Aligned Marketing Blog

Many people are more comfortable with ideas than they are with data. That's too bad because without good data it's hard to get the funding you'll need to implement your good ideas. The business world is driven by facts, sales projections and generating a return on the investment.

Granted many of the projections are nothing more than educated guesses tied up in your ability to sell and gain a consensus. That doesn't make them useless or wrong, it just makes them, as stated, a guess.

As a creative type person, as a marketer, I had to acquire my taste for numbers. What I found was that the "what-if" scenarios appealed to my imagination. Where as a numbers geek would embroil themselves in the data looking for the one, single, truth, I knew no such single truth existed but found joy in exploring what was possible.

I knew that we could make a reasonable projection based on a certain set of variables and that work would exhaust our capabilities. Working beyond that point is wasted energy but, at times, the politically-wise thing to do.

Ours was a search for excellence, not truth. If you don't believe me review your last ten-years January sales projections. More than likely you'll find half of them are significantly wrong, missed guesses.

If you struggle with data, with facts, then try framing the process in terms your imagination can embrace. Try searching for "possible outcomes" instead of "the number."

Thought of and shared the right way numbers can be fun. If you don't believe me then watch Hans Rosling's amazing presentation about myths and predispositions surrounding the third world.


Steve

On Monday we talked about golf and related it to your business: You have to play the ball where it lies in the same way you have to make business decisions based on today’s realities. Wishing for a better lie is silly.

Our economy is in the rough and, while most are slashing expenses, people and marketing budgets, some leaders are using this pre-recovery time to increase investments in marketing. In a recent BtoB Magazine survey, “2010 Outlook: Marketing Priorities and Plans Survey results, 11-16-09, 71% of those surveyed are investing more in their website in 2010 than they did in 2009.

In a separate study from Bain covering over 2500 companies, about 24 percent more firms were shown to “move from the back of the pack to the front of the pack,” with regards to sales and profits, during recessions than do during non-recessionary times. Do significant marketing investments during a recession make sense?

It did for Southwest Airlines and Wal-Mart (see Monday’s post). Both were noted in the Bain study for their vision and results but other companies have made smart pre-recovery investments as well. For example, the “Intel Inside” campaign was launched during a recession in the 1990’s. Before that, Proctor & Gamble invested heavily in Ivory Soap during the Great Depression and achieved spectacular results that lasted for decades. What is it that Southwest, Wal-Mart, Intel, Proctor & Gamble, great companies all, knows that other companies seem to miss?

It’s this, marketing investments that are consistent and aligned with your customers’ needs and aspirations are always wise investments. Now is the time to assess your customers’ needs, as well as your own strengths and goals, and invest.

Slashing marketing to survive in 2008-2009 may have been necessary but now you have to play the ball were it lies. What’s your plan for 2010 and 2011? Do you know what your competitors are doing? Who was weakened by the recession and who became stronger is important marketing intelligence. As the dust settles, where do you stand or do you even know?

A return to the pre-recession competitive landscape in 2010 is unlikely. The mammoth adjustments necessary for survival changed the playing field. You and your competitors were not affected equally and new options, most likely driven by technology and the web, are available to your customers and prospects. In every segment of the economy customers are beginning to look at products and services through a new, post-recession lens. How visible are you?

John Donahoe is CEO of eBay and to summarize what he said,

“It’s not about battening down the hatches and waiting for the storm to pass anymore than it is about betting big in the vague hope your hunches will pay off. Instead, it’s about executing what you do well better than ever before, making improvements, seeing the potential in new opportunities and, most importantly, having the vision to see beyond the immediate situation and taking action…“There is more market-share shift in turbulent times than there is in good times — more of an opportunity for a strong company to gain ground.”

Donahoe is right. You can’t stand over the ball forever. At some point you have to pick a club, commit to the shot and make an aggressive best swing. Are you going to play another round defensively, trying not to shoot over 100? Or are you going to play aggressively in hopes of breaking 90? It’s your choice. Take the shot.

Golf is my favorite game. You learn a lot about yourself and your friends on the course. There are a few life-lessons to be had as well. One of my favorites is, “You have to play the ball where it lies.”

Right now our economy is in the rough. That’s the bad news. The good news is there’s more golf to play and you have a business to run.

The recession has no doubt taught you a lot about your core competencies, operational inefficiencies, customer relationships and people. You probably have more control over your budgets, cash flow, pricing and product portfolio as well. Those are all positives. What now?

Recessions end and, while we’re not out of the woods yet, there are several indicators pointing to a brighter future. However minor, most businesses are shifting from cost cutting to planning and investment decisions. How are you approaching your marketing investments? How aggressive should your next shot be?

Looking back may help us look forward. Every company adjusts expenses to revenues but successful companies never stop investing in critical competencies, be they product development, infrastructure or general marketing, most of which is digital now.

The recession of 2001, which was brought on by 9/11, was studied by Bain & Company. They evaluated 2500+ companies and concluded:

About 24 percent more firms moved from the back of the pack to the front in the 2001 recession compared with the subsequent period of economic calm (in terms of) net profit margins and sales growth.

Southwest Airlines is a good example. With a strong balance sheet and some cost advantages, Southwest grew sales and market share, while the other airlines, their larger competitors, cut personnel and capacity, Southwest grew and took share by increasing their marketing investments, lowering fares and retaining all their employees, a move that kept their labor force motivated and and loyal for years.

The results were astounding. Southwest increased its fleet 51 percent in the following six years and is still the only airline to be profitable since its inception. Wal-Mart offers another example of investing during a recession. They used the 2001 recession to launch their “Everyday Day Low Prices” slogan. It proved was such as success that they’re doing something similar today, you could say it's their recession-based marketing strategy. 

This time Wal-Mart is using the current downturn, as well as the demise of Circuit City, to enter consumer electronics and, potentially, challenge Best Buy. In addition, they are remodeling their stores to make them more open and consumer-friendly, more like Target’s. These are big investments. Does Wal-Mart know something most companies don’t? Does their success allow them to do what others can’t? Or are they successful because they had the knowledge and courage to act on their goals and aspirations while their competitors responded to their fears?

On Wednesday's post, The Shot, we’ll discuss tactics.

Steve

Social Media To-Do List

You may be confused about social media (SM), many business people are. There are literally hundreds of social media sites and sorting through them seems impossible. There’s Twitter, Facebook, YouTube, FriendFeed, LinkedIn, etc., and then there’s the ones with unusual names,  StumbleUpon or Posterous, to name two. No doubt, there are too many for a non-professional to evaluate and, since most SM sites are awash with non-customers for most businesses, why would anyone in a traditional marketing role take the time to review all those communities. So what should marketing professionals do about social media? Here’s my take:

1. Target your activities:

Information overload saps efficiency and limits productivity, that’s why many of us hate email. Take the time to investigate the top 25-50 social media sites and see if your company, your products, your competitors or your key industry words are prominent. Do a generic Google search for the same terms (company, product, competitors and you) just to see if you’ve missed anything. If any of the social media networks you evaluate have activity around your company, products or competitors, then join and monitor those networks. This approach let’s you focus on what’s important and weed out most of the “social media noise.”

2. Know who is talking about your brand:

You need to know who’s talking about you online and social media is the perfect mechanism. There are companies, such as Aligned Marketing (yes, that’s a shameless plug), that can break down the demographics of the people talking about your brand by gender, age and geography. If the demographics match your target audience then, again, you’ll need to pay close attention to those conversations and be ready to engage quickly, which brings us to the next point.

3. Engage the conversation:

It’s better to be proactive than it is to be reactive. Joining the online conversation allows you to speak directly with your target audience, your customers and your detractors. You can monitor the conversation. You can’t manage the conversation, per se, but you can insert your own perspective and, hopefully, influence the direction of the conversation. Engaging gives you the opportunity to react, share your side and, perhaps, steer a negative comment into a customer service success story before it becomes a trend.

4. Reporting:

Use your social media research and the available tools to capture relevant information. Organize that information and use traditional reporting tools, such as charts, graphs and PowerPoint, to combine both qualitative and quantitative analysis, to inform your organization. As the data increases you may find that even your most ardent critics will realize that spending a portion of your marketing budget to monitor online conversations is wise.

I may be wrong but, like it or not, I don’t think this stuff is going away anytime soon.

Steve

• Imagine it's 1981 - your company is spending tons of money on couriers and shipping documents, and one of your employees tries to introduce you to the fax machine...
• Imagine it's 1984 - the accounting department is using pen and paper for accounting, and one of your employees brings in a personal computer and says this can help us run our business better...
• Imagine it's 1992 – a person comes in and says he thinks this new thing called email could improve communication and efficiencies...
• Imagine it's 1994 – a young employee tries to convince you that the company will sell more if you build  a website on this new thing called the world wide web...
• Imagine it's today and an employee walks into your office and says…

Steve

Source: 1to1weekly (online marketing newsletter)
Issue: May 4, 2009
Byline: Elizabeth Giagowski

Sears, an iconic American brand that has adapted successfully to changing customer needs many times in its 106-year history, is now transforming the contact center experience, for its contact agents as well as its customers, according to Brian Carey, deputy vice president of the Customer Care Network at Sears Holding Company.

Sears' Customer Care Network is made up of 14 call centers and 6,000 contact agents that serve nearly all of Sears' sales, support, and customer service functions. It handles 1.75 million contacts per year across eight lines of business including parts, appliance repair, and customer service. Each line of business used to be its own silo with its own database and systems. Customers were required to call specific numbers for specific purposes and couldn't be transferred to other departments. Carey's new objective is to resolve any customer's issue at any touchpoint.

"Our goal as a company is to be a trusted advisor in the home," Carey says. "We've got to give them 'Sears' wherever they touch us. We want to enable agents to break out of their silos to perform functions defined by the customer. We want to do business on their terms. The customer isn't making the product or service distinction that we are."

Sears is working with Sword Ciboodle [Marketing must not have been consulted when they named the company.] to create a single system that gives agents access to customer data, including purchase and contact history, in a single customer view. Also, the system can route calls based on skills and capabilities and suggest relevant cross-sell and upsell opportunities based on predictive models. Customer expectations are changing, Carey says. As a result, the new measures of success in the contact center are engagement, interaction, and retention. "The beauty of the contact center is that we see the whole customer experience," he says.

The implementation is rolling out in three phases. During the first phase, service levels at Sears' Texas-based Teleservice Outbound operation has seen efficiency gains that include a 14 percent reduction in idle time, 10 percent increase in agent connects per hour, 9 percent reduction in overall agent call handle time, and 13 percent reduction in talk time. "We look at efficiency for trends and target opportunities," he says. "But we're really after customer satisfaction, repeat calls, and first-call resolution." The cross-sell and upsell tools may drive revenue, but it's important to consider the "relationship and dialog, and see what else we can do for that customer," Carey says.

Employee empowerment fuels success: Carey knows that no technology implementation will work without internal support. "Part of the change is making sure everyone is receptive and enthusiastic about it," he says. To that end, he is leading a culture change among contact center employees.

Eight months ago he launched the Commitment to Care program, a cultural program that includes training, communication, active commitment, rewards and recognition for associates. It teaches agents to build empathy with customers by listening and expressing genuine care and concern. Agents are incentivized [sic] based on first-call resolution and customer satisfaction. "Nothing is more important than thinking, 'What's in it for the customer?'" he says. "The program is entirely centered around our passion to effectively serve our customers, and treat them as a valued friend."

Carey also created a Blue Ribbon customer care group -- agents who are empowered to do anything to satisfy a customer or fix a customer issue, including refunds and item replacement. "Agent ownership of the issue goes a long way," he says. "There is pride moving through the organization and agent satisfaction increases as they realize their main purpose is to help the customer."

He notes that usually the angriest customers reach the Blue Ribbon Group, and 88 percent of their issues are resolved positively, which builds customer loyalty. In addition, call volume in the repair call center is down 15 percent, but sales are up. "It's all related to putting the customer first," Carey says.

Steve

The eyes have it:
Several of my blog entries have mentioned that reading is out and viewing is in. That’s not surprising since human beings are visual creatures. Approximately 65% of the information we gather comes through our eyes. Our ability to accurately process information declines considerably when we use our other senses. A steak is a steak to my untrained nose, but my entire being prepares for action at the site of a thick Filet Mignon.

Some seeing is better than other seeing. Fewer and fewer people want to gather information through the oftentimes-dry act of reading. More and more people want to gather information through the visually engaging experience of video. They want to be told a story. They want to be given both the information and its contextual meaning in an engaging and entertaining way. For most, movies are preferable to books.

Give the people what they want where they want it:
This is where (online) video excels and the numbers back it up. According to a survey printed on May 12 in eMarketer Daily, 87% of respondents said they will spend more for online video in 2009 than they did in 2008. An astonishing number.


Similarly, MAGNA Global, a division of Interpublic Group, forecast in April 2009 that online video ad revenues in the US will exceed $1.0 billion in 2011.

In my May 5 blog I summarized the Chief Marketing Officer Council’s 2009 Outlook Report on marketing investments for the coming year.

In the table below, the shift from offline to online investments was quantified from an agency perspective. Here are the highlights from my perspective:

• 87.5% of traditional ad agencies expect to increase digital investments, 10.4% by more than 30%. We are witnessing a huge shift in marketing investments and action is required.
• Similarly, about 15% of digital agencies and digital vendor/service providers are increasing their digital marketing investment by more than 30%. That’s not unexpected since they’re in the digital business.
• Corporate Brands are making the least significant shifts in investment. That probably reflects more on their (conservative) decision-making processes than on their lack of awareness. The reason for the lag doesn’t really matter; this is a red flag.
• Lumping investment increases into one “1%-29%” category is a mistake. The category is just too broad. It undermines the survey’s credibility. Dividing those numbers into two categories (1%-14% and 15%-29%, respectively) would have provided more insight and made the findings more useful as both a benchmarking and a forecasting tool.

No baseline data was provided but they did publish a visual representation illustrating the respondent’s strong belief, which averaged about 60%, that due to current economic conditions digital marketing investments will continue to grow as a percent of overall marketing investments.
 

As documented here on several occasions, the shift to digital is accelerating. 70% of product and service searches begin online and that shift is not only justified, it’s required.

Companies that are shifting their marketing investments online get it. Those that are not shifting investments are flawed. They are flawed because they are (1) not listening to their customers, to reality, and, (2) are incapable of change, of adjusting to that reality. Both flaws are fatal and immediate action is required.

Specifically, if you are incapable of listening and incapable of changing, please resign immediately because you are no longer serving the needs of the marketplace or the needs of your employees, most whom rely on their jobs to feed their families.

Steve