Wednesday, November 20, 2019

Marketing Automation and the Human Factor

Today, much of a marketer's work is related to digital marketing and marketing automation. Considerations include choosing the right CRM, setting up automated sales funnels and drip email campaigns, linking online databases, making sure autoresponders are working properly, creating Google ad campaigns, feeding Facebook pages with the appropriate content, making sure the website is mobile optimized, setting up meta tags and other SEO, using Google analytics and setting up other data analytics. Much of this requires the evaluation of different software solutions and the linking of different software components and plug-ins.

All of this can be quite time consuming and distracting. But where is the human element in all of this? Does the customer get to develop a relationship with your company or brand? Is there an emotional connection? Is there a human being they can call upon? Do they really feel heard?

This is why television advertising still makes sense for many brands. And this is why front line customer service is so important. People want to interact with other humans, maybe not all people and maybe not all of the time, but certainly most people and at least some of the time. Admittedly, some people prefer the convenience of using ATMs over interacting with bank tellers. But others still prefer to interact with a person even if it means waiting in line in the bank's lobby.

Yes, we want everything to be scalable and we are enticed to replace people with automation. And organizations usually want to pay the customer facing service employees as little as possible because there are so many of them and the organizations want to maximize their profits.

But where does that leave our brands and us when emotional connection is largely removed from the process and the few points of human contact are overworked and underpaid (and often undertrained)?

The sole point of this post is to encourage marketers to not undervalue television advertising, videos, personal selling, technical support, customer service and other sources of personal interaction. While Walmart no longer does this, why do you think they employed store greeters for so many years? And guess what they replaced the greeters with? Higher paid "customer hosts" with more stringent hiring criteria and expanded responsibilities.

Again, do what you need to do with marketing automation but never forget about the human touch.

Thursday, October 17, 2019

After 35 Years in the Business, My Thoughts About Marketing

Following are my stream of consciousness thoughts about marketing.

  • People have beliefs, attitudes, values, hopes, anxieties and fears. Marketers must understand these to be successful.
  • In marketing, less is almost always more. This is true of copy and visuals. 
  • The actual customer experience is the most important driver of brand perceptions.
  • Building awareness is the most important marketing activity. Communicating relevant differentiation is the most important branding activity. 
  • People make purchase decisions based on emotions, not logic. Every marketer should understand this.
  • Brands should focus on their most compelling assets, especially if they are unique.
  • Humor and entertainment can be very powerful components of marketing communication. 
  • Shared values and "brand as a badge" (self-expressive vehicle) are the two most powerful sources of brand differentiation. 
  • Related to this, many brands succeed as status symbols.
  • Customer service is a very important part of a brand's success.
  • Know customers' primary sources of information and where they are most likely to shop.
  • To a very large degree, marketing is a combination of consumer psychology and common sense.
  • The sales function is critical to successful brands. Personal relationship-building matters.
  • Sales and marketing must work together seamlessly. 
  • Build a robust but flexible brand identity system. Colors matter. So do symbols and icons. 
  • Brands can often connect with people at a sub-conscious level. 
  • Where a brand is distributed (and where it is not distributed) says a lot about the brand. Make sure your brand's distribution is consistent with its positioning. 
  • Price can be an indicator of quality. Use reference prices to create desired price perceptions. 
  • Inconsistent execution can kill a brand in the long-run. Brands must be trustworthy. 
  • It has been my observation that successful marketers tend to be entrepreneurial, opportunistic and good at ideating. They are always looking for new approaches to marketing.
  • Never forget that marketing is about relating to people and their needs and desires. 

Wednesday, October 16, 2019

The Limits of Marketing (and Customer Service) Automation

In the past few years, I have used marketing automation extensively for my own business and I have interacted with marketing automation from many other businesses. While there is the argument that marketing automation enables one to market 24/7, even when one is sleeping, there are also some cautions that should occur regarding this technology.

First, technology should not completely replace human interaction, which allows for emotional connection. If one uses technology independent of human interaction, it will be more difficult to make or close a sale and it will be virtually impossible to create customer loyalty based on that emotional connection. You must carefully integrate your marketing automation with human interaction.

Second, older people would rather talk to other people, not read FAQs, click through predetermined menus, "press one for...," fill out forms, receive auto responses, etc.

Third, and perhaps most importantly, many companies are not fully competent at designing their marketing automation systems. They don't turn off a prospect email drip campaign when the prospect turns into a customer, leading to confusing or annoying email messages. Or they present the customer with an automated cost estimate that only allows for an "accept" response with no ability to ask questions, discuss or partially accept the estimate.

I have encountered companies that have put me on multiple email streams based on how they coded me on their systems. Because of this, I am inundated with multiple email messages a day from these companies. I have also encountered a couple of companies for which "unsubscribe" only turns off one email stream, not all of them. I find that I have to repeat the "unsubscribe" request multiple times until I am actually unsubscribed from all of their email streams.

Then there are faulty executions of older automated telephone customer service approaches, which can be quite frustrating. Some systems don't mention your need in their menu of choices, forcing one or more of a few things to happen - choosing an option that may get you to the wrong person, putting you into a continuous loop of scrolling through the options again and again, or worst of all, hanging up on you. Another problem is when one system sends you to another system, for which you need to reenter your name, account number, password, PIN, telephone number or payment method.  People don't like to have to do this more than once, and the best CRM systems, if programmed correctly, can eliminate the need to do much of this even once.

Marketing automation and customer service automation are here to stay but don't overestimate their ability to make a sale for you or build your brand. And don't underestimate their potential to annoy your customers.

The best systems are carefully constructed with sophisticated filters, triggers and decision logic. And they provide for human interaction at critical points throughout the process. I have encountered too many systems that are poorly constructed, with the potential to damage the brands they were designed to help.

So be very careful when designing your marketing and customer service automation systems. They are useful tools but need to be carefully designed.

Monday, September 30, 2019

Brand Switching

"62% of consumers who switched brand in the past 12 months did so because brands successfully attracted them, rather than bad customer experience pushing them away.
61% of consumers switched brand at least once in the last year, with automotive (70%) and supermarkets (68%) showing the highest percentage of customers willing to switch brands due to the lure of new opportunities.
Only banking found previous poor customer experience to be an equally decisive factor for the switch, where it was a 50-50 split.
Consumers see a brand being ‘genuine’ as more important in encouraging them to try a startup versus an existing brand they haven’t tried before (31% vs 17%). ‘Innovativeness’ (25% vs 20%) is also important, as well as ‘reflecting a consumer’s values’ (17% vs 13%)."
Source: MarketingWeek Monday, September 30, 2019 email 
Data source: Data & Marketing Association (DMA)
So authenticity, innovation and shared values are brand attributes that can lead to new brand trial and brand switching behavior. And, per previous research, high customer satisfaction does not guarantee customer loyalty. In fact, in categories in which customer satisfaction is high across most or all brands, loyalty is diminished.
For other thoughts on brand loyalty, authenticity, innovation and shared values consider these blog posts:



Shared Values:

Other reasons why customers may switch brands:
  • Customer service is poor or lacking
  • The brand does not deliver at least an adequate value for the price
  • You do not have an adequate understanding of the customer and his or her needs
  • Your brand is resting on its laurels, it is no longer exciting, it is not keeping up with the competition
  • Your brand is not readily available or accessible compared to other brands
  • Another brand offers a free trial and delivers a better value proposition
  • A superior disruptive brand enters the market
  • Your brand has not established sufficient emotional connection with its customers

We recommend that clients constantly measure their customers' attitudinal loyalty and emotional connection to the brand. Our BrandInsistence brand equity measurement system measures attitudinal loyalty and increasing degrees of emotional connection. Even small statistically significant changes can be bellwethers for potential problems. But know that no amount of measured satisfaction or loyalty can guarantee that brand switching won't occur.  

Friday, September 13, 2019

Historical Brands in America

John Jacob Bausch & Henry Lomb

I recently purchased The Branding of America book by Robert Hambleton at an art gallery used book sale. One of the things that I immediately found fascinating (though not surprising in retrospect) is that most of the earlier brands in America were named after the people who founded the brands versus using coined or associative descriptive names, which is a much more common approach in contemporary branding.

Here are some examples:

  • Colgate: William Colgate
  • Levi Strauss: Levi Strauss
  • Borden's: Gail Borden
  • Steinway: Heinrich Engelhard Steinway
  • Campbell's: Joseph Campbell
  • Heinz: Henry John Heinz
  • Bissell: Melville Reuben Bissell
  • Gillette: King Camp Gillette
  • Kraft: James Lewis Kraft
  • Maytag: Frederick Lewis Maytag
  • Schick: Jacob Schick
  • Bausch & Lomb: John Jacob Bausch & Henry Lomb
  • Westinghouse: George Westinghouse
  • Johnson & Johnson: Robert Wood Johnson & James Johnson
  • Dow: Herbert Henry Dow
  • Ferris Wheel: George Washington Gale Ferris
  • McCormick: Cyrus Hall McCormick
  • John Deere: John Deere
  • Yale: Linus Yale
  • Otis: Elisha Graves Otis
  • Crane: Richard Teller Crane
  • Pitney-Bowes: Arthur H. Pitney & Walter Bowes
  • Remington: Eliphalet Remington
  • Colt: Samuel Colt
  • Smith & Wesson: Horace Smith & David Baird Wesson
  • Winchester: Oliver Fisher Winchester
  • Studebaker: The Studebaker brothers
  • Buick: David Buick
  • Packard: James Ward Packard & William D. Packard
  • Ford: Henry Ford
  • Chevrolet: Louis Chevrolet
  • Chrysler: Walter Percy Chrysler
  • Pabst: Frederick Pabst
  • Saks: Horace A. Saks
  • RJ Reynolds: Richard Joshua Reynolds
  • Spalding: Albert G. Spalding
  • J. Walter Thompson: James Walter Thompson
  • Woolworth: Frank Winfield Woolworth
  • Sears: Richard W. Sears
  • Dow Jones: Charles Henry Dow & Edward C. Jones
  • Wrigley: William Wrigley Jr. 
  • Elizabeth Arden: Elizabeth Arden
  • Kresge: Sabastian Spering Kresge
  • Orvis: Charles F. Orvis

As an outlier, George Eastman named his company Eastman Kodak Company in 1892. The word Kodak was registered as a trademark in 1888. George Eastman said, "I devised the name myself. The letter 'K' had been a favorite with me - it seems a strong, incisive sort of letter. It became a question of trying out a great number of combinations of letters that made words starting and ending with a 'K.' The word "Kodak" is the result." The coined name 'Kodak' became the brand. 

Compare all of these brands with some of today's entrepreneurs and their brand's names:
  • Microsoft: Bill Gates
  • Amazon: Jeff Bezos
  • Patagonia: Yvon Chouinard
  • IKEA: Ingvar Kamprad
  • Virgin: Richard Branson
  • Starbucks: Howard Schulz
  • Tesla: Elon Musk
  • Google: Larry Page & Sergey Brin
  • Facebook: Mark Zuckerberg
  • Yahoo!: Jerry Yang & David Filo
  • Lululemon: Chip Wilson
  • Airbnb: Joe Gebbia & Brian Chesky
  • Uber: Travi Kalanick

It is interesting how entrepreneurs have largely moved away from naming brands after themselves to creating coined, associative descriptive or fanciful names. This is an example of how branding has evolved over time. 

Monday, September 9, 2019

Cognitive Distortions & Marketing

I think everyone should learn about the most common cognitive distortions (or thinking errors) as we are all subject to them. Importantly, I have increasingly witnessed political campaigns playing to many of these errors to achieve their intended ends. I believe this is highly unethical. But understanding what these errors are will help you understand how people (including you) can be and are being manipulated. And, as I am sure you know, politicians aren't the only ones playing to these errors. Anyone who is trying to sell you something has a tendency to do this if he or she knows about these errors and is less than completely ethical.

Here are some of the most common errors:

  • Anchoring bias - you are over reliant on the first piece of information that you see or on the first belief to which you were exposed
  • Conservatism bias - you tend to favor prior evidence or thinking over new evidence or thinking, causing you to be slow to change
  • Confirmation bias - only seeing those things that confirm your preconceived notions, including any prejudices or other biases 
  • Choice-supportive bias - when you have chosen something, you tend to feel more positive about that thing
  • Dunning-Kruger effect - people of low ability have illusionary superiority and mistakenly assess their cognitive ability to be greater than it is
  • Overconfidence - this is a variation of the Dunning-Kruger effect that might appear in people of any cognitive ability level
  • Availability heuristic - you overestimate the importance of the information that is available to you over other information that is not
  • Filtering (or selective perception) - seeing only what you want to see while filtering out the rest
  • Clustering illusion - seeing what you want to see in random patterns or events
  • Polarized (or black & white) thinking - if it is not this, then it must be that - there is no room for gray areas, complexity or nuance
  • Negative bias - you tend to believe in and respond more to the negative than the positive, related to this, you act more out of fear than hope or vision
  • Overgeneralization - making generalized conclusions based on one or a very few data points
  • Jumping to conclusions - making a snap judgement before all of the facts are in - deciding on the outcome prior to the analysis
  • Magnifying or minimizing the scale of an event or problem - blowing it out of proportion or significantly downplaying it
  • Oversimplifying - taking something complex and simplifying it to the degree that it cannot be properly understood or addressed
  • Bandwagon effect - this is a form of groupthink in which you are more confident in a position that a large number of people seem to share
  • Fundamental attribution error - you overemphasize your personal uniqueness
  • Always being right - assuming that you are always right and that anyone who disagrees with you must be wrong
  • Projection bias - you think people think like you, agree with you and support your point of view whether they do or not
  • Labeling - you might label something to make it look bad, argue against it or lump it with others in a larger group - you might also mislabel something
  • Emotional reasoning - making decisions based on how you feel rather than objective reality
  • Personalizing - taking everything personally, holding yourself personally responsible for something that was not completely within your control
  • Blaming - this is the opposite of personalizing - with this error, you do not take personal responsibility; rather you point the finger at others
  • Fallacy of change - thinking that others need to change for you to be happy
  • Confusing correlation with causation - just because two things appear to be correlated does not mean that one caused the other
  • Framing effect - you accept or reject something based on how it was framed
  • Context effect - for instance, luxury items only advertised in upscale magazines and sold in upscale retail outlets are perceived to be of higher quality
  • Taking something out of context - without context, something might be interpreted completely differently
  • Observing just a portion of the whole - you might observe data points that contradict the general trend, for instance, if you choose a different shorter or more limited timeframe
  • Placebo effect - believing that something will have a specific effect often causes it to have that effect
  • Authority bias - you tend to follow people in authority rather than your own conscience - you chose authority over your own decisions
  • Illusory truth effect (or reiteration effect) - the more something is repeated, the more you think it is true even if it isn't
  • Scarcity effect - the more scarce you think something is, the more you want it - this applies to exclusivity
  • Recency - tending to weigh the more recent information more heavily
  • Zero-risk (or loss aversion) bias - you would rather avoid any risk even if slight risk would result in a large reward
  • Pro-innovation bias - getting overly excited about anything new
  • Action bias - you prefer action over anything else even if the action is ill-conceived and dangerous or dysfunctional
  • Decoy effect - often marketers feature one or more items at a very high price (or a much poorer value) to make the other higher priced (or better value) items seem more reasonable
  • The choice paradox - the more choices you have the more anxious you feel

I could provide an example of how each of these cognitive errors was used in sales, marketing, persuasion or manipulation, but I will provide just five examples and leave it to you to think about how the others can be and are being used in this way.
  • Emotional reasoning - consider pharmaceutical advertisements in which there is an emotionally appealing scene of two lovers strolling through a field of wildflowers while the company is quickly mentioning the possible negative side effects of the drug
  • Labeling - consider the way our current US president labels his enemies as a way to make them seem less desirable 
  • Framing effect - this is what almost every public relations firm specializes in - marketing copywriters are also expert at this
  • Decoy effect - this is why many realtors show house hunters the highest priced, poorest value house first
  • Scarcity (or exclusivity) effect (and context effect) - this explains while luxury brands such as Vilebrequin limit their distribution to only a small number of upscale shopping centers in carefully targeted upscale markets

Wednesday, September 4, 2019

Listen First, Talk Later

You may have heard the statement, "That is why God gave you two ears and only one mouth, to listen twice as much as you speak." Listening more than you speak is good advice for any human being, but especially so for salespeople and marketers.

A marketer that has not asked open-ended response questions of customers and potential customers in depth interviews, focus groups and other qualitative research forums is at an extreme disadvantage. I even load my quantitative research instruments up with those types of questions. And a salesperson who sticks to the selling script and makes sure he hits on all of the qualifying questions without first building rapport and trying to understand the customer's hopes, fears, needs and desires is an ineffective salesperson.

I recently read an article that indicated that most people listen to formulate their response rather than to understand.

If I have said this once, I have said it thousands of times - a brand personifies an organization and its products and services. In this way, it is able to build an emotional connection with its audiences. Emotional connection starts with rapport building. It grows with understanding, deep understanding. I counsel marketers that they should know their customers' beliefs, attitudes, values, hopes, fears, anxieties, needs and desires. Further, they should know where these customers go for information and advice about the brand's product or service category. Frankly, they should also know something about the customer's personal life. I often ask the question, "What keeps you up at night?"

Listen first and speak later. And when the customer is on a roll, follow that line of thought. Did you know that people who do more listening than talking are more likable than people who do more talking than listening? Everyone wants to be heard. And one cannot be heard if you are too busy talking.

I was recently in a very high end men's clothing store. I was interested in purchasing a variety of items. But the salesperson, rather that watching me to see what I gravitated toward, kept on leading me to items and styles in which I had no interest. When I did not respond positively to his direction, he only tried harder. I did not buy anything from that store that day. My wife was with me and encouraged me to stay and try on the items in which I was interested. I respectfully declined to do so. I had to get out of there because the salesperson was annoying me to the point of complete frustration.

A good salesperson or marketer has a sense of what motivates people, why they act the way they do, when they are displaying buying signals and when they are signaling that they are annoyed, bored or angry. Being able to read body language is also a plus in this profession. But the most important thing is ask the right questions and then to carefully listen to the responses to those questions, including the nonverbal responses.

My client proposals have a very high acceptance rate. Why? Because when I am on a sales call, I ask the right questions to best understand the person's pain points, what he wants to accomplish and what he would consider to be a win. And then I feed that understanding back to him along with my recommended approach based on his very specific needs. People have used different words to describe this process including consultative selling and strategic selling. What is is not is transactional selling.

The bottom line: Listen to your customers before you say anything to them. You have two ears and one mouth.