Saturday, April 27, 2013

Why Intuition Still Matters in Marketing

There's no doubt that data and data analysis are fundamentally changing the way marketing is practiced. Big data is one of the hottest topics in marketing circles today, and many thought leaders argue that extracting insights from customer data is now an essential driver of competitive advantage.

Because data has become so important to effective marketing, some pundits contend that it should be the primary tool for making marketing decisions and that human intuition no longer plays a significant role in marketing.

Rich Beatty with CMG Partners addressed this topic in an article for AdvertisingAge titled, "Data Guides, But the Gut Decides." In this article, Beatty asks whether the growing importance of data, analysis, metrics, and data scientists in marketing means that science will kill the need for the art of marketing. Beatty says that most CMOs define art as the process of using intuition in making marketing decisions and science as the process of using data to inform decisions.

Beatty argues that both science and art play important roles in effective marketing. He writes, "Science provides the foundation for informed decision-making, while art is an accelerant that brings the insight to life in a more impactful way."

I agree that art (intuition) still has a place in marketing, but you need the right kind of intuition. There are three basic kinds of human intuition. Ordinary intuition is what we typically call hunches or gut instinct. We experience ordinary intuition as an emotional feeling. When you meet someone for the first time and after a half-hour of conversation say to yourself, "I feel like I can trust this person," that's ordinary intuition at work.

Expert intuition (the kind of intuition described by Malcolm Gladwell in Blink) is a form of rapid thinking where you jump to a conclusion when you recognize something familiar. When we use expert intuition, we essentially draw on memories of what we've experienced or learned in the past and use that stored knowledge to solve a similar problem. We do this very quickly, and we're not usually aware of the process our brain is using. We just "know" what decision to make. Expert intuition can play an important role in making routine, repetitive marketing decisions.

When faced with major marketing decisions that present new issues or challenges, the kind of intuition you need is what William Duggan has called strategic intuition. Duggan is a professor at the Columbia Business School and the author of several books on this topic, including Strategic Intuition:  The Creative Spark in Human Achievement.

Duggan describes strategic intuition as a flash of insight that occurs when a person taps memories of what he or she has experienced or learned in the past and combines that stored knowledge in a new way to solve a new problem. This is the fundamental difference between expert intuition and strategic intuition - expert intuition is used to deal with familiar problems, while strategic intuition is used when we need to solve a problem we've never encountered before. Duggan argues that strategic intuition has played an important role in most forms of human intellectual achievement, from scientific discoveries to military and business strategy.

Strategic intuition will remain critical for effective marketing because data and data analysis have inherent limitations. I'll have more to say about this in a future post, but one of the major limitations merits a brief mention here. Data and data analysis rarely provide a clear answer when a major marketing decision is involved. This lack of clarity can exist because:
  • We don't have data regarding some important aspect of the decision.
  • The data we have doesn't conclusively indicate that one decision is better than the alternatives.
  • The success of the decision made will depend on future events, and data can only describe what has happened in the past.
I'm a strong advocate of evidence-based decision making, and I believe that marketers should use sound data to inform and guide their decisions. But data and analytics do not eliminate the need for strategic intuition in marketing.

Sunday, April 21, 2013

Why Improving Performance Doesn't Always Create More Value

In a recent post at the SiriusDecisions blog, Jeff Lash wrote about seeing an advertisement for a cell phone that boasted about the phone's 215 hours of battery life between charges. Mr. Lash noted that on a heavy usage day, he spends at most two to three hours on his phone and at that rate, 215 hours of battery life would last about ten weeks. He thought it was pretty likely that he'd be able to find a convenient power outlet more frequently than once every two and a half months.

Mr. Lash's point was that 215 hours of battery life far exceeded his requirements, and therefore much of that long battery life would provide little value to him.

I've written frequently in this blog about the importance of understanding how your solutions create value for customers. Clear and compelling value propositions are, in fact, the foundation of all effective marketing.

Unfortunately, it's easy for marketers and other business leaders to overestimate the value of their solutions. The problem stems from an implicit belief that improving the performance of a solution automatically increases the value of the solution.

Clayton Christensen addressed this issue in The Innovator's Dilemma. In Christensen's view most established companies in any industry improve their products or services along dimensions of performance that their major customers have historically wanted and valued. What often happens, however, is that the pace of performance improvement exceeds the ability of customers to take advantage of the increased performance. Eventually, a company "overshoots" its market. Prospective customers are happy to accept the higher performance, but they aren't willing to pay more to get it because they can't translate the increased performance into benefits that produce better business results.

This circumstance has several important implications for marketers. Most importantly, it means that marketers should always seek to understand whether and to what extent new features or capabilities will enhance the value of a solution in the eyes of potential buyers.

So, before deciding how to market a "new and improved" version of your solution, answer these questions from a prospective buyer's perspective:
  • What performance criteria are most important for my business?
  • What levels of performance must a solution provide in order to meet these criteria?
  • Are some of the performance criteria more vital or important than others?
  • Once "acceptable" levels of performance are met, do higher levels of performance and/or new capabilities create meaningful new value and, if so, how?

Sunday, April 14, 2013

How Lead Development Reps Take Demand Generation to the Next Level

Effective lead management is now an essential component of a high-performing B2B demand generation system. Broadly speaking, lead management refers to demand generation activities that begin when a potential buyer identifies himself or herself to your company and expresses some interest in what you offer.

The two most important components of lead management are lead nurturing and lead qualification. Lead nurturing is designed to build relationships with prospects who are in your target market, but who aren't ready to have a productive sales conversation. Lead qualification refers to the activities and criteria you use to determine where a prospect is in his or her buying process.

Lead management is the weak link in the demand generation chain for many companies. One reason is that it hasn't typically been viewed as a top priority by either sales or marketing. In the conventional view, marketing's primary role is to acquire new leads, and the top priority of sales is to close short-term sales opportunities.

B2B marketing software provides powerful capabilities for automating content-based lead nurturing and some aspects of lead qualification. However, it is also becoming apparent that automated lead nurturing and lead scoring will not, in themselves, enable a company to optimize demand generation. A growing number of companies have recognized that person-to-person communication and human judgment are needed to produce maximum demand generation results.

This recognition is causing a growing number of companies to establish a lead management function that is responsible for coordinating lead management activities. The people who perform this function can have a variety of job titles. Some companies call them telemarketers or inside sales representatives, and others call them business development representatives.

I prefer to call these individuals lead development representatives because this title more accurately describes their actual function. The primary responsibilities of lead development representatives, or LDRs, are to orchestrate lead nurturing communications with specified leads and simultaneously qualify those prospects.

More specifically, LDRs will perform the following major activities:
  • Make contact with leads who have indicated a defined level of interest. This would include both inbound leads and leads acquired via outbound lead generation programs.
  • Ask the lead appropriate questions to determine his or her level of interest and place in the buying cycle.
  • Place each lead in the appropriate lead nurturing track so that nurturing communications will be most effective.
  • Document interactions with the lead in the company's CRM system.
  • Identify leads who are ready to have a productive conversation with a salesperson and arrange an appointment.
The capabilities offered by B2B marketing software play a critical role in today's demand generation, but those capabilities need to be supplemented with person-to-person communications to achieve optimum results. Lead development representatives can take your demand generation to the next level.

Sunday, April 7, 2013

How to Win the Content Marketing Arms Race

Research by the Content Marketing Institute and MarketingProfs indicates that nine out of ten B2B companies are now using content marketing in some form. While I don't believe that 90% of all B2B companies have full-blown content marketing programs in place, there's no longer any doubt that content marketing is becoming a core marketing tactic for many organizations.

The irony is that the popularity of content marketing is creating a new challenge for marketers. As more and more companies implement content marketing and create more and more content, it's becoming more difficult to make your content stand out.

Velocity Partners, a B2B content marketing agency based in the UK, addressed this challenge in a recent slide presentation. In Velocity's view, we're about to experience a deluge of marketing content, and most of this content will be, in their words, "crap." Velocity argues that this flood of bad content will cause people to raise their "marketing defense systems" and be less willing to trust any content.

I would argue that the greatest "threat" to effective content marketing is not a flood of content that is truly bad, but rather a growing volume of content that is just average - not good enough or different enough to stand out in a crowded field.

So, what can marketers do to win the content "arms race?" Velocity Partners says the answer is to develop consistently great content - content that will capture and hold the attention of your audience and differentiate your company from your competitors. In an earlier post, I called this blue ocean content, and this is the kind of content we should always aspire to create.

It's not realistic, however, to expect that every content resource we develop will be a masterpiece. As marketers, what we can do is demand that all our content resources provide real value to the people who consume them. To gauge the value of your content, ask yourself a few questions about each new content resource.
  • Does the resource identify and describe the causes and effects of an important, but previously unrecognized or under-appreciated problem or challenge?
  • Does the resource make the full ramifications of a known problem or challenge visible and understandable?
  • Does the resource provide new or distinctive perspectives regarding known problems or challenges?
  • Does the resource discuss a new or innovative solution for a problem or challenge?
  • Does the length of the resource match the importance of the topic addressed? Have I stretched a 300-word blog post into a 1,200-word article? Have I stretched a 2-page article into an 8-page white paper?