tag:blogger.com,1999:blog-23909291602827487422024-03-18T07:55:52.179-05:00B2B Marketing DirectionsThe rules of B2B marketing are constantly changing. What worked yesterday won't necessarily work today. . .or tomorrow. This blog presents information, opinion, and speculation about where B2B marketing is headed.G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.comBlogger667125tag:blogger.com,1999:blog-2390929160282748742.post-1202990261511101912024-03-17T03:27:00.000-05:002024-03-17T03:27:22.307-05:00[Research Round-Up] The Effectiveness of AI-Generated Images for Marketing<p></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_q_zsXbQplDNkhCOh_LXvHaT4D45zxAF7F9u0CCseceBDRCGiWVWJaZjwDmQ88UPaLOQqSMJ8o6iob6GacIhG70IgomG95pQxL2svBBD6-xoJ_iRnifSFh2Y5dEAlUW8Hsditba7yopbaU_Ih9cdIojVpAVT0UIzPnea1JHilfBNoAHZvHKh_oEPDiUCK/s1000/Illustration%20for%20012124%20Post.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="667" data-original-width="1000" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_q_zsXbQplDNkhCOh_LXvHaT4D45zxAF7F9u0CCseceBDRCGiWVWJaZjwDmQ88UPaLOQqSMJ8o6iob6GacIhG70IgomG95pQxL2svBBD6-xoJ_iRnifSFh2Y5dEAlUW8Hsditba7yopbaU_Ih9cdIojVpAVT0UIzPnea1JHilfBNoAHZvHKh_oEPDiUCK/w400-h266/Illustration%20for%20012124%20Post.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: Shutterstock</i></span></td></tr></tbody></table><i></i><p></p><p><i><i>(This year, I'm devoting some of my Research Round-Up posts to academic research papers relating to the use of artificial intelligence for marketing purposes. This post features an unpublished paper that compares the performance of AI-generated vs. human-made images across three marketing use cases.)</i></i></p><p></p><p>"<a href="https://papers.ssrn.com/sol3/Papers.cfm?abstract_id=4597899" target="_blank">The power of generative marketing: Can generative AI reach human-level visual marketing content?</a>"</p><p></p><ul style="text-align: left;"><li><i style="font-weight: bold;">Authors - </i>Jochen Hartmann and Yannick Exner, Technical University of Munich; Samuel Domdey, Technical University of Hamburg-Harburg</li></ul><div><ul style="text-align: left;"><li><i style="font-weight: bold;">Date Written - </i>July 12. 2023</li></ul><div>This paper describes the results of three studies designed to evaluate the performance of AI-generated vs. human-made images used for marketing purposes. Specifically, the studies evaluated image performance across three dimensions relevant to marketing.</div></div><div><ul style="text-align: left;"><li>Human perception of image quality and realism</li><li>Social media engagement</li><li>Click-through rates of banner ads</li></ul><div>The studies used AI-generated images created with 13 text-to-image diffusion models, including DALL-E2, Jasper, Midjourney v4, and several versions of Stable Diffusion. Altogether, these studies collected more than 17,000 human evaluations of over 1,500 AI-generated images.</div></div><div>All of the AI-generated images in these studies were created using a two-step process. In the first step, the researchers employed an image-to-text AI model to create a textual description of each human-made comparison image. These textual descriptions were then used (without modification) as the prompts to produce the AI-generated images.</div><div>Here are abbreviated descriptions of the three studies and the high-level results of each study.</div><div><b>Study 1 - Human Perception of Quality and Realism</b></div><div>The objective of this study was to compare the perceived quality and realism of AI-generated vs. human-made images across three marketing use cases - product design, social media, and print ads. </div><div>Each image was rated by five human evaluators for quality and realism using a 7-point Likert scale (1 = low, 7 = high), resulting in a total of 7,830 ratings.</div><div>The ratings for quality and realism varied depending on the specific image being evaluated and on the model used to create the AI-generated image. Overall, however, the study revealed that the AI-generated images outperformed or were on par with the human-made images in the product design and social media use cases.</div><div>In the print ad use case, the AI-generated images were significantly less likely to perform on par with the human-made images in terms of perceived quality and realism.</div><div>Again, the ratings varied significantly depending on the model used to create the AI-generated image. So, the choice of model matters.</div><div><b>Study 2 - Social Media Engagement</b></div><div>This study's objective was to compare the ability of AI-generated images vs. a human-made image to produce engagement in a social media setting. In this study, engagement referred to the "likelihood to like" an image and the "likelihood to comment" on an image.</div><div>This study included one human-made image and 13 AI-generated images. The researchers recruited 701 participants who were randomly assigned to one of the 14 images. Each participant was asked to rate how likely they were to like or comment on an image using a 7-point Likert scale (1=low, 7=high).</div><div>The results of this study showed that the AI-generated images generally performed on par with the human-made image in terms of social media engagement.</div><div><b>Study 3 - Click-Through Rates On Banner Ads</b></div><div>The objective of this study was to compare the effectiveness of AI-generated images vs. a human-made image when used in an online banner ad. The measure of effectiveness used was click-through rates (CTR).</div><div>This study was a randomized field experiment that consisted of a real-world online banner ad campaign run on a leading display advertising platform. The human-made image was a professional photo purchased from Adobe Stock. The campaign ran December 28-29, 2022, and generated 702 clicks on 86,809 impressions.</div><div>Of the 14 images tested, the human-made image ranked 10th in terms of CTR. The best-performing AI-generated image achieved a 21.5% higher CTR compared to the human-made image.</div><div>This study also demonstrated that model choice matters. The best-performing AI model (Stable Diffusion v1-3) outperformed the worst model (Disco Diffusion) by 65.5%.</div><div><b>My Take</b></div><div>The three studies described in the Hartmann et al. paper demonstrate that generative AI models can create visual content that is on par with - and often better than - human-made images for a variety of marketing use cases.</div><div>If anything, these studies probably underestimate the ability of generative AI models to produce human-level visual content. The prompts used to create the AI images for these studies were produced by an image-to-text AI model, and the researchers didn't modify those prompts. Prompts engineered by experienced marketers would likely have resulted in more effective AI images.</div><div>These studies also probably underestimate the quality of images generative AI models can currently produce because new, more capable versions of some of the models used in the studies have been released since the studies were conducted. For example, these studies used DALL-E2 and Midjourney v4, but DALL-E3 and Midjourney v6 are now available.</div><div>At minimum, the results of these studies suggest that AI-generated images are likely to play an increasingly important role in marketing.</div><p></p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-76427100687203502242024-03-10T05:25:00.000-05:002024-03-10T05:25:19.906-05:00[Book Review] Why Marketers Should Think Like World-Class Poker Players<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0-SLS5TRxvxC3G_0EVSnTWSVCXv0j2RgyJLKw5vIDs6Yf5ZJWPwHWapBcO2D0xUQ5dYCkhg9It-spQns3UdtlEgDqiqJZ3IMzFeNtGAonZoFyWapzTIz87kyyVXnG2Q2SjTL3LhenYPmBOHnvPFuUMoB9B5iOS5cJlq6pDcN1M5nG5AchkFA4hyiZU2iX/s450/Illustration%20for%20031024.jpg" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="450" data-original-width="300" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0-SLS5TRxvxC3G_0EVSnTWSVCXv0j2RgyJLKw5vIDs6Yf5ZJWPwHWapBcO2D0xUQ5dYCkhg9It-spQns3UdtlEgDqiqJZ3IMzFeNtGAonZoFyWapzTIz87kyyVXnG2Q2SjTL3LhenYPmBOHnvPFuUMoB9B5iOS5cJlq6pDcN1M5nG5AchkFA4hyiZU2iX/w133-h200/Illustration%20for%20031024.jpg" width="133" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: Penguin Random House</i></span></td></tr></tbody></table><p>The idea that marketers need to think like world-class poker players may seem a little odd, but that's the primary lesson I take from Annie Duke's book, <i><a href="https://www.penguinrandomhouse.com/books/552885/thinking-in-bets-by-annie-duke/" target="_blank">Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts</a></i> (Portfolio/Penguin, 2018).</p><p><i>Thinking in Bets</i> isn't specifically about marketing, but it describes an approach to thinking about decisions that would serve marketers well. So, if you haven't read <i>Thinking in Bets</i>, I recommend you add it to your 2024 reading list.</p><p>Annie Duke is a recognized authority in the field of decision-making, but her professional journey has been a little unusual. She graduated from Columbia University with degrees in English and psychology, and she has a master's degree in cognitive psychology from the University of Pennsylvania. She had finished her PhD coursework at UPenn when she became ill and was forced to take a leave of absence.</p><p>During her leave of absence, Duke moved to Montana and began to play poker. She became a professional poker player and, over a twenty-year career, she won numerous high-level poker tournaments, including the prestigious World Series of Poker. During her career, Duke won over $4 million in poker tournaments.</p><p>Duke retired from professional poker in 2012 and just last year completed her doctoral work and earned a PhD in cognitive psychology from UPenn. She's now a sought-after corporate speaker and a consultant on decision strategy.</p><p><b>What's In the Book</b></p><p>Annie Duke describes the primary purpose of <i>Thinking in Bets</i> in these terms:</p><p><i>"The promise of this book is that if we follow the example of poker players by making explicit that our decisions are bets, we can make better decisions and anticipate (and take protective measures) when irrationality is likely to keep us from acting in our best interest."</i></p><p>Duke's core argument is that the significant decisions we make in life are essentially bets on the future, and she elaborates on this argument in the first three chapters of the book. She writes:</p><p><i>". . . our decisions are always bets. We routinely decide among alternatives, put resources at risk, assess the likelihood of different outcomes, and consider what it is that we value. Every decision commits us to some course of action that, by definition, eliminates acting on other alternatives."</i></p><p>According to Duke, uncertainty is the factor that makes our decisions like bets in a poker game. When you place a bet in poker, you can't know for sure that you will win the hand. And, when we make any significant decision, we can't know with certainty that our decision will produce the desired results.</p><p>One key to becoming a better decision-maker is developing the ability to effectively cope with the uncertainty that's inherent in all significant decisions. She writes:</p><p><i>"What good poker players and good decision-makers have in common is their comfort with the world being an uncertain and unpredictable place. They understand that they can almost never know exactly how something will turn out . . . instead of focusing on being sure, they try to figure out how unsure they are, making their best guess at the chances that different outcomes will occur."</i></p><p>Duke acknowledges that becoming comfortable with uncertainty is easier said than done. She observes that the human brain evolved to create coherence and certainty, and this makes us prone to illogical thinking and several cognitive biases. Duke describes the hazards of such illogical thinking and cognitive biases throughout <i>Thinking in Bets</i>.</p><p>Lastly, Duke devotes more than half of her book to a discussion of several tactics that will help us develop our ability to "think in bets" and make better decisions.</p><p>In Chapters 4 and 5, Duke describes how we can use a "decision group" or a "decision pod" to help us maintain our decision-making discipline and thus improve our decision-making skills. In Chapter 6, she discusses scenario planning, backcasting, premortems, and several other valuable tactics that she calls forms of "mental time travel."</p><p><b>My Take</b></p><p><i>Thinking in Bets</i> is a valuable resource for any marketer. Annie Duke's writing style is informal and engaging, and she makes liberal use of stories that are always on point and often amusing.</p><p>As I mentioned earlier, <i>Thinking in Bets</i> isn't specifically about marketing. However, the decision-making principles described in the book are universal. I would argue that <i>Thinking in Bets</i> is especially relevant for marketers because the outcomes of most significant marketing decisions depend on the reactions and responses of other human beings. This means that marketing decisions often involve greater uncertainty than other kinds of business decisions.</p><p><i>Thinking in Bets</i> is a self-help book in the sense that it focuses primarily on how we can improve our individual decision-making. However, Duke offers several suggestions for how business leaders can improve decision-making in their organization.</p><p>Duke argues that it's particularly important for business leaders to encourage skepticism and the expression of dissenting views in their decision-making processes. One way to operationalize skepticism and dissent is by using "red teams."</p><p>Duke describes the role and value of red teams in these terms:</p><p><i>"Just as the CIA has red teams and the State Department has its Dissent Channel, we can incorporate dissent into our business and personal lives. We can create a pod whose job (literally, in business, and figuratively, in our personal life) is to present the other side, to argue why a strategy might be ill-advised, why a prediction might be off, or why an idea might be ill informed. In so doing, the red team naturally raises alternative hypotheses."</i></p><p><i>Thinking in Bets </i>won't teach you how to make specific marketing decisions, but it will help you make better marketing decisions.</p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-38845258943368166212024-03-03T02:32:00.002-06:002024-03-03T02:32:59.591-06:00Decision Science Explains the Power of Strong Brands<p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEisRIlJtTzpJjnMdkqxPhYHLgIkUW-CXI_YlmAlD4Gp34mZM2eArN22fcRwzB-WPOpVyJMDzgjis0Rk1C-zD9rLkXg32aIl6g82MJsTCZBcNjPeh4bdsaGQK11H8cHHrhIbHIPm-JeBrsjZeDpIkJ0RKN55KBORhfx_QsvH2l2pp1O5VyL2FcaHJLEsYzsM/s610/Illustration%20for%20030324%20Post.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="343" data-original-width="610" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEisRIlJtTzpJjnMdkqxPhYHLgIkUW-CXI_YlmAlD4Gp34mZM2eArN22fcRwzB-WPOpVyJMDzgjis0Rk1C-zD9rLkXg32aIl6g82MJsTCZBcNjPeh4bdsaGQK11H8cHHrhIbHIPm-JeBrsjZeDpIkJ0RKN55KBORhfx_QsvH2l2pp1O5VyL2FcaHJLEsYzsM/w400-h225/Illustration%20for%20030324%20Post.jpg" width="400" /></a></div><b><p><b><br /></b></p>Marketers have long argued that a strong brand can induce customers to pay premium prices, increase customer loyalty, and drive growth. But until recently, it's been difficult for marketers to explain exactly why and how a strong brand produces these results. Read on to learn why established principles of decision science can explain the power of a strong brand.</b><p></p><p>Numerous studies conducted over many years have demonstrated that strong brands produce significant benefits for their owners. A strong brand can make customers more willing to pay premium prices, increase customer loyalty, and drive revenue and market share growth.</p><p>While the benefits of strong brands are well established, we haven't had a clear understanding of <i>why</i> or <i>how</i> they produce these proven benefits. But thanks to advances in the decision sciences, this mystery has now been solved.</p><p>Last fall, <a href="https://b2bmarketingdirections.blogspot.com/2023/10/book-review-must-read-explanation-of.html" target="_blank">I reviewed and strongly recommended</a> Phil Barden's book, <i>Decoded: The Science Behind Why We Buy</i>. In Chapter 1 of his book, Barden discusses several decision-making principles derived from cognitive and social psychology, behavioral economics, and neuroscience. Then, he uses these principles to explain how people make buying decisions and how brands influence those decisions.</p><p><b>The Science of Human Decision-Making</b></p><p>Barden's explanation of how brands influence buying decisions is grounded in the model of human decision-making developed by psychologist Daniel Kahneman, who won the 2002 Nobel Prize in economics.</p><p>Kahneman's model posits that people use two types of cognitive processes to make decisions.</p><p></p><ul style="text-align: left;"><li><i>System 1</i> (which Barden calls the "autopilot") is fast, intuitive thinking that operates automatically, quickly, and with little or no conscious effort. System 1 essentially integrates perception and intuition.</li></ul><div><ul style="text-align: left;"><li><i>System 2</i> (which Barden calls the "pilot") is slow thinking that consists of processes that are reflective, deliberative, and analytical.</li></ul><div>Together, these two cognitive systems determine all the purchase decisions that people make.</div></div><div>The human autopilot is "always on." It automatically processes all the information that is perceived by our senses, even if we aren't consciously focusing on those sensory inputs. And all of those sensory inputs have the potential to influence our decision-making and behavior.</div><div>The human brain uses sensory information to learn through a process called <i><a href="https://en.wikipedia.org/wiki/Learning" target="_blank">associative learning</a></i>. Our brain builds neural connections between sensory inputs that occur repeatedly in the same context, creating <i><a href="https://en.wikipedia.org/wiki/Associative_memory_(psychology)" target="_blank">associative memory</a></i>. Or, to put it more informally, "What fires together wires together."</div><div>These associative memories (many of which we aren't consciously aware of) are the basis of human intuition, which can be described as our ability to "know" something without knowing exactly why or how we know it.</div><div>Associative memories also exert a major influence on what we buy, and this largely explains the power of strong brands.</div><div><b>How Brands Influence Purchase Decisions</b></div><div>In <i>Decoded</i>, Phil Barden argued that brands influence buying decisions because they provide "frames" that affect how we perceive products and services. Barden doesn't provide a definition of "brand," but it's clear that he means more than just a product or service. In Barden's model, "brand" refers to all of the perceptions and linkages relating to a product or service (or the business that provides it) that a person has stored in his or her associative memory.</div><div>To demonstrate the impact of framing, Barden used the illustration that I've reproduced below.</div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhNAN6NtHtpRRQNfQjV02ntjEMUuiPnM5zUQXNUhmTiOEIOacyuGLPrOld4Hz4FRZ7t-O-2tW8HYDgoEbgB_fc7pApe5LxgrkghFN-m63Z8qW3zj0w-oUAEeyKpH2xVVMCUj9nyLBX6iT3DGpZNXJveSG50oBA3UgTPvc3D5imkuZzc0uy8ULQoXQTPSJGB/s675/Framing%20Diagram%20for%20030324%20Post.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="387" data-original-width="675" height="229" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhNAN6NtHtpRRQNfQjV02ntjEMUuiPnM5zUQXNUhmTiOEIOacyuGLPrOld4Hz4FRZ7t-O-2tW8HYDgoEbgB_fc7pApe5LxgrkghFN-m63Z8qW3zj0w-oUAEeyKpH2xVVMCUj9nyLBX6iT3DGpZNXJveSG50oBA3UgTPvc3D5imkuZzc0uy8ULQoXQTPSJGB/w400-h229/Framing%20Diagram%20for%20030324%20Post.jpg" width="400" /></a></div><br /><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div>In this illustration, two large squares frame two smaller squares. When people see this drawing, most will immediately say the two small squares are different shades of gray. In fact, they are exactly the same color.</div><div>Our perception that the two small squares are different shades of gray is due to the differences in the color of the two large squares. So, the color of the frame changes how we perceive the color of each small square.</div><div>Barden argues that this is how brands work. He writes:</div><div><i>"The framing effect is crucial for marketing . . . We know that they </i>[brands]<i> have an impact, but how brands work is hard to grasp . . . Framing explains how brands influence purchase decisions: brands operate in the background, framing the perceptions and, with it, the experience of the product."</i></div><div>It's important to note that many of the associative memories that are linked to a brand aren't about the functional attributes of the product or service. More often, the most powerful perceptions stored in our associative memory are about psychological goals (e.g. security, autonomy, excitement) or past emotional experiences.</div><div>Barden's explanation of how brands influence purchase decisions is compelling, and it provides two lessons for marketers. First, it reinforces the importance of effective branding and brand marketing. And second, it should remind us that most significant purchase decisions involve both deliberative/rational and intuitive/non-rational thinking.</div><p></p><p><i style="background-color: white; color: #333333; font-family: Verdana, Arial, sans-serif; font-size: 13px;">Top image courtesy of <a href="https://www.flickr.com/photos/142299342@N06/32794072773/in/photolist-RXUciP-bumAer-9huqH2-psz5B8-HNER2-RXUbMD-9YTWxn-7UuNcL-8htGTz-6s9L2i-9vBynZ-3LxV-RXUcb4-urcVW-7PqZs4-93giUs-aAukJ3-3ebQam-9S317-4zMfjs-6joQ31-9S31D-3e7qHa-dkNqcf-9UwZT-97sPh2-7bZXRV-bEyhze-9S36c-6cPxKM-9hiPC-qcJtUo-9S38H-4MGvpn-9S35V-9S35H-6id9qv-52QBUS-9S361-9S37D-RXUbq6-dURzyD-iy5op-dbtfGD-9n2mi1-9S37p-4pyg5C-bT2Uf2-aqGU1e-7Uoegn" style="color: #336699;">Affen Ajlfe</a> (www.modup.net) via Flickr (PD).</i></p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-50849554910720946542024-02-25T05:48:00.000-06:002024-02-25T05:48:27.866-06:00The Right Customer Promises Drive Better Marketing Results<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhPvaEy2Bj0N-G6T-gh9Zy77TlqeEfTyEPRScVcGzl_wzZJ3d0mWVZLYc05LgsCuLW1JPjQ8Y4smSHf5MAlGHHecWb2aSuT6DIONc26R_l3Dxzh9SLIWSR8cIIWj81yPRAb7-sn6Jo5EDaCbdEKUf_kBZXyNhgr1_i9z3-GynxHoyX6UQYj8gErtY43-rKQ/s799/Illustration%20for%20022524%20Post.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="533" data-original-width="799" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhPvaEy2Bj0N-G6T-gh9Zy77TlqeEfTyEPRScVcGzl_wzZJ3d0mWVZLYc05LgsCuLW1JPjQ8Y4smSHf5MAlGHHecWb2aSuT6DIONc26R_l3Dxzh9SLIWSR8cIIWj81yPRAb7-sn6Jo5EDaCbdEKUf_kBZXyNhgr1_i9z3-GynxHoyX6UQYj8gErtY43-rKQ/w400-h266/Illustration%20for%20022524%20Post.jpg" width="400" /></a></div><br /><p>One of the more infamous quotes in marketing is usually attributed to John Wanamaker, who reportedly said, " Half the money I spend on advertising is wasted. The trouble is, I don't know which half."</p><p>Cracking the code on what drives marketing effectiveness can be incredibly difficult. One TV ad, webinar, or ebook may be hugely successful, while another - based on the same theme and having similar creative elements and comparable distribution - fails to move the needle. In many cases like this, there's no readily apparent way to explain the difference in performance.</p><p>An article appearing in the current issue of the <i>Harvard Business Review</i> offers a potential solution for this conundrum, at least when it comes to brand advertising. "<a href="https://hbr.org/2024/01/the-right-way-to-build-your-brand" target="_blank">The Right Way to Build Your Brand</a>" was written by Roger L. Martin, Jann Schwarz, and Mimi Turner.</p><p>Martin is the former dean of the Rotman School of Management and the author of several books on business strategy and management. Schwarz and Turner are both executives at <a href="https://business.linkedin.com/marketing-solutions/b2b-institute" target="_blank">The B2B Institute</a>, a B2B marketing think tank funded by LinkedIn. </p><p>The authors clearly state their central message early in the article: " . . . the key to successful brand building is a clear and specific promise to the customer that can be demonstrably fulfilled. Advertising that makes such a promise almost always results in better performance than advertising that does not - even if the latter creates greater name awareness."</p><p>This conclusion was based on an analysis of a large database of advertising case studies maintained by the <a href="https://www.warc.com/" target="_blank">World Advertising Research Centre</a> (WARC). The WARC database includes over 24,000 case studies drawn from global ad competitions. These competitions typically require their entrants to provide information about how well their ads worked.</p><p>Specifically, the authors analyzed data relating to more than 2,000 ad campaigns entered in competitions from 2018 to 2022. The first step of the analysis was to classify the campaigns based on whether they had made "an explicit and verifiable promise to customers." Forty percent of these campaigns (the "CP campaigns") included such a promise, while 60% (the "non-CP campaigns") did not.</p><p><b>Advertising that Included Customer Promises Performed Better</b></p><p>The authors then compared the performance of the CP campaigns with the non-CP campaigns on a variety of metrics and found that the CP campaigns outperformed the non-CP campaigns across most of the metrics. For example, the analysis revealed that:</p><p></p><ul style="text-align: left;"><li>56% of the CP campaigns (vs. 38% of the non-CP campaigns) produced improvement in brand perception, brand preference, and purchase intent.</li></ul><div><ul style="text-align: left;"><li>45% of the CP campaigns (vs. 38% of the non-CP campaigns) resulted in increased market penetration.</li></ul></div><div><ul style="text-align: left;"><li>27% of the CP campaigns (vs. 17% of the non-CP campaigns) resulted in market share growth.</li></ul><div>The article also compared the performance of the CP campaigns vs. the non-CP campaigns based on the rating system used by WARC to rank campaign performance. The following table shows the results of that comparison.</div></div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh28et9V0RmOJ9GsesWFv7MWpPVbORAGZJrMDHqn9RBOh5o3yTEf3L1__l6pKcZ3dtvwwQwViG_tF-64O6afGKbSjxcmfmo9YA43nJTAOuKr_mmOKmiaBncnreonrx8TDpFO8Id-BnWtbyb738m5a_dT4d9PPRN223EbJ7NI3PWj4YndINo3eUBEtf14Clf/s650/Table%20for%20Blog%20-%20022524%20Post-Customer%20Promise%20Performance.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="351" data-original-width="650" height="216" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh28et9V0RmOJ9GsesWFv7MWpPVbORAGZJrMDHqn9RBOh5o3yTEf3L1__l6pKcZ3dtvwwQwViG_tF-64O6afGKbSjxcmfmo9YA43nJTAOuKr_mmOKmiaBncnreonrx8TDpFO8Id-BnWtbyb738m5a_dT4d9PPRN223EbJ7NI3PWj4YndINo3eUBEtf14Clf/w400-h216/Table%20for%20Blog%20-%20022524%20Post-Customer%20Promise%20Performance.jpg" width="400" /></a></div><br /><div><br /></div><div><br /></div><p></p><p><br /></p><p><br /></p><p><br /></p><p><br /></p><p><br /></p><p><br /></p><p>As this table shows, the CP campaigns did better than the non-CP campaigns on all but the lowest level of performance.</p><p>Martin, Schwarz, and Turner also looked at what made the promises in the CP campaigns attractive to customers. They found that the most effective promises shared three important attributes. They were memorable, valuable, and deliverable.</p><p><b>Why Customer Promises Work</b></p><p>The authors have built a compelling case for including customer promises in brand advertisements. But what makes such promises effective? Martin, Schwarz, and Turner gave this answer:</p><p><i>"When one person makes a promise to another, it creates a relationship between the two. If the pledge is fulfilled, it builds trust, resulting in a valuable connection."</i></p><p>I don't disagree with this rationale, but established decision science principles provide an even more compelling explanation for why the right kinds of customer promises will deliver better business outcomes. This explanation is based on the interplay of rewards, goals, and motivation.</p><p><a href="https://b2bmarketingdirections.blogspot.com/2024/02/leverage-buyer-goals-to-drive.html" target="_blank">I wrote about this topic</a> earlier this month, but here's an abbreviated recap of the relevant decision science principles.</p><p></p><ul style="text-align: left;"><li>Motivation is a willingness to exert mental or physical effort in pursuit of a goal, and motivation is the primary driver of all human behavior.</li></ul><div><ul style="text-align: left;"><li>As humans, we pursue a goal because we expect to receive a reward if the goal is achieved. Neuroscience research has shown that our brain has a "reward system" that's activated when it processes information that signals a reward we value.</li></ul></div><div><ul style="text-align: left;"><li>When our brain's reward system is activated, we become motivated to pursue the goal that will enable us to reap the expected reward.</li></ul><div>So, a customer promise in a marketing message will be effective when it signals a reward the recipient values. Martin, Schwarz, and Turner allude to this when they write, "Customers must want what the promise offers."</div></div><div>"The Right Way to Build Your Brand" is an important article for marketers. It's well worth the few minutes you will spend reading it.</div><div><br /></div><div><i>Top image courtesy of <a href="https://flickr.com/photos/132826082@N06/33579556025/in/photolist-Taj17v-dnf28-9guMX1-brFBqV-4ZobLc-2m5naQy-2nZHMhf-37AVuD-5W3Z7R-4AJosH-K9VDvF-dk88MC-2iLmXeq-vS6yEu-pusn8a-vT6AEz-obZjYy-obV3TC-vT6BeF-7vM2ru-2iExV8b-obLfdB-2kMwEPP-nUyNju-nZdCTD-vA6vS7-uVQFUe-vA6JdS-vA6v1C-V6sQjf-qr9DuU-vS6y7L-uVGnv7-LUMvH-uVGn5N-nUyM9d-vS6vub-nUA2ap-obV1XU-2iEAHhu-nUzXYM-vAdTYZ-2od9Bu9-dskr4b-nUz4gG-2j5GAMq-2iExRzj-2pvHcAH-e6ksY6-eaf1v3" target="_blank">Kevin Simmons</a> (<a href="https://www.mayberryhealthandhome.com/" target="_blank">Mayberry Health and Home</a>) via Flickr (CC).</i></div><p></p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-50273190914846385512024-02-18T04:40:00.001-06:002024-02-18T04:40:58.877-06:00[Research Round-Up] What CEOs Think of Marketing/CMOs and How Much Tech Buyers Trust Marketing<p><i>(This month's Research Round-Up features a study by Boathouse that reveals what CEOs actually think about marketing and CMOs, and a survey by Informa Tech that addresses how much trust B2B technology buyers actually place in marketing.)</i></p><p><i><a href="https://www.boathouseinc.com/insights/ceo-study-on-marketing-and-the-cmo" target="_blank">The Third Annual CEO Study on Marketing and the CMO</a> </i>by Boathouse </p><table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjAp8ZXkyay49OMDQs5O5Zw-w9_WoLSy4KFLA7UmshqagdUfQFCmN6qqFhcNFk_JRuKFvJQd0MUbj-ZtWKt6a-sBqcaUmnRF3JYKU84-KcRtUhbiOcNbrr9Wm4MCv2l3FOcIL1RGKBNcGEABZgQU8TkQ8BK0Ax1VR4C0mAOFW3frrxIGXylSk0JOVkbiYn1/s1740/Illustration%201%20for%20021824%20Post.jpg" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="979" data-original-width="1740" height="113" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjAp8ZXkyay49OMDQs5O5Zw-w9_WoLSy4KFLA7UmshqagdUfQFCmN6qqFhcNFk_JRuKFvJQd0MUbj-ZtWKt6a-sBqcaUmnRF3JYKU84-KcRtUhbiOcNbrr9Wm4MCv2l3FOcIL1RGKBNcGEABZgQU8TkQ8BK0Ax1VR4C0mAOFW3frrxIGXylSk0JOVkbiYn1/w200-h113/Illustration%201%20for%20021824%20Post.jpg" width="200" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: Boathouse</i></span></td></tr></tbody></table><p></p><ul style="text-align: left;"><li>Based on a survey of 150 CEOs at U.S. companies; 55% were with public companies, and 45% were with private companies</li><li>Survey respondents were with companies having $250 million to more than $1 billion in annual revenue</li><li>Survey respondents represented 17 industry sectors</li><li>The survey was in the field September 9, 2023 - October 4, 2023</li></ul><div>This survey explored the perspectives of U.S. CEOs regarding the performance of their marketing function and their CMO. It also addressed how CEOs view their job and the major issues they are facing.</div><div>Overall, this survey contains good news for CMOs and marketers. On most points, the survey found that CEOs have a more favorable opinion of their marketing team and CMO than they did when earlier versions of the survey were conducted in 2022 and 2021.</div><div>To set the stage, the survey asked participants about the problems they want marketing to help them solve. The top five problems selected by respondents (from a list of 15) were:</div><div><ol style="text-align: left;"><li>"Create new customers, retain existing customers, and drive revenue growth" (52% of respondents)</li><li>"Drive sales and grow market share" (45%)</li><li>"Stay ahead, differentiate, grow faster than our competition" (44%)</li><li>"Improve our brand/reputation" (41%)</li><li>"Transform the company's narrative in the marketplace" (40%)</li></ol><div>Nearly half (49%) of the surveyed CEOs rated the performance of their marketing function as <i>Best in Class</i>. That was up from 24% in the 2022 edition of the survey.</div></div><div>The latest survey also found that CEOs view their CMO more favorably. In the 2023 survey, 26% of the respondents gave their CMO a grade of "A" for the overall performance of their role. That was up from 16% in the 2022 survey.</div><div>Concerning artificial intelligence, over half (57%) of the surveyed CEOs in the 2023 survey gave their CMO a grade of "A" or "B" on their ability to integrate AI/machine learning into their marketing efforts.</div><div>Despite the high grades for overall performance, the latest Boathouse survey identified areas where CEOs aren't as pleased with CMO performance. For example, only 23% of the surveyed CEOs gave their CMO a grade of "A" on strategy, and the lowest number of "A" grades given to CMOs was on their "ability to drive company growth."</div><div><i><a href="https://marketinginsights.informatech.com/free/w_ingg167/" target="_blank">2023 Trust in Marketing Index: How B2B marketers can fill the trust gap</a> </i>by Informa Tech</div><div><table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjTki2uUdNHXOI7pzvTSrG5NB79HsUFUMWatu9l3Tj7dMiSxE82XdEdxDIpCXuoMZJKijLsKcpqliikBDUidRDcqf8gMc7AZOGJLXsxv0bODnLYl_oalh2pSCJdJwf5E57IRZnVnZGJOE01cQiCRw6TqcnaVwRhEj2zhc_a2RJ9l5bC_OXLiZJTtqHiaLYk/s864/Illustration%202%20for%20021824%20Post.jpg" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="486" data-original-width="864" height="113" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjTki2uUdNHXOI7pzvTSrG5NB79HsUFUMWatu9l3Tj7dMiSxE82XdEdxDIpCXuoMZJKijLsKcpqliikBDUidRDcqf8gMc7AZOGJLXsxv0bODnLYl_oalh2pSCJdJwf5E57IRZnVnZGJOE01cQiCRw6TqcnaVwRhEj2zhc_a2RJ9l5bC_OXLiZJTtqHiaLYk/w200-h113/Illustration%202%20for%20021824%20Post.jpg" width="200" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: Informa Tech</i></span></td></tr></tbody></table><ul style="text-align: left;"><li>Based on a survey of 150 B2B technology buying decision-makers</li><li>68 of the respondents were at the C-level or executive level of seniority; 82 were at the director level</li><li>Respondents were located in the United States and the United Kingdom</li><li>The survey was conducted in the summer of 2023</li></ul><div>The purpose of this research was to assess the level of trust that B2B technology buyers have in marketing and identify factors that will increase or reduce that level of trust. To quantify the level of trust, Informa Tech created a "Trust in Marketing Index."</div></div><div>The survey used to develop the index included five index questions with numerical values assigned to each potential answer. The researchers calculated the average score for each index question and then added the average scores together to create the overall index score.</div><div>The resulting index showed that B2B technology buyers' level of trust in marketing is at 61 on a scale of 1 to 100. So, while the level of trust isn't horrible, there is significant room for improvement.</div><div>Here are the five index questions and the key survey finding for each.</div><div><ul style="text-align: left;"><li><i style="font-weight: bold;">"In general, how much do you trust the information marketers provide in B2B content?" - </i>62% of the survey respondents said they trust <i>all</i> or <i>a majority of</i> the content B2B marketers provide.</li></ul></div><div><ul style="text-align: left;"><li><i style="font-weight: bold;">"How often are you disappointed with the value of B2B gated content?" - </i>71% of the respondents said <i>often</i> or <i>sometimes</i>.</li></ul></div><div><ul style="text-align: left;"><li><i style="font-weight: bold;">"How much do you trust personalized content . . . from B2B marketers you've already shared your data with?" - </i>59% of the respondents said they trust <i>all</i> or <i>a majority of</i> such personalized content.</li></ul></div><div><ul style="text-align: left;"><li><i style="font-weight: bold;">"How good of a job are all B2B brands doing in general when targeting you with content and offers?" - </i>62% of the respondents said <i>good</i> or <i>outstanding</i>.</li></ul></div><div><ul style="text-align: left;"><li><i style="font-weight: bold;">"How good of a job are all B2B brands in general doing when it comes to sending content and offers at the right time?" - </i>64% of the respondents said <i>good</i> or <i>outstanding</i>.</li></ul></div><div>The survey also identified several factors that increase or reduce buyer trust in marketing. For example, 85% of the respondents said high-quality B2B thought leadership content improves the perception of a brand. In contrast, 42% of the respondents said content that is too general reduces trust.</div><p></p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-55380952034389823072024-02-11T03:19:00.000-06:002024-02-11T03:19:46.508-06:00[Book Review] "Escape from Model Land" by Erica Thompson<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgzSDs2klOK0dcVHuOfaw_HWvs-EhtV4-5k-0bS5OBUeuPXgP72oMix18Oz1XxtswJt2GSUnehSQ6smvn52uKpA2C7mleeUTtLUvCwN2deiV6CcrX3Td-4viz7KHfIGpIssiwQT0NtxAoAE34iUaKewzA3ZCitOz69vzO_oEXuXCQUcqo0bP6JfsXod0kDr/s720/Illustration%20for%20021124%20Post.jpg" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="720" data-original-width="464" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgzSDs2klOK0dcVHuOfaw_HWvs-EhtV4-5k-0bS5OBUeuPXgP72oMix18Oz1XxtswJt2GSUnehSQ6smvn52uKpA2C7mleeUTtLUvCwN2deiV6CcrX3Td-4viz7KHfIGpIssiwQT0NtxAoAE34iUaKewzA3ZCitOz69vzO_oEXuXCQUcqo0bP6JfsXod0kDr/w129-h200/Illustration%20for%20021124%20Post.jpg" width="129" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: Basic Books</i></span></td></tr></tbody></table><p>Predictive mathematical models touch our lives virtually every day. Every weather forecast we watch, hear, or read is formulated based on multiple atmospheric models. And that's just one example.</p><p>Predictive models have also become an integral part of modern marketing. For example, marketers use mathematical models to determine the optimal mix of marketing programs (marketing mix models), identify the attributes of their best prospects, and personalize marketing communications and other forms of marketing content.</p><p>The primary function of most mathematical models in marketing is to identify patterns in existing data and then apply those patterns to predict the likely future outcomes or results of marketing decisions or programs.</p><p>The use of predictive models in marketing is poised to increase significantly because of continuing advances in artificial intelligence. If you need proof of this growth, just look at the explosion of generative AI applications since the public release of OpenAI's ChatGPT in November 2022.</p><p>All this makes it vital that marketers have a basic understanding of how mathematical models are constructed, how they work, and why they don't always produce accurate forecasts. This makes <i><a href="https://www.hachettebookgroup.com/titles/erica-thompson/escape-from-model-land/9781541600980/?lens=basic-books" target="_blank">Escape from Model Land: How Mathematical Models Can Lead Us Astray and What We Can Do About It</a></i> (Basic Books, 2022) a book all marketers should read.</p><p><i>Escape from Model Land</i> was written by Erica Thompson, an associate professor at University College London (UCL) and a Fellow at the London Mathematical Laboratory. Previously, she was a senior policy fellow at the Data Science Institute at The London School of Economics and Political Science. Thompson holds a PhD in physics from Imperial College.</p><p><b>What's In the Book</b></p><p><i>Escape from Model Land</i> contains ten chapters. In the first six chapters, Thompson focuses on the attributes and limitations of mathematical models. She observes that people who design and build models work in a wonderful place she dubs "Model Land." In Model Land, she writes, all the assumptions that underlie a model are "literally true," and all the uncertainties are quantifiable.</p><p>The problem is that these conditions don't exist in the real world. Thompson writes, "Deep or radical uncertainty enters the scene in the form of unquantifiable unknowns: things we left out of the calculation that we simply could not have anticipated . . . In that case, your carefully defined statistical range of projected outcomes would turn out to be completely inadequate."</p><p><i>Escape from Model Land</i> discusses several other limitations of models. For example, Thompson observes that all models are oversimplifications of the real world, which means they provide an incomplete picture of reality. She writes, " We might think of models as being caricatures . . . Inevitably, they emphasize the importance of certain kinds of features . . . and ignore others completely."</p><p>Thompson also points out that a model builder makes numerous choices when developing a model - what to put in, what to leave out, what scientific and mathematical approach to take, etc. Therefore, a model will reflect the values, education, and culture of the model builder, which means that it only presents one perspective of a given situation when, in fact, several perspectives are possible.</p><p>Throughout the book, Thompson exposes the limitations and "blind spots" of predictive models, but she does not argue they should be relegated to the junk pile. Near the end of Chapter 1, Thompson includes a passage that describes the challenge she hopes the book addresses. She writes:</p><p><i>"I have tried to find a balanced way to proceed in between what I think are two unacceptable alternatives. Taking models literally and failing to account for the gap between Model Land and the real world is a recipe for underestimating risk and suffering the consequences of hubris. Yet throwing models away completely would lose us a lot of clearly valuable information."</i></p><p>Thompson uses the final chapter of <i>Escape from Model Land</i> to offer five suggestions for addressing this challenge.</p><p></p><ul style="text-align: left;"><li><i style="font-weight: bold;">Define the Purpose - </i>"As a starting point for creating models, we need to decide what purpose(s) they are supposed to be put . . . Most models are not adequate for the purpose of making any decision, although they may be adequate for the purpose of informing the decision-maker about some parts of the decision."</li></ul><div><ul style="text-align: left;"><li><i style="font-weight: bold;">Don't Say "I Don't Know" - </i>"If we can give up on the prospect of perfect knowledge and let go of the hope of probabilistic predictions . . . there are alternative narratives in each model which in themselves contain useful insights . . . We know nothing for certain, but we do not know nothing."</li></ul></div><div><ul style="text-align: left;"><li><i style="font-weight: bold;">Make Value Judgements - </i>"All models require value judgements . . . When you understand the value judgements you have made, write them down . . . Allow for representations of alternative judgements without demonising those that are different from your own."</li></ul></div><div><ul style="text-align: left;"><li><i style="font-weight: bold;">Write About the Real World - </i>"When you're explaining your results to somebody else, get out of Model Land and own the results . . . in what ways is this model inadequate or misinformative? What important processes does it fail to capture?"</li></ul></div><div><ul style="text-align: left;"><li><i style="font-weight: bold;">Use Many Models - </i>". . . gathering insights from as diverse a range of perspectives as possible will help us to be maximally informed about the prospects and possibilities of the future."</li></ul><div><b>My Take</b></div></div><p></p><p></p><p><i>Escape from Model Land</i> is well-written, accessible, and engaging. Erica Thompson does an excellent job of making the complex, technical aspects of mathematical models easy for those of us who aren't trained data scientists to understand.</p><p>This book is not specifically about marketing, but it contains a message that is important and timely for marketers. Over the past several years, marketers have increasingly relied on data to inform their decisions, and recent advances in artificial intelligence will likely increase this reliance.</p><p>There's no doubt that data analytics and AI can help marketers make more evidence-based decisions, but these tools also have limitations that often go unrecognized - or at least underappreciated.</p><p>The apparent precision of numbers and the halo of scientific validity surrounding AI can easily create an illusion of certainty that gives us a false sense of confidence in the outputs these tools produce.</p><p><i>Escape from Model Land</i> reminds us that marketing should always be "data-informed," but never totally "data-driven." </p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-77149514796464595372024-02-04T03:54:00.000-06:002024-02-04T03:54:59.497-06:00Leverage Buyer Goals to Drive Breakthrough Marketing Results<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgwRP5ex6Lztu_rT6G2hzSiL9xf5T_FuowgpjHW9VvBZ3nVwKkQeXPydZKq6tQKgiO8F75KH_NxlG-ZswqtwQ7wgHhzshCnZQ5aXhmiy8leWhFEvPEo4VcvQ7pRmWC0NNoxBb5gBpkW6tqjQX2XL6M7Me00bzciY1N9IYYvpmur9sgkHTMwyISlgzX1fdmf/s1200/Illustration%20for%20020424%20Post.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="800" data-original-width="1200" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgwRP5ex6Lztu_rT6G2hzSiL9xf5T_FuowgpjHW9VvBZ3nVwKkQeXPydZKq6tQKgiO8F75KH_NxlG-ZswqtwQ7wgHhzshCnZQ5aXhmiy8leWhFEvPEo4VcvQ7pRmWC0NNoxBb5gBpkW6tqjQX2XL6M7Me00bzciY1N9IYYvpmur9sgkHTMwyISlgzX1fdmf/w400-h266/Illustration%20for%20020424%20Post.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: Shutterstock</i></span></td></tr></tbody></table><br /><p>I've always been skeptical of claims that using any one technique or tactic will consistently result in superior marketing performance. Simple, "silver bullet" solutions for big, complex challenges are incredibly rare in the real world.</p><p>But, if there is one key to decoding the formula for effective marketing, it is the ability to understand how people make decisions and what drives human behavior.</p><p>Understanding what will cause a potential buyer to respond to your marketing messages and ultimately buy your product or service is a prerequisite for developing an effective marketing strategy and creating persuasive marketing messages and content.</p><p>When you can't identify the factors that underlie human decision-making and behavior, it's nearly impossible to design marketing programs that are <i>consistently</i> successful. It's like trying to navigate by the stars on a cloudy night. </p><p>The good news is, you can use established principles of decision science to identify and better understand the mechanisms that drive your potential buyers' decision-making and behavior.</p><p><b>The Critical Role of Buyer Goals</b></p><p>Recent advances in decision science have established that motivation is the primary driver behind all human behavior, including buying behavior.</p><p>The <a href="https://dictionary.apa.org/motivation" target="_blank">American Psychological Association</a> defines motivation as, "a person's willingness to exert physical or mental effort in pursuit of a goal or outcome." Put another way, motivation is the willingness to take action to achieve a goal. The goal may be to solve a problem, satisfy a need, or get a particular "job" done.</p><p>As humans, we pursue a goal because we expect to receive a reward if the goal is achieved. Neuroscience has shown that the human brain has a "reward system," which is a group of structures and neural pathways that are activated when our brain processes sensory inputs that signal a reward we value.</p><p>When our brain's reward system is activated, we are motivated to pursue the goal that will enable us to reap the expected reward. And the more we value the expected reward, the more motivated we become to achieve the goal.</p><p>Our goals also largely dictate what we pay attention to. Research has shown that our brain automatically scans our environment for information that aligns with our goals. So, in essence, our brain causes us to pay attention to information that is closely related to our goals.</p><p>Lastly, goals can be explicit or implicit. Explicit goals are those we set and pursue at a conscious level. An implicit goal operates primarily at a subconscious level. These goals arise out of basic human physical, psychological, and social needs, things like safety, security, and autonomy. We are motivated to pursue implicit goals even when we aren't consciously thinking about them.</p><p><b>Implications for Marketers</b></p><p>These principles of decision science have major implications for marketers. The most important lesson is that the ability of any marketing message to provoke a response from a potential buyer is determined by how closely the message aligns with the buyer's goals. That degree of "fit" is what makes the message relevant to the buyer and what will prompt him or her to respond.</p><p>This means you need to identify what the goals of your potential buyers are and then craft messages that are linked to those goals. Unfortunately, this is easier said than done for two main reasons.</p><p>First, buyer goals are highly individualistic. They can differ even among buyers who have similar demographic attributes, work in similar types of businesses, and have similar job titles and functions. Therefore, even well-constructed buyer personas may not reveal what goals are most important for an individual buyer.</p><p>Second, the goals of a business buyer can and will change as the opportunities and challenges facing the buyer's organization change. This means that a buyer who doesn't respond to a particular marketing message today might well respond to the same message received a month from now.</p><p>The challenges presented by these two factors are always present, but they are more pronounced when you're seeking to acquire new customers.</p><p>If you are properly nurturing your relationship with an existing customer, you should be well-positioned to understand what your customer's high-priority opportunities and challenges are at any point in time. And that gives you greater insight into the goals your customer's buyers are likely to have.</p><p>When you're seeking to acquire new customers, the most effective strategy is to ensure that your marketing messages feature links to one or more of the implicit goals I discussed earlier. This approach has two main advantages.</p><p>First, implicit goals are universal because they arise out of fundamental psychological and social needs that all humans share. And second, implicit goals are durable; they don't change much over time. Therefore, marketing messages linked to these goals will likely resonate with most of your buyers whenever they are used.</p><p>The bottom line is: If you want to achieve consistent marketing success, there's no substitute for understanding your buyer's goals.</p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-57375541465868833872024-01-28T05:25:00.000-06:002024-01-28T05:25:34.070-06:00Are the 4P's Still Relevant for Today's Marketers?<p></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEij2PT_bciQsWAwRINhQzHHuZHe21T51dL6QWhMAlq_UcrGr6JK2KoEypTFJDtwRCqkTu1qSXDEvh2NoqEED9Jc4SqwVZskRsY1FKetgL-jb4Rot9mxiVHwuowkYobE6o9RvQVbzLdLtDcSBTh6xa28Adh7c2YLfjXwhrZbTE5G8TKvVimVJn-H5lQtSOVp/s1000/Illustration%20for%20012824%20Post.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="667" data-original-width="1000" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEij2PT_bciQsWAwRINhQzHHuZHe21T51dL6QWhMAlq_UcrGr6JK2KoEypTFJDtwRCqkTu1qSXDEvh2NoqEED9Jc4SqwVZskRsY1FKetgL-jb4Rot9mxiVHwuowkYobE6o9RvQVbzLdLtDcSBTh6xa28Adh7c2YLfjXwhrZbTE5G8TKvVimVJn-H5lQtSOVp/w400-h266/Illustration%20for%20012824%20Post.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: Shutterstock</i></span></td></tr></tbody></table><i>(The concept of the "marketing mix" has been a staple of marketing for over 70 years. It's discussed in virtually all marketing textbooks and taught in virtually all introductory marketing courses. But does the marketing mix idea still have a place in 21st-century marketing? The answer is "yes," and here's why.)</i><p></p><p>The marketing mix construct has been part of the marketing landscape for more than seven decades. The origin of the concept can be traced to 1948 when James Culliton, a marketing professor at Harvard, wrote an article in which he described the marketing executive as a "mixer of ingredients."</p><p>Culliton's article inspired Neil H. Borden, another Harvard marketing professor, who began using the phrase "marketing mix" in his teaching and writing in 1949.</p><p>Borden developed a model of the marketing mix that included 12 elements - product planning, pricing, branding, channels of distribution, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact-finding and analysis.</p><p>In his 1960 marketing textbook, <i>Basic Marketing: A Managerial Approach</i>, E. Jerome McCarthy introduced a simpler model of the marketing mix that contained only four elements - product, price, place, and promotion. McCarthy's model quickly became popular and has been so widely adopted by academics and practitioners that the "4P's of marketing" have become synonymous with the concept of the marketing mix.</p><p>Despite its popularity and longevity, the 4P's model has been criticized for several reasons. Given how much marketing has changed over the past several decades, it's legitimate to ask whether a sixty-year-old marketing mix model is still relevant. My answer to this question is an emphatic "yes," provided you keep a few things in mind. </p><p><b>The 4P's Include More Than the Terms Suggest</b></p><p>One criticism of the 4P's is that the ingredients used in the model don't adequately capture the complexity of today's marketing environment.</p><p>The response to this criticism is that the terms used in the model should be viewed as flexible category labels that can encompass more than the literal or common meanings of the words would suggest. For example:</p><p></p><ul style="text-align: left;"><li><i style="font-weight: bold;">Product - </i>The "product" element can be used for both products and services, and for complex "solutions" that consist of multiple products and services. In essence, this element can refer to whatever a company sells.</li></ul><div><ul style="text-align: left;"><li><i style="font-weight: bold;">Price - </i>This element can encompass any type of price and virtually every aspect of pricing strategy - for example, cost-plus vs. market-based vs. value-based pricing, premium vs. discount pricing, unit pricing, subscription-based pricing, and pay-for-performance pricing.</li></ul></div><div><ul style="text-align: left;"><li><i style="font-weight: bold;">Place - </i>"Place" can encompass any method or channel of distribution a company is (or could be) using. Importantly, place can also encompass distribution via the cloud.</li></ul></div><div><ul style="text-align: left;"><li><i style="font-weight: bold;">Promotion - </i>This element is intended to encompass all of the ways a company can communicate with its customers and potential buyers. This would include all online and offline "marketing" communication channels and tactics, and personal selling, but it would also encompass communications that are "non-promotional," such as customer service and customer success communications.</li></ul><div><b>The 4P's Describe Factors Marketers Can Manipulate and Control, Not What They Must Achieve</b></div></div><div>Another criticism of the 4P's model is that it focuses on the decisions and actions of the selling company, but doesn't address what is required to be successful with customers. This criticism is factually accurate, but that doesn't mean the model is flawed. It simply means the model was never designed to prescribe what will be effective with customers.</div><div>The 4P's model is like a list of available ingredients a chef can use to prepare a variety of dishes in a variety of ways, but it doesn't provide recipes for specific dishes that diners are guaranteed to like. It's up to marketers to decide what specific ingredients will produce a "meal" that will appeal to their target buyers.</div><div>To make these decisions wisely, marketers will need to use other methods and tools to identify the needs and preferences of their potential buyers. It's noteworthy that, in his marketing textbook, E. Jerome McCarthy did not discuss the 4P's model until after he had explained the importance of understanding the needs and attributes of the potential customers in the selling company's target market.</div><div><b>The Marketing Mix Concept Is Still Relevant</b></div><div>Even if you think the 4P's model is outdated, it's important to recognize that the basic idea of marketing leaders as "mixers of ingredients" is even more valid today than it was when it was introduced more than 70 years ago.</div><div>Regardless of company size, the resources available for marketing are rarely sufficient to enable marketing leaders to do everything they'd like to do. Deciding how and where to invest finite marketing resources has never been easy, but these decisions have become more complex because today's marketing leaders have more options than ever.</div><div>The challenge facing marketing leaders is to use their finite resources to implement the combination of marketing activities and programs that will produce maximum results. Therefore, the task of a marketing leader is similar to that of a professional money manager.</div><div>The job of an investment manager is to construct a portfolio of investments that will produce the highest risk-adjusted rate of return. In today's environment, as in the past, a primary job of a marketing leader is to construct a portfolio of marketing activities and programs that will maximize the return on marketing resources.</div><div>So, James Culliton's 76-year-old description of marketing executives as "mixers of ingredients" is still accurate.</div><p></p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-36181424370253125052024-01-21T05:29:00.000-06:002024-01-21T05:29:43.020-06:00[Research Round-Up] AI vs. Humans - Round 1<p></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOj1ovSAE2kiBr9sUHDlVN5L-Tu5bptZ3HSAiUrccz7_umJUV47bDmI8dIWtmqcmwn5fljdzO7WFF0QkcVjnm2kSAxtcOJ5ONQzPeHlLlh8iFdkEwKA985Y6o0WnADXE0e6NPEPWYXMwA5u8XXP84g38XgkJ-cUc2uVhLmlLqe_dDsKq4kwDoU9LzSDakx/s1000/Illustration%20for%20012124%20Post.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="667" data-original-width="1000" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOj1ovSAE2kiBr9sUHDlVN5L-Tu5bptZ3HSAiUrccz7_umJUV47bDmI8dIWtmqcmwn5fljdzO7WFF0QkcVjnm2kSAxtcOJ5ONQzPeHlLlh8iFdkEwKA985Y6o0WnADXE0e6NPEPWYXMwA5u8XXP84g38XgkJ-cUc2uVhLmlLqe_dDsKq4kwDoU9LzSDakx/w400-h266/Illustration%20for%20012124%20Post.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: Shutterstock</i></span></td></tr></tbody></table><i>(This year, I plan to devote some of my Research Round-Up posts to a discussion of academic research papers about artificial intelligence. Some of these scientific papers will likely focus on comparing the capabilities of AI to those of humans at performing tasks related to marketing. This month's Research Round-Up features an unpublished paper that compares the performance of AI vs. humans at generating ideas for new products.)</i><p></p><p>"<a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4526071" target="_blank">Ideas are Dimes a Dozen: Large Language Models for Idea Generation in Innovation</a>"</p><p></p><ul style="text-align: left;"><li><b>Authors - </b>Karan Girotra, Cornell Tech and Johnson College of Business, Cornell University; Lennart Meincke, Christian Terwiesch, and Karl T. Ulrich, The Wharton School, University of Pennsylvania</li></ul><div><ul style="text-align: left;"><li><b>Date Written - </b>July 10, 2023</li></ul><div>This paper describes the results of an experiment designed to compare the performance of generative AI and humans at producing ideas for new consumer products.</div></div><div>The task used in the experiment was to generate ideas for a new product for the college student market that would sell at retail for less than $50. The AI application used in the experiment was OpenAI's ChatGPT-4.</div><div>The experiment used three "pools" of new product ideas.</div><div><ul style="text-align: left;"><li><i style="font-weight: bold;">First pool (200 ideas) - </i>Ideas created without AI assistance by students enrolled in a product design course at an elite university.</li></ul><ul style="text-align: left;"><li><i style="font-weight: bold;">Second pool (100 ideas) - </i>Ideas generated by ChatGPT based on the same "prompt" as that given to the students.</li></ul><ul style="text-align: left;"><li><i style="font-weight: bold;">Third pool (100 ideas) - </i>Ideas generated by ChatGPT based on the same prompt and a sample of highly-rated product ideas. </li></ul><div>All 400 product ideas were evaluated by a panel of college-age individuals in the United States. The quality of the product ideas was based on purchase intent. Panel members expressed their purchase intent by selecting one of five options - definitely would not purchase, probably would not purchase, might or might not purchase, probably would purchase, or definitely would purchase.</div></div><div><b>The Results</b></div><div>The average quality of the product ideas produced by ChatGPT was higher than the average quality of the human-generated ideas. The average purchase probability of a human-produced idea was 40.4%, while the average for a ChatGPT idea (without examples) was 46.8%, and the average with examples was 49.3%.</div><div>Of the 40 highest-rated ideas in the experiment, 35 (87.5%) were ideas produced by ChatGPT.</div><div>The researchers also asked members of the evaluating panel to rate the <i>novelty</i> of the new product ideas. In this experiment, the mean novelty value of the human-generated ideas was higher than that of the ideas generated by ChatGPT. However, the researchers noted that novelty did not appear to be significantly correlated with purchase intent.</div><div><b>Implications for Marketers</b></div><div>The Girotra et al. paper has important implications for marketers because it adds to our understanding of the capabilities of AI applications like ChatGPT.</div><div>The results of the experiment described in the paper are similar to the findings of other recent research, including an experiment conducted by Boston Consulting Group (GCG) and scholars from four elite universities. I described this study in <a href="https://b2bmarketingdirections.blogspot.com/2023/11/the-promise-and-peril-of-generative-ai.html" target="_blank">a post I wrote last fall</a>.</div><div>In the BCG study, participants were tasked to generate ideas for a new shoe for an underserved market. They were also required to develop a list of the steps needed to launch the product, create marketing slogans, and write a press release for the product. The researchers found that participants who used an AI tool to complete the tasks outperformed those who didn't by 40%.</div><div>The results of these studies suggest that AI tools based on large language models may be better than humans at performing "brainstorming-like" tasks where the objective is to generate a large number of diverse ideas relating to a topic.</div><div>This result should not be that surprising. Large language models are trained on a voluminous amount of data from incredibly diverse sources. The ability to generate responses based on such a vast repository of training data enables an AI tool like ChatGPT to excel at brainstorming-like tasks.</div><div>For marketers, the findings described in the Girotra et al. paper and similar findings in other studies suggest that AI tools powered by large language models can be particularly well suited to perform content ideation tasks such as generating potential topics for blog posts or producing potential social media posts.</div><p></p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-72570804134506444992024-01-14T03:09:00.002-06:002024-01-14T03:09:44.829-06:00[Book Review] An Authoritative Road Map To High-Impact Content Marketing<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhd5TUvpvXBF9m8zqUPv-xU4DcAZBph9B5SNArQsxl7PPch2DyP08o3kptVSDUb0KAldcJSaX0_UxBl4ByisB0bS0fTuu7h49TBsUwkHvgD6E-5BiELTVP2Xtmjv0AuojOoLK1mzz6Z8e99jzn5M5vgiw6aYqsq_s8lOqDIMvtBkcqGpmAymwsoLBJU8wAW/s480/Illustration%20for%20011424%20Post.jpg" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="480" data-original-width="320" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhd5TUvpvXBF9m8zqUPv-xU4DcAZBph9B5SNArQsxl7PPch2DyP08o3kptVSDUb0KAldcJSaX0_UxBl4ByisB0bS0fTuu7h49TBsUwkHvgD6E-5BiELTVP2Xtmjv0AuojOoLK1mzz6Z8e99jzn5M5vgiw6aYqsq_s8lOqDIMvtBkcqGpmAymwsoLBJU8wAW/s320/Illustration%20for%20011424%20Post.jpg" width="213" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: Kogan Page</i></span></td></tr></tbody></table><p>Last November, I published <a href="https://b2bmarketingdirections.blogspot.com/2023/11/book-review-thought-provoking-guide-to.html" target="_blank">a review</a> of Robert Rose's new book, <i>Content Marketing Strategy</i>. Rose's book is one of the best I've recently read, and it's an important addition to our library of content marketing literature. If you haven't read <i>Content Marketing Strategy</i>, I recommend that you add it to your reading list for 2024.</p><p>Shortly after I finished Rose's book, I discovered and read Purna Virji's new book, <i><a href="https://www.koganpage.com/marketing-communications/high-impact-content-marketing-9781398608436" target="_blank">High-Impact Content Marketing: Strategies to Make Your Content Intentional, Engaging and Effective</a></i> (Kogan Page, 2023). This is also an excellent book, and I enthusiastically recommend it.</p><p>Purna Virji is a globally recognized content strategist and marketer whose work has been featured in <i>The Drum</i>, <i>Marketing Land</i>, <i>Adweek</i>, and other publications. She is currently Principal Consultant, Content Solutions at LinkedIn, and before joining LinkedIn, she was Senior Manager of Global Engagement at Microsoft.</p><p><b>What's In the Book</b></p><p><i>High-Impact Content Marketing</i> contains 12 chapters that are packed with strategies, insights, and frameworks designed to enable marketers to conceive and produce intentional, engaging, and effective content.</p><p>Purna Virji uses the first two chapters of the book to explain why many content marketing efforts produce underwhelming results and to describe the essential building blocks of long-term content marketing success. These two chapters are particularly important because they reveal the perspective that Virji brings to the material in the balance of the book.</p><p>In Chapter 01, she argues that marketers struggle to achieve success with content marketing because they often get five basic choices wrong.</p><p></p><ol style="text-align: left;"><li>Focusing on outputs vs. outcomes (a/k/a content quantity vs. business results)</li><li>Chasing trends vs. being grounded in strategy</li><li>Prioritizing short-term vs. longer-term</li><li>Creating for machines vs. humans</li><li>Not balancing creation vs. distribution</li></ol><div>Virji uses Chapter 02 to discuss what she calls the "four essential element pairs" of long-term content marketing success.</div><div><ol style="text-align: left;"><li>Behavioral science and learning design</li><li>Empathy and inclusion</li><li>Copywriting and selling skills</li><li>Strategy and measurement</li></ol><div>The balance of <i>High-Impact Content Marketing</i> covers several topics that Virji argues are critical for the development of a high-impact content marketing program. These include:</div></div><div><ul style="text-align: left;"><li>Needs analysis (internal and customer) - Chapters 03-05</li><li>Competitor content audit - Chapter 06</li><li>Content marketing strategy and measurement - Chapter 07</li><li>Copywriting strategy - Chapter 11</li><li>Content distribution techniques - Chapter 12</li></ul><div>Virji also includes two chapters that explain how to use brainstorming to come up with high-impact content ideas.</div></div><div><b>My Take</b></div><div><i>High-Impact Content Marketing</i> is an excellent book that should be considered required reading for anyone involved in content marketing. The book is well organized and well written, and Virji includes numerous real-world examples, which make the book more engaging and relatable.</div><div>She also provides several practical tips and frameworks in the book, which will enable readers to more easily apply the principles and techniques she discusses.</div><div>One particularly valuable aspect of the book is that Virji includes a discussion of "instructional design" principles and explains how content marketers can leverage those principles to create more effective content.</div><div>At the beginning of this review, I mentioned Robert Rose's new book, <i>Content Marketing Strategy</i>, and I noted that it is one of the best content marketing books that I've recently read. Rose's book and <i>High-Impact Content Marketing</i> address different aspects of content marketing, but these books are highly complementary.</div><div>Purna Virji's book provides a road map for creating effective content, while the primary focus of Rose's book is the organizational structures and processes that are needed to effectively manage a content marketing function. By applying the principles described in both books, marketers will greatly increase their odds of achieving content marketing success.</div><div>So, the bottom line is: If you're involved in content marketing - and especially if you're responsible for leading your company's content marketing efforts - you need to read both of these valuable books.</div><p></p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-41448078007057037922024-01-07T04:18:00.000-06:002024-01-07T04:18:15.730-06:00Looking Back, Looking Forward - 2024 Edition<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhBEtQoOxGIYnuI-uqEaB6SG-8WQVuDc4fHT4TY77fqqpqa7jTdgeCbbwVYa1PSZVxAC1jpk_iNuA3rsvuJB4SyEf43Kdhj-XIacobKi9wghNSJZONefS67GKTsJp6UspNj6Dl1sL6yzuK9_xgPHnpv61MCXTF7vIUl_R1TURSYxYxwhNwJgm3H5YFbZkGe/s1375/Illustration%20for%20010724%20Post.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="625" data-original-width="1375" height="181" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhBEtQoOxGIYnuI-uqEaB6SG-8WQVuDc4fHT4TY77fqqpqa7jTdgeCbbwVYa1PSZVxAC1jpk_iNuA3rsvuJB4SyEf43Kdhj-XIacobKi9wghNSJZONefS67GKTsJp6UspNj6Dl1sL6yzuK9_xgPHnpv61MCXTF7vIUl_R1TURSYxYxwhNwJgm3H5YFbZkGe/w400-h181/Illustration%20for%20010724%20Post.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: Shutterstock</i></span></td></tr></tbody></table><br /><p>The beginning of a new year is what behavioral scientists call a temporal landmark, a date that stands out as more meaningful than others. Temporal landmarks often prompt us to make significant changes in our lives or commit to pursuing new goals.</p><p>If you doubt the power of temporal landmarks, just consider how often we make "New Year's resolutions" to lose weight, or begin a regular exercise program, or learn a new skill.</p><p>Like many marketers, I used the final few weeks of 2023 to reflect on what happened during the year and plan for 2024. Because of the disruptive events of the past few years, I spent a good bit of time thinking about how this blog needs to change and what the focus of my content here should be in 2024.</p><p><b>What Won't Change In 2024</b></p><p>Last year, I began publishing two new types of posts each month - book reviews and "research round-ups." In 2023, I published eleven book review posts.</p><p>Today, marketers have easy access to a huge variety of content resources. They can read blogs, white papers, and ebooks, watch videos, listen to podcasts, and attend webinars.</p><p>All of these content formats can be useful and valuable, but some topics can't be adequately addressed by anything other than a full-length book. Therefore, books will always be an important knowledge resource for marketers.</p><p>My book review posts were very popular in 2023. In fact, three of my ten most popular posts last year were book reviews. So, book reviews will continue to be a regular monthly feature in 2024.</p><p>Last year, I published eleven monthly research round-up posts, and they were also popular with readers. Two of my ten most popular posts in 2023 were research round-up posts.</p><p>Most research round-up posts include brief descriptions of two to four recent research studies, although I have occasionally used a post to discuss one particularly important study in more detail. Given their popularity, research round-up posts will also continue to be a regular monthly feature this year.</p><p><b>What Will Change in 2024</b></p><p>My primary objective for this blog has always been to provide information and viewpoints that are timely, thought-provoking, and useful. To accomplish this goal, the content of this blog needs to evolve to reflect the ever-changing landscape of B2B marketing.</p><p>Without question, 2023 was the year of generative artificial intelligence in business and marketing. OpenAI's release of ChatGPT on November 30, 2022 ignited an arm's race among technology companies to develop and roll out new or enhanced applications featuring generative AI capabilities. Product announcements from both tech industry heavyweights and start-ups came at a rapid pace throughout 2023. </p><p>The capabilities of generative AI language models also evolved at a breakneck pace last year, and it's now clear that generative AI will have a profound impact on all aspects of business, including marketing. I suspect that the pace of AI development will continue in 2024 and that generative AI will again be one of the hottest topics in marketing.</p><p>So, I'll be writing about generative AI this year, but my approach will be a little different than most. I've always believed that it's important to use this blog to make readers aware of concepts and research that they may not encounter in the popular B2B marketing literature.</p><p>Last year, generative AI became an important topic of scholarly research, and that will likely continue this year. Academic research papers can be an authoritative source of information about generative AI, but they can also be more challenging for marketers to access. Therefore, I'll be focused on finding and discussing these kinds of materials in 2024.</p><p>I'll also be actively looking for academic research papers on other topics that are relevant to B2B marketing, and I'll write about those when I find them.</p><p>2024 is poised to be another exciting year in B2B marketing. I look forward to expanding my knowledge and sharing what I learn with you.</p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-17001894052046634662023-12-31T02:32:00.000-06:002023-12-31T02:32:59.331-06:00Three Posts From 2023 That Are Worth Reading in 2024<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjTfQ4oAI_IHIiaj4fAlTYk4bu8mysHddVtSJvwdT2BqWwn0Qd2HfYTsP_PbFPdT23hc77kwr1cse68S-Wa80U8G7x4_Xux-W6bnN92lzSwA-ql3L4aww7ce5yRp5JQsZscglSArPEE8LbNFvy3gLL79WEmvgQdf83qch9BvQb81VBgvrSXpJMQZFaKVbAD/s799/Illustration%20for%20123123%20Post.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="533" data-original-width="799" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjTfQ4oAI_IHIiaj4fAlTYk4bu8mysHddVtSJvwdT2BqWwn0Qd2HfYTsP_PbFPdT23hc77kwr1cse68S-Wa80U8G7x4_Xux-W6bnN92lzSwA-ql3L4aww7ce5yRp5JQsZscglSArPEE8LbNFvy3gLL79WEmvgQdf83qch9BvQb81VBgvrSXpJMQZFaKVbAD/w400-h266/Illustration%20for%20123123%20Post.jpg" width="400" /></a></div><br /><p>A few days ago, I published <a href="https://b2bmarketingdirections.blogspot.com/2023/12/our-most-popular-posts-of-2023.html" target="_blank">a list</a> of my ten most frequently read posts of 2023. I ranked posts based on cumulative total reads, which means that posts published later in the year were at a major disadvantage compared to those published earlier in the year. In the 2023 list, only one of my top ten posts was published after April 1st.</p><p>Several posts that I published later in the year have attracted a significant number of readers, but not enough to crack the top ten list. In a way, these posts are like the ugly duckling in the much-loved fairy tale by Hans Christian Andersen. They just need more time for their popularity to become evident.</p><p>Before we close the books on 2023, I wanted to highlight a few of these ugly duckling posts that, with time, may become beautiful swans.</p><p>The list I'm providing here is very subjective. I've selected posts that I believe will have continuing relevance for marketers in 2024. So, in case you missed any of them, here are three posts from this year that are worth reading as you start the new year.</p><p><b>"<a href="https://b2bmarketingdirections.blogspot.com/2023/07/what-b2b-marketers-can-learn-from.html" target="_blank">What B2B Marketers Can Learn From Missing Bullet Holes</a>"</b></p><table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhiyhNKWLVk49idAVkHyjVlqNA4zAt0tTFebxrvNZVZGMTUnFnXnvVbeWvVVdioyLbSEjXDBj1Oil0RkHnn7OeR86NrsfzI_LkCQ_QHj4zuRj-ai9ioPy3Sb5Na-nP6_iaxllzgjPhC3nVxzZGhIcfl2ofUDp_HowKHx4tZJKbqRu6Pht-5xgENQ-b8j0Om/s640/Illustration%20for%20070223%20Post.jpg" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="477" data-original-width="640" height="149" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhiyhNKWLVk49idAVkHyjVlqNA4zAt0tTFebxrvNZVZGMTUnFnXnvVbeWvVVdioyLbSEjXDBj1Oil0RkHnn7OeR86NrsfzI_LkCQ_QHj4zuRj-ai9ioPy3Sb5Na-nP6_iaxllzgjPhC3nVxzZGhIcfl2ofUDp_HowKHx4tZJKbqRu6Pht-5xgENQ-b8j0Om/w200-h149/Illustration%20for%20070223%20Post.jpg" width="200" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: Wikipedia</i></span></td></tr></tbody></table><p>This post focuses on the importance of avoiding selection bias when making decisions based on data. Selection bias can occur when the data used in an analysis (the "sample") is not representative of the relevant "population" in some important respect.</p><p>It's easy for marketers to fall prey to selection bias. As I wrote in the post:</p><p><i>"Selection bias is a troublesome issue because, like all humans, we marketers tend to base our decisions on the evidence that's readily available or easily obtainable, and we tend to ignore the issue of what evidence may be missing. In many cases, unfortunately, the evidence we can easily access isn't broad enough to give us valid answers to the issues we are seeking to address."</i></p><p><b>"<a href="https://b2bmarketingdirections.blogspot.com/2023/07/how-to-judge-strength-of-your-value.html" target="_blank">How to Judge the Strength of Your Value Propositions</a>"</b></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiWFF65QJmiThXBihvQsCntciU_nniVPqglB1E4HUM-1obTi97MRVPb7CkZOlRP_NAOC_fQIgRZL59ZMuxIIYyHXFL4XrMD0Ea8rSPejrQGuBl6ncn0EgYg3o-rzpU_VEaLiDnG8Sw6F9VoHOuVA9pkCQNUPuFqyDavsmhB6Goi6Ttw-Kacp1MPxt6IkP2n/s355/Chart%20for%20Blog-072323%20Post-Value%20Proposition%20Venn%20Diagram.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="335" data-original-width="355" height="189" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiWFF65QJmiThXBihvQsCntciU_nniVPqglB1E4HUM-1obTi97MRVPb7CkZOlRP_NAOC_fQIgRZL59ZMuxIIYyHXFL4XrMD0Ea8rSPejrQGuBl6ncn0EgYg3o-rzpU_VEaLiDnG8Sw6F9VoHOuVA9pkCQNUPuFqyDavsmhB6Goi6Ttw-Kacp1MPxt6IkP2n/w200-h189/Chart%20for%20Blog-072323%20Post-Value%20Proposition%20Venn%20Diagram.jpg" width="200" /></a></div><p>By now, many of you will have completed most or all of your strategic planning for 2024. As part of that planning, you've probably identified the value propositions you will use with your customers and prospects.</p><p>Compelling value propositions are obviously essential for successful marketing, and it's important to periodically monitor the effectiveness of your value propositions. The best way to determine the strength of your value propositions is to test them with real customers and/or prospects, but that approach isn't always practical for some B2B companies. This post describes a framework that you can use internally to judge the effectiveness of your value propositions.</p><p><b>"<a href="https://b2bmarketingdirections.blogspot.com/2023/08/how-to-take-vanity-out-of-marketing.html" target="_blank">How to Take the "Vanity" Out of Marketing Metrics</a>"</b></p><table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgh9Y8uZ8SL0yS54O0JMhDgeuhkClIc9GoYLLj_ls5wuoWzu2exjFr71oHF3Blj83u0IJDoFHX30EqW8DrdFrPSkBFkWK85u9nZ5Cg5KdVHq8W8QD9mSQaWKfK0ulZrvJwAMAQjd3zYEb_ejpG1wa3ZoCAbACWtocBOxaJggts2PLjmFHkPozWTBatvvB9E/s800/Illustration%20for%20080623%20Post.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="640" data-original-width="800" height="160" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgh9Y8uZ8SL0yS54O0JMhDgeuhkClIc9GoYLLj_ls5wuoWzu2exjFr71oHF3Blj83u0IJDoFHX30EqW8DrdFrPSkBFkWK85u9nZ5Cg5KdVHq8W8QD9mSQaWKfK0ulZrvJwAMAQjd3zYEb_ejpG1wa3ZoCAbACWtocBOxaJggts2PLjmFHkPozWTBatvvB9E/w200-h160/Illustration%20for%20080623%20Post.jpg" width="200" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: <a href="https://www.flickr.com/photos/esoastronomy/14714429715/in/photolist-oqgij4-8H6Z3P-2oGj1KS-65FWnX-2oA2kCZ-2oA7z3R-2gxh1M6-2oA7fq2-a1tk9V-23Ai2L8-a1tfhe-9hE15v-a1wbSq-2oBNG9h-2oGhNit-2oMzPkQ-2oBSrEw-YieVhN-2RrT59-7cu9Jh-7cuaPo-5ryQcV-7cua1s-2oA2m8G-7cu8kq-2oBRFSJ-7cuaN9-Ugjgbv-2oBTAR1-NsTpK-6TRLVS-7cu89G-8uU6HV-b6MjWT-WWqqdk-78EqFR-Wih2N4-aZMKhk-2oBNGux-6TMJSD-2myUPxX-2oBNFwW-JMPvUp-mBvNX4-WaLUH4-2oGjp42-72Hxg1-2oBSpkG-6r19WK-72Hyob" target="_blank">ESO</a> via Flickr (CC)</i></span></td></tr></tbody></table><p>Marketers are usually advised to avoid using "vanity metrics" to measure marketing performance. The primary criticism of vanity metrics is that they don't have a measurable relationship with strategic business outcomes.</p><p>The real problem with vanity metrics is not with the metrics themselves, but rather with the failure of marketers to place those metrics in the appropriate context.</p><p>This post provides a detailed explanation of how to link marketing activities to specific marketing objectives and how to link those objectives to strategic business outcomes. Making those linkages visible is what converts vanity metrics into meaningful marketing performance measures.</p><p><i>Top image courtesy of <a href="https://flickr.com/photos/librariesrock/53428212702/in/photolist-2ppgye5-2knPf1N-2i6YdUy-2mUyc7Q-2b72Ccs-2mUjYfn-C9BXkc-4iy1vz-2mUxbsT-2o8JHqf-234obyK-2mUJB6L-Pu7vSU-4h2Xhp-RGoyTY-2mUw6dx-2cwE9DF-PwehmZ-CeEYdE-Qdh5vW-EVUoxN-2i7PLiq-Cwe3BG-2b7pRTb-2o8ZdB4-2mUvbLW-RBGsDh-CEkkb7-dJfyv1-dJfx2y-QMHZav-2i7UJw6-dJa8bi-pTVguC-QyNcf9-2b9C8HS-dJa54H-2i7ZPXe-qkQuKm-e56Fi3-2i7Xbq4-96meCx-2o93SDN-2cznCqi-5UbUCy-dGb8WD-dDRi6T-7rVm7i-2o8WBbi-2dVuyA8" target="_blank">Carol VanHook</a> via Flickr (CC).</i></p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-59439257030496766582023-12-17T04:14:00.000-06:002023-12-17T04:14:25.906-06:00Our Most Popular Posts of 2023<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiig6125bJz4Knvo577ICu6tjvzknI7q5rBth-cgR85PUl8iBTTjeSSmIxpTuLjNm6bS_T7oZMZAGbYKbVyTUiwsOttHI4VulQwxfBMz8k-pDV7-tsqoEBKK8FHlCQA2T1oW4C2OoajcI5lWZ7IAkgl1jsVw6mC7nFl38c71VHFcbxQ-zKmiz1dRR1zfeUC/s640/Illustration%20for%20121723%20Post.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="409" data-original-width="640" height="256" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiig6125bJz4Knvo577ICu6tjvzknI7q5rBth-cgR85PUl8iBTTjeSSmIxpTuLjNm6bS_T7oZMZAGbYKbVyTUiwsOttHI4VulQwxfBMz8k-pDV7-tsqoEBKK8FHlCQA2T1oW4C2OoajcI5lWZ7IAkgl1jsVw6mC7nFl38c71VHFcbxQ-zKmiz1dRR1zfeUC/w400-h256/Illustration%20for%20121723%20Post.jpg" width="400" /></a></div><br /><p>This will be my last post of 2023, and I want to thank everyone who has spent some of his or her valuable time reading this blog. My goal here has always been to provide content that readers will find informative, thought-provoking, and useful, and I've been immensely gratified by the attention and engagement this blog has received.</p><p>For several years, I've used my last post of the year to share which posts have been most widely read. For this list, I'm only considering posts that were published in 2023. I've ranked the posts based on cumulative total reads. Therefore, those published early in the year have an advantage.</p><p>So, in case you missed any of them, here are our ten most popular posts of 2023. </p><p></p><ol style="text-align: left;"><li><b><i><a href="https://b2bmarketingdirections.blogspot.com/2023/02/how-marketers-should-navigate-economic.html" target="_blank">How Marketers Should Navigate Economic Uncertainty in 2023</a></i></b></li><li><b><i><a href="https://b2bmarketingdirections.blogspot.com/2023/01/research-round-up-continuing-importance.html" target="_blank">[Research Round-Up] The Continuing Importance of B2B Thought Leadership</a></i></b></li><li><b><i><a href="https://b2bmarketingdirections.blogspot.com/2023/01/the-yin-and-yang-of-high-performance.html" target="_blank">The Yin and Yang of High-Performance Marketing</a></i></b></li><li><b><i><a href="https://b2bmarketingdirections.blogspot.com/2023/01/book-review-must-read-guide-to-igniting.html" target="_blank">[Book Review] A Must-Read Guide To Igniting Account-Based Growth</a></i></b></li><li><b><i><a href="https://b2bmarketingdirections.blogspot.com/2023/02/research-round-up-state-of-artificial.html" target="_blank">[Research Round-Up] The State of Artificial Intelligence in Marketing</a></i></b></li><li><b><i><a href="https://b2bmarketingdirections.blogspot.com/2023/03/what-is-955-rule-does-it-apply-to-your.html" target="_blank">What Is the 95:5 Rule? Does It Apply To Your Company?</a></i></b></li><li><b><i><a href="https://b2bmarketingdirections.blogspot.com/2023/02/the-essential-behavioral-science.html" target="_blank">The Essential Behavioral Science Reading List for Marketers</a></i></b></li><li><b><i><a href="https://b2bmarketingdirections.blogspot.com/2023/02/book-review-valuable-introduction-to.html" target="_blank">[Book Review] A Valuable Introduction To the Complex World of Marketing Technology</a></i></b></li><li><b><i><a href="https://b2bmarketingdirections.blogspot.com/2023/03/book-review-insightful-and-timely-guide.html" target="_blank">[Book Review] An Insightful (and Timely) Guide To Marketing Metrics</a></i></b></li><li><b><i><a href="https://b2bmarketingdirections.blogspot.com/2023/04/what-955-rule-means-for-b2b-marketing.html" target="_blank">What the 95:5 Rule Means for B2B Marketing</a></i></b></li></ol><div><p style="background-color: white; color: #333333; font-family: Verdana, Arial, sans-serif; font-size: 13px;"><b>Happy holidays to everyone, and best wishes for a great 2024!</b></p><p style="background-color: white; color: #333333; font-family: Verdana, Arial, sans-serif; font-size: 13px;"><i style="font-family: verdana, arial, sans-serif;">Image courtesy of <a href="https://www.flickr.com/photos/koreanet/12629491483/in/photolist-kf2rPa-kf2rht-k2GHTA-k2GJ2b-k2EkNt-k2EZog-k2EkQn-k2GHXo-k2GHRw-k2EZcK-7EUPm5-a2JuU-cGS3rh-7EQGCB-cGS3Xw-9Ze3d3-cLvVjw-cLvWaw-cLvVCf-cLvULd-cLvUCS-cLvUUf-cLvVYY-cLvV93-cNs4pJ-cHEqiE-d4x2tJ-d4x6CG-dDj8hh-cGS3Nb-81e7zt-cMrgty-cMrfE9-cMri9b-7ERboz-cGS3Tq-7DtsbG-7Dtrmq-7Dtreq-7DtqRJ-7DpDET-7Dts3N-7DtrAs-7DpDxe-7Dtr6W-7Dtrt9-7DpCLM-7DpDMH-cMrg6A-cMrhxY" style="color: #336699;">Republic of Korea</a> via Flickr (CC).</i></p></div><p></p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-33102100313607797102023-12-10T03:47:00.002-06:002023-12-12T14:01:52.292-06:00How to Set Realistic Revenue Growth Goals for 2024<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgkhIBgQnEmt9Glv1a14iC6mQ8h1TMivEEP9kCc3XNEcfaRleNWxoZoZ3DRS3g4HTE_NiwUGR1wPVMyFRw_ZMRS31E1JYSV5tNhlrZH2BCxS4gQCEVXCjXAbTbBdlxdDCSL-aDALtZE4FFQEKrYvr_ZmrHAJ-qo0daK6LGkppM4jGiaGwA7vSSoLhL5KKid/s1000/Illustration%20for%20121023%20Post.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="709" data-original-width="1000" height="227" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgkhIBgQnEmt9Glv1a14iC6mQ8h1TMivEEP9kCc3XNEcfaRleNWxoZoZ3DRS3g4HTE_NiwUGR1wPVMyFRw_ZMRS31E1JYSV5tNhlrZH2BCxS4gQCEVXCjXAbTbBdlxdDCSL-aDALtZE4FFQEKrYvr_ZmrHAJ-qo0daK6LGkppM4jGiaGwA7vSSoLhL5KKid/w320-h227/Illustration%20for%20121023%20Post.jpg" width="320" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: Shutterstock</i></span></td></tr></tbody></table><br /><p><b>Establishing objectives is an integral part of any business planning process, and some of those goals inevitably relate to revenue growth. Revenue growth objectives must be realistic for company leaders to formulate sound business and marketing strategies. The first step in setting realistic revenue growth goals is to identify where your current revenue is coming from.</b></p><p>As the fourth quarter of 2023 draws to a close, many business and marketing leaders will be finalizing their revenue growth objectives for 2024. Growth is the prime directive for many companies, and revenue growth is often the primary measure of business success. Therefore, business and marketing leaders need to set realistic revenue growth goals as part of their strategic planning process.</p><p>Having realistic revenue growth objectives is particularly important for marketing leaders since they are usually tasked to develop and implement the programs that will enable their company to achieve those objectives.</p><p>To set realistic revenue growth objectives for 2024, business and marketing leaders must have a clearly articulated, evidenced-based revenue growth strategy. One important - but often overlooked - step in developing a sound revenue growth strategy is identifying where growth will come from.</p><p>Specifically, business leaders need to answer three basic questions during their planning process.</p><p></p><ol style="text-align: left;"><li>What are the structural sources of revenue growth in our business?</li><li>How much revenue growth is each of these sources currently producing?</li><li>How much revenue growth can we realistically expect to generate from each of these sources in 2024?</li></ol><div>I discussed the structural sources of revenue growth in <a href="https://b2bmarketingdirections.blogspot.com/2023/10/where-to-find-revenue-growth.html" target="_blank">a post published a few weeks ago</a>, so I won't repeat that discussion here. The following diagram shows the major structural sources of revenue growth that exist in all companies:</div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEit2c_-Yv1W4urDzFRsjdj0t7McrwQ-WrLRNmLT0yqr38X30pmX4Q_VnB-yrbLgQV8dp7H2ewhR9SL1yhJbpObUlmlgz1nzF_X5vWqhlBEU2K4J9ekoZUECsmErz9jkVKD-RRgUFF6vK9vAXQ1i-dptsbrNpVOjkDYF7bTUiXYAOYzw5ZrWfubfRjpqZ1b8/s621/Diagram%20for%20121023%20Post-Structural%20Sources%20of%20Growth.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="366" data-original-width="621" height="236" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEit2c_-Yv1W4urDzFRsjdj0t7McrwQ-WrLRNmLT0yqr38X30pmX4Q_VnB-yrbLgQV8dp7H2ewhR9SL1yhJbpObUlmlgz1nzF_X5vWqhlBEU2K4J9ekoZUECsmErz9jkVKD-RRgUFF6vK9vAXQ1i-dptsbrNpVOjkDYF7bTUiXYAOYzw5ZrWfubfRjpqZ1b8/w400-h236/Diagram%20for%20121023%20Post-Structural%20Sources%20of%20Growth.jpg" width="400" /></a></div><br /><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div>In this post, I'll discuss the process I use when working with clients to determine how much of their current growth each source is providing and to analyze how much growth each source can potentially provide in the next year.</div><p></p><p><b>How Much Growth Is Each Source Currently Producing?</b></p><p>Suppose your company had total sales of $110 million for the 12 months ending November 30, 2023. I'll call these 12 months "2023." You had total sales of $100 million for the 12 months ending November 30, 2022. I'll refer to this period as "2022." So, your company grew sales by $10 million during 2023.</p><p>For this example, let's suppose your company did not acquire another business or introduce any new types of products in 2023, but you did begin selling in a new geographic market during the year. Under these circumstances, your primary potential sources of revenue growth in 2023 were base retention, sales to existing customers, sales to new customers in existing markets, and sales to new customers in new markets.</p><p>To quantify how much revenue growth each of these sources produced in 2023, you would use sales by customer data from your ERP/accounting system.</p><p><i style="font-weight: bold;">Base retention (revenue churn) - </i>To measure the impact of base retention (a/k/a revenue churn), identify the customers who bought from you in 2022. but <i>did not buy</i> from you in 2023. The total sales made to those customers in 2022 is the amount of revenue that was "lost" in 2023 due to revenue churn. For this example, let's say the amount of lost revenue was $1 million.</p><p><i style="font-weight: bold;">Sales to existing customers - </i>Identify the customers who bought from you in both 2022 and 2023, and compare the 2023 total to the 2022 total. For this example, let's say that sales to existing customers increased $3 million in 2023.</p><p><i style="font-weight: bold;">Sales to new customers in existing markets - </i>Identify the customers who bought from you in 2023, but did not buy from you in 2022. Then, eliminate those customers located in the geographic market you first entered in 2023. The sales made to the remaining customers are sales to new customers in existing markets. Let's say this source accounted for $5 million of the 2023 revenue growth.</p><p><i style="font-weight: bold;">Sales to new customers in new markets - </i>This is the total sales made to customers in the geographic market that you first entered in 2023. Let's say this amount was $3 million.</p><p>The table below summarizes the results of this analysis and shows where your 2023 revenue growth came from.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgi9LLI9GFiaUqqhUOOHI3-syFQ7ZBJT_ndtO6Q1J25unu6SEZAhOh9vVeLwPr017tb38aR8JWyoFyMPKZaVo3Xt77rn1_2JBv8cIIkEg-MTJVWCBJGxk5c-0Dv6t0cNaiWMnx1jqOzSn13KAfBKjC9_EgyP52JVw08qNGW3sRIVjuIY6hNXstlom1-1O80/s442/Table%20for%20Blog%20-%20121023%20Post-2023%20Sources%20of%20Revenue%20Growth.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="219" data-original-width="442" height="199" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgi9LLI9GFiaUqqhUOOHI3-syFQ7ZBJT_ndtO6Q1J25unu6SEZAhOh9vVeLwPr017tb38aR8JWyoFyMPKZaVo3Xt77rn1_2JBv8cIIkEg-MTJVWCBJGxk5c-0Dv6t0cNaiWMnx1jqOzSn13KAfBKjC9_EgyP52JVw08qNGW3sRIVjuIY6hNXstlom1-1O80/w400-h199/Table%20for%20Blog%20-%20121023%20Post-2023%20Sources%20of%20Revenue%20Growth.jpg" width="400" /></a></div><br /><p><br /></p><p><b><br /></b></p><p><b><br /></b></p><p><b><br /></b></p><p><b><br /></b></p><p><b><br /></b></p><p><b><br /></b></p><p><b>How Much Growth Can We Generate from Each Source in 2024?</b></p><p>Once you know where your current growth came from, you can use these insights to set more realistic and achievable growth objectives for the coming year. The critical step is to analyze <i><b>why</b></i> the current growth happened.</p><p>In our example, sales to new customers in existing markets produced $5 million, or 50% of the total growth in 2023. One possible explanation for this growth is simply that demand for the types of products or services offered by your company expanded in 2023. In other words, the growth may have resulted from "being in the right market at the right time." It's also possible that this growth occurred because your company took customers away from competitors and increased its market share.</p><p>Whatever the specific reason, the important question is: How much future growth can the existing markets provide? If they still have substantial growth potential, you may want to focus a substantial portion of your marketing efforts on acquiring more new customers in these existing markets.</p><p>On the other hand, if your existing markets do not have significant future growth potential, you'll need a different strategy to drive growth. You may, for example, want to focus more of your marketing efforts on acquiring new customers in the geographic market you first entered in 2023, or you may need to consider expanding into additional new market areas.</p><p>This type of analysis should be done for each structural source of revenue that contributed to your current growth and for any new sources that are expected to contribute to growth next year. Once this analysis is completed, you should set 2024 revenue targets for each source of revenue that is relevant to your company. And, once these revenue targets have been established, you can design marketing programs to achieve those objectives.</p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-41771104226185658732023-12-03T05:11:00.000-06:002023-12-03T05:11:28.933-06:00Why You Need to Choose and Use Performance Metrics Carefully and Beware of . . .<p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlOzYe5L6CnpOGbHJLBEzSSvf0RAM2MtRgqDfJjCBjNA7E2kJRR38POa5HPW60QUewF29MJsKfDL7WVSBW35DjjZhEIG0ej0-xR1Y4VvL6xiWUvV_wXmDrIlr9O7YUPoKzgK66ClwbAt8ugOk2UCbgbTKCmBmEyZ1MqII5E0J25kCqoUmdPTUKp0Lqdg-e/s773/Illustration%20for%20120323%20Post.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="403" data-original-width="773" height="209" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlOzYe5L6CnpOGbHJLBEzSSvf0RAM2MtRgqDfJjCBjNA7E2kJRR38POa5HPW60QUewF29MJsKfDL7WVSBW35DjjZhEIG0ej0-xR1Y4VvL6xiWUvV_wXmDrIlr9O7YUPoKzgK66ClwbAt8ugOk2UCbgbTKCmBmEyZ1MqII5E0J25kCqoUmdPTUKp0Lqdg-e/w400-h209/Illustration%20for%20120323%20Post.jpg" width="400" /></a></div><b>Most marketers are now deep into their planning for 2024, and a critical part of that planning is determining how marketing performance will be measured. Performance metrics are essential for effective marketing, but they can also have unintended consequences.</b><p></p><p><b>Surrogation can be a particularly pernicious source of such unintended consequences. Read on to learn what surrogation is, why it happens, and how to avoid it.</b></p><p>Measuring performance has been a prominent feature of the business landscape since double-entry accounting appeared in the 14th or 15th century. "You can't manage what you can't measure" is one of the most often-repeated maxims in the business world, and it's been an article of faith for generations of business leaders.</p><p>Performance measurement permeates virtually all business functions, including marketing. For the past several years, marketers have been increasingly focused on measuring the performance of their activities and programs, and many marketing leaders now use performance data to allocate budgets and make marketing mix decisions.</p><p>Overall, this has been a positive development. Using performance data to guide the choice of marketing tactics and investments should lead to more rational, evidence-based decisions.</p><p>However, performance metrics must be selected thoughtfully and used carefully because they are powerful tools that can produce unintended consequences as well as desirable results.</p><p>Surrogation is a frequent cause of unintended consequences in performance management systems. It can happen even when the selection and use of performance metrics are well-intentioned.</p><p><b>What Is Surrogation?</b></p><p>Surrogation refers to the human tendency to lose sight of the real objective and focus only (or almost entirely) on the metric that is designed to measure performance against the real objective. In other words, we have a tendency to decide (often subconsciously) that scoring well on the metric <i><b>is</b></i> the real objective.</p><p>For example, suppose that one of your company's important objectives is to provide outstanding customer experiences, and you decide to measure your performance against that objective using customer surveys. The survey results are shared with customer-facing employees, and they are frequently discussed at team meetings.</p><p>Under these circumstances, some of your employees can begin to think that the objective is to gain high customer survey scores rather than deliver great customer experiences. This becomes a significant problem if those employees begin to entice customers to give high scores on the surveys even if they aren't completely happy with their experiences.</p><p><b>Why Surrogation Happens</b></p><p>Surrogation can occur because of the inherent power of performance metrics to shape human behavior. After all, that's one of the main reasons they're used. When marketing leaders institute performance metrics, they expect their teams to use those metrics to guide their activities.</p><p>Dan Ariely, the noted behavioral economist and author of <i><a href="https://www.amazon.com/Predictably-Irrational-Revised-Expanded-Decisions/dp/0061353248/ref=sr_1_1?crid=3JHFYWBCHALT7&keywords=predictably+irrational&qid=1701339744&s=books&sprefix=Predic%2Cstripbooks%2C534&sr=1-1" target="_blank">Predictably Irrational</a></i>, described the power of performance metrics in a column in the Harvard Business Review. He wrote:</p><p><i>"Human beings adjust behavior based on the metrics they're held against. Anything you measure will impel a person to optimize his score based on that metric. What you measure is what you'll get. Period."</i></p><p>Eli Goldratt, the developer of the theory of constraints, made the same point in his book <i><a href="https://www.amazon.com/Haystack-Syndrome-Sifting-Information-Ocean/dp/0884271846/ref=sr_1_1?crid=QTJNZO6FIWE7&keywords=the+haystack+syndrome&qid=1701339854&s=books&sprefix=The+Haystack%2Cstripbooks%2C781&sr=1-1" target="_blank">The Haystack Syndrome</a></i> where he wrote:</p><p><i>"Tell me how you will measure me and I will tell you how I will behave."</i></p><p><b>Reducing the Odds of Surrogation</b></p><p>Surrogation can happen wherever performance metrics are used, and there's no ironclad way to completely prevent it. However, marketing leaders can take steps to lower the odds that surrogation will occur.</p><p>One effective way to reduce surrogation is to use multiple metrics when measuring the performance of significant programs or initiatives. This approach is most effective when the metrics used require managers and other team members to balance several competing dimensions of performance.</p><p>So, for example, if you are measuring the effectiveness of your demand generation program, you will obviously track the number of leads generated. But you should also track other aspects of performance such as the number of leads who actually become customers (the conversion rate), pipeline velocity, and customer acquisition cost.</p><p>This combination of metrics - or something similar - will lead your demand generation team to consider quantity, quality, and cost when evaluating the effectiveness of their activities.</p><p><i>Image courtesy of <a href="https://flickr.com/photos/honestreporting/14370762464/in/photolist-nTTV1C-8KXVMq-ybdXrE-fPuk5M-aB7k3w-2hhrZUC-Kn8tyA-2iQDfDi-oVN7Nk-23z4E4T-23z5Ct6-azeSSY-qtVPAe-5ngcJT-8EHB3j-jo2EyS-axrWt7-9Roc2Y-hY8LQP-rKKjv4-6RSZH7-rtoqin-HXBCjZ-2oh82GM-zgzbED-rrvTci-kKaWku-4Bn8t7-bqSgA8-qP3KAT-FC9Znm-8R1Tij-2dZ9yiz-VCB8Tu-QjEUPe-a5NLNf-6k1kCj-mokPe-GqryW4-cS1uMA-4VKf5k-cf3ayu-9ouEK-rUogbC-EpFB5i-JMWZWB-26WxjkD-5kX23K-2iQJycF-5xL2zX" target="_blank">CC BY-SA HonestReporting.com</a> via Flickr (CC).</i></p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-69443487959611026932023-11-26T05:00:00.000-06:002023-11-26T05:00:31.803-06:00The Promise and Peril of Generative AI<p></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg0Cn68VKAS50WmhyyAbhr54x7RmthXHqhSgE_Uew8pWVzgPZrNQ1LoTOA33ZJEtlHBBv4tOfTDRVQ9J7Y2C961hDrfuWu2Ppe9FcdlRANas5qzaT30voj8Q2l56azofb48aHUughMDpu2Q0qeXs2l_8iyyRmv0vQQA6jGJ-JznWYu6OBYMic3dNDWpNxwD/s1000/Illustration%20for%20112623%20Post.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="580" data-original-width="1000" height="233" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg0Cn68VKAS50WmhyyAbhr54x7RmthXHqhSgE_Uew8pWVzgPZrNQ1LoTOA33ZJEtlHBBv4tOfTDRVQ9J7Y2C961hDrfuWu2Ppe9FcdlRANas5qzaT30voj8Q2l56azofb48aHUughMDpu2Q0qeXs2l_8iyyRmv0vQQA6jGJ-JznWYu6OBYMic3dNDWpNxwD/w400-h233/Illustration%20for%20112623%20Post.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: Shutterstock</i></span></td></tr></tbody></table><b>Generative AI has the potential to drive a once-in-a-generation step-change in business performance and productivity, but a recent, first-of-its-kind scientific experiment demonstrates that generative AI can also be a double-edged sword.</b><p></p><p><b>When used correctly for appropriate tasks, it can be a powerful enabler of competitive advantage. However, when used in the wrong ways or for the wrong kinds of tasks, generative AI will diminish, rather than boost, performance.</b></p><p>This Thursday, November 30th, will mark the one-year anniversary of OpenAI's public release of ChatGPT, the generative AI application based on the company's GPT large language model. For the past year, generative AI has been the hottest topic in marketing and one of the most widely discussed developments in the business world.</p><p>Several surveys conducted this year have consistently shown that most marketers are using - or at least experimenting with - generative AI. For example, in the <a href="https://contentmarketinginstitute.com/articles/b2b-content-marketing-trends-research/" target="_blank">latest B2B content marketing survey</a> by the Content Marketing Institute and MarketingProfs, 72% of the respondents said they use generative AI tools.</p><p>The capabilities of large language models have been evolving at a breakneck pace, and it now seems clear that generative AI will have a profound impact on all aspects of business, including marketing. Some business leaders and financial market participants argue that generative AI is the most significant development for business since the internet.</p><p>Given this importance, it's not surprising that generative AI is becoming the focus of scholarly research. One of the most fascinating studies I've seen was conducted by the Boston Consulting Group (BCG) and a group of scholars from the Harvard Business School, the MIT Sloan School of Management, the Wharton School at the University of Pennsylvania, and the University of Warwick.</p><p><b>Study Overview</b></p><p>This study consisted of two related experiments designed to capture the impact of generative AI on the performance of highly skilled professional workers when doing complex knowledge work.</p><p>More than 750 BCG strategy consultants took part in the study, with approximately half participating in each experiment. The generative AI tool used in the experiments was based on OpenAI's GPT-4 language model.</p><p>In both experiments, participants performed a set of tasks relating to a type of project BCG consultants frequently encounter. In one experiment, the tasks were designed to be within the capabilities of GPT-4. The tasks in the second experiment were designed to be difficult for generative AI to perform correctly without extensive human guidance.</p><p>In both experiments, participants were placed into one of three groups. One group performed the assigned tasks without using generative AI, and one used the generative AI tool when performing the tasks. The participants in the third group also used generative AI when performing the tasks, but they were given training on the use of the AI tool.</p><p><b>The "Creative Product Innovation" Experiment</b></p><p>Participants in this experiment were instructed to assume they were working for a footwear company. Their primary task was to generate ideas for a new shoe that would be aimed at an underserved market segment. Participants were also required to develop a list of the steps needed to launch the product, create a marketing slogan for each market segment, and write a marketing press release for the product.</p><p>The participants who completed these tasks using generative AI <i>outperformed</i> those who didn't use the AI tool by 40%. The results also showed that participants who accepted and used the output from the generative AI tool outperformed those who modified the generative AI output.</p><p><b>The "Business Problem Solving" Experiment</b></p><p>In this experiment, participants were instructed to assume they were working for the CEO of a fictitious company that has three brands. The CEO wants to better understand the performance of the company's brands and which of the brands offers the greatest growth potential.</p><p>The researchers provided participants a spreadsheet containing financial performance data for each of the brands and transcripts of interviews with company insiders.</p><p>The primary task of the participants was to identify which brand the company should focus on and invest in to optimize revenue growth. Participants were also required to provide the rationale for their views and support their views with data and/or quotations from the insider interviews.</p><p>Importantly, the researchers intentionally designed this experiment to have a "right" answer, and participants' performance was measured by the "correctness" of their recommendations.</p><p>Given the design of this experiment, it should not be surprising that the participants who used generative AI to perform the assigned tasks <i>underperformed</i> those who did not by 23%. The results also showed that those participants who performed poorly when using generative AI tended to (in the words of the researchers) "blindly adopt its output and interrogate it less."</p><p>The results of this experiment also raise questions about whether training can alleviate this type of underperformance. As I noted earlier, some of the participants in this experiment were given training on how to best use generative AI for the tasks they were about to perform.</p><p>These participants were also told about the pitfalls of using generative AI for problem-solving tasks, and they were cautioned against relying on generative AI for such tasks. Yet, participants who received this training performed worse than those who did not receive the training.</p><p><b>The Takeaway</b></p><p>The most important takeaway from this study is that generative AI (as it existed in the first half of 2023) can be a double-edged sword. One key to reaping the benefits of generative AI, while also avoiding its potential downsides, is knowing when to use it.</p><p>Unfortunately, it's not always easy to determine what kinds of tasks are a fit for generative AI . . . and what kinds aren't. In the words of the researchers:</p><p><i>"The advantages of AI, while substantial, are similarly unclear to users. It performs well at some jobs and fails in other circumstances in ways that are difficult to predict in advance . . . This creates a 'jagged Frontier' where tasks that appear to be of similar difficulty may either be performed better or worse by humans using AI."</i></p><p>Under these circumstances, business and marketing leaders should exercise a significant amount of caution when using generative AI, especially for tasks that will have a major impact on their organization.</p><p>(Note: This post has provided a brief and necessarily incomplete description of the study and its findings. Boston Consulting Group has published <a href="https://www.bcg.com/publications/2023/how-people-create-and-destroy-value-with-gen-ai" target="_blank">an article</a> describing the study in greater detail. In addition, the study leaders have written an unpublished academic "<a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4573321" target="_blank">working paper</a>" that provides an even more detailed and technical discussion of the study. I encourage you to read both of these resources.)</p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-10486886572221066542023-11-19T04:28:00.000-06:002023-11-19T04:28:10.453-06:00[Book Review] A Thought-Provoking Guide to Creating a Successful Content Marketing Strategy<p style="text-align: center;"> "Your content will never provide competitive advantage. But your content strategy just might."</p><p style="text-align: center;">Robert Rose, <i>Content Marketing Strategy</i></p><table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXohVkh2S01K0kf6LAjdAFiwMfXb2WrzWl5esRBVXa5yGIMH9zNGnTYYYWTzDKTtvaJf3U1NO-SM3oiisdmTAPNL8E0JVLuxsRiD-BQ9ydNQBle_QyOVXBeLxAl8qaKGOD7AZgnuF4OkLbX0dc-PBHhqTxMStlAMu0M7QNUOEs7tSitmXYsoNfg0cGRDUp/s691/Illustration%20for%20111923%20Post.jpg" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="691" data-original-width="461" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXohVkh2S01K0kf6LAjdAFiwMfXb2WrzWl5esRBVXa5yGIMH9zNGnTYYYWTzDKTtvaJf3U1NO-SM3oiisdmTAPNL8E0JVLuxsRiD-BQ9ydNQBle_QyOVXBeLxAl8qaKGOD7AZgnuF4OkLbX0dc-PBHhqTxMStlAMu0M7QNUOEs7tSitmXYsoNfg0cGRDUp/w133-h200/Illustration%20for%20111923%20Post.jpg" width="133" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: Kogan Page</i></span></td></tr></tbody></table><p style="text-align: left;">Content marketing has become a core ingredient of the B2B marketing mix over the past two decades. Today, virtually all B2B companies use content marketing in some form.</p><p style="text-align: left;">But despite this widespread use, many B2B marketers aren't satisfied with the performance of their content marketing programs. In the <a href="https://contentmarketinginstitute.com/wp-content/uploads/2022/10/b2b-2023-research-final.pdf" target="_blank">2022 edition</a> of the content marketing survey by the Content Marketing Institute and MarketingProfs, only 29% of the B2B respondents said their organization was <i>extremely</i> or <i>very</i> successful with content marketing. </p><p style="text-align: left;">One key to effective content marketing is having a well-designed content marketing strategy. In the 2022 CMI/MarketingProfs survey, 64% of the "most successful" respondents reported having a documented content marketing strategy. Only 19% of the "least successful" respondents said they had a documented strategy.<span style="font-size: medium;"><b>*</b></span></p><p style="text-align: left;">Because having a sound strategy is so critical to content marketing success, Robert Rose's new book is a must-read for marketers. <i><a href="https://www.koganpage.com/marketing-communications/content-marketing-strategy-9781398611504" target="_blank">Content Marketing Strategy: Harness the Power of Your Brand's Voice</a></i> (Kogan Page, 2023) provides an authoritative guide to the formulation of an effective content marketing strategy.</p><p style="text-align: left;">Robert Rose is the Chief Strategy Advisor of the Content Marketing Institute and the CEO and Chief Strategy Officer of <a href="https://contentadvisory.net/" target="_blank">The Content Advisory</a>, a content marketing consulting firm. He has been working in marketing and content strategy for nearly 30 years.</p><p style="text-align: left;"><b>What's In the Book</b></p><p style="text-align: left;">As its title suggests, <i>Content Marketing Strategy</i> is about the strategic management of content marketing. More specifically, the book describes a process that marketing leaders can use to manage content marketing as a core business function that requires a full-fledged <i>business</i> strategy.</p><p style="text-align: left;">Robert Rose clearly spells out his perspective on the topic of content marketing strategy in the quotation shown above and in the Introduction of the book where he writes that marketing needs to operate as a media company and that the primary function of marketing is to ". . . <i>create valuable experiential media-driven products</i> for audiences that can be monetized in several ways . . ." (Emphasis in original)</p><p style="text-align: left;">In Chapter 1 of the book, Rose echoes Michael Porter's thinking on strategy when he defines content marketing strategy as ". . . a marketing discipline that is the sum of all the activities required to enable a business to consistently communicate in a way that creates tangible value for target audiences. It is what enables a brand to have not only a voice but also something to say that is worth listening to."</p><p style="text-align: left;">Rose uses Chapter 2 to introduce the fundamental elements of a successful content marketing strategy. He argues that an effective strategy has three pillars - Communication, Experiences, and Operations. Then, he goes on to write that these three pillars encompass five core categories of activities, which he labels <i>purpose</i>, <i>model</i>, <i>frame</i>, <i>value</i>, and <i>audience</i>.</p><p style="text-align: left;">In Chapters 3-8 of the book, Rose discusses each of these five categories of activities in detail. For example, he covers <i>purpose</i> in Chapter 3 ("Designing a Strategic Purpose"), <i>model</i> in Chapter 4 ("The Content Marketing Operating Model"), and <i>audience</i> in Chapter 5 ("Understanding Audiences").</p><p style="text-align: left;">In Chapter 9, Rose describes how marketing leaders and their teams can formulate a content marketing strategy that incorporates the principles and frameworks he discussed earlier in the book. Rose called this process "story mapping," and it includes four steps.</p><p style="text-align: left;"></p><ol style="text-align: left;"><li>Identify all the conditions that must exist for your content marketing effort to be successful.</li><li>Identify all the obstacles that could prevent the Step 1 conditions from existing.</li><li>Determine which of the Step 1 conditions are absolutely essential and which of the Step 2 obstacles are "showstoppers."</li><li>Specify when the Step 1 conditions will be accomplished.</li></ol><div><b>My Take</b></div><div>The widespread popularity of content marketing has spawned an impressive volume of literature. Yesterday, I conducted a search at Amazon using the term "content marketing strategy." I found 51 books having that term in the title or subtitle, and I stopped counting after only four pages of search results.</div><div>Many of these books probably contain useful information and insights. However, if you want to better understand how to manage content marketing as a strategic business function - and why that approach is critical for successful content marketing - you should put <i>Content Marketing Strategy</i> near the top of your reading list.</div><div>Robert Rose can speak authoritatively about content marketing. In his position with the Content Marketing Institute and as a consultant, Rose has had a front-row seat to observe the evolution of content marketing for more than a decade. He's seen what does and doesn't work, and he describes several of these experiences in his book.</div><div><i>Content Marketing Strategy</i> is well-organized and clearly written. The book isn't exactly "light reading," but Rose's writing style makes the content approachable and easy to understand. He also includes several illustrations in the book, and these illustrations make it easier for readers to comprehend some of Rose's most important concepts.</div><div>B2B marketers can easily find books, white papers, ebooks, and other resources about content marketing. Robert Rose's book is one of the most thoughtful and thought-provoking books I've encountered on this vitally important topic. I strongly recommend it.</div><div><br /></div><p></p><p style="text-align: left;"><b style="font-size: large;">* </b>The "most successful" respondents were those who said their organization was <i>extremely</i> or <i>very</i> successful with content marketing. The "least successful" respondents were those who characterized their organization's content marketing efforts as <i>minimally</i> or <i>not at all</i> successful.</p><p style="text-align: left;"><br /></p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com1tag:blogger.com,1999:blog-2390929160282748742.post-62348871998623856302023-11-12T03:41:00.000-06:002023-11-12T03:41:10.381-06:00[Research Round-Up] B2B Highlights From the Fall 2023 Edition of "The CMO Survey"<p></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjYoHBtLRYBbc9JSYcrtg3mDK2AP_9ONbGraicBB-BBWdCt4pxPQvnB2Xfzj9qInKCSjYJCEQR5qqTIrIXAFI_Sy2WMCztv4zAOnx2Ggzr6E5J6xENtJl9uHPLX4pGqFCzYkmnQLpxz8YQipTXexOMcGuwPu-C9mZs7tX08YpACORKO7doVMPjN59pmWUY/s920/Illustration%20for%20111223%20Post.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="518" data-original-width="920" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjYoHBtLRYBbc9JSYcrtg3mDK2AP_9ONbGraicBB-BBWdCt4pxPQvnB2Xfzj9qInKCSjYJCEQR5qqTIrIXAFI_Sy2WMCztv4zAOnx2Ggzr6E5J6xENtJl9uHPLX4pGqFCzYkmnQLpxz8YQipTXexOMcGuwPu-C9mZs7tX08YpACORKO7doVMPjN59pmWUY/w400-h225/Illustration%20for%20111223%20Post.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: "The CMO Survey" (Christine Moorman, 2023)</i></span></td></tr></tbody></table><i>(This month's Research Round-Up is devoted entirely to the Fall 2023 edition of "The CMO Survey." This research has been conducted semi-annually since 2008 and consistently provides a wealth of valuable information about marketing trends, spending, and practices.)</i><p></p><p>The findings of the <a href="https://cmosurvey.org/results/" target="_blank">Fall 2023 edition of "The CMO Survey"</a> were released in late September. "The CMO Survey" is directed by Dr. Christine Moorman and is sponsored by Deloitte LLP, Duke University's Fuqua School of Business, and the American Marketing Association.</p><p>The Fall 2023 survey results are based on responses from 316 senior marketing leaders at for-profit companies based in the United States. Over two-thirds of the respondents (67.7%) were affiliated with B2B companies, and 95.6% were VP-level or above. The survey was in the field July 26 - August 17, 2023.</p><p>Dr. Moorman and her colleagues typically produce three reports for each U.S. edition of the survey.</p><p></p><ul style="text-align: left;"><li>"Highlights and Insights Report" - This is a relatively brief and graphically rich report that provides mostly overall survey results and analyzes those results and major marketing trends.</li></ul><div><ul style="text-align: left;"><li>"Topline Report" - This report provides response data at the aggregate level for all survey questions.</li></ul></div><div><ul style="text-align: left;"><li>"Firm and Industry Breakout Report" - This report provides response data by four economic sectors (B2B product companies, B2B services companies, B2C product companies, and B2C services companies), 15 industry verticals, company size, and percentage of online sales. This report is lengthy but it provides the most detailed view of the survey data.</li></ul><div>In this post, I'll be discussing the responses of B2B marketers exclusively, unless otherwise indicated. The percentages and other numerical values in this post are the mean of applicable survey responses, also unless otherwise indicated.</div></div><div><b>Marketers Are More Optimistic About the Economy</b></div><div>For the past several years, "The CMO Survey" has asked participants for their views on economic conditions, and the Fall 2023 edition of the survey was no exception. It asked participants to rate their level of optimism regarding the overall U.S. economy on a 100-point scale, with "0" being the least optimistic, and "100" being the most optimistic. </div><div>The following chart shows how B2B marketers rated their optimism in the six surveys conducted over the past three years.</div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjSIvurIgMp8urUn1uq-Ra7j3Mj7g6JwQOzUPxIyDdAgoCD7ToT4gqPLtthFamj_2kDSzszm9Bfav0BAhIRVYK56EQ8hrQxGp_2ir2OoC1hfgzepXhSlilTYtFoSZ_LZ_shfapRN_SnLtNRrbWu8Re4o-ppRTegQfKjz1Dk3nj5pjVsHbOywReTkMpQa22O/s787/Chart%20for%20Blog%20-%20111223%20Post-CMO%20Survey-B2B%20Marketer%20Optimism%20Re%20Economy.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="389" data-original-width="787" height="198" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjSIvurIgMp8urUn1uq-Ra7j3Mj7g6JwQOzUPxIyDdAgoCD7ToT4gqPLtthFamj_2kDSzszm9Bfav0BAhIRVYK56EQ8hrQxGp_2ir2OoC1hfgzepXhSlilTYtFoSZ_LZ_shfapRN_SnLtNRrbWu8Re4o-ppRTegQfKjz1Dk3nj5pjVsHbOywReTkMpQa22O/w400-h198/Chart%20for%20Blog%20-%20111223%20Post-CMO%20Survey-B2B%20Marketer%20Optimism%20Re%20Economy.jpg" width="400" /></a></div><br /><div><br /></div><div><b><br /></b></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div>As this chart shows, B2B marketer optimism is at its highest level since the February 2022 survey, and B2B marketers are significantly more optimistic now than they were in the two preceding surveys (Spring 2023 and September 2022).</div><div>The Fall 2023 survey also asked participants if they were more or less optimistic about the U.S. economy compared to the previous quarter. The following table shows how B2B marketers responded.</div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh1VZ9O8vUdX-IVLB-voXWkMCYy_zK0neuabbYxeHL0pXP3N1M9N4dVpLICFrfV79ycesTqJS9q5bi7HH2AP7w8cQg0XjG25XWwJ1pZ0sRjTronuqXWaJSNAhCg3n5xUGyVuk8U9K9zQok-2Y6Twj22OxoakE6UAYfCdyRx46DTcdp_fc7ApzY64mxPRj3S/s560/Table%20for%20Blog%20-%20111223%20Post-CMO%20Survey-B2B%20Marketer%20Optimism%20vs%20Previous%20Quarter.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="180" data-original-width="560" height="129" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh1VZ9O8vUdX-IVLB-voXWkMCYy_zK0neuabbYxeHL0pXP3N1M9N4dVpLICFrfV79ycesTqJS9q5bi7HH2AP7w8cQg0XjG25XWwJ1pZ0sRjTronuqXWaJSNAhCg3n5xUGyVuk8U9K9zQok-2Y6Twj22OxoakE6UAYfCdyRx46DTcdp_fc7ApzY64mxPRj3S/w400-h129/Table%20for%20Blog%20-%20111223%20Post-CMO%20Survey-B2B%20Marketer%20Optimism%20vs%20Previous%20Quarter.jpg" width="400" /></a></div><br /><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div>The results in this table also indicate that B2B marketers have become more optimistic since last spring. In the Fall 2023 survey, 46.4% of respondents with B2B product companies and 47.1% of respondents with B2B services companies said they were more optimistic compared to the previous quarter. In the Spring 2023 survey, only 32.0% of the respondents with B2B product companies, and 24.7% with B2B services companies reported being more optimistic. </div><div><b>Anemic Growth in Marketing Spending</b></div><div>The increased optimism regarding economic conditions has not produced a substantial increase in marketing spending . . . at least not yet. In fact, the survey shows that the growth of marketing spending has been anemic for more than a year.</div><div>For the past several years, the survey has asked participants by what percent their marketing spending changed in the preceding 12 months. The following chart shows how B2B survey respondents answered these questions in the six surveys conducted over the past three years.</div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPUU-nPXwdvXGxUvPgPsYD4f7Hu_D7TxcPuk6i2fSvLpY8_2gf3KPxslgrRIHbklL6muqbM7te7kMIZtX840ST-ziwlhozeHZt5eiiMar_hjZVTFogHYDfbuU5rxUu7tmeQHUkFe5KCtHaZiPIzWsiESmmZpmG6nxmP4Cc8-e0hZebOPdYg5LWMFfvsDoA/s781/Chart%20for%20Blog%20-%20111223%20Post-CMO%20Survey-Percent%20Change%20in%20Marketing%20Spending.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="383" data-original-width="781" height="196" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPUU-nPXwdvXGxUvPgPsYD4f7Hu_D7TxcPuk6i2fSvLpY8_2gf3KPxslgrRIHbklL6muqbM7te7kMIZtX840ST-ziwlhozeHZt5eiiMar_hjZVTFogHYDfbuU5rxUu7tmeQHUkFe5KCtHaZiPIzWsiESmmZpmG6nxmP4Cc8-e0hZebOPdYg5LWMFfvsDoA/w400-h196/Chart%20for%20Blog%20-%20111223%20Post-CMO%20Survey-Percent%20Change%20in%20Marketing%20Spending.jpg" width="400" /></a></div><br /><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div>B2B marketers are relatively optimistic about the growth of marketing spending over the coming year. In the Fall 2023 survey, respondents with B2B product companies said they expect overall marketing spending to increase 6.8% over the 12 months following the survey, and those with B2B services companies expect a 6.6% increase over the same period.</div><div>Unfortunately, spending growth predictions by respondents to "The CMO Survey" have not been particularly accurate in the past. For example, in the September 2022 survey, respondents (B2B and B2C) predicted that marketing spending would increase by 8.8% over the following 12 months. In the Fall 2023 survey, respondents reported that their marketing spending had increased by only 2.6% over the preceding 12 months.</div><div><br /></div><div style="text-align: center;"><b>*****</b></div><div style="text-align: center;"><b><br /></b></div><div style="text-align: left;">The Fall 2023 edition of "The CMO Survey" includes data regarding several other topics, and, like earlier editions, it provides a wealth of valuable insights for B2B marketers. I encourage you to read the full survey report.</div><p></p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-53315641629262650642023-11-05T04:20:00.000-06:002023-11-05T04:20:27.939-06:00Why B2B Marketers Need to be Careful With Purpose Marketing<p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjLzs0rm_cg2SnW4Su4PRFXgY8BLvvADFmgrPe_WHdwqeCi7WKQxOcYSbUrt8al4OWblS7DP18pFhbsxkGTPEeIX45kq7dvLFPBl4JC-LvOrif3K5tBuSHWwJ1kTHMJ3PQxl1_Vw5rDekfXKrAe-XMqBoNDCoy-lyh0EILuWzIVOW5g7NAOMHgluVRtWjPJ/s640/Illustration%20for%20110523%20Post.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="360" data-original-width="640" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjLzs0rm_cg2SnW4Su4PRFXgY8BLvvADFmgrPe_WHdwqeCi7WKQxOcYSbUrt8al4OWblS7DP18pFhbsxkGTPEeIX45kq7dvLFPBl4JC-LvOrif3K5tBuSHWwJ1kTHMJ3PQxl1_Vw5rDekfXKrAe-XMqBoNDCoy-lyh0EILuWzIVOW5g7NAOMHgluVRtWjPJ/w400-h225/Illustration%20for%20110523%20Post.jpg" width="400" /></a></div><b>Many marketing pundits argue that companies should make environmental and social "purpose" an integral part of marketing communications. Read on to learn why you should approach purpose marketing cautiously.</b><p></p><p>Purpose marketing can be defined as the use of messaging in external communications that expresses a company or brand's core mission and values. It includes messaging that highlights how a company or brand is positively impacting the lives of employees and customers and/or society as a whole. The term also refers to communications that spell out where the company or brand stands on important social issues.</p><p>Numerous research studies have purported to prove that consumers and business buyers now place great importance on the social responsibility track record of the companies or brands they do business with. Many of these studies also indicate that potential buyers now expect companies and brands to "take a stand" on important social issues.</p><p>As a result, many marketers have become enamored with purpose marketing. Industry media outlets such as Advertising Age, Adweek, Marketing Week, and The Drum have frequently published articles describing the purpose marketing campaigns and other social responsibility efforts of well-known brands such as Dove, Nike, Gillette, and Patagonia.</p><p>In reality, however, the case for purpose marketing isn't nearly as clear-cut as the hype would suggest. Several recent research studies have painted a more nuanced picture of purpose marketing. These studies suggest that marketers should approach purpose marketing cautiously and thoroughly evaluate potential benefits and risks before they launch a significant purpose marketing program.</p><p>Here are a few of the highlights from two surveys conducted earlier this year.</p><p><b>The Bentley University-Gallup Survey</b></p><p>The <a href="https://www.gallup.com/analytics/512066/bentley-business-in-society.aspx" target="_blank">2023 Bentley-Gallup Business in Society</a> study was based on a survey of 5,458 U.S. adults (ages 18 and older). The sample for the survey was weighted to be demographically representative of the U.S. adult population. The maximum margin of sampling error for results based on the entire survey sample was + or - 1.8 percentage points at the 95% confidence level for response percentages around 50%. The survey was conducted May 8-15, 2023.</p><p>Less than half of the survey respondents (41%) said that businesses should take a public stance on current events. This was a <i>decline</i> of seven percentage points from the 2022 edition of the survey.</p><p>The main driver of this decline was waning support from respondents who identified as Democrats. In the 2022 survey, 75% of Democratic respondents said businesses should take a public stance on social issues. That percentage dropped to 62% in the 2023 survey.</p><p>The researchers asked survey participants about 11 categories of issues (e.g. racial issues, gun issues, LGBTQ+ issues, etc.). Of these 11 issue categories, climate change (at 55%) and mental health (at 52%) were the <i>only two</i> that a majority of survey respondents said businesses should take public positions on.</p><p>Perhaps not surprisingly, younger respondents, Asian, black, and Hispanic respondents, and respondents identifying as Democrats were more likely to say that businesses should take a public stance on social issues.</p><p><b>The Ipsos Survey</b></p><p>The Ipsos study was a survey of 1,096 U.S. adults (ages 21 and older). The survey was conducted February 8-9, 2023, and the findings were described in a paper titled, <i><a href="https://www.ipsos.com/sites/default/files/What-The-Future-Purpose.pdf" target="_blank">What the Future: Purpose</a></i>.</p><p>The findings of this research revealed that consumer attitudes regarding brand purpose are more nuanced than generally believed. For example:</p><p></p><ul style="text-align: left;"><li>85% of the survey respondents said global or national brands should play a role in solving global problems, but 51% said companies should remain neutral on social issues.</li></ul><div><ul style="text-align: left;"><li>Two-thirds of the respondents agreed that purchasing sustainable products made a difference for the environment, but only 52% said they were willing to pay more for products that are manufactured sustainably.</li></ul><div>One of the most striking findings in the study related to the importance of brand purpose in purchase decisions. Ipsos asked survey participants which of 12 factors were most important when they were deciding which brands or products to purchase. The following table shows that the factors relating to brand purpose (shown in <span style="color: red;">red</span>) were near the bottom of the list in terms of importance.</div></div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjwlga3eErkaUcJ0jk3_3NQu6BfCHy3YLJkR-1Wsf39rCaRGlMBtawmNyEvZRXZVz5QoGyEi8pfmPf42Hk__dmHqDnmvzSRsPukDBcx1ZhgrW7hZoXzdYupqH3BjRdfzKxs1XDI-Dzt6uJ-YIFtCedp6R_sl5Lg_bZKnmH8T9-sbFgVuGozxnm7aeR_olL5/s608/Table%20for%20Blog%20-%20060423%20Post-Importance%20of%20Brand%20Purpose.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="528" data-original-width="608" height="348" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjwlga3eErkaUcJ0jk3_3NQu6BfCHy3YLJkR-1Wsf39rCaRGlMBtawmNyEvZRXZVz5QoGyEi8pfmPf42Hk__dmHqDnmvzSRsPukDBcx1ZhgrW7hZoXzdYupqH3BjRdfzKxs1XDI-Dzt6uJ-YIFtCedp6R_sl5Lg_bZKnmH8T9-sbFgVuGozxnm7aeR_olL5/w400-h348/Table%20for%20Blog%20-%20060423%20Post-Importance%20of%20Brand%20Purpose.jpg" width="400" /></a></div><br /><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><b>Does Purpose Marketing Work?</b></div><div>Other recent research has suggested that many purpose marketing programs have failed to make a meaningful impression on potential buyers.</div><div>In <a href="https://insights.gfk.com/bridging-the-purpose-gap?utm_campaign=na_us_202303_brand%20purpose%20ebook&utm_source=PR&utm_content=ebook" target="_blank">a 2022 online survey</a> of more than 2,000 U.S. adults by GfK, over half of the respondents <i>could not name (unaided) a single brand</i> that is "taking care of the environment and fighting climate change," "promoting diversity and inclusion," or "giving back to the community."</div><div>The authors of the survey report drew this conclusion: "Despite all the billions of dollars spent on purpose-driven campaigns, brands have not achieved top-of-mind awareness for this crucial work. In some cases, purpose marketing has become a kind of 'green noise' - a constant hum about virtuous brand behavior in which few messages or actions stand out . . ."</div><div><b>The Bottom Line</b></div><div>These recent studies provide a more balanced view of buyer attitudes regarding the appropriateness and value of purpose marketing. The findings show that while values matter to potential buyers, there is little consensus regarding whether companies and brands should take public stances on social issues.</div><div>That's why marketers should approach purpose marketing with a great deal of caution.</div><div><br /></div><div><i>If you'd like to learn more about the benefits and risks of purpose marketing, take a look at <a href="https://b2bmarketingdirections.blogspot.com/2022/01/deep-dive-is-purpose-marketing-right.html" target="_blank">this "deep dive" article</a> that I published in January of last year.</i></div><div><br /></div><div><i style="background-color: white; color: #333333; font-family: Verdana, Arial, sans-serif; font-size: 13px;">Top image courtesy of <a href="https://www.flickr.com/photos/blech/5231746257/in/photolist-8Yj4TF-3dbg7P-fCHSYD-9ciqqc-ofFyeB-4QYTt7-7uxQcQ-8AaPCn-dp4wX8-HuBDY-9PAZmP-63o88y-7MvqAA-h6Se8k-5ToDYM-aEbMjW-6m9jNw-87y9hM-iYg8qV-98PUvs-aYqgG-9BZ7Gj-61g3Um-agB71X-oGgzZU-8mYvMi-azA5j5-4TArJ2-gWS4V-srMAv6-5E6kuV-7mraM6-6MBPPr-87PDFC-fEdi6V-78Xnf5-696xTT-4Uvm1p-cWHBhw-7YUvtq-66zAig-8NxJ6R-8DX9jr-5ypsJ4-eeMuic-8gjpAx-6aRBC4-fLrdBK-3oYEoL-s3BNE" style="color: #336699;">Paul Mison</a> via Flickr (CC)</i><span face="Verdana, Arial, sans-serif" style="background-color: white; color: #333333; font-size: 13px;">.</span></div><p></p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-58797702667095067042023-10-29T02:30:00.000-05:002023-10-29T02:30:00.225-05:00The Power of Context in B2B Buying, and What That Means for Marketers<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlilLw-ZQ8wMHRvu5NhI7IyQiEweK8ZuckZ9ZMIXWlxVW1BThx4HeP2oC2Zc9CdGmK6o8A8IPDKOwqVVP3tWsxYTCkKUu7yh4k92PV1J6bbK9NyblgbNQoBc5nL032vvWapErxenTLP50QyPvN4NqzPICiItq24YpwS16nVCCOOxwYYIJYP7f_8j1I4U9q/s800/Illustration%20for%20102223%20Post.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="600" data-original-width="800" height="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlilLw-ZQ8wMHRvu5NhI7IyQiEweK8ZuckZ9ZMIXWlxVW1BThx4HeP2oC2Zc9CdGmK6o8A8IPDKOwqVVP3tWsxYTCkKUu7yh4k92PV1J6bbK9NyblgbNQoBc5nL032vvWapErxenTLP50QyPvN4NqzPICiItq24YpwS16nVCCOOxwYYIJYP7f_8j1I4U9q/w400-h300/Illustration%20for%20102223%20Post.jpg" width="400" /></a></div><br /><p>The context in which people consider buying something has a significant impact on how the buying decision is made and on what is (or isn't) ultimately bought.</p><p>Hundreds of research studies conducted by cognitive scientists over the past four-plus decades have shown that contextual factors can affect everything from how we react to marketing messages and offers, to how we perceive specific products or services, to how we make buying decisions.</p><p>More recently, neuroscientists have used functional MRI technologies to identify the specific areas of the brain that are activated under various decision-making conditions. This research has confirmed that contextual factors can impact what areas of our brain are involved in making decisions.</p><p>Understanding the "buying context" is therefore vital for effective marketing. Context obviously affects how individuals make buying decisions, and I plan to address that topic in a future post.</p><p>In this post, I'll discuss how the buying context shapes the attributes of the B2B buying process, and I'll argue that most B2B companies need marketing strategies and programs for more than one type of buying process.</p><p><b>The Many "Flavors" of B2B Buying</b></p><p>Most of the research and published literature about B2B marketing has focused on "high-consideration" purchases that typically involve multiple decision-makers, complex decision-making processes, and lengthy buying cycles.</p><p>For example, in the <a href="https://www.demandgenreport.com/resources/research/2022-b2b-buyer-behavior-survey-orgs-must-remain-agile-as-buyers-conduct-self-service-anonymous-journeys" target="_blank">2022 B2B Buyer Behavior Survey</a> by <i>Demand Gen Report</i>, 59% of the survey respondents said their average buying group included four or more individuals, and 23% said their average buying group contained seven people or more.</p><p>But, high-consideration purchases with large buying groups and long buying cycles have never represented all (or even most) B2B buying. In fact, many B2B purchases are routine, with buying decisions being made fairly quickly, often by one person.</p><p>The importance of buying scenarios that don't fit the high-consideration stereotype can be seen in the expanding role of B2B e-commerce and, more specifically, in the rapid growth of online B2B marketplaces.</p><p>Online B2B marketplaces have become the fastest-growing segment of a rapidly growing B2B e-commerce market. <a href="https://www.digitalcommerce360.com/industry-resource/2023-b2b-marketplaces-report/" target="_blank">Digital Commerce 360 has estimated</a> that online B2B marketplaces will produce $112 billion in sales in 2023, up 100% from sales of $56 billion in 2022.</p><p>Research has also shown that marketplaces and other B2B e-commerce channels are no longer just for low-ticket purchases. In <a href="https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/busting-the-five-biggest-b2b-e-commerce-myths" target="_blank">a 2021 survey by McKinsey</a>, 85% of business buyers said they are willing to spend $50,000 or more on a single purchase made via an e-commerce channel or other remote interactions, and 35% said they are willing to spend $500,000 or more.</p><p>The reality is, many B2B companies derive significant revenue from more than one type of buying situation, and these different buying scenarios require different marketing strategies and programs to produce maximum results. Therefore, identifying the buying scenarios that are relevant for your company should be an integral part of your go-to-market planning.</p><p><b>The Buying Context Shapes the Buying Process</b></p><p>The characteristics of a B2B buying process are largely dictated by the context in which a potential purchase is considered, as the following diagram illustrates.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh8UGQ6VOkn1JEU247tYfCZhQk_ZyeqDv67d2sTrbLhA2ygJj8NZPZ_zcfOwEJZf295y6AnLPeh2IOqBMXla2zY926fBd8YJ0pFPisaVuPkgKGsha0SFcpNDNvWX2TA83r3X1rEGtFc2XejT6Gc-CoDKQ8YM25WZmNQkikm5Xque20Hw_o1MPc77jRZcj7i/s572/Context%20Diagram%20for%20102223%20Post.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="482" data-original-width="572" height="338" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh8UGQ6VOkn1JEU247tYfCZhQk_ZyeqDv67d2sTrbLhA2ygJj8NZPZ_zcfOwEJZf295y6AnLPeh2IOqBMXla2zY926fBd8YJ0pFPisaVuPkgKGsha0SFcpNDNvWX2TA83r3X1rEGtFc2XejT6Gc-CoDKQ8YM25WZmNQkikm5Xque20Hw_o1MPc77jRZcj7i/w400-h338/Context%20Diagram%20for%20102223%20Post.jpg" width="400" /></a></div><br /><p><br /></p><p><br /></p><p><br /></p><p><br /></p><p><br /></p><p><br /></p><p><br /></p><p><br /></p><p><br /></p><p><br /></p><p><br /></p><p><br /></p><p>The box on the left side of the diagram contains several factors that describe the context in which potential purchases are considered. One common denominator across most of these factors is that they capture the level of risk associated with a prospective purchase. In this case, "risk" includes both risk for the buying organization and professional risk for the individuals participating in the purchase decision.</p><p>For example, buyers will likely perceive a high level of risk if they aren't familiar with a product or service, or if the product or service has a high level of strategic importance for their company.</p><p>The box on the right side of the diagram describes the major attributes of the buying process. These include the size and composition of the buying group, the length of the buying cycle, the volume and nature of the activities performed in the buying process, and the use of formal procurement processes.</p><p>As the perceived risk associated with a proposed purchase increases, buyers will take steps to mitigate that risk, and these steps will largely dictate the attributes of the buying process that's used.</p><p>As a result, the buying process used for a high-risk purchase will usually involve more people, include more research activities, and require more time to finish than the process used for a low-risk purchase.</p><p>Not all contextual factors are directly linked to perceived risk. For example, the explicit functional goals and the implicit psychological and emotional goals of the individuals involved in making the purchase decision will also affect the attributes of the buying process. I'll have more to say about this topic in my next post on context effects.</p><p>The bottom line is that marketers need to understand the "buying contexts" that are relevant for their company and develop marketing programs that will fit each of these buying scenarios.</p><p><i>Top image courtesy of <a href="https://www.flickr.com/photos/lukask/4696134759/in/photolist-89YVfF-CRge7S-6TwssG-27AeYq8-2hJRCX1-evKj8-evKiL-evKgx-wCVsUZ-k3VUwh-23uCtvp-2kHX3nb-adK1ui-2cYt8eP-8GwJjs-8GpnSN-8GnLL9-8GrJz6-8GpYxd-8GqjGs-AKvAA-8GrNu3-8GoA2p-DUHSpH-2n7oYvC-CbgVk3-8Gpunv-Ks4My2-7knMEr-8GhwZZ-2ndKk98-8Gm5H1-CUpjFF-GHVBjz-BkDuP6-8Gs3nY-n6PYh-2fPQ3SF-8GkNiU-8Gs5Ym-2c65iVz-2n7quis-8GowyP-8GpdnK-2n7nJHP-8GmNt5-8GkQ9A-2iLA95y-P4dnUy-2o3EU1P" target="_blank">Lukas Koster</a> via Flickr (CC).</i></p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-30362520785997892852023-10-22T03:48:00.000-05:002023-10-22T03:48:28.195-05:00[Book Review] A Must-Read Explanation of the Science Behind Why People Buy<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqmJ0hD8WasuJx0H8kr2QF7XD3h17hQPRr79O5Up_7jly5hCdmr7E7HuxNxdiukoD8y4R-srHAD7VVVe080HPmk7nzgzLGLbO4M2iPJhtSY5WjSeBSJSkSycwrY4CJtlQFtnhc7rMyQ2eHD6Bqh0sYvEHFQ6H2wOy5TOHTt5ceLlRGndYw1aawfIEOXnS5/s450/Illustration%20for%20101523%20Post.jpg" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="450" data-original-width="300" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqmJ0hD8WasuJx0H8kr2QF7XD3h17hQPRr79O5Up_7jly5hCdmr7E7HuxNxdiukoD8y4R-srHAD7VVVe080HPmk7nzgzLGLbO4M2iPJhtSY5WjSeBSJSkSycwrY4CJtlQFtnhc7rMyQ2eHD6Bqh0sYvEHFQ6H2wOy5TOHTt5ceLlRGndYw1aawfIEOXnS5/w133-h200/Illustration%20for%20101523%20Post.jpg" width="133" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: John Wiley & Sons</i></span></td></tr></tbody></table><p>The most basic goal of marketing is to influence customer buying behaviors, so understanding why customers buy is essential for successful marketing. A new edition of <i><a href="https://www.wiley.com/en-us/Decoded%3A+The+Science+Behind+Why+We+Buy%2C+2nd+Edition-p-9781119673101" target="_blank">Decoded: The Science Behind Why We Buy</a></i>, 2nd Edition (John Wiley & Sons, 2022) by Phil Barden provides a wealth of science-based insights on this critical aspect of human behavior.</p><p>Phil Barden is the Managing Director UK of <a href="https://decodemarketing.com/en" target="_blank">DECODE Marketing</a>, a consultancy that combines hands-on brand management experience with cutting-edge capabilities in cognitive and social psychology, neuroscience, and behavioral economics. Barden has over 25 years of marketing experience, having held senior positions at companies such as Unilever, Diageo, and T-Mobile.</p><p>In January of this year, I wrote that marketing success in 2023 and beyond would depend on marketers' ability to leverage the capabilities of technology and data science and effectively apply behavioral science principles that describe how people make decisions. <i>Decoded</i> is one of several books that address the vital psychological aspects of marketing.</p><p><b>What's In the Book</b></p><p>The main theme of <i>Decoded</i> is that advances over the past several years in the decision sciences have significantly increased our understanding of human decision-making and behavior, and thus enabled a more science-based approach to marketing.</p><p>Phil Barden clearly states his objective for the book in the preface, where he writes:</p><p><i>"The goal of this book is to share what I have learned on my journey about bringing decision science to life for marketing . . . We now have a framework, a language, and a growing body of knowledge to enable marketers to address the real drivers of brand choice . . . I want to empower the reader to harness this valuable knowledge and apply it to everyday marketing work."</i></p><p>Barden uses the first two chapters of <i>Decoded</i> to introduce the core cognitive mechanisms that drive customer buying behaviors and discuss some of the implications of those mechanisms for marketing.</p><p>In Chapter 1, Barden describes Daniel Kahneman's model of human decision-making, which holds that people use two types of cognitive processes to make decisions.</p><p></p><ul style="text-align: left;"><li><i>System 1</i> is fast, intuitive thinking that operates automatically, quickly, and with little or no conscious effort.</li></ul><div><ul style="text-align: left;"><li><i>System 2</i> is slow thinking that consists of processes that are reflective, controlled, deliberative, and analytical.</li></ul></div><p></p><p>Barden embraces the Kahneman framework and uses it throughout <i>Decoded</i>. He refers to System 1 as an autopilot and calls System 2 a pilot. Barden describes several attributes of the autopilot that are particularly relevant for marketers, including how it processes information and the role it plays in framing our buying decisions.</p><p>In Chapter 2, Barden focuses on the "neuro-logic" of individual purchase decisions. Neuroscientists have shown that when we encounter a product or service we perceive to be valuable, an area of our brain known as the "reward center" is activated, which causes us to "want" the product or service. When we see or hear the price of a product or service, a different part of our brain is activated, the area that "fires" when we experience pain.</p><p>Therefore, whenever we face a potential purchase decision, our brain performs a type of cost-benefit analysis that weighs the potential reward (value) and the price. Barden writes, <i>"Our brain calculates a kind of 'net value' and if this is high enough, if the difference between reward and pain is great enough, then we buy."</i></p><p>In the remaining chapters of <i>Decoded</i>, Barden covers several other attributes of customer buying behaviors that have important implications for marketers. He also explains how marketers can adapt their approach to marketing to take advantage of these buying behavior attributes. For example:</p><p></p><ul style="text-align: left;"><li>How human perception works, and how marketers can use established rules of human perception to optimize marketing activities. (Chapter 3)</li></ul><div><ul style="text-align: left;"><li>How the architecture of the "decision interface" influences purchase decisions. (Chapter 4)</li></ul></div><div><ul style="text-align: left;"><li>The critical role of goals in customer buying decisions. (Chapter 5)</li></ul></div><div><ul style="text-align: left;"><li>How to effectively implement a marketing strategy based on decision science principles. (Chapter 6)</li></ul><div><b>My Take</b></div></div><p></p><p>Back in February, I published a post that included brief descriptions of four books that I called "required reading for marketers who want to leverage behavioral science principles in their marketing efforts."</p><p>When I published that post, I hadn't yet read <i>Decoded</i>. If I had, I would have included it in my required reading list.</p><p><i>Decoded</i> is packed with valuable insights from beginning to end, which makes it a must-read for marketers. The book is particularly compelling because Phil Barden does an excellent job of connecting the sometimes arcane world of behavior science to pragmatic marketing issues and practices. Many of the examples he provides in the book involve real-world marketing situations.</p><p>Barden's writing is clear and engaging, but <i>Decoded</i> isn't a light read. The reality is, human decision-making is a complex, multifaceted phenomenon, and as Albert Einstein once said, <i>"Things should be as simple as possible, but not simpler."</i></p><p>By now, most marketers are at least somewhat familiar with psychological concepts like "loss aversion" and "social proof," and many have heard or read about the power of defaults and other "nudges" to influence customer decisions.</p><p>The most important message of <i>Decoded</i> is that marketers have many opportunities to influence customer decision-making and buying behaviors, but success will require marketers to advance their understanding of human psychology and keep up-to-date on developments in neuroscience.</p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-44746933787449762272023-10-15T04:48:00.001-05:002023-10-15T04:48:58.547-05:00[Research Round-Up] Where AI In Marketing Stands In Mid-2023<p><i>(This month's Research Round-Up discusses two recent surveys that examine how marketers are using artificial intelligence in mid-2023. These surveys explore the extent of AI adoption in the marketing industry, the use cases and expected benefits of AI, and marketers' concerns and uncertainties about AI.)</i></p><p></p><table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQsmFB_v5lcNBn9iDUbbOiC203NRnzGlUFhqEGcQkqci13jSj4GAqr10y0tyXymGMLj-MDuiFr-yi83neqEKuUUtOmQwtSm6WR47rpxQcDOvAP4zAm_A_ebW_pVngE9h4K4VuKAmDTAz7XycXhFMsJTcf8VMm5zO0zrD7KmGAtXfWiDI5J0nSSIm3jqLxj/s880/Illustration%201%20for%20100823%20Post.jpg" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="880" data-original-width="680" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQsmFB_v5lcNBn9iDUbbOiC203NRnzGlUFhqEGcQkqci13jSj4GAqr10y0tyXymGMLj-MDuiFr-yi83neqEKuUUtOmQwtSm6WR47rpxQcDOvAP4zAm_A_ebW_pVngE9h4K4VuKAmDTAz7XycXhFMsJTcf8VMm5zO0zrD7KmGAtXfWiDI5J0nSSIm3jqLxj/w154-h200/Illustration%201%20for%20100823%20Post.jpg" width="154" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: Marketing AI Institute/Drift</i></span></td></tr></tbody></table><i><a href="https://www.marketingaiinstitute.com/2023-state-of-marketing-ai-report" target="_blank">2023 State of Marketing AI Report</a> </i>by the <a href="https://www.marketingaiinstitute.com/" target="_blank">Marketing AI Institute</a> and <a href="https://www.drift.com/" target="_blank">Drift</a> <br /><p></p><p></p><ul style="text-align: left;"><li>918 survey respondents, 61% of whom were director-level or above</li><li>53% of the respondents were affiliated with B2B companies - another 35% said their company is both B2B and B2C</li><li>Respondents represented over 20 industries - 41% worked in professional services or software</li><li>57% of respondents worked in companies with $10 million or less in revenue</li><li>Survey conducted between April 26 and July 12, 2023</li></ul><div>As expected, this survey found that the adoption of AI in marketing is still in its early stages. When asked what "stage of AI transformation" best described their marketing team, most respondents (58%) selected <i>understanding</i> - learning how AI works and exploring its applications and potential value.</div><div>Almost two-thirds of the respondents (64%) said that AI will be very important or critically important to the success of their marketing over the next 12 months. That was up from 51% of respondents in the 2022 edition of the survey.</div><div>Nearly all of the respondents (98%) said they personally use AI tools in some way.</div><div>When asked what their organization is interested in achieving with AI, the top four outcomes selected by respondents were:</div><div><ul style="text-align: left;"><li>Reduce time spent on repetitive, data-driven tasks - 77%</li><li>Unlock greater value from marketing technologies - 62%</li><li>Generate greater ROI on campaigns - 61%</li><li>Accelerate revenue growth - 60%</li></ul><div>When asked about the barriers they faced when it came to the adoption of AI in marketing, the four most frequently selected barriers were:</div></div><div><ul style="text-align: left;"><li>Lack of education and training - 64%</li><li>Lack of awareness or understanding - 56%</li><li>Lack of strategy - 44%</li><li>Lack of talent with the right skill sets - 38%</li></ul><div>It's important to note that this survey does not claim to be based on a representative sample of marketers. The author(s) of the report included the following statement in the description of the survey methodology.</div></div><div><i>"The survey was primarily promoted via the Marketing AI Institute website, newsletter, podcast, and webinars, so it is possible that respondents, who have shown a predisposition to AI content and information, may have higher awareness and adoption levels of AI than the broader industry."</i></div><div><br /></div><div><table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvewvmrdLBDxj-nZ4MiqKLP0eIHRNs95e9xuaAIe61ecgTZv0SdJ6iQBaYadlPUUEAKtju7X9UO4ihdKzoFconjYLdrZ6rattFP9Jn1PLTXcbIiGKqYJLtF0EwsM4fGCQJHLpj-54hhovipGoxJnBvK-RmsH7YQKiqxHg-4H0M74wmdvbOJn0t7R798eLj/s1325/Illustration%202%20for%20100823%20Post.jpg" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1325" data-original-width="1020" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvewvmrdLBDxj-nZ4MiqKLP0eIHRNs95e9xuaAIe61ecgTZv0SdJ6iQBaYadlPUUEAKtju7X9UO4ihdKzoFconjYLdrZ6rattFP9Jn1PLTXcbIiGKqYJLtF0EwsM4fGCQJHLpj-54hhovipGoxJnBvK-RmsH7YQKiqxHg-4H0M74wmdvbOJn0t7R798eLj/w154-h200/Illustration%202%20for%20100823%20Post.jpg" width="154" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: The Conference Board</i></span></td></tr></tbody></table><i><a href="https://www.conference-board.org/publications/AI-Marketing-Communications-survey" target="_blank">AI in Marketing & Communications: Boosting Productivity - and Creativity, Too?</a> </i>by <a href="https://www.conference-board.org/us/" target="_blank">The Conference Board</a> in collaboration with <a href="https://www.ragan.com/" target="_blank">Ragan Communications</a> </div><div><ul style="text-align: left;"><li>An online survey of marketing and communications professionals</li><li>287 respondents</li><li>36% of the respondents were vice president-level or above</li><li>Survey conducted from June 1 to June 23, 2023</li></ul><div>As noted above, this survey included both marketers and communications professionals, and the survey report provides separate response data for those two cohorts in some instances. The survey report also provides separate response data for "senior" respondents (VP-level and above) and "mid-level/junior" respondents (all others).</div></div><div>The survey found that most marketers (68%) are using AI in their daily work. Forty-eight percent of the marketer respondents reported using AI in their daily work <i>sometimes</i>, while another 20% said <i>often</i> or <i>all the time</i>.</div><div>As might be expected, mid-level and junior marketers were more likely to be using AI than senior marketers. Seventy-two percent of mid-level and junior marketers reported using AI in their daily work, while the percentage for senior marketers was 64%.</div><div>Most of the current uses of AI by marketers related to improving productivity, although content personalization was also popular. The five uses of AI most frequently selected by marketer respondents were:</div><div><ul style="text-align: left;"><li>Summarize content - 44%</li><li>Do the legwork/inspire thinking - 41%</li><li>Personalize customer/user content - 33%</li><li>Produce content faster - 30%</li><li>Content research - 30%</li></ul><div>When asked about their biggest challenges and/or concerns related to the use of AI, the four challenges/concerns most frequently selected by marketer respondents were:</div></div><div><ul style="text-align: left;"><li>Lack of accuracy/misinformation - 68%</li><li>Legal uncertainties - 62%</li><li>Data security and privacy - 57%</li><li>Reputational risk/erosion of trust - 49%</li></ul><div>Lastly, the survey found that informal self-education is the dominant way that marketers learn about AI. Marketer respondents said they have learned about how to use AI by:</div></div><div><ul style="text-align: left;"><li>Reading articles and/or watching videos - 81%</li><li>Exploring it on their own time - 76%</li><li>Talking with colleagues, friends, or others with AI knowledge - 73%</li><li>Exploring it during work time - 65%</li></ul><div><br /></div></div><p></p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-25803333928643497912023-10-01T03:54:00.000-05:002023-10-01T03:54:00.203-05:00Where to Find Revenue Growth Opportunities<p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhTdwlwOjzgDq3hXAMlr1xc9CKol2mxPxmgRdIVcUyQ0USPK5DZiwPNENbc0zbngRM1ALhpPJ1vtYGnXEkDVh46qwHlEDSTmQPgUXUGH6FH7bUcMmWw3cyrJCFwnESTD0xI6gaxuxZEa_qnhWNPZZ0WCm7lfaKJ7Z5j7mUq8e76aDM2Amz7bzK9vFjfmj8I/s535/Illustration%20for%20100123%20Post.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="402" data-original-width="535" height="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhTdwlwOjzgDq3hXAMlr1xc9CKol2mxPxmgRdIVcUyQ0USPK5DZiwPNENbc0zbngRM1ALhpPJ1vtYGnXEkDVh46qwHlEDSTmQPgUXUGH6FH7bUcMmWw3cyrJCFwnESTD0xI6gaxuxZEa_qnhWNPZZ0WCm7lfaKJ7Z5j7mUq8e76aDM2Amz7bzK9vFjfmj8I/w400-h300/Illustration%20for%20100123%20Post.jpg" width="400" /></a></div><i>For the past several years, I've written a few posts each fall that address some aspect of marketing planning. With the fourth quarter of 2023 beginning today, many marketers will have started (or soon will be starting) their planning for 2024.</i><p></p><p><i><span><a href="https://b2bmarketingdirections.blogspot.com/2023/09/when-planning-for-2024-focus-on-jobs.html" target="_blank">Last week's post</a></span> discussed how marketers can use the jobs-to-be-done framework to define their market and determine how their products or services create value for customers. This framework helps marketers pinpoint what will motivate their customers to buy.</i></p><p><i>The following post describes a framework marketers can use to identify what sources of revenue growth are (or can be) available to them. Identifying sources of potential revenue growth is an essential part of a sound planning process.</i></p><p><i>I published this post in 2019, but the content of the post is as relevant today as it was four years ago. What follows is a lightly edited version of the original post.</i></p><p style="text-align: center;"><b>The Original Post</b></p><p style="text-align: left;">Driving consistent, profitable revenue growth is one of the greatest challenges that business and marketing leaders face. The key word in that sentence is "consistent." Many companies can produce substantial revenue growth sporadically or over a short period of time, but it's exceptionally difficult to consistently generate above-average growth over the long term.<br /><br />Business and marketing leaders must perform two distinct but related tasks to maximize revenue growth:<br /><br /></p><ol><li>They must identify what growth opportunities are (or can be) available to them and determine which of those growth opportunities are most attractive.</li><li>They must find the right balance between short-term and long-term growth opportunities.</li></ol><div>In this post, I'll focus on how business and marketing leaders can identify growth opportunities.</div><div><b>Structural Sources of Growth</b></div><div>The first step in identifying potential growth opportunities is to understand the dynamics of revenue growth - how it happens or, more accurately, where it originates. There are, in fact, several distinct sources of growth. These structural sources of growth are not dependent on how a company is organized or on the types of products or services it sells. Instead, they are based on the business and marketing strategies that a company uses to tap into each source.</div><div>This topic has been discussed in management and marketing literature for a long time. In a 1957 article for the <i>Harvard Business Review</i>, <a href="https://en.wikipedia.org/wiki/Igor_Ansoff">Igor Ansoff</a> identified four structural sources of growth and four related types of growth strategies:</div><div><ol><li>Sales of <i>existing products in existing markets</i> (market penetration strategy)</li><li>Sales of <i>existing products in new markets</i> (market development strategy)</li><li>Sales of <i>new products in existing markets</i> (product development strategy)</li><li>Sales of <i>new products in new markets</i> (diversification strategy)</li></ol><div>In <a href="https://hbr.org/2004/04/take-command-of-your-growth">a 2004 article in the <i>Harvard Business Review</i></a>, Michael Treacy and Jim Sims identified five structural sources of growth:</div></div><div><ol><li>Continuing sales to existing customers (base retention)</li><li>Sales won from the competition (market share gain)</li><li>New sales in an expanding market (market positioning)</li><li>Sales from expanding into <i>related</i> markets (adjacent market expansion)</li><li>Sales from expanding into new, <i>unrelated</i> lines of business (diversification)</li></ol><div>I've used both of these models when working with clients to frame our discussions about how to grow. But over the years, I've expanded on these models to create a more detailed framework of the alternative ways to generate growth. The current version of my framework is shown in the following diagram.</div></div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHQenNBvQZnSyDv9skEqO0VARSxKVhuZA-YCeqwNBDZeC2mk3_RR4T5s0ZsuN_ZP3zJcpBdzOJI15ooK4HM0uCSvaX7wGwe5TwdMw1N1xiO9jxhoNlmyLWmv_0YTvREH3iesgvMiii1LrLxza2IfJRvJboipi2YbX438FPMYKIorUeR39hOuZnoOfWz0km/s582/Illustration%20for%20080220%20Post.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="360" data-original-width="582" height="248" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHQenNBvQZnSyDv9skEqO0VARSxKVhuZA-YCeqwNBDZeC2mk3_RR4T5s0ZsuN_ZP3zJcpBdzOJI15ooK4HM0uCSvaX7wGwe5TwdMw1N1xiO9jxhoNlmyLWmv_0YTvREH3iesgvMiii1LrLxza2IfJRvJboipi2YbX438FPMYKIorUeR39hOuZnoOfWz0km/w400-h248/Illustration%20for%20080220%20Post.jpg" width="400" /></a></div><br /><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div>This framework is a good tool for stimulating your thinking about how to grow your business and for identifying the growth opportunities that are (or can be) available to your business. When using this framework, it's important to keep several things in mind.</div><div>First, the good news is that these structural sources of growth are always present, at least to some degree. Their existence isn't dependent on the market conditions a company is facing at a particular moment in time. However, the <i>volume</i> of revenue that a company can obtain from each source is greatly influenced by the market and competitive environment. </div><div>So the framework identifies potential sources of revenue growth, but it doesn't tell you about the relative attractiveness of those sources. You'll need to use traditional market and competitive analysis tools and techniques to perform that evaluation.</div><div>Second, no single source of growth is likely to provide all the revenue you need to reach your growth objective.</div><div>And third, each source of growth has distinctive attributes and dynamics. So you'll need a specific strategy and game plan for each source of growth you choose to pursue.</div><div><br /></div><div><b><span style="font-size: large;">*****</span></b></div><div><br /></div><div><i style="background-color: white; color: #333333; font-family: Verdana, Arial, sans-serif; font-size: 13px;">Top image courtesy of<a href="http://www.ccpixs.com/ccimages/3d-growing-revenue-graph/1192/" style="color: #336699;"> ccPixs.com</a> (CC)</i><span face="Verdana, Arial, sans-serif" style="background-color: white; color: #333333; font-size: 13px;">.</span></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div><div><br /></div>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-55818009898308917132023-09-24T05:22:00.000-05:002023-09-24T05:22:36.649-05:00When Planning for 2024, Focus On the Jobs Your Customers Need to Get Done<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjrwV-kPLaixkN981YV4k5YyyIKT-X_Zx_GlPN8BC38Yph0UrKPjI9NK0Jw7ygf-1mbfXNxRxWUgQn7wIkJ-rvDHrFhGPFTFMKNyCumNSgkNW3nW1iGKtmINfkPg2Tu9IKVBaWEq1WUOn4OtbrsEIgi_aIEo94uYpfOQ-MjKW6aT2tWPLs1uPh0aEM18kUu/s800/Illustration%20for%20062622%20Post.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="600" data-original-width="800" height="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjrwV-kPLaixkN981YV4k5YyyIKT-X_Zx_GlPN8BC38Yph0UrKPjI9NK0Jw7ygf-1mbfXNxRxWUgQn7wIkJ-rvDHrFhGPFTFMKNyCumNSgkNW3nW1iGKtmINfkPg2Tu9IKVBaWEq1WUOn4OtbrsEIgi_aIEo94uYpfOQ-MjKW6aT2tWPLs1uPh0aEM18kUu/w400-h300/Illustration%20for%20062622%20Post.jpg" width="400" /></a></div><br /><p>Understanding what will motivate a potential customer to buy your products or services is a critical prerequisite to developing an effective marketing strategy and creating compelling marketing communications. As thousands of marketers will attest, this isn't a simple task.</p><p>As marketers, we develop customer value propositions and we create content we believe will resonate with our potential buyers. But too often, our marketing programs don't produce the results we expect.</p><p>This lackluster performance frequently stems from the methods marketers typically use to define their market(s) and to determine and describe how their products or services will create value for customers.</p><p>Most B2B marketers define their market(s) based on a combination of product/service characteristics and the attributes of their potential customers (company size, industry vertical, etc.). </p><p>So, for example, a marketer might define his or her market in these terms: "We sell manufacturing execution system software to large enterprises that are engaged in both discrete and process manufacturing."</p><p>Then, marketers use these definitions to guide the development of their customer value propositions.</p><p>The problem is, these conventional approaches to defining markets and identifying how products or services create value don't help marketers pinpoint what actually motivates people to buy. Fortunately, there's a proven way to solve this problem.</p><p><b>Understand What Customers Need to Get Done</b></p><p>The starting point for understanding what will motivate your potential customers to buy is to recognize that people don't buy a product or service because they <i>want</i> the product or service itself. In most cases, what they really <i>want</i> is what the product or service will enable them to accomplish. </p><p>For example, most small business owners don't really want a company brochure, or a direct mail campaign, or, for that matter, a website. But, many will invest in these things because they see them as effective tools for increasing sales.</p><p>Theodore Levitt, the legendary professor of marketing at the Harvard Business School, memorably expressed this idea when he often told his students, "People don't want to buy a quarter-inch drill. They want a quarter-inch hole."</p><p>In their 2003 book, <i>The Innovator's Solution</i>, Clayton Christensen and co-author Michael Raynor built on Professor Levitt's thinking to describe what is now widely known as the <i>jobs-to-be-done framework</i> (the "JTBD framework"). In 2005, Christensen and co-authors Scott Cook and Taddy Hall further described the importance and value of the JTBD framework in <a href="https://hbr.org/2005/12/marketing-malpractice-the-cause-and-the-cure" target="_blank">a landmark article</a> published in the <i>Harvard Business Review</i>.</p><p>The basic idea of the JTBD framework is that when people identify a "job" they need or want to get done, they look for a product or service they can "hire" to perform the job.</p><p>Christensen and his co-authors argued that this is how customers "experience life." Their thought process begins with an awareness that they need or want to get something done, and they seek to hire something or someone to do the job for them.</p><p>So, the presence and recognition of a job that needs to get done are what trigger and energize a potential customer's motivation to buy. This makes the job - not product/service features or customer demographics/firmographics - the primary unit of analysis for marketers who hope to develop and execute high-performing marketing strategies and programs.</p><p>In the <i>HBR</i> article, Christensen and his co-authors put it this way:</p><p><i>"The marketer's task is therefore to understand what jobs periodically arise in customers' lives for which they might hire products the company could make. If the marketer can understand the job, design a product and associated experiences in purchase and use to do that job, and deliver it in a way that reinforces its intended use, then when customers find themselves needing to get that job done, they will hire that product."</i></p><p>I've <a href="https://b2bmarketingdirections.blogspot.com/2019/11/why-your-marketing-content-should-be.html" target="_blank">previously written</a> about how the JTBD framework can be used to guide the development of marketing content. The point of this post is that the framework can also be a powerful tool for thinking about market definition, market segmentation, and value proposition development during your marketing planning process.</p><p>So, as you begin planning for 2024, take enough time to identify the jobs your potential customers are facing that your products or services can perform. This is the real key to understanding what will motivate your potential customers to buy.</p><p><i>Image courtesy of Got Credit (<a href="http://www.gotcredit.com">www.gotcredit.com</a>) via <a href="https://www.flickr.com/photos/gotcredit/46125487874/in/photolist-2dgXbyj-D2zujL-9vqPm5-7TJtH3-5ueqxH-azEp2e-7TepfV-78Xu4F-aM3p8F-nbAv6C-S9sSgL-fQ4KFy-fPMaCM-fPM7tc-fPMcGc-fPM4ar-fQ4Hyy-fQ4FU9-fPMbYV-fPMf6D-fQ4MCq-RQrpy1-7fsvRZ-6sHDR5-fQ4EdY-fQ4P3G-fPM6QR-fQ4Fdm-fQ4B39-fPMhHB-fQ4Ccm-fPM5kK-fPMg1z-fPMecK-9uosBc-9urxGC-9uosya-9uru2E-fPMjBV-Sv1odg-9vqP2d-SsjdbA-dxkhc-9AZHDo-9AWRyX-9AZLpf-fPMiE6-Sv1GdV-2cgAb91-Txoask" target="_blank">Flickr</a> (CC)</i></p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0tag:blogger.com,1999:blog-2390929160282748742.post-83504310507779004662023-09-17T03:42:00.000-05:002023-09-17T03:42:11.118-05:00[Book Review] A First-Rate Guide to the Power of Choice Architecture<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjGWBuFnmRAj5o38Z8ZoxoJTblwPtODRYudJefUt99_j7rbrTTyYNLxeSnSHYjLgUVvCSs9tGZLzmomJqqsSZq0OPWnLkitEmca8qgkkfAtyeUg1S5H12IO7xFb-yAPaREfdmx_Su796eQUv-31W-J5djuhha_gir0U6XPgnvggnIYlgNGsoq-MUREYdLjK/s450/Illustration%20for%20091723%20Post.jpg" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="450" data-original-width="300" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjGWBuFnmRAj5o38Z8ZoxoJTblwPtODRYudJefUt99_j7rbrTTyYNLxeSnSHYjLgUVvCSs9tGZLzmomJqqsSZq0OPWnLkitEmca8qgkkfAtyeUg1S5H12IO7xFb-yAPaREfdmx_Su796eQUv-31W-J5djuhha_gir0U6XPgnvggnIYlgNGsoq-MUREYdLjK/w213-h320/Illustration%20for%20091723%20Post.jpg" width="213" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Source: Penguin Random House LLC</i></span></td></tr></tbody></table><p>Over the past several decades, psychologists and other behavioral scientists have conducted thousands of research studies examining various aspects of human decision-making. Thanks to this research, we now know that people use a variety of mental shortcuts known as heuristics to make decisions.</p><p>Research has also found that our decisions and actions are greatly influenced by how choices and options are presented. This particular aspect of decision science is called choice architecture, a term that was coined by Richard Thaler and Cass Sunstein in their 2008 best-selling book <i>Nudge</i>.</p><p>The principles of choice architecture and the practice of "nudging" have been implemented in many business, non-profit, and governmental settings, but choice architecture is still not understood as well as it needs to be. That makes a recent book by Eric J. Johnson an important read for marketers.</p><p><i><a href="https://www.penguinrandomhouse.com/books/610230/the-elements-of-choice-by-eric-j-johnson/" target="_blank">The Elements of Choice: Why the Way We Decide Matters</a></i> (Riverhead Books, an imprint of Penguin Random House LLC, 2021) explains the psychological principles that underlie choice architecture and describes the tools that choice architects can use to influence our decisions and actions. </p><p>Eric Johnson is a recognized authority on human decision-making. He is the Norman Eig Professor of Business and the director of the Center for Decision Sciences at the Columbia Business School. He previously taught at Carnegie Mellon, the Sloan School of Management, and the University of Pennsylvania. According to the Institute for Scientific Information, Johnson is one of the most highly cited scholars in Business and Economics.</p><p><b>What's In the Book</b></p><p><i>The Elements of Choice</i> contains ten chapters. In the opening chapter, Johnson introduces the major topics he addresses in the balance of the book, and he briefly discusses his professional journey in human decision-making.</p><p>In Chapter 1, Johnson also describes his objective for the book and the perspective he will use throughout the book. He writes: <i>"This book goes well beyond the simple idea that defaults and other choice-architecture tools can nudge people into desired behaviors. It's much more important to understand <b>how</b> choice architecture changes choices." </i>(Emphasis in original)</p><p>One of Johnson's main points in <i>The Elements of Choice</i> is that choice architecture largely works by influencing a decision maker's <i>plausible path</i> and <i>assembled preferences</i>. He discusses plausible paths (the strategy a decision-maker chooses to use to make a decision) in Chapter 2, and he covers assembled preferences (the memories that most easily come to mind when we're faced with a decision) in Chapter 3.</p><p>In Chapters 5-9, Johnson covers the major tools and techniques of choice architecture.</p><p></p><ul style="text-align: left;"><li>How to use defaults (Chapter 5)</li><li>How to decide how many options to offer (Chapter 6)</li><li>How to decide what order to use when presenting options (Chapter 7)</li><li>How to describe options (Chapter 8)</li><li>How to design and build online choice engines (Chapter 9)</li></ul><div>In the final chapter, Johnson discusses some of the ethical issues surrounding the use of choice architecture and offers some ideas about how marketers, other business leaders, and policymakers can be responsible choice architects.</div><div><b>My Take</b></div><div><i>The Elements of Choice</i> is an important addition to the growing body of literature about the use of behavioral science principles in marketing.</div><div>The book is clearly written and easy to read, although Johnson does tend to ramble a bit at times. He includes several useful anecdotes and examples in the book, but some are longer than necessary.</div><div>The content of the book is supported by extensive scientific research. Johnson includes over 170 detailed endnotes and provides a 25-page bibliography of resources that interested readers can consult.</div><div><i>The Elements of Choice</i> is a valuable resource for marketers because it advances our understanding of choice architecture in two important ways. First, Johnson discusses numerous research studies that have demonstrated the power of choice architecture tools and techniques. This discussion reinforces the importance of choice architecture in the marketing toolbox.</div><div>Equally important, Johnson does an admirable job of explaining <i>why</i> choice architecture works. Unfortunately, many resources about choice architecture - and the related concept of "nudging" - describe the tools, but don't address why the tools are effective.</div><div>Johnson fully appreciates the importance of understanding "why" and "how" choice architecture works. He writes: <i>"Without understanding the processes underlying choice architecture, we can't be responsible designers </i>[his term for choice architects]<i>. Knowing how choice architecture works will allow us to invent new and more effective tools."</i></div><div>Marketers present choices in almost every communication they create for their potential buyers. Therefore, whether they realize it or not, marketers regularly function as choice architects. <i>The Elements of Choice</i> provides insights that can enable marketers to design and present these choices in ways that will improve marketing performance.</div><p></p>G. David Doddhttp://www.blogger.com/profile/09073614864749043762noreply@blogger.com0