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Was “Big Data” a Big Deal in the 2012 Presidential Election?
One of the most surprising outcomes of the 2012 presidential election was the volume of–not to mention the velocity with which–the business and marketing press produced pronouncements about the marketing lessons to which those of us in the industry should pay particular attention. Front and center in most of the discussion continues to be one of the hot marketing topics of the day—“big data”—and the way both campaigns used it to make more data-driven marketing decisions than in any other previous election.
As Michael Scherer recounted in Time magazine, “From the beginning [Obama’s] campaign manager Jim Messina had promised a totally different, metric-driven kind of campaign in which politics was the goal but political instincts might not be the means.”
One of the few issues on which both parties could agree this year, Democrats and Republicans both admitted that their respective campaign organizations had far too many separate databases.
As an example, to quote Scherer’s Time piece again, during the 2008 election, “volunteers making phone calls through the Obama website were working off lists that differed from the lists used by callers in the campaign office. Get-out-the-vote lists were never reconciled with fundraising lists,” and so on. Not surprisingly, none of the databases could “talk to each other.”
The Obama campaign spent almost two years creating “a single massive system that could merge the information collected from pollsters, fundraisers, field workers and consumer databases as well as social-media and mobile contacts with the main Democratic voter files in the swing states.”
Not to be outdone, the Romney campaign also looked to better integrate databases in order to guide decision-making. “The Romney team, too, looked to harness unwieldy data sets and close the gap,” wrote Kate Kaye in AdAge.
Both campaign organizations did unprecedented amounts of precise targeting of messages and media buying. For instance, the Obama campaign developed a scoring methodology to rank order undecided voters in swing states based on their “persuadability.” Using internal databases, the campaign then determined the best ways to reach its audience with media and to influence behavior with messaging.
As a result, the campaign reported to Time it was able to “buy 14% more efficiently [than in 2008]…to make sure we were talking to our persuadable voters.”
According to Lois Beckett on ProPublica.org, the persuasion scores further allowed “the campaign to focus its outreach efforts and their volunteer phone calls—on voters who might actually change their minds as a result. It also guided them in what policy messages individual voters should hear.”
The Romney campaign did its fair share of message targeting to very specific audiences on- and off-line, as well. In Florida, for example, Antony Young, CEO of Mindshare, said, “the Romney campaign sought Cuban-American voters with hard-hitting TV commercials claiming Venezuelan President Hugo Chavez supported Mr. Obama’s policies.”
Both campaigns also seemed to be doing a large amount of message testing and performance tracking with all manner of fundraising and voter acquisition efforts on- and off-line, and used the data to inform marketing and message choices almost moment-to-moment. Young noted, “although all marketers listen to consumer responses, it was the speed and consistency with which both the Romney and Obama campaigns were able to respond that impressed me.”
He used as an example the multiple occasions Mr. Romney tested a message or storyline with a real audience at a campaign rally speech and “if it got a reaction from the audience, video spots would quickly follow online. If there was strong response online or pickup by cable news networks, the ads would appear on broadcast TV…all within a matter of days, often adjusting further as the campaign progressed.”
Obviously, we’d agree that using “big data” to enable more precise, effective, and efficient media placement, messaging, and outreach, a.k.a., “activation” in marketing parlance, is great and might very well be cutting-edge as far as political marketing goes. We’re a little hard-pressed to see how it’s incredibly different from what many companies are already doing or trying to do, be it to use data to make decisions in response to day-to-day shifts in marketplace demands, to micro-target messaging, to localize efforts, etc.
We’re not as sure as AdAge’s Kate Kaye who asserted that “corporate brands could learn a thing or two,” from the campaigns’ applications of “big data,” “whether it’s how data can incite speedier decisions, or ways offline info can benefit online messaging.” It sounded like the campaigns often were integrating data from a variety of sources—not a bad thing by any means—but somehow didn’t exactly sound like it qualified as the processing, analysis, and “curation”—a term we’re hearing almost every day now—of large and complex data sets that we usually associate with “big data.”
It may be true that “in politics, the era of ‘big data’ has arrived,” as Time’s Michael Scherer concluded. At the same time, it’s also hard to say that either campaign was exactly breaking new ground in this area within the marketing world.
As a case in point, nowhere in all the data discussion was much of an indication that “big data” was driving the “big picture” marketing strategy of either campaign.
For instance, the Obama and Romney campaigns appeared to target the core supporter and demographic groups on which the respective political parties have typically concentrated. “Women, Latinos, young people, and blue-collar families in the auto industry,” were among the Obama campaign’s targets, as Elizabeth Wilner wrote in her AdAge summary piece. “Big data” perhaps improved the effectiveness and efficiency of communication and get-out-the-vote efforts, but near as we can tell these were still pretty traditional targeting decisions driven as much by experience and past voter behavior than anything new coming out of “big data.”
To the extent that either candidate had a clear, consistent, definitive, over-arching positioning, it’s hard to say that the positioning decision was shaped by “big data” either.
Romney, for example, continued to employ his “the candidate with real business experience” positioning which he’d used in previous presidential, gubernatorial, and senatorial campaigns—with mixed end-results, we might add—as opposed to something that came out of a new insight gleaned from the integration and analysis of voter, fundraising, media, and consumer databases.
Certainly there’s no arguing that the more information a campaign has about individual voters’ on- and off-line media habits, voting behavior, location, attitudes, demographics, etc., the more precisely it can reach and motivate them. Campaigns—particularly for national office—are expensive propositions and there’s every reason for campaign organizations to make sure they get the most out of every dollar they invest in marketing a candidate.
Nor is there much doubt that the easier it is for a campaign to find and identify individual voters and/or people similar to them in different databases, the more integrated and adaptable the organization and the better the performance of marketing efforts will most likely be.
In and of itself, however, “big data” isn’t necessarily going to make or break a campaign—political or otherwise. As Mike Zaneis, general counsel of the Interactive Advertising Bureau, quipped, “big data isn’t going to help Todd Akin,” referring to the disgraced Congressman from Missouri who lost his Senate campaign after claiming women can ward off pregnancy resulting from “legitimate rape.”
In other words, many factors go into the success or failure of a candidate’s bid for office; an exceptional data-driven marketing campaign–as sophisticated and impressive as its back-end data warehouse might be–is but one of them.
Illustrated by C. Madden
Interview with an Expert: Kevin Clancy on Priming the Pump for Loyalty with Targeting and Positioning
According to IBM’s Global Chief Marketing Officers study, the absolute TOP priority for for CMOs “is to enhance customer loyalty and encourage satisfied customers to advocate their brands.” Most marketers also agree that fostering loyalty among current customers and motivating advocacy behaviors is primarily an untapped opportunity to improve profitability.
Certainly there’s plenty of evidence to suggest there’s something to that line of thinking. The American Customer Satisfaction Index, for example, reported that the cross-industry satisfaction average hovers around 76%—a “C” grade—and hasn’t budged for two years. The lower the level of satisfaction, the higher the likelihood the customer won’t purchase the brand again. Not surprisingly, a Bain Consulting study found the average company loses 20-40% of its customers every year.
Unfortunately, many marketers aren’t sure what to do about the problem. The same IBM CMO study reported that most CMOs feel under-prepared to deal with decreasing brand loyalty.
We asked Kevin Clancy, chairman of Copernicus, for a strategic perspective on what marketers can do to foster loyalty to their brands. Here’s what he had to say….
Mzine: Many companies seem to have ongoing struggles with maintaining and growing loyalty to their brands. Obviously there are many potential contributing factors, but to your way of thinking, what are some of the major ones?
Kevin: In our work with B2B and B2C brands in a variety of industries, we’ve discovered that poor targeting and lack of a consistent, compelling positioning are major reasons why many companies struggle to connect customers to their brand.
There are some people who–no matter what a marketer says or does–are just not interested in a particular brand. They wouldn’t take it for free. It’s going to be an expensive and maybe even impossible proposition to try to convert them from a completely disinterested buyer to a loyal customer.
Still, it’s not an infrequent occurrence to hear a company declare plans to target non-users of their brand without any indication that they know how many non-users are even open to switching or giving some share of their requirements to the company’s brand.
Just like if you’re on the wrong train, every stop is the wrong stop, if you start with the wrong target, it’s going to be a challenge to get where you want to go as far as growing loyalty.
Mzine: What’s the connection between a strong positioning and growing loyalty?
Kevin: Establishing an emotional connection between their brand and target consumers is something marketers talk about a lot. Interestingly, when Copernicus asked consumers about the “personal or emotional connection with their preferred brand” across a variety of product and service categories, less than 10% on average claimed a “strong” connection. Just 20%-25% of consumers on average reported even a moderate emotional connection to a brand.
While it did appear an emotional connection was more readily formed in certain product categories because of the innate characteristics of the category, generally speaking, it’s up to marketers to encourage and help forge those higher-order bonds between their brands and the people who use them. One of the best ways marketers can do that is by solving customer problems with products or services.
A criteria we suggest marketers consider when assessing the potential profitability of different market segments is the size of the problems buyers in the group have that brands in the category or industry can solve with products and services. We have found time and time again that the bigger the problem a marketer can solve, the bigger the market response.
Carrying that thinking forward one more step, the bigger the problem on which marketers base the positioning strategy for their brands, the bigger the market and emotional response.
Mzine: Do you think companies are currently focused on the right things when it comes to growing loyalty to their brands?
Kevin: We have sometimes observed a tendency among senior management to get preoccupied with a metric—more often than not the Net Promoter Score—and improving it rather than focusing on what the barriers to loyalty are among current customers and doing something about them.
A brand’s Net Promoter Score, of course, is calculated by asking people on an 11-point “recommend” scale the “ultimate question:” how likely are they to recommend the brand to a friend or colleague? The scale runs from zero (“definitely would not recommend this brand”) to 10 (“definitely would recommend”).
People who score 9 or 10 are labeled “promoters”; people who score 0-6 are, in turn, labeled “detractors”; the 7’s and 8’s are ignored. Subtract the percent of detractors from the percent of promoters and you have the “net promoter score.”
While it’s not a bad metric, it’s only one behavioral measure of the far more complex concept of “brand loyalty.” Same can be said for fans on Facebook, followers on Twitter, and so on—they are but one measure and don’t offer much in the way of prescriptive guidance on the most profitable ways companies can improve that measure.
We’ve also sometimes found a tendency to hone in on a program that will encourage loyalty. I have no less than eight different “rewards” cards from different stores I go to on my key chain, for instance. How well those programs work in terms of achieving increasing levels of loyalty, however, is more a reflection of the strategy on which they are based.
And that’s the real ultimate question marketers should be asking: how do you integrate growing loyalty into your marketing strategy to take advantage of this untapped opportunity? Marketers that have focused on taking a more comprehensive view of growing loyalty—that it’s about targeting the right people, with the right message, with the right kinds of campaigns, programs, and experiences with the brand—have seen the greatest success in this area.
Mzine: Can you give some examples of companies that have done that?
Kevin: Everyone seems to cite Apple and certainly it’s a ready-case to point to in order to demonstrate the effect of developing and maintaining a strong, loyalty-inducing positioning.
It did it by solving a pretty major problem consumers were having with PCs—they were frustrating and sometimes incomprehensible to use—by offering a product that was the exact opposite—user-friendly and easy to use. One of Steve Jobs’ many claims to fame was his religious focus on making Apple’s products “plug and play.”
The company stayed razor-focused on that positioning and pretty consistently delivered on it. It was/is easy for customers to love Apple and have those feelings develop into heightened levels of loyalty that are the envy of the business community.
In recent years, McDonald’s by all appearances has very effectively targeted parents and families by positioning itself as the brand with something every member of the family can love. The chain has expanded and upgraded menu offerings to include something fun and tasty for the kids—with the promise of more reasonable, calorie-conscious portions—and more sophisticated fare for the folks.
In the opposite extreme—more of an anti-case—Avis Rental Car recently switched its long-standing positioning of “the brand that tries harder for its customers” to the brand that helps corporate travelers feel less stress and be more productive.
Sure, lots of stress and lack of productivity are two big problems business travelers have, yet it’s pretty unclear how the Avis brand does much to chip away at the problem with its services—it’s still just renting out the same kinds of cars offered by its competitors.
It’s not providing an actual solution to that big problem, and it’s the solution where the lovin’ feeling customers have for the brands they buy and use comes from.
Mzine: If you had the ear of every CEO and CMO for five minutes, what would you say to them about growing loyalty to their brands?
Kevin: When you chart out a model of how sales occur, it usually looks something like this: first a marketer approaches a target market, they build awareness, achieve distribution, stimulate trial, encourage repeat, foster loyalty, etc. Loyalty may come toward the end of the sales process, but marketers need to start taking the steps to build brand loyalty from the very beginning.
If marketers want to grow loyalty, there’s no better place to start than with the most important strategic decision there is: who to target. It makes little economic sense to invest marketing dollars in fostering loyalty among customers who are not profitable to a brand or all that likely to remain loyal in the first place.
Once you have a target group, you need to figure out how you’re going to motivate them to consider your brand and do it in a way that fosters the kind of strong, positive feelings that enhance loyalty. Remember that an emotional connection is something that you have to work hard at building over time. It’s not something that comes from having a hip new logo or clever, funny ads…. It comes from providing products and services that consistently deliver something of meaningful value to a customer.
Marketers who take the time to learn more about problems target customers have that products and services in the category can feasibly and profitably solve and build their brand’s positioning around delivering that solution will have an infinitely easier time earning the long-term devotion and allegiance of target customers.
Again, loyalty isn’t something marketers only need to start worrying about after a customer has made his or her first purchase. Growing loyalty isn’t just a matter of finding the right reward program or return-visit incentive. A large part of success in this area comes from making strategic decisions that prime the pump, so to speak, for loyalty.
To watch Kevin’s recent webcast on this topic for the American Marketing Association visit: goo.gl/AsyAx
Leave it in 2012
We recently stumbled across the #leaveitin2012 hashtag conversation and got a good chuckle out of some of the suggestions for things better left behind as we move into a new year. The acronym “YOLO,” swag, the band One Direction, girls making their eyebrows look like they were sponsored by Nike, and the Kardashians, to name a few, each got a good-sized number of mentions on this micro-meme.
We didn’t see too many business, or more specifically, marketing-related suggestions–the spirit of this particular Twitter discussion, as of this writing anyway, is clearly more cultural (i.e., catchphrases, reality TV and pop stars that many of us could do without) and personal (i.e., bad boyfriends, things that make you unhappy, saying “new year, new me”). Nevertheless, we’ve most definitely got our running list of business and marketing ideas, concepts, and practices that we’d just assume not see in 2013, beginning with our top pick:
The statement, “marketing is dead.”
We’ve read and heard more than our fair share of articles, blog posts, speeches, interviews, and discussion that have encapsulated the sentiment of this irritating sentence in one way or another over the years.
Whether announcing the death of traditional marketing, some aspect of marketing strategy such as positioning, or just marketing in general, those uttering the statement typically are expressing the disappointment many have with the current performance of existing marketing programs and the excitement about a new tactic, technology, or channel of communication that’s caught the attention of buyers in the category or industry and, therefore, the businesses trying to engage with them.
Bill Lee’s much-ballyhooed piece on the Harvard Business Review blog back in August, “Marketing is Dead,” stands as a case in point from 2012. Though, in spite of the title, the object of his ire is primarily traditional marketing communications, Lee’s piece is pretty representative of the mindset we’d just assume pass into the annals of history: if it’s not working as well or having the same effect it once did, it’s definitely because it’s no longer relevant and, rather than think about why, marketers just better pull the plug.
“Traditional marketing—including advertising, public relations, branding and corporate communications—is dead,” Lee proclaimed in his post. “Many people in traditional marketing roles and organizations may not realize they’re operating within a dead paradigm. But they are. The evidence is clear.”
He continued, “Several studies have confirmed that in the ‘buyer’s decision journey,’ traditional marketing communications just aren’t relevant.” His conclusion: “Buyers are no longer paying much attention [to traditional advertising].”
Let’s take a closer look at some of his points.
True, there’s plenty of evidence that many marketing programs and new products/services do not perform as well as they could or should. Still, it seems a little bit premature, to say the least, to conclude that advertising, pr, branding, corporate communication, and, heck, the whole practice of marketing in general are totally irrelevant to the business of selling goods and services today.
It’s a fair statement that the explosion of digital, social, and mobile communications has improved the accessibility to a vast array of information about brands, products, and services and has forever changed where, when, and how companies reach and communicate with customers. While it’s entirely possible that in some cases for some brands, the digital revolution may have had some negative impact on the effectiveness of traditional advertising campaigns, companies should not automatically presume that traditional forms of communications have been rendered entirely ineffectual.
Keep in mind there could be many potential contributing factors to disappointing performance. Perhaps, for instance, the strategy, plan, and tactics used were not appropriate given the firm’s marketing objectives. It could have been a flaw in the strategy on which the tactical plan or a campaign was based; inefficient spending; or some combination of both.
As our chairman Kevin Clancy is fond of saying, “a body brought in from the cold is not necessarily dead.” It could be that how traditional advertising is used by a company in the future will change, but until a marketer determines for sure that his or her customers aren’t paying attention to it; gets a little closer to the bottom of why not; and figures out how and when it could be better deployed within the context of the consumer journey, it should not be declared dead on arrival.
In fact, there’s a growing body of evidence that indicates some aspects of “traditional marketing,” may be worth a second look. Recent work done by Marketing Management Analytics (MMA), for example, demonstrated that for every dollar a consumer packaged goods (CPG) company spent on traditional TV, print, and radio advertising, the return was negative and had declined over the past five years. Very importantly, however, MMA found the opposite to be true for non-CPG firms where the ROI of traditional advertising had markedly improved over the same time period—which, as an aside, happened to be when digital and social was exploding—and was highly positive.
eMarketer also reported that, according to a 2012 study conducted by Millward Brown and Dynamic Logic, “TV ads were the No. 2 reason smartphone and tablet owners turned to their mobile devices for actions such as brand searches, app downloads or visiting brand websites or social networking pages.” Granted, as depicted in the table below, it ranked second to recommendations, but it would nonetheless seem that TV advertising played a pertinent role in generating awareness and interest in a brand, not to mention inspiring subsequent action.
Making statements like “marketing is dead” isn’t going to make it any easier to get people to buy a brand. It’s not going to encourage companies to do a thoughtful, more comprehensive evaluation of marketing objectives and activities to figure out what’s working, what isn’t, why, and what to do to improve effectiveness and profitability. It’ll be a better year for marketers all around if we just leave it in 2012.
Our Top 3 Reading List from Brand ManageCamp
Several weeks ago, we had the honor of once again participating in the Brand ManageCamp conference, which had one of the most unique and compelling agendas we saw this year. Promising “fresh thinking,” every year ManageCamp features speakers on a wide range of business, management, and marketing topics.
As some background, Copernicus has been involved with Brand ManageCamp since the conference first began. Over the years, Kevin Clancy and Peter Krieg, chairman and CEO respectively of Copernicus, have served as keynote presenters; Kevin organized and moderated a panel on improving marketing ROI; and we’ve also signed on as a sponsor of this truly thought-provoking event.
Back to the matter at hand, one of the things we really like about this conference is that most of the speakers have books out on their respective topics. As a result, their presentations served either as good overviews of their thinking or more in-depth discussion of a particular issue covered in the book.
We came away from the conference with a long list of books to pick up, three of which top the list:
Touchpoints: Creating Powerful Leadership Connections in the Smallest of Moments
By Doug Conant (Jossey-Bass, May 17, 2011)
With getting the right organization in place and inspiring employees to serve as brand ambassadors for their brand becoming an increasing preoccupation for CMOs these days, who better to learn from than Doug Connant, who, as CEO of Campbell Soup, was able to take employee engagement from the worst in the Fortune 500 to among the best.
Brand Harmony: Achieving Dynamic Results by Orchestrating Your Customer’s Total Experience
By Steve Yastrow (SelectBooks, May 1, 2010)
Jugaad Innovation: Think Frugal, Be Flexible, Generate Breakthrough Growth
by Navi Radjou (Jossey-Bass, April 1, 2012)
We’re always interested in learning about new approaches to generating ideas for new products/services, so Navi Radjou’s presentation at the conference grabbed our attention. We’re looking forward to reading more in his book about the process and examples he shared at the conference.
From the Copernicus Marketing Genius SeriesTM: Measuring & Motivating Brand Advocates–Download Now!
In Measuring & Motivating Brand Advocates: The State of the Science, Copernicus’ Kevin Clancy and Eric Paquette explore how marketers have successfully built a superior base of knowledge about their Brand Advocates to create a true competitive advantage.
It’s true that marketers have always loved Brand Advocates—a group Kevin and Eric define as consumers who not only use a brand, but also love it and want to help others get to know it—because they help to build awareness, positive perceptions, and trial of brands. In recent years, this group has taken on even greater importance to marketers.
In general, consumers have grown more skeptical of advertising and have placed greater emphasis on recommendations of their friends, family and other consumers. At the same time, the proliferation of digital technologies has given Brand Advocates the tools to quickly and effectively reach networks of their friends and other consumers.
Social networks, blogs, video-sharing, review sites and other digital tools make it much easier and more effective for Brand Advocates to share their knowledge of and their experiences with their favorite brands than even a few years ago.
As Kevin and Eric write, while few would argue about the perceived potential of Brand Advocates to help brands with marketing and sales, “the bigger and, naturally, harder question for marketers to answer is how ‘real’ is the group’s value? How much—if any—time and resources should go into engaging and broadening relationships with Advocates on- and off-line?”
They continue, “It goes without saying that there are many potential targets for marketing efforts to choose from and companies looking to get the most out of their increasingly precious marketing dollars want to make the most effective and efficient decisions.”
In their ebook, Kevin and Eric describe how many marketers have developed an in-depth understanding of the size and scope of the profit-enhancing opportunity Advocates hold as a group for their individual brand based on a big-picture perspective of:
- Who they are
- How many are there
- How do you identify them
- What is the best way to communicate and motivate them
- How do you integrate this knowledge into the brand’s overall marketing strategy
Download Measuring & Motivating Brand Advocates: The State of the Science for free now.
AMA and Copernicus Launch Seven Habits of Highly Successful Marketers Podcast Series
The American Marketing Association (AMA) and Copernicus have kicked off an on-going podcast series, “The Seven Habits of Highly Effective Marketers.”
As some background, our senior consultants sat down recently to compare notes and experiences from their many years of behind-the-scene observations of marketing organizations at work. They discovered that the marketers who achieved heightened levels of program effectiveness and, very importantly, brand growth, tended to follow similar practices and patterns when it came to making better, more profitable decisions in key strategic areas.
Inspired by the late Stephen Covey’s recommendations for improving personal effectiveness, they developed a list of seven habits of highly effective marketers:
- Habit 1 – Get your bearings and set clear, effective marketing objectives
- Habit 2 – Challenge conventional approaches to targeting
- Habit 3 – Take a stand–make your brand stand for something
- Habit 4 – Invest in early implementation planning
- Habit 5 – Select the most profitable product, not the most appealing
- Habit 6 – Apply big picture shopper insights all along the path to purchase
- Habit 7 – Embrace a continuous improvement approach to planning
The AMA suggested offering a series of podcasts to provide listeners with a deeper understanding of each of the seven habits and techniques for making them standard protocol in their marketing organization.
And here we are. Read more about the series and download the first four podcasts in the series at: marketingpower.com/ResourceLibrary/Pages/the-seven-habits-of-highly-effective-marketers.aspx
Download the a printer-friendly version of vol. 2. 2012en translated into 5 languages. His most recent book, Your Gut Is Still Not Smarter Than Your Head, ma
Download the printer-friendly version of Vol.1.12
Are the Olympics Worth It?
To be sure, it seems as if marketers have been volleying back and forth over the issue of whether sponsoring the Olympics is worth it for as long as Misty May-Treanor and Kerri Walsh Jennings have been making digs and spikes on the beach.
Leading up to the 2012 games, a steady stream of consumer studies offered contradictory view points on whether sponsors would get their money’s worth.
Hours before the opening ceremonies at the end of July, for example, Ad Age reported the results of Toluna’s new study which found, “consumers often don’t appear to be aware of who has paid to attach their name to the games. Worse yet, they often think that honor belongs to a major rival.”
To make matters even worse, when asked if an Olympic sponsorship makes them feel more positive about that brand, consumers had some of the strongest responses for the brands that are not sponsors. For instance, 54% of respondents said Olympic sponsorship made them feel more positively about Nike; 52% said the same about Burger King; and 48% about Pepsi.
International studies also drew similar conclusions.
Research Now, for instance, conducted a study of consumers in the U.S., the UK, Canada, France, Germany, and Australia. It found that although McDonald’s, Coca-Cola, Visa, and Samsung all scored over 90% awareness across all six countries, many didn’t see the connection between McDonald’s and Coca-Cola and the games. Some used the term “inappropriate” to describe the sponsorship.
The study also found that brands “that are associated with images of athleticism and sport are being confused as Olympic sponsors.” Nike was a big winner on that front.
Yet the hardest news for sponsors was likely the finding that 62% of respondents overall who said they would not buy from an Olympic sponsor. The write-up of this study that we read did not provide any of the reasons respondents gave to explain why they would not buy, though it’d definitely be interesting to find out.
“The study of consumer views of the 2012 Olympics reveals that sponsorship may not be a goldmine for brands after all,” concluded Research Now.
On the other hand, there were a number of studies drawing entirely different conclusions about the performance of an Olympic sponsorship. Havas Sports & Entertainment (HS&E), for example, maintained its research demonstrated that sponsorship of the 2012 Olympics–even before the start of the games–had “already led to substantially stronger brand image and purchase intent across a wide range of official sponsors’ brands.”
Consumers perceived the brand image of a representative selection of official sponsors 25%-50% more positively. HS&E also discovered that when a consumer was aware of a brand’s Olympic sponsorship he or she was 50% more likely to consider purchasing a sponsor’s product.
Commented Alastair Macdonald, sponsorship insights director, HS&E: “Our findings demonstrate London 2012 sponsorship is already providing sponsors with tangible image and business benefits. These patterns apply specifically to the Olympic sponsors—the same effect does not apply to competitor brands, which indicates this is a genuine sponsorship effect.”
Talk about opposing viewpoints.
We wouldn’t draw any major conclusions about effectiveness or ROI of an Olympic sponsorship for any individual brands based on the public results of these studies, however.
For one thing, data for these studies were collected before coverage of the Olympics—and all the TV advertising and promotional efforts that go along with it—began.
Finding out if and how awareness, positive perceptions, and likelihood to purchase changed once consumers saw and heard advertising that, at least in theory, presented a clear, compelling message about the brand and its connection to the Olympics, would provide more of an indication of the effectiveness of a sponsorship program. See our review of Olympic advertising in this blog post.
For another, by all appearances, these studies were of consumers in general. We have no idea if the specific target customers of each of these brands had different levels of awareness and reactions to Olympic sponsorship than the general public. Finding out if and how an Olympic sponsorship and its elements changed attitudes, perceptions, purchase interest, and loyalty among current and prospective target customers—the real folks the sponsors presumably wanted to reach, engage, and influence—would also provide more of an indication of program effectiveness.
Generally speaking, establishing whether or not a sponsorship is “worth it” is definitely a far more complex and brand-specific question to answer. Tackling this big, over-arching question requires a more in-depth understanding of what the brand’s objectives are and what if any other marketing communications efforts—whether other sponsorships or something else—might more effectively and efficiently achieve those objectives.
Illustrated by C. Madden
Will Best Buy Land On Its Feet Again?
If there’s one retail chain that’s had as almost as many lives as a cat, it’s Best Buy. In its four-plus decade history, the purveyor of consumer electronics ranging from mobile phones and tablets to washing machines and dryers has reincarnated itself at least four times.
Whether or not it’ll land on its feet this time as it sets out to transform itself once again is anyone’s guess.
The situation isn’t pretty:
- As reported in the Wall Street Journal, shoppers today visit Best Buy one to two times a year, down from 10 times annually a decade ago.
- Same-store sales fell 1.7% in the most recent fiscal year and 1.8% the year prior. From the beginning of February to the beginning of May of this year, same-store sales dropped 5.3%.
- Shareholders aren’t happy as Best Buy shares have lost more than half of their value in the past five years.
- With Wal-Mart, Target, Home Depot (for appliances), Apple Stores, mobile phone stores, and a slew of ecommerce players, most notably Amazon, all nipping at its heels, competition is fierce.
- Earlier this year, the American Customer Satisfaction Index ranked Best Buy as the sixth most hated company in America for customer service.
Not surprisingly, in his 2012 Letter to Shareholders, interim CEO Mike Mikan agreed with the prevailing opinion that, “bold action is required,” to stay relevant to consumers. Yet what the company has done so far seems more like catching-up as opposed to forging ahead:
1. Try to look more like Apple. The hope among Best Buy executives is that the stores, “will be a place where customers want to congregate and learn how to get more out of their gadgets,” wrote the Wall Street Journal’s Ann Zimmerman.
Towards that end, newly remodeled “connected” Best Buy stores are heavily inspired by the design, layout, and features of the Apple Store. They “feature a ‘central knowledge desk’ [Solution Central] that offers services, support, training and classes and an expanded Geek Squad presence…at the front of the store.”
Geek Squad employees staff Solution Central and help customers program their new gadgets, offer advice, and answer questions. Best Buy promised that 40% of Geek Squad employees would receive “intensive training” in September and new hires would get 80 hours of training.
2. Launch a new ad campaign. A few weeks ago, Best Buy announced a new ad campaign to drive home the new emphasis on service and explain how Best Buy uniquely adds value to the lives of customers by “making technology work for you.”
“For years Best Buy has marketed its wares by focusing on the purchase, with taglines such as ‘Buyer be happy’ and ‘You, happier,’” explained AdAge. The company’s SVP of marketing Drew Panayiotou explained that, unfortunately, those messages were product-oriented and, “we want to be a brand that’s about more than that.”
3. Layoff employees. Practically simultaneous to the store rollout with the “expanded Geek Squad presence” and ad campaign announcement, Best Buy decided to layoff 600 of its Geek Squad employees and 1,800 other store workers. That’s 3% of the Geek Squad workforce—the accessible “experts” waiting at-the-ready ONLY at Best Buy to make technology work better—and about 2% of the store workforce.
A bit of a head-scratcher, no?
The premise of Best Buy’s positioning strategy is by no means a bad one. As retail consultant Alison Paul, put it, there’s a “slow revolution” happening in retail: “Retailers are recognizing that their key differentiator could be that person standing in the store.” She cites Lululemon and Apple as examples of retail success stories where having “highly trained, engaging and engaged sales associates who offer a unique expertise” has motivated “a shopper to eschew the convenience of internet shopping for a traditional brick-and-mortar experience.”
“Those that want huge selection, low prices, and no service can find that online, without the hassle of leaving their living rooms,” Time’s Christopher Matthews rightly pointed out. Yet, that doesn’t mean that some shoppers—maybe even the majority of them—wouldn’t like some helpful customer service when making some consumer electronics purchases. As one Best Buy customer told CBS News, “I’d rather go buy it in a store with someone telling me how it works and if it doesn’t, they’ll take it back.”
Particularly in the consumer electronics retail space, there’s a very high probability that there’s white space in the area of delivering exceptional service aimed at making technology less frustrating and more productive for customers. Consumers want it; it’s entirely likely that none of the major traditional and online retailers are perceived to be great at improving the lives of their customers with the technologies they have purchased.
Reversing negative perceptions, however, is no easy matter—particularly when you’re currently the sixth most hated company in terms of customer service in America. An Apple-like update to store design; promises of future ambiguous “intensive training” of less than half its Geek Squad staff which it then downsized; and an ad campaign probably isn’t going to cut it.
Interestingly, of the many ideas it borrowed from Apple stores, Best Buy did not increase the wages of its employees, as Apple recently did in an effort to retain the quality personnel that appears to be an inherent characteristic of its retail operations. Perhaps—like many retailers—Best Buy believes if it invests “more in employees, customers will have to pay more,” a common assumption MIT business school professor Zeynap Ton debunked in an article for the Harvard Business Review.
As described in her article, she studied a group of retailers including Quik-Trip convenience stores, Trader Joe’s supermarkets, and Costco wholesale club stores, that offer low prices AND are “highly regarded by customers and industry peers” as providing good service.
Though the employees of these retailers had higher pay, fuller training, better benefits, and more convenient schedules than their counterparts at the competition, these investments paid off handsomely: “In addition to healthy sales and profit growth,” these retailers “have substantially higher asset and labor productivity than their competitors.”
She found that while they make some other tradeoffs in the form of offering more limited choices, doing more in the way of cross-training employees, and getting rid of waste in everything BUT staffing, these highly regarded and financially successful firms, “can compete successfully on the basis of low prices and simultaneously keep their customers and employees happy.”
Of course, that’s just one idea for Best Buy in terms of the more-than-skin-deep changes that need to happen in order turnaround perceptions and same-store sales. The main point here is that if Best Buy’s senior management really wants the brand’s key differentiator to be “exceptional service” delivered by “the person standing in the store,” they’ve got to go to a deeper operational level to do something about delivering on that.
Beware of the Testosterone Rush
We’ve always had a keen interest in understanding what it is exactly that compels business folks to take marketing and new product risks without a whole lot of evidence to suggest that they have a plan in place that’s going to benefit the brand and the bottom-line.
Tongue in cheek, of course, we referred to it as the “testosterone rush” when executives for no other explicable reason other than temporary hormonally-driven insanity bet the farm in a blind hurry to get a new strategy, campaign, or product up, running, and out into the market.
As it turns out, it’s no joke.
According to John Coates, a research fellow at the University of Cambridge and author of the new book, The Hour Between Dog and Wolf, “When we take on risk, including financial risk, we prepare for it physically. Body and brain fuse as a single functioning unit. “
Among the physical preparations our bodies make: surging levels of testosterone.
In an article for Time Magazine, Coates described experiments he and his colleagues did with traders and found that “during a winning streak, our biology can overreact and our risk taking can become pathological.” Testosterone levels, he explained, naturally increase in advance of impending competition, increasing our capacity to carry oxygen and, in our brains, increasing “confidence and appetite for risk.”
Winners emerge with even higher levels of testosterone, which raises the odds of winning again. Turns out, though, this sequence has a downside: “at some point in this upward spiral of testosterone and victory, however, judgment becomes impaired.” As a result, “effective risk taking morphs into overconfidence” and, under the influence of testosterone, we “may take on positions of ever increasing size with ever worsening risk-reward trade-offs.”
We were particularly fascinated with what Coates’ discovered about the affects of testosterone on decision-making when a winning streak comes to an end. He found that elevated levels of testosterone sends the “stress response into overdrive.” And “the stress response may foster irrational risk aversion, impairing a person’s ability to manage positions taken on in more optimistic times.”
You can find any number of examples of this dangerous cycle in marketing and business.
Netflix, for example, had, by mid-2011, become, “a business-school lesson in how to make a smooth transition from old technology (sending out DVDs by mail) to new (delivering streams of movies and shows on the internet),” according to the Wall Street Journal.
It had taken on Blockbuster and won. It was surging ahead of cable companies like Comcast. Hollywood studios were grumbling about all the distribution power Netflix had. Subscribers had grown to more than 23 million in the US. According to the LA Times, Netflix had a “brand name that’s becoming as familiar as Starbucks.” Total digital revenue had hit $1.5 billion.
We can only imagine how high testosterone levels must have been running.
Though some industry observers wondered if it was a bit risky of Netflix to expand internationally at the same time it was trying to grow its streaming business given the resources required, company management forged ahead with both simultaneously. When Wal-Mart, Best Buy, Amazon, Hulu, Dish Network, and Facebook made clear their intentions to explore offering or expanding services similar to Netflix, the company rushed to get out ahead by splitting its streaming and DVD services into two separate businesses.
When it announced the split, Netflix explained to customers that they would have to manage two separate accounts via two separate websites and pay more for the privilege of doing so. Not too long after the announcement, it rolled out the Qwikster name for its DVD-by-mail business.
Analysts almost instantly took issue with what seemed like the hastily prepared plan to separate streaming from the DVD business–the DVD business was highly profitable after all. Customers complained about the increased cost given that neither the selection of streamed movies nor the service itself was improving. No one could understand calling a snail mail DVD service “Qwikster.”
In the face of a falling stock price and defecting customers, rather than take any further chances, the company seemed to retrench. Senior management decided to shelve Qwikster and said it’d keep the DVD-by-mail within Netflix.
As of last month, the Wall Street Journal reported that the “company has been losing roughly a million of its DVD customers per quarter. That damages the bottom-line because the DVD business is nearly three times as profitable as streaming.” Subscriber growth among streaming customers is now at a trickle, thanks at least in part to increased competition for content. HBO dismissed Netflix’s recent idea to partner on content, and the company now says it will look overseas for growth.
Coates concludes his Time piece with the suggestion that managers need to learn to identify signs of testosterone-driven “exuberance” among the traders they supervise and make them take a breather “until their biology resets.” Might not be such a bad idea for everyone in business to watch out for the testosterone rush, too.
The Hour Between Dog and Wolf: Risk Taking, Gut Feelings and the Biology of Boom and Bust
By John Coates (Penguin Press HC, June 14, 2012)
A topic near and dear to our hearts, Coates explores the detrimental effects of testosterone on decision-making and offers suggestions for addressing the impairment before damage is done.
Buy now on…..
Kevin Clancy in Italia
When: October 6, 2012
Where: Laguna Palace Hotel, Venice, Italy
This one day intensive marketing conference will feature presentations by Kevin Clancy, Chairman of Copernicus, and a webcast from Peter Krieg, President & CEO of Copernicus. Kevin will use case studies and examples to illustrate tools and approaches to develop a world-class, highly-successful marketing strategy that will change your brand’s trajectory.
For more information about the conference and to register, visit kevinclancyinitalia.it
Shopper Marketing Expo
When: October 16-18, 2012
Where: Navy Pier, Chicago, IL
Copernicus will have an exhibit at one of the biggest shopper marketing events of the year and Peter Krieg will give a seminar, “Transform Your Shopper Marketing Strategy: Three Things You Can Do Today to Dramatically Improve ROI Tomorrow,” on Wednesday, October 17, at 3:30 pm.
For more information about the conference and to register, visit shoppermarketexpo.com
When: October 17-18, 2012
Where: MGM Grand, Las Vegas, NV
Copernicus is a sponsor of this annual gathering of marketing and brand managers looking for new ideas and “fresh thinking” on a variety of marketing and business issues.
For more information about the conference and to register, visit brandmanagecamp.com
And stay tuned for information on the webcasts Copernicus’ Kevin Clancy and Eric Paquette will give for Brand ManageCamp ahead of the conference.
Available On Demand: The Copernicus Shopper Marketing Webcast Series
This special four-part webcast series explores current thinking, strategic research tools, and process models that can help marketers super-charge the profitability and ultimate performance of their shopper marketing programs.
Access any or all of the webcasts on-demand….
Transformational Shopper Marketing Strategy: 5 Things You Can Do to Improve ROI
Peter Krieg, President & CEO, Copernicus
Shopper Typologies for Ecommerce
Eric Paquette, Senior Vice President, Copernicus
Mission Possible: Profiling Shopping Occasions to Maximize Sales
Jeff Maloy, Senior Vice President, Copernicus
Simplify the Shopper Journey
Special Guest Phil Burroughes, Commercial Director, rmi
Is There A Marketing Genius in the Room?
Find out if you have the stuff of marketing genius by taking our 10-question marketing IQ quiz. Visit copernicusmarketing.com/our-thinking/marketing-iq-quiz
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Eliminating Advertising ROI Anxiety in 2012
As 2011 winds down, forecasters are out in force with prognostications for ad spending in 2012 and beyond. With U.S. presidential elections, the summer Olympics, and European soccer championships on the horizon for next year, not surprisingly, so is growth in ad expenditures.
“There has been some downgrade in spending in the fourth quarter, but we are quite reassured,” Steve King, CEO of media firm ZenithOptimedia, explained to The Hollywood Reporter about current ad market trends. “There has been no dramatic change like we saw in 2008.”
He described the 2012 ad market as one characterized not by “the exuberance of the 1980s and ’90s, but continued spending on proven, trusted ways of getting returns” like TV and the web.
Likewise, Brian Wieser, senior research analyst at Pivotal Research Group, predicts that in 2012, “ad media will feel a ‘haves versus have-nots crunch.’” As he clarified, “simply put, in scarce times, marketers are concentrating their budgets among their primary medium (often network TV for large brands seeking awareness) and a secondary medium (often digital platforms for traditional brand marketers, who typically pursue engagement-based outcomes among a subset of the population who are aware of their brand attributes).”
Our takeaway from these observations: yielding a highly-positive return on investment has not decreased at all in importance. Marketing accountability is as important as it has ever been.
Sticking with tried-and-true media vehicles that have performed reliably may be one way marketers can alleviate advertising ROI anxiety. We have five more solutions to knock it out all together in 2012:
1. Get a revolutionary selling message.
As much as many marketers rely on TV and the web to yield a solid ROI, much of traditional and online advertising remains a complete mystery to target customers. A shocking number of prime-time television spots, for example, consist of 27 seconds of an unrelated, irrelevant, perhaps humorous story and 3 seconds of brand mention. You can’t build sales or a brand by communicating either a non-message or a message that no one understands. You HAVE TO give people a reason to buy your brand.
2. To find a revolutionary selling message, start with an audit of brand perceptions and preferences.
Any firm or organization can ask target customers what they think of your brand and its competitors—does it have a clear or fuzzy brand image? How does your brand compare to competitors on characteristics that your target customers would like to see in a product or service in the category or industry? It’s also possible to ask which brands they prefer.
3. Communicate the SAME revolutionary selling message across all mediums.
If you’re a McDonald’s and you’re spending, for the sake of argument, $300M in measured media, you can afford to communicate a somewhat different message through different media. But there are very few McDonald’s. The overwhelming majority of brands, in the overwhelming majority of product categories should communicate the same message. It should be the same message in every media and in every communications vehicle. Not just advertising, but packaging, PR, the website, everything.
4. Test your way to a 3-sigma execution.
Research firm Dynamic Logic found creative quality is 50% to 75% responsible for a campaign’s success or failure. Yet more often than not, companies develop and test too few commercials. While many companies regularly test hundreds of product and service concepts, getting a read on only one or maybe two ad campaign concepts is pretty commonplace. Expanding the number of ad concepts tested BEFORE developing a campaign will dramatically increase the probability of finding truly breakthrough creative.
5. Get to know digital behaviors.
Taking the time to research the digital behaviors of your target customers–where they go, what they do, what they search for, how they search, and what they need in a website–is absolutely necessary to dominating the internet. With all the attention on social media, “websites haven’t been bright and shiny for years now; they’re more de rigueur,” wrote David Armano on the Harvard Business Review blog. “I have to conclude that getting your website to completely satisfy business, brand and user goals is still elusive for many companies.” As a result, many marketers are increasingly coming back to their websites and evaluating them in terms of untapped ROI opportunities.
As Scott Briskman, now of Signal to Voice, once famously wrote, “It doesn’t matter how good your delivery system is if the creative sucks.” Using consistently-performing media certainly makes sense as far as taking steps to ensure you achieve highly positive ROI. Going a few paces further to get other inputs to performance in exceptional working order will greatly enhance the power of your advertising in the year ahead.
Illustrated by C. Madden
The “Disappearing” Middle Class: Is It Really Time to Shift Your Strategy?
“As income falls and diversity rises, a smaller, less homogeneous middle class is emerging—and you’d better shift your strategies,” urged an article in AdAge.
“A wide swath of American companies is convinced that the consumer market is bifurcating into high and low ends and eroding in the middle. They have to alter the way they research, develop and market their products,” reported the Wall Street Journal.
“Companies have thought that if you’re in the middle, you’re safe. But that’s not where the consumer is anymore,” warned Deborah Weinswig, an analyst with Citigroup.
Whether or not every product, service, and brand marketer in America needs to shift their strategy, of course, is not as straightforward a question to answer as these statements from authoritative sources may make it sound. There are at least a few reasons why a marketer may want to think twice.
For one thing, the notion of a “vanishing middle class” of Americans itself has long been a controversial topic, primarily because the very definition of “middle class” is so ambiguous. A quick internet scan of definitions of “American middle class”, for example, yielded wildly different sizes ranging from 25% to almost 70% of the population.
Some say “middle class” is more a state of mind than an economic distinction anyway.
“Historically, sociologists have defined ‘middle class’ as those with salaries,” explained one sociologist from the National Council of Applied Economic Research. “I think ‘middle class’ is very much a state of mind.”
“Everyone wants to believe they are middle class,” said Dante Chinni, journalist and founder of the Patchwork Nation. “For people on the bottom and the top of the wage scale the phrase connotes a certain Regular Joe cachet.”
If membership in the middle class is, in fact, self-determined, we haven’t seen any evidence that a decreasing number of consumers define themselves as Middle Americans.
Many self-described Middle Americans do indicate they have less discretionary income to spend. Just-published analysis done by the non-partisan Congressional Budget Office revealed that the middle three-fifths—60% of the U.S. population—has essentially the same share of after-tax income now as it did 20 years ago. Meanwhile, the cost of living has increased dramatically over the course of that time and everyone cut back during the recession. The middle class specifically decreased spending between an estimated 10% to 13%.
Yet even AdAge admits, “clearly, people [in the middle class] are still spending money and buying products.”
Maybe the middle three-fifths isn’t spending at the same level or rate as the top fifth of the population, but that doesn’t mean there isn’t a healthy-sized segment of middle income Americans ready to make a purchase and with money to spend. Considering that globally the middle class is surging–The Christian Science Monitor reported that by 2030, the global middle class will at least double in size to 5 billion—to the extent that products, services, and brands in a category can be cross-marketed among the middle classes in different countries, continuing to target middle class America could be quite cost-effective and lucrative. Especially if all these other companies have abandoned them.
The squeeze on the middle market of brands in some categories is much more likely the result of the increasingly indistinguishable differences between the quality of brands along the pricing spectrum than it is the contraction in the size of the American middle class.
Regardless of their income bracket, if consumers can get the same level of quality, don’t need the cache of a brand name, and can save a few bucks in the process, they just might “trade down” to a lower-priced dish soap, clothing brand, or car. In 2008—before the recession hit—estimates already put the “trading down market” at $1 trillion in the U.S. (out of consumer spending of $3.7 trillion), up from $700 billion in 2005.
At the same time, as the gulf between the prices of high-end and middle market brands have narrowed, there’s much less of an economic impediment to “trading up”—paying a 50%-200% premium to get what’s perceived as a better product or experience.
Middle class consumers may trade up or trade down in some categories, on some purchasing occasions, but it appears they’re doing it because marketers—either through pricing, product quality, packaging, customer experience, and more—are supplying them with compelling reasons to do that. A bifurcating market may just be marketer-made.
Bemoaning the death of a middle class of people and brands seems premature as does an across-the-board shift in strategy. Though many in the middle three-fifth are quite pressed financially, that doesn’t mean there are fewer consumers looking for a superior balance of price and value in most product and service categories. A two-pronged market where only high-end, prestige brands and low-end, lowest-possible-price products and services will survive is not a fait accompli.
Steve Jobs: Facts and Fictions
Since his death a few months ago, Steve Jobs has been heralded as many things. A visionary, a true inventor, a business hero—the list is long and makes it clear that the man and the products Apple sold were/are greatly admired.
As with any legend that gets told and retold though, sometimes the facts get glossed over, toned down, or even left out all together. As a result, every behavior ascribed to the champion of the story contributes mightily to success and are, therefore, worth emulating. Before the tales of Jobs’ alleged propensity for going on gut feel alone and how much his intuition-driven decision-making style contributed to his success gets blown too far out of proportion, let’s take a closer look at history.
While we haven’t personally come across an interview or speech he gave where he actually utters the words himself yet, Jobs reportedly abhorred all forms of consumer research. He’s purported to have believed that research reflected the needs, wants, attitudes, habits and preferences of today, not tomorrow. Rumor has it that he trusted in his innate ability to make a marketing decision—whether about a new product, an ad campaign, packaging, or store layout.
Assuming for the sake of argument that the zeitgeist has it right, the real question to consider is how did this intuition-driven decision-making style fare?
“Everyone thinks of Jobs as the genius who gave us the iPod, MacBooks, the iTunes store, the iPhone, the iPad, and so on,” wrote Nick Schulz in a piece for the National Review Online this past summer.
“Yes, he transformed personal computing and multimedia. But let’s not forget what else Jobs did:
- Apple I – failure
- Apple II – failed to take off until the floppy disk was introduced
- Lisa – “an epic failure”
- NeXT computer – a “big nothing-burger of a company”
Even the iconic Macintosh was not successful initially and Jobs famously got the boot from the division for failing to spur sales.
True, no one could claim with any certainty that marketing research could have helped avoid those failures or with resuscitating the product when sales proved disappointing. At the same time, it’s at least safe to say pure gut instinct didn’t reliably contribute to Jobs’ market or early career success either.
For an alternative theory to Jobs’ more recent product and business triumphs, consider his ability to focus the company entirely on consistent delivery of the clear and compelling positioning, “easy to use.” In all the commentary about Jobs, the vignettes about the hard–sometimes viewed as questionable–trade-offs he made in order to ensure that Apple’s products worked seamlessly together and were something that anyone without a tech background or engineering degree could operate indicate that this guy understood the power of making a brand stand for something.
Instead of “plug and pray,” as one commentator describe other technology products, Apple offered products that were truly “plug and play.”
Was it a gut instinct that led Jobs to “easy to use?” It certainly could have been, though it’s hard to believe there wasn’t some awareness among decision-makers at Apple about how other companies were developing and marketing their products, not to mention what users of those products complained about.
The information doesn’t come direct from the horse’s mouth, but in an interview with The Hub a few years ago, Apple’s co-founder Steve Wozniak, for example, described the early computer market: “Here was the world in 1975, and a whole bunch of people were trying to make money on low-cost microprocessors and build computers with switches and lights—like every computer ever had been.” This knowledge inspired him to do something different and design a computer that a “normal, average” person could use.
Apple’s cult following also afforded it a variety of resources as far as finding out what users like and don’t like, would like but can’t find, etc. Not too many companies have a MacWorld magazine and annual trade show event, blogs, and websites independently operated and dedicated to all-things related to the brand and using its products. It’s hard to believe at some point Jobs and others at Apple didn’t tap these sources to at least do some informal customer research.
Now an argument could be made against the necessity of certain kinds of marketing research in some technology categories that are changing every six months. Jobs may have had a point that if you ask consumers how likely they are to buy a product or service that’s entirely new and never been seen before—as was the case at one point in time with home computers—they’ll most likely tell you that they won’t buy the product.
The fact remains, however, that most categories aren’t even changing every five years, let alone six months. Practically-speaking, most new products and services aren’t as radical, game-changing, or so totally breakthrough that potential target customers couldn’t offer some insights into their viability or direction on how to market them most effectively and efficiently.
In our experience, the heroic tales of going on gut feel alone turn out to be much less the stuff of business legend than they first appear. Reports of terrific performance are more often than not greatly exaggerated just as the role of research, business experience, and the market knowledge of the individual are often minimized for effect. With that in mind, we suspect Steve Jobs made a whole lot more informed gut-decisions, at least in Apple’s more recent history, than ones based purely on hunch alone.
Leading-Edge Marketing Research: 21st Century Tools and Practices
Edited by Robert Kaden, Gerald Linda, Melvin Prince (Sage Publishing, November 2011)
A just-published anthology, Leading Edge Marketing Research: 21st-Century Tools and Practices showcases the excitement of a field where discoveries abound and researchers are valued for solving weighty problems and minimizing risks. Nearly 40 other authors–many considered visionaries in the field of research and marketing–provide rich new tools to measure and analyze consumer attitudes, combined with existing databases, online bulletin boards, social media, neuroscience, radio frequency identification (RFID) tags, behavioral economics, and more.
Truth be told, we’re partial to this book for a reason.
Copernicus’ Kevin Clancy and Ami Bowen contributed Chapter 6, “State-of-the-Science Market Segmentation: Making Results Actionable for Marketers,” to this exciting compilation of industry best-thinking.
The duo make the case that a truly state-of-the-science approach to market segmentation focuses as much on ensuring the relevance and applicability of the outcome to fundamental strategic decisions as it does on the technical complexity of the algorithm or analytical technique used to sort buyers into groups.
Download an excerpt of their chapter from Leading Edge Marketing Research.
“For approximately 50 years,” say Kevin and Ami, “knowledge of how a market segments and what constitutes a good market target has been the sine qua non of marketing strategy. No wonder most marketing textbooks include among their introductory chapters a discussion of market segmentation and targeting.”
“Yet some in the research industry say market segmentation is no longer relevant in today’s marketplace. We say unless it achieves state-of-the-science standards of actionability, it probably isn’t.”
With an eye towards who within an organization will use the results and how they will use them, along with clever measures of profitability and a range of descriptive variables to test, the two describe how marketers can tap into the full potential of this critical strategic research tool to improve performance and ROI.
To learn more about Leading Edge Marketing Research and order a copy, visit Amazon.com.
Buy now on…..
Kevin Clancy to Speak at Local AMA Chapter Events
Topic: “Inspiration, Aspiration and Transformation: Overcoming Testosterone-Driven Decision Making and Problematic Research to Build Extraordinary Strategies”
Tuesday, February 28, 2012
Hyatt Regency Boston
Topic: “Inspiration, Aspiration and Transformation: Building Extraordinary Marketing Programs”
Thursday, March 15, 2012
University of Richmond Jepson Alumni Center
Happy holidays and best wishes for 2012 to all!
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“Actionable Insights”: Watchword or Buzzword?
We’re only one year into the 2010s, but we’re already concerned that the term “actionable insights” is fast on its way to topping this decade’s list of meaningless marketing buzzwords. Don’t get us wrong, we love the sentiment behind the term—we’re as frustrated and depressed as the marketers who paid for the study when research results end up gathering dust on a shelf because no one could figure out what to do with all the “insights” into customers and prospects. When recent discussion on the topic turned to the measurement of the return on marketing research investments, however, we started to worry a bit.
“Return on Investment (ROI) on research projects,” predicts Bob Lederer, editor and publisher of Research Business Report, “is going to become a factor in the everyday functioning of client research/insight departments. It is already happening in a handful of companies. Many others see its inevitability [and] are beginning to think about it. Some expect it to materialize in the short term.”
It’s true, getting hard and fast ROI numbers for research certainly would help on many fronts. When Copernicus sat down with a group of marketing research directors at some of the leading companies in America a few weeks ago, most agreed that middle management submits “too many requests for small annoying projects” focused on nearer-term, tactical issues. Having some side-by-side comparisons of the ROI of frequently requested smaller tactical projects vs. more comprehensive, strategic assignments could help managers understand how to get more value out of the research they ask for and do.
Many of the back-of-the-envelope kind of ROI calculations we ourselves have used either reflect the risks inherent in not doing the research or the relatively minor cost associated with doing research that could produce a sizable improvement in marketing performance. Admittedly, this kind of ROI discussion does not necessarily make for the strongest business case for doing it in the first place. We agree that providing a number based on actual investment dollars and sales/profit results would be more in line with what a CEO or CFO would expect, and could certainly help when it comes to securing and protecting the annual budget.
Of course, we can forsee any number of difficulties in getting to that number. For instance, what happens when marketers implement a marketing plan different than the one the research supported? How can you reliably calculate ROI in that situation? Or in a larger organization, how do you isolate the actual financial contribution of a market segmentation exercise from that of, say, the advertising campaign to the performance of a new product?
Whatever the measurement system that does get into place, we can also forsee any number of difficulties resulting from that number. There’s already plenty of evidence to suggest that the perception among marketers is a good deal of research produces insights of marginal value. For example, only 14% of senior executives who’ve done a market segmentation exercise in the past two years say they derived any value from it. Put another way, nearly 90% think they got little out of one of the most frequently done major strategic research exercises.
According to a recent Boston Consulting Group (BCG) study, just 41% of executives said marketing research was a source of competitive advantage and only a third said their company was above average when it came to turning consumer insights into innovative products or services. Only 34% of line managers agreed that their insights team consistently answered the question “so what,” about the data they provide. Reported BCG, “money is spent on research reports that languish on dusty shelves because the data rarely yield actionable plans….The result is a low return on marketing research investment that can total hundreds of millions of dollars.”
We hope for all the energies spent getting the metrics and measurement capabilities into place to evaluate ROI, equal or greater attention gets paid to what’s driving the perception that many insights aren’t actionable in the first place. While measuring the ROI of marketing research is certainly an intriguing idea and could help direct marketers to the kinds of strategic research that can have the biggest impact on performance, why wait to get a measurement system in place to ensure that marketing research is demonstratively useable and relevant to marketers?
No matter what, the outputs from the measurement system will only be as good as the inputs. If the ultimate goal is to deliver “actionable insights” and highly positive perceptions of value, improving the ability to assess ROI won’t get us there on its own. Employing research tools and approaches that make it easier to connect insights to actions needs to play an equal part in the ROI effort.
Get Marketers to Eat Their Spinach and Love It Too! 5 Tips for Marketing Researchers, Copernicus Marketing Consulting & Research
The Consumer’s Voice: Can Your Company Hear It?, Boston Consulting Group
Lessons from Oscar: What NOT To Do With An Established Brand
How to differentiate an established brand, stay relevant as competitors encroach, broaden your audience without losing existing core customers, and continue to grow are all issues marketers deal with on a regular basis. No one is immune.
Up until recently, for example, retail heavy-weight Wal-Mart had a bumpy road as it tried to figure out how to update its brand strategy from “always low prices.” Starbucks has made many recent moves, including a new nameless logo, as it searches for ways to keep its aging brand relevant and competitive. More recently and in true Hollywood fashion, the Oscars, the venerable annual award show honoring “the best of the best” in motion pictures, has demonstrated some very important “don’t’s” when trying to reinvigorate interest in an aging brand.
All signs seemed to point to the potential for the show to expand its audience base. Though the TV audience for the show’s yearly broadcast had increased 30% over the past two years from an all time low of 32 million in 2008 to 41.7 million in 2010, there still seemed to be opportunities to grow in every age group. Yet when the median age of the broadcast topped out at over 50 last year, the Oscars’ brand managers must have become so preoccupied with attracting younger viewers that all their energies went into coming up with ways to appeal to the younger demographic.
The Oscars secured twenty-something actress Anne Hathaway and thirty-something actor James Franco as hosts and launched a full-throttle marketing campaign, “You’re Invited,” with a slew of digital and social media elements.
As Nicole LaPorte described on The Daily Beast: “The decision by this year’s Oscars producers…to hire Franco and Hathaway—the youngest hosts in the history of Oscar—was itself a drastic act in the progressive slouch towards a cooler, more populist Academy Awards.” She went on to describe Franco’s “offbeat reputation” as playing “perfectly into the Academy [of Motion Picture Arts and Sciences, the owners of the Oscars] to rebrand the Oscars as, well, playful,” and to detail other digital efforts to make the show more “au courant than ever before.”
Certainly hiring hosts who appeal to current and prospective viewers makes sense. Same for extending the event into social media during the broadcast. Hitting viewers on the multiple screens they supposedly look at simultaneously seems like the direction entertainment is going. Yet these are far from bold strategic moves to resuscitate a flailing brand. In fact, they strike us as superficial fixes backed by little more than an intuition that going after a younger demographic is the best way to increase overall audience size.
Not surprisingly, they didn’t work. The broadcast—younger hosts and all—received less-than-rave reviews across the board from critics and viewers alike. As reported in the Wall Street Journal, about 37.6 million people watched, down almost 10% from 2010, and “ranked as the fifth lowest since at least 1974.” True, the 2011 broadcast didn’t LOSE as many 18-to-34-year-olds as it did last year, but that’s not exactly a selling point that ABC—or whichever television network may broadcast the Oscars next year—can use to woo potential advertisers or justify higher ad prices.
Taking a closer look at who to target was by no means a bad place for the Oscars—or any other established brand that’s seen stalled or shrinking share, for that matter—to start when it comes to formulating a plan of attack. Sometimes even just asking the question “who is our target?” can instantly reveal a whole host of opportunities, particularly when the targeting decision wasn’t all that well-fleshed out to begin with.
What was the rationale for selecting this group? What do we know about them, not just demographically, but about their movie-going habits, attitudes towards award shows, favorite stars, etc.? What percentage of this group tunes into our program? Why don’t they tune in? Are they familiar with the Oscars? Are we not appealing to them in a way that’s all that compelling or motivating? Is there something about the broadcast that they don’t like?
Interestingly, we’ve found through our own experiences working with companies to set marketing objectives that sales problems are often NOT the fault of the product or service. Still, we wouldn’t be surprised to find out the Oscars bucked this trend. The inexplicably long broadcasts and many, many dry and self-congratulatory moments have made for some fairly unentertaining television over the years. Another good question for the Oscars to ask is what would reliably and feasibly increase the entertainment value of the broadcast to the target audience?
While it’s probably not the kind of news that brand managers like to hear, as the Oscars demonstrate, reinvigorating a brand more often than not requires much more than superficial fixes.
Customer Satisfaction in a Slump: Even the Net Promoters Agree
A few weeks ago, we saw the latest statistics from the American Customer Satisfaction Index (ASCI), which put the average customer satisfaction rating for more than 225 companies in 45 different industries and government agencies at 75.3 out of a hundred. As it turns out, that number has not improved appreciably for more than a decade.
By way of background, the ASCI is based on customer interviews and an econometric model developed at the University of Michigan’s Ross School of Business. The model maps the relationship between customer expectations, perceived quality, and perceived value (a.k.a., the drivers of satisfaction), satisfaction, and customer complaints and customer loyalty (a.k.a., the results of satisfaction).
Given all the recent emphasis on really “engaging” with customers by responding to their unique needs, wants, and interests throughout the pre- and post-purchase process, we found the news that it hadn’t improved at all for years pretty astonishing.
Keep in mind that for more than a decade, companies have obsessed over corporate and brand equity and management consulting firms have preached the joys of 100% customer satisfaction. For all that, according the ASCI many firms still earn “C” grades.
Coincidentally, about the same time we saw the ASCI report, we also read the 2011 Net Promoter Industry Benchmarks put out each year by the software firm Satmetrix. A completely different measure of customer satisfaction from the ASCI, the Net Promoter Score first saw the light of day in 2003 when The Harvard Business Review published “The One Number You Need To Grow,” by Fred Reichheld, a senior management consultant at Bain and Company.
Reichheld’s objective was (and is) to elevate customer satisfaction metrics to the same level of rigor and importance as financial metrics like revenue growth or return on equity. He proposed an 11-point “recommend” scale from zero—definitely would not—to 10—definitely would “recommend this company to a friend or colleague.” People who score 9 or 10 for a particular company or brand are labeled “Promoters”; people who score 0-6 are, in turn, labeled “detractors”; the 7’s and 8’s are ignored. Subtract the % of detractors from the % promoters and you have the “net promoter score” (NPS).
Generally speaking, a score over 50% is considered a good score. In some industries where the average NPS is negative, just hitting positive single digit numbers is a relative achievement. True, NPS is one of the most controversial and often criticized customer satisfaction metrics in marketing research, but true or not, correct or incorrect, it’s a score that many CEOs and CFOs look at to gauge how their company and its brands are performing at keeping customers happy.
According to Satmetrix, there were some standouts in their 2011 report. Financial services firm USAA earned the highest NPS across all brands and industries examined at 87%. Grocer Trader Joe’s was also up there at 82%, as was Costco at 77%, Apple at 72%, and Amazon at 70%. Still, we were startled by the negative NPS industry averages and scores for big brands. Insurance had an industry average of –5%, for instance. In credit cards, Citigroup earned a -20%. In insurance, Cigna had a -24%.
Other industry averages and scores for big brands were only just fair. Airlines had an industry average of 15%, for example. We know getting over 50 is considered in the range of good, but we would have expected a brand like search engine giant Google–the #2 most admired brand in the world no less—to do more than just barely make it over that threshold. It got a 53%.
Interestingly, Reichheld himself has said the NPS score of the average American company is 15%. You could get that by having 45% promoters and 30% detractors or 58% promoters and 43% detractors or—and this would be really crazy—you could have only 20% promoters and 5% detractors with 75% of customers and prospects giving you a pass. Any way you look at it, a 15% isn’t exactly a good sign about the ability of American business to make customers happy.
Our own research does not support the pursuit of 100% customer satisfaction. We have repeatedly found the relationship between satisfaction and profitability to be curvilinear—profitability does rise as satisfaction rises, but only up to a point. After that point, the costs of delighting the customer with ever-increasing levels of satisfaction exceeds the retention-linked profitability.
While the point of diminishing returns differs from company to company, it does exist. Finding out where it is as part of an effort to better understanding the financial relationship between satisfaction and profitability would certainly help companies set more realistic, achievable, and bottom-line-friendly goals than 100% customer satisfaction.
Still, anyway you look at it, put the ASCI and Net Promoter results together and it’s clear that companies have some work to do when it comes to figuring out what drives customer satisfaction with their brands.
At the Top of Our Reading List….
By Duncan Watts (Crown, March 2011)
We just got our copy of this new book which we’ve already read quite a bit about. Watts, a principal research scientist at Yahoo!, takes on conventional wisdom—which is, he writes, “not so much a worldview as a grab bag of logically inconsistent, often contradictory beliefs, each of which seems right at the time but carries no guarantee of being right any other time”—and challenges some strongly held marketing beliefs such as the marketing power of “influentials.”
We’re looking forward to reading it.
Looking for more good books to inspire your marketing strategies and programs? Consider the seven books written by the principals of Copernicus. The list includes the popular Your Gut Is STILL Not Smarter Than Your Head, chock full of ideas for balancing experience and judgment with rigorous, actionable research when making important marketing decisions.
Buy now on…..
Register for Our Upcoming Webcasts….or Check Out One On-Demand
Each month, we tackle core strategy development issues or offer points of view on hot marketing topics to marketers looking for fresh perspectives, ideas, and information to help them improve the performance of their marketing programs.
Visit our webcast channel for a complete listing.
Upcoming Speeches and Talks at Conferences Near You
Find out if we’re coming to your favorite industry event or a conference in your city.
OTC Perspectives National
Topic: Market Segmentation in the Digital Age
Speaker: Eric Paquette
Tuesday and Wednesday, May 10-11
Sheraton Atlantic City
Atlantic City, NJ
Topic: Digital Strategies “Illustrated”: Translating Insights in Actions
Speaker: Kevin Clancy
Tuesday, June 21
Villa Christina Restaurant
Who Makes for a Good Customer Target These Days Anyways?
Naturally, smart marketers want to put their precious marketing resources and budget dollars into the efforts that will help them get to and inspire the purchase interest and loyalty of their “best” customers. It’s just not very effective or efficient in most situations to cast as wide a net as possible and see what you drag in anymore—those days have come and gone.
But that begs the question, who makes for a good target customer these days anyways?
In this day and age of exploding digital and social media where the mainstay of media—“buy advertising and customers will watch, listen, and go shopping for our brand”—no longer applies, the answer to this question is far more complex than it might appear. Marketers have to integrate traditional and digital paid advertising with “owned” properties such as the brand’s website, as well as traditional and social “earned” media such as news articles and tweets.
Now, generally speaking, most marketers know the “best” customers—either current or prospective—are the ones who will generate the highest return in terms of profits for your brand. They are indeed “good targets” for digital and social marketing activities.
There are many pieces to the profitability equation, however. Yes, there are the financial measures of revenue such as lifetime value, current spending in the category in dollars, current share for your brand today, number and types of products or services purchased, and brand switching history/potential. Yet there are also several other characteristics that make one target more valuable than another because they’re easier to get and keep.
A good target is…
…less price sensitive. Unless you’re Wal-mart and want to grab share amongst the folks who put price above all other brand considerations, price insensitivity is another important indication of a buyer’s value to a brand and one particularly relevant these days.
*….struggling with big problems. The bigger the problem your brand can solve, the bigger the market response.
…interested in new products and services from the brand. Introducing new products and services—in good times and in bad—can generate the kind of organic growth companies crave. So why not ensure that new products and services WILL generate bottom line growth by narrowing in on the buyers most interested in considering the latest offerings from a brand or company?
….will advocate for your brand. The greater the level of influence a buyer has among their family, friends, and acquaintances, the more a brand’s marketing ROI will benefit. Customers who do some of the work for a brand because they’re more likely to spread the word off- and on-line about a product they found that really works or a service that solved a serious problem are like money in the bank.
….socially-connected on the web. Because of the speed and number of tools available to customers to spread information about product and services on-line, word-of-mouth activity is even more important to capture in a digital environment. The more active and engaged a customer is with different social media, the more valuable they can be to a brand.
Marketers can use the answers they collect from buyers in their category or industry as filters to separate the “good” from the “OK” and “not-so-good” potential targets for off- and on-line marketing activities. Just figure out which descriptive characteristics—demographics, psychographics, attitudes, lifestyles, needs, behaviors, and more—have the strongest relationship to these profit-related criteria and marketers will have one half of the guidance they need to build a high performance marketing plan.
Let’s talk about the other half—very often the forgotten half—because this information that helps smart marketers identify the high value targets will only get them so far. They also need to know how best to communicate with them.
From an operational standpoint then, a good target ALSO is…
…distinct in terms of needs and wants. The more homogeneous and preemptible a target’s needs and wants, the easier time marketers will have developing compelling positioning and messaging that breaks through in traditional and digital channels.
…relevant to traditional and digital communications decisions. Get a sense of how high-value customers use traditional, digital, and social media throughout the pre- and post-purchase process, and, in particular, how they like to interact with a brand within different communications channels.
…findable in syndicated media databases. The “best” communications channels—either current or prospective—are the ones with a disproportionate number of high-value customers. Ask and answer the same questions used in the database resources media planners regularly access to develop direct links.
As more and more marketers shift their mentality from experimentation with digital and social media to integration of all on-line efforts with the overall marketing plan, they will need to update their image of a “good target” in order to give themselves a leg-up in generating the most return from digital marketing investments.
Bloggers and Influentials: Kevin Clancy Offers Insights Into these Key Targets for Word-of-Mouth Marketing
“Before Americans buy, they talk. And they listen,” explain Berry-AMA book prize winners Ed Keller and Jon Berry in The Influentials. These days, they say, “the buying process is to ask a friend, family member, or other expert close at hand what they think.” To back up their contention of the power of the word-of-mouth marketing channel, we offer up the following quick stats:
- According to a recent NOP World survey, 9 in 10 consumers say that of all the sources of ideas and information about products and services available, they trust recommendations from people they know the most.
- 67% of consumer purchase decisions are primarily influenced by word-of-mouth, found consulting firms McKinsey and Thompson Lightstone.
- As for B2B, 50% of U.S. and U.K. executives say they are likely to buy a product or service based on word of mouth, or so found a study by Keller Fay.
As far as leveraging WOM in their brand’s favor, most marketers know they’ve got to get to the “influentials” and “super-influentials” in their category or industry. These folks tell friends and neighbors what and where to buy. Their friends, family members, and colleagues turn to them for their perspectives and opinions on products and services. In other words, when they talk, people listen. The messenger carries as much—if not more weight than the message.
Now, as our readers know, Copernicus is always on the prowl for conventional marketing wisdoms begging for some grounding in empirical data. And in the area of WOM marketing, one of the biggest CWs going is that “influentials” and “bloggers” are one-and-the-same-person.
Though many studies have established the growing awareness of blogs and increasing blogging activity, none have included direct measures of personal influence. Still, this commonly-held belief has inspired many marketers to push their brands into the blogosphere to reach and impact influentials.
We sat down with Copernicus’ chairman Kevin Clancy to talk about the findings of an in-depth R&D investigation he led to determine whether or not “influentials” and “bloggers” are indeed synonymous terms.
Here’s what he had to say:
Mzine: Where did the idea that “bloggers” and “influentials” are one-and-the-same-person come from, do you think?
Kevin: One measure of personal influence is certainly a willingness and interest in sharing opinions with others. People who are actively commenting or writing their own blogs are giving their perspectives and recommendations on different topics, so it’s not all that far-reaching an assumption to think there could be a relationship between these two groups.
But there’s more to personal influence that just the propensity to share opinions.
We get asked on a fairly frequent basis, hey are the folks who post reviews on products and services influentials? We say we don’t know. Yes, they’re sharing opinions and the content of their reviews may impact the purchase decisions of others. But are the individuals who post reviews on Amazon or Angie’s List or Facebook influentials? Are folks regularly seeking out the opinion of these specific individuals to see what they say? Are folks looking for reviews in general or for the reviewer?
When it comes to reviews posted on Amazon, for example, our experience is generally folks look at them in the aggregate. If most reviews are negative, people may decide not to buy. But that’s different than people seeking out the opinions of a specific reviewer–say a blogger–when considering a purchase in a particular product or service category.
The Word of Mouth Marketing Association defines an influencer as a person who has “a greater than average reach or impact through word of mouth in a relevant marketplace.” That means to be considered “influential” you, for instance, have to have a level of authority and knowledge on a particular topic.
What struck us about previous research on the topic was the lack of direct and comprehensive measures of personal influence. Some measures came at it by asking about likelihood to share opinions. Others talked about the number of connections or friends study participants have. But there was no definitive answer to the question, certainly not one grounded in empirical data.
Mzine: So are influentials and bloggers one-and-the-same?
Kevin: While they aren’t redundant concepts, there’s a strong relationship between the level of blogging engagement and cross-category personal influence.
Copernicus surveyed a national cross-section of 808 men and women, ages 18 and older, about their blogging behaviors and their personal influence patterns across 21 categories, ranging from products and services such as soft drinks and fast food restaurants to social/cultural topics such as sports and politics. We identified five groups that varied in terms of blog usage and three groups that differed in personal influence across the categories.
In our study, we found 53% of those who scored high in cross-category personal influence post comments or write their own blogs in contrast to only 21% of those who scored low in cross-category personal influence. In the simplest terms, these influentials are highly engaged with blogs.
Mzine: What do you think of blogs as a marketing communications tool? What about as a research tool?
Kevin: Whether it’s an effective means to achieve an end in large part depends on who you are trying to reach. In our study, about half of respondents did not read blogs on a regular basis. In other words, if you’re planning on using blogs to reach a market on a mass-scale, there’s a good chance you’re going to miss a lot of potential buyers of your product or service if you just focus on blogs.
Same holds true as far as research goes. You may miss hearing about issues, needs, trends, etc., of the pretty sizable portion of the population that’s not actively engaged on the blogosphere.
As far as reaching and engaging with influentials—a target group whose word of mouth power far exceeds their numbers in the population—however, blogs can be a powerful tool. Interacting with those most likely to influence the personal decisions of others in a medium in which they more actively engage can boost the effectiveness of word-of-mouth marketing efforts.
One big takeaway from our study is that while there’s a tendency for influentials in one product category to be influential in others this correlation is far from perfect. This flies in the face of marketers and researchers who employ a single, general measure to tap into personal influence and expect it to work across different product categories.
Marketers are wise to study and target influentials in their particular product/service category and understand their digital and social behaviors to enhance the performance of efforts aimed at this important group.
Mzine: If you had the ear of every CMO in America for five minutes, what would you say to them about reaching and impacting super-influentials in their category or industry?
Kevin: For a variety of reasons, the first step in the purchase process in a growing number of product and service categories is to ask a friend, colleague, or family member what they think about different brands. This holds true as much for business-to-business and industrial products and services, as for consumer products and services.
The big challenge for marketers is to identify, reach, and impact the one in ten folks who tell the other nine what, when, and where to buy. One estimate we’ve seen is that every influential impacts the purchase consideration of 7 friends and family members. The key here is to not only figure out who these people are in terms of demo- and psychographics, but what their on- and off-line media habits are to most effectively pre-dispose them to share information about your product or service.
I’d also add that every company that has made innovation a priority—and really, who hasn’t—identifying and getting a better understanding of influentials should be a critical component of any marketing strategy for a new product or service. There’s just so much evidence out there that demonstrates influentials spread the word at a much higher rate. Tapping into this group can definitely help improve the overall return on your innovation investment.
To learn more about this topic, listen to Kevin’s recent webcast, “Super Influentials: New Insights For Reaching Them on the Web,” available on-demand. To download, visit our webcast channel.
Tips for Improving Innovation ROI: 4 Tools to Give You a Read on New Product or Marketing Program Performance in 30 Days
With management chomping at the bit to demonstrate that the company is getting a good return on their marketing investments, CMOs need to know whether new products/services and marketing programs are successful in as little as 30 days.
No one can afford to wait the customary six to 18 months to get performance data anymore. With the uncertain economy, tight marketing budgets, bottom-line pressures, and so on, there’s a heightened urgency for marketers to demonstrate results to CEOs and CFOs as early as possible. The sooner there’s some directional data on how the marketplace has received a new product or marketing program the better. Wait six months and marketers may not have enough time to make adjustments to get maximum performance and meet management expectations.
What can marketers do to measure the performance of new products/services and marketing programs quickly and accurately?
We’ll start to tackle an answer to this question with four more questions:
Is the product/service or campaign new and different?
Is it a front-loaded effort?
Is the media weight behind the launch substantial enough to read the results?
Do people care about the product category?
A “yes” answer to all of the above opens up the possibility of putting one or more of the following four tools to work on early performance tracking:
1. Blog hyper-analysis
Use widely-available analysis tools to see if your new product, campaign, or program has inspired online conversation, positive or negative.
What it gives you: Although blog posts are not necessarily linked to sales, they do provide an early indication of whether people are talking about a new product or campaign, which give marketers some indication of whether it has broken through. They’d have an early warning if nothing’s happening, if conversation takes a negative turn, or there’s little mention of a new product or something related to the key brand message contained in a new campaign.
Set-up time: One week
Predictive validity: Fair
Ball-park costs: $30K
2. Souped-up campaign penetration tracking
Instead of looking at 25 different “awareness” metrics, we recommend developing a single measure that we call campaign penetration which incorporates most of the traditional measures into a single metric.
What it gives you: The advantage to using campaign penetration is that instead of having a bunch of numbers that fluctuate seemingly at random from one quarterly tracking study to the next, marketers get one reliable and valid metric that tells them how a campaign is doing at generating “real” awareness for a brand and its key brand message. It also gives them a much better handle on a campaign’s impact on sales.
Set-up time: Two weeks
Predictive validity: Good
Ball-park costs: $50K
3. Novel applications of simulated test marketing
Simulated test marketing (STM), the single best validated tool in all of marketing research, can help gauge the ROI of actual campaigns after they’ve been launched.
What it gives you: Though marketers often use an STM to forecast sales and profits of a new product/service or a new advertising campaign pre-launch, they can also use one cleverly done to improve a forecast 30-days post-launch. A marketer can see the current trajectory of a new product/service or program based on 30-days of actual, real-world results and use this information to recalibrate the model. If a marketer sees a big difference between where the pre-launch and post-launch forecasts have sales and profits headed, they will have an early warning to take action.
Set-up time: Four weeks
Predictive validity: Very good
Ball-park costs: $100K
4. After vs. Before Econometric Modeling
Some marketers undertake econometric analyses of historical investment and sales data to gain insights into which components of marketing plans work best.
What it gives you: Often marketers use this kind of information to guide future marketing planning decisions and to understand the incremental impact each marketing investment had on sales, account activations, usage, etc. There’s an opportunity here, however, to use the same kind of sophisticated statistical analysis to gauge the performance of a new campaign pre- and post-launch.
For example, a consumer packaged goods firm might have been collecting years worth of investment and sales data for the markets in which it’s rolling out the new product. Econometric modeling could then be used to make a forecast of new product performance following the launch. After the campaign begins, it could continue to track the same data. At about the four week mark, the model could be recalibrated based on the actual market performance. Very quickly, the firm could compare forecasted sales performance with actual performance.
Set-up time: Six months
Predictive validity: Excellent
Ball-park costs: $300K
Though these four tools use very different types of data and inputs, they all provide insights that weren’t widely available even a few years ago. Depending on your budget and the amount of historical data you have available to you, using one or a combination of two or more can give you, at the very least, a general sense of whether a new product/service and/or campaign has broken through the clutter.
Remember the primary purpose of employing one or more of these tools in the first few weeks a new product or campaign is in the market is to give a marketer a fighting chance to make improvements, figure out necessary adjustments, or give peace-of-mind that an innovation effort is on its way to delivering the kind of return that makes senior management smile.
For more ideas for improving ROI, check out our new white paper:
At the Top of Our Reading List….
Competitive Intelligence Advantage: How to Minimize Risk, Avoid Surprises, and Grow Your Business in a Changing World
By Seena Sharp (Wiley, October 2009)
Competitive intelligence is a hot topic of discussion among marketers these days. More and more, we’ve been asked for examples of when companies can use competitive intelligence and how to find useful information that can help guide resource allocation and strategic planning in the short- and long-term.
Good thing there’s a terrific book available for marketers looking for a thorough introduction to the topic: Competitive Intelligence Advantage, written by noted competitive intelligence expert and a good friend to Copernicus, Seena Sharp.
“Competitive intelligence gets at the truth,” she writes in the opening pages of the book as she begins to make her case. “It objectively details what is happening, much of which may be unknown to most executives. Unless you conduct an analysis of current conditions, the information that you know is only partially current and may be only partially accurate.”
Read this book and you’ll come away with the understanding and tools you need to get a strong CI program going for your brand or business. Also read Seena’s interview on The Marketing Fray for more thoughts and perspectives on getting value from competitive intelligence research.
Looking for more good books to inspire your thinking as you look ahead to 2011? Check out the seven books written by the principals of Copernicus! The list includes the popular Your Gut Is STILL Not Smarter Than Your Head, chock full of ideas for infusing research into marketing decision making to improve ROI.
Buy now on…..
Register for Our Upcoming Webcasts….or Check One Out On-Demand
Each month, we tackle a new and, we hope, relevant topic to marketers looking for information and tools to help them do their jobs better. To date, we’ve covered everything from market segmentation to “white space,” improving innovation ROI to performance tracking.
For a full listing of past and future webcasts, visit our webcast channel.
Upcoming Speeches and Talks at Conferences Near You
We’re on the docket to speaking at several upcoming conferences. Check out the schedule below:
AMA 31st Annual Marketing Research Conference
Topic: Market Segmentation for the Digital Age
Speaker: Eric Paquette
Sunday-Wednesday, September 26-29
Pharmaceutical Marketing Research Group Fall Institute
Topic: Implications of the Digital Revolution in Marketing
Speaker: Eric Paquette
Sunday-Tuesday, October 24-26