by Richard Fouts | April 23, 2014 | Submit a Comment
The shortest definition? “Meeting customer needs profitably.”
- Tesla (and now, BMW) have both discovered that people who crave luxury automobiles are also passionate about sustainability.
- Uber responds to urban dwellers, stressed by the unreliability of hailing a cab when they need it most.
- ZocDoc provides same-day doctor appointments to those requiring urgent medical care.
- When IKEA noticed that people wanted good furnishings at lower prices, it created knockdown furniture.
- Ebay found a unique way to merchandise items buyers desire most (guaranteed LOL when you read how eBay started).
All of these examples illustrate how people with marketing savvy turned an unmet need into a profitable business opportunity.
Unmet needs, market gaps, white noise … whatever you wish to call it, it’s that hole in the market that opens the door to profitability. But, before you know it, fast followers find a way to deliver even more for less, especially in our current world of digital disruption, where emerging technologies and techniques have a way of trumping the value proposition that once led the market.
How can marketers avoid this scenario?
Don’t get comfortable. Marketers that fill an unmet need, often relax, then enjoy the ride (thinking “they’re done”). This used to work, when product lifecycles lasted 10 years. But things started to change when those lifecycles, propelled mostly by the tech industry, became five years, then two, then one, then a few months.
It’s why you as a digital marketer — need to integrate innovation into the organization a process, not something you think about at the annual off-site or during some casual quarterly brainstorm.
Innovation as a process, is something Lisa Bodell explores in her compelling book, Kill the Company. Bodell’s treatise is a modern-day manifesto for companies that forgot to heed Peter Drucker’s famous advice, “better to reinvent yourself than have a competitor do it for you.” In her book, she describes a systematic way to reinvent yourself for the modern age. Bodell recognizes that this could be an overwhelming hill to climb, hence arms marketers with killer quick wins (my personal favorite is “Kill a Stupid Rule”).
When Nintendo designed its Wii game system, when Tesla introduced its electric cars, and when Apple launched its iPod, they all were swamped with orders – because they filled an unmet need through the right product. And of course, each of these companies faced fast followers, eager to trump their value proposition.
All still lead, albeit with gaps not as wide as they once enjoyed. In an ironic twist, Bodell’s book helps you avoid the day when you discover that killing the company is the only path to survival.
Category: Digital Marketing Marketing Strategy Tags: futurethink
by Richard Fouts | April 18, 2014 | 1 Comment
Buyers and sellers agree that sharing information produces value. They also agree that consumer privacy should be protected in such an exchange. Where disagreement arises is the degree to which the parties benefit.
In a Forbes study titled “The Promise of Privacy, Respecting Consumers’ Limits While Realizing the Marketing Benefits of Big Data” 60% of sellers said their buyers (both b2b and b2b) are willing to provide personal information if they perceive value from the exchange. The figure rises to 77% when survey data is statistically sliced to focus on those sellers that are the most sophisticated in their use of customer data in marketing programs.
The picture grows a tad less enthusiastic when buyers are surveyed.
53% of b2c customers (and 45% of b2b customers) say they are willing to provide personal information when they perceive a benefit. And – this is the finding that shouldn’t surprise anyone – 55% buyers agree with the statement “companies who track my personal information owe me some form of commensurate benefit.”
So who benefits most? The study goes on to show three out of five consumers readily admit that it’s the seller who benefits most from the sharing of information. Not a big surprise. But do buyers care?
The study concludes with findings that show – while consumers see a slight imbalance of benefit, they remain content with the exchange. And while a small subset of consumers care a lot about privacy, what most are concerned with is security.
This finding aligns strongly with marketers’ concern that a security breach has a huge negative impact on buyer trust (not to mention impact on brand and reputation).
Category: Uncategorized Tags:
by Richard Fouts | April 9, 2014 | 1 Comment
By the time you read this blog post, over 12 million people will have viewed The Big Leap on YouTube. Lacoste’s ad illustrates what consumer marketers often do so well: tell stories that tap into emotionally-filled memories.
Memory, after all, is the crux of brand awareness
Often, you remember a brand because a marketer told you a story that was interesting enough, moving enough, or startling enough … to create a memory. Moreover, tales that bring a strong human emotion to the surface are the ones we remember (and share) the most.
But interestingly enough, emotions aren’t feelings.
Rita Carter, author of Mapping the Mind, writes, “Emotions are not feelings at all but a set of body-rooted survival mechanisms that have evolved to turn us away from danger and propel us forward to things that may be of benefit.”
Our navigation through life’s obstacle course – filled with danger and joy – can be a wild ride. For many, a deliberate ride into danger (e.g., speeding down the freeway in our new BMW) delivers a rush, by releasing chemicals such as dopamine into our brain.
Two proven memory makers
The brilliance of Lacoste is that it simultaneously weaves us in and out of two states we are likely to remember most: joy and danger. Lacoste marketers employs a second technique, the metaphor, to seal the deal.
Hence, our star’s dangerous leap from a skyscraper interleaves with his leap across a table to kiss a young woman for the first time. The metaphor works beautifully. Our story’s hero throws caution to the wind. His first kiss creates a magnetic field so powerful it plunges the two of them into midair. Our lead character (actor, Paul Hamy) plays the sport of life and wins. And who doesn’t remember the first time they kissed someone they were attracted to, the first time? Along with the memory of the anxiety that likely preceded it?
Marketers love metaphors. When a marketer told me how many hackers exist in the world, it didn’t really register until he said “it’s the equivalent of New York City’s population.”
When Marketo CEO Phil Fernandez (at Marketing Nation in San Francisco this week) noted that $135 Billion will be spent on digital marketing in the US alone, he followed it with, “that’s the size of many national economies.” That created a memory (evidenced by subsequent tweets).
Tap into a familiar memory to create a new memory
Lacoste creates a universal metaphor we can all relate to — through one of our own, highly personal memories. But the beauty of Lacoste’s story is its emotional ying-yang. Its metaphor, that “life is a beautiful sport” illustrates how determination can trump fear. How fight can trump flight. And how the reward of joy motivates us to take on danger. After all, playing it safe doesn’t deliver nirvana. Playing it safe delivers mediocrity. In life, it’s the contrasts we remember.
So they next time you market your product through a story, try creating a new memory through a metaphor — that taps into a familiar memory. And remember: stories that illustrate why a difficult path to joy was worth the risk, are the ones we remember most.
And, it you check out Why Campaigns Go Viral, (Gartner subscription required) you’ll see more evidence of these techniques at work.
For a look behind the scenes of Lacoste’s Life is a Beautiful Sport, directed by Seb Edwards (with BETC Paris) and actors Paul Hamy and Anna Brewster, go here.
Category: Brand awareness Digital Marketing Marketing communications Tags:
by Richard Fouts | April 7, 2014 | 1 Comment
At the heart of value, lies the price/performance ratio, a measure of how much performance you offer for each unit of price. If you deliver more performance, at a similar or lower price than your competitor, you become the value leader. Similarly, if a competitor drops its price, with no diluation in performance, it has the opportunity to take the lead.
Of course, price/performance can become an unending game of cat-and-mouse, as competitors one-up each other through unending twists of the price and performance levers (the wireless industry is famous for this).
Few marketers find this game fun to play. Kmart’s disastrous attempt to overtake Walmart on price illustrates the challenge of trying to win this game on the value leader’s terms.
To effectively compete, marketers may instead downplay or even abandon some market segments. British Airways for example, when challenged by low cost providers, easyJet and Ryanair, put more emphasis on its long-haul routes, where lower-cost players don’t compete; less on the short haul routes where they thrive.
If you’re in a British Airways type of situation, you can follow the same strategy.
This course of action doesn’t preclude you however, from competing on price. But – if you decide to do this, do it through a subbranded, low-cost operation, but only if it makes your existing business more competitive. Also, the new business should derive a distinct advantage through its association with your primary brand. Examples include ING (and ING Direct), Royal Bank of Scotland (Direct Line Insurance), Mercedes (C Class). In these examples, the low-cost option was designed and launched as a moneymaker in its own right (albeit, bolstered through brand association), not just as a defensive play.
Read more about this type of strategy in Nirmalya Kumar’s HBR piece: Strategies to Fight Low Cost Rivals.
Category: Digital Marketing Tags:
by Richard Fouts | April 3, 2014 | 3 Comments
Gartner expects digital business disruption to heat up over the next 2 to 3 years. If your organization’s legacy model is being aggressively challenged by nimble startups – you need to act now.
But, you can’t summarily abandon your legacy business model …
….in favor of one altered for a digital world, overnight (although many stakeholders, especially board members, may apply this type of pressure). An all-out replacement may be tempting, especially if a disruption is causing losses in revenue and share. But premature abandonment is sure to dilute the value proposition you’ve taken years to build and refine.
Think of transformation as two efforts happening in parallel tracks.
The first track realigns your legacy model to an altered marketplace leveraging the value proposition that has worked for you. The second track works to develop new sources of growth through a new startup business unit or service line.
This dual-track approach was used by Xerox, the New York Times, NBC, FedEx and Nike.Launching a startup business inside a traditional business challenges old ways of doing things, but it also leverages legacy values, strengths and resources that can add value and insight to any new business,
These resources, particularly marketing, HR and product management, are readily available to support an internal startup through your existing shared services models. But keep in mind, the extra load can be stressful. Hence, leadership is the key to helping people set priorities. Most companies engaged in this dual-track approach use the CEO to drive tough decisions when resource tradeoffs must be made, causing legacy businesses to wait a bit longer for support they typically get faster.
Looks outside your industry for inspiration
My coverage of consulting firms reveals several instances where this approach is being used to generate new growth. For example, Razorfish is working with Delta Airlines, Peet’s Coffee and Audi. SapientNitro with Target, Ralph Lauren and the Boston Red Sox.
If you follow their lead, you’ll likely insist your consultant staff people that deeply understand your sector. You’re not wrong to insist this, but you also need to give consultants the freedom to reframe business problems and opportunities in completely new ways.
Be open to staffing your initiative with an expert who may have a moderate understanding of your sector, with a high degree of empathy and expertise in the piece of the value chain you want to impact; e.g., customer service, delivery, loyalty or the user experience. Immerse this person in what a satisfied customer in your business looks like versus the existing process and structure currently in place to deliver it.
For example, marketers at B2B publishing giant Thomson Reuters adopted the mindset of P&G (a company known for following its customers around stores and observing them in their kitchens) to understand precisely how brokers and bond traders use its products to make investment recommendations, resulting in several changes to how products are now developed, priced and distributed.
Conduct the “worst nightmare” exercise …
….where the team imagines how a new competitor, from an adjacent market, with no legacy to manage, would challenge your existing customer value proposition. What is this new competitor providing that your existing customer base finds irresistible? What does it do faster, with more accuracy, and with more relevance due to insightful customer context? Use your imagination to craft as many scenarios as you can. Then vote on them to create a prioritized list of competitive attributes you want to instill in your own organization. Lead this exercise with one of Peter Drucker’s famous quotes, “It is cheaper and more profitable to obsolete yourself than have your competitor do it for you.”
Category: Digital Marketing Marketing Strategy Strategic Planning Tags:
by Richard Fouts | March 26, 2014 | 5 Comments
Carl Sandburg once described a foggy day from the perspective of “a little cat” who peered through the harbor fog on its silent haunches before moving on. A few years ago, real time marketing was like Sandburg’s cat. Its aspirational, illusive promise sounded misty and futuristic – causing a wait-and-see attitude. Meantime, our cat has been moving on, in real time, but in subtle ways that don’t always make for flashy headlines.
Why? Because using data (much of it unavailable, until now) to make decisions in real time is becoming the new norm.
Consider the following product use cases, promoted not as real time marketing solutions, rather applications with real time attributes:
Getting instant advice from a peer. An innovative company in Salt Lake City, Needle, tracks a buyer’s shopping experience in real time; then invites another buyer to join in (who already owns the product). The solution is careful not to disrupt those who will probably buy anyway, or those that are just passing by, rather those who are struggling to make a decision – and want to talk to a peer in real time.
Like many innovative companies, Needle was born from the personal experience of its founder (in this case, a guy named Morgan Lynch, who needed help buying a triathlon wetsuit). After hours of scouring through forums and product reviews, Morgan realized what he really wanted was a credible peer to talk to; one that could help him decide which wetsuit would give him a competitive edge. And Needle was born.
Making a same-day doctor’s appointment. Former McKinsey consultant Cyrus Moussoumi, needed immediate medical attention after returning from vacation with a painful ear infection. Four days later he finally got in to see a doctor. The experience got him thinking that there must be a better solution for patients requiring immediate care (other than an emergency room, which is often anything but quick). He was right. It turns out up to 20% of appointments made with physicians are cancelled.
Cyrus went on to found ZocDoc, which makes these last minute cancellations available to patients requiring same-day appointments. Today, four million people use the service in nearly 2,000 cities.
Pitching the right product to the right buyer at the right time. Another innovative vendor, Gagein (also known as Google alerts on steroids), helps sales teams double, even triple their conversion rates using sales intelligence they gather, in real and near time. The CMO of a large retailer for example, says to the press, “Revamping our digital commerce systems will be one of our leading priorities this year.” That intelligence goes straight to the sales team of an eCommerce vendor. And as we all know, showing up first (armed with relevant knowledge) gives any sales team an advantage.
Serving the right ad to the right buyer at the right time. Then there’s programmatic ad buying (fueled by real time bidding). This solution is akin to programmatic stock trading. In this case, ad buying happens as the result of a computational proxy bidding on behalf of humans. This is a true, real time application where ads are served up in microseconds, based on information gathered immediately. Vendors in this space, such as Rocket Fuel, [X+1], Infectious Media, MediaMath and Turn are all growing.
Giving buyers choices, right now. Augmented Reality provider, Metaio, just released its free augmented reality browser (for Android and iOS devices) which combines GPS, image recognition, and visual search to attach digital descriptors to one’s physical environment. Metaio is one of dozens of vendors that augments our physical world with digital information obtained in real time.
What do these cases have in common?
These use cases illustrate how vendors are making money from data that we never had before, or at least never had in a timely, scalable manner. Sure, that cancelled appointment was known, but only to the receptionist and the doctor. The peers we needed to advise our purchases were out there, but we had no way of finding them, let alone chat with them.
And in all of these cases, the scenario feels so natural that it’s not promoted as a real time marketing solution, rather an application with real time attributes, that gets people what they want, when they want it.
If you’re like me, the last thing marketing needs is another adjective, mostly because such an overuse of qualifiers to describe marketing has a way of giving birth to new silos (digital, email, social, mobile, data, real time, near time – have all headlined the latest marketing strategies). I suspect we’ll slowly drop all these adjectives some day and just get back to marketing.
Category: Digital Marketing Tags: CYRUS MOUSSOUMI, Gagein, mediamath, metaio, Needle, real time, Real time marketing, Rocket Fuel, Turn, x+1, zocdoc
by Richard Fouts | March 18, 2014 | 1 Comment
As marketers and salespeople we are good at generating ideas. Where we often fail is pitching them. Why does this happen?
According to University of California business professor Kimberly Elsbach, it comes from preconceived notions about us (the pitchers) and our audience (the catchers). Elsbach says:
“Before you know it, your audience has placed you in a neat little box, defined by stereotypical biases and images of what they think you represent.”
Knowing how you’ll be stereotyped gives you a leg up in how to control the pitch. Elsbach came to this conclusion by observing the pitches of both Hollywood screen writers and Silicon Valley entrepreneurs, which as it turns out – have a lot in common.
Both are strong stereotypes – that pitch highly creative, high stakes ideas – along with requests for piles of money in order to execute the idea. Money and risk always create a drama-packed, emotional situation that has the potential to blow up if not managed. The requisite step to cooling things off, says Elsbach, is to identify which stereotype your catcher will likely place you (which allows you to play to – and control – the catcher’s expectations).
Elsbach’s research identifies three pitcher stereotypes:
The Showrunner, the seasoned business leader, combines charisma with an implementation track record to win people over. Catchers often see showrunners as good politicians that know how to sell and navigate organizations. They don’t however – expect showrunners to pitch the most creative idea possible, rather to pitch what’s workable and practical.
The Artist, often possesses the showrunner’s charisma, but is less slick and far less conformist. Artists really don’t care about implementation; they are passionate (and highly possessive) about their idea. They sell by commanding the catcher’s imagination.
The Neophyte turns youth and inexperience into a strength – to illustrate what’s really possible if we’ll just let go of old baggage. Sure, neophytes are naïve, but they use this as a way to come off as refreshing. Unlike the artist, who fiercely identifies with the idea, the neophyte is almost detached from the idea, laying it out as a gift to anyone who wants it, using their selflessness to charm the pitcher.
Armed with this information, marketers can position their idea relative to what their audience is really looking for: a wildly new, brilliant idea that breaks old norms and convention, a great idea that will likely encounter resistance, but will use convention to succeed, or a good idea that will improve what’s already in place without threatening anyone.
Where pitches fail is lack of alignment. For example, a Showrunner pitches an idea to a catcher that’s expecting a highly imaginative idea (something you’d get from an artist). Artists of course, shouldn’t be used when time, money and risk mitigation are the catcher’s priorities. Neophytes are great when the catcher is looking for some fresh thinking from someone who is not invested in old norms (because they have not personally experienced them).
So, it all comes back to Walter Cronkite’s sage advice: know your audience.
Given what you know about the perceived weaknesses of these stereotypes, you can complement your pitcher with his or her opposite to fill in any gaps. There’s a lot more to Elsbach’s research, including some good scenarios of all three pitcher types – along with other insight from people who have studied creativity.
You can read a summary of her research, titled “How to Pitch a Brilliant Idea” in the Harvard Business Review. It’s a great read and will leave you with lots of ways to improve your pitch success rate.
Another great resource is a company called Second Story (now part of SapientNitro), which approaches marketing through a storytelling lens.
Category: Digital Marketing Marketing communications Personal selling Tags:
by Richard Fouts | March 6, 2014 | 4 Comments
Simplicity. The mere sound of the word is musical.
Listen to your buyers.
If there’s one thing people don’t need in a world of sensory overload, it’s complexity, a sentiment that rings loudly in a survey conducted by IBM’s Institute of Business Value. Consumers say in the study that marketers try too hard to engage with them over social media.
Moreover, they push out too much information. The result? Buyers overthink purchase decisions, which drive them into buyer’s remorse before they’ve even purchased the product. This often causes them to change their minds and abandon the path to purchase altogether.
Help buyers think less about the decision.
In another study by the Corporate Executive Board, consumers expressed, rather begged, marketers to “simplify the decision process” to the point where they think less about the decision. Sounds counter intuive right? It’s actually consistent with other research.
In one study about choice, a grocery store had two display tables of fruit juice products. One table had 12 choices (which drove more traffic) the other had four (which drove more sales).
You can read lots of stories similar to this one in a fascinating book by Dr. Robert Cialdini titled, Influence and the Power of Persuasion.
For another example, consider the State of Kentucky, lauded for its smooth healthcare rollout, also known as Kynect.
“Kentucky seems to have a smoother rollout than some other states,” said Jennifer Tolbert, director of state health reform at the Kaiser Family Foundation. When she visited various exchange websites she said, “the one I got through most easily on to get prices and comparisons was the Kynect site.”
Though Ms. Tolbert said she wasn’t certain why the Kentucky site functioned more effectively, she speculated it was likely its pared-down design. It “doesn’t have all the bells and whistles that other states tried to incorporate, like interactive features,” she said. “It’s very straightforward in allowing consumers to browse plans without first creating an account.”
The program manager for the initiative, Chris Clark commented, “We spent an enormous amount of time making it functional,” commenting further that the goal was to provide the most relevant information in under 10 seconds.
Get out of the way
Take a look at your own path to purchase; get the obstacles out of the way. According to the CEB study, brands that simplify decisions are:
Category: Digital Marketing Marketing Strategy Personal selling Public relations Strategic Planning Tags:
by Richard Fouts | February 10, 2014 | Submit a Comment
We all have better things to do with our hands when we’re shopping, driving a car, or riding a bike than hold a device to our ear or hypnotically gaze into a screen. It’s why consumers are especially attracted to the hands-free, mobile functionality offered by wearable computing.
Wearable computing, or “wearables” is one of those emerging trends that has been slow to adopt, but will soon explode. That’s because the technical hurdles that have stalled the adoption of wearables are quickly eroding.
In fact, Gartner Predicts that by 2020, consumer data collected from wearable devices will drive 5% of sales from the Global 1000. It’s all part of Gartner thought leadership around trends that are both disruptive and constructive. Read the full report, Gartner Top Predictions 2014: Plan for a Disruptive, but Constructive Future.
- By 2020, well over 150 million wearable devices will ship worldwide, led by the sports and fitness sectors. Nike FuelBand technology (targeting general consumers), combined with the Adidas launch of miCoach (targeting professional sports), are just two illustrations of how the human body’s transmission of information will trigger commerce. Advertisers will likely use exercise data and eating habits (from devices like the Fitbit) to serve up relevant ads and offers.
- Then there’s health care. Our increased attention toward personal health combined with a movement on the part of providers to contain costs — will trigger products and services that promote preventive measures.
- Wearable technologies will also emerge in the huge disability market (such as aids for the deaf, blind, paralyzed and elderly).
- In manufacturing and distribution markets, wearable computers worn on the arm for hands-free operation will continue their popularity in field service and assembly lines and warehouses.
Although Google has said it won’t give advertisers access to its Glass, consumers will use it to view ad-rich social sites, Web pages and Facebook news streams.
When it comes to wearable computing, all you need is some creativity and an open mind.
Read the full report, Gartner Top Predictions 2014: Plan for a Disruptive, but Constructive Future, along with our other top 10 predictions for 2014.
Category: Digital Marketing Marketing Strategy Tags: Google Glass, wearables, werable computing
by Richard Fouts | February 3, 2014 | 1 Comment
If you’re a loyalty marketer, you likely know the name Hal Brierly (who invented the airline industry’s first frequent flier program, AAdvantage). At the time, Hal figured that the best way to encourage loyalty would be to recognize continued purchases. And so he designed a program that would reward customers based on the number of miles they flew.
Thirty years later, Hal says, “Airline rewards are still based on miles flown. This is a mistake.”
As you can imagine, Hal still does a lot of thinking about loyalty. In fact, he pretty much obsesses over it. And in those 30 years of pondering, thinking and analyzing the effectiveness of loyalty programs he has watched several flaws creep into loyalty program design.
First, marketers tend to define loyalty by measuring the wrong metric. For example, customers that buy lots of products from us, and stay with us the longest, are the customers that deserve rewards, right?
Not exactly. Some of the customers you’ve had the longest are costing you money. Hence, Hal says you should reward customers that are the most profitable. How you reward them is up to you, whether you choose discounts, points or free products. But reward those that make you money. Loyal customers, that aren’t terribly profitable (or are money losers) should be switched to low cost service channels, or even managed out of your portfolio.
Second, loyalty is about cadence, more than the length of time one has been a customer. Walgreens for example, rewards my purchase by offering me a $5 discount on my next purchase – if its used by the end of next week. That gets me back in the store to buy things I don’t need right away, but will need eventually.
Third, we tend to “over reward” our top customers. If switching providers is easy – then by all means, you should reward your top customers as a way to discourage defections. But if switching is difficult, or even costly for the customer, you’re better off using your limited resources to acquire new customers versus rewarding good customers.
Last, you can also reward customers through downsizing. For example, a 20 year member of a fitness club decides the cost can no longer be justified now that he’s turned 80. So offer him a plan where he can pay by the visit. Or some other reduced plan. Don’t let him go.
You can read more of Hal’s thoughts on loyalty here.
Category: Digital Marketing Marketing Strategy Tags: loyalty, loyalty marketing, rewards programs