How not to sell a commoditized product

I saw this on YouTube last night as I was working on packing for my upcoming trip to Estonia.  I laughed, not only because of Brian Regan's style but also because I've worked in consultative sales organizations as a marketer, sales consultant, operations/marketing person, or a combination of all three for almost 6 years. In these organizations, you would never (if you're positioning your product correctly and leveraging your training) sell your product in this way.

It got me thinking, however, because all products are eventually commoditized when the market gets penetrated, that differentiating your products as solutions to consumers' needs and values (if you're selling to consumers) or a business person's critical business needs and stated goals (if you're selling B2B) is critically important when your market is in this condition.



In light of that...  If you were this appliance sales person, how would you sell a refrigerator?

Social Marketing - Does it matter?

It seems as if a lot of companies are, whether internally or externally, starting to embrace this new paradigm of "social" communications and networks within their communications and PR networks.  You may have seen a few signs of these, such as:

• Companies are becoming more and more engaged on social networks such as Facebook and Twitter
• Internal social networking platforms like Yammer and Chatter are being experimented with, and being adopted with a good deal of success
• Corporate executives (especially at forward-thinking technology companies) are tweeting their thoughts, visions, and expectations
• Your marketing team has used the term "fan," "like," "follower," or "engagement" in any context regularly in the last year

I believe "social" is here to stay.  The fact that Facebook's ad impressions are set to (if they haven't already) exceed Google's is a decent sign of this new reality.  Now, the question is as brand-stewards, "what do we do with this?" and "Does our engagement in social media networks really matter?"  In the B2B marketing world, in particular, this can be a quandary because much of the emphasis here is on demand generation and "leads," which social sites may be able to create in the B2C world but if we are strictly measuring the value of social in this way in B2B, can the ROI be justified?  

Perhaps leads can be uncovered through social sites, but the danger is that if your behavior is dictated by this mandate that you could either or both a.) sabotage your potential success in social, and b.) underestimate the value of engaging in this world and thus never invest the time or resource required to be successful.  

However, I believe the the key is moving the perception of social from being a thermostat to being a thermometer.  

Social is a very poor thermostat, because with the instantaneous feedback of the social world (especially with external messenging) any messaging that you present to change perceptions can potentially be, if it is contradictory with the experiences of your customers, challenged immediately by those with different experiences.  In a world where over 40% of people trust "someone they know" versus corporate advertising, who do you think they will listen to:  The brand message or their "friend" that discounts the brand message?  This interaction puts you potentially in a difficult circumstance when you are at "odds" with your audience.  The thermostat "broke" if you will, because you intended to change the environment but the environment did not change.  

It is however a very good thermometer.  Do you want to know what your customers are truly interested in learning from you?  Do you want to know what the real perception of your brand and your products are?  Are you humble enough to listen, incorporate the feedback, and change if the feedback you are receiving and your brand are not in alignment?  If they are not, it is a powerful thing to tell your customers (who are committed to you with their dollars), that we are in this together and we are going to change for your benefit.  And if they are, how can you leverage the crowd that is surrounding and loves your brand?  When the love for your brand within and without is high, this is when great marketing goes viral.  This is when friends will recommend you.  

At the end of the day, social media is not just a "marketing" tool, it is really a community-building tool that can revolutionize how you learn about, communicate with, and create value for your customers and fans.  When we see it in this multi-dimensional way, we can truly leverage its power and see the results.   

Your Customers Brand You

You know it's rarely a good sign when people get creative with your company brand :-)

I'm on a Delta flight, leaving an hour and a half late (fortunately not as late as other Delta flights here), and when I put a comment on my Facebook wall about "what's up with the Delta delays?" a guy that I worked with during my road warrior work days commented with...

Don't you know Delta stands for Doesn't Ever Leave The Airport? 

And then another friend commented with...

Don't Expect Luggage To Arrive. 

For someone who has endured long delays and has had my luggage lost... not once, not twice, but at least three times by this airline, I had to laugh.  Why?  Because I've experienced this... it's pretty true. 

Being a marketing professional by training and trade, this intrigues me a lot, because you know that Delta isn't really trying to get this type of publicity and their PR department isn't exactly pumping out this message.  However, Delta does (if you see the billboards and other marketing they put out) spend millions of dollars every year to attempt to brand themselves as an airline that can take you everywhere and anywhere, where they still care about customer service, and that they have a personality (or at least that redhead that talks like William Shatner and waves her finger at you when she says that smoking is "not allowed" does).  However, all of those ad dollars and all of those branding efforts, you have to imagine, get wasted when you book a Delta flight to "go somewhere" and it's stuck on the tarmac for 2 hours, or is delayed by over an hour and a half, or when you arrive at this exotic destination you find out that your luggage is in an entirely other part of the world. 

What speaks louder?  The advertising messages... the PR statements... the cool new colors on the airplane? 

Or the fact that they lost my luggage... again? 

I think you know :-)

And back to Delta, and the fact that they can get me anywhere... 2 hours late.  Maybe with my luggage.  They do provide a good service, but at the end of the day these consumer experience issues do become part of a company's brand, whether they like it or not.  It's not just for airlines. 

At the end of the day, your Marketing department doesn't ultimately determine your brand; they can only attempt to define it in the customer's perception and drive awareness.  Your customers ultimately define the brand.  And for those brands that meet or exceed expectations, this is a wonderful thing.  For those that do not, it keeps Brand Managers busy, but can make a company look a little silly.  

As the acronyms and parodies can tell you.  Ha!

I have data, but I need information

I have a confession:  I am a statistics and data junkie.  I’m not sure where it came from… perhaps it’s from my love of baseball growing up, from playing Fantasy Football (in which I never missed a Fantasy playoff in a league I’ve played in), or tracking the Rivals star status of Texas A&M’s football and basketball recruits to assess whether I should get excited about the upcoming seasons or start blogging in support of a coaching change.  Regardless of where it came from, I have built my post-MBA career on an ability to leverage data to decipher insights and recommend future strategy.  Especially working in the BI space, I have found that organizations that understand the importance of leveraging data for competitive advantage tend to be more successful than others.

This is a good time to be an analytics professional.  Today, like no other time in history, there is a plethora of data in the world.  From organizations siphoning terabytes (and even pedabytes) of operational business data into massive data warehouses, to all of the information you can search for on Google, to the clickstreams of your website visitors, to the massive amount of data aggregators providing syndicated lists & analyst reports, to all of the chatter on the blogosphere and Twitterverse, we are swimming in an ocean of data and organizations have an endless appetite for it. 

In fact, every company can probably say these two things:  1.) We have too much data and 2.) We don’t have enough data. 

Or perhaps this is what they are saying:

• “We have too much data”  We are having a difficult time getting value out of the data we have. 
• “We don’t have enough data”  We don’t know what we don’t know or need to know.

Both of these statements/issues are related.  I have heard multiple times, especially on consulting engagements, this term:  “We are data rich, but information poor.”  This is a good statement, because it recognizes the reality that a company has a lot of data at its disposal (like most organizations) but that’s all it is… data.  It means that the organization is spending a lot of energy collecting and delivering data but what it really needs is information… insights that can drive actions that get results. 

How do I do it?  How do I take all of the data I have, or better said want to collect, which has limited value and transform it into information and insights which are extremely valuable? 

At a high level, here’s how you make it happen

1.  Follow Steven Covey’s rule from “The Seven Habits of Highly Effective People” and start with the end in mind.  In order for your data to be effectively leveraged, you must first ask the question:  “What do I want to learn?” and evaluate the questions that you will answer through your data.  
2. Pre-define your data to support the questions you want to answer and develop systems to ensure that it is consistently collected and codified according to this definition.  Your data must support your analysis, rather than your analysis support your data if the quality of your information will drive the maximum value you want to achieve.  This is the hardest work, because in many cases you may not know what you don’t know yet.  As a result, this is fluid process.
3. Collect data consistently, accurately, and with proper governance.  This is especially important when your analytical data is coming from many sources in your organization.  If your organization is truly going to be data and insights driven, then data governance and data quality must be a high priority and governed at a high level in the organization. 
4. Review, analyze, and refine often.  Once you start gaining insights, you will start to ask deeper questions and create a market for intelligence in your company.  At this point, we would start over at #1 and once again ask the question:  “What do I want to learn and how do I need to collect and define my data to get me the answer I need?” 

This is key to truly becoming data-driven.  Good data is intelligently conceived and is supported by good processes.  You can’t have good processes without good data and you can’t have good data without good processes.  The two work hand-in-hand.  It is hard work, but the value that insights can give over mere data is well worth the effort to align an organization from being a data consumer to an insights creator.  

The power of the unexpected

Anyone who watched (or know someone who has) American Idol on Wednesday night has probably heard about an audition of a 62 year old man that is known as "The General" who can regularly be seen downtown.  Generally, Idol doesn't allow anyone older than 28 in to audition, but they let this guy come in and showcased his audition at the end of Wednesday's show.

He performed his original rap, and Simon's words were "I have a horrible feeling that song's going to be a hit."

He's right... I'm not certain about the "horrible feeling" or that it's going to be a hit, but the latter is true.  The original video has gotten over 33,000 views on YouTube yesterday and a total of 19 "Pants on the ground" videos have been posted.  In addition, "Pants on the Ground" was a consistent trending topic on Twitter, which highlights the buzz around this episode and how the word has gotten out virally.

American Idol appears to have gotten the buzz it needed after the drama surrounding Paula at the end of  last season.  They knew that providing a twist; a surprise; the unexpected would grab viewers' attention, which is one reason I feel that The General, while not "contestant status," was invited to audition.

The water cooler talk at the office is that (and I think this may happen) an Atlanta rapper may pick it up and cover it.  Needless to say, viewers have a new reason to tune into Idol.

What's interesting to me is that while The General's audition was very unconventional, it was consistent with the Idol brand (namely the practice of putting up "losing" auditions during the first episodes) and at the same time added to it.  I'm sure that some marketing genius at American Idol was thinking that... after all look at the amount of editing they gave to "The General's" clips.

Vegas Style Marketing

1-to-1 targeted marketing is the dream of just about any sales and marketing organization.  It is highly coveted and extremely difficult to attain to, especially if you have thousands or even millions of customers to serve.

However, there are some industries (or better stated companies within industries) that have come very close to reaching this nirvana.  One company and industry that is often cited as a leader in 1-to-1 is Harrah's Casino in Las Vegas (or Harrah's worldwide), but other gaming companies have started to follow suit and are attempting to play catch up.  At one of their casinos, a "guest" playing on the casino floor that is starting to lose consistently will at an opportune time be greeting by a casino staff member that will offer the guest show tickets, free dinners at a buffet or restaurant within the casino, or another valued commodity to avert the possibility of the guest having a negative experience (and potentially keep them at that facility).  Implementing this 1-on-1 guest rewards program has been very successful for this and other gaming companies both in terms of customer satisfaction and ROI that they are considered models in the world of high-touch database-driven marketing.  You may have heard the phrase "Vegas-Style" when referring to CRM database marketing before and this is one of the reasons why.

Given that I've worked at the company that supplied many of these companies with the underlying technology that drives this 1-to-1 CRM success, I am familiar with the keys to success in making an effort like this happen.  While the ROI is significant; the effort, energy, and investment required to realize this dream is also extremely significant.

So what are the keys to success?  Here are, at a very high level, a few required steps:

1.) Committing to create a single, 360-degree view of the customer:  As long as the data that a company uses to drive decisions regarding customer interactions is disintegrated, there is no possibility of being able to market Vegas-style.  There must be a single source for customer data that is strictly governed at a high level in the organization and is considered the single source of truth.  This is important because whenever a customer interacts with you and this interaction isn't aligned with other interactions they have with your company, then that interaction cannot be factored into your relationship with the customer.  In a case where customer data exists in multiple places in your organization, each group that interacts with the customer will have their own version of the truth, and those versions can conflict with one another.  In that case, your company can look schizophrenic to your customer, which does not help your brand.  Implementing an effective 1-to-1 strategy requires consistency and consistency requires accurate, complete, and well-governed data.  In this world, giving data governance the appropriate attention, visibility, and authority is paramount to your success.

2.) Committing to marketing based on data-driven customer insights:  The reason that Harrah's dual-active data warehouse understands when to alert the casino staff that a customer service professional is needed on the floor is twofold:  First, Harrah's spent time reviewing the behavior of its guests from the casino data and knew with a certain degree of certainty when those "points of frustration" would occur and decided as an organization what the rules of engagement would be.  They knew not just intuitively when to make an offer, they reviewed the data and knew exactly when to act.  Second, they took the data analysis and decided as an organization what the rules of engagement would be based on insights.  These rules were built into the database, along with a certain degree of flexibility to ensure that the personal touch would not be lost.  However, the decision to act was decided, vetted, and justified prior to that high roller losing a quarter of a million on the slots and the show ticket giveway action put into effect.

The true value of data analysis is on the front end strategy development side of the marketing process.  While it is valuable to analyze "what happened?" once a campaign has completed, it's value is not nearly as significant as the value of predicting "what should happen and how should we drive behavior based on our insights about the customer?"  In fact, "what happened?" gains a lot more value when the strategy itself is based on rock solid data-driven insights.  This creates a feedback loop where future campaigns can be refined and strengthened based on validated or perhaps invalidated insights and assumptions.

3.) Committing to align your organization around the roadmap:   The "Vegas Style database," once the insights were analyzed, the customer data completely consolidated, and the rules of engagement decided upon, defined the going forward marching orders for interacting with the customer.  This is not only key to developing consistent communication with the customer but it is paramount to strengthening the company's brand.  A brand, being a "promise of value," is built over time when the customer's experience with you consistently matches up with their expectations of you.  When these expectations are high and they are consistently met, then your value to them and their loyalty to you grows.  To achieve this, everyone on the organization needs to be working from the same playbook, the same customer data, and the same M.O. - it's why the West Coast Offense won the San Francisco 49'ers four Super Bowls in the 80's and is why Harrah's consistently "wow's" it's visitors with it's guest service.

At the end of the day, 1-to-1 marketing is not technology-driven, even though it is technology-enabled.  It is a strategic decision that requires investment in organizational alignment and cultural focus in addition to the technology.  It is worth the effort, however, as people in the gaming industry will attest.

"So much cooler online"

The other day, I saw a tweet come across my feed that made me laugh out loud.  It stated:

"I still hate Comcast, but @ComcastMarc_NE makes me hate them less. Good customer service guy." (from @617patrick)

This tweet illustrates that importance of authenticity and ensuring that the interactions that you have online and in social networking as a company align with the reality of your brand.  Comcast has been very successful with using social networking, and specifically Twitter, to improve their customer service.

A banner at Dreamforce evangelized their success story with social media, claiming a 46% increase in their net promoter score as a result of using SalesForce for Twitter to engage with their consumers.  They have a team of customer service reps (like @ComcastMarc_NE) that strictly look for complaints on Twitter (which I can imagine based on the staffing in this organization and my own personal experience that there are many) and start conversations in the attempt to resolve their cable, internet, or phone issues.

However, as we can see (and a lot of us that use Comcast can attest), the offline interactions many of us have with Comcast haven't changed much.  They are giving us one image online with their "Twitter Ninja" team and another one with the contracted technician that visits our home and does very little to meet our expectations.  Are they like the guy in the Brad Paisley song "Online" who works at the Pizza Pit, drives an old jalopy, and lives with his parents yet portrays himself as a hot model from Malibu with extraordinary tastes?



At the end of the day, being successful with marketing in social media requires authenticity, and is not a highly-effective image management mechanism.  Customers today are very savvy and can tell, and in many cases will call us out if we are "so much cooler online."  News does travel fast in the social networking world.  The good news is, if we are authentic online and offline,  serve our followers, customers, and fans well, and deliver on our brand promise in every channel it will do wonders for our brand.  Good news also travels fast.

Salesforce Chatter

Attending Dreamforce 2009, as with every one of Salesforce.com's conferences you know that an exciting game-changing announcement is in the works.  This year provided one that I believe could be monumental.

Chatter.

"Chatter" is Salesforce's new "Facebook for the enterprise."  It essentially takes the "feed, follow, and profile" features and best practices of Facebook and Twitter, and applies them to the CRM cloud model that is currently in place.  What it creates is an tool where anything that is worked within Salesforce.com or communicates with Salesforce.com can "talk" to you through a live feed that is similar to the one that you see when you log into Facebook and view the news feed.

In Mark Benioff's keynote, he made this statement that I believe is the core reason why this may really take off (especially in younger companies but is not limited to).  He asked "Why is it that I know when one of my 5,000 Facebook 'friends' have gone to a certain movie but I don't know when my VP of Sales has visited a key client?"  The point is this:  social networking has greatly enhanced our abilities to organize our social lives and disseminate information in our personal lives, so why can't we have these same abilities in our businesses?   Why can't the same automatic notification I get when a picture of me from a party has been tagged come when a creative brief that I'm collaborating on has just had a key revision?

In business today, I have to either be proactive, I have to get alerted through my dedicated communications system (Outlook or IM... all disparate) or someone has to take the initiative to push the information I need out to me.  In social networking, I get all of my information socially from the feed.  Essentially, "Chatter" is their attempt to bring this metaphor and this "integration of people, applications, and data" into a single collaboration engine that is familiar to those of us that use tools like Facebook, which statistically is most, if not all of us.

Time will tell whether this bet will pay off... and if business will indeed transform based on this new metaphor.  However, considering that SalesForce.com's initial inspiration for SaaS was Amazon.com (another highly successful consumer web application), they may be on to something.

According to the folks I talked to at Dreamforce, expect Chatter to hit your Cloud in Summer '10.  However, their Safe Harbor statements indicate that we shouldn't put all our chips on this quite yet, but it will be exciting to see what it brings to the table when it is generally available.

Unconventional

It's been a while since I've posted here, especially with my attention being focused on the political season as it is.  I do have an observation from the last couple of weeks:

Notice the unconventionalness of the decisions made by each of the candidates... partly I believe to shore up some of their perceived weaknesses as well as to energize their ticket.  Obama, relatively inexperienced in National politics and running as an anti-establishment "change" candidate picks a 65 year old Washington insider who is the epitome of the Democratic establishment.  John McCain, the experienced one running for President, counters by picking a very young, first-year, relatively unknown Governor for his running mate.  Interesting.  

On the technology side, I am enjoying the video tributes that both of the parties are using in their conventions.  The multimedia flair is adding a little to the polish of the conventions.  

Startup evaluation

Having worked in an entrepreneurial environment in the past, and wanting to return to the innovative, creative, and fast-paced high-tech startup world, I have been giving some thoughts to how to evaluate opportunities that will present themselves in this space.  This thought came about from talking to colleagues who have worked at or are currently involved in new ventures and the wisdom gleamed both from my as well as their experience.  There is a lot of new venture activity in the analytical BI and CRM space where I am positioned, especially with SaaS analytics companies and new DWA vendors.  

The issue is not in finding companies, but more so in picking a winner...  In my venture evaluation, these are the criteria that I believe would be the most valuable (feel free to debate):

1. Venture funding partners... Who in the venture capital market has bought into their business plan and are supporting them with capital and leadership?  What are the reputation of these firms and the companies that they fund?

2. Leadership team... What is the experience and reputation of the executives and founders of the company?  Have they succeeded before (like Brett Hurt of Bazaarvoice who founded CoreMetrics)?  What is their experience in the space (such as Foster Henshaw of Dataupia, who founded Netezza which is now public, profitable, and has revenues of over $150M/year)?  What type of people are they to work for?  What type of corporate cultures do they incubate?  

3. The technology... Is the technology differentiated in a real and relevant way?  Is the value proposition compelling?  

4. Customers (tie with technology)... Who from a customer standpoint has bought into the venture's value proposition and put "skin in the game" to invest in it for themselves?  What has their success been with the technology?  

Obviously, all of these are relevant and important.  In addition, the order of consideration does depend on the amount of risk you want to take... for example, customers may be #1 if you're more risk averse... and leadership team before venture capital if you're more of a risk taker.  I have seen some interesting ventures in the market (a couple I listed above) and it'll be exciting to see what their future may be... 

Mass Blast no more... but how?

Talking to a number of folks in the CRM and digital interactive marketing spaces over the past months and weeks, the ancedotal truth that the old "mass blast" form of marketing is either on its way out into extinction or may already be there.  I think that there may be a place for it in some way (TV, radio, print advertising that is) but it is no where near the force that it once was in the brand managers' world.  

That's the bad news... the good news is that with all of the digital media outlets that we have today, there is a plethora of data out there for marketers to mine and gain insights into segmented or even one-to-one marketing.  The better news is that there are technologies out there today that allow companies to store and harness that information (data warehouse appliances, analytical toolsets in SaaS delivery, user friendly BI tools, plug-in application delivery mechanisms to user connection points, etc.), so in a sense a company can actually know you and market to you individually if they wanted to.  

But there's some bad news about that... This can (and does) creep people out.  Like, in a "1984" kind of way (the George Orwell book, not the Macintosh ad)... or think about how the billboards were talking to Tom Cruise's character in the movie "Minority Report."  Technically, something along those lines could be possible with the data and delivery mechanisms... the problem is that it is (or can be) a major invasion of a person's privacy if permission to market has not been given.  In a harmless way, people like me are clearing spam out of their inboxes because of all of the marketing aimed at us based on some action or actions we have taken online... in a less harmless way, people start to feel uncomfortable and start bailing from good services that they once trusted.  

The key for a marketer in this world, I believe, is gaining permission to market to a consumer... to engage in a dialogue with them that feels more like a "pull" than a "push."  In a sense, consumers that trust companies they do business with and engage them on their terms ("market to me on my terms") will become raving fans and will be more loyal.  The trick is how to obtain permission... because we have the tools and the technology.

Now, we need to earn the trust.... and not betray it.  

Food for thought. 

Is John McCain getting Web 2.0 on us?

For anyone who had an opportunity to check out the clips from the Saddleback Forum on the Presidency on Saturday (or the replays on Sunday and/or on CNN.com), you may have been intrigued by some of the answers provided by the candidates to Rick Warren's questions.  

One that particularly intrigued me from John McCain was his final choice for an advisor for the "Who are the three wisest people you would rely on in your administration?" question.  His choice was Meg Whitman, the founder of eBay.  Hers is, in the words of the candidate, "one of the great American success stories." and also someone whose entrepreneurship has transformed the way that many of us conduct our business today.  In an essence, it was the invention of "social commerce."  

I believe that answer was not only strategic on John McCain's part (what public comment of a Presidential candidate isn't?), but also signaled a realization of the importance that technology, eCommerce, and social networking mechanisms are playing in the U.S. economy today.  His response to leverage her experience signals that he believes that this is the direction that we are headed.  Not knowing whether Senator McCain knows how to Twitter or not, he does campaign on LinkedIn and Myspace and is obviously a little bullish on the future of web-enabled businesses.  

Food for thought for today... 

Starbucks $2 Receipt Special

As many in the Retail (and hospitality) industry know, Starbucks just recently announced (and executed) their plans to start a loyalty program similar to the ones being deployed by grocery and general merchandise retailers. I'll be interested to learn about how they feel their success with the program is being, but a couple of developments are interesting:

First, every successful loyalty program has some sort of "carrot" that is offered to entice consumers to sign up for the program. Starbucks offered three "carrots" to its' caffeinated consumer base to motivate the sign-up. 1.) A free tall coffee once a consumer signed up. 2.) 2 hours of free wifi through AT&T per day for consumers signed up through the card program, and 3.) A free flavor shot for lattes purchased with the card (It's worth about $0.30 for each peppermint latte I get). I imagine that would entice a certain amount of participation, especially for those of us that like to work from coffee shops that hated going to Starbucks to pay for T-Mobile.

My action item now is to research what their participation rate is... more to come.

I'm curious though if their current "magic receipt" promotion is likely coming out of some of the consumer insights initially gleamed from the card program. For Starbucks and it's peers, there are generally 2 buying and usage occasions... the morning coffee rush which usually results in more sales of drip coffee (like Pike Place Roast) and the afternoon/evening occasion in which more lattes and frappucchinos are sold.

Now, the promotion goes like this... buy a drink in the morning and the barista at the counter will stamp your receipt with a mark that in essence makes your morning receipt into a "coupon" for a $2.00 iced beverage in the afternoon (after 2PM). Notice the synergy with the number "2" in the promotion. After 2PM, this receipt can be redeemed for a grande frap, iced latte, or Vivanno for $2.00 plus tax.

What I imagine the analysts in Seattle observed with this were: The people buying in the morning and the people buying in the afternoon were two different segments of consumers. A lot of people buying <$2.00 coffee in the morning weren't coming back in the "evening occasion" to get the $4.00 lattes, which are probably more profitable for Starbucks. The "afternoon" consumer is likely the "coffee culture" buyer that is pretty loyal to Starbucks anyways and is the "coffee date" type of person (I'm speculating here)... more of the Gen-Y or Millennial crowd. So, I imagine that Starbucks is attempting to entice the "morning consumer" to come and try Starbucks in the "after work" occasion and create a new occasion for them, realizing that many of them do not buy coffee after lunch (perhaps because of price). So, by making the after-work drink the same price as the "work drink" they may get a greater share of wallet and more repeat business from them?

It'll be interesting (for the Starbucks folks) to see if this promotion creates some "sticky" behavior there. What will the drop off from the sales spike be after September 2nd (when the promotion ends)? Will the professionals they enticed with $2.00 iced drinks come back and consider Starbucks the "new non-alcoholic happy hour?" or will they return to their pre-promotion behavior?

It is a good idea, at least from my perspective. Perhaps, however, I'm just enjoying the $2.00 drinks :-).

Self-Service and Real-Time Analytics

As I had written before, the consumer-facing market is migrating into more and more of a self-service model with the prevelent use of ATMs in banking, self-checkout and self-ordering devices in Retail and Hospitality, and the growth of eCommerce online merchants. This channel obviously provides the consumer and the merchant with some advantages (convienence, efficiency, etc.) but it has one notable disadvantage. This disadvantage is obviously the lack of person-to-person interaction in these exchanges. In such an environment, how does the consumer feel that she is "known" and the merchant able to conversely "know" the consumer?

In businesses where self-service works well, the merchant has to "know" the consumer based on her previous interactions with the company. What are her tendancies, history, affinities, etc? Based on the occasion that she is shopping within, what type of merchant offers will be relevant to her? This type of knowledge requires "real time analytics" in the sense that the shopper's behavior is analyzed and her tendancies are known... and then based on the predicted shopping occasion (fill-in, splurge, pantry filling, convienence trip, etc.) can the merchant offer her an incentive to make that visit more profitable for the merchant and more valuable for the consumer?

Obviously, in the eCommerce world the merchant will know through the contents of the consumers' shopping basket and her session clickstream behavior. Is this possible in a brick and mortar world? Is it possible without real-time basket information? Possibly... but this would require that the shopping and occasion data is available and the patterns are analyzed on every customer... something that requires sophisticated analytical CRM tools and an active data warehouse environment with the horsepower to support it (obviously the merchant needs to know in some way when the consumer is interacting with them). In the banking world, this can effectively be handled through the ATM device similarly to the way Amazon would offer a next best offer from a purchase.

However, what would the ROI on consumer marketing efforts be if, like eCommerce, you could analyze and dynamically offer value-added services in the midst of the shopping occassion... at the point of purchase instead of the point of sale? There are some mechanisms for doing that today, but they are by no means segemented. There is one retailer that is experimenting with self-scanning technology within the store... if this could be married to the offer and relationship management technology it could be a huge win for them, both in terms of understanding their shoppers but also in marketing effectively to them on their terms.

Keeping it light today

A little bit of trivia: Did you realize that this year, the iTunes Store became the #1 seller of music in the United States? Over 5 billion songs have been downloaded from the iTunes site since it's inception in 2003.

Those are a lot of $0.99 plays. Is the compact disc format on its way out?

http://en.wikipedia.org/wiki/Itunes_store

The growth of self-service

Time Article Link: Time Self Service Article

I thought that it was very interesting back in 2007 when NCR and Teradata split off that the young, aspirational, motivating CEO of NCR Bill Nuti was chosen to head up the new NCR versus move over to the Teradata division spin-off to drive the growth of enterprise intelligence. Seeing where he is now and the aggressive repositioning of the "National Cash Register" company into the self-service juggernaut, the move is making sense. Especially as this market is poised, based on most analyst reports, for incredible growth which NCR can take advantage of if it's positioned to uniquely meet the market needs.

Self-Service in commerce is prevalent and hits all aspects of our daily lives. Obviously, the first mainstream application was the ATM machine back in the '80's but with the growth of the Internet and Web 2.0, consumers are becoming much more comfortable with shopping and selecting services without the in-person assistance of a human being on the other side. This phenomenon is moving into the brick and mortar world as well as electronic kiosks and self-service checkout devices are becoming more common, with the trade off being between that personal service we love and convenience.

It's not always successful, but when it is (as companies like NCR, IBM, eBay, and Amazon.com would like it to be) the following criteria is usually met:
- Customer convenience is delivered
- The consumer trusts in the outcome of the transaction
- The consumer continues to feel an affinity to the merchant's brand
- The merchant is able to use the channel to offer value-added services that consumers value
- ... and even more interesting, if the devices include personalization, then companies can deliver unique offers through Relationship Management technology at a key selling opportunity

For instance, my favorite self-service application may be the Papa John's online ordering tool. Through it, I find out about specials without having to sift through my mail, order quickly, and usually get the pizza at my house quickly. It's worth checking out.

The Analytics ROI Question: "Which came first, the chicken or the egg?"

Everyone has likely heard the riddle: Which came first, the chicken or the egg? I do not know what the answer to that question is, and perhaps it is more a philosophical one to assess a person's position on origins...

Having spent a signifiant part of my life in the business development world in the Enterprise Data Warehousing market over the past couple of years, the question is also generally heard but in a different form: "Who takes credit for the ROI on my Business Intelligence project, the data warehouse infrastructure or the analytics/applications that make sense of all of this data?" In the sales world, this is an important question because it determines the strategic importance of a vendor's products. Of course, that strategic importance ultimately determines the vendors' share of wallet with that company and over the long term in the industry. Money talks. Therefore, like a good politician every technology is out there to take credit for the analytical ROI.

For an analytics or application solution like SAS, Retek, Siebel, TRM, i2, SPSS, Microsoft analysis tools, etc... the value is obvious. The deep analytics and decision-making capabilities enable companies to drive to decisions and answers they were not able to reach prior to having those tools and applications in place. Without the decision-making intelligence, no decision, no benefit, no ROI.

However, the database and infrastructure vendors also have a case to be made... especially the MPP (Massively Parallel Processing) database technology vendors like Teradata, DATAllegro, and Netezza. Without the ability that the database engines provide to crunch through terabytes worth of detailed data at the atomic level, the analytics engines that depend on this machinery would not be as effective. Therefore, they may say: "Not too fast, you're delivering that value on our nickel. We should take credit here."

Interestingly enough, only recently the BI market was relatively fragmented. Application vendors, BI vendors (Cognos, Business Objects, Hyperion, Microstrategy, etc.), and the database infrastructure vendors (Oracle, Teradata, IBM, etc.) were all in their own camps. And as such, each vendor sold on the merits of their own tools in this interdependent technical environment. Today, the industry is starting to consolidate where BI and application companies are being bought up by larger infrastructure players (IBM, Oracle, and SAP... who is taking the analytical market more seriously now). As such, it is now possible for a company to get all of their analytical needs met by a single vendor and gain a complete picture of the benefits and returns without necessarily having to ration the cost/benefit among tools offered by different vendors. Of course, this is being said as the ROI evaluation process provided by technology vendors is, at the end of the day, a marketing and sales function rather than a consulting or financial evaluation function. In this world, having a vendor that can offer a single package that will deliver all of the goods will be to your benefit.

However, while there is consolidation in the market, all of the tools are (as far as I know) compatible with all of the major infrastructure platforms. Additionally, the deep analytics powerhouses remain independent (I'm thinking of SAS here) so there will be tension in the ROI credit discussion. Yes, even with all of the consolidation this is a very competitive market... especially with the DWA (data warehouse appliance) significantly lowering the cost for performance for infrastructure which is a great thing for IT staffs with limited budgets.

For an industry poised for growth, and a market ready to leverage those capabiliites, that is a good thing.

Barack Obama's Fundraising Coup

We still have 2 1/2 months until the US presidential election's outcome will be decided, and it is yet to be decided. However, one lasting change is going to resonate from this year's political season.

Traditionally, conservative Republicans and "establishment" candidates have dominated in the political fundraising wars, generating millions in donations from wealthy contributors and corporations through lavish fundraisers and photo opportunities. Of course, those aspects of fundraising continue to exist in today's political season, but the winner of the fundraising battles may surprise... as well as where a lot of his support is coming from.

Barack Obama is neither an establishment candidate nor is he a conservative Republican. His platforms are highly progressive and he definitely aligns ideologically with the Democratic party. However, he IS the runaway winner in political donations this year, far ahead of rival Republican John McCain and fellow Democrat Hillary Clinton (who would be considered as a Democrat to be the establishment candidate). While donations have come from traditional sources for Senator Obama, a significant portion of his support is coming in chunks of $50 by online donations through the BarakObama.com website... a cumulative total of donations that netted him over $50 million in June 2008 alone. This is not an altogether new phenomenon, however, but Howard Dean was unable to finish after a poor showing in Iowa in 2004.

I imagine that in 2010 and 2012, we will see a greater emphasis on populist web support, donations, and blogging take hold in Presidential elections, especially if Barack Obama is elected in November. If you look at Mike Huckabee's website, you'll see some similar strategies as he continues to position his populist conservative platform to the party base and possibly positioning himself for another run in 2012 or 2016. He's deploying the same mechanisms to reach dissatisfied limited government /populist conservatives as Barack Obama is going after citizens longing for change in our political environment.

Additionally, it will be interesting to watch how the Web 2.0 enabled strategy plays out for Obama in the general election, as neither Bush nor Kerry leveraged these tools much 4 years ago.

Facebook for iPhone application

This past weekend, a friend of mine showed me her new iPhone 3G device. This is the first time that I have seen the new 3G "in the wild" and I of course started to play with it. My friend showed me not only the functionality of the phone itself (which is extensive... GPS navigation, integration with email, high quality photo, etc. - oh yeah, and it can be used as a phone too!) but also the Facebook for iPhone application that she downloaded for it. I browsed around for a bit and saw what was going on in my virtual world and saw my own profile on the device.

If I'm a marketer looking at this, and I'll be many including myself are, they are probably thinking to themselves: "Wow, this takes the social networking space to an entirely new level... 24/7 access through an iPhone (or Blackberry, there's an app for Blackberry too)... How can I use this to get the word out to my fans?" Social networking is, but may not be for long, confined to instances where a user is "at the computer." However, with the iPhone handy (this isn't an iPhone ad... I swear!) their Facebook and social networking gossip is only a button's click away which makes the medium much more real-time for the user. This could spell out opportunity for marketers that are smart about it.

... and I say "smart about it" because the consumers (including myself) who use social networking sites like Facebook are not the types that want to be overtly marketed to. Even though, as a marketing aficionado I love listening to/watching commercials, they usually go through my analytical, "what message/positioning are they trying to convey?" mind, versus the moldable consumer mind that most advertisers want to sit and be influenced through these 30 minute spots. I want to be sold on my terms, as do many in Gen X, Gen Y, etc..

Consumers today are much more independent minded in terms of commercialization than previous generations and the backlash on early marketing push efforts by Facebook is evidence. They want to be informed about products and services that they care about, but at the end of the day (and research supports this), they want to be advertised to on their own terms by trusted people like them. This spells out an opportunity for Facebook, Myspace, and companies that would partner with them, especially as the technology moves beyond the web browser and into the everyday "iPhone" device. Those companies do need to be careful... but if they are it could be very successful.

Especially since... people only watch commercials during the Super Bowl nowadays. For all other occasions, there is TiVO.

The tangled web of marketing

Remember 30 years ago, when a brand manager would have the following (perhaps a few more, but these are the main) options available to him or her?
- Television ad spots
- Radio ad spots
- Newspaper and Magazine advertisements
- Trade promotion dollars for endcap displays

Fast forward to today: Retailers have more power in the negotiating process than ever before, slick technologies like TiVO, the web, etc. are reducing (or possibly eliminating) the influence of commercials and print advertisements, and there are more and more devices out in the market by which marketers have options to position their products today.

Add to that, the ever-increasing influence of the online space... which has been growing double digits for many years and is pulling more and more ad dollars away from traditional media. The good news is that the web offers advertisers and merchandisers new means to market to, especially younger, consumers. Better yet, the web offers what traditional ad spots have not really been able to definitively provide, quantifiable metric-gathering ability by which to measure the Return on Marketing Investment... which in a world where marketing (and all expenses for that matter) is being increasingly scrutinized is a really good thing.

However, the not-so-good news is that the web, and especially now the emergence of Web 2.0, provides an increasingly complex number and types of channels available to use in the marketing mix. Paid search, unpaid search, website impressions, click-through advertising, email, affiliate marketing, social commerce, social networking, SEM, cell phone couponing... you get the picture. And I'm sure that there are more options than that. With options, of course, comes the risk of analysis paralysis... "Which options should I use?" "What's the latest 'new' thing?" "What am I getting out of this ad, really?"

In reality, depending on your target segments and the types of behaviors/actions you want to influence, any one or a combination of these tools may be used. I will not go into any one of these right now (that would be for future blogs, of course), but here are my thoughts about evaluating your mix:

- Who are your customers? And how do they interact with you and others online?
- What is your desired outcome? Is it awareness? Visiting your website? Creating UCG to support your brand? Sales (obviously everyone's endgame)?
- What tools provide the most logical resource to accomplish your desired outcome and can the technologies/partners you use provide accurate and actionable measurements to help you assess your Return on Marketing Investment?
- How do these online channels interact with your current offline channels? Can you leverage cross-channel marketing?
- Do you have the right data on your customers (behavior, preferences, history, etc.) and sufficiently robust analytics available to make intelligent decisions about targeting with these channels?
- How rapidly can you adjust your messenging/strategy using this means if there is a need to course correct?

These are my initial thoughts. I will provide thought on specific tools later.