Archive for the ‘Customer Insights’ Category

Unbrand to stand out in the market

For organizations hoping to grow, the mantra is often: faster, better, cheaper. But is this an effective way to build and sustain a brand in an age of consumer skepticism, marketing noise, economic uncertainty and declining product differentiation?

Studies show that as consumers move online, buying decisions increasingly hinge on factors such as social proof, honesty and regular engagement. Firms that fail to pivot their marketing strategy to address these trends increasingly lack integrity and purpose in the eyes of consumers and put themselves at risk of becoming targets of fickle, social-media-enabled customers and activists (see: J.P. Morgan’s #AskJPM campaign).

That’s why some companies are embracing what I call “unbranding” to maximize brand equity and minimize risk. While traditional branding appeals to the left side of the brain — faster, better, cheaper — unbranding appeals to the right side: trust, aspiration, purpose.

  • Trust is is achieved by building credibility through transparency (see: Costco).
  • Aspiration is achieved by developing a brand that aligns with who the customer wants to be (see: Coach).
  • Purpose is achieved by articulating a clear set of values that permeates the entire customer experience (see: Apple).

McDonald’s Corp. is perhaps the most successful unbrander to date. Spurred by customer research and in response to socio-cultural developments, they launched “Our Food. Your Questions.” — a digital hub where McDonald’s employees, suppliers and nutrition experts answer questions from curious consumers and dispel myths that have long plagued the global fast-food giant. Here is a sampling from the site:

Q Is your meat made of cardboard?
A “Cardboard is for moving boxes, meat is for eating.”

Q Did McDonald’s hold a competition to make an edible burger out of worms?
A “We’ve never held such a competition.”

Q Is your beef processed using ‘pink slime’ or ammonia?
A “No.”

Q Why is the food at McDonald’s so cheap?
A “Buying power.”

Q Is your food tasty?
A “Is the Earth round?”

This program is not about bragging, preaching or evading. Rather it’s about dialogue, humility and openness. For McDonald’s, this represents a paradigm shift in how the company builds its brand and reinforces its core message of quality.

“Today, brands need to get comfortable with being uncomfortable and challenge convention,” says Antoinette Benoit, senior vice president, national marketing, McDonald’s Canada. “It’s important for us to have an ongoing and transparent two-way conversation with our customers in order to make a meaningful and long-lasting connection with them. This not only enables us to tell our story but also to evolve our brand based on what’s important to our customers.”

This unbranding strategy has contributed to improving the overall perception of McDonald’s. The idea came out of the Canadian wing of the company, but benefited from further development by McDonald’s France and McDonald’s U.K., both of which were able to overcome business and public relations challenges and grow revenues. The campaign has now been adopted in Australia, New Zealand, the United States and parts of Latin America.

Behind the success of this unbranding strategy was an up-to-date understanding of consumer needs, a return to focusing on historical core values (“quality” in the case of McDonald’s) and courage on the part of management to follow though on the program’s requirement for honesty, transparency and directness. Moving forward, McDonald’s will build on the strategy’s success by incorporating these learnings across the entire customer and partner experience through new training, advertising and more.

How can you make unbranding work for your business?

  1. Understand who you are as company. This should be based on your institutional values, history and how you are perceived within the marketplace.
  2. Identify your customer’s needs. This should be accomplished through both traditional and new marketing-research techniques.
  3. Create a vision or ethos for your company. This should encapsulate who you want to be and how you want to be perceived as an organization.
  4. Select the appropriate communications methods. Understanding how to articulate your message is as important as knowing what your message is.
  5. Unify your message across all customer touch points. Consistency is key in articulating a message that will both resonate and change perception.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

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1:1 Marketing is here

If you are a forward-thinking manager, chances are you’re thinking about ‘personalization.’ Delivering a unique, tailored, 1:1 interaction with a customer based on previous interactions, the hardware they are using, their particular needs and location within the purchase cycle is a very compelling idea — if you can pull it off. Where do you start?

Thanks to the arrival of mobile computing, powerful smartphones and advanced data analytics, personalization is taking off. During the pre-purchase phase, firms can deliver special promotions or compelling content to make the shopping experience more engaging. Marketers can use social shopping communities to identify product trends and use these insights to enhance their product mix by segment. Companies can even target shoppers in-store in real time with relevant, personalized, location-based advertisements and promotions, thanks to technology such as Apple’s iBeacon.

Product companies are using personalization strategies to stand out by offering unique products such as do-it-yourself t-shirts, blankets and home decor featuring custom messages and designs. Web-based firms like Amazon are successfully using personalization tools to drive revenue, conversion and average transaction value. FRHI Hotels & Resorts uses personalization to create unique experiences for their three brands (Fairmont, Raffles, Swissôtel) both pre and post stay.

“The key to winning in today’s competitive marketplace is to have a universal commitment to putting customer’s first, understanding their stated and implied needs and providing solutions that address those needs on their terms,” says Jeff Senior, executive vice president and chief marketing officer of FRHI Hotels & Resorts. “It requires a holistically aligned organization, and is not a marketing initiative, but a company commitment.”

FRHI Hotels & Resorts maintains a single, holistic profile of each guest and their needs, with the ability to customize their stay, the promotions they receive and the prices they pay. This profile can seamlessly migrate from call centre and hotel to mobile device and social media platform. This personalization strategy has been an important driver in enhancing customer satisfaction and brand image, leading to market share increases in each of the past six years. Some of the best practices they follow include:

  • Align personalization strategies with well-defined brand strategies and values.
  • Act as an insight-driven organization. For example, the Company leverages big data to get a single, holistic customer profile. Furthermore, Fairmont expends a considerable amount of effort on customer research and social media analytics to define the ideal experience, with no detail escaping their attention.
  • Put the customer by segment (their needs, requirements and expectations) at the center of all operations and planning. Careful attention is paid to articulating the customer opportunity, understanding all business issues and producing creative solutions that fits local requirements.
  • Focus on real-time reputation management. Measure, track and evaluate a variety of customer metrics to better leverage existing programs and identify hiccups.
  • Optimize the operational (online and physical) and talent model to ensure alignment, collaboration, responsiveness and seamless execution.

Implementing your own personalization strategy can improve the value your firm delivers, the precision by which you target customers and the marketing efficiency of your programs. But first you need to do some serious thinking about your customers, brand and organization. Firms looking to implement a personalization model need adopt a customer-centric mindset that engages the entire organization. To do this, key activities such as IT, marketing, research and support must act in an integrated fashion, sharing the same information and strategic playbook. This four-step framework can help take a firm from a strategic vision to a personalized experience:

  1. Segment your customers by lifetime value, needs, and habits.
  2. Categorize them by the digital and physical channels they prefer across their entire purchase and support journey.
  3. Customize and choreograph your offering and experience based on where they are in this journey.
  4. Ensure your capabilities (people, systems, processes, assets) can support your personalization strategy.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Tangerine repositions for growth

Market success, even one based on disruptive innovation, is often fleeting. Many new businesses burn bright but quickly fade away due to competitive moves, changing consumer tastes, or ill-fated acquisitions. This need not happen, as the story of web-based bank ING DIRECT, now rebranded as Tangerine, illustrates.

Dutch bank ING Group introduced ING DIRECT into Canada in 1997 as a phone and web-based retail bank with a unique brand proposition – no fees, higher savings rates, simplicity and approachability. The business was instantly popular, especially among educated and tech-friendly consumers. By 2010, ING had attracted 1.5 million customers and over $20B in deposits, primarily owing to its innovative high interest savings account, no-haggle mortgage, and low-fee mutual funds. The firm was also an early adopter of social media and mobile banking. Despite the success, storms clouds were appearing on the horizon.

ING began to lose market differentiation and was close to its market potential in its core segments. The Big 5 Canadian banks had taken notice and were picking up their game in terms of market competitiveness. Importantly, ING’s savings rate advantage was evaporating in a falling interest rate environment. Finally, ING’s consumers were evolving, looking for a greater variety of products and services. Clearly, the firm was at a strategic crossroads: continue to focus on its core market with a niche, largely “savings” offering, or evolve towards more of an everyday bank that was capable of truly meeting the needs of the emerging “direct” banking consumer.

In 2010, the Company decided to go for growth and reposition ING as a more full-service ‘everyday’ direct bank for individuals, families and small businesses. To do this properly, however, ING needed capital. Their Dutch parent was in no position to deliver, but Scotiabank was, and in 2012, they agreed to acquire ING DIRECT’s Canadian business. As part of the deal, the firm had to undergo a rebranding and name change – which culminated in the launch of the Tangerine brand in April 2014.

“Changing the name of a beloved Canadian brand that always delivered on its promises needed to be approached delicately. Our challenge was in how to leverage the equity of an iconic brand, while forging new ground and establishing leadership in everyday direct banking in Canada,” said Andrew Zimakas, Chief Marketing Officer at Tangerine. “We knew this change would be highly scrutinized by our employees, customers and the market overall.”

Research shows that upwards of 80% of all M&A deals fail to generate incremental shareholder value. Quite often, the acquired brands end up being scuttled. Yet, this did not happen with Tangerine. Management of both companies prudently followed four key principles:

Establish brand primacy
The repositioning has always been a Tangerine marketing-led initiative. This ensured equal attention was paid to crafting and communicating the right narrative and message to the overall market – as well as to each Tangerine employee or brand ambassador. Unlike many acquisitions, this was a growth-focused, value enhancing story, not one of cuts.

All parties understood the value of Tangerine’s unique brand, growth imperative and value proposition – and the importance of not compromising it for short term gain. Safeguarding Tangerine’s brand heritage, authenticity and differentiation were paramount before and after the deal was completed. Going forward, both Scotiabank and Tangerine’s management have remained true to this mission.

Enhance customer value
To remain relevant and ensure message clarity, Tangerine conducted extensive customer and employee research immediately after the deal was consummated. The Company learned that they had to enhance their value proposition to maintain loyalty and to improve their odds of successfully growing the number of customers and the number of products they purchased. To this end, a number of service enhancements were introduced concurrent with the rebranding, including new ATM distribution and a fully responsive web site.

Execute with excellence
Many acquisitions and strategic pivots give short shrift to execution, significantly increasing risk. From the outset, senior leaders understood it would take 12-18 months and sufficient resources to effectively re-brand the operations – which impacted over 3000 consumer touch points across digital properties, call centers, marketing materials etc.

Get the governance right
Having good governance is vital to making deals work. This acquisition featured clear roles & responsibilities around who was leading the Tangerine rebranding and how this effort was plugged into the Scotiabank governance structure. Even though the Tangerine team maintained autonomy, Scotiabank was part of the transformation team from the outset and provided important support for the rebranding strategy and execution.

The Tangerine story is a best practice for strategically repositioning a brand into new markets as well as how to prudently integrate a successful company without compromising its brand values. Many of the lessons include: getting the right people committed to the same goals; understanding and delivering on consumer & employee needs and; executing the transformation with excellence.

For more information on our services and work, please visit the Quanta Consulting Inc., web site.

Getting started with Big Data

Leveraging Big Data can help every company significantly improve competitiveness and financial results. At the same time, poorly conceived and executed initiatives can lead to wasted investment and organizational distraction. Not surprisingly, the question of how best to reap the benefits of Big Data is triggering extensive deliberations in many companies. What is ‘best practice’ in launching a Big Data strategy?

Big Data is a set of activities for collecting and analyzing various types of data located within and outside the organization. The insights derived from this analysis are used to enhance business performance such as boosting advertising efficiency, improving supply chain responsiveness or improving service levels.

Most large companies are already in the Big Data business. The amount of data collected is growing exponentially thanks to the digitization of virtually every customer and operational interaction. In a typical Fortune 500 firm, terabytes of data are being amassed through regular business activities such as point-of-sale transactions, barcode tracking, web traffic or social media communications. This data torrent – when properly mined — affords management a valuable opportunity to learn about consumer behaviour or internal operations, enabling them to optimize tactics for better performance. At the same time, realizing the Big Data vision presents significant technical and organizational challenges. These challenges can increase the chances that managers will embark on expensive or poorly designed initiatives – or become paralyzed due to complexity.

In our experience, the best way to get into Big Data is to start with a sensible roll out plan and leverage best practices. This plan should consider four key elements:

1.  Data

Any plan should begin with a review of the relevant internal and external data, according to the 4 Vs: volume (the amount of data and its location); variety (types of data, both structured and unstructured); velocity (how quickly the data changes) and veracity (the accuracy and availability of the data). In many firms, data is siloed by function or business line; is not standardized and; it comes in various stages of completeness. Getting quality data can be difficult and time-consuming. It may be desirable to outsource this data integration and clean up to specialist firms who can make it ‘analytics-ready.’

2.  Hypotheses

It is easy to get side-tracked if you dive right into analysis without any strategic guideposts. Not all insights are equally important. Like other major initiatives, it is essential the Big Data effort links to business priorities and metrics. One way to do this is to start with a limited number of pilots based on specific hypotheses that directly impact strategic goals. Successful pilots can generate early wins that justify further investment, and can produce important insights around the business, as well as test out first generation capabilities.

3.  Analytics

To effectively and efficiently mine the data, the team should carefully choose the appropriate analytical methodology or model for each business problem. The analytics will vary whether the goal is workflow optimization (e.g., minimizing inventory levels, delivery times) or predictive analytics (e.g., anticipating consumer behaviour, forecasting events). However, managers can easily over-speculate on solutions, choosing costly and complicated tools that require expensive or scarce talent. Judicious CIOs will take a “great is the enemy of good’ approach to choosing their models and depth of analysis.

4.  Capabilities

Many IT environments are not conducive to quick or easy Big Data deployments. These infrastructures can be a heterogeneous mix of new and legacy hardware & software, lacking in data standardization and centralized control. To exploit Big Data opportunities, firms will need a unique combination of data experts, software tools and management capabilities as well as supporting governance practices. This capability should be developed with practicality in mind. Initially, CIOs could outsource Big Data needs to a cloud-based analytics service limiting upfront investment and accelerating time to value. Over the long term, the organization can look to develop world-class capabilities through employing specialized talent, bespoke software tools and private cloud architectures.

As with other strategic initiatives, a prudent way of getting into Big Data would be to start small and target actionable insights. Ongoing attention should be paid to ensure the learnings are understood by the staff and implemented into existing workflows. Where necessary, new processes or practices may be needed to fully leverage the insights. Learning by doing will prompt managers to connect different analytical models together to address wider problems that span functions and business units.

Firms that are winning with Big Data are often the quickest out of the gate with a practical plan, based on a thorough understanding of their data, staff and IT environment. Big Data will be a game changer for companies who can deploy the right analytics and capabilities against their most pressing business issues.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Marketer as anthropologist

Many companies prioritize learning customer needs above any other marketing activity so that they can create better products and service experiences. Typically, marketers will use traditional qualitative techniques like focus groups, surveys and one-on-one interviews. Unfortunately, these tools often fail to generate breakthrough insights. Standard qualitative methods are good at telling firms what is happening but not the why it’s happening. To get to the root cause of a consumer’s actions, marketers need to explore the recesses of their mind to identify subconscious drivers of behaviour. Anthropology is a very effective way to do this.

Simply put, anthropology is the study of people and civilization, past and present. It incorporates teachings from a wide range of disciplines, from psychology and biology, to the humanities and sociology. Anthropology is increasingly being used by companies (Starbucks, Lego, Herman Miller and Nokia are pacesetters) to better understand latent consumer needs and as well as societal and religious influences on their behavior.

In action

The following example shows anthropology in practice. A firm in the spa industry engaged us to help redesign its customer experience and service offering for female patrons. The client wanted to address any unmet customer needs and better differentiate their customer experience. Conventional research techniques regularly produced muted feedback, which led to copycat store designs and products. We wanted to go deeper into the consumer’s subconscious to find unmet needs and drivers that triggers behaviour. To get there, we employed anthropology to probe fundamental beliefs and values around their body image and wellness as well cultural influences. For example, how do women define beauty?  What role does human touch play? And, how can a spa experience help satisfy a women’s intrinsic needs? Our findings upended conventional thinking and led to a revamping of how the facilities were designed and how the services and benefits were communicated, resulting in higher client retention, an enhanced brand image and increased rates of cross selling.

Conventional qualitative research techniques take people at their word. This can be risky for brands.  At their core, consumers are often irrational, driven by motives or external influences that are unseen even to themselves. Using anthropology as complementary research can produce a more holistic and penetrating view of the consumer in their real life condition. Likewise, anthropology’s rigorous, academic-driven methodology preempts the emergence of erroneous assumptions around a customers’ behaviour that could have been shaped by a firm’s culture, the bias of its managers, or increasingly, the large but imperfect data stream flowing in.

Anthropologist have a number of data-collection instruments at their disposal including artifact analysis, quotidian diaries, and observational studies. Importantly, practitioners approach their research without hypotheses, gather­ing large quantities of information in an open-ended way, with no preconceptions about what they will find. The collected data is raw, personal, and first­hand — not the incomplete or artificial version of reality that is generated by most market research tools.

Anthropology is particularly helpful in understanding the dynamic world of social media. “Companies are beginning to use anthropology to understand the stream of consciousness within social medial that flows with ‘here’s what I’m doing/thinking/wanting now,’” says Lynn Coles a leading marketer. “Anthropological research helps us better understand and inhabit the social communities to identify behavioral patterns as well as the emerging dialect within a particular community so we can better communicate with our target consumers.”

Basic approach

1. Frame the issue

Anthropology requires the marketer to frame the problem in human — not business — terms. Doing so gets to the core of how a customer experiences a service or product. For example, a business problem could be:  How can a wireless provider reduce churn? The corresponding anthropological issue would be: How do our customers experience our service, and why are they leaving?

2. Assemble the data

The raw data is codified in a form of carefully organized diaries, videos, photographs, field notes, and objects such as packages. Although this open-ended data collection casts a very wide net, it requires a disciplined and structured pro­cess that needs to be overseen by anthropologists skilled in research design and organization.

3. Find patterns, insights

The anthropologist then undertakes a careful analysis of the data to uncover themes or patterns. When organized in themes, a variety of insights will emerge about how a customer feels, their goals and what drives their actions.

Of course, traditional quantitative and qualitative research methods have their place and should remain part of a marketer’s analytical tool kit. However, anthropology will play an increasing role in uncovering the consumer’s subconscious needs as well as societal/religious behavioral drivers, areas that are largely impervious to standard qualitative techniques. Producing this holistic view will allow marketers to design more relevant products and services that deliver higher value.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Customer fees spark a backlash

Millions have enjoyed Seinfeld’s “The Library Book” episode, in which an aging library official zealously pursues Jerry for an overdue book from 1971.  Though a parody, the plot’s sub text – the perversity and unfairness of an organization’s penalties – clearly resonates. Managers that heed this message can reduce business risk and improve customer satisfaction.

Understandably, firms look to cover extra costs and encourage certain behaviors by imposing supplemental fees.  Many consumers, however, resent the use and fairness of these practices and will quickly desert (and bad mouth via social media) a brand when they believe they have been treated unfairly.  New research published in Business Horizons, a journal of the Kelley School of Business at Indiana University, discusses how companies can prudently employ extra fees to cover reasonable costs without inciting a popular backlash.

A tough habit to kick

Today, many companies especially in the Telecom, Airline, Retail, Banking and Credit Card sectors, rely on extra fees – for late returns, cancellations and service changes – for a significant portion of their revenue and profits.  For perspective, penalties for late payments in the U.S. credit card industry almost tripled from 1997 to 2007, generating approximately 10% of profits over that period. In 2009 alone, airlines in the U.S. reaped about US$2.4B (or roughly 3% of their overall revenue) from fees assessed for changing or canceling flights.  For some enterprises like Blockbuster Video, these revenues represented the difference between profit and loss.

Fee-addicts are not irresponsible or stupid; they understand they will lose customers and suffer from a reputational hit. However, they believe the short-term benefits outweigh the long-term pain.  What many companies do not realize is that the era of consumer passivity may be coming to an end and the risks have increased, particularly given the power of social media and activist groups.

The survey says…

The study’s authors surveyed a representative sample of 200 U.S. consumers who had been charged a penalty of some sort over the past six months from a variety of industries.  Not surprisingly, almost 75% of the respondents who previously had a positive impression of a company reported being upset with the way they were treated.  More importantly, 18% of those surveyed reported bad-mouthing the firm to their on and offline friends and co-workers.

There are many reasons for this anger.  Firstly, 64% of the respondents thought the charges were unfair.  Almost 50% claimed they were unaware that they would be penalized, either because the penalty notice was buried in the fine print or because it was never communicated.  Secondly, 74% of those surveyed considered the penalties excessive, especially when they resulted from an unforeseen emergency or because they felt the penalties were applied punitively.   Finally, only 27% of the consumers reported that the company waived the charge out of courtesy or to appear fair.  Given these findings,  organizations run a major risk of treating (or appearing to treat) consumers poorly.

Prudently avoiding risk

A number of steps can be taken to soften the blow of applying extra fees:

Get your data

Policy changes should not be made in a vacuum.  Managers need to understand the true revenue and profitability contribution of extra fees.  On the cost side, they need to know the revenue loss from customer churn and the negative impact of a decline in brand image. If costs exceeds revenues, then the policies should be reconsidered.

Moreover, every customer is not the same and should not be handled with a blanket policy.  For example, some people are habitual late payers while others through their loyalty have earned the right to make an honest mistake. Managers should segment their consumers through qualitative research and gauging call center interactions.

Provide flexibility to staff

Prudent managers know when to cut their losses in certain situations. To a point, they should properly train and empower front line staff to waive fees for emergencies, one-off cases or when dealing with a valuable customer.

Be transparent and explicit

The majority of people do not read terms and conditions, particularly if they are confusing or tough to find.  Companies should simplify and make more transparent their messages around fee changes and penalties.

Revisit some policies

For every possible penalty clause, ask yourself a simple question:  Would the policy really upset you, if you were the client?  For the clauses that carry a ‘yes’ answer, it is likely they do not pass a fairness test and would not be suitable.  Companies should also consider fixing touch points in their customer experience that are needlessly frustrating such as long phone queues and multiple customer representative hand offs.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Boost marketing performance

The marketing landscape of 2013 is a menagerie of media vehicles, digital tools & platforms, Big Data initiatives, sales channels and influencer programs — all requiring coordination, integration and funding.  Making sense of this complex world is a challenge; it’s hard to know what’s working and what’s not.  Conventional evaluation tools like ROI have their place but they are not strategic and don’t go deep enough in analyzing plan effectiveness.  To really evaluate marketing’s worth, it pays to go back to basic principles. We have found that asking five questions can help determine whether the marketing function is “doing the right things, right.”

Do we really understand our customer and what influences them?

For many companies, the answer is an unfortunate no.  This knowledge gap goes beyond understanding basic needs; it touches on how consumers interact with companies, who or what influences their actions, and what sub-conscious triggers drive purchase behaviour. Even data-intensive companies often know little about how specific tactics — like social media or TV advertising — drive purchase, as well as how various programs interact with each other.

To maximize performance, managers need a new, 360-degree view of today’s consumer.   “Connecting with clients is much tougher now than it used to be,” says Lynne Coles, a senior B2B and B2C marketer.  “They are one click away from becoming as well or even better informed than the firms trying to sell to them. They’re also just one click away from sharing their opinions and experiences with an ever-expanding activist community. Marketers need a holistic approach to understanding the entire customer experience across all channels.”

Is our value proposition relevant and differentiated? 

Whenever I give a speech on branding, I ask the audience members what their value proposition is, and can it be supported.  Typically,  80% or more list the same benefits, like great service or lowest cost.  Furthermore, less than 20% of the audience will link a meaningful outcome and explanation to the benefit (e.g., thanks to newer technology, XYZ brand delivers an 80% savings versus the leading brand). These ad hoc surveys usually point to serious flaws in a company’s core positioning, that no amount of spending or technology can fix.

Most firms can differentiate.  Many already do, they just don’t realize it.  The marketing challenge is around finding meaningful strategic differentiation and then driving the message through all marketing tactics as well as the customer experience.

Do we have enough information and wisdom to make decisions?

Exploiting Big Data — using advanced methodologies and tools to mine data for insights — is all the rage these days.  Making it work is another story.  Companies may collect a lot of data but it is not always accessible and usable. Furthermore, much of the data may not be germane to marketing goals.  Finally, data mining skills does not necessarily translate into wisdom that would help in areas like fostering innovation or creative development.

Modern marketing remains as much an art as a science.  Companies require proven analytical and IT capabilities plus common sense to ask better questions and to make better strategic and tactical decisions.

Are we using the right metrics?

Einstein said, “not everything that counts can be counted, and not everything that can be counted counts.” Many firms use metrics that cannot be effectively measured, are unrelated to strategic goals and lack organizational buy-in. The choice of metrics is important.  They play a major role in driving management focus & behavior, allocating resources and in framing the evaluation of marketing plans and vehicles.

Leaders should regularly confirm that each tactic is properly measured, evaluated and then linked to the long-term, strategic goals of the company.  Managers should also be mindful that a slavish focus on metrics is not a replacement for solid business and creative judgment.

Is the organization enabling marketing?

Many leaders believe their firms are market(ing) driven, with a mission to fully satisfy in a differentiated way the needs of consumers in attractive markets.  The organizational reality, however, is often different.  Other internal groups frequently have different agendas, a disproportionate share of internal resources and dissimilar perspectives on what drives long-term performance.  These dynamics are natural but could result in strife, lack of focus and poor resourcing.

Marketing performance — and ultimately competitiveness — will suffer without adequate alignment, investment and capability-building. Making the marketing mission real will be part cultural change, part priority-setting and part talent management.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

 

Cross sell to grow

In a low growth economy, many companies understand that one of the best way to grow revenues is by selling more goods and services to existing customers.  At the core of this strategy is ‘customer focus’ – providing better solutions to satisfy more customer needs.   Yet, this easier said than done. A variety of factors can combine to scuttle the best designed plans.  Managers can overcome these barriers and be ‘cross sell ready’ by optimizing their organization structure, product portfolio and incentive schemes.

A corporate buzzword for the past decade, CF is a simple idea:  understanding and targeting a customer’s full gamut of needs will enable the delivery of solution value, therefore catalyzing the cross selling of other products. Our clients that have gotten CF right have generated millions of dollars in profitable, new revenue along with higher customer satisfaction scores and lower marketing costs. Though each firm had a unique CF strategy, they all share three important characteristics:  a deep understanding of customer needs across a purchase life cycle; a shift from selling products to marketing solutions and; a focus on relationships versus transactions.

Despite a compelling premise, increasing cross-selling rates is not a slam dunk.  There can be multiple organizational barriers to better performance.  For example, most firms are organized in product, geographic or functional silos making information sharing, collaboration, and joint selling very difficult.  These silos often extend down to the IT systems, restricting visibility into a client’s sales history and requirements. Secondly, compensation schemes and metrics often do not support cross selling versus other goals like client acquisition.  Finally, the culture in many organizations is a barrier to implementing a CF mandate, collaborating or cross selling.

Our consulting experience suggests that the difference between leading cross sellers and under-performers comes down to who can get the 3Cs of organizational alchemy right:

Capabilities

Customer-focused firms have deep knowledgeable of their customers and the capabilities to enable them.  Len Lyons, General Manager of Workplace Medical Corporation a leading occupational health service company, asserts: “We demonstrate to our clients that we’re experts in our field and in theirs. People maintain strong loyalty to someone they trust and for us, this has had the added benefit of significant growth through customer referrals.”   Companies with a strong CF have well-developed people, technology and marketing competencies.  Their workforce features a large coterie of generalist, and team-driven problem solvers who can interact directly with the customer.  Formal corporate education programs and defined career paths cultivate and reinforce these vital individual traits.  Moreover, these firms will have: an advanced CRM and data management systems that deliver a comprehensive view of each customer and prospect’s buying behavior; a long term, relationship-inspired sales approach and; product and R&D teams that are connected directly with buyers and users.

Cooperation

Being internally cooperative (as well as with channel and supply chain partners) is critical to aligning around customer needs and deploying maximum capabilities.  Workplace Medical implemented this shift in two steps.  Says Lyons, “first, we systematically recalibrated our entire organization and marketing strategy from a transaction focus to a solution-driven model. Then, we led our clients through a paradigm shift in the way they perceive the nature and value of our service.”

Customer-focused enterprises encourage and reward cooperation across the organization.  For example, they foster accountability by having all team members measured against key performance indicators like customer satisfaction and cross selling rates.  And, they subordinate departmental metrics to larger, more customer-centric measures.  However, achieving higher levels of cooperation and information sharing will be problematic in low-trust cultures. Many firms will need to undertake change management initiatives to get recalcitrant or skeptical employees (particularly disinclined sales people) to go along.

Coordination

Maximizing cross selling activities requires internal departments as well as channel partners to be strategically and tactically aligned.  High levels of coordination – enabled through supporting technology, regular communication and processes – are needed to share information, efficiently deploy resources and solve multi-faceted customer problems. One way customer-focused companies achieve this is by putting sufficient authority in the hands of an ‘owner’ who is closest to the customer or segment’s requirements – and opportunities. In some of our clients, the leaders needed to dismantle their siloed department-based structures and replace them with multi-functional, autonomous customer-based teams.

Improving a firm’s organizational model to deliver high cross selling rates is not for the impatient or clumsy.  It is part culture change, process redesign and incentive re-engineering.  Furthermore, cross selling efforts need to be consistent with the company’s value proposition and brand image, not to mention the best interests of the client.   Managers should expect to spend at least six months transitioning to a new model while they work through hiccups.   Though the process is time consuming, the rewards are undeniable.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Simplicity drives sales

Virtually every company shares one goal:  increase revenues by better delivering on customer needs.  To this end, marketers will regularly add product features, tweak their brand messages or increase product availability.  A no-brainer approach, right?  Wrong, according to new research published in the Harvard Business Review.  Besides generating excessive operational complexity and cost, this strategy is turning off the very customers you are trying to keep and sell more to.   The better strategy would be to simplify your offering, streamline the purchase experience and optimize the amount of information provided.

New Research

The study’s authors looked at buying behaviour though a typical purchase cycle.  In the U.S., Australia and the U.K., 7,000 consumers (plus 200 senior marketers) were given pre- and post-purchase surveys on their attitudes and buying experiences (e.g., information gathering, product evaluation) of different products across a variety of categories.  Specifically, the CEB wanted to know what made some customers “sticky” (i.e. follow through on an intended purchase) and others not.  Studies like these are important for companies looking to maximize sales opportunities, improve customer satisfaction and boost returns from marketing and IT investments.

Surveys says...

The findings are thought-provoking.  Managers think that most consumers want more product information and choice, to participate in a community and stay connected through social media.  The research found that the opposite is true. Many consumers feel overwhelmed by information and are confounded by the purchase process.  They don’t want a relationship with a company.  Rather, they only seek services and messages that facilitate an easy buying decision and transaction.  These include a simplified buying process, less (but more relevant) information and greater visibility into available discounts.

A wealth of academic research has found that offering excessive product choice or complicated messages leads to consumer indecision and angst, and ultimately less satisfaction with the process and the products themselves.  Our firm has seen similar results in packaged goods, retail and IT firms during complexity reduction and client experience projects.

At the root of this paradox is the differing perceptions of what the customer really wants and needs versus what management thinks they want and need. This mismatch has many causes.  Proper customer research is not undertaken often enough to keep pace with evolving customer needs.  In other cases, organizational factors such as departmental or management bias, cultural practices or compensation schemes generate an impetus for more products, messages and processes.  Finally, complications inherent in business these days – think technological change, channel proliferation and inflexible infrastructures – virtually guarantee more complexity, minimal integration and less consistency.

Keep it simple, Stewart

Smart firms make simplicity a goal in itself.  To simplify the buying experience, we recommend managers follow these three basic steps:

Update

Company’s need to be vigilant that what they are saying, doing and selling is aligned with what consumers really want and when they want it.  As such, marketers should regularly update their knowledge of consumer needs, requirements and online behaviors by looking at a variety of data sources including CRM data, social media activity and independent market research.

A holistic analytical lens can lead to some interesting learnings.  For example, some auto manufacturers, travel businesses and retailers discovered that the platform used for searching product information plays an important role in the timing of the purchase. Specifically, 70% of people who use a mobile device for search are hours away from a purchase.  On the other hand, 70% of people who used a desktop for search are roughly seven days away from a purchase.

Optimize

Too many brands lead consumers down unnecessary and frustrating purchase paths or clutter their message with too much information. This can be fixed by providing better navigation and search tools that enhance the buying experience.  These tools would guide consumers to the right products by helping them evaluate available choices, choose relevant features and provide trustworthy external input. Furthermore, managers would be wise to benchmark their buying process against industry best practices from companies like Amazon, Victoria’s Secret and Intuit.

Reduce

Less is often more.  Product managers should periodically cull under-performing products, prune the amount of information provided and scrap redundant marketing & sales programs that add more confusion than revenue and value.  Firms should institute and enforce guidelines to prevent this complexity from returning. Finally, companies should standardize on proven, simplicity-enabled products, messages and practices and roll them out throughout the organization.

For many enterprises of any size, increasing simplicity is the new black.  Getting to the ideal purchase process will require managers to conduct unbiased consumer analysis, simplify the buying experience and product portfolio, and have the fortitude to prevent confusion from creeping back in.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

6 Ways to Viral Content

Whether it’s a new restaurant, toy or the Gangnam Style dance craze, everyone follows the crowd at one point or another.  Certain ideas and products have the uncanny ability to become instantly popular, driven by powerful word-of-mouth and online viral effects.  Capturing and leveraging this elusive “x factor” is the holy grail of many marketers, especially when they seek to exploit the reach of  social media technologies. Fortunately, new research is available that helps them improve their odds.  A new book, Contagious:  Why Things Catch On, was recently reviewed in the Knowledge@Wharton newsletter (published by the Wharton School).  The book’s author, Jonah Berger, studied the idea of contagiousness and explores what companies can do to bottle it.

In our client work, we often come across managers who try to generate contagiousness through guerilla marketing or zany creative ideas.  While both of these have the potential to trigger contagiousness, they may not be sufficient in their own right. Although creating viral content or products is an art, a little management discipline can go a long way.

Based on research, Berger identified six success principles – the STEPPS acronym – for why some things catch on and others don’t.  Infectious content and products feature these social elements:

  • Social currency – People tend to talk about things that make themselves look good, rather than bad.
  • Triggers – Individuals more readily talk about ideas that are”top of mind and “tip of the tongue.”
  • Ease for emotion – We are inclined to share more of what we care about.
  • Public – People tend to mimic what they see others doing.
  • Practical value – We tend share useful information to help others.
  • Stories –  Content that is shared is usually wrapped up in a story or narrative.

According to Berger, managers that can incorporate STEPPS principles have a better chance of increasing brand awareness, relevance and word-of-mouth transmission of their content.

STEPPS in practice

Any company or person can insert contagiousness within their content, regardless of the product or brand.  The key is to think about what elements about a product would make people want to talk about and share, and then build that into your creative execution or message.   The story of Blendtec, a household appliance manufacturer, perfectly illustrates this approach.

This medium size firm builds high quality blenders. Their first video featured a CEO doing what he did on a regular basis: throwing items like golf balls or pens into a blender to test product quality and performance. The video was distributed to their customer mailing list, who in turn forwarded it to others.  Soon, the videos went viral, generating more than 10 million views.  Based on this success, the Company launched a series of videos called “Will it blend?” – where they stick all types of different things in a blender.  This series has garnered over 150 million views.  To be clear, this video series was not the outcome of a large marketing budget or effort.  A new marketing person spent $50 on a white lab coat and safety glasses and he filmed his amicable boss torture-testing various products in a lab. Yet, the videos were based on a powerful but simple notion that people would enjoy seeing an appealing demonstrator use a familiar household product to destroy a wide variety of items.

Leveraging these insights

Be real – Firms need to recognize their core brand essence (every firm or product has one) and seek to authentically embed this in their marketing content and products.  For Blendtec, it was about performance, approachability and inventiveness.

Make it social – Marketers should understand the psychology behind what makes people talk about, share and endorse things. For example, people are resistant to sharing content that overtly resembles an advertisement. The STEPPS framework is an effective tool to gauge the social appeal of new content.

Experiment – You cannot guarantee a Gangnam Style success every time.  What you can do is improve your learning, test different creative ideas and boost interest by launching ‘quick and dirty’ experiments as well as being open to customer-generated content and creative ideas wherever they come from.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.