Warning: data-driven marketing can result in a tragic crash

If you’re reading this on your smartphone, while driving, please stop. Car crashes injure between 20-50 million people each year; it’s a serious problem.

I’m not trying to make light of car crashes, but the pursuit of “data-driven” marketing is also causing a lot of wrecks out there; many organizations are investing in marketing vehicles (MarTech), without the right people to drive them and without the right fuel (data) to power them.

How did we get here?

Imagine hearing this: “our CFO is very data-driven.” Your reply would probably sound like this: “thanks captain obvious! For someone in finance this is table stakes; numbers and data are the foundation of all financial operations!

Further, imagine if your sales team wasn’t measured by financial results, specifically revenue booked vs a target (data-driven). In that scenario, the VP of sales could dismiss sales numbers and highlight the new opportunities added into the CRM, or worse off, the thousands of (fake) cold-calls their sales reps made.

Data has always been the sole basis of all financial and sales operations. Why has it taken so long for that to the be standard with marketing? Remember the days when marketers could get excited about opens and clicks? Those days are gone.

The Marketing ROI Expectation

This “data-driven” expectation has finally extended to the marketing organization. Marketing has become closely connected to growth. CMO’s and marketing leaders are being asked to prove their value, in real numbers (revenue).  Their only true strategic objective is to maintain growth, and it relies on sophisticated technology and data-savvy teams to understand customer needs and growth drivers.

Shifting to a data-driven marketing approach is much more than buying the right marketing technology. As someone who makes a living by selling MarTech, I wish it was that easy, but it’s not… it’s a process that requires a complete commitment from stakeholders across the company.

To make it even more complex, being “data-driven” isn’t enough. If you’re not leveraging the right data, your marketing is going to crash.

From what I’ve seen, there are 4 stages of leveraging data; each have varying results.

Warning: some data-driven tactics may result in a crash

1 – Marketing Data in a silo

This is a narrow focus on response based decision making where marketing is driven by marketing data alone. If you are running a marketing automation platform outside of CRM, totally disconnected from every other business application, this is where you are…

Result: deadly crash! (unless your CEO / CFO doesn’t measure marketing by revenue correlations).

2 – Sales Data

In this stage, the CRM data is leveraged by marketing with a focus on conversion based decision making. Ideally, there is an integration between the CRM and the marketing tools, but often times the merge is a manual process through excel, which is so 1990. Anyway… this is essentially marketing driven by sales pipeline performance.

Result: CRASH! (but you’re still alive)

3 – Finance Data

Show me the money! This is where marketing is making decisions based on revenue, by adding data from finance, fulfillment and services. This type of data-driven marketing is guided by strategic business objectives.

Result:  Safe driving! (measurable success – you’ll get to your destination)

4 – CLV Data

This 4th stage concentrates on profitability based decision making, by adding data from support and account management, where marketing is driven by customer lifetime value (CLV) (This is where tactics like Account Based Marketing (ABM) come into play.)

Result:  Exhilarating driving experience. (market mastery)

Are we there yet?

With a mind shift into data-driven marketing, marketers can move away from wacky notions like the marketing funnel, counting clicks, opinion-driven decisions and one-way communications. Instead, they can turn infrastructure into an intelligent, self-improving system to guide them to real customer conversations. That’s all marketing is…conversations.

Let the (right) data be your guide on the road to data-driven marketing – and be safe out there.

A DMP is only for B2C – pause – Not!

You don’t say “pause,” and just to be clear, DMPs aren’t only for B2C organizations that spend millions of dollars a year on advertising; there are plenty of use cases in the B2B world.

Data Management Platforms (DMP) are becoming more popular in the B2B world, because the lines between B2C and B2B technologies have blurred. We first saw this with marketing automation, when B2B marketers realized they could personalize communications at scale. Instead of orchestrating millions of communications like B2C organizations, instead, B2B marketers focused on automating smaller audience touch-points.

Without getting too far off track, lines between martech and recruitment technology are also being removed (previous post). When you break it down, it’s really just person to person (P2P) communication. Any technology that’s designed to create communication efficiency should be leveraged across various departments: marketing, sales, talent acquisition, finance, etc. You should be focusing on what the technology is designed to do and then applying those capabilities to solve challenges – anywhere.

Before we get too far, let’s step back. What exactly is a DMP?

Data Management Platform or Data Warehouse?

A DMP is a type of data warehouse, but it’s important to make a distinction. A data warehouse (DW or DWH), also known as an enterprise data warehouse (EDW), is a system used for reporting and data analysis. It is considered as a core component of Business Intelligence environment. DWs are central repositories of integrated data from one or more disparate sources. While business intelligence and reporting are the main objectives for data warehouses, more efficient ad execution and robust segmentation / personalization are the key objectives for DMPs.

  • Segmentation and personalization: what B2B marketer doesn’t want to better segment and personalize?

Initially, the main objectives of DMPs was to execute an ad campaign. Segment your audience and then personalize an ad. With programmatic ad buying, advertisers are able to extend campaigns across a huge number of sites and apps through ad exchanges, ad networks and demand side platforms (DSPs). DMPs help marketers connect audience and performance data across all of those sources.

A DMP enables you to build audience segments where the criteria can include customer information, demographics, household income, past browsing behavior, purchasing information, location, device, etc. Then it can analyze how those segments performed. Based on that analysis, the campaigns can be continually optimized to reach those audience segments that perform best.

If you are a B2B marketer that doesn’t spend a lot in advertising, a DMP can still be used to optimize email, social, SMS, or almost any other campaign that your heart desires. In fact, below are five other areas a DMP will impact.

5 B2B use cases for a DMP

Site Optimization: use first or 3rd party data to determine customized content for different consumers when they come to your site.

Retargeting: easily implement customized re-targeting campaigns based on specific activities and behaviors taken on or offline.

Prospecting: seamlessly integrate with 3rd party audience data source to acquire anonymous data to achieve higher precision and scale with targeting campaigns.

Audience Intelligence: contrast your site audience against 3rd party data sources to learn more about specific audience attributes to target more likely converters.

Better ROI: use centralized media performance analytics to determine which audience performed and where to double down.

A DMP for all:

DMPs are for all organizations that want to better understand, segment, and communicate with their audiences, while also spending ad dollars more efficiently. – Me

Old B2C use case (ad optimization)

DMPs are the glue that holds all of a marketers key advertising data together, providing one comprehensive platform to help marketing organizations take control and make sense of their private 1st party data, achieve world class audience segmentation, reach targets everywhere and create a closed-loop feedback for optimized media planning.

P2P use case of today

DMPs connect all relevant customer data, so organizations can leverage their 1st party data to create meaningful segments, discover correlations through unknown audiences to better understand customer/prospect attributes, and optimize each customer experience. Additionally, you get a robust analytics platform so you can continue to refine your communication strategy, across all channels.

And you thought a DMP was just for ad optimization? It is…pause…NOT.

*if you missed the humor in the “not” comment’s please check out this video: (YouTube)

Differentiate or Die: 3 tips to stay alive

Isn’t it amazing when you read a classic business book and the messages still resonate, many years after they’ve been published?  Recently, I wrote a summary of Relationship Marketing, which was published in 1993, where the points were still relevant today. This is another summary of a book that could have been written yesterday.

Are you wondering why I’m still writing book reports after high school? Don’t worry about it…

Differentiate or Die was written by Jack Trout – 16 years ago in 2000. His main argument was that we lived in an “over-communicated society,” where too much information was being sent to consumers. (Do you think there’s more information out there today, than in the year 2000? – of course you do. ) Anyway, he claimed that “positioning” was the only way to get through the noise.

So how does one get through the noise in an “over-communicated” society? Targeting. Trout wrote that having a targeted, focused, approach to the consumer enabled messages to cut through the noise. The next time you hear someone say that personalization and segmentation are new trends, tell them to google Jack Trout.

At a high level, Differentiate or Die is a how-to-guide that offers differentiation strategies. Trout suggested that companies have to think about differentiation in 3 key ways:

  1. Being everything to everyone undermines what makes you different
  2. Ignoring market conditions makes your difference less important
  3. Staying in the shadow of larger competitors is a path to failure

Everything to everyone

If you ignore your uniqueness and try to be everything for everybody, you quickly undermine what makes you different. The example he gave was Chevy. Once the dominant good-value family car, Chevy tried to add “expensive,” “sporty,” “small,” and “truck” to their identity. Their “differentness” melted away as did their business.

  • Today, Chevy is ranked 20th (Best Car Brands) according to Consumer Reports. The top five are Audi, Subaru, Lexus, Porscshe, and BMW.

Let’s focus on the leader; Audi was living in the shadow of Mercedes Benz and BMW, so how did they position themselves to compete (and thrive) in the luxury market? They didn’t try to be everything to everyone. They focused on a segment. Audi targets luxury-car buyers in their 20s, 30s, and 40s, making up about 48% of Audi’s U.S. customer base.

Within that segment, Audi  positions its brand as a leader in technology: “Innovation through Technology and “Truth in Engineering.” If you’ve seen their commercials, it’s clear to see that the message is for younger people who want to “break from script.” This is a direct attack at their larger competitors in the luxury vehicle business: BMW and Mercedes. (Also hitting on point #3 above)

  • Here is the commercial in case you haven’t seen it: “Scripted Life

“Positioning dictates that you find unique and meaningful points of differentiation and use them to competitive advantage.” Trout

Audi is a great example that when you find unique and meaningful points of differentiation, it’s a competitive advantage and their top ranking in the 2016 Consumer Reports report is evidence. They weren’t trying to be everything to everyone, but rather, own a segment 20-40 year olds…

I can’t here you

“Ignoring market conditions makes your difference less important.” Trout

If you are marketing driven, instead of market driven, you lose. You have to know what your consumer is thinking, doing, buying, reading, tweeting, etc. Once you lose the pulse of your consumer, your messages are falling into a black hole.

As Trout points out, we live in an over-communicated world (since the year 2000). Please don’t add to the noise pollution. In order for your messages to be differentiated, they have to be meaningful, unique, and defensible (MUD).

Are you afraid of shadows?

To Trout’s third point…

“If you stay in the shadow of your larger competitors and never establish your differentness, you will always be weak. Consider Westinghouse. They never emerged from the shadow of General Electric. Today Westinghouse is no longer with us.”

Let’s not let the facts get in the way of a good story (Westinghouse is still around today). Trout’s point is that you have to pick a fight with the big guys, just like the Audi example above. Here are his four tips:

Differentiation:

  1. Make sense in context and start with market place (market driven not marketing driven)
  2. Find the different idea
  3. Have credentials
  4. Communicate your difference

Main points:

  • You cannot own the same attribute or position that your competitor owns
  • Have a history: heritage has the power to make your product stand out
    • There is a psychological importance of having a long history

Differentiate or Die is a classic business book and it’s much more than marketing strategy. Top management has to be in charge of making sure that differentiating strategy is generated, communicated, and maintained. Something as important as “differentiation” can’t be left up to marketing people and ad agencies (no offense); it should be a top down strategy.

Thank you for your attention; if you’ve read all the way to this point, you’re in the top 40% (most viewers read only 60% of an article)

Since this is a “book report” of sorts, reader grades are greatly appreciated. If you like it, share it; if you don’t like it, comment and say why.

Relationship Marketing: strategies for 1993 and 2016

Relationship Marketing: successful strategies for the age of the customer written by Regis Mckenna, was published in 1993. At that time, Mckenna argues that a shift occurred from a company based economy to a customer-driven economy, where advertising that “suckers” customers didn’t work anymore. Further, he argued that there was an evolution from a marketing driven approach to a market driven focus, where customers took control; we entered the “age of the customer.”

Was Mckenna’s book in 1993 a Machiavellian prediction for what was to come, or have we always lived in the “age of the customer?” A Forbes article claimed that 2014 was the beginning of the “Age of the Customer,” and asked the question: are you ready? A more recent Forrester study highlighted digital transformation in the age of the customer in October of 2015, which suggests that “the past five years have marked the beginning of the “Age of the Customer,” in which technology and economic forces have put customers in control of their interactions with businesses.

When did the age of the customer really start? If you ask me, it started in the middle ages with inception of modern trade, but consumerism started around 1760 with the industrial revolution, which eventually led to mass media in the 1900’s. If you’re reading this, you’ve been living in the “age of the customer” your whole life, but the methods of communication have evolved: word of mouth, books, newspapers, radio, t.v., email, and THE internet.

Getting back to Relationship Marketing…

“Starting with the customer will guide a company’s product, market, and corporate positioning decisions – and strategies to implement those decisions.” Mckenna

To further his point, marketing isn’t a function; it’s a way to do business. Put another way, marketing is everyone’s job – creating and sustaining relationships with the customers and industry leaders. When organizations integrate customers into the product development process and provide top-notch service, they are establishing a foundation for success.

In addition to redefining “marketing,” Mckenna argued that the old way of marketing is too slow: idea, research, develop a product, test the market, and finally go to market. That approach didn’t work anymore, because the target is always moving and marketers need to keep adjusting and altering their course…and that was written in 1991. That point is even more true today, IF there can be degrees of truth.

With a new approach to marketing, comes a new objective; the goal of marketing is to own the market, instead of a “market share” mentality. In 2015 M&A activity broke records and part of the reason why this happened is because organizations are making strides to take over markets. We see this in finance, hospitality, technology, healthcare, etc. Organizations aren’t happy with a piece of the market, they want to dominate.

Aside from acquiring customers through acquisitions to own the market, an organizational focus on its customers will pave the road toward customer mindshare, which leads to wallet share. Mckenna pointed out that market driven companies initiate a dialog with the customer and with the market itself. That’s how mindshare is gained. Clever marketing and a barrage of advertising doesn’t work, unless the customer is at the center of everything. Positioning needs to start with the customer: “It’s how customers think about you in relation to your competitors.” Mckenna

Typically when you hear the word “positioning” you think of advertising and the internal strategy to communicate with customers, but advertising should be the last portion of the marketing effort, not the first. It should be used to reinforce a products position. In his book, Mckenna defines three attributes of “dynamic positioning:”

  1. Product positioning – not focused on product specifics
  2. Market positioning – industry influence
  3. Corporate positioning – financial success

To take it further, Mckenna argues that word of mouth testimonials are more believable than any advertising / marketing. This was before Facebook, Twitter, and LinkedIn, so imagine if those powerful social tools existed in 1991; Mckenna might have spent hundreds of pages talking about social sharing impact.

While on the topic of sharing, McKenna had some interesting points about the buyer journey and the role that marketers play. He suggested that marketers need to focus on educating the market about your product, company, and industry. More recently, the great people at CEB reconfirm this point in The Challenger Sale and The Challenger Customer that suppliers need deliver commercial insight; buyers need to be educated, not “sold to.”

Selling and marketing lines have blurred and strategies should be aligned. When developing a market positioning strategy that is customer centric, advice that was relevant in 1991 is still relevant in 2016. Mckenna said that developing a positioning strategy begins with two steps:

  1. Understanding your company
  2. Understanding your market

It is a simple concept, but it forces you to think about how to hold constructive conversations that create positive relationships with customers.

Mckenna concludes Relationship Marketing with advice about deciding on strategy. His message still rings true, that we still suffer from analysis paralysis. Let’s face it, marketing plans sit on a shelf and collect dust. Instead of marketing plans, Mckenna suggests that people meet regularly to plan strategy, make sure it’s implemented, and analyze it’s impact. There are three steps:

  1. Input
  2. Analysis
  3. Synthesis (manipulate ideas)

In closing…

Relationship marketing is a timeless concept that enables organizations to see their customer’s requirements in a more personalized way so that the chances of defection are diminished. It’s different from conventional marketing where the customer and supplier position each other to achieve short-term business goals. Relationship marketing benefits everyone involved in the process. Customers benefit from better products and services and organizations get loyal customers and market domination (not market share).

Cubicles are killing your business

Do you remember the moment in the movie Office Space where Peter Gibbens dismantles his cubicle? Try to hold on to that image for a little while.

If you’ve ever worked in a cubicle, you know that sometimes it feels like a cave. Temperatures in the northeast dropped into the sub-zero’s recently, so being in a cave might sound great for hibernating, but if you’re trying to get things done at work, a cave-like cubicle isn’t good for business…is it?

Similar cubical-like caves exist with departmental deployments of technology, where the data is walled off from the rest of the organization. Are cubicles bad for business?

The evidence says no and yes…

First, let’s focus on the cubicle vs open-office debate:

A New Yorker article notes that the open-office concept originated in Germany in the 1950s “to facilitate communication and idea flow.” 66 years later, open-offices are trendy, but do they accomplish the desired goals for better communication and idea sharing?

Some research on open-offices indicates that they create dysfunction. A study from the Finnish Institute of Occupational Health revealed that the “negative effects of acoustic environment increased significantly” when workers moved from private to open offices. These effects include “increased distraction, reduced privacy, increased concentration difficulties and increased use of coping strategies.”

Another study, from the University of Tennessee Knoxville found that a “decrease in privacy reflected a decrease in confidentiality of conversation,” meaning it has become harder to have important conversations.

While the open-office concept might be cool, it sounds like it probably isn’t improving communication and driving innovation.

Trapping data in cubicle walls

By deploying disconnected business applications the data typically becomes siloed; that’s a problem. The information gathered or stored within each application (customer information, analytical data, etc.) is often limited to that particular department, with no continuity throughout the company. With disconnected applications, data gets trapped behind “cubicles.”

As companies utilize more cloud based applications for different aspects of their business, we’re seeing more segmentation of data within these silos, with less interaction between them. This results in poor communication between departments and customer experiences that fall short; breaking down the “cubicle walls” that trap data and creating an open-office data environment will address both challenges.

IT isn’t the only department spending on technology. In fact, some reports show that marketing is spending more on tech than IT. If you combine that with HR, Finance, Sales, etc., it’s easy to see how each department is building metaphoric cubicles throughout the organization. Instead of individual department leaders making tech decisions that impact the rest of the business, organizations need to lean on IT to create a data strategy for the organization. From that framework, business leaders can still maintain autonomy when selecting SaaS suppliers.

Maybe cutting down the physical cubicles for an open-office concept isn’t going to increase productivity, but breaking down the data barriers will certainly “facilitate communication and idea flow.” Further, chopping down the metaphoric departmental cubicles that create data-divides leads to better customer experiences.

Learning from open-office concepts

Like the well-intentioned open-office concept, departmental deployments of technology create dysfunction, restricting the return on investment for the organization. Maybe it’s time to reinstall the cubicle walls and shift the focus to an open-office technology strategy where the siloes are destroyed and data flows freely across the organization, enabling better communication with customers and driving innovation.

Disclaimer:

I’m sure there are arguments for open-offices, but the majority of research I found supported my point about the dysfunction. I work from home, so I’m neutral on this subject. While we can debate the open-office merits, trapping data is just plain old bad for business.

LinkedIn 3D

LinkedIn launched in 2003 and has accumulated over 332 Million members globally, but what is it really? Here’s how LinkedIn see’s themselves:

“the world’s largest professional network with hundreds of millions of members, and growing rapidly. Our mission is to connect the world’s professionals to make them more productive and successful. We can help you: Establish your professional profile and control one of the top search results for your name.”

Can LinkedIn really make you more productive and successful? Yes – indeed it can. Speaking of indeed…sorry, you’re just a narrowly focused search engine. Conversely, LinkedIn is much more than a platform for recruiters and job seekers; it’s a place to learn, share ideas, and build a personal brand.

So, how can LinkedIn make you more productive and successful? You have to start looking at the platform in 3D!

The way I see it, the platform has 3 dimensions

  1. Discover
  2. Disseminate
  3. Differentiate

Discover: to find something (or someone) unexpectedly or in the course of a search.

LinkedIn has eradicated the need for outdated contact lists on hoovers, or other lead generation lists. If you’re looking for someone, they’re probably on LinkedIn. The platform is also great at pointing you to other professionals with similar backgrounds, when you’re searching.

The other aspect of discovery is related to learning. No matter what profession you’re in, continuous learning will prepare you for success. LinkedIn enables you to customize a newsfeed so you see only what you’re interested in; it can be a single destination for news, industry analysis, articles, and company and personal updates.

Simply put, LinkedIn makes it easy to find things, so you can get back to your daily objectives.

Disseminate: spread or disperse (something, especially information) widely.

If you’re looking to get a message out, having access 1/3 of the US population is pretty exciting. LinkedIn gives people and organizations a platform to share information. Content is always going to be “king” and if you are associated with sharing great content others will take notice.

So what should be shared? I suggest you share only interesting things…in the mind of your target audience. What new insights can you broadcast throughout your network? By the way, if you share information, you should comment on why others should check it out.

Differentiate: recognize or ascertain what makes (someone or something) different.

How is your company better than “competitor name here?” Why should people talk to you? If you can answer those questions, you’re on your way to differentiating.

LinkedIn is a great place to build a brand and stand out from the crowd. If you’re listening to understand and then sharing thought provoking information that attracts others to you, you’ve just turned the LinkedIn platform into a productive means for achieving success.

Dan’s 3 D’s to Dodge

Disturb: don’t bother people. Just because you have access to contact information or inmails, don’t be a spammer. Take the time to DISCOVER, before you engage with a new contact.

Dump: if you share only content about how great your company is, or how great your new job opportunity is, you’re dumping. Unless you want to be known as a dumpster, stop it. Some experts say that for every 10 shares, only 2 should refer to your company, but I’d suggest only 10%. If a competitor likes, or shares your content, that’s how you know you’re not a dumpster.

Daydream: I can’t remember the point I wanted to make here… Oh yea, get in and get out. You could waste hours of your most productive time, surfing around LinkedIn, but don’t do it. For me, I allow 15 minutes to accomplish 3 simple daily goals on the site:

  1. Read 3 articles
  2. Find 3 new contacts
  3. Reconnect with 3 existing contacts

By setting parameters, you can focus on the 3 D’s of LinkedIn: Discover, Disseminate, Differentiate (without being distracted!)

Done…

Would you add any other “D” words to describe how LinkedIn makes us more productive and successful?