How to Use Big Data to Win Customers, Beat Competitors, and Boost Profits

TAKING ADVANTAGE OF BIG DATA

When used car dealer Les Kelley launched the Kelley Blue Book, his target customers were used car dealers (and insurance companies and banks that made car loans). Dealers could consult the book and, based on the information it contained, have an idea of what price tag to put on their merchandise. Today, the target customers for the Kelley Blue Book, now free online, are used car buyers who consult it to have an idea of what they should pay for the used car they are buying.

The customer flip for Kelley’s Blue Book exemplifies the switch in power in the purchasing process from seller to buyer. Buyers are no longer dependent on sellers to give them the information they need to make a purchasing decision. So in this new purchasing paradigm, are sellers completely powerless?

The answer is no, and the reason, in large part, is what is commonly known as “big data.” As explained in The Big Data-Driven Business by LinkedIn marketing executives Russell Glass and Sean Callahan, in today’s world, buyers don’t have to go to sellers in order to find the information they need to make the right decisions. Instead, they can use a variety of digital search channels to gather any information they need and then approach the sellers.

However, write Glass and Callahan, the same digital capability that allows buyers to take the initiative allows sellers to follow what the buyers are doing. They track the websites and pages within those sites that buyers or potential buyers are visiting. They also track purchasing trends, which merchandise is popular at a given time, which items lead to the purchase of other items and a whole host of other customer-related data — so much data, in fact, that we now refer to all of this information as “big data.”

Such extensive tracking takes some sophisticated software, of course. This software, write Glass and Callahan, is what is known as the “marketing stack.”

The marketing stack includes marketing automation software, business intelligence databases, CRM systems, content management systems (which allow marketers to take over updating digital marketing content with minimal IT involvement), blogging and data management platforms, analytics tools, social media management platforms, search engine platforms, and other systems and software that, in essence, enable marketers to manage the accumulation and analysis of big data.

Principles for the Data-Driven Company

It may seem, from the litany of technological systems just cited, that establishing a big data-driven company is complex and expensive. It can indeed be complex. The chief marketing officer and the chief information officer must work closely together if a company is going to have any success at using big data. Some companies have started hiring “chief marketing technologists” solely responsible for the technology side of marketing. The bottom line is that all marketing professionals today must be at least knowledgeable about the technological components of the marketing function.

Using big data does not have to be expensive, however. In one of the most insightful chapters, Glass and Callahan offer 11 principles for successfully making a business more data-driven. Among the principles are, determine what you want to know about your customers and prospects; start small; don’t bet everything on technology (figure out first what you need, not what technology you want to use); and hire the right people — forget the art schools, and think about Star Trek conventions instead.

Glass, who heads B2B marketing at LinkedIn, and Callahan, LinkedIn’s senior manager for content marketing, present a guide for marketers in companies of all sizes.

Book Review: Bringing Strategy Back

BringingStrategyBack

by Jeffrey Sampler

When the world of business is so chaotic, leaders need strategy more than ever. However, the business environment is changing too quickly for conventional strategic planning processes. In Bringing Strategy Back, Sampler explains why strategy is more important than ever for your business. Strategy expert Jeffrey Sampler introduces four “strategic shock absorbers” that enable leaders to build resilient organizations that can withstand even the most unexpected global turbulence.

With four “strategic shock absorbers,” leaders all around the world at organizations of any size and type can build strong organizations that withstand chaos and instability. Based on the Sampler’s in-depth research into the world’s most unstable markets, these strategic shock absorbers work together in an ongoing process that can be applied to any organization: Accuracy, Agility, Momentum and Foresight. Of the four, agility helps leaders deliver with speed and flexibility in terms of strategic options. Leaders need to be able to act quickly using agility in unpredictable markets.

Businesses can’t afford to become stagnant in their strategic process in order to survive and thrive. Sampler says that giving up the old way of strategic planning can seem risky; however customizing the best approach for your business will make a positive difference. With this new framework, Bringing Strategy Back shows how to be prepared and proactive, rather than reactive, even when the future is uncertain.

Rediscovering the Art of Brand Marketing

MARKETING IN A DIGITAL WORLD

There are a lot of shiny objects in the world of marketing today. Traditional marketing channels such as television and print media ads are being outshone by the flashier marketing opportunities of the digital age, including big data mining and social media marketing. Many marketing experts happily sound the death knell of traditional marketing: television ads might have worked in the time of the giant television console with its rabbit ears, but this is the age of Hulu and Netflix.

In a new book titled Twitter Is Not a Strategy, Tom Doctoroff, CEO of J. Walter Thompson Asia, begs to differ. Given that global television advertising revenues are forecast to grow from $162 billion in 2012 to more than $200 billion in 2017, according to PriceWaterhouseCoopers, it seems a bit disingenuous, he writes, to say that television advertising is dead. The world is indeed changing, but it’s not a question of the past being replaced by the future.

As Doctoroff explains, traditional marketing was based on top-down positioning. The brands controlled the message and the channel, and customers were passive recipients. The digital age has given the customer more power in the process, which is now more bottom-up than top-down. Many marketing books tout this dichotomy as mutually exclusive; in other words, bottom-up has replaced top-down marketing. For Doctoroff, this is a false dichotomy. Marketing today is both bottom-up and top-down. That is why social media marketing is booming, but so is television ad purchasing.

Successful Marketing Today

The secret to successful marketing today, writes Doctoroff, is to know how to meld the two approaches together. “We must permit consumers to participate with brands without surrendering the ability to manage the message and what people say about their products,” he writes. The goal of marketers is to develop a life-long relationship between the brand and consumers.

To help companies enable customer engagement while managing the message, Doctoroff offers a framework for marketing based on four “interconnected modules.”

The first two modules are conceptual and focus on customer insight, on one hand, and the brand idea, on the other. No matter how much technology evolves, customer insight must remain at the core of marketing, he writes. Doctoroff describes the human truths shared by all and nation- or region-specific cultural truths, and explains how brands succeed when they can resolve the conflicts among and within these two sets of truths. Mont Blanc pens, for example, are very successful in China because, he writes, the luxury brand reconciles two competing cultural truths: “the desire to project accomplishments but also the need to be understated, to obey the rules.”

The brand idea, in Doctoroff’s words, “crystallizes the long-term relationship between consumer and brand that remains consistent yet evolves over time.” The brand idea emerges from the “fusion” between customer insight and a unique brand offer (UBO). The UBO, he writes, is based on product truths –– physical or emotional characteristics that differentiate the product, and brand truths, which build brand equity in the minds of consumers.

The executional modules of Doctoroff’s framework are engagement ideas, the ideas that will spark consumers to become engaged with the brand, and engagement planning, which is focused on bringing the brand into the lives of consumers. Successful engagement ideas connect to the three levels of passion, he writes: the individual-focused “me,” the community-focused “we” and the global-focused “the world.” For engagement planning, Doctoroff offers a step-by-step engagement system based on marketing communication at every step of the buying process: trigger (the unmet need), consideration, comparison, preference (choosing the brand), purchase and experience.

The core message of Twitter Is Not a Strategy is clearly conveyed when Doctoroff quotes Clive Sirkin, Kimberly-Clark’s global Chief Marketing Officer, who says, “We don’t believe in digital marketing. We believe in marketing in a digital world, and there’s a huge difference.” Twitter Is Not a Strategy also benefits from the global perspective that Doctoroff brings to the subject. His expertise in both China and emerging markets will be of immense value to companies looking to expand into these markets. Doctoroff has written a balanced, informed guide to branding in the 21st century.

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Book Review: Low-Hanging Fruit

LowHangingFruit

by Jeremy Eden and Terri Long

Consultants Jeremy Eden and Terri Long define low-hanging fruit as the targets or goals that are easily achievable and do not require a lot of effort. Your business can achieve better results with greater ease by thinking small and reaching for the low-hanging fruit like many of the smartest companies today. Eden and Long share 77 of their most effective techniques for generating real performance improvements drawn from their success working with major companies. In Low-Hanging Fruit, the authors explain why leaders should not agonize over large-scale change efforts and ways to reduce costs. Instead, they show leaders how to go after small solvable problems and uncover the low-hanging fruit.

“True low-hanging fruit is within your reach. Harvesting low-hanging fruit produces bigger results with much less risk than those big projects on which companies rely, like strategic transformations and enterprise-wide systems! Individual pieces of low-hanging fruit come in all sizes — from those worth millions of dollars to those worth just a few thousand dollars. Collectively, it is your growth engine,” write Eden and Long. Of the 77 techniques outlined by Eden and Long, the first few help leaders and managers find ways to see problems easily, for example “Ask “Why?” Five Times to See the Real Problem.” This point illustrates the importance of asking “Why?” which will help you gain progress toward finding the right problem to solve.

If you think you don’t have the resources to be faster, better and more profitable, think again. Low-Hanging Fruit will help managers and leaders to boost productivity in their organizations by identifying and solving hidden problems.

How to Build Habit-Forming Products

FOUR STEPS TO BUILD HABIT-FORMING PRODUCTS

When was the last time you checked your smartphone? If you’re like most people, almost certainly within the last hour. What about your Twitter? Or your Facebook page?

The fact is that smartphone manufacturers, Twitter and Facebook have all created products that are, in the words of consultant and entrepreneur Nir Eyal, “habit-forming.” As Eyal explains in a new book, Hooked: How to Build Habit-Forming Products, a habit is in fact a shortcut for the brain. A habit is an automatic, almost unconscious reaction by the brain to a trigger.

Habit-forming products are an obvious boon to business. Consumers automatically use the product on their own, again and again, without any prompting from ads or marketing. Of course, not all industries need habit-forming products. The sale of life insurance, for example, requires salespeople, advertising and word of mouth. There is no habit for the consumer to acquire.

But for many companies, success depends on developing such habit-forming products. For those companies, Nir Eyal offers a four-step circular framework, which he calls the “Hook Model,” to ensure that consumers keep returning to their products, over and over again.

The Hook Model

The first phase of the hook model is the trigger. This is the spark to the entire process. Triggers can either be external or internal. External triggers might be an email, website link or even an app icon.

External triggers propel consumers through the loop of the model in the hope that eventually consumers will no longer need prompting from external triggers; instead, the prompting comes from internal triggers — triggers that come from within the consumer. Internal triggers are formed slowly, taking weeks or even months of frequent usage. Eventually, however, the consumer automatically turns to the product whenever a particular emotion or need arises.

The second phase of the model is the action that the consumer takes as a result of the trigger. Building on the behavioral work of Stanford University professor B.J. Fogg, Eyal explains that consumers take action when there is both motivation and ability. External triggers will seek to spark motivation — an ad will seek to give a reason for the consumer to use the product — but it is internal motivation that in the end proves most powerful. Motivation without ability is useless, however, which is why companies work hard to make the use of the product as effortless as possible.

Variable reward is the third phase of the Hook Model. In traditional terms, consumers take action because they want a problem solved. The key word in Eyal’s definition, however, is “variable.” The consumer expects something as a result of the action, but exactly what that reward might be varies, and this is what keeps the consumer returning again and again to the product or service.

The last phase of the Hook Model is investment. In this phase, the consumer will put something — time, effort, social capital, money — that encourages the consumer to continue with the Hook cycle. Research has shown that the more consumers invest time and effort into a product (or service), the more they value that product. An additional motivation to return to the product is “stored value.” The more songs you download to iTunes, the more likely you are to return to iTunes to listen to them.

Pinterest, the online bulletin board, exemplifies the four stages of the Hook Model. The external trigger that sparks the consumer’s engagement might be a recommendation from a friend or reading about the application in books (or book reviews). The consumer takes action by registering on the site. The variable rewards include seeing what others have posted, reviewing what one has posted (after the first cycle), and the comments and likes to those posts. The consumer now makes a further investment by posting new images or commenting, liking or sharing (repinning) other posts. “Each pin, repin, like or comment gives Pinterest tacit permission to contact the user with a notification when someone else contributes to the thread, triggering the desire to visit the site again to learn more,” the authors write.

Filled with examples and anchored by the Hook Model, Hooked is a hands-on guide for companies seeking to emulate the amazing success of Pinterest, Twitter and others and build their own habit-forming products.