5 Obstacles to Marketing Intelligence – II What Stops Us From Achieving Marketing Greatness
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Quick Review of Last Week’s Lecture
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Last week, we started talking about the 5 obstacles that keep b t th 5 b t l th t k organizations from achieving organizations from achieving marketing excellence
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
We covered the first 2 obstacles and will be moving on the final 3 thi this week k
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
We will have established the W ill h t bli h d th foundations of the course after this lecture and will start moving i into the actual analytics and h l l i d metrics from our next class metrics from our next class http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
So let’s get caught up first…
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Obstacle 1: Obstacle 1 Getting Started g
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
What are some of the reasons that people give for why they are unable to get started? bl t t t t d?
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
How do we overcome them?
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Obstacle 2: Ob t l 2 Causalityy
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
What is causality? Wh ti lit ? How does it affect our marketing? g
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
As intelligent marketers, how do As intelligent marketers how do we counter causality arguments? y g
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
The Remaining 3 Obstacles
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Overcome Obstacle 3: L k fD t Lack of Data— Strategies for Obtaining g g Customer Data
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Many marketers struggle with y gg too much data, rather than not enough h
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Remember that we covered collection and analysis of the right data in overcoming obstacle i h d i i b l 1 http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
But B2B companies have a l iti t d t h ll legitimate data challenge, since i these companies do not sell p directly to customers
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
They sell through a channel and y g do not have direct access to customer transactional data i ld
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
There are three approaches to Th h h overcome this obstacle overcome this obstacle
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Option 1: O ti 1 Channel Partner Data Sharingg
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Mornings for John Chambers, M i f J h Ch b CEO of the $39 billion Cisco $ Systems empire, starts with a can of Diet Coke and Cisco’s e‐Sales f Di C k d Ci ’ S l portal http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Through this enterprise web Through this enterprise web application, the senior management can drill down through global sales data that through global sales data that occurred on the previous day by geography, purchasing company/products or sold by a company/products or sold by a specific sales manager p g http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Now, for those of you unfamiliar , y with the Cisco sales model, this is a great trick tt i k
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Why?
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Cisco sells more than 95% of its products indirectly through value‐added resellers l dd d ll
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
So how does Cisco do it?
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Cisco contractually requires its y q value‐added resellers to share customer sales data l d
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Most B2B companies find that requesting customer data from the channel partner is met with a firm channel partner is met with a firm ‘‘no way.’’ The partner refuses on th the grounds that the data are its d th t th d t it property and the source of its competitive advantage. http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Cisco requires channel partners q p to share customer data in order t to resell their products ll th i d t
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
So B2B companies must answer So B2B companies must answer the question: q ‘‘What’s in it for my channel ‘‘Wh t’ i it f h l p partner to share its data?’’
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
One answer is that B2B companies spend considerable marketing dollars co‐marketing with channel g partners so shared data analysis provides deep insights into how to provides deep insights into how to radically improve the marketing performance http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Now, we need to be clear about one Now, we need to be clear about one thing – and it’s a big thing ‐ the B2B fi d firm does not necessarily have to t il h t know the name and address of the customer; this could be deleted from the shared data file from the shared data file.
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
What we are interested in is what products or services the customer purchases, and the h d h ability to act upon these data, ability to act upon these data, perhaps through the channel partner http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
This “disguise approach” works g pp because the channel partner’s concern that if the B2B firm has h if h B2B fi h the customer data, it will want to the customer data, it will want to go direct and cut the channel out of the deal http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Option 2: O ti 2 Frequent Drinker Programs q g
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Suntory is one of the largest liquor distillers in Japan and liquor distillers in Japan and brews a beer called Suntory Malts
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
It is in the 3rd tier of popularity, p p y, in terms of sales revenue and b d brand awareness
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
But in the late 1990s, Suntory did something with the Internet that something with the Internet that at the time that was particularly innovative
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
They created a y frequent drinker web site b i
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Now, Suntory, like Cisco, sells all of Now, Suntory, like Cisco, sells all of its beer indirectly through beer di t ib t distributors, bars, restaurants, b t t g grocery stores and vending y g machines – which makes data collection difficult if not impossible collection difficult, if not impossible
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
So the creation of a website where So the creation of a website where customers would come to and input the number of beers they drank, g e by codes o given by codes on the bottles, and in e bo es, a d return get points was an interesting way to collect data way to collect data http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
IIn return for sharing the data, t f h i th d t customers got to purchase silly g p y hats, bottle tops with their name i imprinted on it, or the chair that i d i h h i h is too uncomfortable to sit in is too uncomfortable to sit in http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
At the peak of the campaign, p p g , Malts reported 300,000 visitors a month to the web site h h b i
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
More importantly, these were high‐ value customers – the frequent q drinkers – and the website enabled the collection of data for direct the collection of data for direct marketing extremely easy
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Now, this worked in Japan N thi k di J because after work office parties p involve the mass consumption of alcohol. This would not have l h l Thi ld h worked in the US! worked in the US! http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
But the idea of a frequent q drinker program transcends cultures and geographies… lt d hi
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Welcome to mycokerewards.com k d
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
My Coke Rewards ¾ The website is a loyalty
program for frequent Coke‐ branded product drinkers ¾ Again, users get points for how many Coke drinks they y y have and get rewards such as T‐shirts, DVDs and discounts with the many partners with the many partners affiliated with the marketing activity
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
What do we learn?
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Customer data is a cheap C t d t i h as a T‐shirt!
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
My Coke Rewards enable Coke to M C k R d bl C k have direct access to their “frequent q drinkers” and to do direct marketing via e mail to this valuable customer via e‐mail to this valuable customer base
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
The site also provided a revenue stream for Coke through the paid t f C k th h th id ads on the site for participating ads on the site for participating partners
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
In both of these example, there i is a crystal clear value t l l l proposition for customer and proposition for customer and resellers to share their data
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
S th So the question that we ask is: ti th t ki “What is your value proposition f for customers to provide their id h i data? http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Option 3: p Use Surveys as a Proxy f C for Customer Data
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
We can also use focus groups and surveys for fine‐grained d f fi i d segmentation and target segmentation and target marketing
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
The idea is to capture the demographics, characteristics, and g p , , purchasing habits of your end customer through in depth market customer through in‐depth market research
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
We can create survey‐based, analytic marketing offers targeting y g g g these segments and test them using focus groups and experiments as we focus groups and experiments as we discussed in Obstacle 2
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Now, I should note that this approach is not as effective as pp analyzing large customer transaction data sets it can be a great way to data sets, it can be a great way to get started if you are a B2B firm
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
There are many professional service firms that will design, conduct and g , analyze the survey, but you can start with a free lunch and a gift for with a free lunch and a gift for participants
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
The internet has also given us the ability to create and conduct online y surveys. For the cost of surveying 10 people in person you can survey people in person, you can survey 100 or more online
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
But there is a problem with the survey model, online or offline – d l li ffli getting people to sign up and getting people to sign up and participate
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
The other problem that we discussed was privacy issues p y because customers can be hesitant about sharing information in fear of about sharing information in fear of how it might be used
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
One marketer once told a story of their legal department telling them g p g to delete customer data after a specific time period for fear of specific time period for fear of liability
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
The reason…
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
The company did not have a privacy p y policy and the legal department did g p not understand what marketing planned to do with the customer planned to do with the customer data
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
So, first thing – So first thing marketers must marketers must clearly communicate the privacy y p y policy both internally and externally about how data will t ll b t h d t ill and will not be used
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
In some cases, there are laws , preventing direct data collection of customer data f d
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
In the United States, the Health Insurance Portability and y Accountability Act (HIPAA) prevents pharma companies from knowing companies from knowing patient prescriptions
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
While we have to follow these laws, there are ways around them
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
If you create a website targeting a specific illness, like diabetes, you can provide information and provide provide information and provide community support groups to give product information to customers d i f i while gaining customer feedback g g and insights http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
The key understanding is simple – always add value to the customer y interaction by answering the question “What’s in it for me?” from question “What’s in it for me?” from the customer’s perspective
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Overcome Obstacle 4: Resources and Tools— d l Build the Infrastructure for Data‐ Driven Marketing
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
IInfrastructure for f t t f Analytic Marketing y g
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
A PC combined with Microsoft Excel makes for an amazingly powerful tool f lt l
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
For infrastructure, this is all most marketers need to get started on th the analytic marketing path l ti k ti th
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
But you should know the limitations ‐ Excel 2003 had a limit of 65,536 , rows in a spreadsheet, and Excel 2007 has a limit of 1 048 576 rows 2007 has a limit of 1,048,576 rows by 16,384 columns
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
So if you have a large number of customer, Excel is not going to t E li t i t work as a marketing database, work as a marketing database, not should it
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Now I will provide you with Excel templates for analyzing customer p y g satisfaction data, internet metrics, and calculating financial return on and calculating financial return on marketing
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
We can also use Excel to create and manage marketing campaign scorecards d
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
But if you have a large customer database you will need to use database, you will need to use SAS, SPSS or a specialized business intelligence application
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
‘‘The difference in these requirements is the difference i t i th diff between building a ranch house g or the Empire State Building.’’
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
In short – Think big, start small and scale up fast d l f t
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
IInfrastructure for f t t f a Large Firm g
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Customer Data Customer Data Collection
Technical Tools g Data Storage http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
We will spend time talking about this model in later lectures so I this model in later lectures, so I will hold off on going into detail g g now
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Overcome Obstacle 5: P People and Change— l d Ch Create an Analytic Marketing y g Culture
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
What’s the one phrase that we h hear more than any other in th th i business when it comes to business when it comes to change?
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
“I am just a _________ and have “I j t dh no influence to create change.” g
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
90% of employees % p y underestimate their potential to i fl influence others h
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
In previous examples, we have p p , seen that small changes can have bi i big impacts t
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
You have to understand that in the culture of an organization, change g , g starts with you. So start with simple changes that positively impact those changes that positively impact those around you
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Now, we have to understand that creating a analytic marketing or ti l ti k ti marketing intelligence culture marketing intelligence culture requires more than one person
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
You have to convince others and the quick win is an essential early step t
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Find out who the decision makers in your organization are k i i ti and learn what will convince and learn what will convince them to believe in the change
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
One fact that we need to remember is: b i The trouble with change is people
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
To understand corporate culture, thi k f it th think of it as three major j categories: rational, bureaucratic g , or political
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
YYoung MBAs believe that MBA b li th t organizations are rational g meaning the best idea will win. E Experienced managers know that i d k h isn’tt the truth. isn the truth. http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
A bureaucratic organization has a g very rigid organizational structure, and protocols must be t t d t l tb st ct y o o ed strictly followed in communicating with senior executives i http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
These organizations are g militaristic, with the general giving orders from the top, and i i d f h d the commanders ensuring the the commanders ensuring the orders are executed on the front lines http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Political organizations have g centers of power, with i di id l h h individuals who have kingdoms ki d within the organization, often within the organization, often accompanied by budgetary authority and staff http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
The best example of a political p p organization – a university or center of higher learning t f hi h l i
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Henry Kissinger once said, ‘‘The reason the fights are so fierce in th fi ht fi i academia is because the stakes academia is because the stakes are so low.’’
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
What are the Wh t th best ways to drive change? y g
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
‘‘Our Our marketing budget is being cut marketing budget is being cut by 36 percent; we need to justify our f future marketing spending.’’ k i di ’’ ‘‘We are losing significant market share ’’ share. http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
‘‘Our Our discount marketing is killing overall discount marketing is killing overall profitability.’’ ‘‘We are hemorrhaging customers and don’t know who are the most profitable.’’ ‘‘Our Our competitors are consistently competitors are consistently outmarketing us.’’ http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Create Incentive for Change g through Measurement and Behavior d h i
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Weight Loss g & C l i C Calorie Counting ti
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
The point is if p you can measure it, you can control it. t l it
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
For marketers, making metrics and measurement ‘‘public’’ d t ‘‘ bli ’’ within the organization will incite within the organization will incite change
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled
Many organizations incite activity, not results, so the idea is ti it t lt th id i to focus on the metrics that really value marketing
http://emagine‐group.com
Brand Focused, Socially Active, Digitally Enabled