a small logical leap to go from using the term personalized to relevant.  

While custom coupons are relevant; is all relevant content necessarily promotional?  

It seems that our point of view need not to be the same when it comes to relevant vs. promotional content.   In the first case we need to understand what the consumer is trying to achieve; in the second case we need to serve our best option to generate an event or transaction.  Similar, but not quite the same.   In fact, there may be other types of content that are appropriate depending on the context of the situation.  And it is context, both the consumers and ours, that should shape our content strategy.  

If we want to help her, be relevant by first understanding what she is trying to achieve.
If we want a sale, offer incentives that make sense to her and mitigate the risks of decisions.

So, let's first be clear about what we're trying to achieve.

Context Generates Big Data

Where does "Big Data" come from?

Lots of discussion these days about "Big Data."  A technical term that made its way fairly rapidly into the daily discourse.   Simply put, big data is the result of the increasing velocity, variety and volume of information being generated as we act like cyborgs.   A recent NYT article describes how we got here and what the opportunities might hold for businesses.  

On the one side of the real are the half-empties who worry that the term 'big' is another nefarious character who wants to control our lives - brother, government, and oil come to mind.  This is the central argument around behavioral targeting - too much data is a bad thing.  For the half-full's amongst us, big data allows for some interesting concepts for marketers, not only in terms of relevance but also in terms of incentive. 

One current idea being tested is the creation of personalized pricing where everything that is known, inferred or surmised about an individual is used to set the prices a specific customer sees. These price differences may be in flyers, coupons, or at the shelf. And since smart phones are the new decision support platform prices could be different in and out of the store. 

The mantra of delivering relevant content to the right person at the right time in the right place means context matters.

And thus it is context, and the need to understand it in real time, that drives big data.

Customer Replacement Therapy

Where do we need to focus our attention?

In many circles the discussion focuses on customer loyalty; it sounds so good.   But the reality is that we lose far more customers on the way to loyalty than we care to admit.  In fact, the odds run 19 to 1 against.

First, just what do we mean by loyal?

Like many concepts in marketing it can be elusive to define what we mean.  For this post, I'm going to define it simply:  A customer is loyal if the probability of another visit exceeds 60% so a bit better than flipping a coin.

Since we tend to be creatures of habit, the probability of shopping somewhere is fairly predictable at least in aggregate.   In fact, we can fit a curve to estimate the number of future transactions a business is likely to have from a cohort of new customers.

The picture shows the results of estimating how many future transactions a group of new customers will make over the next year or so.  The steep drop off from 0 to 1 is quite typical and is a function of the category purchase cycle.  But the crux of the matter is very clear, a lot of people simply don't come back for a second visit.

Given the definition of loyalty above, that doesn't happen until the 4th transaction or higher where the step change from one transaction to the next starts to get small.

The implication:  We go thru a lot of customers to get to one loyal customer.   To see the effect of this curve on a business, imagine starting with 50,000 customers and we want to know how the business looks after 10 years.  In particular,

• How many loyal customers do we have?
• How much focus do we need to spend on acquisition?

The following table simulates the above curve over time and shows the number of expected customers each year by the their visit number.

After 10 years, fewer than 5% of our customers are loyal.   More importantly, 60% of our business comes from new customers. 

So, rather than burn thru bodies to get to loyalty maybe we should think more about our replacement strategy. 

• Why do over half of our customers fail to come back?  How did we disappoint them?
• Why does it take so long to go from trial to loyalty? What are people thinking at each stage?
• What is the essence of our offering that makes the decision to repeat a no-brainer?

Impossible Marketing

What does a walk-in computer have to do with marketing?

Recently a colleague circulated Joel Runyon's chance encounter with Russell Kirsch the inventor of the first internally programmable computer who pretty much summed up his view as: "nothing is withheld from us which we have conceived to do." 

Or, just do the impossible.

And to put a finer point on the idea of conceiving something never done before he also created the first digital image.  And 50 years later we're still living with the square pixel - it was 'logical' to use.

While the storyline centers on computers, particularly those we can use to create stuff versus merely being consumers, the idea clearly extends beyond code and technology.

In fact, this mantra describes the entrepreneurial spirit pretty and should be applied to marketing as well.  The digital era creates the perception and need to both re-imagine how things work and then solve the consumer's need for solutions.

So, what should marketers conceive in the new ROPO world of researching online, purchasing offline that many might deem impossible?  A couple of recurring themes.

• Altering the product assortment that a consumer recently browsed.
• Surrounding the consumer with real content that actually helps her choose.
• Leveraging purchase and event histories to create a media plan for one.

While there are technical challenges; these are not technology problems.   They simply require a will and persistence to overcome.

What would you think would be impossible?

Choice Marketing

What is the next evolution of marketing?

It has been said a million times: Marketers are no longer in control.  Self-expression, technology and media fragmentation have fundamentally altered the flow of information.  As a result we live in a "fluxed-up world" (found that on an agency bio) which is a bit more earthy and descriptive than the fluid fog.

So, if we're not doing business as usual then we shouldn't be doing marketing as usual.  So, what augments Brand Marketing, Direct Response Marketing, Content Marketing, etc.?

How about 'choice marketing'?

People are going to make choices, they will decide regardless of what we do.  Since we can't limit the information they use to reach their conclusion or where they access it, let's flip the table and ask the question:  What can a brand do to facilitate a person's choice?  How do we make it easy to choose us?

• Do we understand the needs and aspirations?
• Do we know the intent of each interaction along a journey?
• Do we know the emotional and rational drivers of the decision?
• Do we know how various types of content influence that decision?
• Do we understand why and how a consideration set is formed?
• Do we know the shortcuts people take in making a decision?

Since a brand is a proxy for information (Chris Anderson from wired's view) or an emotional short cut to a decision (my view) maybe a brand is simply in the information business; it is an aggregator and sometimes filter. 

Actually, 'choice marketing' would be what an agency would sell to its clients.   An altogether different view would be to focus on 'facilitating choice'.   While the wording change may seem simple, the implications of taking the consumer's point of view could be rather striking.  

Retail isn't About Shopping Anymore

What happened to shopping at retail?

Nicholas Negroponte once wrote...

You enter a store. You see something you like. You write down the product name and manufacturer. You go home and order it over the Internet. As a result, you didn't have to carry it, you probably got a better price, and you may have avoided sales tax.

The store in this scenario is merely a showroom. Have I just described the exception to tomorrow's retail, or the rule?

Except for that 'write down the product name' he got it about right.  In their third annual update on the future of something, PSFK highlights the new trends for retail that take advantage of technological changes since 1998.

PSFK presents Future of Retail Report 2012 from PSFK

The ideas center on one theme - make it easier to choose by blending the best aspects of digital and physical experiences. 

Quantifying Evangelism

How should we look at mobile research?

A recent MediaPost article reported research sponsored by Greystripe that suggested mobile shoppers are more likely to be evangelists (as well as naysayers) than their traditional counterparts.   This conclusion was based on the number of people who posted reviews about their experience - 49% vs. 31%.  In addition, the results suggest that mobile shoppers are less price sensitive because fewer of them reported the use of retailer coupons - 71% vs. 94%.

I grew up in the market research industry so tend to think in terms of the validity of the results.

• Who does the sample represent?
• Do the conclusions reflect the data?
• Can we extrapolate beyond the sample?

This research came from a self-selected audience who responded to an inquiry to participate from the sponsor's mobile ad serving system.  So, the 'traditional counterparts' are still engaged mobile users leaving us looking at only one segment of the shopping market.

The jump from 'write reviews' to 'better evangelist' equates an action with a mental state without understanding the reasons behind it.   Sharing opinions can be considered an aspect of evangelism, but it could also simply reflect the basic need for self-expression: "I post, therefore I am". 

The results do pose some good food for thought, but only within the context of who responded.  There is other evidence that suggest that 50% of US population has written at least one review; if that figure is correct then this sample is 'below average'.   On the other hand, Forrester's "Social Technographics" suggests that 37% of the US Adult population are 'Critics' (those who write reviews). 

In an example of the importance of the reviews Olery created an infographic on the hotel industry.  And because the data came primarily from TripAdvisor it isn't surprising to see the purpose of the trip to be for 'fun' rather than for 'work'.

And these issues are things the whole mobile research industry faces.   A recent conference sponsor on the topic posted a number of key take-a-ways.  Some of the key ones:

• The industry is too young to have standards established yet and the likely leaders aren't necessarily interested in setting them
• There is a thirst for innovation but there remains an addiction to what we've measured before
• Entrants will have to prove the ROI while at the same time breaking traditional models 

It is a good time to be in market research....

Segment Based on How Consumers Choose Too

How do retailers segment their customers?

The National Retail Federation and KPMG do an annual benchmark study on retailing.   In this year's edition there is discussion of how firms segment their customers.  Here's a summary chart.

It is good to see all the usual suspects, starting with a consumer's transaction history and her preferences.   But in this day and age of channel blur, infinite paths to purchase, and self-expression there appear to be additional opportunities to better understand how consumers choose not just what they chose.

• What touchpoints are used? In what sequence? For what purpose?
• What types of content are consumed?
• What media crosses their path, when?

Since satisfying growth objectives requires finding new ways to efficiently and effectively reach consumers,  we might want to consider focusing our segmentation thinking outward on the digital bread crumbs. 

Social Media is Passing the Turing Test

What happens when we can't tell if it is real or Memorex?

In this age of fragmentation we often use an adjective to qualify what segment we're talking about.   To take a few - print media, broadcast media, online media and social media - it is the adjective that helps us understand the goals, functions, cost models and conversion expectations.

But if we drop the adjective, we're simply left with 'media' - the paid placement of a message.   And in the digital era it is very easy to blur the distinction.   While 'social' started out as focused on human interactions, the technical underpinnings allow for much more.   In a recent article on Fortune about tweetbots, Ryan Holmes of HootSuite suggests a bit of moderation along the path to automation.   We know that targeting can go too far, but so can the creation of content and social posts.

Memorex Ad

And unlike like the Memorex ad it does matter whether it is real or just technology. Anytime we can write down the rules, we can automate the process.  This is where a lot of productivity gains come from.  And sorting thru the bizillion conversations to find the useful comments is clearly ripe for a technology fix.  And so is the scheduling side of things.

Back in the 1950's Alan Turing thought thru whether digital machines could imitate humans well enough to fool the panel.   This was an easier task than answering the question 'can machines think?'   The result is known as the Turing Test.

When it comes to social media we are getting close to passing that test - the auto-generated tweets and posts that pass as human.   While the advantage of scale is obvious care should be taken in how far we go down this path.

Tweetbots and the like could produce some unintended consequences.

1. Social media will become just like TV media - lots of eyeballs but conversations are filtered
2. People will move toward less business-centric avenues to connect.
3. As the ability to connect becomes pervasive in newer technology, there won't be a need for a separate platform.

Maybe we should have stuck with the original moniker:  Social Technology. 

Mobile is Not a Screen

Why does mobile marketing cause us headaches?

The future of marketing is literally in the palm of our hands - the smart phone.  But we have to rethink things; it is not just another screen.

Given all recent stats from just about every firm around, there should be no question about the impact of mobile on retail shopping.  True, it varies by category according to Deloitte reserach but the trend is undeniable: we use it to help us decide.

The result is a series of paradoxes we're not used to because it totally disrupted the path to purchase as we understood it to be. We're now operating in a world when...

• More information from more sources is present at decision time not less because we don't need to wean out choices ahead of time.  
• The ability to push messages first requires pull, activation or opt-in because this is personal not broadcast.
• The content is not what we'd thought it would be (ads) but rather what they need (info) because that is what is actually important. 
• Awareness and consideration may occur at the same instant because it eliminates the need for prior research.
• The time and space distinction of channels has evaporated because there are no physical constraints on where it can be used.
• Showrooming can lead to higher in-store conversion because consumers can recognize the offer as 'good enough'. 

So, let's stop thinking about mobile as the 3rd screen (NYT piece from 2007) for advertising but rather a decision support platform. 

Maybe we should design our content strategy like a dashboard....
  

Generational Shift: Buying vs. Owning

What if owning didn't require buying?

There have been a series of articles about the generational attitudinal shift among the Millennials toward shopping for cars.  First, the NYT wrote about the "MTVification" of GM where outsiders and upstarts are trying to infuse the culture and product line with insights about what younger people want.  They want the Apple Store not a car lot.   This was followed quickly by an article in The Atlantic that explored the topic further to explain why young people aren't buying cars.  Part of the reason is likely to be the desire to live in an urban setting.   Research into home ownership suggests that that bastion of success is becoming less a part of the dream.  And finally, John Dykstra wrote a piece this month in Fast Company that summarized the needs of the Millennials.

Simply put, this generation "doesn't want to buy stuff."  

Instead, they buy things because...

• of what they can do with them.  Here, simplicity of lives reigns - particularly when you think  of it in terms of creating a seamless relationship with technology.
• of what they can tell others about it. Again, technology has facilitated sharing to a level that makes self-expression an art form.
• of what it says about a person by having it.  As life priorities and needs shift, the role of products changes with them.   Conspicuous consumption and freedom of the road have been replaced by a socially conscious and local focus.  

While it seems silly to state that products and marketing programs should reflect the times, sometimes it is hard to step back and glean the insights of generational shifts.  The challenge of adopting to generational shifts is not only on the product side, e.g. lemonade or denim color palettes, but also in terms of how we market.  The symbiotic relationship between consumer need and our solutions must be embedded in the way we connect with consumers.   Selling via interruption and intervention was used to reinforce the need to actually buy something, just ask the direct response folks.  But since technology allows us to do, share, and express without actually buying anything at all then a whole set of notions need to be reconsidered.

I think the point of these articles is to ask us to rethink the nature and benefits of ownership itself.  And in doing so we may come with insights into how to exchange value.

Time to talk to my son more, he's a millennial.  

Marketing IS Hacking

What do marketers need to do?

If we define a hacker as "generally referring to someone who challenges the existing order, most often using science, engineering, or information technology" in order to change it then we are really talking about marketers in the digital age.

The purpose of marketing is to change history by identifying growth opportunities in terms of markets, products, segments, etc.   Today, this is as much about leveraging technology (and the data it spins off) as it is about the human element.   In fact, about a year ago the post "Find a Growth Hacker" clearly tied hacking and marketing together at the hip when author Sean Ellis talked about that entrepreneurial drive to do what ever it takes to grow the business.

More recently, the term has appeared in connection with big data.  In a Mashable post earlier this month, Joseph Kelly talked about the need for data scientists and growth hackers inside of agencies.  These are the folks that figure out how the world works at its core, kind of like the Higgs boson, then put something new together from the parts so that they can make consumers' lives easier.

And it turns out that marketers have questions that need serious hacking:

• What is the likely next step in a consumer's journey? - when she herself doesn't know.
• How can we intersect a journey with interesting content? - for a person that we can't track.
• What would help her choose? - when we don't understand her changing need states.

The challenge is that these questions require the independent, innovative, hacking mentality that doesn't typically fit within structured programs.  In this world success is measured after the fact, not guaranteed before. 

If your goal is to be an agile leader then hacking is required because the mantra is test, fix and try.

Retail Trend: Blend Instead of Separate

What does the future have in store?

Marketing Charts recently summarized research among retailers on what they see the world looking like in 5 years time.  While clearly written from a retail perspective, e.g. the first step along the path to purchase is to pick a place to shop, the scope of the discussion applies to beyond in-store behavior.  The sub-head says it all:

Omni-channel retailing is about giving customers a seamless, consistent experience whether it's in-store, online or through a mobile device.

To achieve that lofty goal the research suggests we must:

1. Know who is shopping where and when
2. Integrate physical and digital worlds (like IBM's test of augmented reality)
3. Give associates the same level of information that the web site has

I can just imagine a team working to overlay the strength of data-based merchandising, think collaborative filtering in Amazon, on top of the traditional shelf-set or merchandising plan via proximity technology.  Fashion retailers are already doing similar things moving RFID from inventory control to helping consumers find sizes and accessories and creating a digital mirror to see how it looks.  

And all this produces new data upon which to glean insights on how to make the consumer's experience more enjoyable.

Marketing's Role: Simplifying Decisions

What should marketing be focused on?

A recent series in HBR begins to explore why consumers stay with a brand or product.   The authors conclude that it comes down to the way in which they make their choices.

The single biggest driver of stickiness, by far, was “decision simplicity”.

Product proliferation, media fragmentation, and continuous partial attention lead us to find short cuts to decisions.   Chris Anderson, editor of wired, once described a brand as a proxy for information.  And it is this message that resonates in the article.  The three key consumer needs are:

• Trust the information they receive – providing recommendations by consumer advisors, ratings and reviews.
• Learn effectively without distraction – simplifying the research process by offering clear and streamlined brand-specific product information targeted to each decision stage.
• Weigh options confidently – making transparent buying guides and brand differentiated information easily available.

To be clear, this isn't just about producing feeds and speeds or feature checklists.  One must recognize that aspirations, risks, and needs sit behind every simple choice.   

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?

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.

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.  

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. 

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.  

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.

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....

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.  

Re-Imagining: Lessons for Marketing

What does the future hold?

A recent presentation by Mary Meeker of Kleiner Perkins on Internet Trends has (at least) two major implications for marketers and publishers.

First, the good and bad news regarding mobile.   The opportunity and head room for growth remains huge but the ad revenues are depressed.   The cost per thousand is five times lower on mobile devices than it is on desktop.  If this gap is in part a function of performance, then there is additional pressure on both existing and new businesses in terms of growth and financial expectations. 

Second, the expansive list of ways that things are re-imagined.   From coupons to jobs, she offers over 50 examples of re-imagining the world in light of digital/web technology.  Some common themes:

• Self-service leads to self-expression.   The nature of the digital business models is to allow consumers to do the work.  An unintended consequence is that sharing of personal things takes precedence over the paid placement of a message.
• Device trumps channel.   The experience of consuming content overshadows the means by which it is delivered.   The plug-and-play nature of the technology means that consumers will be able to naturally follow their interests.  Any channel related roadblocks will lead to frustration. 

At 112 slides, worth every second of walking thru it....

The New Competitive Front: Time

Does speed pay?

Speed dating, speed pitching and speed networking all work on the same principle:  First matters.  

In the digital age the time it takes to plan and execute is compressing radically as previously distinct processes are smoothed over with the goal of shrinking time.  A recent Boston Consulting Group article discusses how consumer goods firms (FMCG) are competing on time.  

From the article, best in class firms are substantially quicker at getting things to market:

The secrets are a common goal, no functional boundaries and no politics; this in turn contributes to revenue growth, market positioning and transformation. 

At the extreme, the decisions are automated.   In the world of digital advertising where real-time-bidding, targeting and tracking have shown the value of eliminating time comes new research from Nielsen Catalina Solutions that shows integrating touch points with a consumer's transaction history works even better.   Here is the payback of directly integrating what people buy with the media buy.

The implication is that there are no channels, there are no demos.  There are only needs to satisfy.

Must go faster....
 

Cyborg Anthropology and Marketing

What will we attach next?

At TED Women in late 2010, Amber Case made the point that we are all cyborgs because we're using technology to create or adapt to new environments. The ideas behind the cell phone glued to our ear and a pair of Google Glasses on our head are no different than what the science fiction writers dreamed up decades ago.  However, the key point is that technology isn't used to modify our physical self to be stronger, faster, or immortal - but rather for the first time it extends our mental self across time and space thus making us more human.  

Cyborg

This brings us new challenges:

• We aren't slowing down so have no time for reflection and as result are losing the ability to create 'self.'
• We are reinforcing a dependency on technology to remember for us where everything and anything is. 
• There are now parallel and simultaneous timelines as each device, screen, and application supports varied asynchronous schedules.

So, how can marketers help people deal with alternative selves, panic architecture, and ambient intimacy?

• Guide us thru this digital adolescence that is defined by competency and understanding rather than age.
• Facilitate introductions and methods that make us more connected to those with shared interests.  
• Serve only relevant and interesting content that satisfies our shared needs.

If the digital world creates wormholes that allow consumers to bend time and space to connect then marketing must drop the linear notion of a funnel.

Risk, Complexity, and Marketing

Why is analysis so misunderstood?

Marketing's goal remains the same: align solutions and needs to everyone's benefit.  A recent McKinsey article described that reality as one of the most complex and riskiest business functions.   Complex because we have to succeed as the tools used to communicate evolve and fragment while at the same time messaging shifts from paid placement to self-expression.  Risky because we're dealing with human emotions and behavior while at the same time we're trying to expand or create new markets as needs shift. 

Analysis, in its simplest form, answers the question: Why are things the way they are?   For businesses, it often starts with the understanding of why we might be deviating from expectations.  Our forecasts are always wrong, what is interesting is why.  Analysis turns the interesting into the useful.

We deal with risk and complexity by one of three means:  ignoring it and forging ahead with a vision and thus change the world, sticking our heads in the sand and let the world pass us by, or by trying to minimize the associated uncertainty and adapt accordingly.  In fact one can think of analytics as a means of quantifying uncertainty in order to reduce risk to the business. 

Analysis. like marketing, comes in many flavors.   A recent post in Forbes outlined three different uses of analysis:

• Evaluative:  the review of marketing execution and includes ROI, attribution and a host of other 'devil in the details' functions.  By far the most common use of analysis.
• Instrumental: the development of insights that guide strategy development and implementation.  These analyses focus on understanding why we might be successful, not how we will get there.
• Conceptual: the challenging (and changing) of pre-conceived notions and assumptions about a market.   Since the mind is the most difficult thing to change and the impact is likely longer term this class has the potential to affect total business performance.

We need to do more of all of the above. 

Just like a brand is not a logo, analysis is not a computation.