Sunday, June 25, 2023

[Deep Dive] Should Marketers Rely on Intuition?


Source:  Shutterstock

Key Takeaways

  • Intuition is a cognitive process that draws on our past experiences and subconscious memories to produce a quick conclusion without conscious reasoning or analysis. It's automatic and nondeliberative, but not necessarily irrational.
  • Marketers need intuition. They will often be required to make decisions based on intuition, either because of decision time constraints or because the available evidence is inconclusive.
  • Psychologists differ about whether intuition is a reliable basis for making decisions. The best answer we currently have for this question is:  "Sometimes, but not always."
  • To use their intuition effectively, marketers need to respect it and take it seriously, but not trust it unconditionally.

Data Rules! Or Does It?

Today's marketers have access to an immense amount of data about customers, potential buyers, and the performance of marketing programs. And astute marketers have recognized that this vast sea of data can be a rich source of insights for improving marketing decisions and enhancing marketing performance.

The benefits of using data and analytics to support marketing decisions have been touted so loudly and persistently over the past several years that "data-driven marketing" has become virtually synonymous with proficient marketing.

Belief in the superiority of data-driven marketing is so powerful that some marketers now question the legitimacy of using intuition to make marketing decisions. And the growing use of artificial intelligence will likely diminish the role of intuition in marketing even further.

Marketers' skepticism of intuition is easy to understand because an air of mystery surrounds it. Intuition is sometimes described as "knowing something without knowing why or how you know it."

Under these circumstances, some marketers are uncomfortable relying on intuition to make important decisions, and the thought of telling their boss they want to do something "because it feels like the right thing to do" makes them especially nervous.

But notwithstanding the enthusiasm for data-driven marketing, recent research shows that the actual use of data analytics in marketing isn't as pervasive as might be expected.

For example, in the September 2022 edition of "The CMO Survey," senior marketers said their company uses marketing analytics before a decision is made in 48.9% (average) of projects. This means that analytics is not used to support over half of all marketing decisions.

Earlier research by Gartner produced a similar finding. In Gartner's "Marketing Data and Analytics Survey 2020," respondents reported that analytics influenced only 54% (average) of marketing decisions.

While these studies didn't directly address the use of intuition by marketers, the clear implication is that intuitive decision-making is still playing a major role in marketing.

What Is Intuition?

Psychologists generally describe intuition as a mental process that draws on our past experiences and subconscious memories to produce a quick conclusion without conscious reasoning or analysis.

Many of us tend to equate intuition with instinct or emotion, but psychologists usually distinguish between these phenomena based on their underlying characteristics and operating mechanisms.

Instincts are innate biologically determined behaviors that are present in all members of a given species. Unlike intuition, instincts are genetically programmed and don't depend on prior experiences or learning.

Emotions are complex psychological states that involve subjective experiences of feelings, physiological changes, and behavioral responses. Unlike instincts and intuition, emotions aren't necessarily innate or automatic, and they can be triggered or influenced by a wide range of factors, including culture, personal experience, and cognitive appraisal.

The important point here is that intuition is subconscious and nondeliberative, but not necessarily irrational. As Albert Einstein put it:  ". . . intuition is nothing more but the outcome of earlier intellectual experience."

Our intuitions arise out of what we have experienced or learned in the past even though we may not consciously remember experiencing or learning those things. The flash of insight we call intuition results when our brain draws on stored memories and associates them with a new situation.

Why Marketers Need Intuition

Whether they like it or not, most marketers will be required to make intuitive decisions several times during their careers. The need to base decisions on intuition can arise for several reasons, but two occur frequently.

No Time - We've all been there. A decision needs to be made quickly, little or no data relevant to the decision is immediately available, and there isn't enough time to collect relevant data. In these circumstances, marketers have no choice but to base their decision - at least in part - on intuition.

Ambiguous Data - Even when marketers have an abundance of relevant data, the right decision isn't always obvious. Some data may indicate that one option is best, while other data points in a different direction. In the Gartner research mentioned earlier, survey participants were asked why they don't use data and analytics to support decisions more often. One of the top four reasons given by respondents was analysis does not present a clear recommendation.

Beyond these specific situations, there is another reason marketers still need to use intuition when faced with important decisions. As I noted earlier, marketers have access to a vast amount of data, but the data doesn't provide a comprehensive picture of the wants, needs, and mindsets of customers or potential buyers.

Like all humans, marketers have a tendency to base their decisions on the evidence that's easily available and ignore the issue of what evidence may be missing. Psychologist Daniel Kahneman (more about him below) has a great way to describe this tendency. He uses the acronym WYSIATI, which stands for what you see is all there is. The point here is that it's easy for marketers to think the data they can track, collect, and analyze is all that matters, and that simply isn't true.

Intuition can be a powerful antidote for WYSIATI. When faced with an important decision, intuition is what prompts us to look beyond the evidence that's in front of us. Even when the data and other evidence relating to a decision seem to be clear and convincing, our intuition will often trigger our "spidey sense" that tells us "something isn't quite right" or "we're missing something important."

Is Intuition Reliable for Decision Making?

Psychologists and other cognitive scientists have been studying intuition for decades, and one major focus of their research has been whether human intuition is a reliable basis for making decisions.

Not surprisingly, scientists differ in how much confidence they place in the reliability of intuition. The best answer we currently have for this question is:  "Sometimes, but not always."

The diversity of opinion among scientists about the reliability of intuition can be seen in the views of two highly-regarded psychologists - Daniel Kahneman and Gerd Gigerenzer.

Daniel Kahneman

Daniel Kahneman won the Nobel Prize in Economic Sciences in 2002, and his groundbreaking research with fellow psychologist Amos Tversky laid the foundation for the discipline we now call behavioral economics. Kahneman believes that intuitive thinking is quite useful and mostly yields adequate decisions, but he also argues that it is subject to judgment errors that can result in bad decisions.

In his 2011 best-selling book, Thinking, Fast and Slow, Kahneman proposed that the cognitive processes people use can be thought of as two "systems."

  • System 1 (fast/intuitive thinking) operates automatically, quickly, with little or no effort, and with no sense of voluntary control.
  • System 2 (slow thinking) consists of thinking processes that are reflective, controlled, deliberative, and analytical.
Kahneman contends that System 1 (intuitive thinking) relies extensively on mental shortcuts known as heuristics. These heuristics are useful in our everyday lives. They enable us to cope with the immense amount of information we encounter on a daily basis, and they usually result in sound decisions. But, they can also produce predictable judgment errors or biases.
A bias exists when a factor that should not affect a decision or judgment does have an effect on it, or when a factor that should affect a decision or judgment does not.
The work of Kahneman and Tversky in the 1970s triggered a flurry of research on heuristics and biases. To date, researchers have identified more than 150 cognitive biases that can affect human judgment and decision-making. While some of these biases are probably redundant, there are still many that can cause us to make suboptimal decisions.
Gerd Gigerenzer
Gerd Gigerenzer, a psychologist and the Director of the Harding Center for Risk Literacy at the University of Potsdam, has a more favorable view of intuition and heuristics than Daniel Kahneman. He believes the value of intuition and heuristics has been underappreciated - particularly in academia - and that they will frequently support effective decision-making.
Gigerenzer views intuition as a form of unconscious intelligence that is often based on the use of heuristics. He recently wrote:  "An intuition, or gut feeling, is a judgment based on years of experience for which one is not fully aware of the underlying reasons; that is, one cannot explain why it [the judgment] was made. In many cases, intuition can be equated with the unconscious use of heuristics."
Gigerenzer argues that heuristics are particularly well suited for judgments or decisions that must be made in situations subject to uncertainty. A purely logical, probabilistic approach to decision-making can work well when the decision-maker has perfect knowledge of all the possible outcomes of a decision and the probabilities of each possible outcome. But logic and probability analysis won't identify the right decision when uncertainty is present.
Heuristics, Gigerenzer says, are better decision-making tools in uncertain environments. He writes:  "It [a heuristic] ignores information to make decisions faster, more frugally, and/or more accurately than complex procedures . . . Studies of experts show that an option that intuitively comes to mind first is likely the best, and further deliberation tends to generate inferior options . . ."
The Bottom Line
Earlier I wrote that the best answer we have for the question of whether intuition is a reliable basis for making decisions is:  "Sometimes, but not always." The work of both Daniel Kahneman and Gerd Gigerenzer supports this conclusion.
Although Kahneman and Gigerenzer differ in how much confidence they have in the reliability of intuition, they both acknowledge that reliance on intuition will result in good decisions in some cases . . . and not-so-good decisions in others.
Under these circumstances, the critical question is:  How can marketers tap into the undeniable benefits of intuitive thinking, while also minimizing its risks?
There are no magic solutions here, but I've found that a two-step approach works best.
  • First, respect your intuition, take it seriously, and recognize that intuitive thinking can produce game-changing ideas and solutions that purely analytical thinking would probably miss.
  • Second, don't trust your intuition unconditionally. Whenever possible, look for data or other evidence to validate what your intuition is telling you to do. When you're testing your intuitive ideas, be sure to avoid confirmation bias. Look for evidence that supports your intuitive judgment and evidence that reveals its flaws.
Perhaps the best description of the proper role of intuition is captured in a quotation from Jonas Salk, the doctor and medical researcher who developed the polio vaccine. Salk said, "Intuition will tell the thinking mind where to look next." That's not a bad way for marketers to think about how to use intuition in their decision-making.

Sunday, June 18, 2023

How To Make Your Survey Reports More Credible To Buyers

Many B2B companies use surveys and survey reports to fuel their thought leadership marketing programs. Here's a proven way to make your survey-based content more credible to potential buyers. 

Research surveys and survey reports* have become important marketing tools for many B2B companies. A growing number of companies are conducting or sponsoring surveys and featuring survey results prominently in their marketing programs.

The proliferation of surveys and survey reports has been driven by the growing importance of thought leadership in the B2B marketing mix. Real thought leadership content must provide novel insights that are supported by authoritative evidence. As a practical matter, therefore, real thought leadership content requires primary research, and surveys are one of the most widely-used forms of primary research.

B2B marketers obviously want potential buyers to view their survey results and survey reports as credible and reliable. The reliability of survey results depends primarily on the quality of the methodology used to design and execute the survey. But whether potential customers perceive your survey results as credible also depends on how well you describe the research methodology.

I frequently work with clients to prepare survey reports, and I review many survey reports published by others. Over the years, I've developed a mental checklist of items relating to survey methodology that I look for whenever I review a survey report. I use the same checklist when I'm preparing a survey report.

Marketers can benefit from using a similar checklist both as producers and consumers of survey-based content. Marketers are increasingly using survey results to support important decisions, and it's important to make sure those results are reliable. It's always a good idea to approach survey results with a critical eye because, as Mark Twain wrote:  "There are three kinds of lies:  lies, damned lies, and statistics."

Describe Your Methodology Thoroughly

A survey report should include a thorough description of the methodology used in the research. This enables knowledgeable readers to assess the quality of the methodology and have confidence in the reliability of the survey results.

For a survey of business professionals about a business subject, the description of the survey methodology should include the following:

  • Sample size (the number of responses the survey received)
  • When the survey responses were obtained
  • How the survey responses were collected (e.g. online, telephone)
  • How potential survey participants were selected
  • If appropriate, how survey respondents were qualified
  • Respondent demographics/firmographics (more about this below)
Include Respondent Demographics/Firmographics
Surveys are frequently used to capture insights about a defined population by collecting data from a sample of that population. However, this approach only works if the survey respondents constitute a representative sample of the larger population. 
If the survey respondents aren't a representative sample, the survey findings can't be "projected" to the larger target population. In essence, the findings are only valid for the survey respondents. When a survey uses a representative sample, the survey report should include a detailed explanation of the sampling process in the description of the survey methodology.
Very few of the surveys I review claim to be based on a representative sample. Such surveys can still be useful - they're just not as compelling as surveys that use a representative sample.
When a survey isn't based on a representative sample, the survey report should include a disclaimer similar to the one used by Gartner in a recent survey report:  "Disclaimer:  Results from this study do not represent global findings or the market as a whole but reflect sentiment of the respondents and companies surveyed."
Whether or not a survey is based on a representative sample, the survey report should include a description of the demographic attributes of the individual respondents and the firmographic characteristics of the companies they are affiliated with. 
When I'm reviewing a survey report, I want to see data on the following demographic/firmographic attributes:
  • Job title/job function of respondents
  • Industry verticals/types of companies represented
  • Company sizes represented
  • Geographic location of respondents
Respondent demographics/firmographics are important for interpreting survey findings and assessing their relevancy, particularly when a survey isn't based on a representative sample. For example, I recently reviewed a survey that dealt with marketing data and analytics. 
In that survey, 83% of the respondents were with companies having $1 billion or more in annual revenue. So, the findings in this survey may be highly relevant for marketers in large enterprises, but less instructive for marketers in small and mid-size companies.
The Takeaway
Many B2B companies are relying on surveys and survey reports to play a vital role in their marketing efforts. Marketers can add credibility to their survey-based content by providing a thorough description of the research methodology, including a detailed picture of respondent demographics.

*The principles discussed here also apply to other types of long-form research-based content such as white papers and eBooks.

Illustration courtesy of via Flickr (CC).

Sunday, June 11, 2023

[Book Review] An Important New Model of the B2B Buyer Journey

Source:  Kogan Page Limited

Understanding how business people actually make buying decisions on behalf of their company is vital to B2B marketing success. Without such insight, it's almost impossible to design and execute effective marketing programs.

Analysts, consultants, and other marketing pundits have responded to this need by developing models that attempt to describe the B2B buying process, which is now frequently called the B2B buyer journey.

These efforts are by no means new. The earliest I've found is a 1972 book titled Organizational Buying Behavior by Frederick E. Webster and Yoram Wind. About a decade ago, the B2B buying process model developed by SiriusDecisions (now part of Forrester) became widely popular with B2B marketers.

A new book by Antonia Wade - Transforming the B2B Buyer Journey:  Maximize brand, improve conversion rates and build loyalty (Kogan Page Limited, 2023) - provides a fresh, expansive, and decidedly buyer-centric perspective on B2B buying and marketing. 

Antonia Wade has specialized in B2B marketing for more than 15 years, so she can speak with authority on the topic. Ms. Wade is currently the Global Chief Marketing Officer of PwC, one of the leading professional services firms in the world. Previously, she held senior marketing leadership positions at several well-known B2B organizations, including Capita, Thomson Reuters, and Accenture.

What's In the Book

The centerpiece of Transforming the B2B Buyer Journey is Antonia Wade's buyer journey "framework." In her opening chapter, Ms. Wade argues that traditional marketing "funnels" are inadequate to capture the vital attributes and dynamics of present-day B2B buying because many assume "a singular set of buyers going through a rational series of choices."

Wade's B2B buyer journey framework contains five distinct phases - Horizon Scanner, Explorer, Hunter, Active Buyer, and Client. Her labels for these phases symbolize the buyer's needs and the thought processes that are important during each buyer journey stage.

In Chapter 02 of the book, Ms. Wade describes the major buyer needs that exist in each phase of her buyer journey framework, and in Chapter 03, she introduces the marketing objectives that are applicable in each phase.

Following this introductory material, Ms. Wade devotes a separate chapter to each phase of the buyer journey framework. In these chapters, she provides a detailed discussion of:

  • What buyers are trying to accomplish and how marketing should respond to those needs.
  • What types of content are most appropriate and what marketing channels are likely to be most effective.
  • What metrics are most relevant for measuring marketing performance.
In the balance of the book, Ms. Wade addresses a range of diverse topics, including:
  • The importance of understanding that the size and composition of your target audience can change at each phase of the buyer journey (Chapter 10).
  • How to use the buyer journey framework when deciding where to invest your marketing budget (Chapter 10).
  • The role of branding at each stage of the buyer journey (Chapter 11).
  • How to use technology and data to drive results across the buyer journey (Chapter 12).
  • How to build a more productive relationship between marketing and sales (Chapter 13).
Ms. Wade concludes Transforming the B2B Buyer Journey with an appendix that contains several useful guides and templates.
My Take
Transforming the B2B Buyer Journey contains a wealth of insights that will benefit most B2B marketers. Antonia Wade has been on the front lines of B2B marketing for more than 15 years, and the breadth and depth of her experience have enabled her to produce a book that is authoritative and practical.
The book is well organized and well written, but it is so packed with information that I can't describe it as "light reading." I read the book twice and got much more out of it from the second reading.

One particularly valuable attribute of Transforming the B2B Buyer Journey is that Antonia Wade doesn't sugarcoat the complexities of B2B marketing. For example, Chapter 13 of the book contains an excellent discussion of why it's critical for marketing and sales to build a more collaborative relationship.

In that discussion, Ms. Wade identifies eleven distinct issues that marketing and sales must, in her words, "get completely aligned on." These issues include:

  • "Who is in the total addressable market in each part of the buyer journey."
  • "What the buying stages look like, how long you think buyers will spend in each stage, and what information they will need."
  • "How long something takes to sell."
  • " A realistic conversion rate - from the buyer's perspective, not a work back from what the sales team needs to hit a number."
  • "What signals there are that the buyer is moving from one stage to another."

Even this partial list should make it clear that building the right kind of relationship between marketing and sales is a formidable challenge.

One final observation. Transforming the B2B Buyer Journey contains many insights that will be valuable for all B2B marketers. However, some marketers will need to modify or adapt some of the book's specific recommendations to fit their circumstances. Here's why.

When a business book is written by a practitioner, the advice it contains is usually based on the author's professional experiences. As I noted earlier, Antonia Wade is the Global CMO of PwC, one of the largest professional services firms in the world. For the fiscal year that ended last June, PwC's gross revenues were $50.3 billion.

The point here is that some of the specific methods and tactics described in Transforming the B2B Buyer Journey are very appropriate for a large enterprise selling expensive and complex products or services, but they may not be as appropriate for small or mid-size companies and/or companies that have a different product/service mix.

Sunday, June 4, 2023

[Research Round-Up] Three Recent Takes on Purpose Marketing, Brand Purpose, and ESG

(This month's Research Round-Up discusses three recent studies that focus on the effectiveness of purpose marketing, the importance potential buyers really place on brand purpose, and the attitudes of consumers and business executives about corporate ESG initiatives.)

Source:  GfK

When Purpose Turned Beige by GfK

  • Based on GfK's Purpose Impact Monitor study
  • 2,024 interviews conducted among a US online population (ages 18-64)
  • Interviews conducted October 25 - November 3, 2022
The survey findings described in this paper won't sit well with advocates of purpose marketing. In the GfK survey, over half of the respondents could not name (unaided) a single brand that is "taking care of the environment and fighting climate change" (57%), "promoting diversity and inclusion" (57%), or "giving back to the community" (24%).
When GfK took a close look at the survey responses, it found some interesting patterns
  • Respondents who earned more than $125k/yr were more likely to remember at least one purposeful brand than respondents earning $30k/yr - $60k/yr.
  • Millennial female respondents were less likely to be able to name a purposeful brand than millennial male respondents.
  • Democratic respondents were more likely to remember at least one purposeful brand than respondents who classified themselves as Republicans, Independents, or members of "other" political parties.
The paper's authors 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 . . . "

Source:  Ipsos
  • Based on a survey of 1,096 US adults (ages 21+)
  • Survey conducted February 8-9, 2023
This research focuses primarily on attitudes regarding brand purpose. The findings of the underlying survey revealed that those attitudes are more nuanced than the recent hype would suggest.
For example, 85% of the survey respondents said that global or national brands should play a role in solving global problems, but 51% of the respondents said companies should remain neutral on social issues.
Two-thirds of the survey respondents agreed that purchasing sustainable products made a difference for the environment, but only 53% said they were willing to pay more for products that are manufactured sustainably.
One of the most striking findings in this research relates 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 red) were near the bottom of the list in terms of importance.

Matt Carmichael, the head of the Ipsos Trends & Foresight lab, summarized the current situation nicely when he wrote:  "The choices that people as consumers make with their wallets will dictate how much brands can or cannot help, no matter how much those same consumers say they want brands to be part of the solutions."

Source:  IBM Institute for Business Value
The ESG ultimatum:  Profit or perish by the IBM Institute for Business Value
  • Based on two surveys. The report doesn't state when the surveys were conducted.
  • Survey 1 - A survey of 20,000 consumers across 34 countries
  • Survey 2 - A survey of 2,500 executives across 22 industries
This study focuses primarily on the business implications of ESG (environmental, social, governance) goals and programs adopted by business enterprises.
The central argument of this paper is that robust ESG capabilities and programs can drive higher revenue, improved profitability, and deeper customer engagement. However, the research also found that most companies aren't realizing these benefits from their ESG initiatives for a variety of reasons.
The authors of the paper point to several survey findings to support their conclusions.
From the consumer survey:
  • About two-thirds of the surveyed consumers said environmental sustainability and social responsibility are very or extremely important to them.
  • But . . . 51% said cost of living increases had made environmentally sustainable and socially responsible decisions more difficult in the past 12 months.
  • Only 20% of the surveyed consumers said they trust companies' statements about environmental sustainability.
  • But . . . nearly half said they had paid a premium for environmentally sustainable or socially responsible products in the last year.
From the survey of executives:
  • About three in four (76%) of the surveyed executives said ESG initiatives are central to their business strategy.
  • ESG "leaders" - organizations with more mature ESG capabilities - had an annual rate of revenue growth that was more than 10% higher than ESG laggards and generated 5% higher shareholder return.
  • Almost all (95%) of the surveyed executives said their organization had developed ESG initiatives, but only 41% said they had made progress on those initiatives. And, only about 10% said their progress had been significant.