Marketers, You’re Thinking About Loyalty Programs All Wrong, And Other Consumer Disconnects [Study]

By Ginny Marvin:

Companies expecting to sit back and rely on their loyalty programs need to take a hard look at how their programs connect with key customers.

I wrote about the true purpose of loyalty programs earlier and this survey really brings to light that piece.  Marketers want to sit back and let the loyalty program be the driver of loyalty business, when that is just a piece of the puzzle.  There's so much rich, valuable data that comes with the loyalty program, that is what should be the focus, using the program as the carrot to give as much data about the customer as possible.  

Nearly three-quarters of consumers (73 percent) said that loyalty programs should be for brands to show appreciation for their loyal customers. And yet, two-thirds (66 percent) of marketers see it the other way around: loyalty programs are for consumers to show their commitment to their businesses.  “Businesses must revise their strategy and prove to consumers that loyalty goes both ways,” the report’s authors point out.  

It is troubling to see so many marketers looking upon their loyalty programs like this.  We all know that customers will want the most they can get out of the program and nothing is ever enough, but marketers need to be more strategic.

Similar to the complaints about loyalty programs being used by companies to get the sale rather than develop customer relationships, consumers also have gripes about email marketing practices. Interestingly, businesses seem to know their is a problem but can’t seem to change bad habits.

While 58 percent of the marketing executives polled acknowledged that customers don’t want to be sold, companies continue to pummel consumers with untargeted, untimely offers. Many businesses know this is a problem. Over a quarter (28 percent) of companies said they believe the reason consumers most often unsubscribe is because they’re sending too many emails and irrelevant offers. Consumers agree: just 10 percent said the majority of promotional marketing they receive is relevant to their purchase interest.

Marketers need to combine the practices of the loyalty program and email marketing (all of digital marketing for that matter) under one umbrella.  All of these disciplines need to work hand in hand.  I talked about companies changing their organizational structure to accommodate the new digital marketing age.  

When 90 percent of the promotional marketing customers receive is irrelevant, there is a problem.  I know in the emails I receive this is the case.  With so much data about customers, it is a wonder this still is happening in 2015.  As has been my mantra since Adobe Summit, relevant content will be the key to better customer experiences.   

Even though companies are getting better about the frequency of emails, there is still a faction of email marketers that believe more is better.  The secret to frequency of emails is to engage the customer a little more than the frequency in which they buy from you.  This way there is not an over saturation of emails, but there is also the opportunity to drive more frequency.

Busy is not a Strategy

One of my favorite people once taught me the mantra of "Busy is not a Strategy".  So many businesses use the wrong metrics or KPI’s when measuring success of the business.  For brick and mortar companies, their eyeballs tend to deceive them and they use that as their main metric (we were so busy).  For other industries it is market share.  How many widgets can we sell.  The problem can be using the wrong KPI’s along with having the wrong culture can lead to an unprofitable business.

I have implemented the “Busy is not a Strategy” with resounding success before.  We had a casino/hotel in a declining market that had 1,800 rooms.  They were moderately successful considering their location, but they were using the wrong metrics.  Their KPI’s were hotel occupancy and casino revenues.  Now anyone who knows the casino/hotel business is going to ask, what is wrong with those metrics?  They had good casino revenues for the market and an occupancy of 87%.  Most anyone would love these numbers.  Plus, they were really busy.

When we took over the business strategy of the property we saw to get these impressive numbers, there were a lot of giveaways and very low hotel room rates.  To drive the wrong metrics, they were servicing a large number of unprofitable guests.  The belief was if the hotel is full, more profits would eventually flow to the bottomline.  There was just one problem, the other centers of business were not large profit centers and the customers coming in at very low hotel rates did not gamble, because they didn’t have a lot of money.  

To increase profits, we decided we were not going to busy, we would focus our attention on the best customers and try to drive more frequency from these guests while sacrificing the low-end of the business.  This resulted in decreased occupancy and decreased casino revenues.  Uh oh.  Hotel occupancy went down to 44% and casino revenues were down 10%.  The operators were crying “the business is being ruined”.  Even competitors were coming over and asking the operators “are you going to be able to remain open until the end of the year”.  There was pure panic.  That was until the financials came out.  EBITDA was up 100% for the quarter.

By focusing on the best and most profitable customers, this property saw increases where it mattered most, the bottomline.  How did this happen?  The expenses to drive the KPI’s that were important to this property were astronomical.  They were essentially competing for market share instead of profit.  What happened through time, is the best customers started to come more often as that was the new focus of the property.  Casino revenues started to increase through time to levels much higher than before the strategy change, however occupancy remained at 44%.  They did this by focusing on:

• Increase frequency of their top tier from the players club
• Increase hotel room rate
• Target giveaways to the more profitable sector of the database
• Increase customer satisfaction of the best customers

This is very similar to what I see is happening in the phone industry.  There are many manufacturers and most of them are focusing on “Busy” as a strategy.  Now the metrics for busy in this industry are phones sold and market share.  Android accounts for approximately 80% of the worldwide market share for phones sold.  Yet when it comes to profit, that metric is almost reversed.  In fact it is a lot less than 20% in the last quarter.  So how can this be?

The phone manufacturers are selling basically the same thing.  They run Android software that they manipulate in small ways, but all the apps are compatible with their competitors.  This creates an experience that cannot be differentiated in any way but price.  This is the same thing that happened in the PC industry.  All manufacturers ran the same operating system, Windows, and they had to compete on price which forced them to make deals of adding bloatware onto their machines that destroyed the customer experience.  This is where the phone industry is heading.  When price is the main differentiator, businesses eventually will go out of business unless they can outlast the competition.  

So these OEM’s sell many millions of phones to increase market share which leads to…  To what?  I don’t know.  From what I have read these manufacturers have a decent amount of customers that are buying new phones, but they are buying them for the price.  So the manufacturer sold an unprofitable phone so they can gain a customer who will buy another unprofitable phone.  That doesn't sound like a sustainable strategy.  There is nothing that differentiates the experience of the customer enough to make that return customer more profitable.  It is a vicious cycle.  

The only company that is running a different strategy is Apple.  Apple is making almost all of the profit in the phone industry by having a differentiated product that is customer focused.  Apple is doing the same thing in the PC industry, their Macs account for about 10% of the market, but more than 50% of the profits.  Apple has been able to run the “Busy is not a Strategy” strategy to ultimate success.  Sure Apple sells a lot of phones and they would like to sell more, but these sales are the outcome of their strategy, not the focus.  Apple has a culture that is design focused which leads to a product that has a better customer experience.  

Apple is dominating the phone industry because they do not bow down to the marketshare gods.  They focus on the customer first through their design culture.  They make profitable, differentiated products which bring in the majority of the profits in the industry, which then allows them to spend more money on R&D to create more products and services to keep their customers in the ecosystem.  These customers buy new phones at a nice profit which creates a beautiful cycle.  All because Apple is NOT implementing “Busy as a Strategy” 

The Content Marketing Paradox - TrackMaven

TrackMaven has put out a white paper documenting 13.8 million pieces of content from 8,800 brands.  With the massive amount of options to post content, are organizations providing relevant content to their users.  The key to digital marketing is providing relevant (targeted) content to customers to provide great customer experiences.  With that in mind, have marketers been using relevant content or is there still a shotgun approach.  

TrackMaven documents Pottery Barn on an initiative they had to increase their "engagement" on Pinterest.  The mistake they made, which a lot of marketers make when it comes to social media channels, is to increase the amount of content.  Increased content = increased impressions = increased engagement, right?  Not so fast.

Pottery Barn Engagement and Posts

What is happening in this example is the number of pins are increasing, however the average interactions per pin is decreasing at about the same rate.  So in effect, they are working much harder to engage the same amount of customers.  I love this chart, because it shows that more is not necessarily better.  In the database marketing world, my push is to always increase frequency, whether that be purchases or trips to a casino, etc.  But the key metric to look when frequency starts to increase, is does the worth of the customer per transaction decrease and at what rate.  

In this case, frequency of pins is increasing, but the engagement is not, so the content is not relevant, there's just more of it.  Pottery Barn isn't the only guilty party when it comes to this tactic.  As TrackMaven saw, a lot of brands were implementing the same tactics.

The good news is Potter Barn (using TrackMaven software of course) was able to identify this and change tactics.  Instead of focusing on content designed to sell certain items, more like an advertisement, Pottery Barn started to pin content that helped their customers make their home better.  Of course Pottery Barn goods were front and center in this approach, but they posted less and focused on relevancy to their customer to change the engagement equation.  So the new equation is:

More relevant content = increased engagement

Pottery Barn results with new relevant content strategy

Much better content has resulted in the end goal, more engagement through Pinterest.    

Managing Your Mission-Critical Knowledge - HBR

Martin Ihrig and Ian MacMillan for HBR:

Tantalizing as the promise of big data is, an undue focus on it may cause companies to neglect something even more important—the proper management of all their strategic knowledge assets: core competencies, areas of expertise, intellectual property, and deep pools of talent. We contend that in the absence of a clear understanding of the knowledge drivers of an organization’s success, the real value of big data will never materialize.

This continues to be a theme I am seeing with "big data" and I wrote about here.  This applies to "regular ole" data also, the key is to apply the knowledge and insight of the operation with the data to create actionable strategies and tactics.  Data analytics, big and small, is a combination of Art and Science.

This is a fascinating paper and one that I would recommend reading.  It attempts to identify company knowledge to find strengths and opportunities within that base.  It also attempts to spread that knowledge and expertise throughout the company to different divisions, which would assist on where to use that knowledge for the most profitable or strategic initiatives.  Very high level and difficult work, but very valuable.  

DIB Digital Trends Report 2015_EMEA Part 2

In part 2 of reading through the Digital Trends Report for 2015, The next part has to deal with the areas of digital related business.  The big surprise to me is how high social media engagement ranks on this list.  Multichannel campaign management is still not receiving its rightful mindshare in organizations.  At 22%, this area should be right up there with targeting and personalization, it is that important.

I find these next responses fascinating.  The difference in this year and the next 5 years, especially in the area of multichannel campaign management is perplexing to me.  This is the age of campaign management and the respondents are thinking 5 years out.  That boggles my mind.  I do like that respondents are thinking customer experience is the most important item, but that is more of a culture change compared to the other items.  All the other items support the customer experience.  The fact that customer experience is viewed as a tactic or strategy is why I think this item will be talked about for years to come.  Multichannel campaign management, personalization, big data and content marketing are items that will enhance the customer experience, so these items are all striving for the same goal, to deliver relevant content to customers to enhance their experience.

This part of the study is a little perplexing to me.  Organizations want to enhance the customer experience, but there very little is being done in the area of geo-targeting.  Only 24% have this in their 2015 plan or are already using this technology.  For brick and mortar operations, this is the most exciting technology to me.  Using this in conjunction with multichannel campaign management is the ultimate targeted marketing.  

Even if the uses of this technology are just to enhance the data about customers, organizations should be implementing this technology sooner rather than later.  The ability to understand the behaviors of your customers in store and communicate with them if they exhibit certain behaviors is no different than how a customer behaves on a website.  Digital marketers have been enhancing their strategies on customer buying funnels on the web for years now, but not enough are jumping at the opportunity to do the same thing in brick and mortar operations.  

A good sign is importance organizations are putting in the cross channel journey of their customers.  The top 2 answers are what make up a big part of the customer experience.  The clear, concise message, regardless of the channel is the key to the ultimate customer experience. 

This is probably the most concerning part of this survey.  Most companies want to make customer experience across channels their number 1 priority, however the data is still an issue with most companies.  Only 37% of the companies feel they have the ability and the infrastructure to capture and act on the data.  

In the new age of marketing, data is the first and most important step in the marketing strategy.  Without laying a data framework to capture and properly analyze, the ultimate customer experience will be nearly impossible to implement.  Companies to focus on the data as much as the culture of being customer centric.  These two items go hand in hand.    

DIB Digital Trends Report 2015_EMEA

I'm reading through the DIB Digital Trends Report for 2015 and there is some interesting tidbits.  For one, on Figure 5, what is the most exciting opportunity in 2015 vs last year.  Customer Experience has jumped into a huge lead, while Mobile and Social have fallen.  Why is this?  I believe organizations are starting to realize that both of those decliners are just channels.  Channels for your content to create great customer experiences.  Mobile shouldn't be your strategy any more than email.  I view content marketing and personalization as the same thing.  If your content isn't personal, then work needs to be done on your content.  However, I understand why they are separated here.  I believe multi channel campaign management needs to rate higher on these lists.  This is the engine that will run most of this,

Another interesting section is asking what companies plan on how they will differentiate themselves from their competitors within the next 5 years.  The report states they are surprised that price is only 5%.  I believe organizations will try to differentiate through customer experience, and maybe there is some bias in the respondents, because these companies are probably a little more innovative than the typical organization.  I believe companies tend to fall to price differentiation because it is the easiest way to gain sales and market share.  

Number 1 and 2 are intrinsically related.  As I wrote here, companies that focus on design will constantly look to improve on 1 and 2.  A design first mentality puts the experience and the quality ahead of all else.  Companies who are answering these questions should be looking to change their culture to a design culture before tackling these differentiators, or else the strategy may fail.

Strategy does not work without the culture to back it up.  The fact the respondents have listed strategy before culture leads me to believe these initiatives have a higher chance of failure.  If the culture of the company does not support the strategy, it will take too large of an effort to accomplish being customer first.

These are my thoughts halfway through the document.  Tomorrow I will comment on the next piece of the document.  Very interesting stuff.  Organizations are saying the right things, but with anything, it is all in the implementation.  The next 5 years will be very exciting indeed.

Big data: are we making a big mistake? by Anum Basir

Anum Basir writes for Analytics Weekly:

“Big data” has arrived, but big insights have not. The challenge now is to solve new problems and gain new answers – without making the same old statistical mistakes on a grander scale than ever.

This is an article every executive should read about "big data".  I believe it fits right in to my narrative about event with data, companies need art along with the science to have true insight as I wrote here.  The article is a long read, but it details the promises of "big data" along with the pitfalls that come in only trusting the results without having the proper insights and testing.

As with so many buzzwords, “big data” is a vague term, often thrown around by people with something to sell.

I believe in more data, not a term of "big data"  When people are trying to sell "big data" to corporations, are they really helping?  

But the “big data” that interests many companies is what we might call “found data”, the digital exhaust of web searches, credit card payments and mobiles pinging the nearest phone mast.

In some circumstances they might be, but what Basir discusses in this article is the idea of "found data".  This is data that already exists inside the company, or data that is just not being tracked and analyzed.  As I wrote here, companies are sitting on a treasure trove of data that they aren't using optimally already.  Adding "big data" may send the corporation down a path they are not ready for.  Always search for the next best data that will solve the answers to the questions that need answering.  

Cheerleaders for big data have made four exciting claims, each one reflected in the success of Google Flu Trends: that data analysis produces uncannily accurate results; that every single data point can be captured, making old statistical sampling techniques obsolete; that it is passé to fret about what causes what, because statistical correlation tells us what we need to know; and that scientific or statistical models aren’t needed because, to quote “The End of Theory”, a provocative essay published in Wired in 2008, “with enough data, the numbers speak for themselves”.

Unfortunately, these four articles of faith are at best optimistic oversimplifications. At worst, according to David Spiegelhalter, Winton Professor of the Public Understanding of Risk at Cambridge university, they can be “complete bollocks. Absolute nonsense.”

Basic goes on in the article to punch holes in these four claims.  "Big Data" is very promising, but it is a destination for most companies.  When something is a destination, there is a path that needs to be taken to get there.  The path may change and there are detours on the way, but most companies can't just jump all in on "big data" or "found data".  Companies must build an analytics culture, live in their data and use that data to make decisions with the business acumen they have built up for many years.  

As Basir points out in the article, the problems with data do not go away with more of it, they just get bigger.  

Four years after the original Nature paper was published, Nature News had sad tidings to convey: the latest flu outbreak had claimed an unexpected victim: Google Flu Trends. After reliably providing a swift and accurate account of flu outbreaks for several winters, the theory-free, data-rich model had lost its nose for where flu was going. Google’s model pointed to a severe outbreak but when the slow-and-steady data from the CDC arrived, they showed that Google’s estimates of the spread of flu-like illnesses were overstated by almost a factor of two.

The problem was that Google did not know – could not begin to know – what linked the search terms with the spread of flu. Google’s engineers weren’t trying to figure out what caused what. They were merely finding statistical patterns in the data. They cared about ­correlation rather than causation. This is common in big data analysis. Figuring out what causes what is hard (impossible, some say). Figuring out what is correlated with what is much cheaper and easier. That is why, according to Viktor Mayer-Schönberger and Kenneth Cukier’s book, Big Data, “causality won’t be discarded, but it is being knocked off its pedestal as the primary fountain of meaning”.

But a theory-free analysis of mere correlations is inevitably fragile. If you have no idea what is behind a correlation, you have no idea what might cause that correlation to break down.

Correlation without causation arguments do not go away with "big data".  Having insights to enhance the results is key to successful analytics.  We are all familiar with the story of ice cream sales and shark bites are strongly correlated, so selling more ice cream causes shark bites?  Well thats just silly and obvious, we all know because sales of ice cream and swimming in the ocean increase in the summertime.  

But the example brings up a crucial point, do not trust the output of the data without using your vast knowledge on the subject as a barometer.  Anyone can see the shark bite, ice cream example has nothing to do with each other, but findings of big data can be a lot more tricky to detect.  What may look to be a relatively reasonable explanation of data from a model a data scientist created may actually ruin a business because the data scientist had no knowledge of the subject matter.  When just solely relying on data, all the great human knowledge about the business are thrown away.  This is art and science.  Treat it as such.  Get the artists into the room with the scientists and find the best answer, not the cheapest and easiest one.  Actionable analytics is hard, don't underestimate the complexity of the problem.     

Big data as a driver of organizational change

Analytics can “open up many doors for healthcare organizations” of all types, including life sciences companies aiming to get new medications to patients faster or to “provide regulatory bodies with evidence of drug safety.”  Or, for payers, analytics can “answer questions about future growth, profitability and sustainability,” or help them to detect and prevent fraud.”

It still amazes me that big organizations in so many industries are still talking about what analytics can do for them.  Of course, this headline is a little deceiving as there really is no "big data" to be found.  You get a lot of clicks when you have "big data" in the headline though.

500 Homerun Club

Wanted to see what the impact of the steroid era had on the 500 homers club.  Seems that the list would not be the same.  The steroid era had such an effect on baseball, I would argue it might have also saved the game.  The Mark McGwire and Sammy Sosa home run race was the best baseball television of those years.

Customer Experience Focused Company? Focus on Design

I was just reading Ben Thompson's latest member post regarding Cyanogen in India.  On a side note, if you don't subscribe to the daily update, it is worth every penny, great insights.  Anyway, he mentions how Cyanogen is focused on engineering around Android so they don't have to be reliant on Google.  Thompson then went on to say the engineering solution is not focused on the customer experience, so it will have a hard time competing in the consumer market.

This got me thinking about the different kinds of companies there are and to dominate in the consumer space, what should a company be driven by to succeed.  I'm sure I'm missing different types of companies, so feel free to let me know if I missed any, but there are a few different types of companies that come to mind:

• Engineering driven companies
• Sales driven companies
• Marketing driven companies
• Financial driven companies
• Design driven companies

I contend the design driven company is the only company that can truly have long-term success in the consumer market.  The design driven company can beat low-cost competitors and drive sustainable profits.  This is the Apple story.

Engineering Driven Companies

These companies are engineer focused.  They look at the world through all the cool stuff they can build, whether it be technology or buildings, the engineer rules the roost in this company.  The problem with the engineering focused companies is they forget the customer experience and focus on the technology.  The need to create something cool outweighs the need to solve a problem.  Samsung fell into this trap with the Galaxy's, especially 4 and 5.  

By not first looking at the customer experience and then trying to solve the customers problems, a company will create cool technology and then try to fit a customer experience around the cool technology.  This will not have sustainability in the consumer space.  The mass consumer will be confused by the technology and get frustrated with the experience.  Eventually that consumer will choose to churn and choose another product that focuses more on their experiences rather than cool technology.

Sales Driven Companies

These companies are focused on making the next sale.  They look at the world through the need to solve the next customers problem, not the customer experience.  A sales driven organization tends to try to be everything to everyone, and we all know how that story ends.  The need to sell the most and constantly focusing on acquisition drives companies to lose focus on retaining customers.  Microsoft was led by a salesperson for many years and while they had success for many of those, they were disrupted many times over.    

By focusing on selling the most of something, the customer experience becomes muddled.  To serve many masters, a company must focus on creating many different experiences at many different price points for the customer.  This creates no expertise in one area and allows for disruption to come from all angles.  Focus is the key to customer experience and the sales driven company has a hard time selling when everyone is not their customer.  When the focus is on the customer experience, a company can acquire and retain at the same time

Marketing Driven Companies

These companies are focused on making the company well known.  They look at the world through their message.  They focus their time to try and get someone to buy a product or position themselves in the minds of the consumer through advertising and social media.  The infatuation with their own creativity and messaging tends to put the focus on the company, not on the customer experience.

By focusing on branding and messaging, the customer experience becomes secondary.  The metrics of this company is awareness and likes, instead of on customer satisfaction and experience.  The marketing company believes they can convince anyone to buy and the power of the brand will hide all sins.  Customers in the long run will not be loyal to the brand if the experience is not up to par.  They may want to stay with the brand, but they will churn for the fact that being cool and hip is not satisfying their ultimate need for the best experience.

Financial Driven Companies

These companies focus on making as much money for their shareholders as possible.  They look at the world through profits and cash flows, leaving the customer as a means to an end for those metrics.  The desire to make the most money trumps the customer experience in all cases, unless there is a clear-cut ROI for that experience.  These companies get uncomfortable with words like experience, because it can't necessarily be measured or used to create a proforma.  

By focusing on profits, the customer experience tends to fall off in favor of saving expenses.  This company will question R&D and figure out ways to save money now, while sacrificing the future of the company.  Wall Street may like the short term gains of focusing on profits, but when the customer experience erodes and the customers start to churn 3-5 years down the line, it then becomes a marketing or product issue.  These may be the least sustainable businesses in the long run.

Design Driven Companies

These companies focus on the design of what they are producing.  They look at the world through solving problems.  The desire to take a customer experience and make it better trumps profits and sales.  The belief in a design driven company is that if the customer experience is better than all others, the profits and sales will follow. Design is how it works, not just how it looks.  

I used to think that Apple was a marketing company.  Of course I did, I was a marketer and Steve Jobs would get up on stage and do great keynotes and their advertising was second to none.  They had to be a marketing company.  If they were just a marketing company, then they would have already been disrupted.  The iPhone would not be a dominate player and they would be a niche product company with nice profits.  

The fact Apple is a design company has kept them from being disrupted.  Their products are designed with the customer experience at the forefront.  Being able to pay for something without having to pull out your wallet with the touch of your finger is a simple solution.  That solution is not coming from a space of engineering, it is coming from a space of design.  Apple looked at the problem and designed a solution that was easy for the customer to use and that is why people use Apple Pay, otherwise Google would have already been the owner of the space because they were first.

When a company is design focused they don't have to be first.  These companies want to truly solve customer problems, not be fast to market.  If the design company can't solve a problem, they won't enter that market.  A design company will be long-lasting and survive into the future because they care about the people paying money to use their products and services.  Those products and services are designed for the customers they serve, not to take advantage of a need of the customer, but to truly solve their problems.  That is true design.   

Digital Trends for 2015 | Digital Marketing

Simon Morris writes:

More than 6,000 mar­ket­ing, and ecom­merce pro­fes­sion­als around the world took part in this year’s Dig­i­tal Trends sur­vey, which has been by far our largest response since we launched this annual survey in 2012. Thanks to all of the con­trib­u­tors who took the time to provide their per­spec­tive. I’m pleased to say the 2015 Dig­i­tal Trends report is avail­able now to download.

I can't wait to dig into this report and green some insight on what marketers are seeing.  I suggest downloading and perusing yourself.  

Per­son­ally, what makes this report inter­est­ing to me, is not just the trends but the insight into how a com­pany needs to adapt to cap­i­talise on these new trends. Two aspects are key here: Strat­egy & Cul­ture. As seen with the emergence of cus­tomer expe­ri­ence as an over­ar­ch­ing dri­ver, we aren’t talk­ing about small shifts in your mar­ket­ing organ­i­sa­tion, but the con­scious deci­sion to develop and align your activ­i­ties with the goal of cus­tomer expe­ri­ence at the heart. How­ever, strat­egy change with­out cul­ture change is inef­fec­tive, to quote Peter Ducker ‘Cul­ture eats strat­egy for break­fast’.

These are concepts I have been writing about the last few days here and here.  Adapting to the "mobile first" shift in the consumers, organizations have to change their culture and structure.  The companies that will be successful in the next 5 years will be ones that adapt to these changes in their organizations, to put the customer first and align the organization around customer experiences instead of functional duties.

Agile is the Key to Digital Marketing Success

Another key topic coming out of the Adobe Summit 2015 is this idea of structuring the organization properly.  Now this is an age old problem and doesn't necessarily just revolve around digital marketing, many organizations fight the structure issue.  I had a mentor that preached to be a successful organization its 80% structure, 10% people and 10% process.  Now that made the people really mad when he said this, because people always want it to be about them.  In reality, it is about them, what he was trying to say is without the proper structure, it doesn't matter how good your people and processes are, they can't thrive if they are always being stifled.

So a day in the life of a digital marketer is too reliant on other individuals for them to be a success, they are stifled by the system.  Now they may produce content and delivering good results, but if the structure of the organization is not optimal, it is preventing these outstanding individuals from being great.  Once the marketer has to jump through so many hoops to achieve the end goal, they are already making compromises.  It may be they are making compromises on the content because they know the content creators will give them push back, or have too long of a timeline, so the request becomes watered down.  The landing page may need a little extra something to up conversion, however that may need a new set of requirements for the web team to build, so to keep things moving the marketer doesn't add that piece.

To be great a digital marketing organization needs to be agile.  Things are changing constantly and the digital marketer needs to move at the same pace, if not faster, than the consumer.  Today the digital marketer is 10 steps behind the pace of the consumer.  The organization tends to be divided into marketer, technical and creative.  These all need to live under the same umbrella.  The second a marketer is waiting on IT or a creative agency, the marketer is not fast enough.

The marketer needs to have those departments set them up for success.  So IT needs to set up the hardware and get the marketer the tools to be self reliant.  IT should not try to control the content being moved and updates that need to be made to websites, landing pages or apps.  Creative agencies need to set up multiple templates and ensure there is enough creative content to fill those templates, but they should not be a roadblock to any content that is released.  If a new email and landing page needs to be created for a real-time need, the agency or brand should not be involved in slowing this process down, the digital marketer should have all the tools and messaging already at their disposal.

If the organization is set up so the digital marketer can see the opportunity (data), glean insight from the data (analysts), create an audience (technical), create a new email marketing campaign (database marketer), create a landing page for the email (creative and technical), create a cross channel ad campaign for that audience (media and creative) and then measure the results (data and analysis), then the organization is set up correctly.  The digital marketer should be enabled to go through this entire process without needing IT tickets, agency or brand approvals or pro-forms to be created and approved from the executive team.  Allow your digital marketing team the freedom to be successful.  Measure their success, give them a budget and guidelines, but empower the digital marketer to drive revenue and jump on opportunities.  The results will speak for themselves.  

Are CMOs wasting money on faulty marketing analytics?

Manji Matharu writes:

CMOs are now at a crossroads between data quality and data results. It’s no longer enough to dabble in analytics and come out with the richness required for informed decision-making. The business needs integrated systems across IT infrastructure, and marketers — not IT pros — must champion the call for improved data controls and governance as their cause.

Data quality is the first step in all marketing processes.  Ensuring this is boring and hard, but it is a necessity.  This is the first step when I come into an organization, determine the quality of the data and work to fix that.  Once there is a trusted version of the truth, marketing analytics come to life.  

Data + Insight = Action and Back Again

Adobe Summit brought with it a great nirvana of a near-future where marketers are able to deliver relevant content to customers creating great experiences.  The words that permeated throughout the conference were those, content, experiences and data.  The big stars of the show were content and customer experiences, which I believe are extremely important as I have written before.  

However, there is no right content delivered at the perfect moment to create wonderful customer experiences without data.  Data is the key to making this all work, and not just any data.  No, I'm not talking about "big data", I'm talking about actionable data.  

Most companies are sitting on a treasure trove of data already.  Without purchasing third-party data, understanding every click, customers have data that can transform their business.  The issue is in interpreting the data, making it actionable.  Actionable data isn't a product, it's a culture.  

Actionable data is the combination of art and science.  The path to actionable data isn't necessarily going out and hiring a bunch of talented data scientists, though it doesn't hurt to have these people on your team.  The path to actionable data is marrying the data with the business acumen.  It's not enough to have data telling you something happened, there has to be an understanding of the business as to why it happened.

Once there is an understanding of what happened (science) and why it happened (art), you have actionable data.  Now you can create optimal tactics to deliver relevant content to create targeted experiences in the digital age.  The great thing about this process is it's circular.  Once a company creates great targeted experiences for their customers, customer behaviors will change and the entire process starts all over again.  There are always puzzles to solve and amazing content and experiences to create.  

Marketing Beyond Marketing

Adobe Summit has come and gone and if there was one big messaging push it was "marketing beyond marketing".  How can marketing be beyond itself you say?  Well that's a good question.  What Adobe had to say was marketing is your product.  So if marketing is your product, then as marketers we have to think beyond what we have traditionally thought of as marketing.  

I love going to conferences with great speakers and company examples of excellence because it really gets your mind flowing.  Of course Adobe is a company that wants to sell you their products in the end, but I truly believe they want marketing to advance regardless if they are your solution choice.  They want to be thought leaders in the space, which in turns sells you more products.  Which oh by the way, is an example of Adobe marketing beyond marketing.

Now as hokey as these tailgates can be, I believe Adobe is out in front of what lies ahead for digital marketing tools.  They want to enable that lifecycle approach to marketing that has only been a tagline.  To manage the customer experience from beginning to end and change the behavior of your customer by being relevant in the content that is provided takes marketing to a whole new level.  

But marketing has to go beyond marketing in organizations.  Up until now the brand marketer has been able to infiltrate the C-suite, but it is the age of the digital marketer and Brand is just one piece of the marketing puzzle.  Brand focused CMO's tend to be advertising first and lack execution around them.  They also tend to defend the brand in strategic meetings instead of evolving the brand around the latest trends, whether they be digital trends or customer related trends.  

Digital marketers have found the C-suite title, with the Chief Customer Officer, but I believe this is just a knee-jerk reaction to an identified problem.  The C-suite doesn't necessarily need to get larger, the role of the CMO must transform.  The CMO must be more of a generalist, someone that understands brand value and developing brands, but they must also be tech savvy and have an extreme customer focus.  CMO's can no longer be the spend first and advertising will fix everything type of leaders from the past, CMO's need to be savvy marketers with an eye on tailoring their marketing spend to better reach the customers when they want to be reached with an experience that matters.  An ad being fed that promotes awareness does not cut it anymore.

When your message is omnipresent in multiple channels when your customer wants it to be there, marketing has truly gone beyond marketing.  We are a long way from that reality, but the framework is being laid which will allow marketers to deliver meaningful content when it matters most.  It's cheesy, yet high concept at the same time, which is why I don't think many people in the audience understood what Adobe was trying to say.  I had a leader who taught me you have to say something seven times in seven different ways for people to understand what you were really saying, well this is one time in one way, so I can't wait to hear or see the next articulation of this concept. 

How to Make Big Data Work for You

This article is the problem with Big Data.  Everyone wants to jump so many steps on their way to true 1-to-1 marketing using data as the cornerstone.  Great marketing is always an evolution.  One step forward using data brings results and different behavior is gleaned from that data.  Then that data is taken and different questions are asked of the data based on the results using the previous data set.  This is how marketing problems are solved using data.

Marketers can't take a dataset that is fairly large, one they are already struggling to make the most of anyway, and then be given a much larger dataset and told to "go make magic".  Marketing with data is a disciplined venture.  As a marketer, make sure you are making the most out of the data you already have before worrying about what keystrokes the customer is making or the "Internet of Things".  

Always make sure the next step in the data is one that will bring you value today.  Have a long term understanding of where the data can take you, but be disciplined in getting there or you just might miss a lot of insight on the way. 

Rich Data, Poor Data

Great article by Nate Silver on why sports analytics is much better than other "real life" analytics.

I've always been such a baseball stat nerd.  I remember playing stats only baseball games since I was a young kid, which might have been a precursor to my professional life.  

Adobe Marketing Cloud Summit 2015

Upon returning from Adobe Marketing Cloud Summit 2015 I've had some time to digest the experience fully.  The Summit is a great weak of digital marketing discussions.  Of course since this is an Adobe event, the discussions are around the products Adobe is selling with the marketing cloud.  Fortunately for me, and Adobe, the overarching strategy Adobe is putting together with their products is extremely compelling.  

Just five short years ago Adobe had $0 of revenue from digital marketing products.  I believe in 2014 the amount of revenue was over $1.2 billion, but I didn't write the number down, it's not important.  What is important is Adobe, through mostly acquisitions, has created the most compelling digital marketing hub/cloud in the industry.  Adobe rates highest on the Gartner Magic Quadrant and it is in its infancy.

Having come from a software product background also, it is impressive they have been able to start to integrate most of these products together.  What Adobe is setting out to accomplish is no small feat.  Creating a singular platform from many disparate products is what marketers have to do on a daily basis with their own systems, but Adobe is attempting to make that life a whole lot easier.

Last year we were introduced to the marketing cloud strategy, a set of 6 products with 6 core services that support all the products.  I was very bullish on what was being layed out by Adobe.  The idea of taking a customer through their lifecycle with the company from anonymous to known, from new to dormant, all in one platform is very appealing to me as a marketer.  Adobe is trying in essence, to let marketers control their own destiny.

Today marketers have to fight to get things done.  Marketers destiny is in the hands of many other groups, from website developers, IT, database engineers and creative agencies.  Sometimes it amazes me that we as marketers are able to get an email out the door, or target an individual on a website.  The amount of effort sometimes makes a campaign not worth doing at all.  

There are three main thoughts I came away from the Summit with this year.

1. Audiences are the key to digital marketing
2. Adobe has a messaging issue
3. AEM should be the center of the marketing cloud universe

Audiences

I have always firmly believed the customer is the center of all businesses, yet I never believed they were the center of the marketing universe.  My belief is that everything starts with the customer and they are all different in their various ways.  Advertising tended to lump all the customers into one bucket and make the product the center of the universe.  Digital has come along and helped marketing become more targeted, but the hardest part of targeting is creating the single customer database.

Marketers have had to deal with a plethora of disparate databases of customers, which has made targeting especially difficult.  The need for database engineers to create a data warehouse bringing all the different customer databases together with each individuals spend slows the process of driving behavior through targeted experiences down to a crawl.  

Adobe audiences are referred to as a Core Service.  What that basically means is that all of the applications of the marketing cloud can use this customer database.  This makes audiences the key to allowing the marketing cloud to be the most targeted customer solution I have seen to date.  

Adobe tracks a customer from their first anonymous visit, to authentication, through the entire customer lifecycle.  The applications then allow marketers to target those customers in so many different ways.  From purchasing of ads, to email marketing, to push notifications for mobile apps, through retargeting campaigns, audiences can be used in all of these ways.  Same database.  No need for database engineers.  Hallelujah.

For example, a customer may come into the website, authenticate and reach a certain part of the purchasing funnel.  Through Analytics, this group of customers can be identified and a custom audience can be created.  Through AEM, email creative and a landing page can be created, by marketers, with approved assets from the brand team, to be used to create an email campaign for these guests.  With Target, different messages can be tested to determine what is the most effective message and offer for a customer to create the conversion.  Through Campaign, this audience can be used to send an email, measure the results, and a new audience can be created with all of the customers that didn't convert to create retargeting campaigns.  That's pretty powerful stuff right there.

Adobe Messaging

One of the concerning parts of the conference was the introduction of 2 new products for the marketing cloud.  The idea of having 6 products is already a little overwhelming.  The constant comments I was hearing from other attendees was confusion on what products they need and why.  This is a problem for Adobe.  I believe they have 1 product, the Marketing Cloud, with many features inside the product.  By keeping the multiple product structures, it is showing some infighting within Adobe.  As I said earlier, these products were purchased by Adobe to then be integrated into the cloud.  It seems those product owners are fighting for their power, which is making it confusing to develop the strategy with Adobe as a partner.

I also believe this product strategy makes the cloud more cost prohibitive.  Because so many products have to be purchased, it becomes more expensive than turning on features.  There also tends to be salespeople dedicated to the certain products, so there is a loss of 1 dedicated resource.  

I'd like to see Adobe move away from products an into features.  This will simplify the messaging and allow customers to purchase based on what they need, instead of what Adobe is trying to package.  It will allow more customers to be locked into the ecosystem of Adobe, instead of keeping their current products that aren't as integrated.  They should take some lessons from Apple.  The ecosystem is the most important play for Adobe right now and they should have a longterm vision for this strategy.  Once customers start crossing over into different products within the marketing could it will make it impossible to leave, because the customer database and all the processes are driven by Adobe.  

AEM is the Center of the Cloud

The digital marketing platform all started with the purchase of Omniture which turned into Adobe Analytics.  Analytics is the heart and soul of the Marketing Cloud and I believe has the largest  user base by far.  Analytics may be the soul, but I don't believe it should be the heart of the solution.  

Adobe Experience Manager is the heart of this solution.  It is the product that puts the marketers destiny into their own hands.  The ability to manage assets, create approved templates, change website messaging, create emails and create landing pages with variable content is so powerful.  It even can build mobile applications across platforms and manage all those apps in realtime.  

This is the heart.  Analytics allows the identification of opportunities to enhance conversion and make more money, but without AEM a marketer is stuck waiting for many other departments to help them take advantage of the opportunity.  Campaign allows for great multi-channel marketing, but without email creative and dedicated landing pages, the marketer is in a waiting game.  Target allows offers to be measured in real-time and a winner is chosen, but to get to that point, AEM has to manage all of the content and messaging.

Content is the key to delivering targeted experiences to customers in the digital age.  Let me say that again, content is the key to delivering targeted experiences to customers in the digital age.  The faster a marketer can deliver that content, through whichever channel, be it mobile app, website, email, social or ad, the bigger a competitive advantage that company will have over its competition.  This is why AEM is the heart of the marketing cloud/hub.  AEM will ultimately create the competitive advantage, because without it, the content will not be delivered at the speed in which customers will not only demand, but will also change their behavior.  

Bravo to another great Summit from Adobe.  Adobe is truly the leader in this nascent category and they are continuing to push the envelope with their vision.  I am super bullish on Adobe and what the future holds for the Marketing Cloud  Plus, having Imagine Dragons play at the bash was super awesome!!!

Marketing Is Dead, and Loyalty Killed It - HBR

Hmmmmm.  I thought I would love this article from the title, but it really was lacking any real insight.  Sure, everyone can point to Apple and say look, they really didn't do any marketing and they sold 74 million devices at $700 a piece.  It took many years and building a sticky ecosystem for them to be able to get to that point.  Loyalty should always be the main goal of your business, but marketing is still an intricate part of that equation. 

Microsoft Is The New Google, Google Is The Old Microsoft

Very interesting article which has great points.  History has a funny way of repeating itself, even though companies made it to the top by being different from the competitors they dethroned.  How do companies become the very thing they more than likely mocked years before?  I think the pressures of Wall Street and investors drive conservatism.  Companies have to be true to themselves and keep that spunk as they become market leaders.  Apple seems to be one of the only companies that do this, however that was Steve Jobs, will Tim Cook be able to kill the iPhone when the time comes?   

For Google the good news is it still has plenty of time to wise up. Microsoft is fighting from a long way back and Search, Adsense, Android, Google Maps and Gmail market positions aren’t going to be troubled any time soon. But it does beg the bigger question: does Google in its arrogance even realise it has a problem? After all it took Microsoft a decade…