A persona is “a realistic personality profile that represents a significant group of your users,” according to Steve Mulder, author of “The User Is Always Right.” But why should you take the time and energy to create personas? Personas:

• focus on the visitors who matter most.
• allow businesses to relate to and understand those visitors.
• help you build consensus among your web team.

Creating persons sounds daunting—if you think you have to document every person who goes to your site. Not so. Instead,”try to boil it down to the three or five distinct subsets of your users that represent all the people that matter,” says Mark O’ Brien, Newfangled president and presenter at the MarketingProfs seminar Cure for the Common Website: Using Personas to Boost Site Performance

Personas should represent visitors who influence purchases—whether in buying or encouraging others to do so. O’Brien suggests that, if you have trouble coming up with three distinct personality types, then use the three stages of purchasing. Then choose whether to take a qualitative or a quantitative approach to this process. A qualitative approach means getting an idea of who the people are and the emotional decisions they make. A quantitative approach focuses on the exact facts. For your comic book shop, it would be who your site visitors are, which comic books they bought last year, how many of each issue, how old they are, etc. O’Brien recommends the qualitative approach in the seminar because it takes just two to four weeks to craft those personas.

10 Questions, 15 Subjects

Once you’ve chosen 15 subjects from your significant visitors, O’Brien suggests running them through these questions:

1. What were your impressions when you got to the current website?
2. Did you come back to the site? What encouraged you to return?
3. How often do you visit the site and for what purpose?
4. Are you familiar with our area of expertise? Are you just learning about it and our site is a research tool? Are you a competitor?
5. If you do have an understanding of our area of expertise, what other sites have been good resources in this area?
6. What do you dislike about those sites? Do you prefer ours?
7. What do you do on the site? Do you: check press releases, sign up for newsletters, download white papers, etc.?
8. How would you describe our site to a peer?
9. How would you like feature X?” (Use this question to bounce ideas off people about a feature that you are considering adding to the site.)
10. What is the No. 1 thing we could do improve our site?

That last question is the most important one. “It’s last on purpose,” says O’Brien, “because unless the conversation is really primed, and they feel comfortable, and they’re open to talking with you about these things, they’re probably not going to be able to answer the last question very effectively. It’s one of those loaded questions that could intimidate people.”

What to Do Next

Start segmenting by user goals and stage in the sales cycle. “We’ve done the 15 interviews, and now we need to figure out three to five segments that these 15 people will all very neatly fit into,” says O’Brien. “Again, this is an intuitive and nonscientific process. Go with your gut.”

Ask yourself:

1. Are the segments unique enough? Do they stand on their own as individual segments? Do they feel like real people?
2. When you’re creating the segment, could you envision somebody with these goals and these attitudes towards your site?
3. Can they be easily described?
4. Do they cover all key user types?
5. Is it clear how these segments will effect decision-making? Is it clear how your planning committee will be able to use these personas as a guide to bring them to consensus-based and effective decisions?

If the segments you created don’t work, don’t worry. It’s rare to get it right the first time. Just go back (maybe even a few times) and re-create some segments based on the 15 interviews. Once you’ve got some rough sketches of those personas, add the details. “We’re just gleaning these (details),” says O’Brien, “from both the interviews, which we know very well, and also our understanding of our market.”

All done? Don’t forget to put these personas in a sheet so they can be printed and shared. And prioritize them, so you know which one has the most pull.

To learn about getting the most out of personas and boost your site’s performance, attend the MarketingProfs seminar Cure for the Common Website: Using Personas to Boost Site Performance presented by Web developer and marketer O’Brien. PRO members can view the on-demand 90-minute seminar for free; Basic members pay just $129.

Aneta Hall and Lucy Hackman of Pitney Bowes showed how to extend the impact of events, particularly for B2B marketing, during their presentation, “Events 2.0,” at the  Digital Marketing Forum today. Despite admitting they were “late adopters” of social media, Lucy and Aneta have quickly caught up.

Below are 5 excellent tips that I culled from their presentation for maximizing social media to boost engagement around your event.

1. Plan Ahead

If you want to get conversations started before an event (and keep them going after), make sure you connect early and often with your partners. You want to know what their social media strategy is. In some cases, this might require “some hand-holding,” Aneta said, because your partners might not have a cohesive strategy in place. If that’s the case, take the lead.

You also want to prepare an editorial calendar of sorts. Determine who will own your Twitter handle beforehand to avoid embarrassing overlaps. TweetDeck and Hoot Suite allow you to schedule tweets in advance. But remember to allow for some spontaneity.

2. Do Your Research

Who are the people attending the event? If there are joiners, you want to investigate what online communities they are involved with and join in. If they are critics, you want to listen in on their commentary and try to turn negative comments into positive outcomes. If they are content creators and curators, give them backstage access, and invite them to your booth. Try to be involved in the content they are pushing out to their followers.

You want to walk into an event with a thorough knowledge of the sluggers. Free tools, such as Klout, Technorati, Social Mention, and LinkedIn, can be a big help in your research process.

3. Know Your Resources

Beyond the number of bodies you plan to have on the floor of the event, you will want to look at what skill sets are represented. Your CEO might be attending—but may not be the best blogger. Identify the people you have in place who have the natural knack or the training to blog, tweet, and push out content to online communities. (Ideally, you have a people who have both training and talent.)

Pitney Bowes hired a videographer for events and equipped that person with a mobile studio. Today, those tools are not that costly (great editing software is available on your laptop). Equipping your employees with the right tools enables them to push out content in real time and creates storehouse of content to use post-event.

4. Get Away From the Noise

Pitney Bowes doesn’t do all of its tweeting and commenting from the event. Sometimes,, they do it back at the office. For really strategic messaging a healthy distance from the crowds, booths and gimmicks can be clarifying. Additionally, do your research of how others are leveraging social media not by attending the event, but by sitting down and watching what your competitors do around their own events. After all, a hashtag is easy to follow.

5. Avoid the Data Dump

A lot of times we feel the urge to take all the great data we collected after an event and dump it into a spreadsheet. But the reality is most people won’t be able to make sense of that data, Aneta said.

Instead, tell a story. Give your numbers context. Wrap your data on generated messaging and page views into an explanation of the exposure earned. Take the number of people who visited your online store, filled out lead forms, and commented on your blogs, and turn it into a narrative about the action you incited. Don’t orphan your valuable data by just dropping it into a spreadsheet.

I think the real reason is that the misalignment between marketing and sales is not actually the real problem. It’s actually a symptom of deeper problems:

• Lack of process
• Aligning around the wrong things
• Mismanaged sales quota

Lack of Process

According to several recent studies, up to 80% of leads do not get the proper follow-up. So, not surprisingly, one of the biggest challenges facing marketers is delivering qualified leads.  But in most organizations, there are multiple definitions for “qualified leads,” depending on who you speak to. This inconsistency helps contribute to the misalignment.  This challenge faced by organizations is most often because marketing and sales do not share a set of common definitions for terms such as “lead,” “qualified,” “prospect,” etc.  Marketing and sales have not collaborated on defining a process framework that answers fundamental questions, such as “What is the definition of a ‘qualified lead’ for our company?”

Marketing and sales should work together to define a Lead Management Framework, including:

• data process
• lead planning process
• lead routing process
• lead qualification process
• lead nurturing process
• metrics process

Organizations that do so will benefit by having:

• A set of common definitions for managing leads
• SLAs and business rules for lead routing
• A lead scoring model that delivers quality leads to sales
• Lead nurturing communications for those not ready to buy
• A host of other benefits.

As one customer stated after developing their process,  “Marketing and sales used to pass in the halls and not even look at each other.  Now we pass and give high fives because we know we are a team.”

Aligning to the Wrong Thing

One of the obstacles that marketing and sales organizations face when looking to align is their own misunderstanding on what alignment should be based. They’re aligning around the wrong thing. For example, marketing may want sales to come their way and think about campaigns. Sales on the other hand, may ask marketing to start thinking about collateral support for helping to close deals. These examples are not alignment; they are just trying to get the other side to view the world their way. The truth is that the right thing around which marketing and sales teams should align are their buyers.

Today’s B2B buyer is looking to engage with their vendors and have a relevant 1-1 dialogue. They don’t care about the internal squabbles that may occur between marketing and sales teams. They want to feel attended to. So, marketing and sales need to collaborate on how to have the dialogue with the buyer.

There are three key areas on which this collaboration should focus. The first is identifying the ideal buyer profile.  Having this profile (or profiles—most companies will have multiple personas/profiles unique to each service or product offering) ensures that marketing and sales will be engaging with the same targeted buyer.

Secondly, it’s vital to create a map for each profile’s buying cycle. This is more than just time to sale. It’s a full understanding of the buying journey of each persona to whom your organization sells.  Understanding and defining the buyer’s journey will allow you to “walk in your customers’ shoes,” helping both marketing and sales to better understand what they need at each stage, and to engage them in meaningful dialogue.

The third area of focus, once you have identified the personas and mapped out the buyer journey, is to develop your offer and content maps. These maps are guides that will enable you to deliver the most relevant content to the buyer at every stage of the cycle. Communicating based on an offer/content map will improve the alignment with your buyer, enable 1-1 engagement and deliver a more qualified and educated prospect to sales.

Mismanaged Sales Quota

One of the biggest obstacles marketing and sales organizations face in trying to align is the issue of quota.

I remember a conversation I had with a sales VP at a company I used to work for where I ran one of the global marketing teams. It was about half-way through the quarter, and he was panicking because his team’s performance was not what he needed to attain quota. During the conversation he looked at me and said, “I know we agreed on a strategy at the beginning of the year, but right now I need revenue. I’m telling my team to ‘chase it and sign it’ or else I won’t be here to work the strategy for the second-half of the year.” What was I to say to that?  This guy and some members of his team were fighting for their jobs. At the very least, I appreciated his candor.

The quarterly quota pressure is felt in organizations every 90-days. But this pressure would be easy to alleviate if organizations would begin to align their sales compensation plans to the buying/sales cycle (see customer alignment above). In the scenario I mentioned above, we had statistics that showed that the average buying time was 180 days. Yet we were telling our sales folks they had to sell in 90 days.

This quota pressure was not only causing panic in my sales counterparts, but it kept us from alignment with them as well.  Sales had bypassed the agreed to strategy in exchange for demanding only hot leads.  With that pressure there was no talk of nurturing, dialogue, buyer journeys, etc. They wanted leads they could close today!

This issue is easy to resolve and it’s something most organizations should seek to address early in 2011. The simple fix is to align sales quota to the customer buying cycle. This could result in either lengthening or shortening the quota cycle: If you have a 30-day sales cycle, then adjust your quota accordingly; if it’s 180 days, do the same. By adjusting your sales compensation to reflect the buying patterns of your buyer, you will not only provide your sales people a less pressure-filled environment in which to sell, you will better align with marketing and more importantly your buyer and marketing will be able to develop a demand generation strategy based on the buying cycles.

As we begin a new year, let’s stop addressing the symptom of marketing and sales alignment and begin working on some of the fundamental problems that are causing the symptom. It would be great if at this time next year, we could write about success stories instead of repeating ourselves on how to solve the problem.

I know we all whisper it, but it’s true.  B2B buyers are liars. They are.  There, I said it.

If you’re in B2B marketing and sales, you probably aren’t surprised by that statement, and you probably suspect it yourself.  But where’s the proof?  How and why do B2B buyers lie? And what are the implications for your demand generation programs?

The “lying” by B2B buyers is a nuanced reality.  It’s not something that buyers do out of spite; it’s something they do both intentionally and unintentionally to better manage the dynamics of their interactions with vendors—to gain control in the buyer/seller relationship.  But if we are going to anticipate and respond to this situation, we must better understand these nuances.

So here’s my take on the nature of the “lies” and how we can respond as marketers.

How and why do B2B buyers lie?

Here are some of the key points to understand about our interactions with B2B buyers:

Buyers are only willing to share a limited amount of information at the initial point of contact with your organization. In the beginning of cultivating the buyer/seller relationship, you don’t know the buyer, and (s)he doesn’t know you.  Yet we as marketers too often ask the buyer to tell his/her complete life story to download a white paper—even though that is the first point of contact you’ve ever had with that buyer.  There is something wrong with this approach.

The results of a recent study indicate that, at initial stages of contact, buyers only provide accurate and complete information on the most basic of information they’re asked to supply for things like white paper downloads.  Only name, email address, industry, company name and job title have high rates (i.e., greater than 50% of the time) of being “always” completed correctly.

What about those questions we use to further qualify potential leads?  According to the same study, technology buyers say they “always” provide accurate answers to custom questions only 29% of the time.  That means 71% of the time there’s some degree of lying going on.

Craig Rosenberg (a.k.a. the ‘Funnelholic) commented on this in a past post on his blog.  He explains it’s just too early in the process of getting to know a buyer to go so deep with qualifying questions:

It’s noble to try, but don’t use reg forms to do the job of your lead qualification or sales team.  You are scaring great prospects off, and are hurting conversion to little benefit.  Use your reg forms to confirm interest, target your market, and get their info.  Gather more data on your second date or your third when you’ve both invested some time.

This point of view is supported by other marketers that have tested the impact on quality and quantity of registration requirements for their own demand generation programs.  “[A] lot of people—more than 75%—DON’T sign up for papers requiring registration, which means the vendor is missing the opportunity to share and disseminate their knowledge,” comments Jay Hallberg, VP of Marketing for Spiceworks in a recent Q&A with the Savvy B2B Marketing blog folks.

So-called “BANT” information for buyers and their organizations increasingly must be discovered on an implicit basis, not asked for on an explicit basis: What does this mean?  BANT stands for budget, authority, needs and timing, and it is a basic set of criteria that nearly all B2B marketing and sales organizations use to assess potential buyers and their organizations.  Implicit data is behavioral data (i.e., the things buyers tell us through their actions).  Explicit data is self-reported data (i.e., the things buyers tell us directly, such as by filling out a form online).  And the issue I’m calling out?  It is simple:  Not only do buyers not want to share this information at first contact, but more than ever buyers often don’t really have accurate, explicit answers to BANT questions, so we have to figure out when/where they’re moving forward on an implicit basis.

Recent research by DemandGen Report found that the B2B buying process is less formalized than ever before.  “More than 8 in 10 respondents said the buying process did not follow a traditional path where a budget was established, criteria outlined and then an RFP distributed to a pre-set list of solution providers,” according to a post by Andrew Gaffney summarizing the report.

B2B buyer organizations are becoming more agile and making more decisions on a non-planned basis.  But this is bad news for our BANT criteria.  A lack of formal process means we can’t really get the information we need when we ask about that process.  So the best indicator of a buyer’s real intentions is his/her behavior (i.e., actually doing the things that indicate they are considering a purchase).  This means that BANT increasingly is something that must be gathered on an implicit basis, and it speaks to the importance of B2B marketers using behavioral factors to better score and route interactions with prospective buyers via marketing automation.

Your prospective, individual buyer is not the sole decision-maker at his/her organization. Even if answered truthfully and accurately, the responses of an individual buyer to questions posed via online forms only constitutes a portion of the buying picture.  Perhaps we can call this “unintentional” lying, but it is the skew that results from one contact inside an organization having his/her perspective on the situation—which may not be consistent with the perspective of the larger group that will approve the final purchase.

The fact is that B2B purchase decisions are not made by a single buyer most of the time.  Increasingly, a complex, savvy buying unit makes B2B purchase decisions inside organizations.  For purchases in the $25K to $99K range, nearly 2/3 of the time there are four or more buyers engaged in the decision, according to data in recent marketing report. For purchases in the $100K to $999K range, 92% of the time there are four or more buyers engaged in the decision.  And it goes up from there.

Buyers aren’t ready to talk to us when they are downloading a white paper, anyway. Any content marketing strategy requires understanding the B2B buying process and rationalizing content and engagement around this process.  Earlier on in the process — when a buyer is first becoming acclimated to, and wrapping his/her head around a problem, it’s more important to help educate and shape the direction of a buyer’s thinking  in a hands-off fashion than it is to capture his/her information yet.  Initial lead capture must be staged a step or two below the point of initial research and consideration.  Lead capture is the launching point for dialogue with a prospective buyer, but it requires having established a growing relationship and having credentialed your organization upstream.

Not only is this good practice, but this is increasingly how buyers expect to act.  The nature of the B2B buyer has changed in a Web 2.0 world, and buyers expect to be able to do more research on their own time and unhindered by proactive vendor interactions.  B2B buyers spend 79% of their time in what Robert Jolles calls the “Acknowledgment” phase in his classic text, Customer Centered Selling.  Acknowledgment phase is the phase where buyers are on the fence, thinking about a problem but not yet ready to act or to pursue a formal buying process.

Buyers need to go through a process of self-education before they move beyond the Acknowledgment phase and before they are ready to become a lead.  So attempts to glean information from them through forms, early on in this process will only lead to buyers providing incorrect information because they want you to leave them alone … until they’re ready to talk to your organization.

How can B2B marketers tune their demand generation programs to anticipate (and overcome) these buyer lies?

The good news is that there are several techniques that have emerged in recent times to help B2B marketers cope with this situation and to gain leverage in their interactions with potential buyers.

Three ideas you can embrace today:

> Require less up front; progressively profile and append data instead: Make your content targeted at the earliest stages of the buying process free.  Don’t require registration.  And when you have that first white paper that requires registration—because it represents the next step in the buying process—just get their email address.  You can continue to send nurture emails and invite prospects to Webinars and events where you can iteratively ask more information from the buyer as they continue their process.  This approach is known as progressive profiling.  You can also append information such as industry data after the fact, using resources from folks like Dunn & Bradstreet.  Such an approach is more appropriate to the rhythm of interaction with buyers in a Web 2.0 world, and it is more appropriate to the give and take that is part of real relationship building.

> Score based on a combination of demographic and behavioral data: Don’t explicitly ask buyers everything you want to know; instead, observe and infer.  If you have found that 49 out of 50 prospects that take X action, such as visiting a specific page on your website, have a high probability of wanting to buy from you, then use that information to increase the buyer’s lead score and have a sales person contact him/her.  A lot smoother than having a check box on your first reg page that says, “Would you like someone to contact you?”

> Combine marketing automation with human contact: Craig Roseberg called this out in his quote.  Don’t expect to learn everything about a prospective buyer through online or automated interactions.  Marketing automation should exist to help power your lead management and content marketing strategies and give you greater operating efficiency, but you still need a combination of smart processes, people and technology to be successful.   A piece of these strategies should include live contact via Webinars, field events, inside sales and field sales interactions.  Use these live points of contact as key steps in your progressive profiling—building this into what you know about your prospective buyer and informing the next steps in your interaction.  Again, technology can weave all of this online and offline insight together, but the buyer facing piece must be a combination of online content and offline interactions.

What do you think?

What are your experiences with buyers “lying,” and how has your company responded in its demand-generation programs?

Where customers have to wait in line for service, you can be sure the science of queue management is involved. Queue management is the design of customer flow to and possibly through some function (cashier, customer service, help desk agent etc.). Processes can be documented, calculated and optimized and are sometimes enabled or automated by technology. But not all queues are created equal.

In a WSJ article, “Justice–Wait for it on the Checkout Line“, author Carl Bialik discusses how different industries react and adjust to improving customer wait times. For example, in an effort to speed service and ensure fairness (first come, first served) Wendy’s has long implemented a single line to order food. And most airlines, with the exception of the red carpet treatment for frequent fliers, also have implemented a single line for customer service.

Undoubtedly, most of us have experienced the aggravation of Murphy’s Law of queues–that the line next to you, will finish first. To address this issue, most transactional businesses (with the exception of grocery stores) have implemented a single line (or queue) for service. A single queue helps speed service and more importantly, gives waiting customers a sense of fairness that they will be served in an orderly fashion.
So your customer wants fair, but he/she probably also wants fast. And while you may think you’re delivering speedy service, your customer likely perceives something entirely different.

The above WSJ article cites a study by Richard Larson a professor at MIT which showed that customers waiting in line for a Boston Bank “overestimated their wait times by 23%”! So, customers often think they wait longer than they actually do, and get especially irritated when others get service (unfairly) after arriving later.

Now let’s add something else to the mix …. suppose you are a business that has segmented your customer base and identified your most profitable customers. What if you wanted to design processes for them to “jump the queue”–allowing them to go first?

For example, in an effort to reward their most valuable customers, airlines often let passengers with status board an aircraft first. Some airlines employ priority baggage handling where bags in effect “jump the queue” by coming off the conveyor belt first. Passengers without status often look at this special treatment as unfair–at least until they achieve a level of status and start accruing special benefits!

Indeed, it’s a tricky balance to deliver a different level of service to a customer segment … especially when that treatment is visible to your entire customer base.

Technology can and should play a critical role in optimizing customer queues, especially when there is more demand than resources:

• A global grocer based out of the UK uses sensor technology to “count” how many people enter a store location and then “predict how many tills will be needed up to an hour in advance and monitor average waiting times and queue lengths.”
• Disney uses technology to create “virtual queues” such as FastPass to “track guest activity and smooth out demand by scheduling a future time slot for guests to return to an attraction.” This practice helps reduce wait times and allows guests to enjoy more attractions in the park instead of waiting in long lines.
• Automated call distribution systems allow for the intelligent routing of priority customers to agents with the right skills to assist them.

When it comes to customer service, every business must consider its capacity, and required service levels based on customer expectations and then balance these variables with available resources, costs and fixed architectural constraints.

However, a word of warning; getting the service queue wrong could be a prime reason why your customers aren’t coming back. Richard Larson, the afore mentioned MIT professor, says he remembers a time–23 years ago, when he wasn’t served on a first come first serve basis at a local department store. He hasn’t been back since.

Questions:

• The WSJ article notes that at grocery stores there seems little time to exchange pleasantries with cashiers as management systems track the speed of each transaction. In the name of optimization are we sacrificing a “better” customer experience?
• Is self-checkout the savior for long wait times?
• When it comes to waiting in line–would you take fairness over fast? What about “valuable” customers that get to go first–any resentment?

Similarly in the marketing discipline, while practitioners often debate whether marketing is more “art than science”–a trend towards analytics is afoot.

Tradition and convention are certainly hallmarks of Major League Baseball. And for many years, the status quo reigned–especially in the processes used to construct a baseball team.

Using knowledge, intuition and experience to evaluate talent, field managers and scouts would scour high schools, practice fields and colleges looking for the missing pieces that could potentially elevate them to a championship. Gut decision making ruled–until Billy Beane and the Moneyball analytics revolution started.

An ESPN Magazine article shows how based on geographical location, Oakland was forced to compete in a smaller market with revenues far lower than teams like Boston or New York. Attempting to level the playing field, Billy Beane took a different approach to baseball resourcing. Instead of trying to sign big name players with the best batting average, Beane used statistical analysis to discover indicators that he believed would have a better correlation with offensive success.

Michael Lewis, author of Moneyball–a book on Billy Beane’s methods writes,

“By analyzing baseball statistics you could see through a lot of baseball nonsense. For instance, when baseball managers talked about scoring runs, they tended to focus on team batting average, but if you ran the analysis you could see that the number of runs a team scored bore little relation to that team’s batting average. It correlated much more exactly with a team’s on-base and slugging percentage.”

And for awhile, Moneyball worked. In the early years of Moneyball, the Oakland A’s were competitive with payrolls in the $50 million range whereas larger market teams were spending $100 million plus. It wasn’t that Oakland was choosing to pocket the $50 million annual difference–they simply didn’t have that kind of money to spend. Oakland needed a way to compete and they chose analytics.

Unfortunately for Billy Beane, his competitive advantage didn’t last very long. Other baseball teams adopted statistical analysis and General Managers like Boston’s Theo Epstein quickly combined analytical prowess with the advantage of a major revenue market to assemble a perennial powerhouse. Like it or not (and some GMs still don’t), the adoption of analytics drastically changed baseball and now the use of analytics to help build a ball club is a standard process.

Similar to the adoption of Moneyball, marketing is in the throes of an analytical revolution.

Specifically, practitioners of marketing know they need fresh and accurate data for advanced marketing functions such as better segmentation, devising more effective campaigns and offers, and creating relevant interactions with the customer across multiple touch points. This data must be clean, modeled and managed–a large undertaking that involves marketers working closely with IT.

Marketers also are realizing that some understanding of analytical applications and business intelligence know-how is necessary to help analyze and translate data into actionable information that can be used to create better customer experiences. Hundreds of case studies in business publications and books have emerged over the past five to seven years as a testimony to these trends.

Analytics helped a small market team like the Oakland A’s compete with clubs that had much larger budgets. Indeed, Oakland enjoyed a period of success before larger teams “caught on” to Beane’s analytical approach.
In the same vein, the window of opportunity for marketers to adopt business analytics–before their competitors–is closing rapidly.

• With the early success of Moneyball, Billy Beane parlayed himself an ownership stake in the Oakland A’s. For marketers, how valuable will analytical skills be in the near future?
• Are you competing with companies that have much larger budgets and personnel resources? If so, what strategies are you using to win?
• Critics of Moneyball say that one cannot run a major league baseball team with a computer. Going forward–in marketing–will knowledge and intuition win out over analytics?

Are you prepared for the “Moneyball-itzation” of marketing?

There are poor in China–and lots of them–as peasants from the countryside struggle with daily hardships and most live “hand to mouth”. And for a country that once frowned on the accumulation of wealth, there are also individuals who are very well off. But a segment of consumers exists in China, just above the hefty niche of factory workers–a middle class–growing in sophistication and disposable income.

To be sure, this middle class is just a segment of Chinese consumers–estimated to be anywhere from 150-300 million, of a total 1.3 billion people. But these individuals are spending and could potentially be the growth engine that delivers the world from its economic doldrums.

To keep their economy humming at a 6-8% growth rate, China has unleashed a $586B stimulus package. A recent Wall Street Journal article cites the implications of this stimulus on China’s economy:

“A torrent of bank lending, spurred by the government, is increasing investment in China. Consumers are out shopping in response to incentives such as lower mortgage rates and tax cuts on car purchases. Auto makers in particular are benefiting. Vehicle sales in China climbed 5% to a record 1.11 million units in March–a tentative turnaround from last autumn, when car sales slowed significantly.”

It’s important to realize that not all of the $586B will be put back into the hands of consumers. In fact, most of the monies will go towards needed infrastructure improvements and healthcare. But a significant portion of the stimulus is helping China’s middle class spend more aggressively. “In China, people still have the money to buy a Mercedes”, said Ulrich Walker, chairman and CEO of Daimler’s northeast Asia operations. We expect a continued positive growth trend.”

To be sure, China’s definition of middle class isn’t the same as in most Western societies. Affluent workers in China’s middle class only earn up to $12,500 (USD) per year. Moreover, many middle class workers are still salting away a significant portion of their salary for housing, healthcare, and schooling–not exactly spending wildly on international brands.

However, as global marketers desperately seek buyers for their products and services, it might be worth a look at the rising incomes and spending power of China’s emerging middle class.

Questions
1. The Chinese head of Nissan Motors says that China’s market is currently the only growing market. Proctor and Gamble says sales in China have slowed, but not as much as other countries. Can affluent and middle class Chinese “save” the global economy?
2. Many multi-national retailers have made significant strides in the Chinese market. Are they placing safe or smart bets (both?) on a growing middle class?
3. Have you identified your growth engine for the next 5-7 years? What/where/who is it? Does China factor in your plans?

However, the ability to track individuals in space and time with location-aware technologies has left some privacy advocates a bit queasy. Can the power of the GPS revolution be harnessed for good–or will it ultimately reduce our collective freedoms?

A Wired Magazine article recently chronicled the experiments of one of its writers with a location enabled mobile phone. Equipped with his 3G handset, the writer walked about San Francisco announcing where he planned to visit and allowed the mobile phone to publish his whereabouts as he toured the city. He also used location aware applications to find friends, colleagues and even converse with strangers in close proximity!

Location based technologies and accompanying services hold significant potential for personal and business endeavors. Such services, for example, could help a user find the location of a friend or retail establishment on a map. In business they might be used to track an asset or could be used to compute “pay as you drive” insurance rates.

Location based services are enabled by a plethora of geospatial data–some of which is transmitted by 3G handsets. Geospatial data is helping companies take the power of analytics–and marketing–to a whole new level.

For example, suppose you work for a retailer with traditional data in your data warehouse. With traditional data types you can query your data warehouse to discover information such as, “Show me all my stores in New York” or “Show me all stores in zip code 95136, which had two million in sales”. The usefulness of data is limited in this format.

However, adding geospatial data into a database that supports this type of data, some very sophisticated applications can help a user compute and visualize the distance between objects, or perform area and perimeter calculations. Some applications even incorporate commonly used map based services such as Google Maps or Google Earth.

When geospatial data is added to a database, queries from analytical applications can bring back much richer information. For example, physical store placements can now be populated on a map, and the distance between stores calculated. Marketers can run promotions within a specified number of miles from their store location instead of using postal codes. And supposing a company had the data and proper analytical infrastructure, customers could be selected for a promotion based on their segment and/or profile and their current proximity to an establishment (yes–Minority Report here we come!). In short, geospatial data can assist with more granular marketing efforts.

Now, let’s get back to the topic of proliferation of location-aware mobile phones. Benefits to businesses and individuals notwithstanding, the ability to pinpoint a person’s physical presence concerns many privacy advocates. They argue for example, “Do you really want your boss to know that you’re playing hooky instead of working virtual on Fridays?” or “Should one be advertising that they are out of town, notifying the world that their spouse and children home alone?”

Of course, it is currently possible to purchase a mobile phone without GPS. And location based applications must be enabled on the handset. In addition, many applications allow the user to control the information published.

However, the trend is unmistakable; cellular manufacturers are shipping more phones with location aware capability. And in the next 5-7 years it will become very difficult to purchase a phone without these features.

This brings us full circle to a long list of questions that both society and individuals must contemplate. Enthusiasts of location-aware mobile phones counter that privacy concerns are overblown, especially since mobile operators can currently locate your signal via cellular towers. Privacy advocates play the other side of the coin asking, “Have we really thought through all the ramifications of broadcasting our location information?”

There are certainly myriad benefits to location awareness for individuals, companies and society. Nonetheless, with an ability to pinpoint the location of an individual to within 10 meters, are we unexpectedly opening Pandora’s fabled box?

Questions:
* What marketing benefits can you see from consumer adoption of 3G phones equipped with GPS/Wi-Fi? Will the adoption of these technologies benefit your business?
* Many DailyFIX readers own a 3G phone. Are you using location applications and are you actively publishing your whereabouts? Advantages/disadvantages?
* Is the coming GPS revolution ultimately more benefit than bane? Or the converse?

Suppose you are a marketer at a wireless telecommunications company in Europe. Your company has a deep historical record of customer transactions, products purchased and billing history. Three months ago, your company also finished an implementation of an activity based costing project complemented with a profitability management application that now shows customer spend, margins and life-time value.

Deciding it’s high time to determine which of your customers are creating and potentially destroying value, you start analyzing a key segment of customers.

On one particular day, while finishing the last sip of your Monster energy drink, you’ve zeroed in on customer “Thomas Smith”.
The analysis shows that Mr. Smith is chronically late on his bills. He does pay but often late, and while you appreciate the incremental revenues associated with late charges, you also examine that he constantly uses your call center to ask mundane questions (bypassing the automated systems). You also see from your product analysis that he likes to switch phones frequently, bringing back product just before the thirty day exchange policy expires.

In the initial analysis, it appears Mr. Smith is costing your company a lot of money. Now, as a marketer, should you keep Mr. Smith as a customer, or gently pass him onto the competition?

What might be obvious is in fact a very complex decision, especially when you include social network analysis.

Leading edge companies are using Social Network Analysis to detect and interpret the patterns of social ties within a customer base. Authors Stanley Wasserman and Katherine Faust in their book “Social Network Analysis: Methods and Applications“, mention that SNA is “based on an assumption of the importance of relationships among interacting units. The social network encompasses theories, models, and applications that are expressed in terms of relational concepts or processes.”

In this particular marketing example, social network analysis can be used to determine the “importance” of Mr. Smith, especially in relation to other paying customers.

So let’s get back to the analysis on Thomas Smith. By adding call detail records to your data warehouse, and using social network analysis techniques, you now see that Mr. Smith is a “node” in a pretty complex network of customers. In fact, through a “Fab Five” campaign you concocted a year ago (where customers can call five friends for free in-network), you also see that Thomas is linked to five very profitable customers.

Since Mr. Smith is well connected to five very profitable customers, treating him poorly on his next customer visit, or jettisoning Mr. Smith altogether could lead to the defection of his five closest friends … customers on your network, and customers that pay their bills and produce positive cash flow.

Let us suppose you also had the divine prescience to add net promoter scoring to the mix. Now you notice that while Mr. Smith has trouble paying his bills, he is in fact a “promoter” of your company. He likes your friendly customer service representatives, and also is very generous in telling his friends about your willingness to “bend over backwards for him” to meet his changing needs.

With this analysis in hand, you determine that Mr. Smith isn’t a customer to jettison, and in fact, is probably one that deserves a closer look.

Before we get too caught up in the hype, social network analysis isn’t a savior to marketing decision making.

Social network analysis–done right–requires a lot of data from myriad sources. In the hypothetical marketing example above, simple call detail records are used, but to say–find a terrorist–the National Security Agency of the United States (NSA) would require call detail records, credit card transactions, car rental receipts, and many other digital markers. Even then, the output of the analysis isn’t always accurate.

Accurate data is a key factor in reliable results, but so too are the assumptions used in the model. Is Mr. Smith really that “important”? Should we assume that “associations” are actual close relationships? Should we also assume that if Mr. Smith leaves our company, his “Fab Five” connections will follow?

Social network analysis–hype or help? It’s up to you to decide.

Questions:
* It is well documented that Social Network Analysis (SNA) can be the source of “false positives”. Would you trust the output of SNA to make marketing decisions in your organization?
* Call detail records show Mr. Smith calls five contacts quite often. Does “activity” … in this instance a phone call–denote a “close relationship”?
* SNA can also be used to model employee connections in an organization–in effect to determine the “importance” of an employee? Good or bad idea?
* If you were the marketer in the situation above, what other tools might you use to determine if you should keep Mr. Smith as a customer?

When it comes to behavioral targeting (using clickstream data), where is the fine line of benefit vs. “big brother”?

With petabytes of data available to ISPs, auction sites, search engines, and social networks, these companies are naturally seeking profits via targeting advertising based on the interests and inclinations of users as determined by clickstream data.

However, “targeted advertising” based on the recordings of queries, clicks and mouse scrolls is quite controversial as some privacy advocates think such targeting is invasive, while others worry about companies amassing–and storing–too much information on our behaviors.

Adding to the challenge, a recent New York Times article, “Web Privacy on the Radar in Congress“, August 11, 2008 mentions, “There is no broad privacy legislation governing advertising on the Internet. And even some in the government admit that they do not have a clear grasp of what companies are able to do with the wealth of data now available to them.”

Why is behavioral targeting getting such prominent play?
Annoyed with non-relevant advertisements, internet users are increasingly ignoring banner advertising, skipping flash programs, and deleting email offers. Behavioral targeting provides promise because based on the analysis of clickstream data, powerful applications are able to calculate customer affinities with fine precision and then tailor advertising according to predicted customer needs.

More relevant advertising suggests satisfied consumers as offers pitched relate more closely to web queries, companies can charge more for advertising, and advertisers benefit with higher click-thru rates and hopefully more revenues.

Companies that rely on web-based advertising for their business model see much promise in behavioral targeting. Indeed, for many social networking websites, behavioral targeting may be their only viable path to profitability.

MIT’s Technology Review, “Part I: The Business of Social Networks“, July/August 2008, highlights the difficulty of turning a profit for social networks like Twitter, Ning, Meebo and others.

The Technology Review article notes that, for example, when users search Google, they expect display advertising and even in some instances welcome paid advertising results because they’re shopping for an item, or looking to supplement information in a buying decision. For social networks, however, Jason Calcanis, founder of Mahalo.com notes that users are, “are busy in conversations and don’t want marketing messages.”

Thus the challenge for social networks is to provide value to their user base while creating a revenue stream that can sustain the business and pay back shareholders and/or investors. Increasingly that path is behavioral targeting of relevant advertisements in order to turn a profit. Let’s be clear–”profit” is not a dirty word. However, some companies are pushing the limits of what many would find acceptable in behavioral targeting.

Case in point, the same Technology Review article details the well documented travails of Facebook’s roll-out of the Beacon platform.

The article mentions, “Working with commercial websites like Blockbuster and eBay, Beacon tracked Facebook users’ purchases and displayed them to their friends. The problem was that users were enrolled in the program automatically. If a user went to, say, the Blockbuster site and rented a movie, that information was automatically sent to everyone in her Facebook network. Online petitions and negative press ensued, and the program was clumsily scaled back.”

Perhaps there was nothing inherently wrong with Facebook’s approach to behavioral targeting; however the lack of disclosure was particularly galling to users and privacy advocates.

So where’s the “fine line” where advertisers, consumers and companies win?

With the debate on privacy swirling, and Congressional action looming, I have questions for DailyFix readers:

* When it comes to targeting advertising based on customer behaviors (online or off-line) where’s the fine line between customer benefit and “spooky big brother”?
* Is there a way to target customers based on their affinities–without actually invading their privacy? Barneys of New York seems to be doing it right. What do you think?
* Does “the line” get crossed when a consumer is targeted across multiple sites vs. one site?
* Done right, will behavioral targeting be Web 2.0’s salvation (from losses to profitability)?

Last week, I gave a speech at the MarketingProfs B2B Forumwhere I highlighted some research from Forrester. Through a survey of B2B marketing executives, Forrester discovered only half of the respondents were using technology to measure and manage marketing efforts and 57% admitted reporting systems “needed more work.” I’ll take “needing more work” as a euphemism for “what we have in place isn’t cutting it.”

In most instances, B2B marketing executives are a bit behind B2C marketers in the adoption and utilization of key technologies (data warehousing, analytics, interaction management etc). However I still found the results of the survey disturbing.

The information frontier is moving quickly. Robert D. St. Louis, a professor at Arizona State University notes:

* Storage space is doubling every 12 months
* Bandwidth speeds and capacities are doubling every 9 months
* The number of transistors placed on an integrated circuit doubles every two years (Moore’s Law)

The implications of these trends? More storage space is needed to keep up with the deluge of data from ERP, point of sale, billing and other source systems. With bandwidth speeds doubling, data will be delivered to those who need it at rapid speeds. And faster computer chips mean that data will be processed at an accelerated pace.

Technology won’t wait for marketing to catch up. Today’s marketer needs to champion the technology of today, while preparing for the technology of tomorrow.

But wait, you’re probably thinking that technology isn’t the only panacea to marketing effectiveness. And you would be right. For if it were, to simply purchase a marketing automation suite (for example) would solve all our woes–and obviously that’s not the case. The wise executive knows that it’s a people, process, technology issue–in that order.

However–if, as marketer’s, we’re not using the technology available to us today, how are we ever going to be prepared to utilize and capitalize on the technology of tomorrow?

To be fair, there are companies (and marketers), especially in the B2C space utilizing the technology of today to drive better segmentation strategies, find hidden patterns for product/service affinities, create more relevant customer communications, and even price more effectively. That said, these companies are in the minority.

The information technology frontier isn’t standing still–in fact it’s moving at an exponential rate.

What do you think is the impact of Moore’s Law on marketing–now and in the future?

No surprise to anyone, some upscale retailers and hotels are looking for visual cues to determine the service level they should provide to customers. According to a WSJ article, “The Gatekeeper: How Posh Hotel Sizes Up Guests”, May 10, 2007, some hotels are sizing up guests based on what car they park in valet, or what they’re wearing when they walk in the door.

In addition to keeping a record of the spending of hotel guests, the staff of the Peninsula Beverly Hills looks for signs of wealth and sophistication in guests. The article notes,

“The hotel’s managing director, Ali Kasikci, is something of an anthropologist of status signals. He is highly aware of the delicate hierarchy of fashion and symbols of influence, and he looks for small details to tell him what a pair of jeans and a T-shirt can’t.”

In the article, Mr. Kasicki spots a Hermes tie and a Charvet shirt among his wealthy guests and says, “It’s like a skunk. There’s enough scent being sprayed around that you can connect the dots.”

Mr. Kasicki is thin-slicing; segmenting and treating his customer’s differently based on his seasoned observations and intuition.
It’s also a dangerous strategy.

Malcolm Gladwell, in his best seller, Blink, defines the concept of thin-slicing as, “the ability of our unconscious to find patterns in situations and behavior based on very narrow slices of experience.” Essentially, it’s the ability to see patterns based on extensive experience in a particular field or discipline. In the case of Mr. Kasicki, his years of hotel experience are giving him visual cues and “distinctive signatures” of which guests can afford his services.

Solely relying on “at a glance” decision making, or decision making based on gut instinct can be very costly to our business and careers. For Mr. Kasicki to make better decisions on which guests should receive special attention, both observational data (visual cues) and hard numerical data are necessary.

It’s probably challenging in a service business like high-end hoteling, to not consciously or unconsciously segment and then treat customers differently based on how they dress or what they drive. However, even Mr. Kasicki admits that sometimes he gets it wrong when it comes to sizing up his guests. For example, the article notes a poorly dressed retired pharmaceutical executive is one of Mr. Kasicki’s wealthy guests!

It often makes sense to build loyalty programs, marketing campaigns and service/product offers to keep valuable customers spending money with your company. A good segmentation strategy, based on quantitative data, can help a company determine what customers to keep and which ones to let go to the competition.

For example, a data-driven customer profitability and life time value analysis could show that while an individual is a frequent guest to Mr. Kasicki’s hotel, they also tend to bargain for the lowest rates, berate the service staff, tip poorly, steal towels and swipe hotel fixtures.

In the case of Peninsula hotel, the best dressed customers might be the least valuable customers! Just because someone is wearing a Hermes suit doesn’t mean they won’t abscond with the light fixtures and conversely, the guest who is dressed like a slob might have a very large bank account!

The article mentions that Peninsula hotel tracks guest spend, but doesn’t say if it’s a manual or technology based approach. There are many solutions both custom and off the shelf that can help Peninsula hotel track customer interactions and provide analysis to help make sense of mountains of collected data. The Ritz-Carlton provides a great case study of service and technology happily married to each other in the hospitality business.

In an era of fierce competition, taking care of your most profitable and valuable customers has never been more important. Just don’t base your definition of a valuable customer on criteria such as he or she “looks the part.” Even Gladwell admits, “We are often careless with our powers of rapid cognition.”

Providing better levels of service to your top customers is a good strategy, but close your eyes for a moment and let your data speak to you for a comprehensive picture of who is “valuable.”

That was the email MP Seminar Junkie Shelley Ryan sent our membership earlier this week, written in her own inimitable style. She’s talking about today’s virtual seminar, when MP Founder Allen Weiss presents Tighten Up Your Marketing Plan: The Nuts and Bolts of Market Segmentation.
The virtual seminar, accessed from the comfort of your own desktop, takes place at noon today. It’s free for Premium Plus members, $99 for everyone else.
Allen will be bringing you the same expertise that he shares in USC and Stanford executive education gigs. He’s talking about segmentation, an analytical process that he says too many marketers are getting all wrong, making their marketing more art than science.
Segmenting your market, Allen says, gives you a crystal-clear understanding of your customers, plus the basis for precise targeting and positioning. Yet if you follow the popular press and many marketing textbooks, you’re probably confused by misinformation. The term “segmentation” has been used to signify many things. Typically, you’ll find it misapplied to company size, industry and geography in business markets–and to demographics and lifestyles in consumer markets.
As a result, companies are often blindsided by the competition because they haven’t correctly segmented their markets.
Today, you’ll learn how to properly segment markets–giving you the foundation of a sound marketing plan and making sure you ultimately target the right customers. As Shelley said, “If you want to make sure your company is targeting the right customers, don’t miss this seminar. Allen has a gift for making complex marketing concepts come alive.”
And speaking of gifts… MP is giving away a $100 Amazon certificate at the end of Thursday’s broadcast. I’ll be on hand to introduce Allen and moderate the audience Q&A, after which I’ll pick one lucky person at random from the audience.
And speaking of questions… here’s where I could use your help: As marketers, what issues about segmentation do you struggle with? How do you ensure you are reaching the sweet spot of your own audience? Your feedback here will help me create some relevant questions to fire at Allen after his presentation.
Hope to see you there.

Dynamic pricing, or pricing based on supply and demand, seasonality, or other events is popular with online auctions and with many transportation companies such as airlines. However, as companies in all industries look to improve sales margins, many are realizing that a single minded focus on fixed pricing can hurt more than help.

An article in Information Age, “Liquid Commerce” May 12, 2007, details some interesting trends regarding dynamic pricing in the insurance, retail and financial services industries. According to the article, “variable pricing–has quietly taken root, aided by a combination of technologies including customer profiling and analytics, data warehousing, pricing optimization, revenue management and, recently, event processing systems.”

Companies of all sizes are using analytics to sift through mountains of supplier, point-of-sale, and other data to determine the best price to maximize sales.

One company in particular, Norwich Union, has rolled out a “pay as you drive” car insurance program. In this program, Norwich Union uses GPS, and other technologies listed above to capture, aggregate, store, analyze, price and eventually bill customers based on factors such as times of use, distance traveled, and other variables. Prices can be as low as a penny per mile!

“Young drivers are charged according to each individual journey, and the risks those journeys pose, rather than being charged one annual premium based on a demographic profile,” the article states. “For example, journeys made during the afternoon are cheaper than those made at night.”

Doesn’t this make sense, especially for young drivers who might not drive much, but generally get stuck with high premiums because of the overall risk profile of teenage drivers? The teenager that takes the car out once a week, all things being equal, should be less risky than the teenager using dad’s car every night.
Pay as you drive isn’t for everyone. The idea of a GPS installed in a car makes some privacy activists wary, and drivers who rack up high miles annually wouldn’t benefit from this plan. However, for certain customer segments, cost savings of up to 30% are available over standard premiums.

Despite my provocative post title, fixed pricing isn’t going away.

However, retailers, transportation providers, finance and insurance companies and even manufacturers are starting to realize the mountains of data they own are a virtual goldmine! The right technologies coupled with the right processes and people skills can help companies collect, analyze and act on data–to price correctly–ultimately making them much stronger in the global marketplace.

———————————————————————————————————————————-
What are your thoughts regarding “dynamic pricing”?
Do you get irritated that it’s becoming more difficult to enjoy the certainty and simplicity of a fixed price?
Do you believe that dynamic pricing will eventually overtake fixed pricing as the norm?

This is the headline from a just-released report by DoubleClick and the e-tailing group, Inc. What I find most interesting is how this will undoubtedly make headlines among various media outlets without any serious thought into what is going on here.

First and foremost is the question of price and consumer loyalty. The impression given by such a headline is not that most people are price sensitive (we don’t need research to tell us this), but that price is the MOST IMPORTANT factor when deciding which online store to buy from.
Personally, I find this nonsense. It is true that for some people price is the most important factor, but not ALL people. This is simply a matter of segmentation.
I’m always confronted by this question when I work with technology companies, and especially engineers, who tend to think that people are completely rational and thereby purchase based on the lowest price. To confront this mistaken thinking, I ask the company who in their market has the lowest price (which they readily tell me) and then I ask why doesn’t that competitor have 100% market share.
The point is this: You can’t have price be the most important factor in consumer purchase (and loyalty) and at the same time not have the competitor with the lowest price have 100% market share.
Anyway, if the lowest price is the most important factor in consumer loyalty, than you have another problem. All a competitor has to do is come up with an even lower price and consumer loyalty should vaporate (you see, you can’t make someone loyal totally on the basis of something, like price, that can be instantly changed).
Finally, since the study was conducted using an online survey methodology, you run into an additional problem. Consumers are well known to use implicit theories to explain their behavior. So even if they are loyal to a retailer for service, breadth of products and other factors, many will attribute their loyalty to something more easily identifiable and logical, like price. Most academic research shows that the implicit theories that consumers use can be quite misleading.
So, consumer behavior is far more complicated than this headline suggests, and indeed the specifics of the DoubleClick study suggest this. Here is the essence of their findings:
* Seventy-one percent of shoppers “browse multiple online stores prior to completing a purchase.”
* Four out of ten (42 percent) shoppers “price shop a product via comparison engines.”
* Nearly half (48 percent) of the online shoppers surveyed described their loyalty to merchants across channels (store, Web, catalog) as “somewhat loyal to certain merchants based on a combination of good value, superior service and the right mix of product.”
* Seventy percent of respondents surveyed belong to a frequent buyer/loyalty program.
* More than half of the respondents (53 percent) ranked “discounts or exclusive offers for members” as the most important feature of Frequent Buyer/Loyalty Programs.
* When deciding to go back to a Web site, “online order tracking” was rated as very important by 56 percent of those surveyed.
* Shopping patterns vary by gender, with men less loyal and women more apt to register or be influenced by promotional mail.
* “Poor service” ranked most likely to deter shoppers from becoming loyal to a Web site by 41 percent of respondents.
* Rewards’ customers (those belonging to 2+ programs) are less apt to be focused on price, utilizing more features and tools to enhance their multi-channel shopping experiences.
* At least half of the shoppers surveyed indicated purchasing clothing, books, music, computerware and toys online.
* Free shipping continues to be the most important enticement to drive customers back to sites.
Read the full press release.
So, reading the above findings, would you conclude that “price is the most important factor in consumer loyalty”?

This just in: politicians, and the marketing strategists running their campaigns are finally getting it–niche marketing is available now and it’s not just for B2B companies anymore. In fact, with the right culture, data environment/infrastructure and the right processes, any company (or politician) can become “data-driven” and reap tremendous results.

The Wall Street Journal, October 21, 2006, in a page one article titled “Democrats Playing Catch-Up, Tap Database Marketing to Woo Potential Voters”, highlights that Democrats are now realizing what Republicans have known for at least two years, that micro-targeting (also known as niche marketing) really works.

The article describes how both the RNC and DNC have turned to micro-targeting to identify not only information about their base (who they are, where they live, what they buy, where they shop etc–) but also are attempting to profile voters who might be leaning one way or the other.

According to the article, both the RNC and DNC are using micro-targeting to, “identify potential supporters by collecting the unprecedented amount of information now readily available from census data to credit card bills–to profile individual voters.”

One subject matter expert quoted in the article mentions a successful micro-targeting campaign can bring congressional campaigns 5,000 to 10,000 additional votes!

The Democrats, taking a cue from Karl Rove (who came from the world of direct marketing) are now using a firm to “identify more than a million potential new supporters, a significant number given that many races–are likely to be decided by thin margins.”

A fragmented media and lots of competition for the attention and time of voters is causing a shift to niche marketing for both parties. The new approach, according to the article, is to identify and then “divide people into segments of like minded voters”, and then use modeling techniques to decide which themes to emphasize with voter segments.

So even the politicians are becoming data driven, or as Thomas Davenport, Professor at Babson College likes to say, they are now “Competing on Analytics“.

Companies, as well as politicians, can no longer afford to do business as usual, in fact, Mr. Davenport would suggest those not on a data-driven path will lose market share, or in the case of the politicians–votes!

Look around your company. Are you in danger of being left behind? If the politicians are finally getting it, and they are usually the last to know, shouldn’t you be thinking about becoming a data driven enterprise?

Last year, I wrote an article for the MarketingProfs newsletter titled Who Comes First: Good to Great Marketing in which I argued that too often marketing professionals are focused on “the WHAT.” What tradeshows should be reviewed, what types of direct mail should be sent, whatInternet portals should gain the most ad spend, etc.

Instead, to make marketing more effective, marketing executives needed to focus on “first WHO.”
If it sounds elementary, perhaps it is. Too bad few companies practice it.

I stated, “In the B2B world, the application of ‘first WHO’ means it is no longer acceptable to have a target list of 500, 100 or even 50 companies. Instead, the list would be narrowed to a group of 10 or 20 key companies. Next, a marketer must ensure that he or she has a deep and thorough mastery of the ‘WHOs,’ or core decision makers within those target organizations.”

Too obvious? Too simple?

Then why do we still see B2B, Fortune 500 companies taking out full-page ads in the Wall Street Journal? Why do companies still spend over a million dollars on the largest trade shows in their particular industry? Why do we still do “spray and pray” direct marketing and accept 1-2% return rates?

Depressed and contemplating medication, I was elated to see a recent Wall Street Journal article titled Unisys Pitch Finds the I in Niche. The article described the efforts of Unisys to customize and target media and advertising to reach a very small group of CIOs.

Through a special deal with Fortune magazine, Unisys is customizing the covers for 20 high-ranking executives on its target list. Each magazine shipped to these individuals will have a mock Fortune cover with the executives own face gracing the cover. In addition, he or she will discover a letter — individually tailored from a senior Unisys manager — describing challenges in the target’s specific industry.

According to the article, “Fortune cover-wraps also offer personalized Web addresses where executives can find mock news videos that mention their names and how they achieved business success.”
This, my friends is niche marketing at its finest. It’s tailored, it’s focused and (in this instance), it’s all about stroking the egos of the target audience.

I wrote in my MarketingProfs article, “Applying ‘first WHO’ to the marketing organization means marketing dollars will no longer be spent on gaining awareness. For example, marketing dollars will now be spent on gaining awareness with the right WHOs. Advertising, once focused on a few publications, will be halted until research can clearly show the target audience reads the publications in question. If a marketing dollar does not touch the right ‘WHOs,’ then it is a wasted dollar.”

The concept of deeply understanding your target audience and tailoring marketing programs to reach them, and only them, isn’t a new idea. It’s just rarely practiced.

Imagine:
–advertising dollars focused on the right audience–
–a message tailored directly to customer needs
–awareness gained with the people actually responsible for buying your product/service–
–an actual return on investment from a marketing dollar spent!

I love this quote from Ellyn Raftery, VP of Marketing and Communications for Unisys, “We’re not trying to have grandma at home understand who we are and what we do–it’s a very narrow set of executives we really want to reach.”

So the bigger questions are: Why is “First WHO” marketing not widely enacted? Is it because “First WHO” requires more analysis and legwork than “spray and pray” marketing? Why does an article of a company enacting focused, targeted and tailored marketing make the front page of the WSJ?

Are marketing professionals too lazy to really dig deep and attempt to segment, understand, and then market exclusively to their target audiences? Ask yourself, who is the “I” in YOUR niche?