Behavioural Marketing

Customer centric marketing is just too difficult, luckily I think we can give up on it and move on to something a bit easier, behavioural marketing.

We still talk a lot about segmentation and understanding customers needs. The argument is we can group customers into like minded groups and infer likely behaviour from their profiles. Why bother? It is a lot easier to observe what they do, and offer them something on a 'people like you' basis.

What do Amazon know about us? Nothing much about us as people, why should they care. But they do know what we buy and what we have told them is in our wish list. They don't care if two book buyers have different profiles, what does interest them is that they buy the same books. Admittedly they could get a bit smarter merging profiles and behavioural data but it sounds like a lot of work for very little return. Predicting book reading interests from personal data is just too much like guess work, you will get many more misses than hits.

Behavioural marketing is easier to apply in e-commerce environments, retail and service, the likes of Amazon, BA Frequent Flyer clubs but the behavioural approach is applicable across the board. What it means is that the role of the marketer is to do stuff, give stuff away, offer help, offer services, content, whatever allows the customer to do something, interact. The marketer is searching for Behavioural clues. Consequently our job is to do something interesting to the customer rather than something that looks to sell with indecent haste. In high end business technology the things that work best are the offers of free IT reviews, on and off line. The information you get is all you need to know about a customers requirements and willingness to purchase.

The problem with the behavioural marketing approach is that as marketers we have to think about the quality of prospects and customers rather than the numbers we reach. For some this is a major cultural shift, for others it is an easier transition. Behavioural marketing is more than behavioural targeting it is effectively the fusion of digital and direct marketing. It is giving us 121 marketing but without the complexity of profiling and inferring behaviour from attitude, profile, demographics, firmographics or whatever. So what will make it really interesting is when (complimentary) businesses sharing their behavioural data becomes common place.

One day soon, what do my customers look like, may become an irrelevant question. We just won't care.

A Marketing DO list - distributed content

One thing that has changed over the last few years in marketing is an increasing need to go and do things rather than just talk about it. Unfortunately whilst small operations get this, the bigger corporations, clients and agencies alike, have not quite grasped this for a number of pretty understandable reasons. Firstly, there are internal pressures to get the strategy perfect. Secondly, how do agencies charge for earned media, which cannibalise their traditional revenues. As no one has quite mastered payment on performance, agencies will naturally do the work that feeds the children (we are getting older) and leave the other stuff to later. Thirdly, traditional media is more visible (success and failure) to the organisation so as a marketing director you focus on this stuff first. I would.

Distributed content is a classic example. We all know it is a great idea but we can spend too much time in circular strategising.

"How and where are we going to distribute content?"
"Depends on what you are saying?"
"What do we talk about it, the stuff we are marketing or something else?"
"Surely we can re-use our content?"

So here are some DO-ing guidelines.

1. Distributed content is a longer term strategy so focus on your brand, your attitude and what makes you different. Sacrifice strategy to be interesting. In other words don't bother distributing boring marketing stuff or thinly veiled advertising unless you are Apple.

2. Dedicate time and resource (that means people) to creating interesting stuff. You cant just wave goodbye to your content as it leaves the door and hope it brings the goodies back. Hire a journalist, a copy writer. Create videos. How to's. How not to's. Top 10s. My mistakes. It is entertainment.

3. Social media. Get your videos on YouTube, Blinx and other video sharing sites. Get pictures on google images and other photo sharing sites. Wikipedia, How to sites. Link it. Tag it. Start now.

4. Use links and buttons in your email to entice visitors to other destinations. You don't want to be too in the face. Be brave, link away from your site. Host third party content tools in your site if you want to be really clever and transparent.

5. Having already established links with friendly bloggers keep them informed, they are linked with each other so this can snowball really quickly.

6. Plan news releases for next 12 months. Manage your media relations. They love content if it is good. Foster relations, don't harass them ask them what they want. Try using a phone as well as email.

And if you get this half right it should improve relevance scores and traffic through organic search and .

Rewiring business brains

Where do i save a presentation to a client on social media and CRM? Do i save it under the client name or under a discipline? Or both?

When the 4 and 5 year olds of today grow up they won't know what filing is. They may not even understand the concept of folders. That is because everything will be tagged, they will think in terms of search even now i have given up saving files in neat folders on the computer. Save it anywhere and find it again with google desktop. They will also think video. A Forrester type organisation estimate that 91% of new content in 2014 will be video. YouTube is already the world's no 2 search engine.

Increasingly we will struggle to think in linear terms, we will think more by concept association. Even now generation x, or y or is it z, reared on digital struggle to tell structured stories but what they are very good at is managing lots of different thoughts and not worrying about how everything connects. They use their right brain to make sure it feels alright rather than worrying whether something is watertight. Mr Logic has been allowed to put his feet up.

So going back to presentations and presenting information i suspect the new way to illustrate complex ideas will be increasingly be via images, video and pictures; documents will not be structured in a a linear order but the different sections will be hyperlinked. Clients may ask for a 3 minute video pitch rather than charts.

I am sure this 'rewiring' has big social and educational implications but for the moment the thought of less powerpoint is a pretty good one.

The future of CRM

Understandably businesses are increasingly obsessed with customer loyalty - both emotional and financial. Customers are harder to win over, as the mantra goes - they are in control.

So how long will it be before businesses offer customers stock to stay loyal. It is the perfect arrangement. If you like us you can be part of us, every time you buy something you get a little bit of us in return. And of course customers will be less tempted to go somewhere else because they will feel the company is 'theirs' - even if they only own 10 shares. It does not have to be tricky. Take Tesco, they could buy back stock and hand it over to customers for club card points at the year end. 'I go there so often i should have shares in the place' will be a reality.

The means of production will fall into the hands of the workers to paraphrase the German bloke - it would just be ironic that shares the symbol of capitalism will be the mechanic that makes it real.

Suicide and customer satisfaction

Sweden is the 7th happiest country in the world based on a Leicester University study, Denmark just a few miles away is no 1. But they both rank extremely highly in the international suicide rate table. For that matter where do you think Switzerland -not unassociated with suicide ranks? ... that's it, 2nd in happiness.

This research is based on a questionnaire along the lines of how happy are you (there are other more sophisticated ways of measuring happiness). But it illustrates a really important statistical point.

If you take all the unhappy people out of your happy survey or they exclude themselves by virtue of suicide then your national happiness score will increase. So any happiness survey needs to find a way of accounting for this, perhaps including their responses until they would have reach the average life expectancy, but that doesn't sound right either. Exactly the same logic illustrates why the FTSE 100 does not reflect the fortunes of the economy, it is because the companies that perform worse fall out of the index. It is called survivor bias, which takes on a whole new meaning when you relate it to happiness and suicide.

And the point. By the same logic we should not exclude customers who have moved to a competitor from our customer satisfaction scores; if we want to use customer satisfaction as an indicator of how we well we are servicing customers. The smarter way to measure this is to use a composite score underpinned by churn, customer sat, net promoter scores. Otherwise it is conceivable you would see customer sat increase side by side with customer churn.

I now have to explain to the family why i have bookmarked a couple of pages on suicide statistics.

When choice drives women crazy - Times Online

When choice drives women crazy - Times Online

Another article highlighting the confusion created by too much consumer of choice - in this instance in technology, if you get a chance do read the 'paradox of choice'. Still think it is the best, most rigorous book on the subject.

And whilst i am on there was a feature in the daily's ridiculing labours 'minister of spin'. apparently he had circulated emails discussing 'behavioural economics', 'loss aversion' and other madcap ideas to MPs.

Not sure what to make of this. Is the take out that MPs are too thick to understand it or that that the ideas are too way out there. I suspect the problem is that it is difficult to always express new ideas on one page in 5 sentences with double spacing.

Reinvigorating brand Santa (reprise)

The present situation

Santa has won the hearts and minds of his customers. But growth is fuelled by population expansion, retention rates are average at best. The customer relationship starts round age three and fades ages 7 to year 9. Santa is privately owned so there is no financial reporting requirement. The business model is hazy; it is not clear how Santa makes its money. To grow the business you require cashflow or substantial capital. Property lease back is a non starter; they only seem to have seasonal concessions within a variety of retail outlets. Lapland HQ is not practical for other businesses of this scale, so you wont be able to find alternative tenants. Opportunity cost of these assets would seem to be close to zero.

The solution to turning Santa around must lie on the revenue side of the equation.


Our recommendations.

1. Brand identity. Santa, St Nicholas, Father Christmas, Papai Noel, Babbo Natale – the different names dilute the brand. Choose one name and stick to it. It worked for Snickers. Whilst a name that resonates with the Chinese market is tempting we feel an English name provides the greatest global reach. SantaServices gives you brand stretch.

2. Create added value services e.g. charge for different delivery options, delivering on Christmas Day should be the premium not the standard service.

Why not charge for returns or provide warranties? It estimated that 15% of presents are damaged on Christmas Day. This must be a significant revenue opportunity.

3. Merchandise yourself how about replica kits for children; think laterally! What would be the equivalent of the soccer away strip? What about a light suit for hotter climates. Don’t be a slave to red.

4. Investigate sponsorship opportunities. Formula 1 would offer the best benchmark. Look for brand synergies, but obviously avoid competitors like DHL, red letters days unless there is a clear income opportunity.

5. Share of hearts. Make sure Santaservices.com is on all packaging and clothing. “This present was bought you to by Santaservices.com” reinforces the brand.

6. Embrace digital. Letters posted up chimneys is a nice touch but difficult to believe it is practical. And this hardly good for the environment. Email has to be the way forward. Make the website work harder, a personalised web experience is essential. And of course this year we are expecting mobile technologies to take off so integrating SMS is a must.

7. Brand experience days help your best customers embrace the brand. It is probably Pizza Express No.1 marketing activity. Children come along make Pizzas in the morning and pester their parents in the afternoon to return in the evening - and they pay for it.

8. Business continuity. Business is over-reliant on one man; no one is going to invest in a business without a clear succession plan. Consider an X-Santa type show.

Give Mrs Santa more of a role cf Cameron and Brown. Older men into children can be perceived as unusual e.g. Michael Jackson.

9. Go beyond the seasonal demand. One day a year! Enormous opportunity even if we don’t go 24x7x365. Of course it is possible more frequent Christmases may be difficult to market but the core competence is distribution and logistics. Look to provide corporate outsourcing solutions.

10. Develop a retention program for teenage into adult years, you know all about random acts of kindness. Make sure the C in CRM stands for Christmas.

11. PR. Appearance is everything. Looking that comfortable in the present climate does not seem appropriate. Even Puff daddy is forgoing bling in concession to the crunch. Obesity and children is a hot topic. We really do live in an age of style over content so think about going on TV with Gok or Gillian Mckeith.

12. Crisis management. Don’t get pissed in public even seemingly indestructible can be destroyed with 1 or 8 moments of madness. (Tiger Woods)