A Temporary Change of Direction

For only the second time in over five years, I did not publish a post here last week. Over the past few weeks, I have found it increasingly difficult to create posts that I truly believe are timely, relevant, and useful for my readers.

The reason for my difficulty is COVID-19, the disease caused by the novel coronavirus. One way that I keep myself on a regular writing and publishing schedule is to always have several topics lined up for future posts. So when February began, I had already identified what I thought at the time were several solid topics.

But over the past two months as we have been bombarded with negative COVID-19 news on a daily if not an hourly basis, the topics I was writing about began to feel, well, almost trivial in light of unfolding events.

When I work with clients to develop marketing content, I stress that the most important attributes of good content are relevance and usefulness. The core idea is that your content should be helpful to your customers and prospects.

My goal for this blog has always been to provide useful information and thought-provoking ideas, but the business and economic repercussions of COVID-19 have fundamentally changed what constitutes "useful" and "thought-provoking," at least in the short term. Therefore, the content of this blog is going to be different for the next several weeks.

As the COVID-19 pandemic continues to unfold, marketers will need to rapidly adapt their strategies and tactics to meet changing business conditions. Time will become a precious commodity, and many marketers will find it difficult to keep up with all the information that could be vital for making sound business and marketing decisions.

Part of my work has always involved finding information and insights from sources that most marketers would not routinely encounter and making that information more accessible to the marketing community. This type of information will play a larger role in my posts for the next several weeks.

Some of my posts will address topics that don't directly relate to the day-to-day practice of marketing. But during this period, it's important for marketing leaders to play a central role in formulating their company's strategic response to COVID-19. Therefore, one of my objectives will be to identify and communicate information that will help marketing leaders fulfill this critical role.

In this post, I want to provide a few basic common-sense guidelines for communicating with customers and prospects during the COVID-19 outbreak. These guidelines are not earth shattering, and they are far from exhaustive. But they do provide a good starting point.

Provide Relevant, Useful, Timely, and Concise Information

I've already alluded to this point, but its importance cannot be overstated. Every communication you send, and every content resource you publish should be measured by these essential attributes. During a difficult period, the most effective way to approach content development and communications is to constantly ask:  "What information do our customers need right now?" Relevance and usefulness are always essential for good content, but they have a shorter shelf life during a crisis period.

When stress and uncertainty are high and time and attention are limited, it's also important to use clear and precise language and to make communications as concise as possible. Make your content easy to scan by using bullet points and headers to highlight the most critical information.

Avoid Promotional Content

For the next few weeks, customers and prospects will be especially sensitive to anything that smacks of brand opportunism. Therefore, avoid using any messages or content that is self-serving or promotional in tone or substance. Of course, there can be exceptions to this guideline. For example, I've already received at least a dozen emails from SaaS software companies offering free use of their apps for fairly significant periods of time. If your company has decided to provide customers and prospects with something that has substantial, out-of-the-ordinary value, it's both necessary and appropriate to communicate that offer.

Stay Connected to Customers

The extent and contours of the COVID-19 epidemic are changing every day, and that will likely continue for the next several weeks. As the situation evolves, customer needs and attitudes will also change. So it's vitally important for company leaders to listen closely to customers throughout this event. For most companies, the listening will necessarily be informal. Now is not the time to run a large survey, and in-person focus groups are an obvious no-no. But by continuing to talk with and listen to customers and prospects regularly, business and marketing leaders can get valuable insights on how to communicate effectively.

Illustration courtesy of William Allen via Flickr CC.

A Worthwhile Perspective on the Economic Impact of Coronavirus

This will be a shorter post than you normally see here. For the past several days, I've been debating whether or not to write a post dealing with some economic aspect of the coronavirus outbreak, which the World Health Organization classified as a global pandemic last week.

My internal debate has revolved around two issues. First, I'm somewhat uncomfortable writing about the business impact of the outbreak while the virus is still causing widespread illness and a significant number of deaths around the world. That being said, it's undeniable that the economic aspects of the outbreak are vitally important to all of us.

The second challenge associated with writing about the outbreak is maintaining the right perspective. In a crisis such as this, we have a tendency to overemphasize the extreme possibilities and to largely ignore the much more likely probabilities. Focusing on extreme possibilities can easily lead us to (a) unreasonably minimize risks on one hand, or (b) an irrational panic on the other.

So with those considerations in mind, I'm using this post to recommend an analysis by McKinsey & Company that addresses the economic implications of the coronavirus outbreak. This analysis was published on March 9th, and McKinsey indicates that it will be updated regularly as the situation evolves. It's not clear how frequently these updates will occur, so you'll want to check this site every few days to get the firm's current thinking.

Two aspects of the McKinsey approach are particularly important for all of us to remember over the next few/several weeks. First, McKinsey displayed a significant amount of humility about its ability to see the future clearly. The authors of the analysis wrote, "The next phases of the outbreak are profoundly uncertain . . . Our perspective is based on our analysis of past emergencies and on our industry expertise. It is only one view, however. Others could view the same facts and emerge with a different view."

The second important characteristic of the McKinsey analysis is that it presents a range of possible economic outcomes. The authors of the analysis observed, "In our view, the prevalent narrative, focused on pandemic, to which both markets and policy makers have gravitated as they respond to the virus, is possible but underweights the possibility of a more optimistic outcome."

In the March 9th analysis, McKinsey descried three economic scenarios - a "quick recovery," a "global slowdown," and a "global pandemic and recession." It will be interesting to see whether or how McKinsey's thinking will change when the firm updates its analysis.

Image courtesy of Alachua County via Flickr (Public Domain).

Should Sustainability Be Part of Your Brand Story?

The political debate surrounding climate change has been raging for the past two decades and is likely to continue for the foreseeable future. However, several recent developments indicate that the leaders of many large business enterprises have accepted the reality of climate change and recognized they need to step up their focus on environmental sustainability.

August 2019 - The Business Roundtable, an organization whose members are the CEOs of major U.S. companies, issues a new Statement on the Purpose of a Corporation. The new statement says that corporations must serve the interests of a broad set of stakeholders, including "communities." The CEOs signing the statement committed to supporting communities by "embracing sustainable practices across our businesses."

January 2020 - Microsoft announces that it will become carbon negative by 2030, and it pledged that by 2050, it will remove from the environment as much carbon as the company has emitted since it was founded on 1975.

January 2020 - BlackRock, the world's largest money manager with over $7 trillion of assets under management, announces that will will make sustainability a major component of its investment strategy. In a letter to clients, BlackRock's global executive committee wrote, "We believe that sustainability should be our new standard for investing."

The general public is also becoming more concerned about the environment and climate change. In January, Pew Research Center polled a nationally representative sample of U.S. adults. In this research, 64% of the respondents said that the environment should be a top priority for the President and Congress. That was up from 47% in a 2016 Pew Research poll. Fifty-two percent of the respondents said that climate change should be a top priority, up from 38% in the 2016 poll.

Several recent studies have also found that B2B buyers - particularly younger buyers - are placing greater importance on the environmental and social practices of their prospective suppliers and business partners. For example, in a 2019 Marketo survey of 910 B2B buyers in the U.K., Germany, and France, 67% of the respondents said they seek to work with companies that are striving to reduce their impact on the environment.

In response to heightened buyer interest in environmental issues, some B2B marketers have made sustainability a part of their messaging strategy. Including sustainability in brand messaging can be effective, but it's also a tactic that must be used carefully in order to avoid being perceived as engaging in greenwashing.

Marketing that focuses on sustainability is one form of purpose marketing. Purpose marketing is strongly supported by some marketing pundits and strongly criticized by others. But one thing is clear. When a company engages in purpose marketing, it also invites close scrutiny. Therefore, it's critical for marketers to be sure their company is "walking the walk" before they begin "talking the talk."

There are two specific steps that marketers should take when adding sustainability to their messaging strategy.

Know Where You Stand - Before making sustainability part of their brand messaging, marketers should thoroughly understand what actions their company has taken to improve the sustainability of its operations. This analysis should also cover the company's supply chain because the company's reputation for sustainability will be significantly affected by the environmental practices of its suppliers.

Don't Exaggerate - When it comes to marketing messages around sustainability, it's best to use a conservative approach and be prepared to demonstrate the accuracy of any statements or claims that marketing messages contain. And if messages include commitments for future actions, marketers need to ensure that senior company leaders are fully onboard with those commitments

In today's business environment, it's increasingly important for B2B companies to have programs in place to improve the sustainability of their operations and to make customers and prospects aware of those programs. But marketers must be careful not to "overpromise and under deliver."

Image courtesy of Ron Mader via Flickr CC.

How to Make Personalization Work in a Privacy-Conscious World

In my last post, I wrote that it's time for marketers to rethink their approach to personalization. The value of personalized marketing has been widely recognized for nearly two decades, and most marketing pundits are recommending that marketers expand their use of personalization. They contend that marketers should make personalization more specific and use it more frequently, in more channels, and for more types of communications and experiences.

The problem with this "more personalization" approach is that it fails to account for widespread and growing privacy concerns among both consumers and business buyers. Personalized marketing will not reach its full potential unless marketers use an approach that addresses these privacy concerns. Simply increasing the use of personalization will be ineffective at best, and may do more harm than good.

Personalization has been the subject of numerous research studies over the past few years, and these studies provide a good picture of what is required for personalized marketing to produce maximum results. There are three major components of an effective personalization strategy.

Make Personalization Useful

The first requirement for effective personalized marketing is that it must deliver meaningful and pragmatic value to the recipient. A 2018 study by Gartner/CEB documents the business value of personalization that is perceived by customers and prospects to be helpful. I've previously discussed this research, so I won't repeat that material here. For a more detailed description of the Gartner/CEB study see this post.

Make Personalization "Relationship-Appropriate"

The second component of an effective personalization strategy is to use a level of personalization that is appropriate for each customer or prospect. By appropriate, I mean that the level of personalization should match the real-world status of the relationship. A message or offer sent to a long-time customer can and should be more personalized than a first outreach to a new prospect.

To be effective, personalized marketing must be based on genuine insights about your customers and prospects. When you take personalization beyond such insights, it becomes inauthentic and will tend to be perceived as presumptuous. Corporate Visions recently conducted a field trial involving this principle, and you can read more about that research in this post.

Get Meaningful Permission for Personalization

Much of the concern about data privacy and personalization revolves around the issues of transparency and control. Many consumers and business buyers aren't confident they know what personal data companies are collecting about them or how that data is used. And many feel they don't have any meaningful control over those data practices.

Several recent research studies have shown how important transparency and control are for customers and prospects. For example, in a 2019 survey of 3,000 people in the U.S., Canada, and the U.K., The Harris Poll asked participants about the importance of several data privacy practices. The following table shows the percentage of survey respondents who rated four transparency and control practices as very important or absolutely essential:

These research findings point the way to the third important component of an effective personalization strategy. In a world where privacy concerns are heightened, permission is critical to successful personalized marketing. If all the research about personalization tells us anything, it tells us that most consumers and business buyers will welcome and value personalized content when it is helpful, authentic, and based on permission that is willingly and consciously given.

So, how can marketers gain this kind of permission? There are three key steps.

Use Personalization "Programs" - In most cases, personalization efforts 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 leads marketers to focus on the purpose of personalized marketing from the recipient's perspective.

Invite Participation - Invite your customers and/or prospects 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. The main objective of the invitation is to persuade customers or prospects to participate in the program. So it 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
• The duration of the program
• A clear statement that the recipient has the option to "unsubscribe" at any time

It's About How - Not Whether - to Personalize 

The issue for marketers is not whether to personalize marketing content and customer experiences. The evidence is clear that customers and prospects want and appreciate the increased relevance that personalization can provide. The real issue is how to deliver personalization in a way that respects privacy. By making personalization helpful, authentic, and permission-based, marketers will reap the maximum benefits of personalized marketing.

Top image courtesy of Josh Hallett via Flickr CC.

Related Articles

Why It's Time to Rethink Personalization

With Personalization, Less Can Be More

Two Ways to Make Personalization Welcomed

The Growing Personalization Conundrum for Marketers

Why It's Time to Rethink Personalization

The value of personalization in marketing has been largely unquestioned for nearly two decades. Today, most marketers view personalization as essential for success, and many companies have made personalization a top priority. But the marketing environment is changing, and that means it's time for marketers to rethink their personalization strategy.

In a report published last November, the research firm Gartner predicted that by 2021, one-third of marketers will reduce spending on personalization, and by 2025, 80% of marketers who have invested in personalization will abandon their efforts due to lack of ROI, the perils of data management, or both. These predictions were both surprising and controversial because they run counter to most of the current conventional wisdom about personalization.

While I doubt that eight out of ten marketers will completely abandon personalization over the next five years, it is clear that marketers are already facing a personalization conundrum. On one hand, numerous studies conducted over the past several years have reported that consumers and business buyers want - and are willing to provide personal information in order to receive - personalized offers, messages, and experiences.

But a growing number of studies also show that consumers and business buyers don't always welcome personalized marketing and will react strongly when they perceive that personalization goes too far. In one recent study, for example, 38% of survey respondents said they would stop doing business with a company that sent them "creepy" personalized messages.

Most marketing pundits and many marketing leaders argue that the key to increasing the effectiveness of personalized marketing is more personalization. They contend that marketers should collect and use more data about customers and prospects, make personalization more specific, and use it more frequently, in more channels, and for more types of interactions. The popularity of this view explains why hyper-personalization and personalization at scale have recently attained buzzword status.

The "more personalization" argument is based on the idea that increased personalization will produce more relevant messages and experiences, and that the increased relevance will make those messages and experiences more compelling. The fundamental flaw of this approach is that it fails to account for a significant shift in public attitudes toward personalization that's occurred over the past few years.

The Shadow of Cambridge Analytica

Since the Facebook-Cambridge Analytica scandal became public knowledge a few years ago, we have been bombarded with media coverage about how companies collect and use our personal information. Facebook's data privacy policies and practices have been widely, strongly, and repeatedly criticized, but other large tech firms such as Alphabet/Google have also been the subject of multiple media stories and Congressional hearings.

All of this has made the public more acutely aware of how much personal data companies are collecting and how they are using that data to target and personalize advertisements and other marketing communications.

Note:  The data practices of large technology companies have also been addressed by several highly-respected scholars. If you'd like to see an example of these discussions, get a copy of The Age of Surveillance Capitalism by Shoshana Zuboff. Dr. Zuboff is the Charles Edward Wilson Professor emerita at the Harvard Business School. Her book is thorough and sobering - if somewhat strident - but at over 700 pages, it is not a quick or easy read.

The heightened public awareness is impacting personalization in two ways. First, as members of the public have become more knowledgeable about how companies are using personalization in marketing, they have become desensitized to its effects. They no longer see personalized messages or content as extraordinary. So, many of the more widely-used personalization tactics and methods make less of an impact today than they did in the past. As the old saying goes, "Familiarity breeds contempt."

More importantly, as the public has learned more about how companies are collecting and using personal information, they have also become more disturbed about those practices. Today, when someone receives a personalized message, he or she is likely to think first about what enabled the personalization. What does this company know about me? How did the company obtain that information?

The conundrum facing marketers is clear. Most consumers and business buyers say they want and value personalized offers, messages, and experiences. At the same time, however, both consumers and business buyers are becoming more concerned about privacy, and they are increasingly distrustful about how companies are obtaining and using their personal information.

Under these circumstances, the "more personalization" strategy may do more harm that good. So, what's the alternative? I'll discuss that in my next post.

Image courtesy of Phil Wolff via Flickr CC.

The State of Trust in Business

The global communication firm Edelman released the 2020 edition of its "Trust Barometer" survey during the World Economic Forum in Davos, Switzerland last month. The new survey found that despite low levels of unemployment in most of the markets covered, many people aren't optimistic about their prospects for the future. About two-thirds of the survey respondents said they do not have confidence that their current leaders can successfully address their country's challenges.

Edelman has been conducting an annual survey on the state of trust around the world for the past 20 years. The Trust Barometer survey focuses on trust in four societal institutions - government, business, non-governmental organizations (NGOs), and the media. The latest survey polled over 34,000 people in 28 countries.

The 2020 Trust Barometer survey found that the overall level of trust has changed little over the past year. Edelman's global Trust Index (the average percent trust in NGOs, business, government, and media) was 54 in the 2020 survey, compared to 53 in the 2019 survey. On average, trust in all four societal institutions increased slightly, but both government and media are still distrusted in most of the countries included in the survey.

Trust has become a major issue for business and marketing leaders over the past few years because of growing concerns about the collection, protection, and use of personal information by business organizations. The Trust Barometer survey doesn't directly address privacy-related trust issues, but it does provide insights about the general level of trust in business. These insights are important for marketers because they describe the "trust environment" in which marketing activities are conducted.

The findings of the 2020 Trust Barometer indicate that public perceptions of business are somewhat ambivalent. Overall, survey respondents trust business organizations as much as they trust NGOs, and significantly more than they trust government and media. Based on the Trust Index scores, business organizations are "trusted" in 12 of the countries included in the survey and "distrusted" in 7 countries. In the 9 remaining countries (including the U.S.), business earned a "neutral" Trust Index score.

In the United States, trust in business has remained relatively stable over the past 5 years, as the following chart shows:

The ambivalent views of business can be seen in several specific findings from the 2020 Trust Barometer. On the positive side, business was the only societal institution that survey respondents rated as competent ("good at what it does"). The net competence score for business was 14, compared to -4 for NGOs, -17 for media, and -40 for government. Respondents gave business fairly high marks for generating value for owners, being an engine of innovation, and driving economic prosperity.

On the negative side, 56% of the global respondents agreed with this statement:  "Capitalism as it exists today does more harm than good in the world." (Note:  "Only" 47% of U.S. respondents agreed with the statement.) In addition, 54% of the global respondents said that business "serves the interests of only the few," while only 29% said that business "serves the interests of everyone equally and fairly."

So how should business and marketing leaders interpret these findings, and what can they do to bolster trust in their company? When interpreting the results of the Trust Barometer survey, it's important to remember that Edelman focuses on business generically - as one of four societal institutions. The survey did not ask respondents about their trust in individual companies. It's not surprising that the respondents had ambivalent feelings about "business" as an institution.

The good news is that business and marketing leaders can identify what they need to do to increase trust in their company. In a December 2019 survey of 2,200 U.S. adults, Morning Consult asked participants what factors are very important when considering whether to trust a company. The following table show the 11 factors that were  identified by more than 50% of the survey respondents:

These results are noteworthy because they show that when U.S. consumers are deciding whether to trust a specific company, they place greatest importance on factors relating to reliability. Protect my personal data - make products that work as advertised - deliver on what you promise - treat your customers well.

Morning Consult also presented survey participants several factors that embodied aspects of social and environmental responsibility, but except for "treat employees well," none of these factors were rated as very important by a majority of survey respondents.

I am not suggesting the business and marketing leaders can safely ignore environmental and social issues. Numerous recent surveys have found that younger consumers and business buyers are placing increased emphasis on environmental and social factors when deciding what companies to buy from.

There is also a growing focus in the investment community on so-called "ESG" (environmental-social-governance) investing. For example, 2019 research by Morningstar found that in 2018, there were 351 "sustainable" funds available to U.S. investors, up from 235 such funds in 2017. This research also found that 2018 was the third consecutive year these funds had received record cash inflows.

So it seems clear that environmental and social issues are becoming more important when it comes to earning trust, but right now, the most important factors still relate to reliability.

Top image courtesy of chuks mbata via Flickr CC.

Unconventional Views on B2B Growth

Last fall, The B2B Institute (a think tank funded by LinkedIn) published a research report that every B2B marketer should read. The 5 Principles Of Growth In B2B Marketing describes the findings of research conducted by Les Binet and Peter Field, two highly-regarded, UK-based experts on advertising effectiveness.

This report is based on an analysis of data contained in the IPA (Institute of Practitioners in Advertising) Databank. The IPA is a trade organization representing the UK advertising industry, and the Databank includes extensive data submitted for the IPA effectiveness awards competition. This database includes information about almost 1,500 advertising and marketing campaigns.

In this report, Binet and Field discuss five principles of B2B growth and effective advertising. Most of these principles embody views that run counter to much of the current conventional wisdom about how B2B marketers can effectively drive growth. While Binet and Field accurately describe their findings as tentative - more about this later - this research is provocative and should be given serious consideration.

Below is a brief summary of the five principles discussed in the report.

Principle 1 - Invest in Share of Voice

Share of voice is typically defined as a brand's share of all category advertising expenditures. A long-standing principle in B2C marketing is that brands tend to grow when their share of voice exceeds their market share, if all other things are equal. Brands whose share of voice is less than their market share tend to shrink. Binet and Field found that this principle is equally true for B2B companies.

Principle 2 - Balance Brand and Activation

Binet and Field argue that B2B companies should balance their spending on brand building activities and sales activation activities.  They define sales activation as any marketing activity that is designed to produce an immediate response from a potential customer.

Sales activation activities usually produce results relatively quickly, and their short-term ROI can be high. But the effects of sales activation activities don't last very long, so they don't foster long-term growth. Brand building activities, on the other hand, excel at driving long-term growth because their  effects last longer.

Binet and Field found that the effectiveness of B2B marketing is maximized when a company allocates about 46% of its marketing budget to brand building and about 54% to short-term sales activation.

Principle 3 - Expand Your Customer Base

The growing importance of customer experience, and the shift to subscription-based business models have led some B2B marketers to place greater emphasis on programs intended to improve customer retention and loyalty. However, the research by Binet and Field found that customer acquisition strategies are much more effective at driving growth than customer retention/loyalty strategies. They also found that reach strategies - strategies that seek to engage both customers and non-customers - tend to be most effective of all.

Principle 4 - Maximize Mental Availability

According to psychologists, human beings use a variety of mental shortcuts called heuristics when they make decisions. One of the most important mental shortcuts is the availability heuristic, which says that when people are facing a choice between several options, they will tend to prefer the option that comes to mind most easily.

Marketers have long known that the availability heuristic plays an important role in B2C marketing. The research by Binet and Field found that mental availability is also critical in B2B marketing, and that marketing activities that increase share of mind are highly effective at driving growth.

Principle 5 - Harness the Power of Emotion

Binet and Field found that emotions are almost as important in B2B buying as they are in B2C buying. Specifically, they found that B2B advertising messaging that appeals mostly to emotions is far better at creating brand preference than more rational content. Conversely, rational arguments perform better than emotional appeals when the main objective is short-term sales activation. The researchers also argued that emotional brand building programs can improve the effectiveness of rational sales activation programs.

Caveats

As I noted earlier, Binet and Field acknowledged in the research report that their conclusions should be viewed as tentative for several reasons:

• The research was based on an analysis of less than 50 cases in the IPA Databank, so the sample size is very small.
• The campaigns analyzed may not be representative of B2B marketing in general.
• The campaigns analyzed tended to have relatively large budgets.
• Most of the campaigns analyzed were run in the UK.

Despite these caveats, the research by Binet and Field raises several important issues, and I hope to see more research on these issues. Much of the conversation in B2B marketing focuses on how many things have changed. The research by Binet and Field reminds us that some things may not have changed as much as we usually think.

Image Source:  The B2B Institute (LinkedIn)