Marketing News: September 2016 by Molly Soat

American Marketing Association

ama.org

September 2016

The Customer Experience Issue

September 2016 No.

MN Sept 2016 Cover.indd 1

8/19/16 12:03 AM

MN_Sept2016_full_pgs.indd 2

8/19/16 12:15 PM

table of contents

SEPTEMBER 2016

AMERICAN MARKETING ASSOCIATION

VOL. 50 | NO. 8 AMERICAN MARKETING ASSOCIATION

Valarie Zeithaml Chairperson of the AMA Board 2016-2017 Russ Klein, AMA Chief Executive Officer rklein@ama.org Andy Friedman, AMA Chief Content Officer afriedman@ama.org EDITORIAL STAFF

Phone (800) AMA-1150 • Fax (312) 542-9001 E-mail editor@ama.org Molly Soat, Editor in Chief msoat@ama.org Michelle Markelz, Managing Editor mmarkelz@ama.org

Zach Brooke, Staff Writer zbrooke@ama.org Hal Conick, Staff Writer hconick@ama.org Sarah Steimer, Staff Writer ssteimer@ama.org Vince Cerasani, Associate Art Director vcerasani@ama.org ADVERTISING STAFF

Fax (312) 922-3763 • E-mail ads@ama.org Sally Schmitz, Production Manager sschmitz@ama.org (312) 542-9038 Michael Gay, Account Executive mgay@yourmembership.com (727) 329-4421 Nicola Tate, Account Executive ntate@yourmembership.com (727) 329-4437 Jordan Berthiaume, Media Sales Representative jberthiaume@YourMembership.com (727) 497-6565 x3409 Marketing News (ISSN 0025-3790) is published monthly except July/August and November/December by the American Marketing Association, 130 E. Randolph St., 22nd Floor, Chicago, IL 60601. Circulation: (800) AMA-1150, (312) 542-9000 Tel: (800) AMA-1150, (312) 542-9000 POSTMASTER: Send address changes to: Marketing News, 130 E. Randolph St., 22nd Floor, Chicago, 60601-6320, USA. Periodical Postage paid at Chicago, Ill., and additional mailing offices. Canada Post Agreement Number 40030960. Opinions expressed are not necessarily endorsed by the AMA, its officers or staff.

Marketing News welcomes expressions of all professional viewpoints on marketing and its related areas. These may be as letters to the editor, columns or articles. Letters should be brief and may be condensed by the editors. Please request a copy of the “Writers’ Guidelines” before submitting an article. Upon submission to the AMA, photographs and manuscripts will not be returned unless accompanied by a self-addressed, adequately stamped envelope. Annual subscription rates: Marketing News is a benefit of membership for professional members of the American Marketing Association. Annual professional membership dues in the AMA are $220. Annual subscription rates: $35 members, $145 nonmembers and $190 libraries, corporations and institutions. International rates vary by country. Nonmembers: Order online at amaorders.org, call 1-800-633-4931 or e-mail amasubs@ebsco.com. Single copies $10 individual, $10 institutions; foreign add $5 per copy for air, printed matter. Payment must be in U.S. funds or the equivalent. Canadian residents add 13% GST (GST Registration #127478527). Advertisers and advertising agencies assume liability for all content (including text, representations and illustrations) of advertisements published, and also assume responsibility for any claims arising therefrom made against the publisher. The right is reserved to reject any advertisement. Copyright ©©2016 by the American Marketing Association. All rights reserved. Without written permission from the AMA, any copying or reprinting (except by authors reprinting their own works) is prohibited. Requests for permission to reprint—such as copying for general distribution, advertising or promotional purposes, creating new collective works or resale—should be submitted in writing by mail or sent via e-mail to permissions@ama.org. Reprints in quantity are available by contacting Kristy Snyder at Sheridan Reprints: (717) 632-3535. Printed in the U.S.A.

MN Sept 2016 1-56_MS 8.18_4pm.indd 1

featureS

dePartmentS

marketing management

the buzz

snapshot

core concepts

Celeb Threads

celebrity clothing is big business. but for every Paris hilton, there are several less successful celebrities who lend their names to fashion flops. what sets the winners apart in the business of big-name brands?

34 The Future of Cash

mobile payment has been touted as the “future of payment” for nearly a decade. can marketers finally start strategizing, or will the technology be relegated to the coffee-and-doughnut market indefinitely?

seen on ama.org Food52

mobile apps

the middle market

scholarly insights

seven sages

Power index

Product Development

Strategic Change

J. walker smith discusses how brands must keep pace with customers who seek radical solutions.

24 Customer Choice

according to Gordon wyner, researchers should consider all the factors that influence consumers to understand marketing’s impact.

Generating insights

42 10 minutes with Joseph ansanelli, ceo of Gladly

ama careers

ama community

expert advice chapter Volunteer of the Year and nonprofit marketer of the Year

56 backpage

chris Grabarkiewicz, Director of consumer insights & marketing analytics at luxottica retail north america

Cover: Photograper: lisa Predko (lisapredko.com). assistants: Jacqueline ayala, Tom michas. hair & makeup: Jamie Tannenbaum, chicago makeup artists. models: randi Dowling, chris martiniano. retouching: Tom michas.

FIND OUT MORE AT

aMa .org

OR FIND US ON

8/18/16 4:44 PM

thebuzz Letter from the Editor

The New Customer Experience

ashion evolves, money evolves, technology evolves—and so does the customer experience. Consumers are bombarded with more choices than ever, and marketers are constantly clamoring for attention and share of voice. As they do, they shape customers’ future decisions since, as Einstein said, “the only source of knowledge is experience.” The only way to create affinity and loyalty is to provide a good customer experience. In no other market is customer choice more obvious than fashion. People all over the world use clothing as a form of self-expression, and those customers are looking for ways to connect with brands. When a celebrity is the face of a brand, customers are essentially “buying” that celebrity—wearing that person on their sleeve, if you will. On page 26, staff writer Zach Brooke explores the successes (and failures) of

celebrity clothing brands. “Bringing a celebrity on board is the mother of all marketing shortcuts,” Brooke writes. “By leveraging the notoriety and goodwill accumulated by luminaries of the stage, screen and sports world, brands can reach the masses in a fraction of the time needed to build a traditional brand, freeing up marketers to concentrate on making the brand a winner.” Cash is king, but according to many experts, that may soon be more idiom than gospel. Many thought that by 2016, mobile payment would have gained more traction than it has. On page 34, staff writer Hal Conick explores whether mobile payments will ever replace cash and cards. “Mobile payment use has not yet hit critical mass. Consumers have shown a lack of enthusiasm toward adoption and use of mobile payments. Even in 2016, … mobile payments are a bit of a quixotic idea, akin to flying cars,” Conick

writes. Chalk it up to an as-yet underwhelming customer experience. How are you changing your customers’ experience, both with your brand and in the marketplace?

Molly Soat Editor in Chief @MollySoat

Lisa Predko

Jen Drolet

Pierre Le Manh

Lisa Predko is a Chicago based commercial and editorial photographer who specializes in conceptual and narrative work. Shooting characters and creating her own vibrant world, Lisa loves using light and color to evoke emotion and hero her subjects.

As the CEO of iModerate Research Technologies, Drolet helps develop methodologies for online resreach solutions. She previously worked as a financial analyst.

Le Mahn is the CEO North America of research giant Ipsos, and is a member of the Ipsos S.A. Board of Directors and the Management Board Executive Committee.

Predko Photo by Alberto Vasari

Contributors

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 2

8/18/16 4:44 PM

thebuzz Seen on ama.org

P&G Ramps Up Advertising After Cutting Agencies by 40%

rocter & Gamble has reiterated plans to increase its investment in marketing with the goals of re-energizing sales growth and boosting capital spending efficiency. The company reported its fourthquarter and full-year financial results on August 2. New CEO David Taylor said on a same-day call with analysts that the company plans to increase its ad spend. P&G’s net income for the year ending July 30 was $10.5 billion, an increase from 2015 full-year net income of $7 billion. Full-year net sales, however, fell to $65.3 billion, compared with 2015 sales of $70.7 billion. Tressie Rose, associate director of media relations and social media, along with global company communications at P&G, says the company’s Form 10-k offers a more detailed look at its advertising expense. Rose says P&G’s advertising for fiscal year 2016, which ran from July 1, 2015, through June 30 of this year, is up from a year ago, and it expects to be up this year as well. “We’re reducing non-working marketing expenditures, costs that don’t impact reach frequency or continuity of our advertising and trial generation programs,” CFO Jon Moeller said in the call with analysts. “We were spending $2 billion per year on agency fees. Two years ago we reduced the roughly 6,000 agencies we work with by nearly 40% and cut agency and production spending by about $370 million.” Moeller said P&G delivered an additional $250 million of agency-related savings in fiscal year 2016, reinvesting the savings in advertising and sampling of consumer-preferred products. The result has been more than $600

million in savings in two years. In December 2015, The New York Times reported that the company shifted the bulk of its North American media buying and planning

business from Publicis Groupe to Omnicom. A smaller piece of P&G’s business will go to Carat, part of Dentsu Aegis. Marc Pritchard, P&G’s global brand officer, told The Times

sePTember 2016 | MARKETING NEWS

MN Sept 2016 1-56_MS 8.18_4pm.indd 3

8/18/16 4:44 PM

thebuzz SEEN on AMA.org

that the entire ecosystem of media and advertising is transforming, and the company wants to get mass reach with greater precision. Despite cuts the company made to its advertising costs during its fiscal 2014 and 2015 years, (July 1, 2013, to June 30, 2015), it remained the biggest U.S. advertiser in 2015, according to Ad Age Datacenter’s “Leading National Advertisers 2016” report. P&G’s 2015 U.S. ad spend was $4.3 billion, a 3.8% decrease from 2014. Pritchard made a panel appearance and speech at the Cannes Lions International Festival of Creativity in June, noting the company’s goal of raising the bar on creativity while cutting hundreds of millions of dollars of agency and production costs. In an interview with Advertising Age at the event, Pritchard said the goal is to

be more thoughtful, even with social media work. “What we found, and I think a lot of brands would say this, is that we were just throwing too much stuff out there,” he told Ad Age. “We’re trying to turn down the noise and turn up the quality, which gives you a better chance of success.” The plans to boost ad spending come as P&G has cut more than half of the 105 smaller brands it says contribute little to its operating profit, The Associated Press reports. The company has increased its profits recently by way of cost reductions and price increases, and last quarter it said another six months to a year would be needed before greater volume begins to drive profit increases. The AP also reports that increased marketing hurt P&G’s core earnings in the most recent quarter, but

that the company plans to reinvest a significant portion of its costcutting savings back into programs like product sampling that help drive sales. “We’re expecting increases in advertising spend this year versus last. Think about it in the probably mid-single-digit range,” Moeller told analysts. “We need to be more relevant in-store and online. It is all part of an activity system we believe will help us restore market share growth that is necessary going forward.” Moeller said marketing would focus on “maximizing category growth” for both P&G and retailers and that the company would continue to pursue efficiency savings in its agency and advertising costs.

–Sarah Steimer

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 4

8/18/16 4:44 PM

MN_Sept2016_full_pgs.indd 5

8/19/16 12:20 PM

thebuzz SEEN on AMA.org

Avoid These Blogging Mistakes

here’s a simple reason why most bloggers fail: They give up. They start with big plans and high hopes, but they never budget the time to make it sustainable. They’re set up to fail before they begin. A blog can grow an audience (and a business) without a big outlay of cash. But it takes time. Orbit Media surveyed 1,000 bloggers and discovered that the typical blog post takes about 2.5 hours to create. Some bloggers spend six-plus hours per post. But who’s got that kind of time? Not you. Just the idea of blogging makes this thought jump to mind: I’m too busy to blog. But what you’re really thinking sounds more like this: I don’t have time to blog because I’m too busy with e-mail, writing 1,000 words a day and answering questions for my audience. See the irony? You’re already creating content. If you’re in any kind of sales or service role, you write a lot of e-mails. You’re writing about

important topics. You’re writing in a personal tone. These are the keys to successful blogging.

Your Outbox is Filled with Blog Posts You just need to mine your sent e-mail folder. You and other people in your small business are blogging away on a daily basis. You just don’t think of it as blogging. Here’s the problem: Sales and customer service people don’t have that marketing circuit built into their brains. They don’t realize, “Wait, I’ve answered that question in four separate e-mails. Maybe that answer should be content on our website.” Here are some ways to get those ideas out of the outbox and onto the blog: • Blind copy yourself when you answer common questions via e-mail. Put these in a folder so you can find them quickly when you need a post. • Train the sales and customer service teams to copy the

marketing folks when they answer common questions within e-mail. • Set up a monthly meeting with front-line team members to look through sent e-mail and ask them what questions they’re hearing most often. Now combine those e-mails, polish them up and publish.

Never Waste a Good Conversation by Having it in Private A great conversation you had with a customer or prospect doesn’t benefit anyone but the two of you, unless you publish it.

The Hidden Cost of Blogging Failure You may never notice it, but the risks of not using this trick are high. Your audience wants to find answers before they get in touch. They’re

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 6

8/18/16 4:44 PM

MN_Sept2016_full_pgs.indd 7

8/19/16 12:23 PM

thebuzz SEEN on AMA.org

researching a buying decision right now. Studies have shown that 60% of your audiences’ buying decisions are made before they contact a sales rep. If you haven’t published answers to their top questions, they won’t find them on your site. They’ll look elsewhere. They may find the answer on your competitors’ websites.

Create Content with Promotion in Mind The second most common reason for blogging failure is almost as risky. In this case, the blogger writes large amounts of copy, but doesn’t put in the time or planning to drive traffic. Every post needs a plan to get traction. This means email marketing, social media, or search optimization.

Here are some ways to make sure that anything you write will be read. Use a template: Force yourself to consider keywords, social sharing and e-mail subject lines in every post.

Send a link, not an e-mail: Next time someone asks, don’t reply with an e-mail. Send them a link. Better yet, add the link to your e-mail signature. Once they’re on your site, they’ll be a click away from your other great content and calls-to-action.

Use topics that promote themselves: The best topics have promotion tactics built in.

Collaborate with influencers: Collaborating with other bloggers turns co-creators into promotion partners. E-mail interviews are a great way to do this.

Guest blog: Publishing on other websites is an easy way to make your content visible because the audience of that blog will see it.

Have a strategy: Why do blogs fail? For the same reasons anything fails: There’s no strategy that makes them sustainable. Bloggers need a plan to get the job done long term. Time is scarce and resources are limited, so get serious. Commit to content and to marketing. Use your outbox to unleash a stream of content and never create a post without a plan to drive some traffic to it.

–Andy Crestodina, Strategic Direcor of Orbit Media

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 8

8/18/16 4:44 PM

MN_Sept2016_full_pgs.indd 9

8/19/16 12:26 PM

snapshot

media upstart

Creating an e-Gourmet Experience Food52’s ability to crowdsource and community-build helped it integrate commerce into its content By sarah steimer | staff writer

 ssteimer@ama.org GOAL Food52, cofounded by Amanda Hesser and Merrill Stubbs, launched in 2009 with the intention of creating an online gathering space where cooks could “support each other in the kitchen.” The food-discussion landscape at the time was dominated by print, television, a smattering of blogs and user-generated recipe sites. An open-floor online destination for home cooks hadn’t quite been developed. “One of the things we wanted to counteract with Food52 was how impersonal the internet can be,” the co-founders say. “We wanted to create a site with a sense of place and a really engaged community who could get to know us as well as we get to know them.”

As Hesser told New York Magazine in April, she and Stubbs were working with a topic—food—that people weren’t quite taking seriously yet. They created online contests for 52 weeks that resulted in 140 recipes for a cookbook; but it also led to a web-based community of home and professional cooks to share their kitchen creations and tips. In 2013, the company opened its Food52 online store, bridging the gap between content and commerce. The marketplace includes categories such as home, table, one-of-a-kind and pantry, each featuring curated products. ACTION Food52 has crowdsourced from its audience via contests from the very beginning, and these efforts have spilled

over into its social media, blog posts and shop. It’s particularly evident on the brand’s Instagram account. Or, rather, it’s not particularly evident: Food52’s audience has gotten so good at emulating the brand that when their photos are re-grammed, it’s hard to tell the difference between a photo taken by the Food52 staff or a community member. “[Followers] want to live that Instagram life, if you will,” says Lauren Friedman, head of global social business enablement at Adobe with experience working with Fortune 500 brands to integrate digital and social media into marketing strategies. “They’re really crowdsourcing a lot of their Instagram. They always have some sort of campaign going. It encourages others to live in that same experience and to share.” The Instagram account also features photos created by the Food52 team and sponsored by another brand. These pictures not only fit seamlessly into the brand’s look, but they’re well-accepted by its audience. One of the most-liked Instagram posts from Food52 was a photo of a pie with a lattice pattern, sponsored by Simply Organic Foods. Food52 doesn’t just use content from everyday home cooks and brand sponsors. It has also posted content from famous

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 10

8/18/16 4:44 PM

E-COMMERCE

chefs and food writers such as Ruth Reichl, Dorie Greenspan and Mario Batali. Searching for a pasta recipe will generate results such as Nigella Lawson’s linguine with lemon, garlic and thyme mushrooms nestled next to a recipe for Italian ricotta gnocchi from a community member’s grandmother. Users who submit content are on the same playing field as chefs with television shows and cookbooks. “They’re weaving in social validation, which is something I’ve seen a lot of savvy publishers do,” says Alicia Navarro, CEO and founder of Skimlinks, a third party that manages commerce for publishers. The next piece was the Food52 shop. The general homepage for the website features photos of products for sale woven between recipes and blog posts. They all have the same feel: soft, lightly shadowed and often with muted colors. Recipes provide links to products used in the photos, and product pages feature links to recipes that use the products.

CoMPanY

Food52 heaDQUarters

New york FoUnDeD

2009 2015 reVenUe

$11.3 million resULts

10 million web users, and 750,000 million content contributors; 1.4 million Instagram followers, up 460% since January 2015; awarded by the James Beard Foundation and the International Association of Culinary Professionals; press mentions in Fortune, House Beautiful, Martha Stewart Living, The New York Times, TechCrunch and on the Today Show.

“We photograph our recipes in context, often with items from the shop so when we post a recipe, often the comments are, ‘Where did you get that knife/serving platter/napkin/vase?’” Food52 COO Bridget Williams says. “But when we do show products, we tell a story and explain the cool idea behind it. It’s what our community loves and it is also ideally suited for social media.” Williams, Hesser and Stubbs all say the goal is to keep the experience fluid for the visitor. “As a kitchen and home brand bridging content and commerce, we have to look at our business differently than retailers and publishers,” the founders say. “We do not believe that there has to be a clash between content and commerce, or that one feeds the other. Instead, we choose to bring the two schools of thought together to strengthen the user experience and our relationship with our community. “We put just as much value in a customer reading a recipe for summer vinaigrette as we do in that same customer falling in love with a product in our shop.” Like the rest of Food52, the shop provides an open-community platform. Those browsing the shop are welcome to “favorite” the products, with a running tally of “favorites” displayed on the product page. Williams says to expect even more community integration in the shop in the future. The shop has been curated by Food52 since its beginnings, but the company is now launching its own line of Food52 dinnerware in partnership with Jono Pandolfi, a ceramicist for chefs at restaurants such as Eleven Madison Park, the NoMad Hotel, Tosca and Gramercy Tavern. RESULTS Partnering with the food community— famous or otherwise—has brought Food52 an audience of about 10 million across social and its website. It has more than 1 million registered community members, about 75% of whom have contributed to the site. At last count, its number of Instagram followers was 1.4 million, up from 250,000 in January 2015.

snapshot

Hesser has cited regrams from followers as key to its social success. The Food52 shop makes up two-thirds of the company’s revenue while the rest comes from advertising, totalling $11.3 million in 2015, when its three-year growth reached 1,173%. Food52 was recently ranked No. 329 on Inc.’s list of fastest-growing private companies. According to Friedman, people interact and shop with Food52 because the brand has become a trendsetter. “Influencers and influencer marketing in general is really successful right now and it’s all about building trust and relationships, not just selling products,” Friedman says. Food52 offers value without asking for anything in return, she says; a user or visitor to the site needn’t purchase anything from the shop to access the recipes or blog posts. The site has won awards from the James Beard Foundation and the International Association of Culinary Professionals, and has been featured in Fortune, House Beautiful, Martha Stewart Living, The New York Times, TechCrunch and on the Today Show. As Williams explains it, Food52 is building relationships and marketing for the long game. “We’re not always trying to lure you into buying with content,” she says. “If you are here as a reader to find a great peach pie recipe, we are going to optimize for that experience. We aren’t going to stop you in your journey to look at pie plates. We will definitely note in the data that you are a person that likes pies, and peaches, to help optimize another experience down the line, though.” Navarro says Food52 has done a great job turning their content into a utility, something many publishers have struggled to do when trying to cross into the commerce field. Integration has been the company’s strongest marketing tool, whether it’s integrating commerce with content or home cooks with chefs and its own brand. “We want you to feel like you’ve stepped into our world and are part of our community,” Williams says. “We want to be transparent and inspirational and full of joy and discovery.” m sePTember 2016 | MARKETING NEWS

MN Sept 2016 1-56_MS 8.18_4pm.indd 11

8/18/16 4:44 PM

coreconcepts

mobile apps

How to Create an App Customers Will Use Creating a successful app takes a precise mix of input from marketing and user experience teams By Hal Conick | Staff Writer

 hconick@ama.org

reating a great user experience is good marketing. Creating one people will share with friends is the Holy Grail of marketing. This is also the goal when working on an app’s user experience, says Joshua Porter, co-founder of Rocket Insights and former director of user experience (UX) at HubSpot. “If your app is not remarkable, and people don’t talk about it and don’t

market it for you, it’s extraordinarily hard to grow a user base,” Porter says. On average, 90% of mobile users’ time is spent in apps, according to a 2015 report from Flurry Analytics. The “Red Hat Mobile Maturity Survey 2015” found that approximately 90% of companies are increasing their investment in mobile apps in 2016. But many companies are not getting enough value from the apps they create,

according to a May 2016 report from Localytics, an analytics and marketing company. The report found that 23% of users abandon an app after one use, a slight improvement from 25% in 2015. Even so, this means nearly one in four users are downloading an app, using it once and never opening it again. Creating an app that isn’t used likely creates a poor impression, and also wastes money. Savvy Apps, a company that builds apps for businesses, notes in a blog post that building a single-platform app starts at $25,000. Building more complex, multi-platform apps may cost more than $1 million. Lack of use could end up being a huge strain on a company’s budget. The Enterprise Mobility Exchange’s “The Global State of Enterprise Mobility: 2016” found that 29.1% of companies have a mobile solutions budget of $250,000 to $500,000 for the next 12 to 18 months.

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 12

8/18/16 4:44 PM

mobile apps

One app that “got it right,” according to Mashable, was ZipCar’s mobile app. The company, a member-based, car-sharing company, has an app with a four-star rating on Google Play and close to four stars on Apple’s App Store. “It guides users through the reservation process, locates nearby cars and contacts customer support,” the Mashable write-up says. “It even acts as a key fob by unlocking and locking doors and by honking the horn when you’re trying to find your Zipcar car in a parking lot.” Carrie Allen, ZipCar’s director of member marketing, says the company focuses on user experience of the app by mingling the marketing and UX teams to ensure its members have a pain-free, easyto-use experience. “Everything we do, both as a business as well as our technology, is really focused on what we hear from our members,” she says. Here are six tips to combine marketing and UX effort to build an app customers love from the start.

Test to Avoid a Poor Rating

Apps are almost immediately punished for a poor star rating on Apple and Google’s stores, Porter says. “If it’s one or two stars, then forget about it,” he says. “There has to be something else, a competitor’s app, they can download.” The bar is high for apps, Porter says, and if a company releases one that isn’t smooth from the first day of release, they’ll be handicapped moving forward. “You are essentially getting the people who are most interested to download it and use it. If they don’t have a great experience, they’re twice as shy coming back to it. You need to counteract that,” he says. “We spend a lot of time testing and going through beta periods with applications, using them ourselves— so-called ‘dogfooding’—so that we will know what percentage of people will get errors. It’s too big a risk not to know that going in.”

Ask Users What They Want

What better way to improve user experience than to go straight to the

source? Allen says ZipCar’s members are very responsive regarding the app’s usability, updates and new features. “Not only [is it important] from a marketing perspective, but we want to make sure they understand how to use the service to the best of their ability,” she says. “When they go to use the service, we want to deliver on that promise we made with them.”

Think About Onboarding from the Jump

Any regular app user knows the drill. After downloading an app, they’ll likely be asked to login, perhaps with an e-mail address or via Facebook. This is called onboarding, Porter says, and its execution should be the primary focus of an app’s creation. Many companies rely on the Facebook or social media login, Porter says. However, completely relying on Facebook will mean less consumer data; ideal for consumers, bad for companies. Organizations will still need to ask for user information, such as e-mail, age and other information deemed important, on a screen after the Facebook login prompt. “I spend lot of time preaching to our clients: If you can make that initial experience a first-order part of this process and build, that gets us so far and so fast,” he says. “You still need to make the core sequence of the app remarkable, and you need to make whatever the focus of your app is really smooth, but without that actual onboarding, you don’t have a chance.”

Make Data, Analytics and Metrics a Priority

At ZipCar, Allen says the marketing and UX teams work so closely together, they forget they’re two separate departments. Both marketing and UX have a unique set of metrics they need to bring together to work toward the company’s goals. The’re mainly looking at whether members will promote ZipCar and its app. “It’s a variety of metrics around what features or capabilities they deem working the best,” she says. “We dive into their individual comments, as well as their overall score, to understand any pain points the member may be having and how we can resolve those.”

coreconcepts

Porter says this measurement goes by different names, but is essentially measuring “the viral coefficient of an app,” such as how often it’s shared, how many new users regular members bring in and other metrics to create a “digital referral trail.”

Don’t Ignore What Competitors Have Done Correctly

“We’ll download every single competitor app and use it and really understand it, try to understand what makes it work,” Porter says. “We’ll come back to our client and say, ‘Listen, these guys have this total sequence nailed. We’re going to learn from them. We’re going to borrow these four things from them and emulate these four screens.’ ” “Borrowing” proven ideas—but never copying pixel-for-pixel—helps companies emulate what works well in other apps. Some ideas are so great and so obvious that they deserve repeating, Porter says. “Nothing is really new under the sun, so when a client comes to us and says, ‘We want to completely reimagine X,’ we know that the solution is not going to be a complete reimagining,” Porter says. “It’s going to be understanding what really works, understanding how this company is hopefully slightly better positioned in taking advantage of that.”

Keep it Simple

ZipCar’s solution to avoid complexity is to have simplicity as a core company value, Allen says. “We really believe that if we can keep the experience in the app, the service and our marketing approach simple, the member or prospect will be able to interact with the service as it fits them,” she says. “That’s one of the most important pieces from a technology standpoint as well as a marketing standpoint.” Apps that aren’t simple may end up among the 23% that are downloaded and never again used, leaving a proverbial bad taste in the user’s mouth. Not good for user experience; even worse for marketing. “If you get lost in the app, then we haven’t done our job,” Allen says. “We want to keep it simple for you.” m September 2016 | marketing news

MN Sept 2016 1-56_MS 8.18_4pm.indd 13

8/18/16 4:44 PM

themiddlemarket

power index

The Other One Percent The Middle Market Power Index outlines the outsized economic footprint of middle market firms By Zach Brooke | staff writer

 zbrooke@ama.org

iddle market firms may be small in number, but they pack a big wallop when it comes to their economic impact. That’s the takeaway from the June 2016 edition of the Middle Market Power Index, a collaborative report by American Express and B-to-B data and services firm Dun & Bradstreet that details the makeup and output of the sandwiched sector of U.S. companies. Now in its fifth edition, the most recent report was released in June. It looks at what middle market businesses— those with annual revenues between $10 million and $1 billion—contributed to the U.S. economy as a whole between 2011 and 2016 and how they measured up against larger and smaller rivals. The report found that middle market firms, despite only accounting for 1% of all commercially active organizations in the country, are responsible for one-quarter of all private sector revenues and employ 25% of all private sector workers. “The state of the middle market right now is very strong,” says Julie Weeks, research advisor to American Express. “There’s been a near doubling in the number of firms in the middle market— 87% growth between 2011 and 2016— and there has been a doubling in their revenue and collective employment.” “And,” she says, “they’re growing way faster than anybody else in the economy.” According to the index, the number of U.S. middle market firms grew 36% in 15 months, from approximately 136,000 in December 2014 to more than 182,000 as of March 2016. During the same time period, the total number of commercially active firms actually declined by 17%. “It’s probably been the case that they have outpaced average growth for years and years. It’s a trend that we’re more recently becoming aware of, but I’m

not sure it’s new,” Weeks says. “This has been the sweet spot for entrepreneurial dynamism for a long time, and we’re just now realizing that this is a part of the economy that has a name and we’re starting to look at it a little more.” While the survey does not measure the fluidity of the middle market—how many businesses have revenue changes that bring them in or out of the $1 million to $10 billion range—Weeks believes some of the growth can be attributed to previously small firms achieving middle market status. She points to longitudinal data suggesting it takes new businesses an average of a decade or more to obtain middle market status. Interestingly, previous versions of the Power Index found that middle market firms were more adversely affected by the recession and subsequent sluggish recovery than their larger and smaller counterparts. That middle market firms are now, as a whole, doing better than other classes suggests that the middle market may be more responsive to fluctuations in the national economy than other companies. “I think that’s certainly the case,” Weeks says. “It looked from that first report that they weren’t bouncing back as much in terms of revenue growth, but they were making a more concerted effort to keep jobs.” On top of evaluating the overall middle market performance, the report also examines the middle market at a more granular level in order to provide a snapshot of its components. It shows, for instance, that middle market firms are disproportionately made up of manufacturing, wholesale trade and educational services industries, compared to the overall economy. They are also concentrated largely in the Great Lakes

region with Ohio, Indiana, Michigan, Wisconsin and Illinois all making the top 10 states with the greatest number of middle market firms. Those first three states, plus Texas, also report seeing their total number of middle market businesses double over the length of the survey. The survey found that middle market enterprises are more likely to be minorityowned than the general commercial landscape, but they are less likely to be owed by women. The rate at which middle market businesses are led by women, however, is roughly equivalent to commercial active firms as a whole. “Part of that might have to do with incentives in state and federal governments with public sector procurement,” Weeks says. “There are programs in the federal government, the 8(a) Program in particular, which helps

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 14

8/18/16 4:44 PM

power index

minority-owned firms open a door to government procurement, which really is a gateway to larger growth. There are more and more women and minorities who have higher levels of education and higher work experience, managerial experience, so they’re starting businesses now, compared to a generation ago.” Unlike other surveys that report on the middle market, the Middle Market Power Index uses data culled from Dun & Bradstreet’s proprietary database, which Weeks likens to a census of all commercially active firms in the economy. Every business that receives a U.S. government grant or contract work must acquire a data-universal number system (D-U-N-S) ID from Dun & Bradstreet, and the company stores financial data for more than 250 million businesses worldwide.

This allows the Middle Market Power Index to measure and extrapolate from statistical info reported by companies inside and out of the middle market, instead of soliciting self-reported survey responses from a random group of middle market executives. “There’s a lot of value in asking people questions, which is some of the middle market executive reporting data, but that’s fairly small in number. It’s one or two thousand people [total]. You can monitor changes over time and whether there’s optimism or pessimism, so there’s a value there,” Weeks says. “What we bring to the table is a lot broader and richer. We’re able to look in a broader time scale and can bring more detailed nuances like looking at statelevel information and industry-level information, as opposed to talking about

themiddlemarket

the middle market period without that subgroup analysis.” Weeks says she hopes the Middle Market Power Index catches the eye of investors and policymakers who might otherwise overlook this group of enterprises in favor of chasing after the biggest firms and the largest workforces. She suggests this survey hints at an equal, if not greater, return awaiting canny resource brokers who turn an eye toward middle market organizations. “One of the biggest things to take away from this is that this relatively small part of the business population is the source of a lot of what we are taking for granted: job growth and revenue growth,” Weeks says. “The big takeaway is: Pay attention to this small-but-mighty sector of the economy.” m September 2016 | marketing news

MN Sept 2016 1-56_MS 8.18_4pm.indd 15

8/18/16 4:44 PM

scholarlyinsights

product development

Best Practice or Bandwagon? Customer Participation in New Product Development Customer participation in new product development can be a blessing—or a curse. According to researchers, marketers must be mindful of where in the development process customers get involved. By Lance A. Bettencourt | contributor

 lance@liftphd.com

s an executive, you are constantly faced with new marketing ideas and processes. Some you should pursue and some you shouldn’t, and it can be difficult to know the difference between the two. Colorful anecdotes and universal success claims that are shared by consultants and published in popular press articles make it seem like only the most backward company would resist adopting the latest must-have best practice. But academic research reveals a different story. Such is the case with claims that Net Promoter Score (NPS) is the one number you need to know. Such is also the case with claims that only small companies can successfully introduce radical innovations. And such may now be the case with claims that success in innovation requires customer participation at every stage of new product development (NPD). Should Customers Participate at Every Stage of New Product Development? Using stories of success at companies, such as Legos and Starbucks, the argument for increasing customer participation in NPD claims that traditional customer inputs are no longer enough. Rather, in the new age of marketing, success requires involving customers as co-creators at every step.

But is customer participation at each point in the NPD process actually beneficial? Are there situations where customer participation is more or less beneficial, or even harmful? These are the questions that guided a research study published in the January 2016 issue of the Journal of Marketing. The paper, “The Effectiveness of Customer Participation in New Product Development: A Meta-Analysis,” reports the results of a study on the relationship between customer participation and NPD performance across 39 independent samples. On the basis of their findings, Professors Woojung Chang and Steven Taylor, both of Illinois State University, conclude that, “Despite the value of customer input, customer participation may not be an imperative for every firm in every industry.” A parallel conclusion is made about every stage of the NPD process. Specifically, the research shows that customer participation in NPD is significantly related to three different types of performance: new product innovativeness, speed to market and new product financial performance. However, this impact depends on the stage of NPD at which customers participate. In fact, both customer participation during ideation launch have a net

positive impact on a new product’s financial performance via speed-tomarket, but customer participation during development negatively effects speed-to-market which leads to an overall negative impact on new product financial performance. In addition, the effect of customer participation depends on characteristics of the firm, market and customers. Customer participation is shown to be more beneficial when there is a lot of technological uncertainty, the new product is being introduced in an emerging market, the industry is relatively low-tech, the focus is business customers rather than end consumers and it is a small firm rather than a large firm doing the development.

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 16

8/18/16 4:44 PM

form vs. function

Customer Participation: A Project Decision Overall, the results indicate that customer participation in early and late stages of development is most beneficial, contrary to the assumption that traditional customer inputs into NPD are no longer enough for success. Further, the results reveal that customer participation in NPD is unlikely to be universally beneficial for all firms, and it is unlikely to be beneficial for all projects within the same firm. Rather, the merits of customer participation in NPD should be weighed for distinct projects. Specifically, customer participation is most beneficial when customer insights are especially diagnostic and when the

business is especially willing and able to incorporate outsider knowledge into the development process. In this regard, the research suggests the following questions for consideration, with a â&#x20AC;&#x153;yesâ&#x20AC;? in each case pointing toward more value from customer participation. 1. Is there considerable uncertainty or disagreement within the firm about customer needs? 2. Is there considerable uncertainty about how customers would desire to have their needs satisfied? 3. Is there a group of customers who are motivated and able to share knowledge that the development team is lacking? 4. Is the development team motivated to rely on customer inputs in the development process?

scholarlyinsights

5. Does the development team have the skill to gather and incorporate useful customer inputs? Companies should approach the decision to engage customers in NPD on a project-byproject basis. And they should be especially cautious about involving customers in the development phase in comparison to ideation and launch. m Lance A. Bettencourt is a cofounder and managing partner of LIFT PhD, a service that matches corporate decision-makers with the expertise of business school professors. He is a distinguished marketing fellow at the Neeley School of Business at Texas Christian University, and author of Service Innovation: How to Go from Customer Needs to Breakthrough Services. September 2016 | marketing news

MN Sept 2016 1-56_MS 8.18_4pm.indd 17

8/18/16 4:44 PM

sevensages

GENERATING INSIGHTS

seVen eXPerTs weiGh in on The ama’s

Seven Big Problems Problem Four: Generating and using insight to shape marketing Practice

Carrie edwards

diane hayes

Jen drolet

President and Cofounder of InCrowd Inc.

rebecca brooks

President at WHITE64

CEO at iModerate Research Technologies

Founder of Alter Agents

We have to stop thinking about getting insights as market research projects, but rather build continuous dialogue with our key stakeholders. Recognize, engage and track those who most affect your brand. There’s still too much friction in the process of obtaining needed information. New technologies such as mobile, social, automation and analytics, make this imminently possible. They let us have the direct relationships with target constituencies and provide engagement that these communities often crave, and dramatically streamline time to insights so that needed information can drive important decisions at the speed of business today.

To effectively employ insights to fuel progress, companies should start simple and refute the perceived rigidity that accompanies obtaining customer feedback. Seek to generate feedback through a mix of listening, asking and observing both your customers and your competition’s customers. Work to regularly share relevant and substantive feedback across the organization to fuel demand—bite-sized nuggets can be impactful. Recognize the staggering number of requests consumers receive for feedback. Put a higher value on their time by sharing how their thoughts can meaningfully improve their experiences. General Mills did this brilliantly by crediting moms with their changes to Cheerios’ ingredients.

Staying close to your customers and understanding the external cultural factors that shape their thoughts and influence what they do can dramatically increase your competitive advantage. Technology enables insights of all kinds, so you must prioritize who you should track, what you want to know and why it offers the most value. Use technology to understand how prospects and customers navigate through the funnel to purchase, share and recommend your product. This will provide insight and intelligence on how consumer wants and needs may change over time and affect consumption.

Insights can often fail to resonate within an organization because we speak to our customers from our own perspective. “Did you see my advertising? Will you buy my product in the future? Tell me about myself.” These questions bear no resemblance to how our customers are actually experiencing our brand and making decisions about what to buy. Customers experience a brand as a series of discrete moments and make their purchase decisions based on the specific context of that time. For insights to drive action, they must accurately reflect the customer’s experience and not mirror our internal concerns.

MARKETING NEWS | sePTember 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 18

8/18/16 4:44 PM

generating insights

David Krajicek

Craig A. Overpeck

Pierre Le Manh

Chief Commercial Officer at GfK Consumer Experiences

COO of Global Research at M3 USA

CEO, North America at Ipsos

I have been concerned for a while about what I call the tyranny of the dashboard. The proliferation of data has many companies focused on the curation of knowledge and undervaluing the generation of insight. An “insight” that does not answer an important business question is really just a data point. An insight has to have a clear call to action, directing rather than just observing. It needs to be timely: “I told you so” has no value. And it should be digestible: plainly stated, concise and smart. Finally, in my view, you cannot create and activate an insight unless your entire organization understands the broad marketplace and your firm’s strategic priorities. Too many companies fail to activate important insights because of an uneven understanding of the competitive market and unclear business priorities.

Pharmaceutical marketers are in an ever-transforming environment where the decision-maker landscape is rapidly evolving to include multiple stakeholders: practitioners, payers, pharmacists, patients, corporations and governments. Effective marketing requires that life science companies and their agencies uncover each stakeholder’s decision process. New incentive models in healthcare, and narrowing access to prescribers, challenge the traditional pharma marketer to now measure all aspects of the treatment-decision journey. Understanding these new roles in today’s healthcare system is crucial before setting the message, channel, cadence and the target. All of this is further complicated by an age wave of physicians retiring and new practitioners entering the mix. Recognizing the changing faces of the stakeholders is the key to unlocking better customer insights, which creates better marketing.

Finding that 1% killer insight is the goal, yet it is getting harder as we have access to more data sets. Having troves of data is of little value unless someone can make good sense of it all. Then, curiously, after all the effort that goes into finding the 1%, it is rarely shared. Something that is very precious is often not available to most people in the organization. The perfect insight machine marries engaging technology and talented people. It’s about creating empathy, stimulating creation and activating that 1% while immersed in the consumer’s world.

sevensages

For insights to drive action, they must accurately reflect the customer’s experience and not mirror our internal concerns.

September 2016 | marketing news

MN Sept 2016 1-56_MS 8.18_4pm.indd 19

8/18/16 4:44 PM

MN_Sept2016_full_pgs.indd 10

8/19/16 12:28 PM

SPONSORED CONTENT

An Effective CEM Design By DR. TR RAO, President & CEO, Market Probe 8 tr@marketprobe.com

MORE DATA VERSUS BETTER DECISION-MAKING It is very hard to imagine a business today that does not have some form of a customer satisfaction program. Rarely do we go through a purchase today, from a cable service to ordering pizza, from a visit to the auto dealer to any commercial Website, without being bombarded by a two question pop-up survey or a two minute survey. This is all part of the technology revolution in CEM and big data that preaches to us that more customer data means better decision-making by management. Does this mean that businesses have embraced a fundamental shift from product orientation to customer orientation which should impact their customer relationships? Are they all enjoying higher levels of customer loyalty and business growth today than a decade ago? The evidence is sparse, and we seem to be where we were, with just more customer data. A plausible hypothesis is that there are good CEM programs that can help businesses build customer relationships in a meaningful manner, and there are others that produce a lot of data to micro manage specific operations that may or may not have any impact on long-term customer relationships. So, it begs the following question: What makes a CEM program truly effective in driving loyalty and business growth?

their long-term relationship and loyalty. This look back is an evaluation of their journey on high impact experiences, and should be part of any CEM program and can be structured as a relationship survey. BUILDING BLOCKS OF AN EFFECTIVE CEM PROGRAM There are three key building blocks in any effective CEM program. This comprehensive approach helps tell the complete story of customer behavior to the strategic leadership team of a brand or business. It helps them understand their customer/client behavior to develop a customer centric growth strategy. 1. Customer Journey: It is critical to understand the customer look back with the brand or business to learn about their propensity to be loyal to the brand. A relationship feedback survey to evaluate past high impact experiences could serve this purpose. In the case of a wealth management program, look back feedback could include financial performance in up and down markets,

expertise in guidance and explanations, stability of wealth management team, etc. 2. A customer journey consists of different events where customers experience new purchases, onboarding, consider the brand promises versus execution and problem handling and resolution. Customers expect different, but consistent, brand strengths in these events. It is critical that these experiences be measured in detail by customized feedback modules. 3. Finally the CEM design should measure service transactions customers experience on an ongoing basis. This feedback is critical for operations management. It is the combination of these programs that effectively navigates the customer to loyalty, and that drives specifically, the desired business growth. For additional information on Market Probe’s new CEM design and proprietary Advocacy metric, visit us on the web at www.marketprobe.com.

A CUSTOMER’S VIEW OF LOYALTY VERSUS A BUSINESS’S VIEW OF LOYALTY In a recent conversation with my banker about their wealth management program, I asked a question on why they focus all of the feedback they receive on the performance of the account executive? Do they really believe that my relationship with the bank and my loyalty to the program can be explained by the rating I give to the account executive? He paused for a moment and said, “NO - but that is the only contact experience we can control so we focus on it.” This little exchange gets to the heart of the issue in CEM design. As paradoxical as this conversation appears, this is not an uncommon situation. Many businesses seek to build long term relationships with customers based on customer life cycle values. By the same token, customers look back to their journey with the brand and decide whether the brand earned SEPTEMBER 2016 | MARKETING NEWS

MarketProbe_Spon_Cntent.indd 2

8/19/16 5:41 PM

marketingmanagement

strategic change

The Fear of No Change Brands must embrace evolution to keep up with consumers who deplore the status quo and are seeking radical solutions

By J. Walker Smith

 jwalker.smith@thefuturescompany.com

his political season has pried open a Pandora’s box of rancor, resentment and unrest. Across the ideological spectrum, people are defying institutions and incumbents in favor of outsiders promising to remake things from the ground up. People want something different. Typically, when the public mood is this agitated it is because of upheaval or disruption, but that is not the case today. Nowadays, people are not worried about change. They are worried about no change. They are worried about stagnancy. People have lost confidence in the future. People are recoiling from, and in some cases revolting against, being trapped in a trajectory of decline from which they feel there is no escape. The only way people see to break out of this trajectory is to pursue a radical shift in course. Pundits have proposed many theories to explain the bitterly disgruntled public mood, and some of these explanations make good points. Cultures are in conflict, as are social classes, income groups, geographies and racial groups. Defiance, not allegiance, is the defining expression of the moment. But every one of these explanations is about how groups are at odds with one another, as if the underlying dynamic is only about one group versus another. While conflict is a big part of the current mood, this is just a manifestation of a deeper current. What is common to every group on every side of every debate is the fear of no change. On one side, there are people whose economic fortunes have deteriorated

or who feel their social standing is threatened, while on the opposite side are people protesting inequality and what they see as a rigged system of systemic prejudice. For both sides, the worry is that the problems they see will persist unchanged. Both sides are concerned that the future means more of the same. One side believes the other’s solutions add to their downward trajectory. Polls by every organization, including Gallup, CBS, The New York Times, The Wall Street Journal, NBC and CNN, find a complete reversal of confidence in the future since the turn of the century. Over this period, robust optimism soured into forlorn pessimism. Gallup’s monthly tracking of the percentage of people satisfied with “the way things are going” is a straight line down from the late 1990s through the end of the recession. After a slight rebound, the percentage of people saying they are satisfied has settled into a trough two to three times lower than the highs a decade and a half ago. People are not resigned to their fates, however. They are stirred up and determined to bend the arc of their trajectories in a more positive, hopeful direction. The annual Heartland Monitor Poll found in mid-2014 that

70% agreed the country needs “major changes,” with another 25% saying “minor changes” are needed. In other words, a vast majority of Americans— all ideologies, races, incomes and groups on every side of every debate— are calling for change. An April 2016 Public Policy Research Institute poll for The Atlantic found that 45% prefer a leader willing to “break the rules.” People want change, even radical

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 22

8/18/16 4:44 PM

strategic change

change. No surprise, then, that this election cycle has been all about change. Expectations about brands have been affected as well. Brands must embrace change, too. Brands content to continue on course will feel stagnant to consumers and thus out of sync with the change people want. This requires a new way of doing business. Brands are immersed in change, but seek continuity. Change is valued as an input but not as an output. This approach

to change is embedded in businessplanning models in which the objective is to temper change and tamp it down. Marketing is like a shock absorber for change, keeping the ride smooth no matter how tumultuous the road. Marketers want change in and continuity out, but people are now thinking differently about what they need. There is a new sensibility afoot. What looks to be turmoil that puts brands at risk is actually an uncommon

marketingmanagement

opportunity for brands to forge fresh competitive advantage. People fear continuity. They fear no change. They want something different. Change is the imperative for brands. m J. Walker Smith is executive chairman of The Futures Co., part of the Kantar Group of WPP, and co-author of four books, including Rocking the Ages. Follow him on Twitter at @jwalkersmith. September 2016 | marketing news

MN Sept 2016 1-56_MS 8.18_4pm.indd 23

8/18/16 4:44 PM

marketingmanagement

customer choice

Marketing ROI in the Public Eye Successful marketing is defined differently in different contexts. To understand its effect, researchers must consider all the factors that influence consumer choice, not just the marketing effort.

By Gordon Wyner



gordon@msi.org

recent story in the national business press reported on research that found physicians were influenced to prescribe branded drugs with small gifts provided by a pharmaceutical company. Gifts, such as $20 meals as part of a promotional event, were associated with increased prescriptions of branded drugs relative to generic alternatives. The study questions the notion that visits by sales representatives are purely educational. The researchers argue that gifts improperly influence medical decisions and inflate drug costs. Industry representatives counter that they don’t “pay to prescribe” and that they educate doctors about the latest treatments and appropriate uses of new medicines. This report raises several issues for marketing practitioners, both on the science of measuring marketing effectiveness and a wide array of non-scientific issues. In some ways, both sides of this issue (medical professionals and pharmaceutical marketers) agree on the facts: marketing works. They differ on whether that is a good or a bad thing. There are also some important questions about application of the scientific techniques, and whether the interpretation of how marketing works is correct. The non-scientific questions relate to the context in which the research is conducted and used. What are the

goals for medical professionals and the constituencies they represent? What are the goals for marketers, brands and consumers? These different groups may never agree on the proper role of marketing, arguably destined to have a somewhat adversarial relationship. However, it behooves each side to understand the perspective of the other, which might lead to some areas of agreement and improved practices and policies. Scientific Research Issues The story generated some lively discussion over the scientific accuracy of the analysis. Were all the proper statistical controls included so that the estimated effect of the promotion was correctly identified? Could the apparent effect of meals be due to selection of doctors to who are responsive to information? Could it be due to other associated aspects of the sales process, e.g. product samples given by sales

representatives, information/education provided and the frequency and quality of sales visits? Perhaps the relationship was merely correlative and not causal. Scientific methods could be used to consider the possibility of alternative explanations for the observed association. Was the impact big or small? Is the gift associated with a difference in prescribing behavior closer to 1%, 10% or 50%? Is the difference a “tiebreaker” for a close decision or a major influencer compared to other drivers of behavior? Is it important or large enough, in aggregate, to make a difference in the overall market? Quite a lot of research has been done on this topic by medical researchers, as well as consultants and marketing researchers. It would be helpful to know, from a synthesis of all prior research, the different influences on prescription behavior, in various treatment contexts, and how they vary at different stages of the prescription process, e.g. information search, awareness, brand salience, consideration and repeat prescription. Findings from the latest study would be especially interesting if they looked at new types of data and variables, framed the question in a new way and yielded unforeseen results. The implications of new research would be clearer if we had background on what is generally known, what’s new and what questions remain to be verified. Is the new study likely to alter the “consensus” of how marketing works? Non-scientific Issues Research of this type, especially when reported in mass media, is embedded in a broader business and policy environment. What struck me as interesting and potentially important were several aspects that are distinct from the veracity of the analysis itself, such as non-scientific factors that effectively surround the scientific issues. One is disclosure: Who did the research? Medical professionals, public health specialists, health economists or marketing professors? Consultants who specialize in understanding the effectiveness of sales and marketing processes? In some circles the

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 24

8/18/16 4:44 PM

customer choice

sponsorship of research automatically raises credibility questions. Disclosure and discussion of these issues enables all parties to acknowledge potential conflicts, state their case and weigh the evidence. Data sources are another factor. Where did the data come from? When marketers conduct mix modeling and other effectiveness analyses, they assemble a wide range of data from multiple sources, including marketing spending inputs and touch points, behavioral and financial outputs and mindset metrics. The integration of these complex data sets is often a challenge to achieve and a significant source of value to marketers who commission the research. Adding variables from different and new domains that play a role in choice behavior (e.g. social media, content publishing and news reports) is a challenge, raising the specter not only of greater complexity and cost, but greater insight. The data set for the study came from a relatively new source: a byproduct of government-sponsored healthcare and prescription drug programs. Perhaps more could be done to merge this source

with traditional sources of marketing and prescribing variables to achieve a more comprehensive and accurate view. This might also help provide an explanation for some inconsistent or anomalous findings, including instances in which some brands were not prescribed more than generics. Another factor is bias. What are the policy questions and “agendas” of the various parties with an interest in this issue? The topics cited as important to policy makers included reducing cost of drugs (to patients), increasing objectivity in prescription recommendations and leveraging government funding and data. There are others, such as the ongoing debates about the proper role of pharmaceutical marketing, the role of government versus private insurance payers and how to encourage product innovation via research and development. Finally, we can consider goals. Marketers’ goals span the full range of financial, customer and market development topics. Some are common to many product categories, while others are specific to pharmaceuticals. Often the

marketingmanagement

goal in ROI work is to use data to help decide on budget level and allocation to achieve optimal profit results. This pharmaceutical market has a complex buying process in which products are promoted to doctors via a range of marketing channels, hospitals and directly to patients. The process is complex, and optimizing across all stages may be extremely difficult. As in all product categories, there are factors beyond the control of marketers that influence consumer behavior and marketers’ options, such as macroeconomic variables, government spending on healthcare and reimbursement rules and competitive offers and marketing tactics. Long-term factors such as the product development pipeline, patent issues and managing a portfolio of products can play a role. The goals of policy advocates and marketers may clash in terms of reducing costs to patients while encouraging continued flow of investment into new formulations. How does marketing pursue business goals, improve affordability and protect against the inherent risks in medications as well as inappropriate uses that can cause harm? Media attention on marketing practices highlights how different points of view are often associated with different scientific practices and different contextual factors. The future promises more and bigger data to consider for marketing and policy questions, and possibly more divergence in criteria for interpretation and action. It would be unfortunate if this data bounty merely enables more selectivity in finding support for established positions rather than more opportunity for discovery. The need for systematic ways of analyzing the data is only going to increase. In this case of marketing ROI, it will be important to answer questions regarding the effect of all the relevant choice drivers, how it varies by market context and who is advocating for the results. m GordoN wyNer is a partner at Millward Brown Analytics and research director at the Marketing Science Institute. September 2016 | marketing news

MN Sept 2016 1-56_MS 8.18_4pm.indd 25

8/18/16 4:44 PM

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 26

8/18/16 4:44 PM

Celeb Threads Behind the business of banking on big-name clothing brands By Zach Brooke

September 2016 | marketing news

MN Sept 2016 1-56_MS 8.18_4pm.indd 27

8/18/16 4:44 PM

Celebrities are subjected to a lot of scrutiny over what they wear. It only seems right that some would want to construct their own outfits. Much like the entertainment industry itself, celebrity fashion is rife with redux, done over and over again. Granted, image licensing is a natural extension of being well-known. It might be harder to find half a dozen famous people who haven’t endorsed anything than lose a round of “Six Degrees of Kevin Bacon.” But clothing lines stand alone among product categories as magnets of celebrity investment. “Fashion is where most celebrities have found their home,” says Michael Stone, chairman of brand licensing agency Beanstalk. Since the 1950s, celebrities have lent their names to wearable brands in the hopes of fomenting desirability among key consumer segments. Just this year, fashion labels have been launched by pop music star Zayn Malik and actress Eva Longoria while clothing lines for existing companies have been created by Courtney Love, Liv Tyler and Antonio Banderas (who is currently pursuing a fashion degree in a bid to become a serious designer). Some of these brands are extremely successful. Like, discovering-an-oil-well successful. The Jessica Simpson Collection, for instance, is widely reported to pull in $1 billion in annual revenue. Jay Z’s line, Rocawear, has topped $700 million. It’s easy to see why celebrity brands have a leg up on competitors. Bringing a celebrity on board is the mother of all marketing shortcuts.

“Celebrity brands enter the market with instant awareness,” says Trevor Wade, global marketing director at brand consulting agency Landor Associates. “They’re usually thousands, if not millions of people, possibly globally, who know who the celebrity is. That’s something really unusual for a new brand. A new brand works really hard to gain awareness.” By leveraging the notoriety and goodwill accumulated by luminaries of the stage, screen and sports world, brands can reach the masses in a fraction of the time needed to build a traditional brand, freeing marketers to concentrate on making the brand a winner. “If you and I decided we were going to go into business, it would take a lot of money and a lot of time to build a brand. You find the right celebrity and you put their name on it and show it to their social media following and on TV, you can get it out there much quicker,” says Bruce Ross, managing partner at global business development and strategy consulting firm Marvin Traub Associates. Yet it’s foolish to assume all threads backed by celebrities are spun into gold. The fashion world is notoriously cutthroat, and its recent past is littered with cautionary tales of doomed celebrity bids for sartorial success. “Let’s not kid ourselves. There are more failed celebrity licenses out there than there are successes,” Stone says. But properly crafted celebrity clothing companies can become reliable moneymakers for all parties in the manufacturing and distribution chain. In some instances,

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 28

8/18/16 4:44 PM

Kelly Ripa’s newly released home collection is marketed to the same demographic she reaches with her morning show, LIVE with Kelly.

legacies are secured by the products rather than the names attached. Getting there isn’t easy. It takes the right celebrity matched to the right designs and sold through the right channels. Celebrity clothing lines are born two ways in about equal frequency, according to both Ross and Stone. They develop either by a celebrity looking to try her hand at running a clothing company, or by an existing company seeking to recruit a famous name as a spokesmodel for its brand. Both create successes and misfires.

Photo: Beanstalk

Quality Matters One drawback to a celebrity clothing brand is the concern about quality relative to “real” designers. Personageproduced apparel needs to meet suitable quality thresholds to achieve some measure of staying power. “There are a lot of celebrities and their management teams who feel that the celebrity’s name can sell anything. That isn’t the case. If you put any celebrity’s name on the label and then you cover it up, and you have no idea who it is, will the consumer buy that? That’s really critical,” Ross says. “A celebrity’s name will inspire a consumer to buy the product once,” says Stone, “but if it falls apart in the washing machine, [consumers] are not buying it a second time. It’s that second purchase, and that third and that fourth and that fifth, that you need and you want.” Among Beanstalk’s many successes was the fashion label for then-child actors Mary-Kate and Ashley Olsen. As Stone recounts, the idea came about when they realized there were no mass-market clothing lines aimed exclusively at tween girls. “The girls were 12 at the time. We met their representatives. They were extremely popular with the tween girl demographic,” he says. “Every little girl in that 6 to 12 age group was worshipping Mary-Kate and Ashley Olsen. It was quite amazing. If you were the parents of boys, you were totally unaware of it.” Stone says a top-notch creative team surrounding the Olsen twins made them remarkably fashionable and provided creditability for the line. When they launched their Mary-Kate and Ashley brand in seven categories (sportswear, swimwear, sleepwear, eyewear, footwear, bags, jewelry and accessories) at Walmart in January 2001, it was an instant success. By the end the year, it was estimated to

account for one-third of their personal revenue of $500 million for the year. Despite being middle schoolers, the pair were intimately involved in the selection of products, with The New York Times calling their powers over creative direction “despotic.” They pushed Walmart to offer pants that stop an inch below the navel for girls between the ages of 4 and 14. Their massive success enabled the twins to launch three additional lines after they grew of the tween girl market, which was invaded by successive waves of imitators such as Hilary Duff and Miley Cyrus.

September 2016 | marketing news

MN Sept 2016 1-56_MS 8.18_4pm.indd 29

8/18/16 4:44 PM

Celebrity product deals come together when stars like Christiano Ronaldo pair with consultants like Bruce Ross to create and promote authentic products sold through complimentary channels.

Along with product quality and authenticity, identifying the right distributor is key to the long-term success of these brands. Fashion Icons

Photos: Bruce ross

Along with quality is the need for authenticity. Consumers need to be able to picture the famous personality wearing the garments. Ross describes authenticity by pointing to a recently inked deal involving global soccer superstar Cristiano Ronaldo and blanket distributor Elite Team. The heavy sports blankets are designed to be used at sporting events as a way to keep warm or as cushioning for the ground. “What kid doesn’t know or want to be Cristiano Ronaldo? This is something that is truly, truly authentic to who he is and who his fan base is,” Ross says.

The Right Fit The third pillar of enduring celebrity brands is finding the channel. Along with product quality and authenticity, identifying the right distributor is key to the long-term success of the brand. Celebrity-branded merchandise needs to be available where a target audience will shop for it. Retailer mismatch is arguably what tripped up Sarah Jessica Parker’s first bid for a clothing company. She teamed up with now-defunct retailer Steve & Barry’s to offer a line of dresses under the label BITTEN starting at $8.98. Parker has blamed the failure of the line on the economic crisis of 2008, but that doesn’t jibe with general consensus. Parker’s character on Sex and the City exuded sophisticated style and expensive taste. At Steve

& Barry’s, BITTEN was being hawked alongside products from actress Amanda Bynes and Chinese basketball star Stephon Marbury. Carrie Bradshaw, this brand was not. “One of the factors was that it just didn’t really gel with [what] people perceived Sarah Jessica Parker’s brand to be. They didn’t associate [her] with affordable, practical stuff,” Wade says. “Just last year, she launched a new shoe line, SJP Collections. It’s much more high-end, and much more unique, and much more along the lines of what Sarah Jessica Parker is known for. I would expect it to do better.”

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 30

8/18/16 4:44 PM

Fashion Fauxpas

For every success story in the world of celebrity fashion, there are celebrity-backed brands that went belly-up. It’s a list that includes some big names, as well as luminaries whose time in the spotlight was a bit more fleeting.

Mandy Moore In 2005, Moore launched Mblem, a line of contemporary knitwear and cashmere aimed at taller women. For a while, it seemed like Moore was doing it right by frequently wearing her line in public. However, when it shut down in 2009 amid a decline in sales, a “humbled” Moore told the press that the apparel was not a true reflection of her ideas.

LL Cool J The right distribution channel is a key part of achieving lasting success as a celebrity fashion brand. Sears invested heavily in the line in 2008 to boost its standing among multicultural shoppers, only to pull the plug seven months later in April 2009.

Chris Kirkpatrick It’s important for the celebrity endorsing a fashion line to be considered fashionable. This erstwhile NSYNC member tried his hand at a collection at the height of his fame under the label FuMan Skeeto. Described as casual and athletic-based clothing for both men and women, the unique designs were sold through Nordstrom, Bloomingdales and Von Maur in the U.S. and Eaton’s in Canada. The line shut down in 2002, the same year NSYNC called it quits and the bombastic threads were no longer considered stylish.

David Hasslehoff The actor and musician launched a line of “super cool, laid-back surfing

The imbalance can work the other way as well, Stone says. “Some celebrities might come to me and say, ‘I want to do a clothing line for teenage boys. I shop at Bergdorf Goodman and Neiman Marcus, so that’s where I want to sell it,’” Stone says. “That’s not where teenage boys buy their clothes. Teenage boys buy their clothes either at the specialty stores like Abercrombie & Fitch, or they buy their clothes at Walmart and Target. And the celebrity would say, ‘I would never want my name at Walmart.’ Well then, nice meeting you.” An example of a good fit between celebrity and retailer is Lauren Conrad and Kohl’s, who have similarly aligned demographics. “When we did the deal at Kohl’s, Lauren was maybe 24 years old, so her fan base was 15 to 25. Maybe a little bit older,” Ross says. “It hit about 27% of the Kohl’s demographic.” Getting all of this right takes a lot of oversight from the celebrity; lines can falter if their chief brand ambassadors aren’t up to the task. Negotiations need to be hashed out before any deal can be finalized. They need to be able to commit to a certain amount of appearances and social media promotion per year for it to be successful. And they need to be involved behind the scenes, as well.

gear” in 2006 under the brand Malibu Dave. Hasslehoff was reportedly inspired by the popularity of a shirt featuring his likeness and bearing the tagline “Don’t Hassle the Hoff,” and told media outlets at the time he felt comparable to Elvis in star power. It was over by the end of the year.

OutKast Celebrity clothing experts stress the need for brands to be seen as an authentic extension of the stars themselves, and advise each A-lister attached to a label to personally inspect each garment for approval. The failed line from hip-hop megastars OutKast is a great example why. Band member Andre 3000 was quoted in the press saying that neither he nor his partner, Big Boi, would ever wear any of the designs.

Lindsay Lohan Landing big-name celebrities to lend their image to a fashion collection can provide an incredible boost to brands—unless that celebrity happens to be perceived negatively. It’s no secret that Lindsay Lohan’s public image has taken a big hit, starting right around the time she launched her 6126 line in 2008 and escalating until it collapsed in 2011. Lohan and her former clothing manufacturer, D.N.A.M., ended up suing each other, with the company claiming its once-well-received brand was dragged down by Lohan’s high-profile personal issues.

September 2016 | marketing news

MN Sept 2016 1-56_MS 8.18_4pm.indd 31

8/18/16 4:44 PM

Whatâ&#x20AC;&#x2122;s in a Name?

Courtesy of Beanstalk

Todayâ&#x20AC;&#x2122;s celebrity brands may showcase the latest styles, but the ideas behind them are nothing new. The rise of mass media in the past century created an assembly line of cultural icons, many of whom would go on to lend their image to consumer goods.

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 32

8/18/16 4:44 PM

Well-known celebrities like Kelly Ripa and the Olsen twins can successfully market products when they find the righ combination of customer demographic, product aesthetic and distribution channel.

“The celebrity has to understand that this is lot of work,” Stone says. “Celebrities have to be involved in the design process. They don’t have to be designers, but they have to know what they like. … They have to have some design direction that they can give to a licensee. Then they have to be prepared to look at every single product as it’s being developed. And in fashion, that’s a lot. Fashion is at least four seasons a year and there are multiple products in each season.” Before he negotiated the deal between Lauren Conrad and Kohl’s, Ross made it a point to visit with Conrad and suss out her level of engagement. “The first time I met Lauren, I walked into a sample room, and she was on her knees pinning garments,” he says. “That’s authentic. She knew what she was doing.”

Photos: Beanstalk

Fashion Flops And even if all that is done correctly, there is still a chance the brand will fail. One driver of the flops is public perception of the celebrity. Athletes lose endorsement deals all the time for questionable behavior, and entertainers are no different. “Some of the clear misses come when the celebrity really has lost favor in the public eye or gotten in trouble for drug use, or had other encounters with the law, or just is known as a rotten person … and loses favor, because then people don’t aspire to be like them, and they don’t want to be associated with them,” Wade says. So how much do celebrities stand to gain from a successful clothing line? Not as much as you’d think, according to Stone. If a celebrity can be quantified as a billion-dollar brand, that means a billion dollars of product is being sold at retail. A billion retail dollars may translate to $500 million of wholesale sales. If the celebrity gets 7% royalty, she’s getting 7% of $500 million, which is $35 million. “A billion dollars in sales is going to generate anywhere from $25 million to $50 million in royalties for a celebrity. And that’s a billion-

dollar brand. That’s hitting the lotto. That’s a wildly successful brand,” says Stone. The implication is that many brands will never see Jessica Simpson Collection-level revenue. Some may even be money losers for the celebrity. Earlier this year, Kanye West tweeted that he was $53 million in personal debt, with the bulk coming from heavy losses suffered in the wake of two major pushes into the fashion world falling flat. But celebrity clothing lines done properly can provide the big name behind the brand with a comfortable income for years to come, even if they are retired from their original source of fame. “If you do it right, this money is coming in every single year. It can be an annuity of sorts. [Former Charlie Angel’s star] Jaclyn Smith has been collecting royalties now for 25 years,” says Stone. “Most people who are buying the Jaclyn Smith brand at Kmart today don’t know that she was a television star. That’s really what you want. She has become a fashion brand. She is no longer a celebrity license. Her celebrity license has morphed into a fullfledged fashion brand.” m

September 2016 | marketing news

MN Sept 2016 1-56_MS 8.18_4pm.indd 33

8/18/16 4:44 PM

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 34

8/18/16 4:44 PM

Mobile payment has bee n considered the future of money for nea rl y a d e c a d e . C a n m a rke te r s f i n a l l y s t art strategizing, or will the technology b e relegated to the c o ffe e - a n d - d o u g h n u t m a rke t i n d e f i n i te l y ?

By Hal Conick

September 2016 | marketing news

MN Sept 2016 1-56_MS 8.18_4pm.indd 35

8/18/16 4:44 PM

The next b i g th pay m ent ing t in e e x pa ch n o ndin logy g th is Am e r anks ican to a mor coff n n ee a ing nd d Ritu al: oug hnut s.

Although the age of mobile payments isn’t here yet, the technology has already paid dividends for the quickservice food market. Dunkin’ Donuts and Starbucks enjoy industry accolades, sales and return customers thanks to the launch of their unique mobile payment apps. The Dunkin’ App, released in 2012, has been downloaded 18 million times and has bolstered the company’s 4.9-million member DD Perks loyalty program, according to Angela Abdallah, manager of digital marketing and innovation at Dunkin’ Donuts. Apple Pay and Visa Checkout are integrated into the app, which she says gives customers the opportunity to make in-store or in-advance purchases, allowing their order to be ready for a quick pick up. “Enhancing convenience for our guests through technology-based loyalty programs has been huge for our guests,” Abdallah says. “Whether mobile payments will be adopted on a wide retail scale is up to the demand of the market. That being said, customers want to be able to get in and out and on with their busy day, so we believe mobile payments’ presence will continue to grow.” It didn’t take much marketing for the app’s success, Abdallah says, because customers want speed, convenience and brand interaction: perks that make their transactions easier. These desires have made mobile payment an “extremely powerful marketing tool,” instead of something

that needs to be pushed to consumers, she says. Tying the rewards program into the app—offering five points toward personalized offers and free beverages for every dollar spent—helps keep new members coming in, Abdallah says. Daniel Horne, associate dean of Providence College’s School of Business, says speed is of the essence in quickservice transactions. Customers don’t want to fumble with cards, money or change; they do want to speed up interactions, earn rewards and move on with their days. The Starbucks app is even bigger than Dunkin’s offering. With more than 17 million active users of its app in 2015 (according to the company’s 2016 shareholder meeting), the app has made news and helped mobile become a focal point of sales. During a Q1 2016 earnings call, Starbucks revealed 21% of its transactions are now via mobile at point of sale or using the Starbucks’ app. Starbucks also gives customers incentive to download and regularly use the app by providing rewards points and the ability to skip the morning line with advance ordering. CEO Howard Schultz has called the company the “undisputed leader in mobile commerce,” and it’s a hard argument to dispute. “Starbucks counts on people going in every day,” Horne says. “At Dunkin’ Donuts, their core group of customers comes in twice a day. It helps to sell an addictive product.”

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 36

8/18/16 4:44 PM

B r e a k d o w n o f d a i ly pay m e n t u s e s i n 2 0 1 5 , p e r Acc e n t u r e :

Cash- 67% Credit card- 50% Every Market can’t Be Like Doughnuts and Coffee

Check- 16%

While mobile payment adoption has been expected in the larger consumer market for years, success seems to be concentrated within the food industry. Accenture Consulting’s 2015 North America Consumer Digital Payments Survey found that, of those who use their mobile device to make payments, 40% use mobile for quick-service food and drink sales, 39% use it at the grocery store, 34% use it at the convenience store and 33% use it at full-service restaurants. Other markets see less mobile traffic than food payments: 31% in retail, 29% for household bills and 27% for telecom services. “There has been a slight but notable shift in usage patterns for consumers who do pay with smartphones. They still typically use them most often for quick service food/drink, grocery and convenience store purchases,” the Accenture report says. For the better part of a decade, market analysts thought that the ubiquity of smartphones would mean more mobile payments. The technology–which is said to have the potential to save both time and money, reduce fraud, and improve customer tracking—would soon become the standard, many experts believed. However, mobile payment use has not yet hit critical mass. Consumers have shown a lack of enthusiasm toward adoption and use of mobile payments. Even in 2016, Horne says mobile payments are a bit of a quixotic idea, akin to flying cars. “We’re just a little ways away from really seeing it,” he says, chuckling as he mentioned a 2007 report that said a third of all U.S. spending would be mobile by 2015. EMarketer, an independent research company, predicted mobile spending would reach $27.05 billion by the end of 2016 after totaling $8.71 billion a year prior. Consumer spending, however, was $11.5 trillion in the second quarter of 2016, according to the U.S. Bureau of Economic Analysis. All told, mobile spending is less than 1% of U.S. spending. “Even this year, all the mobile phone transactions altogether will end up being equivalent to Gap’s sales,” Horne says (fiscal year 2015 net sales from The Gap were $16.2 billion, according to company sales results). “It’s happening much more slowly than anyone, except the people who study it, predicted.” Outside of coffee and doughnuts, mobile payments in the U.S. have seen steady, if unremarkable, growth. In 2012, eMarketer reported mobile phones as a payment

PayPal- 16% Mobile payment apps by brands- 14% Digital currency- 10% Apple Pay- 8% Google Wallet- 8%

device were worth about $640 million, but set the 2016 value expectation at $62.24 billion. Tony Craddock, director general of the U.K.-based Emerging Payments Association (EPA), says a “flurry” of mobile wallet failures has delayed the technological tipping point and dampened consumer excitement. However, Craddock says many apps, such as those from Starbucks and Dunkin’ Donuts, have identified areas of the value chain to capitalize on. If the value proposition is there, customers will use mobile payments, he says. “You have to be quite careful that you have a discrete edge on the competition. Just having a place you can store value on a phone is irrelevant to a consumer,” Craddock says. “They won’t know why you’re doing it.” The mobile malaise could give way to a bright future. A June 2016 report from Mintel found approximately 40% of consumers are already using mobile payment technology in some form, with 56% of millennials ages 22 to 39 now regularly using mobile payments. An additional 18% of consumers would use mobile payments if more stores accepted it, Mintel reports. In all, 28% say they believe the technology is the “payment method of the future.” Bryant Harland, senior technology analyst at Mintel, says services such as Apple Pay, Android Pay and Samsung Pay have led to greater adoption of the technology in the past year (Apple CEO Tim Cook says Apple Pay now accounts for 75% of all contactless payments in the U.S.). Before 2015, branded apps were the only mobile payment apps seeing heavy use; now, Harland says every age group has expressed some interest in mobile payments.

September 2016 | marketing news

MN Sept 2016 1-56_MS 8.18_4pm.indd 37

8/18/16 4:44 PM

“Younger generations have adopted it more so than baby boomers, but there’s still a fair number [of baby boomers] who are interested,” Harland says. “For example, only 9% of people ages 45 to 54 say they’ve actually used mobile payment and like using it, but 23% say they’re interested. A lot of it is getting that 23% from the point of being interested to actually using.” Wh e r e ’ s th e I n f r a s t r u ct u r e ?

Craddock says mobile payment’s tipping point exists at the nexus of an advanced consumer base willing to adopt, a technical infrastructure, the omnipresence of a contactless payment system and the brand power of companies such as Visa, Apple and Samsung. “If you’ve got those magic ingredients, fantastic,” Craddock says. “If you haven’t got one of them—and in the U.S. you don’t have the omnipresent contactless usage—then these are innovations that won’t fulfill their potential yet.” Horne, who has extensively studied consumer payment, says another issue is non-users who are somewhat interested in mobile payments but have no incentive to adopt. They’re inert, he says, in that they’re not paying much attention to alternative payment methods. “The systems they have in place now, especially the card technology, they’re used to it and it works. And it’s fast,” Horne says. “There’s no imperative to change. … Even the really frequent Subway shopper is going, what, once a week? Twice a week?” Horne says, using nationwide retailers as an example. “At that point, you’re starting to lose the incentive to use this thing. That’s the next place it has the potential to go, but if you’re a Macy’s shopper and you’re going once a month, why would you [have a specific app for it]? Your card works.” Consumer interest in payment technology changes when special offers come into play, Horne says, as has

been the case with Starbucks’ and Dunkin’ Donuts’ apps. However, “new for new’s sake is not good enough,” he says, and infrastructure investment from a retailer will likely cost more money than it’s currently worth. “Eventually we will hit a critical mass and people will have to [adopt the technology],” Horne says. “But don’t be on the bleeding edge of this one, because it’s going to be a while. … You need it if a consumer expects it, but consumers don’t expect it yet.”

T h e E v o l u t i o n o f M o b i l e Pay m e n t

Coca-Cola introduces vending machines in Helsinki that allow customers to pay via text message. Merita Bank uses text messaging for bank account transactions.

1 9 9 7

95 million cell phone purchases are made.

2 0 0 3

PayPal is founded.

Mobile phones are used to buy movie tickets via Ericcson & Telnor Mobil.

KLM uses mobile text messaging to allow for travel booking.

Domino’s Pizza allows for textmessage orders.

Mocapay and Mobibucks debut early versions of the mobile wallet.

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 8

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 38

8/18/16 4:45 PM

Security and regulations may also be a concern for consumers and businesses. Mintel’s report shows 18% of customers believe mobile payments are less secure than traditional methods. In addition, Harland says there are a handful of legislators pushing for more regulatory control over the financial technology market. “When that happens and there is more focus of the law on that, the companies that aren’t familiar with what they need to do to be competent could face a lot of fines and a loss of trust,” he says. This confluence of uncertain regulations, security and poor infrastructure, Craddock says, is creating a frustrated payment technology community that has a difficult time innovating. “The consumers are not sufficiently well-educated because the rest of the things meant to be in place aren’t in place,” Craddock says. “As a result it’s actually improving very slowly.” a d o p T i o n o n a g lo B a l s C a l e

The Digital Money Index 2016, a 90-market perspective on “digital money readiness” by Citi and Imperial College London, categorizes both the U.S. and U.K. as “materially ready.” This means both countries are familiar with digital solutions and have regulation-friendly environments, but have yet to create a digital payment ecosystem. The U.K. moved up from the seventh-ranked country in 2015 to the fourth-ranked country this year while the U.S. remained in third place behind Finland and Singapore, respectively. The EPA, Craddock’s group, has goals in the U.K. of establishing the country as “the global hot spot for payments innovation” and advancing payments innovation, per its website. A key for this movement, according to Craddock, has been de-monopolizing the infrastructure by opening up mobile payments to competition and technological advancements. Instead

of government-owned infrastructure, the U.K.’s Payment Systems Regulator watches over the country’s $98 trillion payment-systems industry. “If you haven’t got that and you haven’t got the economic mode—upon which such an infrastructure depends—you will find yourself likely to have a mobile wallet with friction,” Craddock says. “And these things cannot have friction in them.” Friction in the U.S. market comes from the lack of regulation to support and encourage transformation to mobile payments, Craddock says, as well as the absence of an omnipresent contactless infrastructure. The recent U.S. adoption of Europay, MasterCard and Visa (EMV) cards may also slow the process, as consumers are wary of another payment change. The U.S. has “an approach to regulation which is likely to inhibit rather than promote innovation,” Craddock says. A unique approach could help develop U.S. the mobile payment infrastructure. Other countries on the path to widespread adoption have used government-to-person disbursements, for example. In this model, governments use mobile payments to send benefits, such as tax rebates and social security payments, to citizens, thereby putting an infrastructure in place and getting consumers familiar with the technology. Citi predicts that this method will have a global market value of $12 trillion by 2020, just $1 trillion less than B-to-B digital payments and a bit less than the $31.7 trillion customer-to-business flow will be worth in 2020. Mexico is currently looking to implement the government-to-person model, Craddock says. The country has submitted a request for proposal to his organization for a 7-million-card system and mobile phone probate program to be used for distribution of benefits. The EPA invited its members to showcase different forms of technology for the RFP.

Google Wallet is released and the Starbucks App launches.

MFoundry builds the platform that would later be used for the Starbucks Card Mobile App.

Visa introduces a Mini SD payment card for iOS, Blackberry and Android.

2 0 0 9

Consumers can use the Starbucks App for in-store payment.

Apple Pay launches.

Samsung and Android Pay launch, and Starbucks launches mobile pre-payment.

2 0 1 2

2 0 1 4

2 0 1 5

Dunkin’ Donuts launches on-the-go mobile ordering.

2 0 1 6

sePTember 2016 | MARKETING NEWS

MN Sept 2016 1-56_MS 8.18_4pm.indd 39

8/18/16 4:45 PM

“Financial inclusion is a major strategy objective of Mexican government,” Craddock says. “This product—a combination of a mobile phone- and smartphone-based mobile wallet, plus supporting payment card—has the potential to enable improved transactions, reduced fraud, reduced cost and ultimately improved inclusion in the social and economic ecosystem. … It’s a lovely example of the world of the mobile wallet reaching maturity.” China has seen success with the aforementioned customer-to-business model. Xueming Luo, a professor of marketing, strategy and management information systems at the Fox School of Business at Temple University, says there are more than 500 million mobile payment users in China. The China Association of Quality says approximately two-thirds of customers use their smartphones to pay in bricks-and-mortar shops. In comparison, Statista reports the U.S. had approximately 23 million proximity mobile payment transaction users in 2015, with 37.5 million expected in 2016 and 50 million in 2017. A separate Statista report says there will be 207.2 million smartphone users in the U.S. by the end of 2016, making for a much smaller ratio of mobile-payment users in the states.

M o b i l e pay m e n t t e r m s y o u should know M o b i l e W a l l e t: A digital way to carry credit or debit card information on a mobile device. Examples include Google Wallet and Square Wallet. C o n t a ct l e s s : A smart chip technology that relies on “secure microcontroller or equivalent intelligence, internal memory and a small antenna embedded in a device,” which communicates with a reader through a radio frequency interface, according to the Smart Card Alliance. Omnipresent contactless solutions are those that have reached critical mass across a country. E M V : A chip technology, otherwise known as “chip and pin.” EMV stands for Europay, MasterCard, and Visa. It is one of the top standards for debit and credit card payments across the world. F i n T e ch : FinTech, or financial technology, is the industry that uses technology to add efficiency to financial services. M - c o mm e r c e : Commerce conducted on mobile devices.

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 40

8/18/16 4:45 PM

-egg d n a no icke em t t ch s y e s of a e, d th bit l sal i a u f s b o ’ e t s “ It Do w mer poin . u e s g n n th co th i t at ’t til n pt i u e don o t i s cc a r a e . Wh t m e w i u w t o an ons or d ey w t? C i th d il an unt dem t i and ?” dem irst f s e mov

Im p e r at i v e t o C h a n g e

Marketing author Seth Godin famously said, “Products that are remarkable get talked about.” Many people are talking about mobile payments, certainly, but experts say there’s still opportunity for increased adoption. Lara Balazs, Visa’s senior vice president of North American marketing, says Visa is trying to start the conversation with consumers through product and educational marketing. For example, Visa has partnered with Chevron to implement mobile payment at gas stations with videos playing at pumps that show how to use mobile payments. “It’s really important to recognize that product and marketing are one in the same today. Marketing is well beyond advertising and communications: That product itself is marketing. How your brand shows up in that experience is marketing,” Balazs says. Visa’s incentives to innovate and adopt mobile payment solutions come from competition among financial institutions. Large companies have an advantage in the market due to trust and name recognition, Mintel’s Harland says, but coming to market early with a useful product can make a big difference to the success of an offering and how customers adopt. This has driven the company to build products they believe consumers will use, whether there are initial incentives or not, Balazs says. “There’s always the ability to drive a behavior [by] putting an incentive in the marketplace. That’s your classic trail strategy,” she says. “That’s certainly something you can use just to build [a customer base], but you’re never going to get repeat usage if it isn’t a wonderful experience.” Most marketing in mobile technology focuses on convenience, Harland says, but convenience still lacks in shops across the country. However, online, delivery and on-the-go services have been capitalizing on the consumer desire to make fast, easy and secure mobile purchases.

Marketing, according to Craddock, is a “cog in the wheel.” It can’t compensate for a weak customer proposition or poor customer experience; those have to be in place. However, fulfilling a great promise to the customer and delivering on that promise can make for a seismic shift in consumer adoption of a product. “If you haven’t got those two things, no amount of marketing can make any difference at all,” Craddock says. The Power of Millennials

There’s no doubt the country will be paying differently once millennials have more spending power, Horne says. “They’re used to doing stuff on their phone,” he says. “It’s almost like it’s automated to them. That’s how payments will be once they start. The reality with any new technology like this is the people who are most resistant to it eventually stop spending as much money.” Millennials’ willingness to spend money via smartphones will likely build trust in mobile purchases, eliminating the lack of consumer confidence in security as one of m-commerce’s biggest worries, Harland says. “With mobile payment being used in stores and potentially online later on, this hesitance will dissipate and it will help retailers and other businesses do a lot with mobile they couldn’t do before because they couldn’t keep mobile users throughout the entire purchase process, and that’s going to change,” Harland says. Although hopes are high, the mobile payment infrastructure in the U.S. is largely nonexistent. Until these issues are solved and a mobile payment ecosystem is created, the technology may languish as the “future of payments” while the present money is spent in other ways. “Who is going to build it?” Horne says of the infrastructure. “It’s a bit of a chicken and egg thing. Do we build the system to accept it at the point of sale, or do we wait until consumers demand it? Consumers don’t demand it until they want it. Who moves first?” m

September 2016 | marketing news

MN Sept 2016 1-56_MS 8.18_4pm.indd 41

8/18/16 4:45 PM

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 42

8/18/16 4:45 PM

customer service

knowledgebase

10 Minutes With

Joseph Ansanelli CEO of Gladly By Sarah Steimer | Staff Writer

 ssteimer@ama.org

ustomer service has maintained the same, siloed communications with consumers for years. Two calls to a customer service line can mean reiterating the same story twice. An e-mail to a company might result in an automated response that includes a promise for contact and a case number to keep on file. It can sometimes feel as though the customer is doing all of the leg work, provided it’s done on the company’s preferred platforms. Now imagine a world where the customer can contact customer service on a variety of platforms, and they remember questions from a previous interaction. The company, in turn, uses this information to provide better service to customers and refine its marketing. This is the goal of Gladly, a customer-service software that is based on the cloud and allows companies to recognize customers and communicate on a range of platforms. Gladly was co-founded by Joseph Ansanelli, Michael Wolfe and Dirk Kessler with the goal of changing the way firms interact with customers. We spoke with Ansanelli, who serves as Gladly’s CEO, about the company’s plans, customer expectations and the benefits of flexible customer support.

September 2016 | marketing news

MN Sept 2016 1-56_MS 8.18_4pm.indd 43

8/18/16 4:45 PM

knowledgebase

customer service

It’s an expectation that companies know who the customer is, and that both the company and the consumer can communicate independent of any channels.

What do people expect from their customer service experience?

They want to be treated as a customer and not as a case or a ticket. I don’t think people really appreciate agents saying, “Call back

and remember your case number.” They have an expectation today that companies understand who they are and understand the relationship they have. They expect they don’t have to be the one educating the company or the people in the customer service team about who they are. They don’t

want to say, “I spoke to so-and-so yesterday and here’s the conversation I had with him.” The company should know all that. They expect to be able to communicate across any and all channels. They should be able to send an e-mail and call, and the person on the other end of the phone should have access to that e-mail. It’s an expectation that companies know who the consumer is and that both the company and the consumer can communicate independent of any channels.

Does the burden on the consumer keep them from reaching out to customer service at times?

There are definitely some companies that you enjoy and have a phenomenal experience with because they’ve actually done some of this work,

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 44

8/18/16 4:45 PM

MN_Sept2016_full_pgs.indd 13

8/19/16 12:32 PM

knowledgebase

customer service

usually by building their own systems. A lot of consumers hesitate or go into a customer service experience assuming the worst. That’s probably company- and brand-specific, that wariness of calling or contacting a company for customer service. And it shouldn’t be.

What do you expect the customer experience to be like when a company uses Gladly?

To paraphrase Maya Angelou, it’s really about how you make people feel. It’s about the feelings that you create with your end-user customers: feelings of affinity, trust and empathy. Those feelings get created when agents, the people on the front lines, have the capability and tools to have a very empathetic, knowledgeable conversations with you as a consumer.

As soon as an agent can have an empathetic conversation—for example, “I can see you sent an e-mail yesterday about this, is that what you’re calling about?”—that would be a legendary experience. With Gladly, these are the things we enable. That creates that feeling of customer affinity. Having that sense of empathy from an agent, where they actually know who you are, it just makes people feel cared for. That can dramatically change the relationship customers have with their companies.

Does any specific type of company benefit from using Gladly?

There are certain types of companies that appreciate it more. It can help almost any B-to-C company. It’s usually the ones where they really understand and think about the lifetime

value of their customers and know that it’s far easier to grow your top line and revenue by having a really happy and satisfied customer base that actually transacts with you frequently because they have a good relationship with you. For us, those are companies like retailers, people in the hospitality and travel and leisure space where their relationship with the consumer is really important, [and] financial services, where you have a high-value transaction relationship with the end-user consumer: those have been the sectors where there have been more people who get it. There’s no reason why the utility company shouldn’t provide great service, but because it’s a little more of a monopoly, those types are not always necessarily as focused on growing the lifetime value.

Can companies that use Gladly use it as a marketing tool?

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 46

8/18/16 4:45 PM

MN_Sept2016_full_pgs.indd 15

8/19/16 12:35 PM

knowledgebase

customer service

Having that sense of empathy from an agent, where they actually know who you are, makes people feel cared for. That can dramatically change the relationship.

Service can be and should be a competitive advantage for a company. The more personalized you

make your service, the more the people who interact with you … appreciate the service. When [consumers]

feel like they’re going to get taken care of, service is a competitive advantage. The way to become the competitive advantage is to be very open with your customers, meaning that you let them contact you however they want to. That’s a starting point. When you say, “You want to use Facebook Messenger? No problem. You want to use Twitter? No problem. You want us to SMS? No problem. If you want to still call us? No problem.” That alone is a competitive advantage. Then you empower those agents who are on the front line and turn them from champions of your brand into heroes with a customer. From a marketing standpoint, you should have a really highly engaged and satisfied customer. Just executing on that, word will spread of you as a brand.

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 48

8/18/16 4:45 PM

MN_Sept2016_full_pgs.indd 17

8/19/16 12:38 PM

knowledgebase

customer service

What has the feedback been like?

Generally, folks who have been planning to do those first projects tell us that they really like this customercentered view for the agent, so the agent can—in five seconds or less—understand who the customer is and the state of the conversation that’s happening with that customer. The second thing is they can communicate across any and all channels with the customer, and the customer can do the same back in one system so that you have that unified lifetime of the conversation with the customer. The third piece is seeing a single history of all the communication. When you communicate with your friends you see the whole history of your communication. It may have been a week since you last spoke

with the person, but you still see the whole history of the messaging.

Has there been any hesitance to moving this communication onto the cloud?

I was more worried about that when we started. People are realizing that to get the latest and greatest products and platforms that they have to migrate to the cloud because that’s where all the innovation is happening in technology. Every company is becoming a cloud company in some fashion. They’re leveraging so many cloud products today that it hasn’t really been an issue. I’ve been pleasantly surprised by that. When you think about all the data that’s inside of a system like Gladly, where you have all these customer

questions and answers, one of the big things we’re trying to figure out is how to turn the contact center, not only into a place where you have to have operational metrics, but a place where there is customer insight, where you can actually mine the data to understand the voice of the customer and understand the questions they’re asking, the answers we’re giving and [you can] unlock that data for the rest of the company to change the way they do business.

Has this been one of the ways you’ve marketed Gladly, as a way to better understand the customer?

Absolutely. The idea of understanding the voice of the customer is incredibly valuable. m

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 50

8/18/16 4:45 PM

MN_Sept2016_full_pgs.indd 19

8/19/16 12:40 PM

amacareers

expert advice

Why You Should ‘Backdoor’ Your Résumé After Applying For A Job It can be frustrating to send your résumé out into the online world with no real context on who is looking for it. Here are a few steps you can take to make sure your resume gets in front of the right person. By Kurt Kirton | contributor

 kwkirton@yahoo.com

pplying for work online has vastly improved the ease with which you can apply for jobs, while at the same time making it harder to distinguish yourself when every person with an internet connection has the same access to job postings. There is a way to get a leg up on other applicants, however, if you’re willing to hunt for it. With a little time and detective work, you can give yourself an advantage over nearly everyone else who applied. Here’s how:

Most people want to help, but you should make it easy for them. Be polite but specific with your request. For example, I asked a former coworker to put in a good word for me at his current company and forward my résumé and cover letter after I applied online. This is the standard backdoor message I work from: Dear ____, After having seen the posting for the ____ position you are seeking to fill, I just applied via ____ (method). In addition, I wanted to make sure my résumé and

Avoid Calling Use LinkedIn to find the hiring manager for the position, and e-mail a brief note with your résumé and cover letter attached. Sometimes this is a great bypass of the human resources screening process. Sometimes it’s a good double hit, showing initiative, interest and thoroughness if, for instance, it’s a small company or division with no in-house HR department. As you peruse LinkedIn, if you see you have a close colleague who works at the company, you can use them as a backdoor entrance. If you don’t know anyone, look to see if the person you choose has worked anywhere you have. That makes a great introduction in the beginning of your e-mail. If you can’t find anyone who might be at a hiring manager level, send it to someone in the same department as the job opening.

cover letter are seen by someone in the ____ department. If you are not the hiring manager for this position, I would appreciate it if you would forward this e-mail to that person. Thank you very much for your time and help. Sincerely, (name)

Then, make the e-mail subject line something like, “Hi (recipient’s name); could you help?” Most people like to help— especially when it doesn’t take too much time or is not that difficult. Including the recipient’s first name will help avoid any suspicions that your e-mail is spam. Find an E-mail, No Matter What When you can’t find anyone to e-mail, there’s no general e-mail address listed on the website and you don’t want to call, there’s still another option. If the

company has a contact page with fields to fill in, do this: With most browsers, right-click, and choose “View Page Source” to reveal the html code. Then, press Ctrl-F to search for “@.” This may show you the general e-mail address. Then you can e-mail your backdoor message with attachments. Sometimes, as with Craigslist job postings, you won’t know the company

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 52

8/18/16 4:45 PM

expert advice

at all. In this case, don’t fret about not being able to use the backdoor method. Just use your spreadsheet to keep up with the e-mail address you applied to, and e-mail your follow-up to the same address. If you’re concerned about the legality of these methods, know that after checking with several HR professionals, I found that most companies do have

a reporting stipulation that requires them to have accurate demographics of those who apply for positions, and HR usually expects applicants to come through them. Although some companies have stringent policies regarding what should happen when a manager or employee receives your résumé, you should absolutely use a backdoor method after

amacareers

you apply the traditional way. As long as you are also applying through the “front door,” there shouldn’t be any cause for concern about fairness or regulations. If you are fortunate enough to get your résumé in front of the hiring manager for a position you want, it could only be to your benefit. If the hiring manager is impressed and wants to hire you, HR is unlikely to hinder the process. m September 2016 | marketing news

MN Sept 2016 1-56_MS 8.18_4pm.indd 53

8/18/16 4:45 PM

advertisers’index

ADVERTISERS’ INDEX Quick source for contacting the suppliers in the September 2016 issue of Marketing News. 2016 AMA Annual Conference / Answers in Action............................................... p. 20 ttp://www.AMA.org/annual URL: h ab+c Creative Intelligence . ........................................................... p. 5 Ph. 1-888-848-1552 URL: http://www.a-b-c.com AMA Member-Only Webcasts . ................................................................ p. 46 Email: cbartone@ama.org URL: h ttp://www.AMA.org/mow

Burke Institute . ................................ inside front cover Ph. 1-800-543-8635 URL: http://www.BurkeInstitute.com Customer Lifecycle ............................................... p. 6 Ph. 630-412-8989 Email: info@customerlifecycle.us URL: http://www.customerlifecycle.us Edelman ................................................................... p. 49 URL: http://www.Edelman.us Expedia, Inc. / Hotwire, Inc. ................................. p. 48

AMA’s Face to Face Training Series ................................. inside back cover URL: h ttp://www.AMA.org/FacetoFace

FocusVision .................................................. back cover

AMA Job Board ........................................................ p. 51 URL: j obs.ama.org

Get In Touch! ............................................................ p. 47

AMA’s Marketing Resource Directory .................................................................... p. 4 Ph. 1-888-777-6578 URL: m arketingresourcedirectory.ama.org AMA Webcasts .......................................................... p. 8 Email: sales@ama.org URL: h ttp://www.AMA.org/webcasts AMA Whitepapers .................................................. p. 44 Email: sales@ama.org URL: h ttp://www.AMA.org/whitepaper

URL: http://www.focusvision.com/quantqual

URL: http://www.GetInTouchAdvertising.com Market Probe ............................................................ p. 21 URL: http://www.marketprobe.com Recollective ............................................................. p. 45 Ph. 1-888-932-2299 URL: http://www.recollectiive.com Symantec ................................................................. p. 50 Email: JOBADS@symantec.com URL: http://www.symantec.com

American Marketing Association ................................................................ p. 9 URL: h ttp://www.AMA.org

University of Georgia —

Ascribe ....................................................................... p. 7 Ph. 513-241-9112 ext. 55 ttp://www.GoAscribe.com URL: h

Principles of Mobile Market Research ................... p. 3

Principles of Market Research / Principles of Pharmaceutical Market Research / Ph. 1-800-811-6640 URL: http://www.marketresearchcourses.org

Support Marketing News Advertisers. They Support Your Association. 54

MARKETING NEWS | SEPTEMBER 2016

Sept_Ad_Index.indd 2

8/19/16 7:15 PM

Awards

amacommunity

2016 Chapter Volunteer of the Year Award

ennis Devlin has been named the AMA’s 2016 Ric Sweeney Chapter Volunteer of the Year. The annual award recognizes chapter volunteers whose contributions have added significantly to the AMA’s goals. Members who are designated Chapter Volunteers of the Year receive honorary lifetime AMA memberships and are recognized in front of their peers at the annual Chapter Leadership Summit. In its 10th year being awarded, the Chapter Volunteer of the Year Award was renamed after Ric Sweeney, former AMA Board Chairperson and creator of the award, whose nearly two decades of service to the AMA embody the values of the award and the organization.

This year’s recipient, Dennis Devlin, has served as an AMA member and volunteer for more than 30 years. Most recently, he served as member of the Cincinnati Chapter Board of Directors, where Sweeney served as a chapter board member himself for six years. Prior to joining the Cincinnati Chapter Board of Directors, Devlin led the chapter’s Marketing Research Special Interest Group for three years. As President Elect, he led the effort to launch their CMO Roundtable, a partnership program with the Cincinnati USA Regional Chamber. Devlin served as president of the Cincinnati Chapter Board

of Directors in 2013 and 2014. Under his leadership, the chapter earned Chapter Excellence Awards for Leadership Excellence and Membership Excellence.

2016 Nonprofit Marketer of the Year Award

he AMA and the AMAF named Nicole Dorrler, vice president of marketing at Truth Initiative, as recipient of the 2016 Nonprofit Marketer of the Year Award. The award, which recognizes one nonprofit marketer annually for their extraordinary leadership and achievement in the field of nonprofit marketing, is the highest honor bestowed by the AMA/ AMAF on nonprofit marketing professionals. Dorrler received her award during the annual AMA Nonprofit Marketing Conference in Washington, DC, this past July. “Dorrler is leading the way for nonprofit marketers. She has made a significant, measurable impact in the industry and has propelled the Truth Initiative and its Truth campaign to new growth

and success,” says Russ Klein, CEO of the AMA. “Dorrler has not only risen to the challenge with the utmost professionalism but her achievements have helped revolutionize the way we plan and execute marketing in nonprofit organizations.” Truth Initiative is a national public health organization that is inspiring tobacco-free lives. The organization funds and directs Truth, the most successful and one of the largest national youth tobacco prevention campaigns. As vice president of marketing, Dorrler’s responsibilities include overseeing partner agencies and managing media, advertising, digital and grassroots marketing. She also helps drive the strategy, positioning, messaging and creative for the campaign.

September 2016 | marketing news

MN Sept 2016 1-56_MS 8.18_4pm.indd 55

8/18/16 4:45 PM

backpage

Executive Insights

“The cross-functional nature of analysis allows all of us to align on what drives the business.”

What effect have you seen when data isn’t synthesized and integrated?

Background

InsightsCentral, Inc. recently spoke with Chris Grabarkiewicz, director of consumer insights & marketing analytics at Luxottica Retail North America, for her thoughts on overcoming this challenge. Luxottica designs, manufactures and distributes fashion, luxury and sports eyewear. InsightsCentral develops the strategic skills of internal, corporate insights functions through the use of performanceenhancing methods to advance better business decisions.

How did you and your insights team provide clarity to the glut of data and information?

Our transformation has focused on changing three key items:

1. Replacing a traditional market mix modeling approach with a holistic business mix model. 2. Linking brand tracking and consumers’ perceptions to business results. 3. Linking creative development to business outcomes. In the past, we used several different tools to help executives understand what mattered. Each of the tools delivered an answer, but the answers were disconnected and we weren’t

One of the AMA’s Seven Big Problems facing marketing leaders is “Generating and Using Insights to Shape Marketing Practice.” For many companies, a roadblock to successfully generating insights is synthesizing traditional marketing research information with Big Data.

We all have been at meetings where data from different sources, such as survey results, social media and sales ,was reported without any attempt to weave the information together. These types of presentations can leave decision makers feeling confused and unsure about making a decision. The result is often that every person attending the meeting takes away their own version of the story. Frequently, “gut instinct” rules the day.

sure to what degree different activities influenced each other. Additionally, there wasn’t belief from leadership or cross-functional teams about what data truly mattered. We adopted a new business mix modeling approach. It included traditional marketing and media inputs, labor, training, weather data, consumer confidence measures, competitive activities and traditional consumer insights measures, such as brand equity tracking, copy testing and customer satisfaction.

What effect has this new modeling mix had?

We learned a great deal by integrating all of these sources of data, particularly which items were best at driving business and the ROI of each. The cross-functional nature of the analysis also allowed all of us to align on what drives the business. It has added significantly to our brand profit as our marketing placement and execution improved substantially. The integrated analysis also helped the retail brands understand which brand equity and advertising metrics matter and how to move them. As a result, we work more efficiently. There is little debate about which metrics matter and everyone works off the same playbook. m

marketing news | September 2016

MN Sept 2016 1-56_MS 8.18_4pm.indd 56

8/18/16 4:45 PM

MN_Sept2016_full_pgs.indd 21

8/19/16 12:42 PM

MN_Sept2016_full_pgs.indd 22

8/19/16 12:46 PM