Everything they've told you about marketing is wrong!

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Ron Shevlin (Senior Analyst Aite Group and author of 'Everything They’ve Told You About Marketing Is Wrong') describes why it is time to define new rules for marketing. And why marketers …

Ron Shevlin (Senior Analyst Aite Group and author of 'Everything They’ve Told You About Marketing Is Wrong') describes why it is time to define new rules for marketing. And why marketers should focus on participation. Welcome to 'Sense and Respond' marketing!

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  • 1. WELCOME Everything They’ve Told You About Marketing Is Wrong 370 – THANK YOU! April 21, 2009
  • 2. Value Proposition: • Education: Webinars/Research • Best Practices • Case Studies • Access to Future/Potential Customers: Gen Y Panel • Don’t forget to join today! Marketing Is Evolving? So How Can The PMN Help?
  • 3. Ron Shevlin, Senior Analyst Aite Group and author of Everything They’ve Told You About Marketing Is Wrong Our Featured Speaker
  • 4. Actionable, strategic advice on IT, business, and regulatory issues in the financial services industry Everything They’ve Told You About Marketing Is Wrong Participatory Marketing Network Webinar April 21, 2009 Ron Shevlin Senior Analyst Aite Group Page 4
  • 5. Theme Marketing is suffering from Ignis-fatuus-itis* *Ignis fatuus: Something that misleads or deludes; an illusion
  • 6. Agenda • What changed? • What’s misleading marketers (and what afflictions do they cause)? • What should marketers do?
  • 7. Theory: The four Ps of marketing • Product • Place • Price • Promotion Source: McCarthy EJ (1960) Basic Marketing: A Managerial Approach. Homewood IL: Irwin.
  • 8. Reality: The three Ps of marketing Predict Push Pray
  • 9. The 3 Ps ain’t working like they used to
  • 10. 15
  • 11. “We are fueled by a need to gain more control over our lives, to have valid and significant choices.”
  • 12. What changed? Demand Supply Self-directed consumers More points of involvement Less reliant on firms Web sites More pull, less push Search engines More involved Social networks
  • 13. Misleading marketing myths • Marketing stories • Customer engagement • Customer advocacy
  • 14. “Marketing is the story marketers tell to consumers.” Seth Godin “All Marketers Are Liars” 24
  • 15. Affliction #1: Delusions of brandeur A condition where marketers think that a branding effort will be the antidote to falling or stagnant sales
  • 16. “Good relationships aren’t about clear communication — they’re about small moments of attachment and intimacy.” John Gottman Executive Director Relationship Research Institute Page 26
  • 17. Marketing is getting customers to tell stories to themselves “Successful brands have a story that consumers tell themselves when they reach for the product in the store to buy it.” Larry Huston VP, Innovation Procter & Gamble
  • 18. The stories loyal customers tell They have the most helpful employees They help me make the right choice They’re really easy to do business with
  • 19. “Engagement: Turning on a prospect to a brand idea enhanced by the surrounding context.” Advertising Research Foundation
  • 20. Engagement: Confusion reigns • Importance – One-third of agency execs said customer engagement is essential to their clients versus half of marketers • Business impact – Twice as many agency respondents as marketers said that customer engagement initiatives increased profits • Measurement – Half of marketers have dedicated engagement metrics, just 30% of agency execs think their clients have them Source: cScape, 2007 Customer Engagement survey
  • 21. “Engagement: A series of interactions that strengthen a customer’s emotional connection to the product or firm.” Aite Group
  • 22. What is customer engagement? • Frequency of purchase • Frequency of interactions • Type of interactions • Location of interactions • Rewards program activity • Referral behavior • Category engagement
  • 23. “Why do Apple customers care so much (about Apple)? A good question…but the wrong question. The real question is: Why don’t most consumers care more about firms and brands?” Umair Haque Director Havas Media Lab A: Because they don’t care that much about the product/service that they purchased in the first place
  • 24. Example: Measuring engagement 0 1 2 Money movement None 1-5 times 6+ times Rate monitoring Never Infrequent Often PFM usage Never Infrequent Often Banking advice Never Online In-person OL banking/bill pay Bank offline Bank online Bank + bill pay online Product research Offline Online at bank Online at sites bank + social nets
  • 25. Engagement segments High Engagement 25% Low Engagement 75% Source: Aite Group February 2009 Customer Engagement Survey
  • 26. The economics of engagement I often recommend 41% my bank to my 23% family and friends High engagement I plan to open more 27% Low engagement accounts with my bank 5% over the next 2 years Source: Aite Group February 2009 Customer Engagement Survey
  • 27. Engagement = strength of relationship 1. What what can we do to Customer Engagement engage them? Low High 2. What needs aren’t we meeting for these highly 3 4 engaged customers? High 3. Who are these attrition risks Breadth of 5 and what can be done to relationship retain them? 1 2 Low 4. What is the profit impact of increasing customer engagement? 5. Who’s migrating between quadrants?
  • 28. “The best way to measure loyalty is to ask one simple question: Would you recommend us to a friend?” Fred Reichheld 38
  • 29. Affliction #2: Net Promoter Syndrome The belief that if the number of people who might possibly recommend your firm is greater than the number of people who hate your guts and want to destroy you, then your firm is on the path to Nirvana and should tell its story at conferences
  • 30. (Some of) The issues with NPS • Cost: Requires large investment to collect, analyze, and disseminate data -- and change incentive plans • Operational disconnect: Doesn’t help identify what operational enhancements are needed • Periodic: Captures opinion at periodic intervals, not continuously • Intention: People don’t always do what they say might do
  • 31. Referral behavior versus intention Q. How do you feel about referring your bank to your family and friends? I would never I often recommend recommend it my bank to my family 13% and friends 28% I would recommend it if I thought there was a good fit 60% Source: Aite Group February 2009 Customer Engagement Survey
  • 32. Behavior trumps intention Percentage of segment that plans to open more accounts with their bank over the next two years Often recommend 20% bank to family/friends Would recommend 7% bank if it was a good fit Source: Aite Group February 2009 Customer Engagement Survey
  • 33. Trust is the differentiator Trusts bank 55% very much Trusts bank 25% somewhat Level Has no of 15% opinion trust Often recommend bank to family/friends Trusts bank 11% very little Doesn’t trust 11% bank at all Source: Aite Group February 2009 Customer Engagement Survey
  • 34. Trust is multi-dimensional Trust: Assured reliance on the character, ability, strength, or truth of someone or something “To demonstrate trust, it’s important for firms to . . . ” Human-focused Advice-related Operational-oriented  Have employees that  Clearly explain their  Respond quickly to live up to values products and services inquiries portrayed in ads  Acknowledge  Alert me to  Have friendly and competitors’ offerings changes/issues helpful service reps  Tell me when it’s a bad  Rarely/never make  Listen to my problems idea to buy their mistakes and concerns products
  • 35. The stories loyal customers tell “They have the most “They help me make “They’re really easy to helpful employees.” the right choice.” do business with.” Human-focused Advice-related Operational-oriented  Have employees that  Clearly explain their  Respond quickly to live up to values products and services inquiries portrayed in ads  Acknowledge  Alert me to  Have friendly and competitors’ offerings changes/issues helpful service reps  Tell me when it’s a bad  Rarely/never make  Listen to my problems idea to buy their mistakes and concerns products
  • 36. The ignis fatuus of marketing Marketing is the story marketers tell customers Customer engagement is about interacting with ads Advocacy is getting customers to refer you
  • 37. Marketing’s job High High Trust Basic Engagement No opinion Low Awareness Consideration Preference Purchase Re-purchase Customer Lifecycle
  • 38. What are CMOs doing about this? What they said* What they meant 79% said they’re improving the “My mom thinks I’m doing a great job.” perceived value of marketing “Told you it wasn’t my fault things 45% expect to change agencies are screwed up.” New competencies are at the top of “I just don’t know what competencies the list of planned changes we need to build.” *Source: CMO Council, 2008 Marketing Outlook
  • 39. The prevailing mentality “With loyalty to brands decreasing over time, companies need to figure out how to reach customers where they are.” A popular blogger
  • 40. Affliction #3: Blogophilia According to Wikipedia, this is “the irrational belief that creating a blog or participating on social networks will, in and of itself, help a company reach customers and improve its customer relationships.”* *I made that up. But you have to admit, it sounded real — as do so many of the other half-truths floating around Wikipedia
  • 41. Marketing must make changes Philosophy Persuasion-based Participation-based Focus Attitudes Behaviors Competency Push-and-pray Sense-and-respond
  • 42. Sense-and-respond marketing Sensing consumers’ needs and intentions based on their behavior and responding with the appropriate advice, guidance, and offers
  • 43. One guru who got it right “The secret to creating strong relationships is honesty and fair dealing.” “If you can fake those, you have it made.” — Groucho Marx
  • 44. Aite: Partner, Counterpart Aite Group (pronounced eye-tay) is an independent research and advisory firm focused on business, technology and regulatory issues and their impact on the financial services industry. Ron Shevlin Senior Analyst rshevlin@aitegroup.com www.aitegroup.com 1.617.338.6045
  • 45. Blog Question Forum Research Social Networks Micro-Blogging Resources
  • 46. Our Last FREE Webinar: http://thepmn.org Register with promo code DVYN01 & receive a 20% discount! http://twtrcon.com/ What’s Up Next?
  • 47. Start and continue the conversation. THANK YOU INFO@THEPMN.ORG mdellapenna@aitisolutions.com rthomas@aitisolutions.com