Sep 8, 2014 | Change, Customers, Marketing, Small business
www.strategyaudit.com.au
In 1968 a seminal Book called “Consumer behaviour” Engel, Blackwell & Kollat described the 5 steps in the marketing process that dominated marketing thinking for the next 45 years.
It is clear that they are still as valid now as they have been for all those years. It is just that the tools we now have to manage the process are at once way more sensitive, and way more complicated than they were.
The 5 steps are:
Problem recognition. Not much has changed here, although we are way more sophisticated at discovering when someone may be seeking a solution to a problem, and can step in and assist, but essentially, the recognition of a problem to be solved remains where it has always been, with the consumer. In B2B, the sophisticated sales approach has evolved to what Neil Rackham calls “situation questions” that lead to unearthing and defining a problem, or opportunity for improvement the buyer was not immediately aware of.
Information search. Here the world has been turned upside down by the search tools available to consumers. In addition, sellers now have the opportunity to recognise an information search, and try to engage in the process with the searcher to deliver valuable information, and perhaps progress the sales process in their favour.
Alternatives evaluation. Perhaps this stage is where the greatest changes have occurred. Pre-web, it was the sellers who had most relevant information, and they were in control of the timing, type, amount of information, and how it was given out to a prospect. Now, the power is with the consumer, and in most cases this 3rd process is well advanced before a potential supplier has any idea that the buyer is in the market. However, it is also here that the tools available have exploded, from personalising the web site delivery of information to rapidly evolving promotional and informational mobile apps, emerging geo location mobile promotions, product and service review websites, and more .
Purchase. Amazon and Ebay turned the retail experience on its head, aided more recently by the penetration of mobile. However, when you look at the numbers, the percentage of a consumer total purchases made on line is not more than about 5%, but the spread is uneven across categories, and there is all sorts of research that offers a different, nuanced view. Just ask your local bookstore of music retailer if you can find one. In addition, new ways to purchase have evolved. Apple for example built an entirely new purchase eco-system with iTunes, which in itself is now being disrupted by Spotify and other subscription models.
Post purchase. The notion of the purchase transaction being the end of the game is also over. Lifetime value of a customer is now a really important consideration, as is the consumers opportunity to express their views post purchase via social media. Businesses that ignore the value and opportunity of the post purchase period, indeed the opportunity of consumers to express views on virtually anything, will probably not live long enough to fully realise their mistake.
These 5 steps still “step out” (sorry) the process, it is just that the tools being used have changed radically. It does not matter if you are the corner store, or Walmart, the steps hold true in almost every consumers approach to a purchase more significant than a box of paperclips, sometimes even paperclips.
Human behaviour is too hard wired to evolve at the speed at which the tools have evolved, so the manner in which the tools are used fits with the established behaviour, and changes it over time, rather than radical changes in behaviour emerging as a result of the new tools. Even the most widely adopted tool set of social media is just automating existing behaviour patterns, enabling the existing behaviour to be more effective, rather than introducing new ones.
Jul 30, 2014 | Change, Governance
www.keepcalm-o-matic.co.uk
Last night (July 29) I watched Rod Simms (ACCC chairman) interviewed on the ABC about the price reductions consumers can expect from the removal of the carbon tax. He was assuring us that consumers will receive these benefits because in effect the ACCC had the interview transcripts and documents that confirmed prices went up as a result of the tax, therefore they will go down similarly. If not, he would use the competition powers of the ACCC to ensure businesses, particularly those on whom he “had the goods” complied.
Mr Sims has generally been a pretty good advocate for the ACCC, taking on some challenging projects, but I wonder if he really believes himself when he says this stuff.
The carbon tax has just been a corrosive component of a superficial, emotional and nasty period in our political lives, devoid of facts and intelligent debate almost anywhere. However, to say prices will just drop as a result of the removal is, even by our political masters twisted standards, like asking us to believe in Santa Claus.
Politicians have systematically and capriciously distorted the truth about the state of the economy, over the last 20 years. The source of budget problem we have is on the revenue side, stemming from income tax cuts delivered by the Howard government, rather than being all on the spending side, as eloquently outlined by Dr. John Edwards in his terrific essay published by the Lowy institute, “Beyond the boom” Not addressed by Dr Edwards is the institutional waste I see in Federal expenditures stemming from the cultural imperative never to be wrong, which ensures no risks are taken, and every tiny detail is quadruple checked and backstopped before it is passed up the line, at great cost to us all.
Australian politics is stuffed.
Very low public engagement by any measure, seemingly universal cynicism about the motives and actions of politicians and their cronies, absolute lack of intelligent debate in the House of Representatives, and mayhem in the senate. Little has changed since this December 2009 rant, but I remain an optimist.
Australians have shown a remarkable ability to absorb change, and to enable the evolution of a society unimaginable to those who authored the constitution 114 years ago, so perhaps this is all just a component of the recipe for more change.
I hope so, but it does seem that this lot have polished the political game to within an inch of its life. In a debate, you can usually count on the truth being somewhere between the starting points of the adversaries, but in our current political climate, the truth, and any facts seem to be somewhere else entirely, utterly disassociated from the discourse.
Wouldn’t it be nice to see politicians held to the same standards they impose on the rest of us in relating to misleading statements, fraudulent conduct, false advertising, and the rest?.
Whoops, stop, there is a pink, flying pig going past.
For those few who got this far, thanks, but you must have too much time on your hands if you are to indulge my rant, but thanks anyway.
Back to work, to seeking ways to assist SME’s navigate the shoals of reality, and I will not be advising them to just drop their prices by 10% of the cost of their energy, that would see most of them broke.
Jul 27, 2014 | Change, Communication, Marketing, Small business, Social Media
The single biggest stumbling block I see to successful digital marketing is not the technology, or the money, desire, or need, it is simply the unwillingness or inability to create relevant, engaging content of value that suits the context in which it is seen.
Usually it reflects a lack of a solid understanding of why they are in the business, other than to pay the bills. As Simon Sinek would say, the “Why” of the business.
Interestingly, the same stumbling block exists with bigger enterprises, they may have websites stuffed with words and pictures, but often that is all they are: words and pictures without value.
The same reasons exist for the failure in both categories.
- Lack of marketing leadership. Where marketing is seen as an expense, and customers are all those out there from whom we need to extract money. In these cases, creating content is always a barrier, and where it exists, it is usually a steaming pile of crap. Irrelevant, hard to navigate, bland, talking about themselves, yada, yada. Almost always the content improves when the customer is put as the focus of the content generation activity, answering the question “how can we better inform our market” When everybody in a business recognises that they have a marketing responsibility, you get the environment where content can be improved, and this is a leadership function, to drive the culture.
- Content is not recognised as an asset to be leveraged. Knowledge is the new currency of success, in almost every business. Those who know more, and can leverage that knowledge, find success. Knowledge management is therefore crucial and where does it reside? Between the ears of employees, stakeholders, suppliers, and often customers. When that simple fact is recognised, steps can be taken to extract the knowledge, and organise it in some way to become information of value to customers. Intellectual Capital, is knowledge that can be used, and unlike physical capital, the more it is used, the better it gets.
- No process to record and organise ideas. Content is everybody’s responsibility, but there needs to be processes in place that make it easy, and encourage the contribution of ideas and information that can be massaged into content of value. The best i have seen are a bit like the traditional sales funnel, everything that comes in , and coming in is everybody’s job, is recorded, then the ideas and information progressively filtered and organised in a process that creates value for recipients at the end. You really need an idea bank into which everyone makes deposits, and deposits are rewarded, and used to create valuable content.
- No focus on content. The old adage, what gets measured gets done, is true, if it is important, and is treated as such, it will get done. One business I work with is led by a lady who sees content as important, so she devotes a part of her considerable energy to creating it, and by that simple example has tuned the place into a content generation machine over a relatively short period, and they are getting the sales to prove it works.
- Content is marketing’s job. NO. It is everybody’s job in an enterprise to assist the customer.
- You think you know it all, and why would you tell your competitors?. When this syndrome becomes obvious it is time to leave. Most commonly I see it in other wise sophisticated technical businesses, where the history tells them that keeping information to themselves, and dolling it out to customers like a drunk offering a swig at his bottle when they ask nicely is the way to gain and keep customers. Rubbish!
- Content for contents sake. Putting up any old stuff on digital platforms is counter productive. Our digital world has given all the power to the customer, if you post rubbish, it will be seen as a reflection of the business, and who would want to do business with you?
There has been a lot written by all sorts of people on the subject of “content” and there is a lot more coming. However, there are a few simple rules that should be followed:
- Make sure whatever content you put out there is a reflection of the business, its priorities, strategies, and value proposition.
- Know who your primary customer group is, and what they are looking for in a supplier in your space
- Always look at your content with the eyes of your customer, and in the context of the competitive landscape in which you are competing for your customers attention, engagement, and ultimately, money. If your digital face is not up to scratch, why should customers trust that your products and services are any better?
I would be very happy to talk more about all this over a coffee.
Jul 21, 2014 | Branding, Change, Marketing, retail
It is fascinating to watch the evolution of the marketing of the two retail gorillas, Coles and Woolworths.
It is clear what they are doing, setting out to engage consumers with the freshness, range and provenance of their produce, and selling consumers all the packaged goods they need on the way through the stores. Their strategies are working, but more importantly, they highlight the depth of the opportunity for those few independent retailers left alive, and points to the way the more fragmented food service, ingredient, and emerging home delivery and farmers markets should be marketing themselves.
Coles and Woolies remain mass retailers, vulnerable on the edges.
A few years ago Woolies were undisputed heavweight champ, Coles the belted contender with no hope, but how things can change with a new trainer. Coles has been rejuvenated, and whilst their financial results have been hugely improved, they have a way to go to catch Woolies, but in the marketing stakes, they have taken the lead.
The sponsorship of “Masterchef” was a masterstroke, and they have followed up and leveraged the success extraordinarily well, with Woolies just starting to respond by buying Jamie Oliver to shape up to Heston, Curtis, and Status Quo (I was young in the 70’s) and a massive and very well co-ordinated marketing budget. Bit of an uneven contest.
From a consumers perspective, increasingly their choices are limited to brands the retailers control. Wether they be Coles new “Heston Blumenthal” brand, Woolies “Jamie Oliver” brand, or one of the various other housebrand versions at differing price-points, and pack configurations, they are all housebrands.
Suppliers of packaged proprietary brands have been progressively squeezed out, and those left are mostly sourced via global supply chains rather than manufacturing domestically, where almost nobody is left standing.
Change always starts at the fringes, as we have seen time and again over our history. Change is happening now in the food value chain, but at the fringes. Organics, local produce, micro suppliers of almost personalised products, restaurants differentiating on the basis of seasons and local supply, “pick your own” farmers markets, food tourism, various home delivery services, all happening outside the supermarket, some pretty basic marketing communicating the differentiated offer.
Jamie and Heston can take their money to beat each other up in the ad breaks of the nightly news. The increasing number of us who really care about what we eat, will go to the local blokes who genuinely care about what they deliver to us, and buy from them.
Jul 16, 2014 | Change, Customers, Marketing, Sales
Prospecting, lead qualification and nurturing, prospect management and the transaction itself have all changed forever.
The salesman with a bag has been relegated, at best, to the transaction end of the prospect to transaction continuum. In the process, we have lost some of the humanity, some of the eyeball closeness that good sales people brought to the table, the insights and instinct gathered from the context and body language that underpinned all the conversations they had.
All gone, but most would agree that body language holds a significant place in the sales process, so how have we replaced it?
Is there such a thing as “Digital body language”?
Can we score metaphors of the physical reaction from digital interactions?
Logically the answer has to be ‘Yes”, as we now have access to a huge body of data that reflects the sum of behaviour of all who come into contact with whatever platform or tool we have working for us. However, access to data is a very long way from leveraging the insights that are hidden within the data, a fairly advanced level of analytic capability along with a tool with some grunt is required, although simpler tools with manual intervention can be made to work.
Consider the process:
- Somebody reads a blog post and “likes” it, better yet, shares it,
- They subscribe to the blog to make receiving it automatic,
- They respond to an offer, webinar, e-book download, surveys, or combination of these, perhaps several times, and all the while your system is recording and responding to their actions, delivering the next step to them.
- The system is constantly being improved as more data points are collected, and A/B testing provides finer grained insights
The data collected can be sliced and diced, weighted and resliced in all sorts of ways that can provide an almost visceral insight into the behaviour of groups and subgroups to various content stimuli at differing levels of engagement. The relative effectiveness of differing pieces of content at each point in the sales continuum can be calculated with good levels of accuracy.
Surely this is the equivalent of the sum of the body language cues of those in the database, if not necessarily that of any individual within it, and so is a very effective guide when well used. Data will never replace the one on one human responses, but the value of the digital picture built up is a source of enormous value, immeasurably widening the net of prospects beyond what can be achieved with boots on the ground.
Jul 9, 2014 | Change, Marketing, Small business, Social Media
Last weekend the local tennis club of which I am a member had an open day. We marketed the day pretty heavily to the local community over the course of a couple of weeks, and got a great turnout. In order to ensure we could follow up, we collected the email addresses of visitors by offering entry to a raffle for a new racquet.
I have just completed transcribing the emails into our system, and considering how we may have done it better. A number of factors were absolutely obvious, and whilst they should not have been a surprise, the extent of the change evident in our collective behaviour was indeed a surprise.
- We asked for phone numbers, but did not specify mobile or landline. Every single number we got, which was every visitor except one, gave us a mobile number, not one landline.
- With one exception, every person, irrespective of age, gave us an email address.
- A quick look at the analytics on the website over the past few weeks shows that just over 76% of the hits have come from mobile devices. Whilst the numbers involved are not huge, the dominance of mobile surprised me.
I read, and talk about the switch to mobile every day, but it has been to date a theoretical fact, something I was aware of, understood, but had not brushed against directly to the extend that the general numbers indicated. Now however, the understanding of the numbers has a very personal dimension, and I have absorbed the lesson rather than just understood it.
Unusually for me I have been at home for the last few weeks, and I have been answering the home phone while my wife is away. In the two weeks, there have been quite a number of calls, every single one a telemarketer.
Why am I paying line rental? It seems it is to give telemarketers access. I think I will cancel the landline, the boss will never notice when she gets home, unless she really likes the sales calls.
