Why Brands Like Shiny New Objects

While hanging onto shiny new objects may be the death trap for racoons, it’s just the opposite for brands. Brands like shiny new objects because customers do, too.

While hanging onto shiny new objects may be the death trap for racoons, it’s just the opposite for brands. Brands like shiny new objects because customers do, too.

Price, convenience, quality, variety and even good customer service is not enough to keep customers hanging on anymore. When a brand meets basic expectations, customers easily let go and move on in search of the shiny new object that sparks their interest, enthusiasm and fulfills their passion. However, when a brand offers the unexpected, customers often latch on and won’t let go; no matter how great competitors’ offers or incentives become.

But in a market where customer expectations run high, just what makes for a shiny object that keeps customers connected until the very end?

We know its not the clever ads, free content and rotating digital banners that chase consumers around the web. And we know its not reputation or how many likes your last Facebook post got over your competitors’ posts. One thing that does shine and shines bright is value. Extra value you can’t get anywhere else, even if it does not have a great monetary value, often gets consumers to latch on hard and long.

Just like the racoons, we consumers go for the shiniest value for most of what we choose and buy, luxury products excluded. We do silly things like drive in circles until we find the store that gives us more than we expected. Something as small as a free coffee with a gas tank refill, or the tenth carwash for free, or a free cookie with a deli sandwich purchase can do it. Value works for consumer purchases and business purchases, alike.

In the often cut-throat B2B market, the pressure is on to do more with less, and so purchasers seek greater value than the products they buy.

Negotiations for business contracts, whether it be for SaaS, ERP systems, paper supplies, printers or medical devices, are no longer just about price. They are about “what else can you give me” more often than not. And when asked, most suppliers negotiate and add in a few perks to close the deal. The key, however, is to offer that shiny new object, or maybe two or three, before they ask.

Here are a few ideas:

  1. Rewards for Quantity: It’s nothing new to offer something for free in exchange for volume of purchases. So if you’re not doing this right now, find a way to do it. And soon. You can do this in any industry and it works. Consider your own purchases. You’re still with a specific airline or hotel brand, as you know you’ll get rewarded for volume with free stays or flights.
  2. Consulting or Tech Support at No Extra Cost: While tech support and training is a good revenue stream for many industries, it’s also something you can afford to offer for free, at some level, to those customers who impact your bottom line the most. Find ways to chunk out your training or support offerings into modules you can give away as added value for VIP customers without ruining your revenue streams.
  3. Offer Your Experts: Every brand has experts who are industry-leading in one way or another. Who are yours? And how can you offer their expertise to customers as part of an added value program?

Whatever you do, don’t fall into the trap of promoting the dull objects that have lost their appeal. And likely won’t be appealing again.

Essentially, there are many forms of shiny objects that attract customers and/or keep customers. It’s really all about understanding your customers, what matters most to them and what you have to offer that shines far brighter than offerings from others in your space.

Consumer Engagement, But Not Yet Marriage

How many times have we been asked (or asked ourselves) to come up with a valuation of a minute of a prospect’s time and attention, AKA consumer engagement? Almost all advertising is bought and sold using some version of the metric (cost per person, mostly expressed as CPM) and yet no one seems to have nailed an equation that can reliably be used as a baseline.

How many times have we been asked (or asked ourselves) to come up with a valuation of a minute of a prospect’s time and attention, AKA consumer engagement? Almost all advertising is bought and sold using some version of the metric (cost per person, mostly expressed as CPM) and yet no one seems to have nailed an equation that can reliably be used as a baseline.

It’s not that marketers haven’t tried. The most recent expression was reported in Media Daily News at the end of July. Advertisers and agency executives were researched to determine what they “considered” (perhaps better described as their “best guesses”) on the per-minute value of engaged consumer attention and they came up with $1.81. They even produced a bar graph to add verisimilitude.

consumer engagement chart
Credit: Peter J. Rosenwald

This didn’t impress one skeptical reader who commented wryly: “With a sample of 300 people AND no hard guidelines as to how anyone in the survey determined ‘value’ other than for a very narrowly-defined universe, this is just cocktail party fodder.”

Even after a couple of martinis, it would be hard to derive much value from this yardstick of consumer attention. As so-called “opt-in” and “rewarded” advertising models — which let the prospect have some free content before “opting-in” through a paywall or some other device to more content — are becoming increasingly fashionable, it is not surprising that marketers are trying to put some metrics in place to value them.

This illuminates the fact that in today’s multimedia marketplace the “value” of a minute or some other measure of someone’s time, and perhaps even more importantly, attention, depends on a basket of variables that will be unique to each prospect or cluster of prospects. If we can discover which ones are critical to the purchasing process and at what point they influence the customer journey, we may have the beginning of metrics which will intelligently inform our marketing actions. The question is how we get there and the answer remains elusive.

First we need to know what we mean by “engaged consumer”? We all have lots of experience with commercial messages (Wendy’s “Where’s the beef,” for example) which can be described as highly “engaging,” because the creative brilliance attracts the attention of viewers. But that attention has no value whatever for say, vegetarians.

How much the marketer would be willing to pay for an engaged customer, someone who has demonstrated interest in the marketed category and hopefully has the resources to purchase, is more to the point? The Lamborghini dealer should be willing to pay quite a bit more for that engaged minute than the corner taco vendor.

In a September column addressing marketing metrics and suggesting that we stop chasing our tails, I tried to put a figure on the real cost of reaching the target audience for an advertiser like Pampers. Using a $25 CPM cost of a TV spot reaching only women and, after eliminating all women who were neither in the last trimester of pregnancy nor had children under two years old, I came up with a ballpark figure of $208 per thousand. In fact, with a normal average viewing frequency of five times, capturing the engagement of each one of those thousand women for 30 seconds should be worth about $1 ((208*5)/1000), twice that for 60 seconds of attention, not far off of that $1.81 guess.

But will the “engagement” lead to a committed relationship, a marriage if you will, of consumer and brand? Certainly, if the prospect can opt-in or be rewarded with truly relevant and valuable content by clicking to visit the advertiser’s website, and the website can elevate interest to purchase, and the product satisfies and stimulates repeat purchase, the investment in getting that initial 60 seconds of attention will have a quantifiable value.

But putting a figure on that value is as likely to be correct as predicting the length and quality of the marriage.

As a friend of mine says, instead of trying to figure it all out in advance, just start dating.

Marketing Success Metrics: Response or Dollars?

It’s tempting to ask about whether marketing success metrics should be response rates or money. But you don’t need to ask marketers what they want. Basically, they want everything.

It’s tempting to ask about whether marketing success metrics should be response rates or money. But you don’t need to ask marketers what they want. Basically, they want everything.

They want big spenders who also visit frequently, purchasing flagship products repeatedly. For a long time (some say “lifetime”). Without any complaint. Paying full price, without redeeming too many discount offers. And while at it, minimal product returns, too.

Unfortunately, such customers are as rare as a knight in white armor. Because, just to start off, responsiveness to promotions is often inversely related to purchase value. In other words, for many retailers, big spenders do not shop often, and frequent shoppers are often small item buyers, or worse, bargain-seekers. They may just stop coming if you cut off fat discount deals. Such dichotomy is quite common for many types of retailers.

That is why a seasoned consultants and analysts ask what brand leaders “really” want the most in marketing success metrics. If you have a choice, what is more important to you? Expanding the customer base or increasing the customer value? Of course, both are very important goals — and marketing success metrics. But what is the first priority for “you,” for now?

Asking that question upfront is a good defensive tactic for the consultant, because marketers tend to complain about the response rate when the value target is met, and complain about the revenue size when goals for click and response rates are achieved. Like I said earlier, they want “everything, all the time.”

So, what does a conscientious analyst do in a situation like this? Simple. Set up multiple targets and follow multiple marketing success metrics. Never hedge your bet on just one thing. In fact, marketers must follow this tactic as well, because even CMOs must answer to CEOs eventually. If we “know” that such key marketing success metrics are often inversely correlated, why not cover all bases?

Case in point: I’ve seen many not-so-great campaign results where marketers and analysts just targeted the “best of the best” segment — i.e., the white rhinoceros that I described in the beginning — in modeled or rule-based targeting. If you do that, the value may be realized, but the response rate will go down, leading to disappointing overall revenue volume. So what if the average customer value went up by 20%, when only a small group of people responded to the promotion?

A while back, I was involved in a case where “a” targeting model for a luxury car accessory retailer tanked badly. Actually, I shouldn’t even say that the model didn’t work, because it performed exactly the way the user intended. Basically, the reason why the campaign based on that model didn’t work was the account manager at the time followed the client’s instructions too literally.

The luxury car accessory retailer carried various lines of products — from a luxury car cover costing over $1,000 to small accessories priced under $200. The client ordered the account manager to go after the high-value target, saying things like “who cares about those small-timers?” The resultant model worked exactly that way, achieving great dollar-per-transaction value, but failing at generating meaningful responses. During the back-end analysis, we’ve found that the marketer indeed had very different segments within the customer base, and going only after the big spenders should not have been the strategy at all. The brand needed a few more targets and models to generate meaningful results on all fronts.

When you go after any type “look-alikes,” do not just go after the ideal targets in your head. Always look at the customer profile reports to see if you have dual, or multiple universes in your base. A dead giveaway? Look at the disparity among the customer values. If your flagship product is much more expensive than an “average” transaction or customer value in your own database, well, that means most of your customers are NOT going for the most expensive option.

If you just target the biggest spenders, you will be ignoring the majority of small buyers whose profile may be vastly different from the whales. Worse yet, if you target the “average” of those two dichotomous targets, then you will be shooting at phantom targets. Unfortunately, in the world of data and analytics, there is no such thing as an “average customer,” and going after phantom targets is not much different from shooting blanks.

On the reporting front — when chasing after often elusive targets — one must be careful not to get locked into a few popular measurements in the organization. Again, I recommend looking at the results in every possible way to construct the story of “what really happened.”

For instance:

  • Response Rate/Conversion Rate: Total conversions over total contacted. Much like open and click-through rate, but I’d keep the original denominator — not just those who opened and clicked — to provide a reality check for everyone. Often, the “real” response rate (or conversion rate) would be far below 1% when divided by the total mail volume (or contact volume). Nonetheless, very basic and important metrics. Always try to go there, and do not stop at opens and clicks.
  • Average Transaction Value: If someone converted, what is the value of the transaction? If you collect these figures over time on an individual level, you will also obtain Average Value per Customer, which in turn is the backbone of the Lifetime Value calculation. You will also be able to see the effect of subsequent purchases down the line, in this competitive world where most responders are one-time buyers (refer to “Wrestling the One-Time Buyer Syndrome”).
  • Revenue Per 1,000 Contacts: Revenue divided by total contacts multiplied by 1,000. This is my favorite, as this figure captures both responsiveness and the transaction value at the same time. From here, one can calculate net margin of campaign on an individual level, if the acquisition or promotion cost is available at that level (though in real life, I would settle for campaig- level ROI any time).

These are just three basic figures covering responsiveness and value, and marketers may gain important intelligence if they look at these figures by, but not limited to, the following elements:

  • Channel/Media
  • Campaign
  • Source of the contact list
  • Segment/Selection Rule/Model Score Group (i.e., How is the target selected)
  • Offer and Creative (hopefully someone categorized an endless series of these)
  • Wave (if there are multiple waves or drops within a campaign)
  • Other campaign details such as seasonality, day of the week, daypart, etc.

In the ultimate quest to find “what really works,” it is prudent to look at these metrics on multiple levels. For instance, you may find that these key metrics behave differently in different channels, and combinations of offers and other factors may trigger responsiveness and value in previously unforeseen manners.

No one would know all of the answers before tests, but after a few iterations, marketers will learn what the key segments within the target are, and how they should deal with them discriminately going forward. That is what we commonly refer to as a scientific approach, and the first step is to recognize that:

  • There may be multiple pockets of distinct buyers,
  • Not one type of metrics will tell us the whole story, and
  • We are not supposed to batch and blast to a one-dimensional target with a uniform message.

I am not at all saying that all of the popular metrics for digital marketing are irrelevant; but remember that open and clicks are just directional indicators toward conversion. And the value of the customers must be examined in multiple ways, even after the conversion. Because there are so many ways to define success — and failure — and each should be a lesson for future improvements on targeting and messaging.

It may be out of fashion to say this old term in this century, but that is what “closed-loop” marketing is all about, regardless of the popular promotion channels of the day.

The names of metrics may have changed over time, but the measurement of success has always been about engagement level and the money that it brings.

Mastering Micro Moments: How to Win With a Connected Consumer

We’ve all seen the shocking statistics: consumers check their phones 150 times a day, etc. This reality has given rise to what Google dubbed “Micro Moments” — those little windows of time when a consumer is trying to get something done, and is most open to a brand message. The modern marketer must become a master of understanding and exploiting these little opportunities in order to advance their brand agenda.

Mobile Micro MomentsWe’ve all seen the shocking statistics: consumers check their phones 150 times a day; they look at them first thing upon waking up and lasting thing before sleeping; they see thousands of brand messages in the course of the day; and they multi-task across apps and to-dos like a hamster on crack. And truth be told, we all probably uncomfortably recognize these behaviors in our own daily life. This reality has given rise to what Google dubbed “Micro Moments” — those little windows of time when a consumer is trying to get something done, and is most open to a brand message. The modern marketer must become a master of understanding and exploiting these little opportunities in order to advance their brand agenda.

The good news is that there are only about 5,000 vendors of martech, adtech and other tech who are eager to sell you solutions that will let you insert yourself into these fleeting moments. Indeed, one of the great anxieties of the modern CMO is the challenge of understanding, sorting through and selecting from among the bewildering array of data, analytic and tech offerings. There has also emerged a cottage industry of conferences, consultants and publications whose mission is to further the technical execution of connecting with the distracted, mobile consumer.

The bad news is that all the best technology in the world will not complete the mission without a compelling piece of marketing content — and that comes down to smart, curious humans who deeply understand their target. In the rush to leverage the awesome power of analytics and algorithms, it’s critical that marketers remember that they’re connecting with a human being, not a collection of data points. Here are some principles to keep in mind when creating the human message to ride through the technology medium and win the micro moments:

Focus on the Whole Person

In that fleeting moment, you need to strike a nerve to effectively engage their attention and move their thinking or action. This calls for a level of insight and understanding that goes beyond a thin segmentation or persona with a scant few facts. Try to develop an immersive feel for the human you’re trying to reach, keeping in mind the emotional surround of their life, and that particular moment in the day. Think of the cultural context and the notes that will resonate. The book, Sensemaking, by Christian Madsbjerg, provides a compelling framework for this kind of rich, humanistic appreciation of the non-quant side of the equation.

Deliver Value

In some ways, well d-uh, but it’s all too easy to be so focused on your brand objective that you forget the notion of being of service in that moment. Google calls out four objectives the consumer may have: Know, Go, Do or Buy. Let go of the idea that the consumer journey is a one-way path to your cash register, and focus on what they’re trying to do and how you can be helpful in that moment. Always remember to offer value before you ask for it.

Telemarketing: The Impossible Tradeoff

One of my Brazilian colleagues, Roberto Silva (not his real name), was a frequent traveler to the U.S. on business and for pleasure. He had a daughter at an American university and he visited her whenever he could. He also liked buying things at specialist outlets and, a few years back, had bought some trousers (which became his favorites) from Lands’ End.

Call center agentOne of my Brazilian colleagues, Roberto Silva (not his real name), was a frequent traveler to the U.S. on business and for pleasure. He had a daughter at an American university and he visited her whenever he could. He also liked buying things at specialist outlets and, a few years back, had bought some trousers (which became his favorites) from Lands’ End.

With his wife reminding him regularly that these favorite trousers were wearing out, he decided to buy some new ones on his next trip. From his New York hotel, he telephoned Lands’ End and introduced himself to the cheery telephonist who welcomed him back to Lands’ End. A moment later, she asked him about his daughter, how she was doing and if she had graduated from college? Stunned, he asked how she knew about his daughter and she said that the last time he had called, he had mentioned that as the reason for his visit. What could she do to help him?

She asked how he liked the trousers he had bought before. He replied that if they still had them in stock, he’d order two more pair. “Can we ship them to the same hotel you stayed at last time? We can have them to you by tomorrow evening,” she said. Of course he purchased them and some other items and when he told me the story he said emphatically: “I’ll never buy trousers like these anywhere else. There are warm, friendly people who work there, not a telephone bullpen staffed by bored and underpaid, out-of-work actors. These people obviously enjoy talking to customers and seem in no hurry to get you off the phone and you don’t have to listen to endless menu options and punch in some numbers to get someone to talk to you.”

Perhaps that’s a rather long way around to introduce the “impossible tradeoff,” the obvious cost-saving of having an automated system interact with the customer up to or beyond the point where he or she either needs or demands to talk with a human being, vs. a totally human interface which may be less efficient in terms of costs, but is more likely to have customers become “advocates,” as my friend Roberto had. Can you imagine someone saying how happy they were only having to make four menu options instead of 10?

Banks and credit card companies seem to be in competition with mobile phone operators to win some prize for making it difficult to talk with anyone (and making you wait the longest time if you want to). Internet sellers are often even worse, hiding their telephone numbers in the most secluded nooks of their websites. The recent United Airlines disaster of dragging a passenger off of a flight to free up some oversold seats is a horrible example of how a focus on efficiency (in this case, maximum passenger loads created by intentional over-booking) can undermine customer loyalty. After that incident, it will take a long time before anyone is ever “loyal” to United again.

The ultimate question is one of relative value. And despite all of the big data in the world, there really is no way of gauging accurately the relative value of the tradeoff. How strongly the customer feels about the transaction must be an important if unquantifiable (soft) data point.

The bean-counters will assure you of the obvious saving; machines are, in the long run, cheaper than people. They work 24/7, they don’t demand raises and they don’t need pregnancy leave. Then they will argue that customers are better-served, get to speak to the right knowledgeable person faster than explaining their problem over and over again — or better, have it dealt with without human intervention. Not so for my friend Roberto, who will counter that his loyalty and the loyalty of many like-minded customers will more than make up for the savings in long-term revenue and insulation against “efficient” competition.

So where do you draw the bottom line?

It’s always a tradeoff compromise (the best solution or the worst). But I would opt for an automated answer which, first, thanked the caller for calling and second, offered a choice of:

  1. Immediately talking to a warm, friendly and knowledgeable human, or
  2. Hearing a short menu, which may speed you to the answer you are looking for.

Unfortunately, a “right” answer is impossible.

 

Endit …

The Value of Soft Metrics

In the past decade, marketers and the ecosystem that surrounds them have focused intensely, investing heavily in making direct connections between marketing spend and specific, attributable results. That’s a good thing, and the accountability of digital efforts has largely driven its growth. But we lose valuable nuance when we disregard all that is not accurately and completely quantifiable.

Business meeting, reviewing dataIn the past decade, marketers and the ecosystem that surrounds them have focused intensely, investing heavily in making direct connections between marketing spend and specific, attributable results. That’s a good thing, and the accountability of digital efforts has largely driven its growth. But we lose valuable nuance when we disregard all that is not accurately and completely quantifiable. There is clearly still a relevant and worthwhile tale to be told by customer actions that are not tied to specific marketing triggers. That tale can inform and enhance budgetary and other marketing decision making if we are smart enough to listen.

Soft Metrics: A Matter of Definition

Some of this debate over hard vs soft metrics is a matter of definition. We can take cues from audience actions in a geography that has been receiving marketing spend to determine whether that spend achieves lift over control geographies that were ignored. Is that a hard metric if it does not tie the specific spend to the specific outcome by channel, by campaign, by message, by offer, by customer?

Soft metrics are often those that demonstrate intent or interest but may not be ultimately quantifiable down to the buyer, the sale or other valued conversion. Often they are generalized effects like a rise in site traffic that can be tracked but may not tie to direct conversions or customers. Other types of soft metrics are those that can’t be tracked reliably at all – like many offline ad expenditures. But we have to stop and remember that it doesn’t make them valueless just because we can’t place a value on them.

Soft metrics are still critical because they often establish behaviors that signal intent. Sometimes, for instance with highly considered purchases, the soft metrics can be personally identifiable or at least allow for customizable content delivery even if the individual is not identified. This supports additional follow ups and identifies those most relevant for particular messaging or offers. Setting the stage, if you will, for that measurable conversion down the line.

Make Sure You Have the Full Picture

For brick and mortar retailers, restaurants, CPG marketers and others, the drive to reveal the path from online messaging to offline conversion has been powerful. But tracking the results of online messaging or experiences to foot traffic or in-store sales is a tricky and incomplete effort. We often don’t know if the least traceable efforts are the most or least impactful. Most important, however, is the sum impact of all the efforts. Looking at all the insights available – both hard and soft – will give you the best picture to trend over time and use to make decisions.

Hard metrics have their own limits. We may think of them as an absolute straight line in a controlled environment but that is an illusion. First, there are limits on the accuracy of tracking across channels and platforms and even the smartest marketers still struggle to establish clean data with baselines and trends that are reliable. Secondly, it’s not clean. We can’t discern a myriad non-traceable influences like some competitive actions, or offline influences like first person recommendations – even a consumer’s mood. Macro effects that can be expressed by things like sales rises are most often the result of many, many efforts. Some are in are control and trackable and some are not.

The best marketers can do is measure what we have available and take into account all the information at our disposal – whether it is hard or soft. Information is never complete. A marketer’s job is to use the information at hand to understand consumer needs and reactions to certain stimuli to the best of

their ability. That means making use of everything at their disposal, weighting it for confidence and relevancy. Consider the hard data just the tip of the iceberg and ignore the rest at your peril.

When Your Price Really Is Too High

When I get asked by sales professionals all around the county how they can overcome the “Your Price is Too High” objection, my response is you must first understand that in their operating reality, your prospect is right. Your price is too high. For now.

when-your-price-really-is-too-high[Editor’s note: Though this post talks about sales, it does get into issues marketers find vexing. It also provides solutions marketers may be able to use.]

When I get asked by sales professionals all around the county how they can overcome the “Your Price is Too High” objection, my response is you must first understand that in their operating reality, your prospect is right. Your price is too high. For now.

Your price is too high because you have not done one or both of the following:

  1. You have not uncovered a good and compelling reason for them to buy from you. Put simply, they have not recognized a need.
  2. You have a value problem. You have not established what your product or service will provide to them financially, operationally or personally and what problem you are solving for them.

You have choices when you hear that objection.

You can ask “Where do I need to be with my price in order to close this deal?” which many salespeople resort to. Selling on price, however, is always a losing proposition. You might win a deal, but you are left defenseless because someone can always come along with a cheaper price and take your client away. The other option is that you can take the time to uncover needs and sell value.

The most effective strategy against the price objection is preventing it in the first place.

What’s the Problem?

Let’s assume we have a great handle on all the features and benefits of our product/service. We also have a target set of clients that have been predetermined to likely need what we are selling. We might have even been trained on why they need what we sell. This combination can often be deadly — especially to the seasoned sales rep. We think we know the problem our client has (because we’ve seen it before) and so we charge in to solve it! Even if we are right, we set ourselves up for failure. Why? Because we didn’t take the time to ask about their situation, really listen to them and create something that will be meaningful to them personally. You must show that you care and that you want more than anything else to understand their operating reality and see if you can possibly make it better. If you do this, they will acknowledge a need for what you are selling. The only way to accomplish this is to use effective questioning skills and active listening skills.

So What?

True sales professionals concentrate on first understanding the client’s current challenges and identifying how your product or service will solve their problem. Think of it like this, no one buys the product or service you sell, they buy what it will do for them. 

WIIFM. What’s In It For Me. That is what they buy. Picture your prospect thinking to themselves with every sentence you utter about your product or service. “So What? So What does that mean to ME? What’s In It for ME?” If you can take the problem you uncovered and communicate the value you can deliver in those terms, you are well on your way.

Value = Benefits – Cost

Value has a price tag. And it varies depending on the buyer – not the product/service. Long before the price is ever mentioned, the sales professional must uncover what their prospect perceives as valuable and what the consequences of not buying are worth. With that in mind, they can position it so that the buyer feels as though the price was a great deal for them, regardless of the price. ROI! The equation Value = Benefits – Cost shows that we put a price on cost AND we put a price on the benefits. If in our mind, the benefits are greater, than there is value in making a purchase.

Let’s use buying a highly commoditized item as an example. A cotton, short-sleeved, T-shirt. These types of T-shirts can range in price from $5 to $100 or more. Things matter to buyers; color, sheen, logos, convenience of purchase, weight, etc. And, they often also appeal to emotions such as a souvenir of a great vacation, your favorite band, college, a show of super-fan for a favorite sports team. Personally, I wouldn’t pay much for a Mets T-shirt, but would spend plenty more on a Cubs T-shirt and even more still if I bought it at a game, where I had a great time watching them beat the Mets. But, that’s just me.

You can be prepared in advance to uncover the problem, position what you are selling in terms of what it means to them and in terms of their perception of value, AND help them justify their purchase when they state your price is too high. Or you can lower your price. It’s your choice.

 

Your Future Is Beyond Advertising

I’ve been covering marketing for almost a decade now between Target Marketing and Catalog Success (not to mention some work with EM+C, All About Email and a few others). One word I say far less than I ever thought I would is “advertising.”

IcebergI’ve been covering marketing for almost a decade now between Target Marketing and Catalog Success (not to mention some work with EM+C, All About Email and a few others). One word I say far less than I ever thought I would is “advertising.”

That’s because, when you look at where marketing is now and where it’s going, it’s clear the future is beyond advertising.

That doesn’t mean advertising — paying to run ads on TV, radio, the Internet, your friendly neighborhood Target Marketing magazine, or anywhere else — is going away. But the universe in which you communicate with your customers and prospects has changed, and so has the role of marketing in the company.

Ads used to be the centerpiece, now they’re just the tip of the iceberg.

The customer journey might start there, but it’s going to run through miles and miles your own emails, content, demos, reviews, social media, direct marketing and customer service. And those extra miles do more to define your brand to those people than any ad ever could.

Going Beyond Advertising

One marketing expert who’s very aware of that is Dr. Yoram “Jerry” Wind, lauder professor and professor of marketing at The Wharton School, founding director of the Wharton SEI Center for Advanced Studies in Management, and primary author of the book “Beyond Advertising: Creating Value through All Customer Touchpoints.”

Wind will also be the closing keynote speaker at the Integrated Marketing Virtual Conference on June 23. And 10 attendees to that session will win a free, autographed copy of the book “Beyond Advertising!”

“Beyond Advertising” is based on a multiyear, in-depth study of marketers and agencies throughout the world designed to learn how marketing will look in 2020. The conclusion they came to is that marketers are going to need to be able to manage the customer experience to create value across all their touchpoints with your company.

The book gets into the forces of change that you can harness to propel your company where it needs to be, as well as the mental models that you need to challenge because they stand in the way of change. And Wind will talk about those during the keynote, too.

Wharton Value Creation Model
This all touchpoint value creation model is step three in the Wharton Beyond Advertising Roadmap, and puts the emphasis on creating value for your target customers, rather than brand messaging.

What I want to focus on here is the all touchpoint value creation model that emerged from this study, outlined in the image at right.

The core idea of the model is that someone needs to be orchestrating the elements of your company that touch the customer, which is very nearly all of them.

If you align your products with the goals and community orientation of your target customers, provide a unifying brand focus that rallies the people in your company with those goals, and orchestrate all of your customer touchpoints to deliver experiences that reinforce that focus and help your customers reach those goals, then you are creating value for your customers at all touchpoints and become more than just another commodity in their lives.

In this model, you’re emphasizing the types of interaction that add value for your customers, and advertising represents just a couple of those touchpoints.

You can hear more about the M.A.D.E.s and R.A.V.E.s in the interview I did with Wind earlier this year.

http://bcove.me/4raqv74j

What it all comes down to is marketing is becoming more important to companies and customers, while advertising itself is becoming a smaller part of it. Thus: The future of marketing lies beyond advertising.

What skills do you need to make sure your marketing, and your career, are effective in this new situation? Click here to register for the Integrating Marketing Virtual Conference on June 23 and hear it all from Jerry Wind himself. And if you do that, you’ll automatically be entered to win a free, autographed copy of “Beyond Advertising”!

I hope to see you there.

The Cost of Perfection

Data has become the most strategic asset in modern businesses. It is now a “raw material” that any business requires to create and keep a competitive posture in its category. In order to convert this plentiful resource into business value, the data has to be refined, made easily accessible and deployed into the hands of marketers.

Data has become the most strategic asset in modern businesses. It is now a “raw material” that any business requires to create and keep a competitive posture in its category. In order to convert this plentiful resource into business value, the data has to be refined, made easily accessible and deployed into the hands of marketers.

From the perspective of working with dozens of marketing and IT organizations, it’s all too common to see this process grinding slowly along — even as opportunity costs rise for the organization.

Those opportunity costs are real — as the organization doesn’t have the visibility into its customers base and the wider market to make new strategic investments that competitors can’t even consider. Put another way, the opportunity cost is the foregone competitive advantage.

A Case Study of a Strategic Growth Opportunity Cost
A large “brick-and-click” retail brand asked us to look at its business, as it lacked a clear plan on how to achieve ever-increasing growth goals pushed down from the C-suite.

When the conversation started, it was a very tactical discussion. Lacking a strategic dimension or business context — the outcome or definition of success ultimately was to do something new and fresh.

The C-suite wanted outsized growth. So while the market they served was growing modestly, growing only with “the pie” or the market itself would not meet expectations.

Taking share was going to require a more advanced strategy.

With a large retail store footprint in North America and a robust online business, the company struggled to find credible new ways to scale sales and share further.

Shifting the dialog to the evidence of a specific business issue, and the impact that addressing that issue could or would be expected to have, helped focus the organization on the more concrete opportunities that existed.

The Symptoms
Some fundamental business and marketing “health” metrics were either inaccessible or non-existent.

Two prime examples were: the growth rate of net-new customers, and the value of existing customers.

Beyond those, the value of a customer over time, and the cost of acquiring customers from various sources relative to their upfront contribution to the top and bottom line, to the business and its value over time, were elusive.

When we asked to look at source data to get the answers for the organization, we learned that an 18-month project had been under way to clean and organize “the data” and measurement of these KPIs would have to wait.

With a rush to activity without some important benchmarks to define what must change, we agreed there were elements of a “ready, fire, aim” approach. However, the data was “inaccessible” or otherwise “unavailable.” IT owned the data.

Another case of the new “Data ‘Mine’-ing” (not to be confused with productive “Data Mining”). In the interest of “controls, clean data and process” — data is held hostage and doesn’t create business value. As marketing waits, the value of the data (recency, for one dimension) may decay — and competitive advantage diminishes.

These sounded like pragmatic purposes. After all, one would have to suppose that if it really needed to be cleaned, then it had to have been quite “dirty”  in the first place.

What possibly would the value be in working with such “dirty” data?  It makes sense on the surface to me — plus, who likes “dirty,” in general?

Emotionally, I feel and experience the same concern. This dislike of “dirtiness” has made robotic vacuums a mass-market product — iRobot alone has sold more than 14,000,000 of them — and counting!

Yet this same data that was being “organized and cleaned” for the prior year was remarkable for what it did not do … create value.

This example seems paradoxical for many. Yet there are highly rational reasons for this behavior.

Why Does This Happen? The Wrong Conceptual Model
The organization had a conceptual model that did not serve the business. Those most reasonable-sounding priorities were misplaced.

Why? because “clean” or “not clean” data is actually highly dependent on the specific purposes for that data. The same applies for almost any other description of data (and many other things) made without meaningful context.

One example is sentiment analysis. In this case, limited or even no cleaning at all could work with Bayesian methods on unstructured data, such as reviews on Yelp.

Granted, every review would not make an equal contribution to the final determination of the consumer sentiment about that brand — but does it have to? Of course not.

Your House is Dirty.
How did that statement make you feel? I wrote it, and for me it is really uncomfortable. I’m not a total neat freak, but it gives me an emotional, visceral reaction.

Why?  Because I like “clean.”

But if someone wanted to come in with a white glove, I guess that person would be able to get a smudge on it somewhere. Now maybe I could clean up the place to pass even the most stringent white-glove test …

But what if we came in with a microscope … regrettably, I’d find microscopic organisms in every home — mine, included.

Yuck.

But this being the case, we also know that our homes aren’t any less livable or enjoyable.

Let’s say we irradiated it. Like the perfect “cleaning” you may be envisioning for your data. Let’s just say we applied ultraviolet radiation to every surface. Now it’s as clean as we can get it …

Is home that is anything short of irradiated better than being homeless?

The corollary … is good even if ‘not perfect’ data any better than being data-less?

The reality — “clean” in data and elsewhere really is in the eye of the beholder.

Ever been in a college dorm or a fraternity house on a Sunday morning where no one’s complaining about how it looks? However scary it might be to you and I … it’s clean enough for them.

Yes, the same can be said for your data. It depends on how you wish to use it, and what the outcome you’re looking for is. Even the fraternity house looks perfect and smells like fresh lemons the day that the parents (and their checkbooks) come to visit.

Accuracy vs. Precision
Instead of clean vs. dirty data, marketers do well when they consider how accurate the data is for a specific purpose, vs. how much precision it could produce.

Big Data being “big,” we simply don’t need to hit the bulls-eye every single time; which is critical, because that’s not likely.

If the collection methods are logical and reasonable, even if only 90 percent right … that’s 10 fails out of 100 tries … we can still have precision for a given purpose.

This example from Jim De Novo’s “Drilling Down” makes a great example of why accuracy (AKA, “clean” data ) isn’t the only thing that matters — precision is what matters.

Mike Ferranti blog artWhen our data is inaccurate, but precise, we can use it to predict what will happen next.

In the bulls-eye on the left, we keep aiming for the perfect bulls-eye. We keep missing, however, and how much we miss by, or where the next shot will land is hard to say.

In the bulls-eye on the right, the attempts are precise. That is, they do not hit the bulls-eye consistently — but they are also consistently near the bulls-eye. We can realistically expect to know where the next dart will land.

Perfect Is the Enemy of Good
Similarly with data, we don’t need some theoretical “perfection” to be practical. When we have a large data-set (and in the digital age, they are usually sufficiently large) with some level of random error in it, we have precision, and we can predict the customer will buy more bath soap than perfume.

Better yet, one of the beautiful things about statistics (and computers) is the ability to assess, measure and account for error, outliers and still produce predictable outcomes.

In marketing, especially at scale, we’re looking to optimize performance. Rarely do we get it truly and totally perfect — not just because we’re not building medical devices to implant in a person or bridges that millions will walk across … but because a few percentage points of improvement in profit can redefine the leader in a category.

The Bottom Line
In the example we began with, we used a fairly weak proxy for the “ideal” data we couldn’t get our hands on for our analysis. With all of its limitations, we were able to discover an opportunity to grow customer value and take share from competitors with an eight-figure return … and if we had used only the data the organization already had on Day One, 18 months prior, that rate of return could be double.

Marketers need to have a bias to action, and start using the data they have today. It is far too easy to succumb to a narrative that leads us down the path of inactivity and reactivity.

Clean and perfect may sound or feel good — but the corner office and a big promotion requires action and results.

Don’t delay in the hopes of theoretical perfection that really never happens — take a shot and see what is actually feasible.

If someone, however well-intended, “scares you into inaction” over visions of some perfection, cleanliness or readiness of your raw data, perhaps progressive marketers have to start asking what — or whom it is — who’s “just not ready.”

Omnichannel Customers Are 2X as Valuable – How to Make Them Yours

With so many trying to sort out an “omnichannel” marketing strategy, I thought it would make the most sense this month to provide some structure around what it is, the best way to take the “buzz” out of the term, and provide a framework for thinking strategically about this new mandate in marketing and strategy. For starters, here’s a simple idea, or “true north,” you can use to drive your own marketing strategy as you embrace the omnichannel consumer. “Put the Customer First” and build your “omnichannel strategy” around them.

With so many trying to sort out an “omnichannel” marketing strategy, I thought it would make the most sense this month to provide some structure around what it is, the best way to take the “buzz” out of the term, and provide a framework for thinking strategically about this new mandate in marketing and strategy.

For starters, here’s a simple idea, or “true north,” you can use to drive your own marketing strategy as you embrace the omnichannel consumer. “Put the Customer First” and build your “omnichannel strategy” around them.

Let’s remember, connecting with, engaging and finding the right new customers are where customer value is created and realized in omnichannel marketing. Optimizing that value comes through studying and tuning communications, improving your relevance and becoming more creatively authentic, not in the boardroom, but in the eyes of your customer.

Today, marketers appreciate that consumers engage on multiple platforms, devices and channels—the ones they want, when they want. With mobile devices being a spontaneous window into their thoughts and an outlet for their wants and needs as they arise. What’s a bit more subtle and more often missed is the objective and capability to respect the way your customers choose to engage and buy across them in a scalable manner—as it will either fragment their relationship with your brand or galvanize it.

Consider Kohls. Not exactly a high tech player in most folks’ minds. However they now deliver an omnichannel experience that deepens relationships with them. Recently, my wife received a promotion by direct mail (I doubt if she remembers when they asked for her phone number the first time, making the connection between the POS and her online purchases), she had it in hand as she went to the website to browse. Later, she used another promotion from her email right at the POS with her iPhone.

In a single engagement with the brand, she hopped across three channels, not including a customer service call by phone. As a consumer, she didn’t even notice—she just expected it to work.

Similarly, OpenTable will consistently get you to a good restaurant based on where you’ve dined before, and what your current online browsing and mobile location is. You probably do it all the time. Your relationship with that brand hops between mobile, desktop and point of sale effortlessly—but as a consumer, you’re not exactly impressed: You expect it to work.

As a result, effective omnichannel organizations have become “stitched into” the lifestyles of their customers. Moreover, this supports the creation of competitive advantage in the measurable, trackable, digital age.

Omnichannel Means Understanding the Customer
Putting the customer first obviates really knowing and understanding your customer in more meaningful and actionable ways. Not just with an anecdote of the “average customer,” but with legitimate, fact-based methods that are built on a statistical and logical foundation. This is the basis for the “absolute truth” that your omnichannel source is dependent on.

This, too, is no small task for many organizations, but it’s becoming more “doable.” And it has to be—because your competition is thinking and investing in this path, and it’s not a long-term, viable position to not have an actionable strategy to miss the boat on knowing your customer in a way that is valuable, actionable and profitable.

But first, let’s clear up some of the confusion that we’ve been hearing for at least a year now: Is omnichannel more than the buzzword of 2015, or is it something much more important?

Multichannel
At the most basic level, “multi” means many. As soon as you adopted your second or third channel, be it a catalog or an e-commerce website, your organization became a multichannel organization. Multichannel came quickly—as it’s not uncommon that the majority of a customer base has made a purchase across more than one channel—whether you have that resolution or not is another matter, and often requires a smarter approach to collection.

Digital growth is accelerating channel expansion. With the explosion of online and digital channels and the rapid adoption of mobile smartphones, tablets and now wearables, digital can no longer be viewed as a single channel. We now have the merging and proliferation of digital, physical and traditional channels.

Many marketers have experienced as much challenge in juggling an increasing number of channels as there is opportunity. But digital channels, of course, are more measurable and challenge the traditional approaches by bringing a greater resolution and visibility for some, and confusion for others.

Key factors in leveraging, managing, and maximizing those channels include:

  • Competencies developed in the organization
  • Identifying third-party competencies, especially in digital partnerships
  • The culture of the organization
  • Support for change and innovation in marketing
  • The depth of technical capability in an organization

As channel usage expands, data assets “pile up,” though most of the data in its raw format is of limited practical use and less actionable as one would hope. From the inside of dozens of IT organizations, the refrain is common; “We’re just capturing everything right now.” Creating marketing value would require strategists and the business units.

Omnichannel Is the Way Forward
While most organizations are still working through mastering their channels and the data they perpetually generate, the next wave of both competitive advantage and threats have come with them. The customer learns what works for them relatively quickly and easily, adopting new channels and buying where they want, how they want. Those touches are often lower touch, and introduce intermediaries, and are surrounded by contextual advertising, often from competitors.

Omnichannel buyers aren’t just more complex, they are substantially more valuable. We’ve seen them be as much as twice as valuable as those whose relationship is on a single channel. Perhaps this a reflection of the greater engagement with the brand.

Delivering that omnichannel experience will require more thought, focus and expertise than before. It requires the integration of systems, apps and experiences in a way that’s meaningful—to the customer—and that of course requires an integration of the data about those purchases and experiences.

To serve the business, the Omnichannel Readiness Process has six components, each of which require thoughtful consideration:

1. Capture—many organizations are aware that they need to capture “the data.” The challenge here is shifting to what to capture, and what they may be missing. The key challenge is: It’s impossible to capture “everything” without understanding how it can and should be used and leveraged. How that data is captured in terms of format and organization is of great importance.

2. Consolidate—In order to act on the omnichannel reality, we must have all our data in one place. In the ongoing effort to find the balance between cost, speed and value, “silos” have been built to house various data components. Those data sources must be consolidated through a process that is not quite trivial if those data sources are to create value in the customer experience and over the customer lifetime.

3. Enhance—Even after we’ve pulled our data together into an intelligent framework and model, built to support the business needs, virtually every marketer is missing data that consumers generally don’t provide, or don’t provide reliably on a self-reported basis. “Completing the customer record” requires planning and investing in appropriate third-party data. This will be a requirement if we’re to utilize tools and technology to mine for opportunity in our customer base.

4. Transform—much of the data we need to perform the kinds of analysis and create the kinds of communication that maximize response now, and the customer value over time, utilizes the derivation of new data points from the data you already have. Here is one example: Inter-order purchase time. Calculating the number of days between purchases for every customer in your base allows you to see whose purchase cadences are similar, faster, slower or in decline. On average, we’ll derive hundreds of such fields. This is one example of how a marketer can “mine” data for evidence of opportunity worth acting on and investing in.

5. Summarize—The richest view of a customer with the best data in its most complete state is a lot to digest. So to help make it actionable, we must roll it up into logical and valuable cohorts and components. Call them what you will—segments, personas or models—they are derivative groups that have value and potential that you can act on and learn from.

Many marketers traditionally spend 80 percent to 90 percent of their time and effort on getting their data to a point where it serves both the omnichannel customer and their brand. However, marketers can do better with emerging tools and technologies.There is no replacement for solid data strategy that is built around the customer, but efficiencies can be gained that speed time-to-value in an omnichannel environment.

6. Communicate—The prep work has been done, you’ve found the pockets of opportunity, now it’s time to deliver on the expectations the omnichannel customer holds for marketers. At this juncture, we need to quickly craft and deploy messages that resonate in ways consumers will think about their situation and your brand. They must address the concerns they have and the desires and opportunities they tend to perceive.

Omnichannel customers expect you will recognize them for their loyalty and their engagement with your brand at multiple levels, and that those experiences will be tailored in small ways that can make a bigger difference.

They expect your story to better-fit with their own, if not complete it. That sounds like a dramatic promise, but the ability to know your customers and engage them in the way they prefer, and at scale, is upon us.

Keep It Relevant to Your Business
This entire process must include of course, the answers to key business questions about the types of discoveries we’d make and questions we’d answer with it—for example, does the Web cannibalize our traditional channels? (Hint: It surely doesn’t have to).

That said, we’ve learned to start with the most basic questions—and are not surprised when there are no robust answers:

1. How many customers do you have today?

2. Do you have a working definition of a High Value or Most Valuable Customer?

3. If so, how many of those customers do you have?

4. How many customers did you gain this past quarter? How many did you lose?

a. Assuming you know how many you lost, what was the working definition of a lost customer?

5. How many customers have bought more than once?

6. What’s the value of your “average” customer, understanding that averages are misleading and synthetic numbers are not to be trusted? But we can measure where other customers are in terms of their distance from the mean.

7. Who paid full price? Who bought at discount? Who did both? How many of all the above?

8. For those who bought “down-market,” did they trade up?

9. How many times does a customer or logical customer group (let’s call them “segments,” for now) buy? How long, on average, is it between their purchases? And the order sizes, all channels included?

10. All this, of course, gets back to understanding more deeply, “Who is your customer?” While all this information about how they engage and buy from us is powerful, how old are they? Where are they from? What is relevant to them?

Now, even if a marketer could get the answers to all of these questions, how does this relate to this “Omnichannel” Evolution?

Simple. It only relates to your customer. Of course, they are the most important actors in this business of marketing—in fact in the business of business. What this really means is deceptively simple, often overlooked, and awesomely powerful:

Omnichannel Is Singularly Focused on Customers, Not Channels
It’s about the customer, and having the resources, data and insights at your disposal to serve that customer better. Virtually all of your customers are “multichannel” already. Granted, some are more dominantly influenced by a single channel. For example, online through the voice of the “crowd.” But even then, the point of omnichannel only means one thing: Know your customers across all the channels on which they engage with you. Note the chasm between having the dexterity to examine and serve customers across all the channels, and just knowing their transactions, behaviors or directional, qualitative descriptors.

So “knowing the customer” really means having ready access to actionable customer data. Think about it. If your understanding of your customer data isn’t actionable, how well do you really know your customer in the first place?

Considering the 10 questions above, and evaluating the answers in terms of the most important questions about your customers, is a solid starting point.

When you’ve worked through all of these, you’re now ready to create experiences and communications for customers that are not only relevant, but valuable—to your customer and to the business.

When you’re adding value and are channel-agnostic, as you must become, you’ve achieved the coveted omnichannel distinction that market leaders are bringing to bear already.

Not only is this an impressive accomplishment professionally, it surely is—but remember—it’s the customer we have to impress.