Decision Making, Leadership

How to Prevent Your Biggest Strategy Mistake

It seems like a pretty simple statement: Getting your strategy right is critical to getting the outcome that maximizes your marketing and business potential. Many companies, especially smaller and mid-size companies, tend to put lots of work into getting strategy right, and they often come up with all the right answers. Even so, they are missing the forest for the trees.

Getting the right strategy for your marketing and your business requires that you choose the right strategy framework for your particular situation. No-brainer? Turns out it’s not.

Here’s an example: A young software company wanted to find ways to generate substantial growth. The natural model would be to expand their offering to their market and, at the same time, expand their market. This expands the definition of their capabilities along two dimensions at the same time, significantly increasing the potential to dilute their focus and investment.

After seeking advice, they found out the approach was completely wrong. They could have developed a strong strategy addressing larger markets with more offerings, but execution would have failed. It would have been hard to tell why, since none of the assumptions would have been violated — just the desired outcomes would not have happened.

They ultimately went with a strategy based on the business book, Crossing the Chasm. Doing this required a different approach: narrowing focus on a smaller set of customers initially and then growing from there. This strategy worked, and they are now on a very rapid-growth trajectory.

Why did this choice make sense? The premise of the strategy matched their situation.

The book describes the point at which the strategy makes sense as the point at which, for tech companies, customers become less visionary and more pragmatic. This was their actual experience, but until they saw that described, they would not have seen it explicitly.

Similarly, every strategic framework I’ve worked with has a similar definition of the conditions under which the strategy should be applied. The challenge is it’s hard to find it — most strategy books and frameworks will describe in great detail how to execute the framework but spend little time describing those conditions. You really have to look and pay attention!

Whether you need to cross a chasm or find some blue ocean or move in any direction, make sure your approach suits your situation, your market, your business and your customers.

Or risk unexplained failure.

Customer Trust, Engagement

Storytelling Is Really the Only Marketing

Maybe the inverse of my title is more true:  if you’re not telling a story, you’re not really marketing.  As marketers, we’ve all spent plenty of time analyzing features and benefits of our offerings, figuring out just the right messaging and discovering the right ways to talk to our prospects and customers.

In more recent years, notably with the rise of online marketing of every sort, we’ve started talking about conversations, storytelling, and how to engage our prospective customers and build relationships.  This is also an important part of marketing work.

But no matter what you sell and no matter what audience you want to engage, if you’re not telling them a good story and engaging them with that story, you’re not going to garner much interest.

Why Storytelling Matters

Kathy Klotz-Guest, CEO of Keeping It Human, (also a friend and sometime MENG speaker) recently released a book, Stop Boring Me! How to Create Kick-Ass Marketing Content, Products and Ideas Through the Power of Improv, based on her years as an improvisational actor, then as a storytelling marketing adviser to Silicon Valley businesses.  Her premise is that all business is human (also the premise of my work, which is one reason I admire her!).

Kathy cites marketing professor and author Jennifer Aaker of Stanford University, who notes that people remember stories as much as twenty-two times more than they do facts alone

Worried?

You should be.  If you’re “talking” to your prospects by showing them features and benefits, and your competitors are telling engaging stories, it might explain why you’re having trouble with your conversion rates.

One of the most important pieces of advice Kathy offers is that marketing is about change, as are stories.  If you help your prospect see and understand the possibilities and how to change to realize them, you have a far better opportunity to engage and, eventually, sell to that prospect.

How do I do that?

Three Steps to Better Storytelling

Like me, you’ve probably heard that advice from way too many marketers and so-called experts. But doing it seems to escape you.  Here’s one person doing it well every single day.  Megan DeGruttola heads storytelling and content marketing for Stitch Labs and uses these three guideposts to create a story:

1.  Know your audience

Who is the person you want to hear your story?   What interests them?  Why is your story going to matter to them?  This is nothing more than knowing your target audience but in a much more human way.

2.  Understand their problems and aspirations 

This is not about the problems you think they should have (sorry, we’re marketers, you know you think that way even though you shouldn’t).  Make certain you are addressing the problems that person faces in their daily life.  Maybe it’s something that frustrates them endlessly or maybe it’s something they never thought they could solve.

Then make sure you know their aspirations.  What do they want to change?  What do they hope to become?  How, very specifically, do they think they can get there―and how can you help them?

3.  Take them on a journey 

Show them where they are and make clear the problems.  Show them the way forward to achieving their aspirations.  In other words, tell a powerful story.

Remember, journeys are never a single step, and they are fraught with setbacks. Don’t forget that your story shouldn’t be a carefree romp to the finish line. It should be an honest and credible account of the challenges and motivations that keep the story going.

Are you worried you don’t tell good stories (it’s the worry I hear most often from marketers about storytelling)?  Don’t worry.  You do.  Ask your family or friends.  At least some of them love your storytelling.  Go find out why and use those strengths to get better.

And as with everything else in marketing, keep trying and experimenting.  You’ll get to what gives you and your company that twenty-two times engagement multiplier.

Then tell us the story of how you did it in the comments!

 

Decision Making, Disruption, Management

Artificial Intelligence – The Next Marketing Frontier (and Danger)

Artificial Intelligence seems to be everywhere all of a sudden, and it’s making its way into the technology marketers use every day.  We’ve been talking to (with?) our smartphones for a while now, and there’s pretty much no mobile device that isn’t just begging to hear your voice.  With Apple adding Siri to the Mac, that now applies to pretty much any device. Amazon even has an eerily lighted cylindrical device that can play Jeopardy! with you―and presumably understand your stuttering, uncertain responses in the form of a question.

The Direction of Artificial Intelligence Operational Systems

It’s only in the past year or two that we’ve seen so-called artificial intelligence technologies make their way into operational systems and software used in business.  And now we’re seeing some form of intelligent capability make its way into marketing.  Here are a few examples:

  • Ad Targeting: Machine learning is working for companies such as Baidu to determine when any given user is most likely to click on what kind of ad, then automatically serving the right kind of ads for that user at that time.  This attempts to maximize click-throughs.
  • Recommendation Engines: We’re all familiar with the jokes about Amazon’s (and other vendors’) “people who bought this item also bought” feature which often make less-than-ideal recommendations.  Applying machine learning to large amounts of data on consumer behavior, however, can improve this dramatically.  Under Armour is using IBM’s Watson to analyze its own customer purchase data with third-party data on fitness and nutrition to serve up far more relevant product recommendations.
  • Preventing Credit Fraud: Banks have been using massive amounts of data to try to determine when a particular credit card transaction has a good chance of being fraudulent.  Now companies such as USAA are using natural language processing algorithms to look at the text within transactions to determine potential fraud even without a previous pattern having developed.

These examples are taken from a pretty interesting list of applications of artificial intelligence in marketing.

The key question for me is:  How will this change marketing?  I’ll offer some thoughts on where this is going, but first indulge me a short background explanation.

There are two main lines of thought in the computer science world about how intelligent systems (from software to robots and beyond) should act and interact with humans.  One says we should be developing systems that are independently intelligent.  Those systems would learn from the initial set of experiences humans provide but then would function on their own, without human guidance and making their own decisions.  If this scares you a bit ―and it should―you can read an incredibly insightful speculation on this in Asimov’s classic, I, Robot.

The other line of thought says intelligent systems should be built to extend and enhance human intelligence.  Sometimes this is called the “Star Trek” school of thought since that is how the computer systems on that show generally operated (and the independent androids were almost always evil―apologies to Mr. Data). The goal here is to help humans advance their own thinking.

A good example of the latter in the marketing world (and a function I really hope to see one day soon!) is the ability to ask your marketing automation systems questions such as “What are the top three paths people who buy our products take through our website?” and have your system know it needs to crunch the behavioral data to develop paths and determine outcomes.  Even better, the system would know why.  In this case, the system is not making decisions on website structure or how to present what information to whom, but it is telling you, the human decision maker, what you need to know to make those decisions.

Most of the examples of intelligence, including machine learning and natural language processing, that are in place today fall into the latter category:  they exist to provide some form of information plus analysis to a human decision maker.  There are a few examples of systems that are given jobs they do themselves (such as the ad server example above), but even those are assigned a specific job and decision-making framework by the humans who control them.

What Comes Next?

I think the next few years will bring a dramatic increase in the intelligent capabilities of all kinds that will be brought into business systems, including marketing systems.  Nearly all these will fall into the data or language analysis category at first.  They will do things such as answer customer-service requests or help marketers make sense of large sets of unrelated data.

But some will start to make some of the decisions marketers make every day.  For example, IBM’s Watson technology analyzed millions of recipes and now can develop a (presumably tasty) recipe given a set of ingredients.  That’s why they let it compete on Jeopardy! but not on Chopped!  Imagine if Watson’s artificial intelligence analyzed the marketing mix of every company in your segment and added in the consumer behavior data.  I’m willing to bet it would make marketing mix and timing decisions as well as any of us could―maybe better.

In the retail business, it’s not hard to envision the day when Apple’s intelligent ear pieces (version one comes out later this month in the form of AirPods) can remember that three days ago you mentioned you needed to buy new socks, and then remind you (literally putting a “bug” in your ear) as you walk by a sock-selling retailer that is doing location-based advertising with Apple.  Today this feels intrusive, but as our artificial intelligence assistants become more intelligent, it will seem less so. It’s more like having your friend notice the socks in the window and asking, “Didn’t you mention you need socks?”

Will Marketing Change?

No.  Marketing, as we sometimes need to remind ourselves, is a discipline, not a set of actions.  We’ll still be doing it.  But our jobs will change dramatically.

The predictions for future jobs are dire.  This article predicts Robots (or some form of artificial intelligence systems) will take over 50% of all jobs within 30 years (the career span of someone 10 years out of school!).  And if you Google “Jobs AI is Taking Over,” there is no end of similarly dire predictions.  Many of those jobs are white-collar jobs.

Some of those will be marketing jobs.  As systems get better at analyzing data and behavior, the jobs devoted to that will disappear.  As systems get better at processing and responding to natural-language requests, customer-service jobs will start to go.  And yes, as systems get better at inductive reasoning, jobs that focus on messaging and positioning (inducing target customer desires) will also go.

The flip side of all these dire predictions is that more intelligent systems will help the marketing decision makers make better, more informed, less biased and faster decisions. Those of us who focus on creative roles and on decision-making roles will get much, much better at our jobs, as our systems help us do better, faster.

Now, if Siri could only tell me where I saw that really cool gadget I wanted to buy.  Or even reliably get me directions home.  Then I’d be convinced we’re on our way to more intelligent systems.

Are you using intelligent systems in your marketing?  Are they helping?  I’d love to hear your stories.

Decision Making, Measurement, Technology

Caution: Predictive Analytics May Miss One Important Thing

Predictive analytics is, without a doubt, the new big thing in marketing.  It’s how we marketers are putting so-called big data to work to help us find, target, and sell to the right customers at the right time.  I’ve written about this before; any time we rely on technology or process to tell us about our customers’ preferences, habits, or needs, we run the risk of missing out on one critical element of our customers’ decision-making.  Our customers are human and, therefore, somewhat unpredictable.

Many years ago, I worked with a company that created customized news feeds.  Customers would select their areas of interest, and each day, the company would sort items from a range of newswires (yes, this is before social media!) and send each customer a custom collection of articles, press releases, and other news items.

A general concern others and I raised about the trend toward more personalization (which is still ongoing) is that people would miss out on items of general interest.  In those days, when I read the newspaper, I would seek out sections of particular interest to me, but I would also read the front page and often catch other items on my way to my sections.  This exposed me to news, information, and thinking outside my specific area of interest.  In particular, reading the front page gave me a sense of what was collectively considered important (as filtered by an editor, granted, but one whose interest likely was matching the collective interest).  This provided a common understanding of the world and important events of the day.  With an entirely customized newswire (or, in today’s terms, a group of Facebook friends with whom you completely agree), you create your own unique understanding of the world around you, and you become less aware of what is outside your bubble (and in some cases, less able to understand it).

One of our goals as marketers is to influence behavior, particularly toward buying our products and services.  One way to do this is to create some elements of a bubble around the target buyers so they see more of your offerings than anything else and more messages encouraging the lifestyle associated with your offerings.  That creates stronger associations with the promise of the brand and results in brand loyalty.

We observe the actions customers take and focus on the ones that make them most likely to deepen their association with our brand and all of the things for which that brand stands. That creates the customer journey.

Once we know all that, we work hard to influence customers to take the next step on their journey toward becoming a brand loyalist and buying more and more from us.

Dealing with the myriad actions, possible paths, probable journeys, and the wide range of customer tastes and behaviors has been nearly impossible until technology stepped in to give us ways to store and analyze all that data.  Enter big data and predictive analytics.

We now have computer systems that tell us—if a customer has a certain set of tastes and preferences, and then takes a given action (or a series of actions)—what the most effective way to get them to take the next action is.  So we do that.  Then we see many of those customers taking the hoped-for action.

Enhancing the Impact of Predictive Analytics

One of my favorite themes is to remind marketers that your instinct—your intuitive understanding—goes far beyond the analysis of any computer system.  You will not always be right, but your intuition provides a strong sanity check.

For example, your predictive analytics might suggest prospects who end up buying from you always take a specified action several steps prior to purchasing.  This might be true.  But you might also notice there is a large drop-off rate right before that step—only a small number of prospects in your funnel move to that step.  Your analytics don’t tell you this because you’ve told your systems to answer the question of what causes people to buy, so it looks at the outcome and works backward.  It takes human powers of observation to look at the funnel from a different perspective.

I rely on my systems and the analyses they produce to tell me how my programs are working.  I set them up to give me data-driven answers to a variety of questions, including the question of what actions are most influential in converting prospects to paying customers.

But I always look at the data myself.  I look for anomalies.  I look for things that might not be answered by my systems the way I’ve set them up.  I look for things I’ve otherwise overlooked.  Some of those insights have led to opportunities I would not have seen otherwise.

In short, I use my own experienced intuition to make the final call about what is working, what is not, and where I should look next to improve my efforts.

Don’t miss out on this one critical factor.  Don’t let your predictive analytics and automation systems take over your marketing.  There may come a day when intelligent systems can do this for us, but for now, this is your job.  It’s where your value gets added.  Using your own experienced intuition is what makes the difference between good marketing and great marketing.  Don’t give that up.

creativity, Innovation, Leadership

Three Ways to Find Your Marketing Creativity Again

It would be hard to find a marketer who would not agree that marketing has become much less creative and much more process-focused.  We tend to idealize the 1960s world, stereotyped by the television show Mad Men, where the creative team ruled the business and the great idea was the best product marketers had to offer their client or employer.  At the same time, we lament the rise of technology, complaining that marketing and sales automation has forced us into a never-ending loop of justifying our value based on whatever numbers our client or bosses choose to watch.

What Happened to Marketing Creativity?

It’s easy to blame the shift to more process-focused marketing on the rise of marketing technology and the associated capabilities of measurement.  But it’s also true that we have used technology as a crutch, a substitute for our own creativity, in order to get things done faster, or, at times, with less hard work.

Don’t get me wrong:  Automation and measurement are important to a functioning marketing team.  Without it, you can’t scale and you just don’t know what’s working and what’s not. You need automation to deliver just the right message to just the right person at just the right time and to know whether you succeeded and whether the person took the action for which you were hoping.  As marketing gets more and more personal, the need for technology to handle more tasks at a higher level of functionality will only increase.

Is marketing creativity getting lost in automation?  I don’t think so.

Creativity, though, marketing creativity is the role―and the greatest contribution―of humans in marketing (and beyond).  You can’t delegate that to an automation system.  I think it’s time for us, as marketers, to remember it is still human creativity that drives our work; our automation systems cannot be the source of our creativity but rather the tools we use to automate and scale that creativity.

Is your marketing really as creative as it could be?  Here’s an example of using technology as a substitute for marketing creativity.  See if this scenario sounds familiar:

Your digital marketing team is about to launch another email campaign (the last one worked pretty well, right?).  They decide on the new target audience.  They then look at the last campaign in your marketing automation system and copy it.  They edit the content to more closely match the new idea.  They swap out the calls-to-action with new ones (which look surprisingly similar to the old ones―with apologies to Pete Townshend).  They check it over and hit send.

This is how the vast majority of marketing is being done today.  Email campaigns are being copied.  Ads are being tweaked.  Even paid search parameters don’t really change much. It’s comfortable.  It’s easy to understand. It’s low-risk―both from an investment perspective and in how you have to explain the lower results (it was just like the last one―we thought it would work!).  We accept incremental change and incremental results, because we can understand it.  And because our marketing automation systems, which were designed to automate tasks, are being used as a substitute for creativity.

Nobody ever made a difference in any market by doing something just like what they had done before.  You can insert the Apple branding story of your choice here, because the ways they changed thinking and changed consumer preferences is exactly the point (My personal favorite story about how ads changed minds and the market is the “Reach Out and Touch Someone” campaign.).

How do we put the marketing creativity back into marketing?  It’s not easy, but it’s critical if you want to make a difference in your market, to your clients, and to your company.

Three Ideas for Putting Creativity into Your Marketing

Here are three ideas I use to get my creativity back into my marketing efforts:

1)  Kairos

Morgan McLintic, managing director for the U.S. for Lewis Global Communications wrote an interesting piece for LinkedIn, titled Why You Aren’t Creative Anymore.  He discusses the ancient Greek culture’s two different expressions for time:

Chronos, he explains, is the concept we understand as the ticking of the clock as time passes.  It’s the way time gets measured and how time passes.  It’s how we synchronize (notice the root word, chronos) to get a common understanding of when things happen.

Kairos, on the other hand, is a qualitative passage of time, similar to Csiksgentmihalyi’s concept of flow.  It’s the place where we take the time to focus and create.

McLintic argues that the endless distractions and demands prevent us from creating the space for creativity.  We are not just endlessly busy; we are distracted.  We might be with our families, but we are thinking about work.  We might be meeting with a colleague but really worried about the meeting with our CEO tomorrow.  Focus―a key element of flow―is hard to come by.  Plus, we live in a culture that values busy-ness.  We are always under pressure to appear busy, even if we are not.  That ends up creating more stress as we force busy-work on ourselves to meet the expectation we think our surroundings―especially our work environments―force upon us.

Getting that space is hard, probably harder than it’s ever been.  But it works.  Here’s how I saw that happen recently.

I was leading a messaging project for my company.  We needed to not just revise our messaging but simplify it and communicate it in a clear, simple, concise way that anyone―in our market or elsewhere―could understand.  Even if you do every day, you know this is no easy task.  I took the usual steps, interviewing lots of people, consolidating feedback, looking for common threads and so on.  When I looked at my output, I had four PowerPoint slides with messaging statements and explanations― anything but simple.

I threw it out. I found a quiet place and put on the music that, for me, tends to inspire but not distract me (Mozart’s Symphonies No. 40 and 41).  I thought.  I recalled everything every customer and prospect had said.  I wondered why they bought from us.  More importantly, I wondered what they were trying to achieve when they bought from us.  As I sat there, the image came into my head of what must be in their heads.  Then the word showed up that described it.  Then I used the word in just the right sentence.  And that was it.  I had my answer.

Now, I stop just like that for every campaign I launch.  I encourage my team to do the same.  The result is I am starting my work with creativity―the critical element of marketing success.  I’m not letting my marketing automation system be my crutch for marketing creativity; I’m doing the creative work and letting the marketing automation system do its job of automating what I created.

2)  Finding Our Inner Four-year-old

Sir Ken Robinson discusses how our schools kill creativity.  It’s worth the nearly 20 minutes to watch.

He tells this story (slightly edited for readability):

When my son, James, was four in England―actually, he was four everywhere, to be honest.  If we’re being strict about it, wherever he went, he was four that year.  He was in the Nativity play.  Do you remember the story?  No, it was big, it was a big story. Mel Gibson did the sequel; you may have seen it: “Nativity II.”

But James got the part of Joseph, which we were thrilled about.  We considered this to be one of the lead parts.   We had the place crammed full of agents in T-shirts: “James Robinson IS Joseph!”  He didn’t have to speak, but you know the bit where the three kings come in?  They come in bearing gifts, gold, frankincense, and myrrh. This really happened.  We were sitting there, and I think they just went out of sequence, because we talked to the little boy afterward and we said, “You OK with that?”  And he said, “Yeah, why? Was that wrong?”  They just switched.  The three boys came in, four-year-olds with tea towels on their heads, and they put these boxes down, and the first boy said, “I bring you gold.” And the second boy said, “I bring you myrrh.” And the third boy said, “Frank sent this.”

Kids will take a chance.  If they don’t know, they’ll have a go.  They’re not frightened of being wrong. I don’t mean to say that being wrong is the same thing as being creative.  What we do know is, if you’re not prepared to be wrong, you’ll never come up with anything original―if you’re not prepared to be wrong.  And by the time they get to be adults, most kids have lost that capacity.  They have become frightened of being wrong.  And we run our companies like this.  We stigmatize mistakes.  And we’re now running national education systems where mistakes are the worst thing you can make.  And the result is that we are educating people out of their creative capacities.

Trust me, it’s much funnier when he says it.  But he’s right.  He tells the story―now pretty much folklore in the education business:  when you ask a class of kindergartners who is an artist, pretty much everyone raises their hand.  When you ask a class of sixth-graders the same question, only one or two raise their hands.

You probably can’t go to work and act like a four-year-old.  But you can take the time and focus to let yourself play with your thoughts and ideas like you did when you were four, then take what you come up with, and put it into grown-up terms your colleagues will understand.

I can pretty much guarantee you show more marketing creativity than anyone―including you―ever expected.

3) Avoid Groupthink

This should be pretty obvious to anyone who’s ever tried to make a decision in a meeting. You know the pattern all-too-well:  Everyone speaks, carefully avoiding stating an opinion, until the boss chimes in, then everyone suddenly agrees with the boss, showing how what they already said supports their agreement.  This is not just a business phenomenon.

Brainstorming sessions are a really good way to avoid this.  But most brainstorming sessions fall prey to the exact same malady.  We are afraid to offer ideas that might seem too far away from the norm―or worse, too stupid.  We want to be seen as part of the team, and we want to be seen as intelligent.

One technique I have seen used is to let everyone do their brainstorming alone, while in a group.  In this approach, you might hand everyone slips of paper or post-it notes.  Ask everyone to write down everything they can think of, one idea per slip or post-it.  When everyone is done, collect the notes so they are not associated with any individual.  Let the group get together and look at the ideas, then start sorting them out and prioritizing.

Groupthink is a very dangerous and insidious bias that can kill any attempt to offer anything creative before it is even stated.  You probably know this intuitively.  Avoiding the fear of groupthink will let you find a way to offer your marketing creativity and maybe make a big difference in your next project.

These three suggestions are far from the only ways to reestablish marketing creativity.  I’m pretty sure you have a few other ideas (please offer them in the comments below!).

Reestablishing the role of creativity is critical to the success of your marketing efforts and to the success of your organization as a whole.  It’s time to stop letting automation drive all our thinking and let it do its job―automating the creativity humans bring to the work.

Decision Making, Leadership, Measurement, Technology

How Data Can Be Dangerous: Don’t Market to the Middle

Danger!  Your data is causing you to market to the middle of your audience and miss many opportunities.

In my recent post, I wrote about the dangers of relying solely on data to make good marketing decisions.  While data is the ultimate sanity check, data can also be easily skewed, misinterpreted and used in ways that were never intended (or worse, in ways that are meaningless).  Without good judgment and interpretation, data almost certainly will lead you astray and you could market to the middle.  But there’s a subtler danger that lies beyond just the use of data in your marketing decisions.

What if your actions as a marketer are closing off options for your customers?

What if both you and your customers would be better off with those options open?

What can we, as marketers, do about it?

Douglas Rushkoff, an NYU professor and leading thinker on the Internet and society, said in his recent book:  “Companies know things about you that you don’t yet know yourself, and they only know them in terms of probability.  The world that you see is being configured to a probable reality that you haven’t yet chosen.”  And we, fellow MENG members, are the ones doing the configuring.

We work hard to understand our audiences.  We try to decipher their behavior.  We work to develop models of their personalities and their tastes.  We try to determine what we think they are going to do next.  And then we build every experience custom-tailored to each individual, bringing them closer and closer to the next action.  And then the next.

If you look deep down inside the models that got you to “knowing” what each and every individual’s behavior is going to be, you’ll find they are all based on statistical averages. Even if you segment your audience really well, you’re still looking at statistical averages of each segment.

That works for the 68% of your audience within the first standard deviation from the mean. It skews the results for the next 27% and for the last 5%―the outliers―you just have no idea what they would have done if you didn’t pre-define their path.

Market to the Middle:  The Small Danger

You’re missing some great ideas and opportunities.

One of the tenets quoted so often is that the opportunity for innovation lies with the outliers.  It’s the customers who do the weird thing with your product or ask for something which you haven’t yet thought of who show you the way to your next big opportunity.

When you don’t let them get there by following the market to the middle, when you decide they should follow one of your home-made yellow-brick roads, you miss out on the great opportunities they bring.

This is just another way of saying you are listening to your customer too closely, and you will be disrupted by some other company that thinks about the problem differently.

But that’s just the small danger.

The Big Opportunity

Ten years ago, a small group of sales and marketing people started thinking differently about how to use all the then newly available technology to advance the field.  One of the core tenets of that group―later codified in this book and many other publications―is that companies must now learn to adapt their sales and marketing to what, where, and how customers want to buy, rather than asking customers to adapt to how the company wants to sell and market to the middle.

We’ve tried many different forms of this, but what it comes down to every single time is: we have a really hard time delivering a perfectly customized sales process, product, service, and experience to every single customer.  We’re still looking at averages.

A Short but Relevant Digression

In the old, industrial-age, grade-school classroom―the kind most of us experienced―teachers were said to be teaching to the middle, which means they were teaching to the average student in the class. That makes it very difficult for the students at the top and bottom of the class (for different reasons) to learn effectively.

I recently worked with a company that helps school districts implement personalized learning. What that means―when it’s fully working―is every single student gets exactly the right challenge, information, work, assignments, and education he or she needs at every single moment throughout his or her school career.  Sounds like a tall order, right?  It is.  It requires rethinking how education is delivered.  It redefines (and, I believe, elevates) the role of the teacher.  It changes the school from a factory, churning our identically educated kids, into a greenhouse, growing each and every unique kid in their own unique way.

Can we marketers do the same for the customer experiences we deliver?

Yes, but we have to change the way we do marketing.  It’s OK to rely on data, as long as we’re careful using it and do not always market to the middle.  But we have to start building organizations and processes in a very different way.  Can our marketing analysts turn into customer coaches?  Can our marketing leaders turn into Sherpas (with apologies to the site of the same idea)?  Can our content developers become editors?  Everything we do now would have to change.

And change is hard.

But there’s always someone ready to disrupt if we don’t.  And all the outliers, and then the 27% and, eventually, the 68%, will just go their own way―not ours―right to that disruptor.

Your Turn

I’ve attempted, in this post, to offer a glimpse into an idea I am developing in my own work.  But it’s just beginning.  Please tell us what you think in the comments or on social media, and let’s discuss how to do this.  I look forward to your contributions.

Customer Success, Customer Trust, Engagement, Experience, Relationships

Want to Avoid Customer Rejection? Here’s How NOT To

Here’s a lesson on how to create customer rejection in 30 minutes or less.

I heard a story from a friend today.  She bought what she hoped would be a useful and productive accessory for one of her tech devices.  Nothing fancy, just one of those things that makes your device go from “pretty useful” to “part of my everyday work.”

I can safely say she will avoid doing business in the future with the company that made the device.  And I’ll bet she’ll happily tell all her friends (as she told me) about how well they knew the art of customer rejection.  I can’t tell you how many potential customers this company lost today, but I know of two, and based on her influence circle, I’ll bet that’s a few orders of magnitude off.

It turned out this effort by the company to lose customers was pretty simple.  They spent a total of half an hour of work on it.  The customer rejection professional involved (maybe in charge of this particular effort?) was efficient, effective, and, I’d bet, well-rewarded for his or her efforts.

In fact, if your company is looking to lose some customers fast, I’d try to hire this customer rejection expert ASAP.

The whole thing was pretty simple.  When my friend received the product, it was broken and did not work.  She wanted it replaced; I’m pretty sure I would have, as well.  She emailed them. They asked for pictures.  She sent them.  They asked her to call.  She spent half an hour on the phone with the very competent customer-rejection professional who told her the replacement was out of stock and could not be sent.  Going above and beyond their duty, the same customer rejection professional added that no advance order could be placed for the item to ensure it would be sent when it was back in stock.  The apology acting, I’m told, was extraordinary (maybe the customer rejection professional also is an aspiring actor?).

My friend tried to respond to the company’s email, but the email message bounced. In the bounce message, she was directed to a web page to file a complaint, but the web page produced errors that could not be deciphered (Note to web professionals: If you want to contact the company to help resolve this, remember that is at cross-purposes with the responsibilities of the customer-rejection team).

My friend now has a broken product.  The company that sold it to her thinks this is as it should be.

I’d call this an example to follow of how to lose customers in half an hour or less. Customer-rejection professionals: are you listening?

Innovation, Leadership, Marketing

Three Ways Data Has Changed the CMO: Two Things to Look Out for and One Glimpse of What’s Next

One thing most CMOs seem to agree on is that the availability of data and the ability to process it into information have dramatically shifted the role and effectiveness of marketing in an organization.  This data-centric approach to marketing has had several very positive effects on the function, including:

  • Increased accountability of marketing within an organization.
  • Increased effectiveness of programs with better targeting and knowledge of outcomes.
  • Better understanding of the contribution of marketing, resulting in more powerful CMOs.

The Impact of More and Better Data

Data cuts both ways.  It can help make decisions.  It can show you exactly what is happening in any given operation without introducing bias or opinion.  But it can also show you where you are achieving results and where you are not.  It can open a very clear window into the CMO’s performance, which allows for evaluation in ways that are far more objective than were previously possible.

Robert Carroll (@robcarroll), senior vice president of marketing for Gild, notes that just seven or eight years ago, “Marketing accountability didn’t exist.”  It’s not that there were not metrics, but it was much more difficult to establish hard-data success criteria.  With the rise of both CRM systems and marketing automation systems, the data has become available, and it can be turned into analyses that provide these criteria.

One notable way this has changed the marketing organization is in how results are measured.  With these systems and their underlying data in place, it is far easier to determine the exact outcomes of any given program, often from initial engagement all the way to closed sale.

While some organizations are still learning how to make this work for them, many marketing teams use a range of outcome measures such as engagement or conversion to determine everything from cost of sales to whether programs have targeted the right market.

This has also given rise to an opportunity to shift the way marketers operate.  The availability of hard data showing the effectiveness of specific activities and the speed with which that data becomes available allow marketers to try many different hypotheses about which specific items—such as target audiences, content pieces or messages—will be most effective in achieving any given objective.  It lets marketers do the kind of testing and retesting that makes success possible in experimental sciences (such as lab experiments) or in manufacturing design (such as rapid prototyping).

The data and systems are also helping marketers understand media in ways that our profession had only dreamed of.  We can tell exactly which media are most effective to carry our messages and reach our desired target.  Carroll notes, “Email is still the most effective media for outreach.”  But he also has seen a rise, especially with the increasing number of Millennials in both marketing organizations and as members of our target audiences, in the effectiveness of what we might call old-fashioned outreach methods.

“Most Millennials are not used to receiving a telephone call or a postal mailer,” Carroll says. “The sheer novelty of the outreach method is starting to show some unexpectedly positive results.”

While accountability and measurement, in and of themselves, are generally considered good things.  The result of this new level of accountability and the success that has accompanied means that CMOs are gaining more power in the organization.  Now that it is easier to quantify contribution, it’s also easier to show the exact effect the marketing organization has had on the overall business.

As a result, Carroll points out, “More and more, CMOs are becoming CEOs.”

In my own opinion, this also has the potential to result in organizations that are more focused on serving their markets and building better customer relationships.  It certainly will create a different kind of organization than those that followed the historical trend and were led by CFOs or operational executives.

Data Caution!

So far, it’s starting to sound like the rise of the data-based marketer has brought incredibly positive changes and garnered promotions for CMOs.  But the rise of data is also fraught with possibilities to go awry for CMOs:

  • Measurement measures failure just as effectively as it measure success.
  • Data can mislead as easily as it can reveal.

CMOs have jumped on the data bandwagon, and it is, without a doubt, changing their careers.  But where marketers were once able to explain away failure of programs with everything from rebranding to fancy footwork, the ability to look at the data can expose exactly where and why programs failed.  John Philpin, a serial CEO and author of Beyond Bridges, says “Marketers are being found out.”

Philpin also expresses an opinion common to many of us:  “Marketing is as much art as science.”  It’s hard to say that just because a program failed, and we can pinpoint the source of that failure, that the error did not lie in our approach, strategy, judgment, or other human-created idea that was an assumption of the program.

Data can also mislead.  There’s an old saying that the numbers (if you’re an accountant, or the analysis if you’re a statistician) can say whatever you want them to say.  We see this every day in social media where those with specific points of view create charts that appear to be authoritative but are clearly designed to lead the viewer to specific conclusions that benefit the creator.  This happens not just with political pundits, but with marketers as well. We would love to convince the entire world that it has the exact problem we can solve.  And then, of course, sell them the solution.

The data on which we rely for measuring our own success and for proving our success to our organization suffers from the same limitation.  It can be used to show the kind of outcomes we want to believe we have achieved and can be manipulated to hide the outcomes we know will not lead to proving our own effectiveness.

These two concerns—the exposure of failure and the inclusion of human judgment—along with the ability of data to mislead the reader show the limits of reliance on data as the sole measure of success and accountability for a CMO.  It is incumbent upon the CMO to know when data will be useful, how it is most useful, and when to rely on it as a measure of success.

What’s Next for CMOs and Data?

CMOs are seeing the opportunities brought by an increased ability to analyze data and are seeking ways to both expand data access and analysis and find more effective ways to understand and use data.

We’ve all heard about the rise of so-called big data, which Carroll calls “too buzzy” and Philpin calls “a misnomer.  Philpin goes on to add, “Big data is about the relationship among the data—not the data itself.”

Data gets “big” when there’s lots of it, notably more than traditional databases can handle. But it is just this ability to store and analyze unstructured and often unrelated data that can provide insights into our markets and our customers in ways we are only beginning to see.

Carroll sees how the mass of unrelated data Gild is pulling together has started to show them how best to reach their audience, such as where telephone and postal mail can be effective.  He also sees a bigger picture.  “Prepare to be disrupted,” he says, “and all of that data can point to a potential disruptor of your business.”  Since all businesses are potential targets of disruption, it seems like a valuable use of data.

I also agree with Philpin’s answer to my question, “Have you seen big data work in a marketing effort?”  He responded, “Squirrel!”  Staring at data for too long can distract you and lead you to conclusions that are mere mirages.  You start to see things that are just not really there.

More and better data and data analysis are critical to the future of marketing.  Even more critical, however, is the human ability to know how, when, and where to use that data.

Knowing how to turn data into useful information will become more and more important to the success of marketing organizations—and the CMO.

Chasms of Failure, conversation, Customer Trust, Marketing, Relationships

Five Critical Steps to Knowing Your Customers

It’s a trap into which marketers of all kinds fall:  assuming your customers are just like you in their preferences, desires, and buying characteristics.  It can happen because we lack information to figure out what customers are really like or because our own inherent biases cause us to ignore information that would contradict our assumptions.

In a series of studies (published in the AMA Journals), Hattula, Herzog, Dahl and Reinecke found that marketers putting themselves in their “customers’ shoes” were more likely to assume their customer is just like them rather than the generally expected outcome that they would understand their customer’s needs and desires even better.

In an interview with the Harvard Business Review, Hattula noted, “That tendency [toward egocentrism] is so strong that we’re willing to ignore objective data when we make predictions about others.”

You Are Not Your Customers

Yes, he is saying that in our data-driven world, the more empathetic (and maybe more expert) we become, the more likely we are to just ignore the data and use our own intuition to make assumptions about our customers.  If you’ve been in a marketing organization for any length of time, this should not surprise you (though it may be hard to admit).

Simply put:  The more you assume your customer is just like you, the farther you get from building a relationship with and serving that customer.

In our daily lives, we develop relationships fully realizing that the people with whom we become friends or partners or any other form of relationship are not exactly like us.  Success in each relationship requires that we develop an understanding of what drives the other person and how we fit into their lives—and how they fit into ours.

Consider this:  You walk into a room, and a man approaches you.  He tells you why he is in that room (at that event or party) and then proceeds to tell you he knows you must be there for the same reason.  Maybe he harangues you to engage in ways that suit him well or to help him meet the people he wants to meet.  You can tell pretty quickly this person had no interest in you or your needs.

When you make the assumption that your customer is just like you, you start off your relationship with that customer on the footing I described in the previous paragraph:  you alienate your customer and make them feel like you have no real interest in meeting their needs.

This can be exacerbated by the common marketing practice of developing customer personas.  Personas are just descriptions of prototypical customer types.  If the egocentricity bias that Hattula describes enters your persona development process, the personas can start to look an awful lot like the people who are developing them (One way to check this is to ask someone who knows you but was not involved in the process to look at the persona and describe how much like you it is—as long as you can trust that person to give an honest answer.).

The Importance of Data

Marketing has become, for the most part, a data-driven endeavor.  Marketers work hard to gather and analyze data on the actions of those who engage with the company, on how those actions lead to (or don’t lead to) sales, on the costs and ROI of specific marketing activities, on how customer usage leads to repeat sales, and on so many more things in your everyday activities.  One of the things on which marketers have relied for a very long time is market research.  Assuming it uses well-designed research, the data gathered can inform many marketing decisions and challenge many assumptions.

But challenging assumptions, especially within an organization, is very hard.  When the data clearly contradicts any assumption we make about our customers—from buying habits to feature preferences—Hattula’s study shows we tend to just ignore the data—even when we know the best course of action is to adjust our own assumptions to match the data.

Where Does This Lead?

Hattula’s study suggests that employees who are disengaged from customers are in the best position to understand objectively what the data they receive is telling them.

My own experience says that getting a direct, personal understanding of your customer, including developing empathy (maybe by putting yourself in your customer’s proverbial shoes), gives you insights that data just can’t.

The irony is that in order to truly understand your customer well, you need to do a good job of both getting closer to them and distancing yourself from them.  You need to:

  1. Gain direct exposure, understanding and empathy with your typical customer’s needs, preferences and desires.
  2. Ensure you are gathering good, unbiased data on customers’ needs, preferences, and desires
  3. Pay close attention to even the smallest hint of contradiction between your empathetic understanding and what the data is telling you.
  4. Get objective viewpoints that can tell you when your assumptions about your customers are really just a projection of your own needs, preferences, and desires.
  5. Have the courage to challenge organizational assumptions about your customers.

Did I promise this would be easy?  It’s not.

But if you want to stay close to your customers and continue to succeed in delivering what they want and need, in the way they want and need it, you will have to make sure you are meeting their needs.

Not yours.

Customer Trust, Experience, Leadership, Promise, Relationships, Uncategorized

Are You Really Customer-Centric? Or Is It Just Talk?

It seems every company wants to show just how customer-centric it is these days.  It’s increasingly common to hear PR machines toss around phrases such as, “We value our customers,” or “We put our customers at the center of our business.”

But it’s easier said than done.  When it comes time to make a decision that pits customer interests against a chosen corporate strategy, do you really make decisions that put your customers first?

A.P. Giannini, founder of Bank of America, said, “The purpose of a business is to create a customer.”  If, in the process of evolving your business, you choose to forsake some (or all) of your customers, you not only have no longer put customers at the center of your business but also have given up the business those customers represent.

A recent stark example of the conflict between a chosen corporate strategy and a customer-centric one is the recent decision by Starbucks to close a number of its brands, including San Francisco icon La Boulange.

La Boulange is a chain of bakery cafes in San Francisco that has a reputation for quality food at reasonable prices and has earned the trust and devotion of San Francisco Bay Area locals. This is important to this story, as earning the trust of San Franciscans, as a whole, is not easy, and locals tend to fiercely defend local brands, often at the expense of national brands.

When Starbucks acquired La Boulange in April 2013, there was a local uproar.  Would they keep the beloved cafes open?  Would we be deprived of La Boulange baked goods?  What would happen to the people working at them?

Starbucks is one of those companies that claims to employ a customer-centric business strategy.  Putting customers first means making a promise to those customers, then keeping that promise.  And, of course, not breaking it.  Starbucks made a promise. They kept that promise—until they broke that promise by making a decision that clearly put their chosen corporate strategy ahead of their customers’ wishes.

Make a promise:  At the time of the acquisition, Starbucks stated it would keep the cafes open and even offer La Boulange baked goods in its Starbucks coffee shops.

Keep a promise:  It held to this promise.  It even opened more locations of La Boulange during the two years since the acquisition.

I cannot overemphasize this point:  Starbucks made and kept a promise to the segment of consumers who value and frequent La Boulange.  San Franciscans breathed a collective sigh of baked-good-induced relief.

Break a promise:  Last week, Starbucks announced it would close all La Boulange locations by the end of September 2015.

The justification for the decision was, in Starbucks’ words, “Starbucks has determined La Boulange stores are not sustainable for the company’s long-term growth” and that the decision was made because “Starbucks continually evaluates all components of its business to confirm they are aligned with key priorities and strategies for growth, which includes the continued analysis of the store portfolio.”  Notably, the decision was not made based on profitability, as the company claims the La Boulange brand achieved 16% year-over-year growth, and industry reports show that the newly opened stores far exceeded expectations.

In a company that claims to put its customers first, what is missing from this decision is any consideration of the promise to the customers.

Which brings me to the difficult question Starbucks faced:  Do we follow our chosen corporate strategy or do we make our strategic decisions by putting our customers first?  I wonder how you or I would make the same decision.

Traditional corporate strategy says a company should choose its competencies, market, and customer segment, pursue them to the exclusion of other options, re-evaluate those choices periodically (or continually), and make adjustments.

Customer-centric strategy demands a different approach.  If the customer is truly at the center of your business, then your business must choose its competencies, approach, and services to focus on the needs (known, unknown, or even unanticipated) of the customer. This is true whether your customer is an individual consumer or another business.

Making the choice between a chosen strategy and customer-centricity is not always as stark or obvious as it is in this case.  Companies face decisions every day that pit delivering value to customers against the chosen strategy of the business.  If your company chooses the chosen strategy and moves away from the customer it created, it must either create a new customer or face the fact that it no longer has a business (at least in that segment).

Starbucks’ mission statement is “to inspire and nurture the human spirit—one person, one cup and one neighborhood at a time.”  The core Starbucks brand will continue to do that. But the La Boulange brand did that exact same thing for a different customer in a different way (appropriate to that different customer).  Despite Starbucks’ statement that this decision was one that keeps their mission intact, it seems that the other decision (to keep La Boulange open) would have done that as well.

So, while the decision does not directly conflict with the mission statement, it does conflict with any claim of customer-centricity.

All of which presents us with a stark example of how even the best companies make difficult strategic decisions when customer interests collide with a chosen strategy.

Have you faced such a decision?  How have you handled it?