Monday, November 28, 2011

Strategy first. Warehouse second.

You know I’m a big proponent of (centralized) data warehousing and what it can do for a business. But the key is the “what it can do” part of that sentence. Too often, companies want to start with centralizing the data, when they should be starting with how they’re going to use it.

Consumers (rarely) react to a single contact. Their relationship to your company will normally depend on the sum of all their experiences with it. You need to understand that sum, and what goes into it. The way to do that is to:
1) identify and map out all the ways a customer can interact with your company throughout the customer lifecycle,
2) create a strategy to link and optimize these touch points, and
3) then create the infrastructure to implement your strategy

These interactions will involve tools like your website, email, snail mail, telephone, social media, and face-to-face. They will take place during proactive and reactive interactions with people in your sales, marketing, accounting, operations, distribution, legal, and other departments.

Prospects and customers are not all the same. Which of them are “influentials?” Which are “advocates?” Who is profitable? Who is costing you money? How do you want to interact with each of these groups during every potential contact with you?

Sound complicated? It is. But would you rather have your prospect and customer relationships developing randomly (as they do for most companies), or under your direction?

The more you understand, guide, and control the contacts that create a customer’s relationship with your company, the more successful you are going to be. That idea is simple, it’s the execution that’s hard. But the more you embrace that execution, the greater the competitive advantage you will generate.

Your CMO can help you map your interactions and better control their outcomes to create more profitable relationships with prospects and customers. Give me a call and we’ll talk about it!

Saturday, October 15, 2011

Two key elements of Innovation

It’s a fast-paced world out there these days, and standing still is a good way to get run over. That makes innovation more important than ever. Whether you’re trying to identify new products or services, save money, or improve efficiency, innovation is the best way to increase your competitive advantage.

But most companies lack even the most basic structure to generate innovation. Here are two things that basic structure requires:

1) Ideas! And not just from the managers. Ideas should come from all levels--just offer a reward and see how many you get (it doesn’t even have to be a big reward). [Interesting anecdote: The military once offered its members 1% of the first year’s annual savings for innovative ideas which were implemented. They stopped the program because too many of their key non-coms were retiring on the millions of dollars awarded.]

One free way to foster innovation is to make it one of the job objectives evaluated for each person’s annual review. You can even challenge your vendors to submit ideas. Think about asking for different types of ideas in different years. “What would make us more efficient?” or “How can we save money?” or “What would make our job easier?” for example.

Publish the ideas in an (internal) forum available to your employees. You’ll reduce duplication and encourage synergy (“Instead of this, what if we did that…”)
2) An evaluation system: You won’t be able to implement every idea you get. Nor should you. So you need a system to evaluate and prioritize ideas. Two very basic measures are relevance to your corporate goal(s) and projected return on invested resources. Ideas should not necessarily be ranked on how well they make use of current organizational resources or expertise--that may be too limiting.

Make sure employees know the evaluation criteria. Over time, they will begin pre-filtering their own ideas, improving the quality of the suggestions you receive.

Final thought: Wouldn’t it be neat if some of our government agencies did this?

Your CMO has been involved in innovation for over 30 years. If you want to jumpstart your innovativeness, get in touch!

Stranger In A Strange (generational) Land

If you visit Japan, or Germany, or Brazil, you expect cultural differences. Same with people of different races or religions. But the cultural gap between generations can still surprise us. I think we unconsciously tend to expect people “like us” to have similar attitudes and wants, no matter what their age. Not so.

Why should a marketer care? Here’s just a sampling of industries and functions where generational differences radically impact the form and usage of products and services:

Retirement communities
Cell phones
Publishing
Restaurants
Automotive
Human Resources
Fund-raising
Volunteer recruitment

If you have been giving thought all along to how generational differences affect your business, that’s great. But it’s my experience that very few people do.

If they give it any thought at all, older marketers tend to lump everyone else into YOUNGER. Younger marketers tend to lump everyone else into OLDER. And middle aged marketers just figure everyone is exactly like them.

Generations are defined by unique core values created by what happened to certain groups of people during their formative years. Most “experts” (there’s no certification or credentials for generation gurus) tend to lump living Americans into the following groups:

G.I. generation Born 1901-1926
Silent generation born 1927-1945
Baby Boomer generation born 1946-1964
Generation X born 1965-1981
Millennial generation born 1982-present

If you’re thinking you’d like to know more, you don’t need to reinvent the wheel. There is a ton of research on the attitudes and behaviors that define the different generations, at least here in the U.S. (generational data for other countries is much harder to find). A good starting place is The Generational Imperative by Chuck Underwood, one of the pioneers in the field. He has specific chapters on his book on how to market to each generation, which can be a convenient short cut.

Want to discuss how your business plan might better reflect generational differences? Give me a call--I’ve already read the book!

Identify bad products by how they’re described.

Good products (or services) don’t have to be “sold.” Their benefits and value are easily recognizable. Just communicate them to people, and they’ll buy.

Bad products don’t have easily recognizable benefits, and their value is far from clear. The solution is, of course, to improve the product. But all too often, the company tries to plaster over product deficiencies with a thick layer of glowing adjectives and disclaimers. No one is fooled, but it enables the company to shift the blame (for poor sales) to the advertising agency.

Pick any undistinguished product you like, and check out the language they are using to describe it. The description will be loaded with glowing, generic adjectives like ‘exceptional,’ ‘stylish,’ ‘sexy,’ and ‘supercharged.” And/or the bottom of the page will be covered in mouse type telling you why/how the product isn’t really what it appears to be, or has some unpleasant side effect (‘some assembly required,’ ‘do not attempt at home,’ or my personal favorite, ‘may cause anal leakage’).

Whether consciously or subliminally, consumers do pick up on these cues. That’s why so much advertising is ineffective. Consumers sense the desperation and deceit, and tune it out. Even if there’s nothing wrong with the product, overheated advertising copy can make the product appear second rate.

Want to know what message your advertising is sending? Give Your CMO a call, and I’ll help you figure it out!

Yes you can. And your customers expect it!

Back in the day of the corner store, proprietors used to know their customers. They didn’t have to ask the customer’s name or address, and probably had a pretty good idea of the customer’s likes and dislikes. If an order had to be delivered, the store probably even knew what time the customer was likely to be home. And customers appreciated that knowledge, and the personal service it made possible.

Flash forward 50 years, and everything had changed. The corner stores were gone; relationships had become impersonal. The store didn’t care who you were, and if you wanted something delivered, you had to supply your name and address (every time, even if you’d just bought something there the day before). Despite a greater selection and lower prices, store loyalty and customer satisfaction declined.

Flash forward to today. Thanks to computers, there is no longer an excuse for uncollected or inaccessible information. And customers know it. So customers have every right to expect the same kind of recognition and personal service their grandparents used to get from the corner store. It doesn’t matter whether they are buying face-to-face or online. They want the fast, easy, personalized service that a well-networked database makes possible.

Sure there are exceptions. Some of us have information we don’t want companies to store, like birthdays, social security numbers, and financial access data. But apart from those, customers have the right to expect you to know them, and treat them like the individuals they are.

So think about your transactional systems (and this goes way beyond purchases to systems which handle functions like customer service, billing, and shipping). When someone gives you information, do you store it? Do you pre-populate forms with known information? Do you keep track of customer preferences, and make suggestions based on them? Do your all of your (appropriate) people have access to the customer’s history? In other words, do you treat customers as the valued individuals/corporations they are, or as anonymous, unappreciated “buying units.”

It takes a lot to turn a prospect into a customer, and to keep that customer. A well designed, well networked, well used database can make that effort a lot easier.

Your CMO has extensive experience in using data to create a more user-friendly customer experience, and can provide some great examples from places “doing it right.” Let’s sit down sometime and talk about how that experience can help improve your customer acquisition and retention!

Sunday, May 1, 2011

Time for a Reality Check

The following exchange is from the classic movie E.T.

Elliot: "He's a man from outer space and we're taking him to his spaceship." Greg: "Well, can't he just beam up?" Elliot: "This is REALITY, Greg."


We all need to deal with reality. And reality is that marketing is not about what we want to sell. It is about what they want to buy. It's easy to ignore reality in the short term. You can simply tell your marketers and sales force "Go make people buy this." But eventually reality will have to be faced. And if you're trying to force your product or service on uncaring prospects, the bill will come due sooner rather than later.

It's economic Darwinism. The companies that listen to their prospects; the companies that take the time to understand what is needed, are ultimately successful. The ones that try to shortcut the process ("I know what the public needs--why should I waste money asking them?") are usually the ultimate losers. I'm not saying that these "I know what they want" companies don't occasionally get lucky, but do you really want your business success to depend on luck?

NOTE: I am not paid by, nor am I a member of, a marketing research firm. But whether you use one, or just do casual interviews yourself, you need to check in with your prospects and customers once in a while. No, make that "all the time." Because keeping in touch with reality is not a one-time or occasional chore--it's something you need to write on your To Do list every day.

We live in a world that is changing and evolving more rapidly than in any time in human history. Technology, events, attitudes, even weather--the landscape is constantly shifting around us. Even if you have been successful at meeting a need for a targeted group, that need is not a constant. It will change--and you'd better be ready to change with it.

So stay in touch. Yes, it is time-consuming. Yes, it is expensive. Yes, it is confusing. But "This is reality, Greg." It is also the simplest way to get and keep a competitive edge. And isn't that what we're all looking for?

Four elements of a good advertisement

An advertisement can be anything, from a one-page flyer to a radio spot to an announcement in your church bulletin to a television commercial. No matter what form your advertisement takes, it will be more successful if it contains these four elements:

1) INTEREST VALUE: A good advertisement can attract attention in an environment in which anywhere from hundreds to thousands of advertisements per day (depending on who’s doing the measuring) are competing for your attention. This is job one, because if people don’t pay attention to your ad, it doesn’t matter what you’re trying to say. Note: the more often your ad will be seen, the more you want to avoid “shock” or surprise tactics that lose their punch after the first viewing. For an ad that will be around a while, it is a good idea to include a number of emotionally satisfying or interesting bits that will continue to draw attention during repeated viewings/hearings. Example: The Progressive Insurance ads with “Flo.”

2) RELEVANCE: A good advertisement offers a meaningful reason to consider and remember the brand. This sounds easier than it is. How many times have you been able to remember an ad, but not what it is advertising? It can be a struggle to reconcile this element with Interest Value, but unless you do, you’re wasting your advertising money.

3) SIMPLICITY OF EXECUTION: Don’t get too cute! Remember, you intimately understand your product and its benefits. The people who will see/hear your ad are starting from scratch, and will be paying limited attention to your message. Don’t expect too much from them! They will remember (at most) one or two simple points. So make those points, then shut up! If you have a lot to tell people, you’re going to have to do it over a series of ads, in person, or via your website. The job of advertising is to tease the prospect into seeking more information (or to sway the informed consumer to select your product over another). If you have to spend too much time explaining your product or its benefits, maybe its not as good as you think it is!

4) BRANDING PROPERTIES: Worst case—the consumer sees your ad, then goes out and buys your competitor’s product. Make sure your commercial clearly associates the product in your ad with your brand and your brand only. Make sure your name is clearly and repeatedly mentioned in your ad. If you have a brand logo, feature it prominently (that’s why logos were invented!). This is not only important for the current product, it also creates synergy in advertising for future products.

If you’re looking for help making your advertising more effective, YOUR CMO can help. Give me a call and we’ll talk about how to make it happen!

Wednesday, February 23, 2011

Business-to-Business Segmentation in four easy steps…

Why worry about segmentation? You already know who your best customers are (kind of), and you’re too busy for some kind of facacta academic exercise. But that’s the very reason why segmentation (try calling it prioritization if that seems more comfortable) is a good idea. First, you are likely to be surprised by some of the clients who float to the top, and second, prioritizing your customers will save you time (and help you make more money) in the long run.

I’m suggesting four factors that can jumpstart your segmentation/prioritization project.

1) Current profitability: What are you netting from the account? Revenue is good to know, but a customer may be costing you more than you’re taking in, due to excessive customer service demands and late payments. [If you’re not already measuring net income by account, this is the place to start!]

2) Future potential: What are the opportunities for cross-selling or up-selling the customer? Are there different products or services you can sell to the department you’re dealing with? Are there other departments in the company you can sell your current product or service to?

3) How much attention they require: Sales and service calls, requests for (free) extra work like accounting reconciliations, socializing, freebies like Bengals and Reds tickets, etc.

4) Strength of relationship: Measured by consumer satisfaction scores, willingness to refer other companies to you, the longevity of the relationship, and the degree of interactivity (frequency of reviews, how often they open your e-newsletter etc.)

Data for all four factors should be available within your organization--all you have to do is
a) collect them into a single database (an Excel spreadsheet can work fine)
b) assign a value to each factor (nothing fancy--maybe two points for good, one point for
average, and zero for bad), and
c) rank your customers by their composite score.

Congratulations! You’re segmenting!

If you would like help with this process from someone who’s done it many times before (examples), or want to talk about how to create a great ROI from segmentation once its done, give me a call. You’ll like the results!

WHAT'S YOUR COMPANY'S GUIDING STAR?

In days of old, mariners steered their course by the stars, often picking out one particular star to follow.

Today's companies often have a mission statement which should (but seldom does) serve the same purpose. A mission statement is like a compass, which can keep your company from veering back and forth as the makeup of your management team changes.

Republicans recently read the US Constitution out loud to start the new congressional session. They obviously felt that the country was off course, and were trying to focus attention back on what they considered to be the "national mission statement." If there is this kind of disagreement over our country's direction, how much easier is it for a company to drift off course?

Unfortunately, for many companies, the mission statement doesn't get much attention once it's created. It's dusted off once a year for the annual report, and may appear in a customer presentation or two, but no one really pays much attention to it.

An impressive exception is Johnson & Johnson's CREDO. It's worth a look. This 300 word mission statement addresses the company's relationship with its four most important constituencies: customers, employees, the community, and stockholders. It does this in plain language, and explains why it says what it says. For example, when it states that costs should be kept low, it specifies that this is not to bolster profits, but to hold prices down.

Here at the beginning of a new year, and in the midst of challenging economic times, it might make sense to exhume your mission statement and think about breathing some new life into it. Right now it may be a toothless lion. But if you develop a meaningful mission statement and give it the ongoing attention it deserves, it can be a compass that will help your company sail through troublesome times without expensive and unproductive zigs and zags.

Unconscious Consumption

Just like a computer, our brains have a limited amount of processing capability. If we had to consciously think about things like tying our shoes or buying our daily pack of chewing gum, that processing capability would be used up very quickly, and we’d end up standing around literally “lost in thought.”

To prevent this, most of us tend to hardwire frequent, less important decisions and processes. We turn them into ‘habits’ or ‘routines.’ Which has major implications for us as marketers. We tend to think of purchasing and usage as conscious decisions, when the truth is they often are not. In many cases, logic may have nothing to do with it.

So what needs to change? We need to recognize the unconscious nature of those consumer purchasing choices, and work on understanding the cues that consumers employ to enable these unconscious decisions.

Consumers won’t be able to articulate why they make these choices. To understand the unconscious behavior and gain a competitive advantage, you have to identify the cues that lead the consumer to (unconsciously) behave the way they do. Insights can be found by observing reactions to varying stimuli such as the packaging size, color or weight, or product cost, or shelf position. For example, coffee is perceived as more robust if packaged in dark colored containers. And the higher cereal is placed on the grocery store shelves, the healthier it is assumed to be.

Ferreting out subliminal cues is going to be expensive and time consuming. But less so than wasting your money on advertising that is trying to appeal to logic where it doesn’t apply. Forget the “voice of the consumer.” The consumer can’t tell you why they’re doing what they’re doing, because they aren’t doing it consciously. They’re going to have to show you, through observation and controlled testing. Good luck!

If you’d like some help in figuring out how to interpret and influence your consumers’ unconscious buying decisions, give Your CMO a call!