Sunday, May 19, 2019

Two Ways to Make Personalization Welcomed

In my last post, I discussed the inconsistent and often contradictory attitudes of consumers and business buyers regarding personalized marketing. On one hand, numerous research studies have confirmed that most consumers and business buyers want personalized offers, messages, and experiences, and are willing to provide personal information in order to receive such offers, messages, and experiences.

On the other hand, several studies have found that customers and potential buyers are growing more concerned about privacy, and aren't comfortable with how some companies are collecting, accumulating, and using their personal or business information. In one fairly large study, less than half of the respondents (48%) agreed that, "There are ethical ways in which a company can use my personal information.

These conflicting attitudes are creating a Catch-22 for marketers because it's now clear that personalization is a high-stakes game. Effective personalization drives broad and significant business benefits, but when marketers get personalization wrong, the consequences can be serious. In one survey, 38% of the respondents said they would stop doing business with a company that sends them "creepy" personalized messages.

So far, most marketing pundits and many marketing leaders seem to believe that the key to maximizing the benefits of personalized marketing is more personalization. In other words, collect and use more data about customers and prospects, make personalization more specific, and use personalization more frequently, in more channels, and for more types of communications and experiences. This explains why hyper-personalization and personalization at scale have recently become such popular buzzwords.

The "more personalization" approach is based on the idea that increased personalization will increase the relevance of messages and experiences, and that the improved relevance will make those messages and experiences more compelling, interesting, and/or satisfying for customers or potential buyers. The problem with the approach is that it doesn't address the privacy half of the personalization-privacy conundrum, nor does it provide specific guidance about what attributes (other than relevance) cause personalized marketing to be welcomed by potential buyers.

We need to use a different approach to deal with privacy concerns and maximize the benefits we obtain from personalization. Here are two related steps marketers can take to get the most from personalized marketing.

Base Personalization on "Informed Consent"

The key to alleviating privacy concerns is to base personalization on data that each customer or prospect has willingly and consciously provided for a clearly-stated purpose. This approach addresses three practices that frequently cause a customer or prospect to view personalized communications as presumptuous, invasive, or "creepy:"

  • When a company bases personalization on data that the customer has not directly shared with the company (e.g. third-party data)
  • When a company bases personalization on data that the customer or prospect has not consciously shared with the company (e.g location data from a smartphone, browsing history, etc.)
  • When a company ostensibly collects information for one purpose and then uses the data for other purposes.
Customers and prospects won't see personalized marketing as intrusive or "creepy" when they willingly provide personal data in exchange for personalized content or experiences that are designed to serve a clearly understood purpose.

Make Personalization Pragmatically Useful
The most effective personalized marketing programs are those that deliver meaningful, pragmatic value to recipients. A recent study by Gartner/CEB provides strong confirmation of the importance of making personalization useful. The centerpiece of this study was a 2018 survey of more than 2,500 consumers in North America, Europe, and Asia-Pacific.
One objective of this study was to identify what type of personalization is most effective. So survey participants were asked several questions about the content of the personalized messages they received. Based on the survey responses, Gartner/CEB identified two basic types of personalization:
  • "Prove You Know Me" Personalization - These types of messages mention the recipient's personal information, base personalization on information about the recipient's past purchases from the company, or generally reflect the recipient's interests in some way.
  • "Help Me" Personalization - According to Gartner/CEB, these types of messages can make it easier for the recipient to complete a purchase, help the recipient understand how to better use a product, or otherwise help the recipient solve a problem or address a need.
To measure the relative effectiveness of these types of personalization, Gartner/CEB created a "Commercial Benefit Index" that considered four consumer intent or behavior factors - brand intent, purchase, repurchase, and increase in shopping cart size. When Gartner/CEB analyzed the change in the Commercial Benefit Index produced by each type of personalization, they found that "Help Me" personalization produced a 16% increase in the CBI, while "Prove You Know Me" personalization resulted in a 4% decline in the CBI.
The Takeaway
The important point here is that marketers should organize their personalization efforts around specific "programs" that are designed to serve a clearly-defined purpose and provide pragmatic value. When customers or prospects proactively choose to participate in a program by providing relevant personal information, the personalization-privacy conundrum disappears, the personalization will be welcomed, and it will be more compelling and impactful.

Top image courtesy of Richard Patterson via Flickr CC.

Sunday, May 12, 2019

The Growing Personalization Conundrum for Marketers

For more than two decades, the value of personalization has been largely unquestioned in marketing circles. Most marketing leaders now view personalization as essential to marketing success, and providing personalized marketing messages and customer experiences has become a top priority in many companies.

Several recent research studies have confirmed that marketers strongly believe personalization drives improved marketing performance, and that most are committed to making personalization a core component of their marketing efforts. For example:

  • In the 2019 Trends in Personalization survey by Researchscape International and Evergage, 70% of surveyed marketers said personalization has a strong or extremely strong impact on advancing customer relationships, and more than half of the respondents said personalization produces increased conversion rates, increased visitor engagement, improved customer experience, and increased lead generation/customer acquisition.
  • In the 2018 State of Marketing research by Salesforce, more than eight out of ten surveyed marketers said personalization delivers major or moderate improvements in brand building, lead generation, customer retention, customer acquisition, and customer advocacy.
  • In the 2019 Digital Trends research by Econsultancy and Adobe, targeting and personalization was the second most frequently identified priority for 2019 among survey respondents from larger enterprises.
There are also several studies showing that consumers want (and increasingly expect) personalized experiences.
Given these research findings, it shouldn't be surprising that many marketing pundits are now advocating the use of "hyper-personalization," which generally refers to the use of real-time data and artificial intelligence to deliver more relevant content to each recipient.
So the correct strategy for marketers is to personalize everything they can, whenever they can, as much as they can, right? Well, not so fast!
Why More Personalization Isn't Always Better
There is a growing body of evidence indicating that consumers and business buyers are increasingly concerned about privacy and do not always welcome personalized marketing. For example, in a 2018 survey of nearly 6,400 individuals in France, Germany, the U.K., and the U.S. by data security firm RSA, less than half of the respondents (48%) agreed that, "There are ethical ways in which a company can use my personal information."
When survey participants were asked about specific types of personalization, the results were even more stark, as the following table shows:

Note that more than half of the respondents in this survey believe all four of these personalization practices are unethical, not just annoying or ineffective.
Other research has confirmed that people will react strongly when they perceive personalization goes too far. In the 2018 Consumer Personalization Panel research by Gartner/CEB, survey participants were asked how they would react if a company sent them irrelevant or annoying emails. Forty-eight percent of the respondents said they would unsubscribe, and 12% said they would stop doing business with the company.
But when they were asked how they would respond if a company sent them personalized messages that were "creepy," 57% of the respondents said they would unsubscribe, and 38% said they would stop doing business with the company.
When all of the recent research is considered, it's clear that marketers are facing a Catch-22 when it comes to personalization. On one hand, most customers and potential buyers say they want personalized offers, messages, and experiences, and large majorities also say they are willing to provide personal data in order to receive such offers, messages, and experiences.
At the same time, however, most customers and potential buyers are growing more concerned about privacy, and they aren't comfortable with how companies are collecting, accumulating, and using their personal or business information.
So, how can marketers deal with buyers' inconsistent and contradictory attitudes toward personalization? How can marketers balance the benefits produced by effective personalization against the risks of creating personalized messages or experiences that buyers will perceive as intrusive, presumptuous, or otherwise "creepy?" In my next post, I'll provide a few suggestions for dealing with this growing conundrum.

Top image courtesy of Anders Sandberg via Flickr CC.

Sunday, May 5, 2019

Marketing Myopia Revisited

(The following is a post I published more than six years ago. Given the recent focus on marketing's responsibility for managing customer experiences and driving growth, the topic is as relevant and timely today as it was in the fall of 2012.)

The Original Post

In 1960, Theodore Levitt wrote a landmark article for the Harvard Business Review titled "Marketing Myopia." When it was republished in 2004, HBR editors said the article "introduced the most influential marketing idea of the past half century."

Levitt's central argument was that companies will cease to grow if they define their business too narrowly - in terms of specific products or services, rather than in terms of customer needs. In a quintessential passage from the article, Levitt explained the decline of railroads in terms that have become part of the business lexicon:

"The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because that need was filled by others (cars, trucks, airplanes, and even telephones), but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business."

The "disease" that Levitt wrote about is still with us, but now, some marketers are also afflicted with another kind of myopia. This new strain of marketing myopia is characterized by an almost exclusive focus on marketing communications and the technologies that support them. As practiced in many companies today, marketing means marketing communications and not much more.

Marketing communications are certainly important, but marketing also has other responsibilities that are essential for business success.

For more than four decades, the term marketing mix has been used to describe the operational aspects of the marketing function. The term became popular in the 1960's after Neil H. Borden published an article in the Journal of Advertising Research titled "The Concept of the Marketing Mix." Borden's marketing mix included product planning, pricing, branding, distribution channels, personal selling, advertising, promotion, packaging, display, servicing, physical handling, and fact finding and analysis. E. Jerome McCarthy later grouped these ingredients into the four categories that we know today as the 4P's of marketing - product, price, place, and promotion.

The point of this brief history lesson is that marketing has long had a mandate that is broader than marketing communications (promotion). Companies can suffer when marketing ignores these broader responsibilities because, of all the major business functions, marketing is (or should be) the best suited to relate a company to its external competitive environment.

So, if you're a marketer, give these ideas some thought:

  • Marketing is about communicating your company's value proposition, but it must also be about determining what those value propositions will be.
  • Marketing is about communicating the important features and attributes of your company's products or services, but it must also be about determining what features and attributes your products/services need in order to be attractive to buyers.
  • Marketing is about communicating your company's price-value equation, but it must also be about determining what your company's pricing strategy will be.
Marketing communications will always be a critical part of the marketing function. But marketers need to keep the other aspects of marketing in mind in order to avoid a bad case of marketing myopia.

A Brief Update

Since my original post was published in 2012, numerous research studies have reported that many marketing leaders believe they are (or soon will be) primarily responsible for managing end-to-end customer experiences. Recent studies have also shown that a growing number of marketing leaders now believe they are primarily responsible for driving business growth, and that other senior executives largely agree with that view.

It seems clear, therefore, that marketing leaders recognize that the scope of marketing's responsibilities needs to expand. It's also clear, however, that this particular transformation in marketing is still a work in progress. For example, in the February 2019 edition of The CMO Survey, only 42.4% of respondents said that marketing is leading customer experience efforts in their organization, and only 43.4% reported that marketing is leading revenue growth efforts.

Earlier this year, I published a series of posts discussing the growth challenge facing marketers, and exploring what marketers need to do to effectively drive growth. You can read more about this vital topic here:

Marketing myopia may be less prevalent today than it was six years ago. The big challenge now is to translate the improved "vision" into tangible actions.

Image courtesy of Rob via Flickr CC.

Sunday, April 28, 2019

Three Ways to Make Your Case Studies More Persuasive

Customer case studies have been a staple of the B2B marketing content mix for decades. According to 2018 research by the Content Marketing Institute and MarketingProfs, 73% of B2B marketers are using case studies for content marketing purposes.

Recent research on the effectiveness of customer case studies has produced mixed results. For example, in the 2019 Content Preferences Survey by Demand Gen Report, customer case studies were classified as "influencer content." Ninety-five percent of the survey respondents said they prefer credible content from industry influencers, and case studies were the most-preferred type of such content (cited by 47% of respondents).

On the other hand, the 2019 B2B buying disconnect research by TrustRadius indicates that customer case studies have lost some of their effectiveness with buyers. In that research, just over 20% of the surveyed B2B technology buyers said they used vendor-produced case studies to inform their purchase decisions, and they ranked case studies 11th (out of 15 options) in trustworthiness. Two quotations from survey respondents capture a perspective that is becoming more prevalent among B2B buyers:

  • "Vendor provided case studies - these are hand picked success stories / [we] preferred independent reviews."
  • "Whitepapers and case studies are geared towards selling you the product so I don't put a whole lot of weight on these."
The growing buyer skepticism of customer case studies mirrors a decline of buyer trust in most forms of vendor-provided information. Therefore, one of the major challenges facing B2B marketers is to increase the credibility of their marketing content of all types.
When it comes to case studies, there are three concrete steps B2B marketers can take to bolster credibility and effectiveness.
Make the Customer the Hero
I'm often asked by clients to review and comment on their customer case studies, and unfortunately, what I read all too often is self-promotional "brochureware" disguised as a case study.
The mistake that many companies make is to cast themselves, rather than their customers, as the heroes of their case studies. The story line of many case studies resembles an old silent movie where the villain ties a helpless damsel (the customer) to railroad tracks, and the hero (the selling company) rides in at the last minute to rescue the damsel in distress from an oncoming train.
A good case study will lead readers to identify with the customer. You want readers to vicariously experience the "pain" the customer was feeling and the success the customer achieved. In essence, you want readers to finish the case study believing they can achieve the same success. When you make your company the hero of your case studies, you are asking readers to identify with your company, not the customer.
So, when you're preparing a case study, you can give your company a strong supporting role, but always let your customer be the star.
Include Enough Detail to Make It Engaging
When I began developing content for clients more than a decade ago, the conventional wisdom was that customer case studies should be short, usually no more than 1-2 pages. But most buyers want to use case studies to help validate their purchase decision. And this means that a case study needs to include enough detail to describe the customer's business situation and experience with your product or service in a meaningful way.
So, B2B marketers should forget the old rules about case study length. Each case study should be as long as it needs to be to tell the customer's story in a compelling way.
Make Your Customer Case Studies Realistic
This is likely to be the single most difficult change for most B2B marketers to accept and implement. Most marketers are conditioned by culture and training to emphasize the positives and minimize the limitations of their product or service. But this is the very tendency that causes many buyers to view vendor-provided content with a healthy dose of skepticism.
A lack of transparency about product limitations causes one of the most significant disconnects between buyers and sellers. In the TrustRadius research described earlier, 71% of the buyer respondents said it was very important to understand product limitations before buying, but only 42% of the marketing/sales respondents expressed this view. And while 84% of the marketing/sales respondents said they aim to be clear about the limitations of their product, only 36% of the buyer respondents felt the vendor they selected had been forthcoming about product limitations.
No product or service is perfect. And it's likely that many of your most satisfied customers can identify something about your product they wish was different. These customer perspectives should be included in your case studies because they will make your case studies more credible and persuasive.
A Final Thought
Many companies find it valuable to work with an external content developer to create their customer case studies. An independent content developer can provide the objectivity that's essential for creating case studies that are credible and trustworthy. Just be sure that you work with a content developer who (a) has experience creating evidence-based, non-promotional content, and (b) understands what makes a customer case study effective with today's skeptical buyers.

Image courtesy of Animated Heaven via Flickr.

Sunday, April 21, 2019

B2B Buyers Remain Skeptical About Vendor Content

Last month, TrustRadius published the findings of its third annual B2B buying disconnect research. The 2019 B2B Buying Disconnect report is based on a survey of 712 individuals who were involved in a significant purchase of business technology during the preceding year, and on a survey of 229 individuals who worked for technology vendors in a marketing or sales capacity.

In my last post, I described some of the characteristics of the technology buying process, as revealed by the TrustRadius research. In this post, I'll discuss what the TrustRadius surveys discovered about how technology buyers research potential purchases, and where there are still significant disconnects between technology buyers and sellers.

Information Used to Support Buying Decisions

A primary objective of the TrustRadius surveys has been to identify what sources of information technology buyers use to support purchase decisions, and which sources they view as influential and trustworthy. The 2019 survey found that buyers used an average of 5.2 sources of information when they research potential purchases, up slightly from 4.9 in 2018 and 2017.

The most widely-used sources of information have changed little over the past three years. In the 2017, 2018, and 2019 surveys, the five most widely-used sources of information identified by buyers were:

  • Product Demos
  • Vendor/Product Website
  • User Reviews
  • Free Trial/Account
  • Vendor Representatives
Information Trust
TrustRadius also asked buyers to rate the trustworthiness of each source of information. (Note:  TrustRadius presented buyers with fifteen sources of information in 2019 and 2018, and twelve sources of information in 2017.) It turns out that buyers' perceptions of trustworthiness haven't changed much over the past three years.
The following table shows the five most trustworthy and the five least trustworthy sources of information identified by buyers in the 2019 survey. The table also shows how buyers ranked the trustworthiness of these information sources in the 2018 and 2017 surveys.

At first glance, these survey findings would seem to paint a fairly bleak picture for B2B marketers, given that vendor-provided sources of information were ranked as the least trustworthy by buyers. However, there are reasons to believe that the situation isn't quite as bad as these survey results seem to indicate. The 2019 survey report contains several quotes from buyers that provide context for the survey results. Here are a few examples:
"Vendor collateral valuable for initial research but from there, really a matter of needing to actually see the functionality work as opposed to pretty pictures & glowing case studies."
"Providers are known for their platitudes, and less for the substance of their claims, so I took their marketing materials with a grain of salt."
"Any vendor can put up collateral and a good website, but trying the service for ourselves was crucial in understanding if the product was a fit for our team."
I contend that what these quotations really indicate is that most business buyers are unwilling to trust vendor-provided information completely, or rely solely on such information when making purchase decisions.
In many cases, buyers view vendor-provided information as inherently biased (although not necessarily deceitful), and in some cases, vendor-provided information doesn't adequately address some of the specific issues that a particular buyer may be concerned about. The quotations and the survey results also show that most buyers want direct experience with a produce via demos and free trials whenever possible.
A Major Disconnect Between Sellers and Buyers
One of the most significant disconnects between buyers and sellers revealed by the TrustRadius research relates to transparency about product limitations. Eighty-four percent of the vendor respondents in the 2019 survey said they aim to be clear about the capabilities and limitations of their product. However, only 36% of the buyers in the 2019 survey felt the vendor they selected was forthcoming about product limitations.
It appears that many vendors simply don't recognize how important this issue is for buyers. Seventy-one percent of the buyer respondents in the 2019 survey said it is very important to understand product limitations before buying, but only 42% of the vendor respondents expressed this view.
Marketing content and sales communications rarely address product limitations directly. It's not that B2B marketers and sales reps are intentionally dishonest, but they are conditioned by culture and training to emphasize the positives (and minimize the limitations) of their solutions. Unfortunately, this tendency causes buyers to view most vendor-provided information with a heavy dose of skepticism.
In my next post, I'll discuss one way that B2B marketers can address the trust gap.

Top image courtesy of Terry Johnston via Flickr CC.

Saturday, April 13, 2019

The Key Characteristics of Business Technology Buying

TrustRadius recently published The 2019 B2B Buying Disconnect report, which provides several important insights regarding the sale and purchase of B2B technology solutions. The report is based on a survey of 712 individuals who played a key role in a significant business technology purchase during the preceding year, and on a survey of 229 individuals who worked for technology vendors in a sales or marketing capacity.

This research covers a broad range of topics. The buyer survey includes findings about the general characteristics of technology purchases and the technology buying process, how technology buyers research potential purchases, and how they view technology vendors. The vendor survey explores how technology vendors seek to engage potential buyers and how the perceive their effectiveness with those prospects.

The TrustRadius surveys focused exclusively on the attributes of technology sales and purchases and on the attitudes and behaviors of technology buyers and sellers. While the results of this research may not be directly applicable to all types of B2B purchases and sales, it's likely that they would be similar in other cases involving complex B2B products or services.

Major Attributes of the Buying Process

The findings of the TrustRadius buyer survey describe the types of technologies purchased, the cost of the technology, and several important attributes of the buying process.

Types of Technologies Purchased - TrustRadius asked buyers to think about the most significant technology purchase they were involved in during the preceding year. The largest cohort of survey respondents (24%) said they bought an IT solution. The second and third most frequently purchased types of technology were marketing technology (13% of respondents) and business intelligence solutions (10%).

Purchase Size - Thirty percent of the respondents said the annual cost of their most significant technology purchase was between $11,000 and $51,000. Another 27% of the surveyed buyers said they spent between $51,000 and $500,000 on their most significant purchase.

The Buying Group - Almost two-thirds of the surveyed buyers (64%) said they were part of a buying group that included between two and five influencers and decision makers. Almost a third of the buyers said their buying team included six or more people.

Length of the Buying Cycle - Forty-two percent of the respondents said it took their company between one and three months to complete a significant technology purchase. Forty-six percent of the buyers said that a major technology purchase typically required three or more months to make.

The Shortlist - Forty-four percent of the respondents said they usually evaluate a shortlist of three or more products when making a significant technology purchase. Another 41% of buyers said their shortlist typically includes two potential solutions.

How Buyers Determine the Winner

The authors of the TrustRadius report say that pragmatic factors - such as features/functionality, price, and ease of integration - are important to buyers in making the final purchase decision. They write:  "If your budget is non-negotiable, or if certain missing features or integrations are a deal-breaker, boom! These factors sometimes help buyers narrow things down to a single option."

However, the report authors also identified two other common reasons given by surveyed buyers for making the final decision.

  1. How easily the buyers can visualize using the product in their particular circumstances; and
  2. The buyers' level of trust in the vendor.
The report states:  "There were a number of different ways buyers seemed to gauge trust in their use case and the future of their relationship with the vendor, from the tenor of sales communications to feedback from existing customers."
In my next post, I'll discuss what the TrustRadius research reveals about how buyers research technology purchases, what sources of information they trust, and why TrustRadius contends there are still disconnects between buyers and sellers.

Image source:  TrustRadius

Sunday, April 7, 2019

[Research] The State of Marketing Automation - Adoption, Usage, Benefits, Challenges

Recent research by CleverTouch Marketing, a marketing technology consultancy and service provider based in the UK, provides an interesting snapshot of the state of marketing automation adoption and usage.

Expectations vs. Reality:  The State of Marketing Automation Adoption and Usage is based on a survey of 200 CMOs, Marketing Directors, and Heads of Marketing at companies having more than 250 employees. Fifty of the survey respondents were based in the UK, 50 in the US, and 100 in EMEA.

Although this survey involved a fairly small sample, the findings provide several interesting insights about the attitudes and practices of marketing leaders relating to marketing automation. Here's a description of some of the major survey findings.

Adoption - Eighty percent of the survey respondents said they already have a marketing automation solution in place, and those respondents indicated they were using at least one of these marketing automation solutions - HubSpot, Marketo, Eloqua, Pardot, SharpSpring, or Act-On.

Reasons for Implementing - The survey found that marketers had a variety of reasons for implementing marketing automation, with no single reason being dominant. Among survey respondents who are using marketing automation ("user respondents"), the top three reasons identified were:

  • To drive new insights and intelligence (28%)
  • For content management and customer journey mapping (28%)
  • For change management and the re-invention of marketing (28%)
Twenty-seven percent of the user respondents said they implemented marketing automation for information management and intelligent routing, or for increased business efficiency.
Major Benefits - CleverTouch also asked user respondents what benefits they had realized by implementing marketing automation. The top five benefits identified were:
  • We can now prove the ROI of marketing (31%)
  • Marketing has generated more sales leads (31%)
  • Improved data quality and compliance (31%)
  • Marketing has generated better quality sales leads (29%)
  • Faster lead conversion and sales cycles (29%)
Primary Uses - According to user respondents, the top three current uses of marketing automation are:
  • For lead generation (44%)
  • For lead nurturing campaigns (42%)
  • For account-based marketing (41%)
Biggest Challenges - Nineteen percent of the user respondents in the CleverTouch survey said that lack of good quality content is their biggest challenge to marketing automation success. Seventeen percent of the user respondents cited the complexity of the marketing automation platform, and 16% said changing market dynamics.
Other Findings - Some of the other interesting findings in the CleverTouch survey are:
  • 48% of the user respondents said they are able to show campaign ROI as a result of their marketing automation investment.
  • When asked where they will be investing most of their marketing budget over the next 12 months, 33% of respondents said content marketing, 30% said predictive analytics, 28% said artificial intelligence, and 28% said marketing automation optimization.
  • 48% of the survey respondents said their investment in marketing technology services would likely increase somewhat over the next 12 months, and another 11% said their investment would likely increase significantly.
My Take - The CleverTouch survey results indicate that most large and mid-size companies have implemented a marketing automation solution as part of their marketing technology stack, although I suspect that the adoption rate is less than 80% if all companies are considered. The findings also indicate that many companies are deriving important benefits from their use of marketing automation. Lastly, the CleverTouch survey confirms what other studies have found - that investment in marketing technologies is continuing to grow.
Image Source:  Rick B via Flickr (Public Domain)