Everything they've told you about marketing is wrong!
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WELCOME Everything They’ve Told You About Marketing Is Wrong 370 – THANK YOU! April 21, 2009
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Ron Shevlin (Senior Analyst Aite Group and author of 'Everything They’ve Told You About Marketing Is Wrong') describes why it is time to define new rules for marketing. And why marketers should focus on participation. Welcome to 'Sense and Respond' marketing!
Transcript of Everything they've told you about marketing is wrong!
WELCOME
Everything They’ve Told You About Marketing Is Wrong
370 – THANK YOU!
April 21, 2009
Marketing Is Evolving? So How Can The PMN Help?
Value Proposition:• Education: Webinars/Research• Best Practices• Case Studies• Access to Future/Potential
Customers: Gen Y Panel• Don’t forget to join today!
Our Featured Speaker
Ron Shevlin,Senior AnalystAite Group and author of
Everything They’ve Told You About
MarketingIs Wrong
Page 4
Actionable, strategic advice on IT, business, and regulatory issues in the financial services industry
Everything They’ve Told You About Marketing Is WrongParticipatory Marketing Network WebinarApril 21, 2009
Ron ShevlinSenior AnalystAite Group
RON, YOU HAVE FOOD
STUCK IN YOUR TEETH.
AMERICAN DENTAL ASSOCIATION
THANKS FOR YOUR
LOYAL PATRONAGE, RON.
FRENCHY’S ADULT BOOK STORE
YOUR ALIMONY
PAYMENT IS 3 MONTHS
LATE, RON.
NY ASSOC. OF DIVORCE
LAWYERS
YOUR ALIMONY ISN’T
THE ONLY THING LATE, RON.
Dr. Seymour Schnitz, OB/GYN
Theme
Marketing is sufferingfrom Ignis-fatuus-itis*
*Ignis fatuus: Something that misleads or deludes; an illusion
Agenda
• What changed?• What’s misleading marketers (and what afflictions
do they cause)?• What should marketers do?
Theory: The four Ps of marketing
• Product• Place• Price• Promotion
Source: McCarthy EJ (1960) Basic Marketing: A Managerial Approach. Homewood IL: Irwin.
Reality: The three Ps of marketing
Predict
Push
Pray
The 3 Ps ain’t working like they used to
15
“We are fueled by a need to gain more control
over our lives, to have valid and
significant choices.”
What changed?
Demand
Self-directed consumers
Less reliant on firms
More pull, less push
More involved
Supply
More points of involvement
Web sites
Search engines
Social networks
Misleading marketing myths
• Marketing stories• Customer engagement• Customer advocacy
24
“Marketing is the story marketers tell to consumers.”
Seth Godin“All Marketers Are Liars”
Affliction #1: Delusions of brandeur
A condition where marketersthink that a branding effort
will be the antidoteto falling or stagnant sales
Page 26
“Good relationships aren’t about clear communication — they’re about small
moments of attachment and
intimacy.”
John GottmanExecutive Director
Relationship Research Institute
Marketing is getting customers to tell
stories to themselves
Larry HustonVP, Innovation
Procter & Gamble
“Successful brands have a story that consumers tell
themselves when they reach for the product in
the store to buy it.”
The stories loyal customers tell
They have the most helpful employees
They help me make the right choice
They’re really easy to do business with
“Engagement: Turning on a prospect
to a brand ideaenhanced by the
surrounding context.”
Advertising Research Foundation
Engagement: Confusion reigns
• Importance– One-third of agency execs said customer engagement
is essential to their clients versus half of marketers• Business impact
– Twice as many agency respondents as marketers said that customer engagement initiatives increased profits
• Measurement– Half of marketers have dedicated engagement metrics,
just 30% of agency execs think their clients have them
Source: cScape, 2007 Customer Engagement survey
“Engagement: A series of interactions
that strengthen a customer’s emotional connection to the
product or firm.”
Aite Group
What is customer engagement?
• Frequency of purchase• Frequency of interactions• Type of interactions• Location of interactions• Rewards program activity• Referral behavior• Category engagement
Umair HaqueDirector
Havas Media Lab
“Why do Apple customers care so much (about Apple)?
A good question…but the wrong question. The real question is:
Why don’t most consumers care more about firms and brands?”
A: Because they don’t care that much about the product/service that they purchased in the first place
Example: Measuring engagement0 1 2
None 1-5 times 6+ times
Never Infrequent Often
Never Infrequent Often
Never Online In-person
Bank offline Bank online Bank + bill pay online
Offline Online at bank sites
Online at bank +
social nets
Product research
OL banking/bill pay
Banking advice
PFM usage
Rate monitoring
Money movement
Engagement segments
Low Engagement
75%
High Engagement
25%
Source: Aite Group February 2009 Customer Engagement Survey
The economics of engagement
Source: Aite Group February 2009 Customer Engagement Survey
I often recommend my bank to my
family and friends
41%
23%
I plan to open more accounts with my bank
over the next 2 years
27%
5%
High engagement
Low engagement
Engagement = strength of relationship
Low High
1. What what can we do to engage them?
2. What needs aren’t we meeting for these highly engaged customers?
3. Who are these attrition risks and what can be done to retain them?
4. What is the profit impact of increasing customer engagement?
5. Who’s migrating between quadrants?
Customer Engagement
Low
High
Breadth of relationship
3 4
1 2
5
38
“The best way to measure loyalty is to ask one simple question: Would you recommendus to a friend?”
Fred Reichheld
Affliction #2: Net Promoter Syndrome
The belief that if the number of people who might possibly recommend your firm is greater than the number of people who hate your guts and want to destroy you, then your firm is on the path to Nirvana and should tell its story at conferences
(Some of) The issues with NPS
• Cost: Requires large investment to collect, analyze, and disseminate data -- and change incentive plans
• Operational disconnect: Doesn’t help identify what operational enhancements are needed
• Periodic: Captures opinion at periodic intervals, not continuously
• Intention: People don’t always do what they say might do
Referral behavior versus intention
Source: Aite Group February 2009 Customer Engagement Survey
I would never recommend
my bank13%
I would recommend it
if I thought there was a
good fit60%
I often recommend it to my family and friends
28%
Q. How do you feel about referring your bank to your family and friends?
Behavior trumps intention
Source: Aite Group February 2009 Customer Engagement Survey
Often recommend bank to family/friends
20%
Would recommend bank if it was a good fit
7%
Percentage of segment that plans to open more accounts with their bank over the next two years
Trust is the differentiator
Source: Aite Group February 2009 Customer Engagement Survey
11%
11%
15%
25%
55%
Doesn’t trustbank at all
Trusts bankvery little
Has noopinion
Trusts banksomewhat
Trusts bankvery much
Levelof
trustOften recommend bank to family/friends
Trust is multi-dimensional
Have employees that live up to values portrayed in ads
Have friendly and helpful service reps
Listen to my problems and concerns
Respond quickly to inquiries
Alert me to changes/issues
Rarely/never make mistakes
Clearly explain their products and services
Acknowledge competitors’ offerings
Tell me when it’s a bad idea to buy their products
Human-focused Advice-related Operational-oriented
Trust: Assured reliance on the character, ability, strength, or truth of someone or something
“To demonstrate trust, it’s important for firms to . . . ”
The stories loyal customers tell
Have employees that live up to values portrayed in ads
Have friendly and helpful service reps
Listen to my problems and concerns
Respond quickly to inquiries
Alert me to changes/issues
Rarely/never make mistakes
Clearly explain their products and services
Acknowledge competitors’ offerings
Tell me when it’s a bad idea to buy their products
Human-focused Advice-related Operational-oriented
“They have the most helpful employees.”
“They’re really easy to do business with.”
“They help me make the right choice.”
The ignis fatuus of marketing
Marketing is the story marketers tell customersCustomer engagement is about interacting with adsAdvocacy is getting customers to refer you
Marketing’s job
Awareness Consideration Preference Purchase Re-purchase
Customer Lifecycle
Trust
Noopinion
Basic
High
Low
High
Engagement
What are CMOs doing about this?
What they said*
79% said they’re improving the perceived value of marketing
What they meant
“My mom thinks I’m doing a great job.”
New competencies are at the top of the list of planned changes
“I just don’t know what competencies we need to build.”
*Source: CMO Council, 2008 Marketing Outlook
45% expect to change agencies “Told you it wasn’t my fault things are screwed up.”
“With loyalty to brands decreasing over time,
companies need to figure out how to reach customers
where they are.”
A popular blogger
The prevailing mentality
Affliction #3: Blogophilia
According to Wikipedia, this is“the irrational belief that creating a blog
or participating on social networkswill, in and of itself, help a company
reach customers and improveits customer relationships.”*
*I made that up. But you have to admit, it sounded real — as do so many of the other half-truths floating around Wikipedia
Marketing must make changes
Persuasion-based Participation-based
Attitudes Behaviors
Push-and-pray Sense-and-respond
Philosophy
Focus
Competency
Sense-and-respond marketing
Sensing consumers’ needs and intentionsbased on their behavior and
responding with the appropriateadvice, guidance, and offers
“The secret to creating strong relationships is
honesty andfair dealing.”
“If you can fake those, you have
it made.”
— Groucho Marx
One guru who got it right
Aite: Partner, CounterpartAite Group (pronounced eye-tay) is an independent research and advisory firm focused on business, technology and regulatory issues and their impact on the financial services industry.
Ron ShevlinSenior [email protected]
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