The Invisible Marketing Blog » metrics

Think Twice: harnessing the power of counterintuition

Christie Turner — Mon, 19 Apr 2010 17:51:44 +0000

Trained in storytelling and analysis of human communication, I see in managerial circles a great desire for too-pat formulas to predict human behavior. A lot of business people’s assumptions don’t pass a simple BS test — do I actually know anyone who’s done what we think our buyer is going to do in response to X?

Buyers, end users, investors, leaders, influencers, crowds, politics are all more complicated (and amazing) than we imagine (or wish to allow). Conventional wisdom includes too little respect for individual variance and human nature.

Behavioral finance and behavioral economics contain many interesting attempts to analyze how human nature trumps our simplistic math, exposing some of the limitations of our supposedly predictive models. While it doesn’t come with a magic pill, it opens the way to better decisionmaking and more persuasive communication.

Think Twice: harnessing the power of counterintuition is my most recent read in this category. By Michael J. Mauboussin, an economist, Columbia University professor, and Legg Mason investment officer.

Good stuff. Check it out. (And thanks to Tom Keene’s Bloomberg on the Economy podcast for making the book known to me.)

The Elevator Summary: Handy, readable overview of the ways in which your brain is hardwired to make irrational decisions — and some tactics to spoof your own wiring (if you work at it).

Standout Moments: “In a probabilistic environment, you are better served by focusing on the process by which you make a decision than on the outcome.”

and… “How a person sees a problem — how it’s described to him, how he feels about it, and his individual knowledge — shapes how he reasons [and makes decisions] about it.”

and… “Market irrationality does not follow from individual irrationality…. In dealing with systems, the collective behavior matters more.”

and… “By studying the market, we can get a much better sense of how various decisions affect economic value than we can by listening to partially informed individuals.”

Not so much: Just because I know what I’m likely to do wrong doesn’t keep me from doing it anyway. The author readily admits this. The same is true of any business book.

Who should read it: People who need to influence a buying decision — marketing, sales, investment. People who need to make a buying decision.

Bottom Line: Interested in becoming a better decision maker and decision influencer? This book delivers a wealth of areas where you can become more aware — a first step toward change.

More about the book: Think Twice: harnessing the power of counterintuition

Marketers: under pressure for ROI? How to find accountability mentors.

Christie Turner — Mon, 12 Apr 2010 17:43:55 +0000

Process improvement is a sophisticated science (and art) in the real world where stuff gets moved (logistics), stored (materials management), built (JIT, Six Sigma, Lean, Agile), and so on.

Most marketing people don’t think about what they do in terms of process improvement.

These two disciplines should talk to each other.

If you’re a B2B marketer, especially in technology or other companies that make stuff, find some buddies on the ops side of your shop. (Or at other companies, if you like.) Take ‘em to lunch. They probably think what you do is glamorous and useless. And it may be. But don’t talk about that. Get them to talk about what they do. How they do it. Why they do things the way they do.

What’s useful about this isn’t so much product knowledge (though this couldn’t hurt you). It’s exposure to the operational mindset. To a part of your business that’s probably been accountable for its results a lot longer than yours has.

Why? If the marketing accountability craze hasn’t caught up with you yet, it will. Get a crash course in how to survive in that world from someone who’s already accustomed to the constant demand for visible results.

Here are some questions to get the conversation going:

How much of your week do you (or your team) spend measuring the results of what you do?
What measurement and analysis tools do you use?
What metrics do you follow? What do they tell you? How do you use them?
When a metric is off, what do you do? Do you ever let it ride and see if it gets better on its own? Why or why not?
What are you doing to try & improve your numbers? How well is it working?

The new world of marketing doesn’t spend money on vanity campaigns. It demands NPV and ROI calculations and a general trend of improved results.

If you’re lucky, the new world of marketing also doesn’t get asked as often why the logo is green or how to get extra tickets for the golf benefit.

B2B complex sale = influencing a community.

Christie Turner — Mon, 15 Feb 2010 14:18:47 +0000

To get anything done in a B2B complex sale, you’re not just Selling to The Senior Executive Wo/Man.

That’s why it’s complex.

It’s tempting, especially for salespeople, to depend on just a single contact, champion, or coach inside the client company. Giving in to this temptation? Watch for l-o-n-n-n-g sales cycles, clients who won’t make decisions, endless RFPs, and surprise announcements that you won’t be getting the business.

What do you need when your business depends on successfully influencing communities?

In addition to great sales people and great sales infrastructure, marketing processes that are…

Patient. Sales isn’t supposed to be patient — there’s a qualified deal on the table. Marketing has to find potential and study it, monitor it, listen for cues, compare what’s happening in this deal with others. Its processes (and the technology infrastructure behind them) need to enforce and support patience.
Iterative. Does your team do something more than once? On purpose? That’s the mentality necessary to learn. If you’re trying to influence a complex ecosystem (multiple people, teams, business units), then launch a program or tactic assuming that you’re going to learn something new, which will necessitate additional change to the program. Which brings us to…
Listening. Only the customer really knows what influence them. Not always can (or will) they tell you. Marketing processes in a complex sale enforce and support the effort to listen for customer cues.

If your marketing processes (and by extension your technology infrastructure) don’t support test-listen-measure-repeat, then let’s not kid ourselves — you won’t do it. You don’t have time.

Add these distractions to Marketing’s not-to-do list

Christie Turner — Mon, 08 Feb 2010 14:47:17 +0000

In a world of limited time, finite means, and pressure for results, what not to do?

When marketing is under-resourced, it tends to stop listening to the customer (if it ever did), because listening requires a cessation of action. What happens next? Recycling whatever you said and did in the last campaign. Talking to all customers as if they’re all the same.

Four marketing temptations that are common in a down economy (and ways to avoid them):

Not to do: Try anything once.
Try instead: When results are off (or direct marketing is new to the organization) it can be tempting to churn through new tactics, media, messaging, target industries. Revisit your plan, fine, but spend the energy to first analyze what’s there today. It’s easier, faster, and potentially less risky to incrementally improve an existing program than to chuck everything and start over.

Not to do: Get something out there NOW.
Try instead: Urgency and timeliness are important in marketing. Make the most of them by talking to each of your customers (and prospects) as if their current goals and worries are important to you. Start with the customers you know best and who are most valuable to you. Think about whom you’re trying to reach and what’s important in their world. Just making noise isn’t enough.

Not to do: The Unfunded Mandate.
Try instead: Ruthlessly cut what doesn’t have a budgeted spend, allocated time/project plan, and a revenue stream it’s directly intended to influence. Say no to everything else, regardless of who’s asking. Create a backburner list for nice ideas that need some more time to bake.

Not to do: Abandon everything.
Try instead: Don’t simply stop doing marketing. Establish an ROI objective linked to how your program or tactic will help a salesperson and/or a prospect. Test with a fraction of your sales force and prospects before investing big.

For the concept of the not-to-do list, thanks to @gerhard20 for the post 15 Things Salespeople And Sales Managers Should Put On Their Not-To-Do List.

I bet you don’t know your customer this well.

Christie Turner — Tue, 26 Jan 2010 16:01:40 +0000

The real beauty of Kevin’s article When will CMO heads roll? isn’t the observation that corporate marketing budgets are broken and that change is amazingly slow in coming.

That’s an easy target.

What I like is his description of who is changing.

He describes an actual target market that a marketer can begin to get to know and flush out through sales-related communications as well as corporate positioning.

Why?

It isn’t “people in [Department] with [Job title] at companies with revenue between $[X] and $[Y] million, whose [CMO] is [40] or younger, headquartered in [US].” That is how 90% of business people think of their target markets. In B2B especially, it’s really not true.

Your customer is someone who has a reason to buy from you. That’s not intrinsic to size, location or any other easy demographic or firmographic marker.

Check out Kevin’s article and see what I mean.

How to think like a customer: step #3

Christie Turner — Thu, 02 Jul 2009 14:02:29 +0000

This is the part where we admit that your customers can’t predict their own behavior.

What people tell you they like or think or want to do is different from what they’re actually going to do.

Especially if your business objective involves parting customers from their money for any reason.

The answer?

Test.

Create a situation where a couple of customers buy and use what you’re selling.

See what they do with it.

Experiment, tweak, and retest on a few other customers. Ask customers to explain why they’re doing what they’re doing (especially if their actions don’t favor you). Don’t take their first answer at face value.

See if the idea finds a workable niche.

This is the spirit of software beta testing, product demos, customer advisory committees, putting movies into limited release or straight to DVD, direct response marketing, and many other tactics.

Why should marketing be invisible?

Christie Turner — Tue, 09 Jun 2009 15:48:01 +0000

People ask this all the time. (Which is fantastic, by the way!)

“Why Invisible Marketing? Isn’t marketing about getting visibility?”

Well, here’s how I think about it.

I have enjoyed, talked about, and experienced deep emotional connections with super-cool Superbowl ads for products I’ve never bought and companies with whom I won’t do business.

But I earn a living because I’m known and trusted by a really small group of professionals and executives, for whom I treat the cancer they’re struggling to manage.

Do I want someone to say to my client, “My, what a memorable campaign your company ran”?

My goal is to expose something valuable to people who will value it. To facilitate the development particular kinds of relationships, which eventually result in durable revenue generation.

It’s comparatively easy to design marketing that the marketer thinks is effective. But it’s terribly expensive to do that. Such marketing typically takes place in an echo chamber, absent the customer, the sales people trying to reach the customer, and the people who are serving the customer after the sale.

It’s hard to design marketing that does its job, which is to contribute to positive Prospect Lifetime Value.

Here’s a non-advertising example. When developing a website, most people are tempted to start with the graphics and colors. The disciplined and productive place to start, however, is with the business case: what problem am I trying to solve? For whom? What do they want from me? What do I want from them? What should we accomplish together through our conversations?

I promise, the color scheme is much easier to define and matters far less than a clear, shared definition of the business problem the site is solving. From the business case flow the message, the functionality, the design standards, and the common ground for making decisions throughout the process.

In everything I do, I try very hard not to begin with branding or design or pretty words or Fun Marketing Stuff or putting together a webinar by Tuesday. (Though all those things have to get done, too.)

When I work with companies, we begin by asking and answering hard questions. And then we test those answers to find out if they are true. Over and over. Iteratively, over time.

I’m not a designer. But I think there’s a beauty to this process. As the great Russian filmmaker Andrei Tarkovsky said in his landmark book Sculpting in Time, “The beautiful is hidden from the eyes of those who are not searching for the truth.”

Marketing Metrics: 50+ Metrics Every Executive Should Master

Christie Turner — Fri, 15 May 2009 15:58:57 +0000

Book review time.

The Elevator Summary: Thorough, clear reference book explaining how to measure what marketing is supposed to produce. Knowing what the metrics mean doesn’t tell you how to improve them, but this book does tell you what the metrics mean.

Standout Moments: The Customer Profitability chapter. For example, Prospect Lifetime Value = response rate x (initial margin + (Customer Lifetime Value of acquired customers – cost of prospecting efforts)). Metrics like these bring sweet focus to the sales and marketing mind: if we’re delivering negative PLV, then what the hell are we doing about it?

Not so much: Most marketing teams I’ve seen don’t have the historical data or reporting tools to calculate the metrics. This problem may be rooted in fractured ownership, lack of data capture, functional unwillingness to share data, etc. But it also reflects fear and ignorance on the part of the marketing teams. Why not ask for the information we need to determine how we’re doing?

Who should read it: Marketing and sales executives, and their bosses. Every agency which purports to improve the life and times of the marketing or sales exec.

Bottom Line: Definitely not beach reading, but worth it. A little math will make us stronger.

More about the book: Marketing Metrics: 50+ Metrics Every Executive Should Master

To know us is to love us – right?

Christie Turner — Fri, 27 Mar 2009 03:04:33 +0000

Awareness is a common goal of marketing.

The assumption, of course, is to know me is to buy from me. Image advertising. Being funny, memorable, businesslike, serious, whatever we think will help the customer remember us.

You know the textbook example of great awareness/brand marketing? Movie marketing for Snakes on a Plane. It went viral months before opening day. It had incredible word of mouth. Heck, half the movie was designed by the target audience. Prelaunch estimates projected box office earnings in excess of $100M.

The problem, of course, is that awareness did not translate into sales. Actual U.S. box office? $34M. If you account for both production budget and marketing expenses, the franchise broke even at best. A spectacularly successful failure.

That leap of faith between awareness and sales doesn’t play well for marketing teams in tough times, either. How does marketing show me the money?

First, here are my assumptions:
- Your company doesn’t already have a century-old storied brand.
- You don’t have money or time to build one.
- You are under the gun to drive sales this fiscal year.
- You understand your customers well enough to talk to them in a manner they will consider directly and actionably relevant, or if you don’t you’re willing to roll up your sleeves and figure it you.

If those are your parameters, then the marketing answer, in my view, is two things.

Thing One: Strategic coordination between operations, marketing, and sales.
Someone is driving the conversation internally and externally so that your company is able to make promises it can keep and live up to the promises it does make. This isn’t about perfection or even operational excellence. It’s about understanding the reality of your operations, having some clue of your customers’ mindset and needs, and being able to put your company in a relevant position between the two. If your marketing message makes either your operational delivery team or your customer facing sales people cringe (let alone complain openly), do some more work before you take it to market.

Thing Two: Direct marketing.
Direct marketing teaches us to question anything that (1) can’t be measured, and (2) doesn’t lead to revenue.

Run campaigns which intend to get a carefully identified set of persons to take specific actions to move through their buying processes. Measure what actually happens. Then tweak your approach based on prospects’ behavior and feedback from sales people.

Awareness building tactics that help you gain credibility with your target buyers and influencers can help. But you should be able to draw a line from those awareness tactics to a step in your demand generation process or in your sales cycle, and identify some evidence of lift. Even if it’s anecdotal.

The meat of your marketing budget should go into getting buyers and influencers to take concrete, measurable steps toward you, which lead to other measurable steps, which lead eventually to a sale.