The More Things Change
Just as all of us have (or will have), I’ve been through my share of market booms and corrections, new technological advancements, and have seen my share of businesses and business models come and go…and I’ve seen the impact of each of these on each other. For example, who among us who lived through it, fails to remember the dot-com (business model) boom and the subsequent bust (with all its market impacts) during the late 90s?
Completing my headline, the rest of the cliché, of course, is “…the more things stay the same.” What does this have to with the dynamic changes I’ve noted, above? Just looking back on my career, or more specifically at three critical skills I’ve acquired and deployed during my career, those being:
Direct and database marketing,
Data analytics, insight development and customer segmentation, and
Brand development and management
I’ve found that the truths with which I was working a few decades ago still pertain to each one of them today. For example:
Direct marketing of the past primarily was limited to late night cable TV ads and direct mail. The not-so-secret to direct mail was in understanding that the paramount driver of success (with between 50 – 70% importance weighting) was the quality of the list. In other words, the degree of relevancy your product or service has to those on a given list. If you got this wrong, it doesn’t matter how competitive your pricing is, how compelling your creative is, or how strong your promotional offer is. Can you imagine the response rate for a 50% discounted offer to a year’s worth of diapers promoted with the slickest and most tasteful 4-color packaging but mailed to young singles living in Manhattan? Sure, some on the list might respond if they’re thinking about starting a family. But make the same offer to young families with infants in the NYC suburbs and you could deliver the offer on a brown paper bag scrawled in black magic marker and you’d likely still have a response rate in the double digits. In the world of email, the subject line may be the new outside envelop teaser copy, and certainly there are different rules for writing for email vs. snail mail. But the “delete” key is the new recycling basket and if you can’t properly target your product or service and communicate the relevancy of its primary benefits in a hurry, your email will be no more successful than that of admittedly more expensive, but poorly targeted, direct mail.
Next? Today we have something called “big data” and, no kidding, it’s for real. But what exactly is it and how new and revolutionary is it, really? If you’re focused on the much publicized 4 V’s of big data, and are working with an analytics firm that has the computing power to deliver…
the capability and access to the vast amounts of data generated about individual customers (volume);
every second (velocity);
in all its structured and unstructured forms (variety); and
process these huge volumes at lightning speed (velocity again), and insure the data is both clean and trustworthy (veracity);
…what have you actually got? Have you delivered value to your customers, or created value for your firm? Not yet you haven’t. You still need to understand how to pull insight out of attitudinal data that can yield stronger positioning and more resonant communications, determine which products or services to target to (or develop for) which customers based on behavioral as well as psychographic tendencies, and then how best to reach these customers based on media channel and/or transactional preferences. Essentially, you STILL need to be able to understand how data can yield customer insight and how customer insight can lead to marketing strategy, and then execute effectively against that strategy. When I led the marketing function of a major mutual fund provider back in the late 90s, my team built a proprietary segmentation schema that combined attitudinal, transactional and behavioral segments, and appended this information to each investor record. The marketing and service strategy we developed, from the insight the analytics yielded, improved customer retention by almost 50% and generated lifts in product cross-selling and new customer acquisition by as much as 3 times. Big data wasn’t even a concept back then.
Finally, I come to branding. There’s been plenty of political joking in the last few years about how corporations are people too. While I appreciate the eye rolling this statement initially created, this brings me to the definition of how a brand’s perception and identity largely is governed by the customer’s experience with that brand through all its many touch points, and not exclusively governed by its logo, advertising or other media efforts. Those of us focused on such things need look no further than David Aacker’s book titled, “Building Strong Brands,” first published nearly 20 years ago, to see the relevancy of brand architectural structures that some have told me is “old school.” To this I say look at today’s strong brands to see that, along with powerful mission statements, the best brands have clear value propositions (mixed with tangible and intangible benefits), brand promises, a differentiating market positioning and, yes, even personalities. Compare BMW to Volvo, or Capital One to American Express, or Amazon to Walmart, or even Disney to Marlboro. Apple has always been irreverent, expanding into markets and products no one would have thought possible, and along the way urged us to “Think Different.” Do we attribute these personality and attributes and traits to IBM? No matter the product or business model, the tenants of building strong brands still are a combination of the customer’s experience with that brand, and the same associative, self-expressive value the brand transfers to the customer (who is this brand and what does it say about me?), much in the same way we think about our coworkers, friends and family members in relation to ourselves.
Change is the way of the world, and those firms who can’t change and adapt will struggle to survive. But some truths are immutable, like the freezing point of water, and, no matter how revolutionary the technological or other advances in creating ice, that truth still will be constant. Understand, embrace, and adapt change that brings you competitive advantage, but don’t throw out the baby with the bathwater. Continue to test those marketing principles that have created success and determine if and how they still apply as technologies and business models change to continue to insure success. While different tools exist to make marketers better, faster and stronger, the principles behind creating and driving customer value, loyalty and retention remain fairly constant. Indeed, the more things change the more they really do stay the same.
-Joe
