Social media, Wholesalers of eyeballs.

Social media, Wholesalers of eyeballs.

Jul 11, 2016 | Branding, Marketing, Social Media

The business models  of all major social media platforms require a profit, and they generate that by being wholesalers of eyeballs.

They do not do it for free, any more than your wholesalers of produce at the city markets provides their service for free.

Social media platforms fight for the attention of users, then sell the users attention to advertisers, attracted by the ability to slice and dice the audience in ways almost  unimaginable a decade ago.

However, at the foundation level, little has changed since the dark ages of print media, just a decade ago, when profitability depended on content being sufficiently attractive for buyers to purchase a newspaper or magazine, offering the opportunity to advertisers to show them their advertisements. The only difference is that the media is now run by algorithms and often crowdsourced content, rather than journalists and typesetters.

The objective is unchanged, creating the situation where advertisers are willing to pay for eyeballs.

The fight for this wholesale market share also has not changed much. Newspapers over the years consolidated and generated profits by a combination of scale delivering low cost, and regional eyeball oligopolies, often monopolies.

Now the digital platforms are playing the same game.

Facebook has once again tightened the screws on brand marketers by reducing the eyeballs that will go to their pages. They talk about enhancing the experience for their customers, i.e. those who use Facebook, not the advertisers who are trying to reach users. Controlling access to the newsfeed is a way of controlling supply, and every economics 101 student knows that the intersection of the supply and demand  curves is the price. Build demand, restrict supply, Goldmine.

Microsoft’s purchase of Linkedin for $US 26 billion last month (June 2016), an eye-watering amount, is a similar play for eyeballs, and seems great value when compared to Facebooks purchase of WhatsApp which was still just a startup, for $US19 billion in early 2014. Microsoft had a big hole in their grip on their business customers, now filled by Linkedin. So it seems that even more than ever, Facebook will be the social platform for socialising, and  Linkedin, which includes the Slideshare platform purchased for what now seems a paltry $US119 million back in May 2012, the social platform for business. Given Microsofts power elsewhere in the digital ecosystem, with the ageing cash cow ‘Office’ platform, their enterprise offerings, and Xbox for consumers, it is a logical hole in their range of eyeballs.

All of this leads to the simple conclusion that the marketing priority of businesses should be the building of their own eyeball platform,  their website and own ecosystem that leverages the wholesalers to your benefit, not just theirs. In your own home you can do pretty much what you wish, instead of being at the mercy of the landlord as you are when you rent.

 

How to create a persona that will deliver sales

How to create a persona that will deliver sales

Jul 6, 2016 | Branding, Customers, Marketing

Three key questions all marketers (should) ask themselves at some early point in marketing program development, and obviously have a great answer, are:

Who are we talking to?

Why should they listen to us?

What do we want them to do now?

These are the exact questions that  a well-crafted persona can help answer.

It will help you make good decisions about the content you create, and the channels you use to communicate to those who are most important to your success.

A persona is a composite picture of someone who incorporates  of all the behavioural and personal characteristics of your ideal customer. You can take it to the extent of being ‘hyper-personal’ and in some circumstances such as the sale of a very expensive, luxury car, that may be an effort well worth making, but in others, it may exclude many who may have minor variations, inconsequential to the purchase decision.

I have used the ‘Who, What, Where, Why’ model extensively to define the ideal customer with my clients. It is an iterative process, deceptively demanding, as it requires decisions about who is not an ideal customer, and therefore excluded from primary consideration.

Most small and medium businesses really struggle with this exclusion. It does not mean you do not sell to them if they walk in with money in their hand, but it does mean that you do not expend limited marketing resources trying to convert them, as there are better returns for your marketing dollar elsewhere.

Who: is the demographics they may exhibit. Where they live, age, sex, education, job, and all the other quantitative characteristics that are available. These parameters are all that was available until digital tools came along.

How to create a customer persona

Customer persona

What: are their behaviours. Do they go to the opera or rock concerts, perhaps both, do they travel overseas for holidays, what sort of causes, if any, do they support, are they likely to demonstrate their beliefs publicly, or are they just internal. All the sorts of things that offer a picture of how they think, feel, and behave in all sorts of situations.

Where: will you  find them digitally, as well as in the analogue (perhaps real) world, and what means can you use to make a connection. Are they likely to be avid users of Facebook, Linkedin or other social platforms, are they comfortable buying on line, do they ‘showroom’ digitally then visit the physical retailer, do they get their news from facebook and Reddit, or more focussed news sites, or even, surprise, surprise, newspapers.

Why: should they respond to your entreaties, to do whatever it is you are asking of them. Normally it will be something that will alter or manage their behaviour in some way. In every commercial case, this will end up being persuading them to buy from you, and certainly from you in preference to an alternative.  Interim steps may be to get some sort of conversion on the way to a sale, download a brochure, visit a location, whatever it is you are asking them to do.

Having built something of a picture, from the Who What Where Why method, it often leaves you well short of a complete picture that will determine the sort of material required, and the best means to communicate it. In any event, the process is iterative, and every step helps, and every misstep teaches you something.

An essential adjunct to the creation of a persona is to create a customer journey map. This is the process that your ideal customer will go through from the initial itch, to awareness, consideration, preference, then to the transaction. This will enable you to use the persona to inject yourself into the decision making and buying process a customer is going through to optimise your chances of success.

Identify. A potential customer only comes into the market when they see a need to be addressed, or a problem to be solved. In some way, the first stirrings that lead to them recognising that there is a need to do something, which may involve a purchase at some point, will start the process that leads to the transaction.

how customers arrive at a decision

Customer journey

Research. These days almost everyone goes to Mr Google as a first step in research for anything beyond the most mundane and regular purchase. Often the purchase decision is made before potential suppliers know a buyer is in the market, but it is in this research phase that canny marketers who understand the profile of their ideal customers have the opportunity to seed the sort of information that will get them onto the buyers short list, at least.

Evaluate. Emerging customers will evaluate the alternatives on all sorts of parameters important to them. Performance, delivery, style, price, after sales service, brand reputation, what their neighbours might think, and many others. It is this point where the parameters of the problem to be solved  becomes increasingly important as the customer removes options from the ‘possibles’ list to come up with a choice. It is also this point where the purchase decision still often moves off line. Not many people buy a new car on line without going to a dealer to drive it, or a shop to try on the new evening wear.

Buy. The transaction, now a tiny part of the whole customer journey, but still where the cash to pay the bills is generated.

Use. For many purchases, the transaction is only the beginning of a following process that seeks to ensure that the product meets or better, exceeds the expectation that led to its purchase, thus creating loyalty. Loyalty can be expresses as a willingness to recommend your product to others, the strongest marketing tool there is. When the product delivers less than the expectation, the purchase process is re-started the next time, and even worse, the poor experience is spread.

There is nothing routine or easy about all this, it is a journey for both the buyer and the seller. The sellers job is to find the ways to get into the buyers head as early as possible in the process, and better yet, assist the buyer to define the parameters against which the alternatives will be evaluated. This in not always possible in B2C markets, but in B2B marketing, being able to influence at an early stage is a crucial competitive tool.

The combination of a clear persona and therefore a definable market niche to which you are able to deliver a differentiated and valuable product is the foundation of commercial success.

 

When template business plans are useless

When template business plans are useless

Jul 4, 2016 | Change, Innovation, Marketing, Small business

In Australia, only around 5% of new businesses survive past the 5 year mark, and make money in excess of the cost of capital.

Scary, because most of them had a business plan, certainly if they ever borrowed any money from a bank, they had one that probably doubled as a door stopper.

50 pages of assumptions, rosy projections and financial outcomes delivered via by a suite of complex excel files to the wazoo. It is essential to recognise that the purpose of a business plan of the lender is to ensure that they get their money back with interest commensurate with the risk, and to weed out the dreamers. That is why banks insist on Directors personal guarantees, mortgages over personal assets, simply to ensure that you do not risk their money.

So much for business plans.

Seriously, why would you waste the time and energy?

Most start with what they think is a great product, without realising that a product is just the starting point.

You also need at least a hypothesis about who the customers are, how you will find them, what sort of prices they may pay, how do you deliver the product, what the competitive reaction might be, and on, and on, and on.

Finding a way to turn all this stuff into a business model that makes sense is challenging, but it is what turns a product idea into a business.

A traditional, templated business plan makes sense when there are a lot of knowns, there is an existing market, ruling prices, you know who and where the customers are, and how they might be reached, and there is not much going on. Then plan to deploy resources for productivity and efficiency, but this is rarely the situation with start-ups with an innovation to bring to the market.

Being an entrepreneur setting about marketing a product with few direct competitors is experimental, requiring iteration, practice, persistence, and preferably mentoring from someone who has been there, seen the traps and is able to navigate around at least some of them.

Planning for the unknown is a touch different from planning for the known.

 

 

Is the net killing marketing creativity?

Is the net killing marketing creativity?

Jul 1, 2016 | Branding, Marketing, Strategy

There is just so much stuff around on the net, everything and anything you ever wanted to know, or could think of to ask, is there somewhere.

The availability is removing the necessity to think, to capture the essence of a problem, and then develop creative  solutions and the means to communicate.

Too often the list driven, by the digital book solution, is the only strategy considered.

This blog is no different, when I do a list post with an attractive hook in the headline, views spike. It is a seductive outcome to write a post and double the average number of views.

Marketing has always been about people, with all the vagaries that apply when  you deal with people and their idiosyncrasies.

The people who did marketing well were those able to connect the dots in some way that added value to others. It is essentially a creative skill. Not in the sense of being able to create a drawing, but much broader than that, being able to see things that others cannot.

Then along came the web, and the ‘quick fix’ world we live in, a world of instant gratification, where lists rate very highly, because they meet the need.

But what about the thought process, the creativity??

What about strategy that connects people with unique solutions to their problems?

What about the stories that make things memorable and repeatable?

As I get older, it becomes increasingly obvious that the foundations of marketing, the delivery of value to someone who is prepared to pay for it more than it costs for you to deliver it, are unchanged.

I suspect they are unchanged since Babylon was being built.

How do we come back at this?

How do we ensure that marketing has the depth of thought necessary to truly make a difference?

These days I joke that to get a marketing degree you just need to have a pulse. This is proving to be unfortunately true the more I see the quality of those degree qualified automatons around now, inhabiting businesses and being supposedly in charge of a businesses greatest asset, its brand.

Why was Mad Men was a great TV series?

Not just because it was entertaining, and told stories, but because it was able, for some of us, to tweak a nerve so deep in our psyches that almost hurts. Don Drapers pitch to Kodak, the throwing out of a brief that spoke about the technology, and replacing it with one that spoke to peoples hearts is a classic.

Would that have been possible if Don was following a list?? Beware the siren song of marketing by lists, they can lead you onto the rocks.

How do you reduce customer churn?

How do you reduce customer churn?

Jun 29, 2016 | Customers, Marketing

Pretty simple answer really; you increase customer retention.

It costs way more to find a new costumer than it does to keep a current one, we all know that, but somehow do little about it. Almost every business I interact with fails to get an optimum balance between servicing existing customers and prospecting for new ones.

So, how do you do it.

Stand for something. I am a great advocate of Simon Sinek’s “Why How What‘ analysis. People buy products, not algorithms, and they buy at least partly with their hearts. Even aggressive  B2B buyers, and  multinationals who put in global sourcing by tender as a means to squeeze price, still buy with their hearts because there are people involved. They are more likely to buy from someone they see as standing for something they can relate to, even believe in, than someone who stands for nothing more than their own success.

Be human. Everyone likes to be treated as important, to know that someone cares. It is more than great customer service, it is genuinely caring about your customer. What a poor cliché it has become when much so called ‘customer service’ has been outsourced to low cost countries, where the so called service people have inadequate product knowledge, and no power to actually solve the problem, assuming they understand it in the first place. I received a parcel of stuff bought on line recently. The packaging was superb, and inside there was a note from the person who assembled the order, with her email address at the supplying company. It was such a unusual thing that I tested the email, saying thanks, and got a warm reply from the person. That is customer service!

Be a tribe. Seth Godin’s articulation of this phenomena is superb, people want to be a part of a group of people who are like them. Do you own a Rolls Royce because you want to pay 100 times more than you needed to get adequate and reliable transport from A to B? No. The ownership of a ‘Roller’ says something about you, and those you know and interact with, and attracts like minded people who want to be like you.

KISS. (Keep It Simple Stupid) Making it simple for customers to stay and interact with you is the key to keeping them. Why do Telcos have so much churn? Because they fail abysmally at customer service, and are so complicated and opaque in what they do that you feel encouraged to look elsewhere. It is only when you move that they come up with the better price, or service package, and make the moving of your account as hard as possible, hoping you will stay because it is easier. However, who wants to keep a customer who would rather be elsewhere? They will be restless and bad mouth you to all the time, rather than being an advocate for your product.

A management that encourages, particularly by means of financial incentive, investment in prospecting for new business, when their service to existing customers sucks is on the road to pain.

My preferred measure of churn and retention beyond the simple numbers is Share of Wallet. I recommend you use it.

5 things to avoid to do better consumer research

5 things to avoid to do better consumer research

Jun 24, 2016 | Customers, Marketing, Strategy

I sat through a qualitative research (focus) group a few weeks ago, recruited over the phone against a specific demographic list.

On the odd occasion I receive these calls, my stated occupation is never associated in any way with marketing, as that always disqualifies you, the excuse being you might learn something, which in my experience is pretty unusual.

Anyway, are we not consumers?

The moderator was a nice woman, probably had a psychology degree or something similarly disassociated from the tough task of creating value for money, and proceeded to make every research mistake in the book.

Taking ideas as gospel. Instead of digging around to understand why we said the things being tested would work, she just took the blanket statements as fact. The reality is that nobody knows for sure if something will work or not, so gathering opinions without the supporting attitudes and reasons why is dumb.

 Asking questions we could not answer. This often happens, I have seen it and fired researchers for doing it. Why waste time asking a question, then debating the silly answers when there is no way the group could know  the answer, as it requires some specific knowledge which was not in the filtering questionnaire.

Is it better? Collecting quasi quantitative data with questions like this can lead to gross misjudgements. Just ask Coke if they had the research assuring them that ‘New Coke” was better than ‘old Coke’.

Crystal balling. Asking a group to rub their crystal balls and tell you the future is dumb, dumb unless corralled by a statement such as “if A and B were to happen, what do you think would happen next?”

Defining behaviour by Demographics.  This is a general mistake in recruiting groups. Defining your target markers, which is what this is, by demographics alone went out with the turn of the century when we recognised and were able to track the impacts of the drivers of behaviour beyond simple demographics. Just because you might live in Blacktown and do not have a degree does not mean you cannot own a BMW, purchase expensive wine and go on holidays. Our cultural and social life is far more fragmented and eclectic than in past decades that demographics are now only a small part of the picture of who we are, what we want, and how we behave.

When you spend the money on consumer research, it pays to really consider the problems to be solved and how the answers might be used. If the answer to those is: ‘what problem’ and ‘To convince the boss’   or ‘because I do not what else to do’ it is better to save the research money and do something useful with it.