Sunday, December 4, 2022

4 Questions You Should Ask Before You "Go All In" on Personalization


It's almost an article of faith among marketers that delivering personalized content and experiences to customers and potential buyers will improve business results. The value of personalization has gone largely unquestioned for nearly two decades. Most marketers now view personalization as essential for success, and many companies are on a mission to improve their personalization capabilities.

This strong belief in the power of personalization is easy to understand. There are now dozens of surveys showing that most consumers and business buyers want and expect to receive messages, offers and other content that are personalized based on their wants and needs.

But while support for personalization in marketing is widespread, it isn't unanimous. Earlier this year, Peter Weinberg and Jon Lombardo wrote an article for Marketing Week calling personalization "the worst idea in the marketing industry."

Weinberg and Lombardo base their case against personalization on two points. First, they argue that it's impossible to consistently produce effective personalization because the data used to fuel personalization is often inaccurate. They are particularly critical of third-party data, writing that, "Most third-party data is, to put it politely, garbage."

The second argument against personalization is that it wouldn't work even if marketers had accurate data about every customer and potential buyer. Weinberg and Lombardo write, "Arguably, there has never been a successful piece of personalized creative in human history. The biggest movies, books, songs and ads all speak to universal experiences that resonate with everyone, everywhere."

According to Weinberg and Lombardo, marketers would be better served by investing in performance branding, which the authors define as using "one-size-fits-most" marketing content that "speaks to the common category needs of all potential buyers, all the time."

The Four Critical Questions

In my view, Weinberg and Lombardo go way too far when they assert that personalization is "the worst idea in the marketing industry." The research clearly shows that when personalization is used under the right circumstances and in the right ways, it will boost marketing performance. But as with most business tools, the key to being successful with personalization is understanding when and how to use it.

The first important thing to recognize is that personalization isn't a single, monolithic marketing technique. It's a term that encompasses a wide variety of use cases that differ in significant ways. They have different business objectives and different data requirements, and they can demand different human and technological capabilities. Therefore, you need to assess each potential use of personalization as a discrete marketing project.

When you're evaluating any potential use of personalization, there are four critical questions you need to answer.

"Do we have enough accurate data to successfully implement this use of personalization?"

No proposed use of personalization will be successful if you don't have relevant and accurate data. Unfortunately, personalization efforts often miss their mark because of inadequate or inaccurate data. In a survey of U.S. consumers conducted earlier this year for Redpoint Global, 70% of the respondents reported receiving mistargeted information at least once a month, and 24% said they receive mistargeted information daily.

Each proposed use of personalization will also require specific types of data. For example, offering a research report to potential buyers working in a set of selected industries will require different data from making a product recommendation based on an existing customer's previous purchases.

So, this is really a two-part question:  "Do we have the right types of data to execute this proposed use of personalization, and is the data accurate and reliable?"

"Will this use of personalization provide a meaningful benefit to members of our intended audience?"

Research by Gartner has shown that personalization works best when it provides meaningful, pragmatic value to the intended audience. The most effective uses of personalization will be those that help members of the intended audience solve important problems, or address important issues, or get more value from a product they've already purchased. Personalization can also be effective if it makes it easier for a customer to do business with your company.

The important point here is that when you're evaluating a prospective use of personalization, you need to put yourself in the shoes of your audience and ask, "How will this help me?"

"Is this use of personalization appropriate based on the relationships between our company and members of our intended audience?"

No one likes "creepy" personalization, and today's consumers and business buyers will react strongly to personalization that goes too far. In the Gartner research mentioned above, 38% of the survey respondents said they would stop doing business with a company that sent them creepy personalized messages.

The lesson here is that the level of personalization you use needs to match the real-world status of the relationship between your company and each member of the intended audience. To be effective, personalized marketing must be based on genuine insights about your audience. When you take personalization beyond such insights, it becomes inauthentic and will likely be perceived as superficial, presumptuous or creepy.

"Do we have informed permission from the members of our intended audience for this use of personalization?"

Numerous research studies have shown that marketers are facing a Catch-22 when it comes to the use of personalization. On one hand, the research shows that most consumers and business buyers want and expect personalized messages and experiences. The research also shows, however, that many consumers and business buyers aren't comfortable with how companies are collecting, accumulating and using their personal or business information.

Personalized marketing will not reach its full potential unless marketers use an approach to personalization that addresses these privacy concerns. If the huge volume of personalization research tells us anything, it tells us that consumers and business buyers will welcome and value personalized content and experiences when they are helpful, authentic and based on permission that is willingly and consciously given.

So how can you gain this kind of informed permission? There are three key steps.

Use personalization "programs" - In most cases, personalization should be organized into discrete programs, each of which is designed to provide a specific type of value to a specific type of customer or prospect. This approach will help you to focus on the purpose of personalized marketing from the perspective of your intended audience.

Ask for participation - Invite the members of your intended audience to "subscribe" to personalized content on a program-by program basis, and reassure them that subscribing to one program won't open the floodgates to other marketing communications.

Be Transparent - It's important to be radically transparent in your invitation about the details of the personalization program. So, the invitation should include:

  • Why the program will be useful and valuable for the recipient
  • What personal information will be used, and how the information will be used
  • How the personalized content will be delivered (format)
  • How frequently the personalized content will be delivered
  • How long the program will last
  • A clear statement that the recipient can "unsubscribe" at any time
It's About When and How - Not Whether - To Personalize
The issue for marketers is not whether to personalize marketing content and experiences. The evidence is clear that customers and prospects want and appreciate the increased relevance that personalization can provide. The real challenges are about how to deliver personalization. By making personalization helpful, authentic and based on informed permission, you can reap the maximum benefits of personalized marketing.

Top image courtesy of Jernej Furman via Flickr (CC).


Sunday, November 27, 2022

[Book Review] Ann Handley's Not-To-Be-Missed Guide to Better Marketing Writing

Source:  John Wiley & Sons, Inc.

Ann Handley's new book, Everybody Writes:  Your New and Improved Go-To Guide to Creating Ridiculously Good Content (John Wiley & Sons, Inc., 2022), was released last month, just in time for astute marketers to add it to their wish list for the upcoming holidays.

Even better, you should just go ahead and buy Everybody Writes for yourself and use the holiday season to read and digest the many valuable insights the book contains. That way, you can start applying Ann's principles to improve your writing at the beginning of the new year.

Ann Handley is well known and highly respected in the marketing community. She is the Chief Content Officer at MarketingProfs, a marketing training and education company, and a frequent speaker at marketing industry events. In short, Ann knows whereof she speaks (and writes).

Everybody Writes is a second edition; the first edition was published in 2014. But the new Everybody Writes is, well, new in many ways. Ann Handley says she went into preparing the updated edition thinking that it would take "maybe 10 minutes," that she would, "Run the vacuum and puff the throw pillows and spritz some Febreze around the pages . . ."

Instead, the update took six months, and Ann says she "also built an addition on the back. Replaced the draftiest windows. Installed a bouncy house in the yard . . ."

Early in the book, Ann makes two points that provide the rationale for Everybody Writes. First, she argues that effective marketing requires good marketing content, and good marketing content requires good writing - regardless of the format the marketing content takes.

The proliferation of marketing channels and content formats, and the nearly ubiquitous embrace of content marketing have put extreme pressures on marketers to feed the content beast. Unfortunately, this incessant demand for content often results in the production of content that isn't very good.

Ann describes this problem in unambiguous terms:  "We are a planet of publishers, yet many of us are polluting the pool with content rubbish. We are all creators, yet many of us are squandering the opportunity we have to communicate directly with those we care most about reaching."

Ann's second point is that writing is a craft that can be learned. Therefore, any marketer can improve his or her writing skills by "working the right muscles." She writes, "You can learn to be a better writer - the same way you can learn algebra or Excel formulas or playing the ukulele. You need only a little knowledge, a lot of consistent effort, and good habits."

What's In the Book

Everybody Writes contains an introduction, 91 chapters and a section devoted to content tools. You read that right . . . 91 chapters. Ann chose to share her advice with readers in bite-sized portions. The shortest chapters don't fill even one full page, and most are only two to four pages long.

This approach makes Everybody Writes extremely reader-friendly. You can read the book in small increments without losing your way.

Ann organized the 91 tapas-sized chapters in six thematic parts.

  • Part I contains Ann's rules for how to write better and "hate writing less."
  • Part II discusses some basic rules of grammar and usage.
  • Part III focuses on the importance and use of brand voice.
  • Part IV digs into the importance and value of brand stories.
  • Part V spells out Ann's rules for effective and ethical publishing.
  • Part VI contains Ann's suggestions for how to create 20 common types of marketing content.
Part VII of the book contains descriptions of several content tools that can help marketing writers produce better work more efficiently.
You can use Amazon's "Look inside" function to view the complete table of contents of Everybody Writes.
My Favorite Parts
It should be evident by now that I'm a big fan of Everybody Writes. With this book, Ann Handley has created a resource that can help any marketer become a better writer. In addition, the book is easy to read, and Ann's effervescent personality shows in every page.
Everybody Writes is packed with valuable insights and suggestions from cover to cover, but two specific parts of the book stand out for me.
Chapter 7 describes the Writing GPS, a 17-step process that Ann recommends marketers use when creating "longer" content pieces. As the name suggests, Ann says you should view your writing process as a kind of global positioning system that will get you where you need to go.
Ann explains that seven of the steps in the Writing GPS framework are the "required minimum" for writing content. These are steps that most content writers already use in some form. The other ten steps "add magic and adventure to a basic journey." She writes, "We need a framework that goes beyond the basics so that you can see where a little extra effort or attention can make the magic happen."
My other favorite part of Everybody Writes is the description of "content tools" that Ann provides at the end of the book. These tools include writing tools, editing tools and word finders among others. I was already familiar with some of these tools, but several were entirely new to me. I've already experimented with some of these new-to-me tools, and I can tell they will be extremely useful.
A Final Word
When I'm creating the early drafts of any significant piece of content, I prefer to write by hand in a comfortable chair with a dictionary, a thesaurus and a copy of The Elements of Style within easy reach. From now on, I'm adding Everybody Writes to my small library of arms-length writing aids.

Sunday, November 20, 2022

An Extra "Pinch" of Human Effort Will Boost Demand Gen Results


Powerful marketing technologies enable B2B marketers to automate many communications with customers and prospects. But a "pinch" of additional human effort applied at the right time and place can boost demand generation results just like a tablespoon of bourbon elevates the taste of a Thanksgiving pecan pie.

There's no longer any doubt that technology has reshaped the practice of B2B marketing. Over the past two decades, the number of marketing technology tools has grown at an astounding rate, as Scott Brinker's annual marketing technology landscape graphics have clearly documented.

The capabilities of marketing technologies have also dramatically improved. With today's technology tools, B2B marketers can deliver marketing messages in a wide variety of formats, manage messaging in multiple communication channels, and automate many of their interactions with customers and prospects.

But despite the impressive capabilities of today's marketing technology applications, there are several "inflection points" in your relationship with a customer or prospect where hands-on human involvement can have a big impact on results. These inflection points are moments in your relationship with a customer or prospect when there is a ripe opportunity to move the relationship to a higher level.

One of these inflection points is when you are seeking to have the first person-to-person conversation with a potential buyer. Numerous studies have shown that many business buyers prefer to conduct early-stage research and information gathering on their own, and to delay conversations with vendor reps until later in their decision-making process. Overcoming this reluctance is challenging, but a relatively small dose of human involvement will increase your odds of success.

To illustrate how easy it can be to add a dash of human involvement, consider this example.

Below is the text of an email I recently received from a business development representative with a sales technology company. I received this message after I attended one of the company's webinars. I've altered the message to conceal the real names of the company and the BDR.

"David,

Thanks for attending our webinar with Jones & Company, 'The Secret Sauce for a High-Performing Sales Organization.'

Hopefully, you enjoyed the webinar - John and Joe had some great insights on . . .

  • The current state and challenges of sales enablement in the age of the modern business buyer
  • Why a buyer-centric sales enablement approach is vital for an organization's revenue growth
  • How the right software can accelerate sales enablement efforts and help win more deals
Would love to get your feedback from the webinar.
Are you available this Friday for a quick 15 minute chat?
Best,
Roger Smith"
I suspect the company used its marketing automation software to send this email to everyone who attended the webinar.
This isn't a bad follow-up message. It's concise and not overly promotional. But it didn't convince me to reply and schedule a telephone conversation. (Note:  The webinar itself was quite good. I didn't decide not to schedule the call because of a bad webinar experience.)
What Roger failed to do in this message is show me that he know some basic things about me and my business and suggest why a telephone conversation could be worthwhile.
If Roger had spent two or three minutes scanning my LinkedIn profile, he would have been able to get a basic understanding of what I do. My profile also contains links to the 188 articles I've published at LinkedIn. If Roger had spent another five minutes scanning the titles of those articles, he could have obtained a pretty good understanding of my professional focus.

With this information, Roger could have easily added a short paragraph to the email that would have made me more inclined to schedule a telephone conversation. Something like this immediately after the bullet points:

"I see from your LinkedIn profile that you work with B2B companies to develop marketing strategies and marketing content. I also noticed that you've written several articles about improving marketing and sales productivity. I'd like to get your thoughts about the role that sales enablement technology plays in improving sales productivity."

This approach would have demonstrated that Roger had made an effort to get to know me and my business, and the suggested topic of the telephone conversation fits with my work.

Some readers may be thinking:  "There's no way we can have our business development reps spend even this much time on every prospect." That's not what I'm recommending. This approach should be reserved for prospects whose engagement with your company suggests that they may be ready to move the relationship to a higher level.

Such as prospects who have registered for and attended a webinar.

The important point here is that a small investment in hands-on human involvement, when strategically used, can produce a significant impact on demand generation results.

Image courtesy of Thomas Brueckner via Flickr (CC).

Sunday, November 13, 2022

Why You Need More Than One Go-To-Market Strategy


The stereotypical view we have of B2B commerce is that it involves expensive and/or complex products or services, large buying groups and long buying cycles. But in reality, most B2B companies earn substantial revenue and profit from other types of sales. So, unless your company is an outlier, you need more than one go-to-market strategy in order to maximize revenue growth.

For nearly two decades, most of the research and other published content about B2B marketing has focused on "high consideration" purchases that involve multiple decision makers, complex decision-making processes and lengthy buying cycles.

For example, in the 2022 B2B Buyer Behavior Survey by Demand Gen Report:

  • Fifty-nine percent of the respondents said their average buying group consists of four or more people, and 23% said it consists of seven or more people.
  • More than half (55%) of the respondents said the length of their buying cycle has increased somewhat or increased significantly compared to the previous year.
In an earlier survey of sellers by Forrester, 94% of the respondents said they sell to buying groups of three or more people, and 38% said they sell to groups of ten or more people.
The reality is, high consideration purchases with large buying groups and long buying cycles don't represent all (or even most) B2B commerce. Many B2B purchases are routine, with buying decisions being made fairly quickly. In a 2021 survey of "industrial buyers" by Thomas, more than half (53%) of the respondents said they typically make buying decisions in less than a month.
While we don't have much current data about the distribution of B2B purchases across various types of buying scenarios, it's likely that substantial dollars are associated with scenarios that don't fit the high consideration stereotype.
The important point here is that many B2B companies derive significant revenue from more than one buying scenario. It's equally important to recognize that different buying scenarios require different go-to-market strategies to produce maximum success. Therefore, identifying the buying scenarios that are relevant for your company should be an integral part of your go-to-market planning.
The Buying Context Dictates the Buying Process
The characteristics of a B2B buying process are largely determined by the context in which a potential purchase is considered, and the dominant factor in the buying decision context is usually how much risk the potential buyers perceive is associated with the prospective purchase. The following diagram illustrates this relationship.


















The top box in the diagram contains several factors that define the context in which a potential purchase will be evaluated. The common denominator across all these factors is that they will capture the level of risk the buyers associate with the prospective purchase.
For example, buyers will perceive a higher level of risk if they aren't familiar with a product or service, or if the acquisition and implementation of the product or service will require major internal changes.
The bottom box in 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.
As the perceived risk associated with a purchase increases, buyers will take steps to mitigate that risk, and those steps largely dictate the attributes of the buying process that's used. As a result, the buying process used for an expensive and/or complex product or service, or for a purchase that will require major internal changes will usually involve several decision makers, include substantial research activities, and require a significant amount of time to finish.
In contrast, when a potential purchase has a low level of perceived risk, buyers will typically use a decision-making process that involves fewer people and less research, and they will make the buying decision faster.
Buying Scenarios That Don't Fit the Stereotype Now Matter More
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.
Online B2B marketplaces have become the fastest growing segment of a rapidly growing B2B e-commerce market. In 2021, B2B marketplace sales grew 7.3 times faster than overall B2B e-commerce sales.
Research has also shown that marketplaces and other e-commerce channels are no longer just for low-ticket purchases. In a 2021 survey by McKinsey, over three-fourths (77%) 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 over one-third (35%) are willing to spend $500,000 or more.
The bottom line is, you need a go-to-market strategy for all of the buying scenarios that can potentially produce significant revenue for your company.

Top image courtesy of Willi Heidelbach via Flickr (CC).


Sunday, November 6, 2022

[Research Round-Up] An Updated Look at B2B Content Marketing by CMI and MarketingProfs

Source:  Content Marketing Institute and MarketingProfs

(This month's Research Round-Up reviews some of the major findings from the latest content marketing survey by the Content Marketing Institute and MarketingProfs. This research has been conducted annually for 13 years, and it provides valuable perspectives on B2B content marketing trends and practices.)

The Content Marketing Institute and MarketingProfs published the findings of their latest B2B content marketing survey a couple of weeks ago. The B2B Content Marketing Benchmarks, Budgets, and Trends:  Insights for 2023 report is based on data from 925 survey respondents. All respondents were affiliated with B2B or hybrid B2B/B2C companies, and all were involved in the content marketing efforts of their organization.

Respondents were drawn from a range of industries, company sizes and job roles.* Half of the respondents were concentrated in two industries - technology/IT/software/hardware and agencies (content marketing, advertising, digital, PR, etc.). In terms of company size, nearly half (47%) of the respondents were with companies having fewer than 100 employees. The survey was in the field during July 2022.

Here are some of the important findings from the new survey.

The Growing Importance of Content Marketing

The COVID-19 pandemic drove a step-change in the importance of content marketing at virtually all B2B companies. Throughout most of 2020 and 2021, in-person B2B marketing events were almost nonexistent, and business shutdowns and work from home policies made it impossible for companies to meet face to face with their customers and prospects.

As the pandemic has ebbed, it appears that the importance of content marketing has actually increased. Seventy-one percent of the respondents in the CMI/MarketingProfs survey said content marketing had become more important to their organization over the year preceding the survey.

A High Level of Success with Content Marketing Remains Elusive

Many marketers are still finding it difficult to achieve a high level of success with content marketing. Only 29% of the survey respondents said their content marketing efforts are extremely or very successful. Another 56% rated their content marketing efforts as moderately successful.

Marketers are Optimistic About Future Spending

Half of the respondents in the survey expect their content marketing budget to increase next year, and another 38% expect it to stay the same as in 2022. Fourteen percent expect their budget next year to increase by more than 9%, and 36% expect an increase of 1% to 9%.

These results echo the findings of the September 2022 edition of The CMO Survey. In that research, respondents said they expect their marketing budget to increase 8.8% (on average) over the 12 months following the survey.

Recent actions by the U.S. Federal Reserve to tighten monetary policy in an effort to combat decades-high inflation have triggered rising fears that the U.S. economy will fall into a recession later this year or in 2023. Under these circumstances, marketers' expectations for increased budgets next year may be overly optimistic.

Maximizing the Benefits of Marketing Technology is Challenging

Having and using the right technology tools has become vital for effective content marketing, but the CMI/MarketingProfs survey revealed that most marketers have more work to do to maximize the potential benefits of marketing technologies.

Only 28% of the survey respondents said they have the right technology tools in place to effectively manage content marketing in their organization. Thirty percent of the respondents said they haven't acquired the right technology tools, and another 31% said they have the right technology but aren't using it to its full potential.

Recent research by Gartner produced similar results. In Gartner's 2022 Marketing Technology Survey, respondents reported that they are utilizing only 42% of the capabilities of their overall marketing technology "stack." This was down from 58% in the 2020 edition of the survey.

The CMI/MarketingProfs survey report argues that many B2B companies don't have the right marketing technologies - or aren't fully using what they have - because they built their tech stacks without first developing a sound strategy. There's little doubt that this has happened numerous times.

But marketers may also be underutilizing their technology tools because they are changing tools frequently and thus are often in the process of learning new technology applications. In the Martech Replacement Survey 2021 by MarTech, two-thirds (67%) of the survey respondents said they had replaced a marketing technology application in the year preceding the survey.

Most Companies are Measuring Content Performance, but Challenges Still Exist

Eighty-one percent of the respondents in the CMI/MarketingProfs survey said their company measures content performance. That was up from 75% in the 2021 edition of the survey. When asked what metrics they rely on most when evaluating content performance, the top three metrics identified were:

  1. Conversions (70% of respondents)
  2. Quality of leads (60%)
  3. Website engagement (57%)
The survey also asked participants about the challenges they face with measuring content performance. Four challenges were most frequently identified by survey respondents:
  1. Difficulty integrating/correlating data across multiple platforms (48% of respondents)
  2. Lack of organizational goal-setting KPIs to measure against (45%)
  3. Difficulty tying performance back to our goals (43%)
  4. Difficulty extracting insights from data (42%)
***
The annual research by CMI and MarketingProfs has provided valuable insights regarding content marketing trends and practices for the past 13 years. I recommend that you take the time to review the full survey report.

*CMI and MarketingProfs do not state that this survey is based on a representative sample of a specified target population (e.g. "B2B content marketers"). Therefore, the survey results may not reflect the views or practices of the overall population. In other words, the survey results can't be "projected" to the larger population.

Sunday, October 30, 2022

Why a Cautious Approach to Marketing Analytics Makes Sense

Fueled by the exponential growth of online communications and commerce, marketers now have access to an immense amount of data regarding customers and potential buyers. Marketers have recognized that this vast sea of data can be a rich source of insights they can use to improve marketing performance and drive business growth.

The use of data in marketing has a long history, but it's been one of the hottest topics in marketing circles for the past several years. The benefits of "data-driven marketing" have been touted so frequently by so many industry analysts, consultants and technology providers that leveraging data is now viewed as essential for effective marketing. As a result, many marketers have made substantial investments in data collection and analytics capabilities.

The Real-World Use of Marketing Analytics

Despite the abundance of data and the increasing power and sophistication of data-related technologies, the actual use of data analytics in marketing isn't as pervasive as all the hype would suggest. In the September 2022 edition of The CMO Survey, respondents reported that marketing analytics is used in 48.9% of projects 

A survey of marketing analytics users conducted by Gartner earlier this year produced similar findings. In that research, respondents said marketing analytics influences just over half (53%) of marketing decisions.

When Gartner asked survey participants why analytics isn't used to support more marketing decisions, the two most frequently cited reasons related to data quality and management - "data are inconsistent across sources" and "data are difficult to access."

However, Gartner's survey also found that the practices of business decision makers are impacting the use of marketing analytics. For example, a third of the respondents said decision makers tend to use the output of analytics when it supports the action they've already decided to take and to ignore such output when it points to a contrary action. Hello, confirmation bias!

In addition, about a fourth of the survey respondents said decision makers don't review the information provided by marketing analytics, reject the recommendations provided by marketing analytics, or decide to rely on gut instincts to make their decisions.

Satisfaction With Marketing Analytics is Mixed

Research has also found that satisfaction with the impact of marketing analytics is mixed. For example, the September edition of The CMO Survey asked participants to rate the contribution of marketing analytics to company performance using a 7-point scale, where 1 = "Not at all" and 7 = "Very highly." 

Fifty-eight percent of the survey respondents rated the contribution of marketing analytics at 5 or above, indicating a relatively high level of satisfaction with the impact of analytics.

But in earlier research by Gartner, 54% of the surveyed senior marketing leaders - CMOs and VPs of marketing - said marketing analytics had not produced the impact on their organization they had expected.

Some industry analysts have suggested that underutilization and the perceived lack of business impact may cause some company leaders to reduce their investment in analytics capabilities. 

Commenting on the findings of Gartner's 2022 survey, Joseph Enever, a Senior Research Director in the Gartner marketing practice, said, "By 2023, Gartner expects 60% of CMOs will slash the size of their marketing analytics department in half because of failed promised improvements."

A Cautious Approach to Analytics May Be Wise

But is it altogether bad for marketing leaders to approach the use of marketing analytics with a healthy amount of caution? I don't think so, and here's why.

Marketing analytics can fail to deliver the expected benefits for several reasons. First, the hype surrounding the use of data and analytics in marketing has raised the expectations marketers and other business leaders to inflated levels. And second, marketers are still learning how to generate insights from data and analytics that will make meaningful contributions to business performance.

It's also becoming clear that the data most marketers are relying on, and how they are using that data, can produce "blind spots" that lead to less-than-expected results. An October 2020 article in the Journal of Marketing identified four of these potential blind spots.

  1. "First, marketing data may result in prioritizing short-term growth ahead of long-term growth."
  2. "Second, marketers may overly rely on historical, internal data at the expense of forward-looking, external growth opportunities."
  3. "Third, marketing data may create a preference for more easily measured digital touchpoints at the expense of offline channels."
  4. "Finally, marketers may rely on available data in lieu of representative or predictive data."
(Emphasis in original)
The fourth blind spot cited in the Journal of Marketing article alludes to a broader issue relating to the use of marketing analytics and also points to an important limitation of data-driven marketing.
As I noted earlier, marketers now have access to a huge amount of data regarding their customers and potential buyers. But the data most marketers are using to fuel analytics, while vast, is not comprehensive. It doesn't provide a complete picture of the wants, needs or mindset of a potential buyer. Therefore, the recommendations produced by analytics are not always as accurate as we often assume, and this partially explains why analytics doesn't always deliver the expected results.
Given this limitation, business leaders (including marketing leaders) should view the outputs of marketing analytics with a critical eye and not become overconfident in the accuracy of those outputs or the business impact they will produce.
Like all humans, we marketers have a strong tendency to base our decisions on the evidence that's readily available, and we tend to ignore the issue of what evidence may be missing. Daniel Kahneman, winner of the 2002 Nobel Prize in Economic Sciences, has a great way to describe this powerful human tendency. He uses the acronym WYSIATI, which stands for what you see is all there is
The vast amount of data at our fingertips and the seductive capabilities of marketing analytics technologies can easily lead us to believe that the data we collect and analyze is the only thing that matters, and that simply isn't true.
I'm not arguing that marketers should not use data, analytics and data-driven marketing. These tools and techniques can be immensely powerful. The key is to use them wisely and to remember they're neither complete nor perfect.

Image courtesy of Rick B via Flickr (Public Domain).

Sunday, October 23, 2022

Having a Plan Does NOT Mean You Have a Strategy


With the fourth quarter of the year now underway, many business and marketing leaders have already begun their planning for 2023. Over the next few weeks, they will be evaluating how well their business performed in 2022 and looking for ways to improve performance next year.

This annual ritual is usually called strategic planning, and the output of the process - in larger companies at least - is often a lengthy document that  describes what company leaders hope to accomplish in the coming year and what actions they intend to take. Most strategic plans also include a detailed description of where the company will invest in new or existing assets and capabilities.

In fact, the annual planning process is often dominated by budgeting issues. Roger Martin, the well-regarded strategy guru, has this to say about the predominant emphasis on budgeting:  "The vast majority of strategic plans that I have seen over 30 years of working in the strategy realm are simply budgets with lots of explanatory words attached."

The problem is, many business and marketing leaders confuse strategy with planning. They assume that the development of a business or marketing plan is equivalent to the formulation of a business or marketing strategy.

But in reality, formulating strategy and developing plans are fundamentally different tasks. They require leaders to address different issues, and more importantly, they demand different types of thinking.

Most Plans Have Three Components

In the course of my career, I've reviewed dozens of business and marketing plans, and I've found that most have three major components.

Goals/Objectives - Most business and marketing plans contain a set of goals and objectives that leaders hope to achieve in the coming year (or other planning period). Most of these goals and objectives are expressed in quantitative terms (increase revenue by X%, increase market share by X percentage points, etc.).

Initiatives - The second major component is a description of the initiatives that company leaders intend to implement (or continue) in pursuit of their identified goals and objectives. This is usually the longest part of a business or marketing plan. For example, a marketing plan for a B2B company will usually address several initiatives, such as:

  • What marketing campaigns or programs will be run
  • What marketing channels will be used
  • What events (trade shows, etc.) will be attended or conducted
  • What technology tools will be acquired, updated or replaced
Budgets - The third element of most business and marketing plans is a revenue projection and budget. As I indicated earlier, the annual planning process is often dominated by budgeting issues, so this part of the plan usually receives the greatest scrutiny from company leaders.
What Makes Strategy Different
The formulation of a business or marketing strategy requires leaders to address a very different set of issues from those covered in a typical planning process.
Strategy has been described in a variety of ways over the years. In Playing to Win:  How Strategy Really Works, A.G. Lafley and Roger Martin proposed a five-part framework that captures the essence of strategy very well. Lafley and Martin say that strategy consists of an integrated set of choices that answer five fundamental questions.
  1. What is our winning aspiration? (What does success look like?)
  2. Where will we play? (In which markets, with which types of customers, in what channels, in which product categories, and at which vertical stage or stages of the industry will we compete?)
  3. How will we win? (What will enable us "to create unique value and sustainably deliver that value to customers in a way that is distinct from [our] competitors?")
  4. What capabilities do we need to have in place in order to win in our chosen field of play?
  5. What management systems do we need to institute in order to create, review, communicate about, and manage our strategy?
While all of these questions are important, questions 2 and 3 ("Where will we play" and "How will we win?") are the two that are most crucial for developing an effective strategy. Lafley and Martin wrote, "These two choices, which are tightly bound up with one another, form the very heart of strategy and are the two most critical questions in strategy formulation."
Strategy Must Come First
Success in business and in marketing requires both a sound strategy and a thorough plan, but strategy formulation should always precede planning. That's because the plan should be based on (and designed to support) the choices that define the company's strategy.
For example, a company's strategy will include choices about what types of customers the company will seek to serve and how the company will create value for those target customers. It's impossible to develop a sensible marketing plan until those strategic choices have been made.
Having a strategy in place actually makes planning easier because the strategy provides "guardrails" for the planning process. The content of the strategy enables company leaders to more easily determine which initiatives are most essential for the strategy to work and therefore are most likely to produce the desired outcomes.

Image courtesy of Kyle Van Horn via Flicker (CC).