#15/25: Waiting for your cat to bark?

The window that merging media has opened for us reveals a personal-experience economy, in which customers are in control. Brand in defined in customers’ minds by their personal experiences with a particular product or service.

Experience is entirely about “value in context.” Positive or negative, value is in the eye of the beholder. Whether something tastes like fine champagne or cod-liver oil, the value of the resulting experience will depend on whether the need was for a classy beverage or a relieving purge.

Good wages and benefits for workers means Costco has an extremely low rate of turnover among employees and experiences considerably less employee theft. With minimal advertising, Costco has generated an almost cult-like following of loyal customers, unlike the other deep-discounters. And even the shareholders appear to be happy, as Costsco stock performs very nicely, thank you very much. This is in spite of Wall Street’s penalization.

After we made a presentation to another client, the company’s senior vice president of marketing assumed we had appropriated a brand-new, confidential market study on which they’d spent both months and millions. He was apologetic and impressed when he learned our analysis was based on words customers typed into search engines.

Customers need to resolve their worn concerns so they can build the confidence to buy from you. Ideally, they’ll build that confidence with information you provide. But if you don’t provide it, they’ll track it down by going to other sources.

Lisa doesn’t care about your sales process, and everything about your sales process should be designed so she shouldn’t have to. You should, however, care very much about Lisa’s buying decision process.

It’s beneficial to you to acknowledge the substance of what is available, even the negatives, so you can communicate and position it in the proper light.

Steps of buying:

  • Search
  • Evaluate
  • Decide
  • Purchase
  • Reevaluate

It isn’t difficult to understand why a customer would prefer to buy from someone who understand her needs by using her terms and “peaking” her language.

Persuasion Architecture identifies all the angles from which a customer might approach your product or service as well as the vocabulary that could lead a customer to your doorstep. PA would also ask what other angles or terms a customer would use in searches and plan Web content keyed to both compacted and non-compacted information searches.

You build and sustain persuasive momentum by intentionally and repeatedly providing answers to these three questions:

  1. Who are we trying to persuade to take the action?
  2. What is the action we that someone to take?
  3. What does that person need in order to fell confident taking that action?

Persuasion occurs when people perceive they are on their way to getting what they want. Persuasion is a forward-moving force. People must feel they are making progress. If a customer feels he isn’t making progress, then he isn’t persuaded.

Basic sales process:

  1. Initiating the relationship by building rapport and confidence
  2. Investigating needs, wants and problems
  3. Suggesting a course of action
  4. Obtaining agreement for a decision
  5. Closing, or taking action
  6. #

Feedback loops are an important part of the sales process; establishing rapport and building confidence are ongoing. […] The level of rapport and confidence that a customer must have to initiative the relationship and begin investigating is not the same level she requires to close the sale.

Touch points are the ways businesses make contact and interact with potential customers. These include every traditional and merging media vehicle you might use. SEM, website, yellow page, emails, radio spots, customer call center, etc.

If I went to a florist and told them I needed a birthday gift, would they point me over to the anniversary section? Would they ask me if I needed it for New Years? The florist wouldn’t ask me irrelevant questions.


Source

The ultimate value in SEM is its ability to help you understand the customer’s intent and ensure you present relevant information. Moreover, the value of relevant high rankings is completely undone if you don’t follow through on the promise of the result.

Surveys are invaluable if you want to figure out why your business is coming up short in delivering a consistently delightful customer experience. If customer-survey data reveals a sudden spike in dirty bathroom complaints, you can take it to the bank that some franchise is not following procedure. Research is great at measuring what has already happened.

When someone acknowledges us as individuals and personalizes our experience based on our unique characteristics, we feel understood and valued. Our feelings of good will increase. Our confidence grows. Even our tolerance broadens.

What marketers really want to achieve with personalization is accelerated customer intimacy. The solution to this problem, however is, not personalization. […] The answer is “persona-lization”.

Ultimately, knowing the behavior is more valuable to the interaction than knowing detailed personal information about a customer. It is almost more effective to “persona-lize” before you personalize.

Personas are representative stand-ins for the modes in which it is possible for individuals to interact with you and your business.

Filters: Topology: business landscape, other businesses, innovation, etc.
Psycho-graphics: personality, consumer psychology, etc.
Demographics: age, location, etc.

Once we have compiled the right information about our personas, we use them to generate empathy within the business for the persona’s wants, desires, needs, and problems.

Persuasion Architecture:

  • Create business-specific personas that reflect your audience
  • Develop persuasion scenarios that meet the needs of your audience
  • Integrate multi-channel efforts
  • Establish a culture of test, measure and optimizing

Experience Economy levels of transparency:

  • How you view yourself is not necessarily how others view you
  • The information you currently provide isn’t necessarily the information your customers need to develop the confidence to buy
  • Efforts to keep your multi-channel efforts discreet are not likely to give positive reinforcement to your customers’ experience of your brand

Johari Window

  • Arena: Grows with the intensity in your relationship with your customer
  • Unkown: Not so important because not very productive
  • Blind Spot: Things your customers knows about you that you don’t know => important to know
  • Facade: Things you know but your customer don’t => important to release

Nevertheless, either the manufacturer discloses critical information to customers, or someone else will. Doesn’t it build greater confidence in a customer when the company, rather than a stranger, supplies that information? Taking responsibility for presenting all the information allows you to interact with your customers in a much larger open quadrant.

Four dimensions of sales complexity
Need:

  • critical to luxury
  • Temporal
  • one purchase or multiple?

Risk:

  • psychical risk
  • self-esteem
  • career risk
  • financial

Knowledge:

  • what do they need to know?
  • eliminate friction of confusion or ignorance
  • whom is the customer buying for?

Consensus:

  • sold anonymously
  • personally
  • groups

Types of buyers

Accidentals

  • are their by accident
  • was looking for something else

Knows Exactly

Knows Approximately

Just browsing

Transactional shoppers

  • cheap
  • today
  • ready to change
  • love the exploration process

Relational shoppers

  • long
  • looking for an expert / partner
  • don’t enjoy looking around
  • right place to buy

SJ (Methodical)
Attitude: Businesslike, detail-oriented
Time: Disciplined, methodically paced
Question: How can your solution solve this problem?
Approach: Hard evidence and superior service

SP (Spontaneous)
Attitude: Personal, activity-oriented
Time: Spontaneous, fast-paced
Question: Why is your solution best to solve the problem now?
Approach: Address immediate needs

NF (Humanistic)
Attitude: Personal, relationship-oriented
Time: Open-ended, slow paced
Question: Who has used your solution to solve my problem?
Approach: Testimonials and incentives

NT (Competitive)
Attitude: Businesslike, power-oriented
Time: Disciplined, strategically paced
Question: What can your solution do for me?
Approach: Provide rational options, probabilities, and challenges

Universe of buyers
For each buyer type, there are three states:

  • just browsing
  • knowns approximately
  • knows exactly

How many personas?
At least 2 (rational vs. emotional), better between 3 and 7

Character Diamonds
=> Four core personality traits
=> There are masks, e.g. white kids masking as black kids => ask why

Create a story / plot around the persona

  • how did the began their buying process
  • what are they doing, what are they thinking?
  • how is the buying process and maybe after-sales stuff

Activities

  • Calls to action: what to do?
  • Points of resolution: Answering questions
  • Resolving Doors: the exit from the point of resolution -> what to do next?
  • Persuasion entities: email, billboards, etc.

Persuasion Scenario:

  • Driving point: Where does the scenario begin?
  • Funnel points: Entry points
  • Points of Resolution
  • Way points: critical to success
  • Conversion beacon: starting linear process
  • Conversion point

Storyboarding:

  • Putting everything together

Prototyping:

  • Test different story ideas

Development:

  • developing final product

Optimization:

  • Testing, Optimizing, Measuring

#14/25: Brainfluence


Tipps

  • Try to minimize pain
    • Bundling helps, e.g. car sales
    • Less transactions, e.g. flat rates
    • Don’t show money, e.g. menu 12 instead of $12
  • Higher price paid can lead to higher satisfaction, esp. for premium products
  • $499 works better than $500 because of precision
    • $500 could be $499 to $599
    • $499 could be $499.00 to $499.99
  • Don’t offer too many choices
    • Help the customer choose
    • Recommendation engines, sorting, reviews
    • Avoid similar choices
  • Familiary breeds likability
    • Repeat your offerings in a consistent way
  • Customers can sense passion – include this in your employee search process
  • Compare people not products
  • Pictures of babies get attention
  • People will look at where the person in a picture is looking
  • A model’s eyes that are visible and dilated are more attractive to men
  • Be specific – include photos of actual people
  • Loyality program works because of points
    • Illusion of progress works great
  • Tell people what to think of you
    • “You can trust us to do the job for you”
    • Trust score jumped up 33%
    • People thought company is more caring, has a higher quality and a fairer price
  • Smile to people – in person & on the phone
  • Start with a small favor first then it’s easier to get a bigger one done
  • Stories work
  • People love their own name and birth date
  • Expectation will shape the real experience
  • A tiny positive surprise can improve one’s outlook
  • Don’t argue with a customer about who’s right – offer a sincere apology and offer solutions
  • Use scarcity
  • Avoid the lower right corner in screen designs

Observations

Scents can affect behavior and consumer perceptions. One experiment showed that nightclub patrons danced longer when the venue was scented with orange, peppermint, and seawater. […]
A test in a casino found that people gambled 45 percent more money in a slot machine when a pleasant scent was introduced into the area.

To beat these ingrained consumer perceptions, Nestle first launched upscale coffee shops in major cities for the primary purpose of creating the high-intensity sensory experience people expect […]
The second thing they did was modify the home espresso-making system to release more aroma. This is brilliant and, I can testify, often overlooked strategy.

A classical sound track caused a 233 percent jump in bank goer’s perception of the bank as “inspiring”, compared with their perception when no music was playing.

Researchers found that scent enhances a product’s distinctiveness. They had subjects evaluate pencils that were unscented, had a common scent (pine), or had an uncommon scent (tea tree). They found that the subjects remembered the scented pencils to a much higher degree than the unscented pencils, and this differential increased over time.

The researchers found that guys studying bikini-clad girls make worse decisions when presented with a monetary offer.
To begin with, this effect seems to be a short-term one that would be most effective at the point of purchase. The ideal selling situation, no doubt, would be to have bikini-clad babe selling to the guys in person.

Researchers at Northwestern University and the University of California, Berkeley, led by Hal Ersner-Hershfield found that having subjects visualize historical alternatives made them more patriotic. Similarly, reflecting on the shaky origins of a company made its employees more positive about the firm.
[…]
But, if you avoid the ham-fisted approach and are subtle in introducing alternative scenarios, you will produce the desired positive boost in loyalty and emotion without alienating the other person.

Assuming your product or service is purchased frequently enough, offer your customers a loyalty program. They do work. In addition, keep your customers engaged by letting them monitor their progress and, if possible, reminding them about the program if they haven’t bought in a while.
Beyond the loyalty effect, merely exposing customers to point values at the time of purchase can amplify the effectiveness of the loyalty program. Want to encourage sampling of a new produce or drive upgrades? Try something along the lines of, “1000 extra Rewards Points with every purchase”. Note that bigger numbers may seem more important to consumers, so a little pint inflation could be a good thing.

In Blink, Malcom Galdwell notes that most people who suffer an injury due to doctor negligence don’t use. Based on extensive interviews of injured patients, it turns out that patients who sue have often felt like they were rushed, ignored, or otherwise treated poorly by their physician.
This belief, in turn, is based on the quantity of time spent and the quality of that interactions.

In marketing situations you can still stay honest by using targeted pitches. For example, “As an owner of a Platinum Class suit, you showed you are an individual who can recognize sophisticated styling and superb quality …”

Those seated in hard chairs judged their negotiating partner to be less emotional. Most significantly, the “buyers” in soft chairs increased their offer by nearly 40 percent more than those in hard chairs. In short, not only did a hard chair change the buyers’ perception of their negotiating partners, it made them harder bargainers.

If you want to convey a positive message, use real numbers, not percentages.
Good: 90 percent of our customers rate our services as “excellent”
Better: 9 out of 10 customers rate our service as “excellent”

It turns out that the way companies respond to bad online reviews makes a difference too. A Harris survey showed that 18 percent of those who posted a negative review of the merchant and received a reply ultimately became loyal customers and bought more.
In addition, nearly 70 percent of those consumers receiving replies reversed the negative content either by deleting the bad review or posting a second positive one.

Peck and Shu found that touching an object immediately improved both the level of perceived ownership and positive emotion.

It turns out that reciprocity strategy can work better; give visitors the info they want and then ask for their information. Italian researchers found that twice as many visitors gave up their contact data if they were able to access the information first.

Peck and Shu concluded, “Online retailers who can encourage ownership imagery among potential buyers may be able to increase both perceived ownership and valuation. In the no-touch environment, ownership imagery was powerful in increasing both the feeling of ownership and the amount a consumer was willing to pay”

Brainfluence is such a great book, it’s nearly unbelievable. I would recommend this book to everyone who’s interested in marketing, customer service or just plain psychology. It’s a nice read, the chapters are short and backed by data. Awesome book & recommendation!

#12/25: Data-Driven Marketing

Data-driven marketing and marketing metrics start with the principle of keeping score for all major marketing activities.

Marketing budget falls into:

  • Demand generation marketing
  • Branding and awareness
  • Customer relationship
  • Shaping markets
  • Infrastructure
  • Low performers invest 4% less than average on marketing
  • High performers invest 20% more than average; more on customer relationship, branding and infrastructure
  • High performers increase their budget in recessions

Framework:

  • Know Yourself: Strategic Objectives
  • Know Your customers: Database & Analysis
  • Segment your Customers: Selection & Targeting
  • Data-Driven Marketing: Campaigns
  • Build Trust: Privacy Issues
  • Keep Score: Metrics

How to start?

  • Why should your customer care about data collection?
  • Start small: Walgreens started with a regional store op VP and found savings of $5m
  • Contential: start with focus groups and find data with high ROI
  • Contential: found out that people don’t like their airline, because luggage misses, flights are delayed – started to sent out apology letters within 12h to these customers
  • B2B market: What is in for your partner? Try to connect directly to the end customer

My point is that if you can measure something, you can control it. In this case, the measurement was the calories consumed and the exercise calories burned. The result was clarity in decision making for what I eat, which meant I lost the weight and ultimately completely changed my diet.

Road map

  1. Design – Objectives, Scope, Metrics, etc
  2. Diagnosis – Balance, Risk, Returns: Insights
  3. Opportunities – for action: quick hits, adjustment
  4. Tools
  5. Process – recurring reviews, etc.

So I asked in my survey research, “Do you outsource the creative component of your marketing?” The answer was that 72 percent of firms surveyed outsource the creative. Insight: The vast majority of marketing organizations are not in the creative content business, but instead manage the process of marketing.

Brand awareness = Ability to recall a product or service

  • Often brand awareness surveys
  • Social media activity
  • Billboards with vanity urls / phone numbers
  • Branded search words

Test-drive = Customer pretest of a product or service prior to purchase

Churn = Percentage of existing customers who stop purchasing your products or services, often measured in a year

Customer Satisfaction (CSAT)

  • Would you recommend this product or service to a friend or colleague?
  • 10 point scale, 9/10 points only count as loyal customers
  • NPS: detractors (0-6) subtracted from promoters
  • You can ask “would you recommend” and “are you satisfied”
  • “How much did you spend in different stores in the last x months?” “How much are you probably going to spend in different stores in the next x months?”
  • “What product or services would you not recommend to a friend?”

Take rate = Percentage of customers accepting a marketing offer (CTR * Transactions CR)

I realized that in marketing it is better to be approximately right than exactly wrong, and I started to appreciate the value of qualitative data.

Financial Metrics

  • Profit
  • NPV (Net Present Value)
  • IRR (Internal Rate of Return)
  • Payback period

ROMI Framework

  • Business Discovery: Understand business and impact of marketing
  • Base Case
  • Costs
  • Upside
  • ROMI impact
  • Sensitivity Analysis

Segmentation

  • Start small and segment
  • Segment customers based on CLTV
  • Compare short term and longterm customer value

WOM = 1 + Number of clicks from recommendations/Number of direct clicks

Agile Marketing

  • iterate fast
  • near real-time data, iterate / measure at least 10 in the campaign period

Analytics Marketing

  • propensity modeling -> what wants the customer next
  • market basket analysis -> what do customers also buy
  • decision trees -> easy to understand

Marketing Campaign Management

  1. Selection of campaigns (scorecards)
  2. Portfolio view
  3. Monitoring
  4. Adaptive learning
  5. Technology

Problems

  1. Lack of top management support
  2. Lack of respect
  3. Lack of cross-functional alignment
  4. Lack of employee skill

Data-Driven Marketing is a pretty robust book. The first 50 pages are a short version of the rest of the book. The rest of the book is filled with case studies and anecdotes. It is written very causally which is pleasant. I think that it is a very valuable book if you are new to the idea of using data or want an overview on data-driven marketing.

Reading Kaushik (Part 1): Digital Marketing

I read Occam’s Razor for quite a while now and I really like Avinash’s style and insights. I thought it would be nice to reread most of his stuff and as a nice extra, I will post my notes on here.

I oriented each section by the section defined in his overview of all articles.

Enjoy!

The 10 / 90 Rule for Magnificent Web Analytics Success

  • There is lots of data but no insights
  • Rule: 10% in tools and 90% people/analysts
    • may seem over the top but
    • med-large websites are complex
    • reports aren’t meaningful by default
    • tools have to be understood
    • there is more than clickstream to analytics
  • If you don’t follow the 10 / 90 Rule
    • Get GA account
    • Track parallel to expensive solution
    • Find a metrics multiplier, so you can compare GA to old data
    • Cancel your contract and hire an smart analyst which will probably deliver more insights for less money

Trinity: A Mindset & Strategic Approach

  • The goal is to generate actionable insights
  • Components:
    • Behavior analysis: clickstream data analysis
    • Outcomes analysis: Revenue, conversion rates, Why does your website exist?
    • Experience: Customer satisfaction, testing, usability, voice of customer
  • Helps you understand what customer experience on your site, so that you can help influence their behavior

The Promise & Challenge of Behavior Targeting (& Two Prerequisites)

  • We have so much behavior data but you get the same content regardless whether you are here to buy or get support
  • There are BT systems but you have still think about the input
  • You have to first understand your customers good enough to create suitable content
  • Test content ideas first to learn what works and as evidence for HiPPOs

Six Rules For Creating A Data Driven Boss!

  • Paradox: The bigger the organization the less likely it is data driven in spite of spending lots of money on tools
  • It is possible to achieve this but you have to actually want to do and fight for it
  • 1. Get over yourself: Learn how to communicate with your boss and try to solve his problems
  • 2. Embrace incompleteness: Data is messy, web data is really messy but still better than completely faith based initiatives.
  • 3. Give 10% extra: Don’t just report data, look at it. Give him insights he didn’t asked for. Make recommendations and explain what’s broken.
  • 4. Become a marketer: Great analysts are customer people. Marketer as internal customer (like account plannner)
  • 5. Don’t business in the service of data: Data should provide insights not just more data. Ask: how many decision have been made based on data that have added value to the revenue?
  • 6. Adapt a Web Analytics 2.0 mindset:

Lack Management Support or Buy-in? Embarrass Them!

  • HiPPOs may be don’t listen to you but they better listen to customers & competitors
  • 1. Start testing
  • 2. Capture Voice of Customer: Surveys, Usability tests, etc.: Let the customer do the talk
  • 3. Benchmark against the competition, e.g. use Fireflick
  • 4. Use Competitive Intelligence
  • 5. Start with a small website
  • 6. Ask outsiders for help

How To Excite People About Web Analytics: Five Tips.

  • 1. Give them answers
  • 2. Talk in outcomes / measure impact
  • 3. Find people with low hanging fruit and make them a hero
  • 4. Use customers & competitors
  • 5. Make Web Analytics fun: Hold contests, hold internal conferences, hold office hours

Redefining Innovation: Incremental, w/ Side Effects & Transformational

  • 1. Incremental innovation, e.g. Kaizen
  • 2. Incremental innovation with side effect, e.g. iPod or Adsense
  • 3. Transformational innovation, e.g. invention of the wheel
  • Web analytics can’t probably create 3
  • Clickstream alone is also not enough for 1.
  • generally the more the better (Web analytics 2.0)

Six Tips For Improving High Bounce Rate / Low Conversion Web Pages

  • Purpose gap between customer intent and page
  • 1. Learn about traffic sources / keywords(!)
  • 2. Do you push your customers against their intent? Identify jobs of each page and focus on your call to actions.
  • 3. Ask your customer what they are looking for
  • 4. Get insights from site overlays
  • 5. Testing!
  • 6. Get first impressions from people, e.g. fivesecondtest

Online Marketing Still A Faith Based Initiative. Why? What’s The Fix?

  • Faith based initiatives like TV, magazines, etc.
  • Online marketing gives us useable data
  • and allows us to test easily
  • The web is quite old yet it is not in the blood of executives
  • Old mental: shout marketing, instead of new inbound marketing
  • Lousy standards for accountability
  • Let the customers speak
  • Benchmark against competition

Win With Web Metrics: Ensure A Clear Line Of Sight To Net Income!

  • Focus on the bottom line, i.e. profits
  • 1. Identify your Macro Conversion
  • 2. Report revenue
  • 3. Identify your Micro Conversions
  • 4. Compute the economic value
  • Net income = Unit Margins * Unit Volumes
    • Unit Margins = Price – Cost
    • Unit Volumes = Market Share * Market Size
  • Because Net Income is the goal, you have to measure Price, Cost, Market Share or Market Size
  • Which metrics help doing that? And if not, why do you track/report this metric?
  • They also depend on the strategies or more general goals of the organization
  • — let your “boss” decide what matters most to him/organization
  • identify clear metrics / KPIs for each used strategy
  • use the web analytics measurement framework as a reporting foundation (more to this later)
  • find actionable insights with segmented analysis

Digital Marketing and Measurement Model

  • Marketing with measuring helps you to identify success and failure
  • Digital Marketing & Measurment Model
    1. Set business objectives (should be DUMB)
      • Doable
      • Understandable
      • Manageable
      • Beneficial
    2. Identify goals for each objective
    3. Get KPIs for each goal
    4. Set targets for each KPI
    5. Identify segments of people / outcomes / behavior to understand why things succeeded or failed
  • What scope has the model to cover?
    1. Acquisition: How do people come on your site? Why? How should it be?
    2. Behavior: What should people do on your site? What are the actions they should take? How do you influence their behavior?
    3. Outcomes: What are the goals? (see previous summary)

11 Digital Marketing “Crimes Against Humanity”

  1. Not spending 15% of your marketing budget on new stuff
  2. Not having a fast, functional, mobile-friendly website
  3. Use of Flash
  4. Campaigns that lead to nowhere
  5. Not having a vibrant, engaging blog
  6. “Shouting” on Twitter / Facebook
  7. Buying links is your SEO strategy
  8. Not following the 10/90 rule
  9. Not using the Web Analytics Measurement Model (previous summary)
  10. Using lame metrics: Impressions, Page Views, etc.
  11. Not centering your digital existence on Economic Value