Measuring Marketing’s Effectiveness At Driving Demand

November 18, 2013

Recently one of my favorite clients asked me a very simple question. Did I have an example of a good brand dashboard?

The answer was no. After all the years and all the work, I had yet to come across any brand dashboard that I thought was worthy of sharing with her. So I went to work to answer her question.

I’ve long been interested in the notion of measuring marketing effectiveness. But, most measurement approaches seemed quite theoretical and disconnected from the normal flow of marketing activity. Then I had the chance to work with good friends at Adobe to integrate their recently acquired Omniture analytics business with their leading marketing and creative suites and for the first time I could see a clear pathway to practical value.

The needs we uncovered then very much apply today. Marketers are looking for tools to help measure the effectiveness of the plans they’ve put in place and importantly, give them insight as to how they can make those plans more effective.

In my quest to identify best practices, I uncovered a plethora of approaches used to varying degrees of satisfaction. What I thought would be relatively easy to identify – the best way in the eyes of most – was not easy at all. I learned much, but found little clear consensus

The most pervasive measurement approach in use is Net Promoter Score. NPS was developed by Bain and Satmetrix to measure customer loyalty and the likelihood of recommending a company or product. Tom Buiel from WindForce captures the reason why NPS is so attractive. “I chose NPS because it has all the elements of what marketing is all about – a methodology for finding new customers (through referrals) retaining customers (through closed loop feedback systems) and growing value by listening to what they are saying.”

But used widely as it is, NPS is not the Holy Grail. Many are employing other measurement tools. Some firms have looked to the specialists in Brand Valuation – Interbrand, Brand Z, Brand Finance and Brand Asset Valuator to develop dashboards based upon so called drivers of brand strength. Of these, the most common measurements include:

Authenticity – degree to which the organization remains true to its values and reason for being
Credibility – behaves in a trustworthy fashion and demonstrates appropriate expertise
Relevance – products and services right for needs
Differentiation – degree the brand stands apart from competitors
Presence – availability of touchpoints to provide information and support needed to answer questions, solve problems and make better decisions

A few marketers have sought to unpack NPS to understand the factors contributing to their score. A previous client determined that NPS for them is driven by three factors – brand relevance, authenticity and understanding. They measure these and provide quarterly data for each dimension in addition to their overall NPS score.

Some of the more progressive firms are starting to build their brand dashboards around the drivers of demand in their business. Obviously, each business has a unique set of specific drivers, but interestingly some work that I’ve done recently determined that most drivers fall into four broad categories:

Trust – I can count on you to behave in a manner that is consistent and reflects the best interests of our relationship
Expertise – you demonstrate skill in the competences important for our relationship
Understanding – you demonstrate that you get me and my needs
Empowerment – I believe that through our relationship my needs will be satisfied and I can achieve my objectives

Lastly, many are still measuring traditional brand dimensions, such as:

Awareness – I know you exist
Recall – I’ve seen your ads and I remember them
Engagement – what you offer is attractive to me
Fulfillment – you deliver what you promise
Loyalty – I’m sticking with you
Advocacy – I’m telling all my friends and neighbors about you

These approaches in their own right are leading to some modicum of success. But, with the exception of a few dedicated NPS loyalists, most of the people I spoke with are still looking for a better way.

There is no question that tools for measuring marketing effectiveness are needed, for in the words of many, “If you can’t measure it, you can’t control it. If you can’t control it, there’s no way you can be confident that it is being well managed. Without confidence, you’re better off not even touching it.”

From my conversations, that better way should:

Connect marketing with the drivers of the business to be sure that marketing is in fact driving demand and influencing sales. This means understanding drivers of demand and measuring the degree to which marketing is influencing them. Toward that end, some have suggested that the most important measurement should be the amount of sales directly attributable to marketing.

Measure both process and outcome. Process measurement has become quite sophisticated with new cloud tools like Google Analytics and specialized resources such as Marketo. But as important as it is to measure process effectiveness, without a clear sense of the outcome being produced, you have no clue as to whether you are moving the business forward or not.

The better way also needs to heed two important cautions I heard often in my conversations.

In the process of measuring don’t lose contact with the customer. The power of the new tools for capturing and analyzing data does not mitigate the need for listening to the actual voice of the customer.

Be careful not to overvalue what you can measure and undervalue what you can’t. This wise thought came from John Hayes who has served as CMO for American Express for 18 years. Quite a tenure, especially when you think of the fact that the average life of a CMO today is 18 to 24 months. Even though it is becoming more scientific everyday, marketing remains an art form. There is still room for intuition in creating and executing strategies.

That being said, I believe that the better way is to construct a dashboard that uses a combination of measurement data points to capture a true sense of how marketing is driving demand by attracting, engaging, converting and securing customers for the business. Pulling all my learning together, my ideal dashboard would include:

1. Our share of mind

Awareness
Relevance
Differentiation

2. The strength of our customer relationships

Engagement
Preference
Churn
Loyalty
Advocacy

3. The effectiveness of our Touchpoints

Visibility and impact of each touchpoint
Ease of access and helpfulness of each touchpoint
Effectiveness of integrated touchpoints, measured by campaign

4. The business and financial impact of our marketing

Market share
Margin
Customer profitability by segment
Cost of acquisition
Cost of retention relative to the cost of churn
Sales attributable to marketing

So there you have my thoughts. Please share yours.

Posted under: Branding Strategy, Demand Driving Strategy, Success Driving Briefs

The Wisdom of Engaging by Intruding

July 22, 2013

Have you been watching traditional TV lately? Does showing me the same ad for ED in every show I watch through the day really engage me? Does watching an ad twice in a single commercial break make me pay more attention? In today’s world, does the notion of a “commercial break” continue to be relevant for how we really live?

I feel like I’m watching the very end of an era. The world of advertising and advertisers are struggling to hold onto the last vestige of the Mad Men era, when the consuming public has moved to a whole new way of engaging with brands and making purchase decisions.

Think about it. Traditional advertising works by intruding into the experience that audiences are enjoying. It forces targets to stop doing what they want to do and listen to what the advertiser has to say. And this is supposed to be engaging.

How much sense does that make? Let’s build engagement by bugging people, interrupting them, forcing them to listen to what we have to say and keeping them from what they really want to do.

Today, we’re much smarter about how our targets prefer to be engaged. Study upon study shows that targets – both b2c and b2b – move through a learning process where they talk with people they trust, do their homework on brand websites and review sites, consider expert opinions and then make their choices.

It’s all on their terms. They control the decision process and determine how and when they consume information. Engagement is built through learning and experiencing. The preferred media is the web and the preferred communication style is informational. If you can make the information a little entertaining, all the better.

This is buttressed through recent studies that show us that company websites and the opinions of category experts are the only two media people trust more than they distrust. All other media – advertising, email, collateral, etc. – are more distrusted than trusted.

Research does tell us that traditional advertising still has a role. It is a particularly strong validating tool, especially for people who have made big purchase decisions and for the employees of companies that advertise. However, traditional advertising’s role as a catalyst for shaping decisions is on the wane. Fewer and fewer customers cite advertising as one of the touch-points that shaped their decisions as they moved through the selection process.

Given this, it’s time for marketers, business leaders, consultants and agencies to be much smarter and more creative in building successful engagement programs. We need to disrupt the status quo and leverage the touch-points that customers actually prefer to use in navigating through their purchasing process.

We’ll be far better served by teaching rather than interrupting. We need to be there when customers want us rather than force them to pay attention to us when they would rather be doing something else. When you think about it, it’s fairly obvious – isn’t it?

Posted under: Branding Strategy, Changes in branding, Customer journey mapping, Demand Driving Strategy, General

Understanding your trigger

February 27, 2013

The year is off to a vigorous start and I’ve already had the chance to dig into some very meaty challenges and opportunities. In the course of two recent workshops, I was reminded of the importance of truly understanding what triggers your customers to start an active search for your brand.

In one workshop, the client team had little clue as to the triggering event for their category and as a result were considering a major promotional effort that would yield very little in return. In the other, the team was well versed in their trigger events and was actively engaged in crafting strategies and tactics to catalyze demand for their brand.

Over the years it has intrigued me that so few of the clients I’ve worked with had actually taken the time to identify the trigger events in their category. In my view, this is one of the most important aspects to consider in shaping any marketing or brand engagement program.

Understanding the trigger helps you be there with answers as a potential customer’s questions are being framed. This gives you a distinct advantage in winning brand new customers, capturing competitors’ customers, or very importantly, securing your wavering customers.

To identify your triggers, you must carefully analyze the journey your customers move through in building and sustaining a relationship with your brand. Triggers come in many forms and reflect varied psychological states. Some are quite rational and some very emotional. They generally fall into three categories:

Something I must do to comply with an external mandate
Something I need to do because it’s time to do it
Something I want to do because I really desire it

“Must” and “need” triggers are largely rational and have easily traceable catalysts. “Want” triggers are powerfully emotional and are a bit more difficult to trace.

Once you’ve identified your triggers, it is important to understand the decision making process your customers move through following the activation of the trigger. Examine the touch points they consult, the type of information they seek and the steps they move through in determining a solution for their needs and desires.

This analysis will help you understand where and how you can influence their process to position your brand distinctively as they make their decisions, both through the touch points that are regularly consulted and importantly, through the creation of new touch points you can invent to enhance their decision process.

With this understanding, you have the insight needed to craft your engagement plan. It is important to segment the plan to distinguish between stimulating a new purchase, capturing a competitor’s customer or securing one of your own. It is also important to acknowledge the customer’s mindset and speak to the trigger’s motivating psychological state.

With the very limited exception of offering a current client a motivating counter offer to prevent churn, the purpose of the engagement communications effort should be to inform and solve, not sell. The beauty of this approach is that it allows you to build rich, confidence based relationships with customers where, by virtue of the content you deliver, they sell themselves on the merits of your brand relative to competitors who’ve invested far less in understanding their needs and helping them make their critical decisions.

It’s as simple as that. Once again, by being thoughtful and zeroing in on an important, yet basic aspect of the customer journey, we can yield significant benefits.

The better you understand the trigger, the easier it is to be there with answers when the customer’s decision process begins.

The better you understand the trigger, the more you can leverage that understanding to proactively motivate your competitors’ customers to rethink the value of their existing relationships.

The better you understand the trigger, the more you can be a catalyst in shaping and managing demand for your business going forward.

Posted under: Branding Strategy, Customer journey mapping, Demand Driving Strategy

Branding sure has changed

January 14, 2013

Today, branding matters more than ever. But, the nature of branding has changed dramatically in recent years.

In the course of helping my good friend Jim Little create a “Ted” style presentation, we explored the ways that brand has changed over the years we’d been working together. These are the seven most significant ways that branding today has evolved to better drive demand.

1. It’s about relevance, not just awareness

We know that today people are crazy busy and besieged with messages wherever they turn. To pierce this clutter and get people to notice what we have to say we must speak directly to their needs. If people see our relevance, they’ll be actively aware of our existence. Without relevance, the best we can hope for is passive awareness, which can make us feel good, but won’t generate any meaningful economic value for our firms.

2. It’s about performance, not just positioning

It’s important for us to engage our targets with a meaningful promise. But, people today have no time for empty promises. We need to deliver exactly what we promise or they will turn to an alternative faster than we can say “good bye.”

3. It’s about dialogue, not monologue

Gone are the days when we could stand at the top of the mountain and shout at everyone we could afford to reach. Credibility is no longer simply a function of visibility. People today want to interact with our brands the way they would communicate in the course of any relationship. We need to relate to our targets in a meaningful way, interacting and responding to their needs, as the relationship requires.

4. It’s more about earned media than traditional advertising

Advertising still has its place, but we need to rebuild people’s trust in the medium. People trust what others say about us more than what we have to say. We need to be able to tap all of the new media sources available to give people the opportunity and the venue to open a dialogue with and about our brand. This will build their confidence in their learning and help them to make better decisions about forming a relationship with our brand.

5. It’s about retention, not just acquisition

It’s very important that we not only win business, but that we win our customer’s love and keep it. They’ll be loyal to us and will share their good feelings with those that they influence. We’ll grow our business and our brand on the basis of the security of these relationships and the new demand they help to generate.

6. It’s about advocacy, not just intention to purchase

This means there’s a big change in what we need to measure to ensure we’re being successful. When I started, the magic number was intent to purchase. Today, that’s just the beginning. Now, the most important variable is the degree to which people are willing to be an advocate for our brand to others.

7. It’s about informing and teaching, not selling

The most profound shift I’ve seen over the years is in how we communicate. People today are actively involved in decision making about brands. They seek the information they need to make better decisions and are turned off by “selling.” The brands that recognize this fundamental shift are going to be way more successful than those who don’t. In the sell, inform, solve continuum, inform is now the most important function. If we inform well, our clients will sell and solve for themselves.

So there you have it. As you can see branding has changed quite dramatically, but for the better. A brand today is all about the relationship. Managing a brand today comes down to understanding the fundamental rules around how people want you to behave within that relationship. Following these rules enables us to build strong, rich relationships that build mutual value and the spur the growth needed for our businesses to thrive.

Who knew that I would have been better off with a degree in psychology than marketing.

Posted under: Branding Strategy, Changes in branding, Demand Driving Strategy, General

Toward a better brief

October 25, 2012

Over the years, I’ve worked with many different types of briefs. Some long and complex, some short and simple and one considered so proprietary that we had to sign an NDA just to see it.

Along the way, I’ve never found one that really did the trick. Most led constructively to good communications, but few led to any real business driving impact.

I’ve been on the hunt for a framework that could help me to simply and effectively capture the essence of a demand driving strategy so that both my client and their agency partners could come away with the clarity needed to produce and implement great work. Last week, while collaborating with one of my favorite clients and their very talented agency, we lit on a brief that may actually be up to the challenge.

Together, we were wrestling with how to help one of our client’s lagging business units build the awareness and engagement needed to fuel new growth. Discussions with unit leaders had bogged down in functional attributes and frustration stemming from a lack of any meaningful momentum. To shift the discussion and get us back on track, we built a simple one pager that captured our views as to the real opportunities for distinction and demand management. We asked and answered the following key questions:

What is the best way to drive new growth in our business? We started with a question that most briefs fail to ask – where will growth come from? We looked hard at whether our challenge was stimulating demand by securitizing and growing existing relationships, generating new interests with new prospects or markets, justifying and sustaining a premium price or some combination of the three.

What is the psychology of our target market? Once we zeroed in on the demand management task at hand, we examined the needs and wants of the targets for our growth strategy. We were careful to understand the wants, or cravings, that could spike immediate term engagement. We also examined the needs that establish the underlying expectations in the market and could, if satisfied, provide the basis for sustained engagement.

What is the fit between market psychology and our skills? We then carefully assessed our client’s skills relative to the market psychology in order to highlight areas where they were capable of delivering highly relevant, distinctive value. We were also careful to assess the areas where we were relatively weak and therefore vulnerable to competitive positioning.

What is our value proposition for these targets? Our assessment of fit provided the basis for framing our initial value proposition and contributed to building a messaging matrix where we defined an array of benefits and support intended to drive engagement with those targets who will best fulfill our growth agenda.

What must we do to ensure the delivery of this value? This last critical step involved examining the current customer experience delivered to our priority targets to determine the frustration points that must be minimized in order to eliminate friction, as well as the hero moments we could leverage to further reinforce and distinguish our unique value.

This one pager got everyone unstuck and helped to focus the team collectively on charting a path toward marketplace distinction. It also helped to engage the business unit leaders who held that brand was not critical to the fulfillment of their business objectives. In short, it did the trick for the moment and helped get everyone focused on future potential.

I think this model has some promise for my work in the near future. I’ll hone it with new learning and work with it until I find something even better. But for now, I think it’s promising enough to share. Let me know what you think.

Posted under: Branding Strategy, Demand Driving Strategy, Success Driving Briefs