5 Obstacles to Marketing Intelligence - Part II

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Second part of the 5 Obstacles to Marketing Intelligence in organizations

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5 Obstacles to Marketing Intelligence - Part II

  1. 1. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled 5 Obstacles to Marketing Intelligence – II What Stops Us From Achieving Marketing Greatness
  2. 2. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Quick Review of Last Week’s Lecture
  3. 3. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Last week, we started talking about the 5 obstacles that keep organizations from achieving marketing excellence
  4. 4. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled We covered the first 2 obstacles and will be moving on the final 3 this week
  5. 5. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled We will have established the foundations of the course after this lecture and will start moving into the actual analytics and metrics from our next class
  6. 6. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled So let’s get caught up first…
  7. 7. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Obstacle 1: Getting Started
  8. 8. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled What are some of the reasons that people give for why they are unable to get started?
  9. 9. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled How do we overcome them?
  10. 10. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Obstacle 2: Causality
  11. 11. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled What is causality? How does it affect our marketing?
  12. 12. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled As intelligent marketers, how do we counter causality arguments?
  13. 13. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled The Remaining 3 Obstacles
  14. 14. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Overcome Obstacle 3: Lack of Data— Strategies for Obtaining Customer Data
  15. 15. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Many marketers struggle with too much data, rather than not enough
  16. 16. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Remember that we covered collection and analysis of the right data in overcoming obstacle 1
  17. 17. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled But B2B companies have a legitimate data challenge, since these companies do not sell directly to customers
  18. 18. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled They sell through a channel and do not have direct access to customer transactional data
  19. 19. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled There are three approaches to overcome this obstacle
  20. 20. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Option 1: Channel Partner Data Sharing
  21. 21. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  22. 22. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Mornings for John Chambers, CEO of the $39 billion Cisco Systems empire, starts with a can of Diet Coke and Cisco’s e- Sales portal
  23. 23. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Through this enterprise web application, the senior management can drill down through global sales data that occurred on the previous day by geography, purchasing company/products or sold by a specific sales manager
  24. 24. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Now, for those of you unfamiliar with the Cisco sales model, this is a great trick
  25. 25. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Why?
  26. 26. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Cisco sells more than 95% of its products indirectly through value-added resellers
  27. 27. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled So how does Cisco do it?
  28. 28. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Cisco contractually requires its value-added resellers to share customer sales data
  29. 29. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Most B2B companies find that requesting customer data from the channel partner is met with a firm ‘‘no way.’’ The partner refuses on the grounds that the data are its property and the source of its competitive advantage.
  30. 30. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Cisco requires channel partners to share customer data in order to resell their products
  31. 31. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled So B2B companies must answer the question: ‘‘What’s in it for my channel partner to share its data?’’
  32. 32. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled One answer is that B2B companies spend considerable marketing dollars co-marketing with channel partners so shared data analysis provides deep insights into how to radically improve the marketing performance
  33. 33. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Now, we need to be clear about one thing – and it’s a big thing - the B2B firm does not necessarily have to know the name and address of the customer; this could be deleted from the shared data file.
  34. 34. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled What we are interested in is what products or services the customer purchases, and the ability to act upon these data, perhaps through the channel partner
  35. 35. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled This “disguise approach” works because the channel partner’s concern that if the B2B firm has the customer data, it will want to go direct and cut the channel out of the deal
  36. 36. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Option 2: Frequent Drinker Programs
  37. 37. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  38. 38. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Suntory is one of the largest liquor distillers in Japan and brews a beer called Suntory Malts
  39. 39. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled It is in the 3rd tier of popularity, in terms of sales revenue and brand awareness
  40. 40. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled But in the late 1990s, Suntory did something with the Internet that at the time that was particularly innovative
  41. 41. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled They created a frequent drinker web site
  42. 42. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Now, Suntory, like Cisco, sells all of its beer indirectly through beer distributors, bars, restaurants, groce ry stores and vending machines – which makes data collection difficult, if not impossible
  43. 43. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled So the creation of a website where customers would come to and input the number of beers they drank, given by codes on the bottles, and in return get points was an interesting way to collect data
  44. 44. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled In return for sharing the data, customers got to purchase silly hats, bottle tops with their name imprinted on it, or the chair that is too uncomfortable to sit in
  45. 45. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled At the peak of the campaign, Malts reported 300,000 visitors a month to the web site
  46. 46. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled More importantly, these were high- value customers – the frequent drinkers – and the website enabled the collection of data for direct marketing extremely easy
  47. 47. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Now, this worked in Japan because after work office parties involve the mass consumption of alcohol. This would not have worked in the US!
  48. 48. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled But the idea of a frequent drinker program transcends cultures and geographies…
  49. 49. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Welcome to mycokerewards.com
  50. 50. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled
  51. 51. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled My Coke Rewards The website is a loyalty program for frequent Coke- branded product drinkers Again, users get points for how many Coke drinks they have and get rewards such as T-shirts, DVDs and discounts with the many partners affiliated with the marketing activity
  52. 52. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled What do we learn?
  53. 53. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Customer data is a cheap as a T-shirt!
  54. 54. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled My Coke Rewards enable Coke to have direct access to their “frequent drinkers” and to do direct marketing via e-mail to this valuable customer base
  55. 55. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled The site also provided a revenue stream for Coke through the paid ads on the site for participating partners
  56. 56. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled In both of these example, there is a crystal clear value proposition for customer and resellers to share their data
  57. 57. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled So the question that we ask is: “What is your value proposition for customers to provide their data?
  58. 58. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Option 3: Use Surveys as a Proxy for Customer Data
  59. 59. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled We can also use focus groups and surveys for fine-grained segmentation and target marketing
  60. 60. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled The idea is to capture the demographics, characteristics, and purchasing habits of your end customer through in-depth market research
  61. 61. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled We can create survey- based, analytic marketing offers targeting these segments and test them using focus groups and experiments as we discussed in Obstacle 2
  62. 62. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Now, I should note that this approach is not as effective as analyzing large customer transaction data sets, it can be a great way to get started if you are a B2B firm
  63. 63. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled There are many professional service firms that will design, conduct and analyze the survey, but you can start with a free lunch and a gift for participants
  64. 64. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled The internet has also given us the ability to create and conduct online surveys. For the cost of surveying 10 people in person, you can survey 100 or more online
  65. 65. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled But there is a problem with the survey model, online or offline – getting people to sign up and participate
  66. 66. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled The other problem that we discussed was privacy issues because customers can be hesitant about sharing information in fear of how it might be used
  67. 67. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled One marketer once told a story of their legal department telling them to delete customer data after a specific time period for fear of liability
  68. 68. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled The reason…
  69. 69. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled The company did not have a privacy policy and the legal department did not understand what marketing planned to do with the customer data
  70. 70. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled So, first thing – marketers must clearly communicate the privacy policy both internally and externally about how data will and will not be used
  71. 71. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled In some cases, there are laws preventing direct data collection of customer data
  72. 72. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled In the United States, the Health Insurance Portability and Accountability Act (HIPAA) prevents pharma companies from knowing patient prescriptions
  73. 73. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled While we have to follow these laws, there are ways around them
  74. 74. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled If you create a website targeting a specific illness, like diabetes, you can provide information and provide community support groups to give product information to customers while gaining customer feedback and insights
  75. 75. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled The key understanding is simple – always add value to the customer interaction by answering the question “What’s in it for me?” from the customer’s perspective
  76. 76. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Overcome Obstacle 4: Resources and Tools— Build the Infrastructure for Data- Driven Marketing
  77. 77. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Infrastructure for Analytic Marketing
  78. 78. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled A PC combined with Microsoft Excel makes for an amazingly powerful tool
  79. 79. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled For infrastructure, this is all most marketers need to get started on the analytic marketing path
  80. 80. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled But you should know the limitations - Excel 2003 had a limit of 65,536 rows in a spreadsheet, and Excel 2007 has a limit of 1,048,576 rows by 16,384 columns
  81. 81. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled So if you have a large number of customer, Excel is not going to work as a marketing database, not should it
  82. 82. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Now I will provide you with Excel templates for analyzing customer satisfaction data, internet metrics, and calculating financial return on marketing
  83. 83. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled We can also use Excel to create and manage marketing campaign scorecards
  84. 84. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled But if you have a large customer database, you will need to use SAS, SPSS or a specialized business intelligence application
  85. 85. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled ‘‘The difference in these requirements is the difference between building a ranch house or the Empire State Building.’’
  86. 86. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled In short – Think big, start small and scale up fast
  87. 87. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Infrastructure for a Large Firm
  88. 88. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Customer Data Collection Data Storage Technical Tools
  89. 89. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled We will spend time talking about this model in later lectures, so I will hold off on going into detail now
  90. 90. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Overcome Obstacle 5: People and Change— Create an Analytic Marketing Culture
  91. 91. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled What’s the one phrase that we hear more than any other in business when it comes to change?
  92. 92. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled “I am just a _________ and have no influence to create change.”
  93. 93. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled 90% of employees underestimate their potential to influence others
  94. 94. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled In previous examples, we have seen that small changes can have big impacts
  95. 95. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled You have to understand that in the culture of an organization, change starts with you. So start with simple changes that positively impact those around you
  96. 96. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Now, we have to understand that creating a analytic marketing or marketing intelligence culture requires more than one person
  97. 97. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled You have to convince others and the quick win is an essential early step
  98. 98. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Find out who the decision makers in your organization are and learn what will convince them to believe in the change
  99. 99. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled One fact that we need to remember is: The trouble with change is people
  100. 100. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled To understand corporate culture, think of it as three major categories: rational, bureaucratic or political
  101. 101. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Young MBAs believe that organizations are rational meaning the best idea will win. Experienced managers know that isn’t the truth.
  102. 102. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled A bureaucratic organization has a very rigid organizational structure, and protocols must be strictly followed in communicating with senior executives
  103. 103. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled These organizations are militaristic, with the general giving orders from the top, and the commanders ensuring the orders are executed on the front lines
  104. 104. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Political organizations have centers of power, with individuals who have kingdoms within the organization, often accompanied by budgetary authority and staff
  105. 105. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled The best example of a political organization – a university or center of higher learning
  106. 106. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Henry Kissinger once said, ‘‘The reason the fights are so fierce in academia is because the stakes are so low.’’
  107. 107. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled What are the best ways to drive change?
  108. 108. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled ‘‘Our marketing budget is being cut by 36 percent; we need to justify our future marketing spending.’’ ‘‘We are losing significant market share.’’
  109. 109. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled ‘‘Our discount marketing is killing overall profitability.’’ ‘‘We are hemorrhaging customers and don’t know who are the most profitable.’’ ‘‘Our competitors are consistently outmarketing us.’’
  110. 110. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Create Incentive for Change through Measurement and Behavior
  111. 111. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Weight Loss & Calorie Counting
  112. 112. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled The point is if you can measure it, you can control it.
  113. 113. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled For marketers, making metrics and measurement ‘‘public’’ within the organization will incite change
  114. 114. http://emagine-group.com Brand Focused, Socially Active, Digitally Enabled Many organizations incite activity, not results, so the idea is to focus on the metrics that really value marketing

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