Personalization techniques are now essential for success in both B2C and B2B e-commerce. This post will describe the need for personalization, explore how personalization approaches have evolved, and share recommendations for implementation that help avoid common pitfalls.

As the amount of spending via e-commerce channels continues to increase, the landscape has become more competitive than ever. E-commerce giants such as Amazon and Walmart have advanced the state of the art in their battle for customers and share of wallet. New entrants, including venture-backed startups, aggressively target niche markets. For firms engaged in e-commerce, the need to break through the noise, deliver exceptional customer experiences, and optimize revenue has never been greater.

What’s Driving Personalization?

Personalization techniques that tailor the content, offers, promotions, and experiences for visitors help firms achieve these goals and are now considered essential. Without a doubt, e-commerce has moved from a “one size fits all” to a “one size fits one” approach and static websites are no longer enough. There are four major forces driving the adoption and advancement of personalization.

Customers expect a great experience.

Many firms recognize that the experience their customers have as they interact with them is more important that ever. Customers expect simple, easy, and personalized e-commerce experiences. And, if a site fails to deliver that experience, an alternative is simply a click away. People are also more likely to share their experiences, both positive and negative, with others via social media.

Customer behavior has changed dramatically in recent years.

With the adoption of new technologies, customer shopping behavior has shifted significantly. Customers are now much more likely to browse and research an item in a physical store but eventually purchase the item online. And, the opposite is also true. Customers research online, but purchase in a physical store. Mobile and social technologies have increased the number of touch points most firms have with their customers. Regardless of the interaction channel, customers expect a seamless, consistent experience.

The volume, velocity and variety of data available are all increasing.

According to IBM, 90 percent of the data in the world today was created in the last 2 years alone. Firms have access to more data than ever before. This includes their own first party data, such as information about their customers stored in their CRM system, as well as third party data they purchase from others, such as customer demographic data, past purchases, and web browsing history. Firms engaged in e-commerce are very interested in how to best use this data to increase value.

Firms seek new ways to increase e-commerce revenue.

As the e-commerce landscape becomes more competitive, firms are exploring new ways to optimize their e-commerce revenue. Personalization techniques have proved very effective at increasing conversion rates, average transaction size, and customer loyalty. By 2018, Gartner predicts that B2B firms with effective personalization with outsell their competitors without this capability by 30 percent. According to a study conducted by Cisco, 70 percent of the largest segment of online consumers said that a personalized shopping experience would lead them to increase their purchases.

The Evolution of Personalization Techniques

Personalization techniques include a broad variety of technologies and processes that tailor content for visitors based on their characteristics, behaviors, and interactions. Personalization includes techniques such as segmentation, A/B and multivariate testing, product recommendations, and behavioral targeting. Over the years, behavioral targeting techniques have evolved considerably. Behavioral targeting uses information about a visitor’s past and current activity to customize content.

The first type of behavioral targeting techniques to come into general use were rules-based. With this approach, business rules are defined in advance and optimized over time through a manual, trial and error process. Rules-based techniques have a few limitations. They operate on segments of visitors but don’t customize content for each individual visitor. They are also resource intensive and require ongoing investment to define, test and refine the rulesets.

As behavioral targeting techniques evolved, a new type of approach, based on algorithms rather than rules, began to emerge. These techniques became know as automated or algorithm-based targeting. With automated targeting, software is used to automatically identify micro segments of visitors and evolve statistical models that increase in effectiveness over time. Automated approaches can improve over time—without manual human intervention—and they can find patterns that humans may not be able to detect.

Personalization Best Practices

When embarking on a effort to introduce or improve personalization techniques, there are several best practices to keep in mind in order to avoid common pitfalls. Personalization can be very effective in improving customer experience and increasing revenue. However, effective implementation as well as ongoing management and monitoring are crucial.

Tie investments in personalization to business objectives.

It is very important to define the success metrics for personalization and to measure and monitor against Key Performance Indicators (KPIs) on an ongoing basis.

Don’t surprise visitors with how they are being targeted.

Make sure that personalization techniques aren’t overly aggressive. This is can be the difference between what visitors perceive as an exceptional, tailored experience from one they may perceive as creepy. Keep in mind that most customers don’t mind the use of their past purchases with your firm or stated preferences in customizing content. However, many people are less comfortable with the use of their web browsing history or social media updates.

Actively measure and monitor personalization processes.

All personalization processes should be constantly managed and monitored. Care must be taken to make sure that personalization techniques continue to improve customer experience and sales. This is especially true for automated behavioral targeting techniques where the statical models driving customization are always evolving.

Take an iterative, agile approach to personalization.

The best approach to personalization involves experimentation. Through ongoing test and learn cycles new customized content, promotions, pricing, and products can be explored to determine what leads to improvements.

The Road Ahead

Personalization techniques have evolved over the years and become more sophisticated as available data, personalization technologies, customer expectations and e-commerce competition have all increased. Personalization is now an essential technology component for success in e-commerce and one that can have a significant impact on customer experience and sales. Firms should consider the types of personalization techniques available and evaluate whether rules-based or automated behavioral targeting techniques are appropriate. They should adopt an ongoing, test-and-learn approach to personalization that leads to continuos improvement. And, finally, they must keep customer expectations of privacy in mind to ensure a positive customer experience.

Photo copyright: alphaspirit / 123RF Stock Photo

Summer Reading List

June 4, 2014 — 1 Comment

Summertime is here. As the pace of work slows a bit and you escape to the beach or the mountains, it’s a great time to catch up on reading.

So, what will you bring with you? Here’s a list of great reads for marketers. Some are classics. Some are new. Some are edifying. Some are inspiring. All will help shift your perspective and bring new insights to you and your organization.

Enjoy your downtime. You deserve it. And, happy reading!

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by Bob Lord & Ray Velez

Over the course of their careers, Bob Lord and Ray Velez have had a front row view of the convergence of marketing and technology. As CEO and CTO of Razorfish, a large, global digital marketing agency, they provide their unique perspective on how to succeed in the digital and social era.

Bob and Ray make the case for close collaboration between marketing and IT departments and provide a blueprint for culture and business process change. They explain the new landscape of customer expectations and dive into technologies such as interactive marketing, cloud computing, omnichannel commerce and ubiquitous computing.

Favorite Quotation:

“The villain throughout this book is the silo.”  -  tweet this

 

11 Rules for Creating Value in the #SocialEra41DFHIIKtvL._BO2,204,203,200_PIsitb-sticker-v3-big,TopRight,0,-55_SX278_SY278_PIkin4,BottomRight,1,22_AA300_SH20_OU01_

by Nilofer Merchant

By now, much has been written about the impact of social media on business. Most of this has focused on opportunities to leverage social media from a marketing or customer service viewpoint. Much less, however, has been written about how social media changes more fundamental aspects of business. How will social media change the way we approach strategy? Will it impact the structure of firms? How will it change how people work together as well as corporate culture? And, how will social media help unlock more of the talent that exists within each individual?

In her book 11 Rules for Creating Value in the #SocialEra, Nilofer Merchant addresses these topics, exploring emerging themes and raising new questions for us to consider.

Favorite Quotation:

“Anyone can, but not everyone will.”  -  tweet this

 

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by Harley Manning & Kerry Bodine

As two of the most prominent thought-leaders in customer experience, Harley Manning and Kerry Bodine couldn’t have chosen a better time to write their book, Outside In. Businesses across many different industries are recognizing that creating positive, compelling experiences for their customers is more important than ever. Leaders in customer experience have superior financial performance and sustainable success.

However, customer expectations are increasing every year, and the proliferation of digital, social, mobile and physical touch points makes creating consistently great experiences very challenging. Harley and Kerry offer practical advice and share success stories from leading firms.

Favorite Quotation:

“You need your customers more than they need you.”  -  tweet this

 

The Pursuit of Social Business Excellence51fdHShxCqL._BO2,204,203,200_PIsitb-sticker-v3-big,TopRight,0,-55_SX278_SY278_PIkin4,BottomRight,1,22_AA300_SH20_OU01_

by Vala Afshar & Brad Martin

Vala Afshar and Brad Martin assert that the digital and social era provides businesses with the tools to extend their values, core beliefs and guiding principles to their employees, customers, and partners. This creates an unprecedented opportunity for social and cultural transformation.

Social collaboration—with mutual benefit for all involved—is the key to true connection and requires the ability to listen, learn, share, engage and add value in a way that’s scaled and amplified like never before.

Vala and Brad argue that the transformation to a social business requires technology, but technology should not be the focus. To truly benefit from the opportunities of the social era, businesses must focus on culture and people first and foremost.

Favorite Quotation:

“A social business simply cares more.”  -  tweet this

 

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by Jay Baer

Jay Baer is one of the most widely-recognized thought leaders in marketing today, and he’s working to turn traditional marketing upside down. Instead of marketing that’s needed by companies, Youtility is marketing that’s wanted by customers. It is marketing that is useful, helpful, personalized and provided for free. It is the key to building long-term, trust-based relationships and customer loyalty. And, it is very effective in cutting through the clutter of the advertising and marketing that’s bombarding people every day. It is pull marketing, that which is desired by customers, rather than push marketing, that which only interrupts and annoys customers.

To win attention these days, marketers must start with a new question: “How can we help?”

Favorite Quotation:

“The difference between helping and selling is just two letters.”  -  tweet this

 

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by Ted Rubin & Kathryn Rose

Ted Rubin and Kathryn Rose make a very interesting observation in their book, Return on Relationship. The social and digital era has brought focus and attention to developing relationships with customers and nurturing them over time. This, oddly enough, almost takes us back full circle to the “before mass advertising days” of traditional, face-to-face selling.

Ted and Kathryn encourage business people to drop efforts to tie social investments to traditional Return on Investment (ROI) metrics. Instead, they advocate thinking about the true value of social strategy in terms of Return on Relationship (ROR). ROR is a back-to-basics measurement approach to assessing how well you’re developing true engagement with customers.

* Oh, and one more thing, Ted wears cool socks, which you’re sure to discover if you follow him on Twitter.

Favorite Quotation:

“Relationships are the new currency.”  -  tweet this

 

The Epic Collision of Marketing & DataDaveBirckhead_EpicCollision_3Screens

by Dave Birckhead

I’d like to round out this reading list by humbly adding my own eBook. I wrote The Epic Collision of Marketing & Data to serve as a conversation starter to explore how marketing, technology and data are coming together in rapid and powerful ways. The purpose of the book is to: cut through the clutter and hype surrounding big data and marketing; provide clear, straightforward descriptions; and present ideas and concepts that can immediately be put into practice.

The book is also published on a new platform called Snippet that makes it an ideal beach read. Snippet is available via a browser, iPhone or iPad and has totally re-shaped the reading experience to allow better navigation and social interaction while reading.

I hope you enjoy the book!

Favorite Quotation:

“Marketing is going through the most significant, technology-fueled transformation in its history.”  -  tweet this

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My new e-book, The Epic Collision of Marketing & Data, was recently published on the Snippet platform and is available on browsers as well as the Apple iPad and iPhone. You can read more about the book on the Snippet website here.

The trend towards data-driven marketing in being accelerated and enabled by rapid advances in analytics approaches, big data technologies and cloud computing. Many business people are surprised when they learn just how much technologies have advanced, how much the cost has dropped and how rapidly data-driven insights can be gleaned.

What’s the Big Deal About Big Data?

By now, everyone involved in marketing and technology has heard quite a lot about big data. Big data has been one of the most-used technology buzz words for the past several years. But, many of us are still left wondering exactly what it is and how our organizations can benefit. In this section, I’ll cut through the hype, provide a clear definition of big data, and explore a few potential uses, especially those that will have increasing significance for marketers in the years to come.

So, first of all, what exactly is big data? Big data is a term used to describe the vast—and increasing—amounts of data available to organizations today.

You may hear people use terms like structured and unstructured data. Structured data means data that can be identified because it exists in a structure, most commonly a database where the data is stored in rows and columns. Unstructured data, on the other hand, has no identifiable structure. For example, images, videos, music files, emails, and documents are all considered to be unstructured data.

Large amounts of structured and unstructured data have been the norm in most organizations for quite some time. So, why all the buzz about big data? As it turns out, data volumes have been increasing, especially the volumes of unstructured data. Which makes sense when you think about it. Our increasing use of social media, digital photography, digital video, etc has led to vast amounts of data. Its not uncommon to purchase a new personal computer these days with a terabyte of storage to hold all the music, photos, videos, etc. expected to be stored there. A decade ago, companies with a terabyte of data had the largest data warehouses in the world at that time. Times have certainly changed.

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The Opportunity

The real reason you’re hearing so much about big data these days is the opportunity to take advantage of tremendous new insights that can be gleaned from the volumes of data available.

Tom Davenport, professor at Babson College and author of Competing on Analytics and Keeping Up With The Quants, has identified three different types of analytics that benefit from big data and new approaches.

Business analytics: Business analytics are the traditional reporting, dashboards, and business  intelligence infrastructure that has been in place in most organizations for many years. Advances in business analytics have led to the introduction of new key performance indicators (KPIs) and the capture of data from disparate sources across the enterprise.

Predictive analytics: Predictive analytics uses data from the past and present from internal and external sources in order to build statistical models to predict future events. For example, predictive models can be used to predict when customers are likely to leave or the future lifetime value of different customer segments.

Prescriptive analytics: Prescriptive analytics produce insights that tell organizations what to do. In marketing, prescriptive analytics can be use to optimize the mix of marketing investments and create pricing simulations.

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Enter Cloud Computing

Cloud computing is making it easier than ever to spin up new computing resources—accomplishing this with literately a push of a button. And, cloud computing infrastructure is often half the cost or less. Companies such as Amazon have revolutionized cloud computing with Amazon Web Services (AWS) and have driven down cloud computing costs over the past several years. Many organizations have discovered that cloud computing infrastructure is much more reliable and secure while a fraction of the cost of on-premise infrastructure.

What this means for marketers and other business people is that the ability to quickly ramp up computing infrastructure and integrate and analyze data has never been cheaper, faster or easier. In the past, developing this capability often meant engaging internal IT resources to create enterprise data warehouses which took many months and costs hundreds of thousands of dollars.

“Cloud computing is often far more secure than traditional computing, because companies like Google and Amazon can attract and retain cyber-security personnel of a higher quality than many governmental agencies.”

- Vivek Kundra, former federal CIO of the United States

“Line-of-business leaders everywhere are bypassing IT departments to get applications from the cloud (also known as software as a service, or SaaS) and paying for them like they would a magazine subscription. And when the service is no longer required, they can cancel that subscription with no equipment left unused in the corner.”

- Daryl Plummer, Gartner analyst

Big Data Marketing Recommendations

The combination of new analytics approaches, big data technologies and cloud computing unlocks new capabilities that can be obtained for less money and in less time that ever before. These changes also put marketing leaders and line-of-business leaders in the driver’s seat and increase the pressure to bring new awareness and capabilities into their organizations.

As you consider how you can apply big data to marketing in your organization, we recommend the following:

  • Big data is not about the data or technology, but about the business decisions that the insights enable.
  • Big data insights have maximum value when the focus is on real-time insights connected with front-line execution.
  • Many business insights can be found by mashing up different data pools. But, it is important to begin with whatever data is available today.
  • The best approach is business question or hypothesis-driven. Often the biggest challenge is to follow the 80-20 rule and identify the 20% of the data that provides the right insights.

How to Become a Marketing Hero

Imagine the following scenario. A CMO presents the results of the latest marketing campaign to the CEO and other members of the executive team. Their expectations for the presentation are remarkably different from what they may have expected 10 years earlier. Today, CEOs and CFOs expect marketers to quantify their contributions to the bottom line. The CMO walks the team through the latest results, including the revenue impact and return on marketing investment. As the conversation turns from past results to future plans, the CMO uses data to show the predicted impact on revenue from the planned campaigns. The CEO and CFO agree and allocate additional budget to fund the campaigns.

This scenario is increasingly common but still rare in many organizations. The use of data to quantify marketing’s contribution to financial outcomes is quickly dividing marketers into the “haves” and “have-nots” of data-driven approaches. When marketing is able to speak the language of the CEO and CFO, alignment improves as well as the CMO’s standing in the organization. Data-driven marketers are much more likely to be invited into strategic planning sessions and be perceived as delivering greater value to the organization.

While only a fraction of organizations could be considered data-driven today, many marketers understand the need to move in this direction. There is often some degree of hesitation, and many marketers are unsure of how to take the initial steps. Wharton professor David Reibstein summarized this very well in a recent interview:

There are some CMOs who embrace finance, data, dashboards, and transparency. These CMOs are the ones who are being invited to the table. However, there are many who simply seem afraid. Some seem afraid of being held accountable. The irony is that without demonstrated value, they are actually more at risk of being fired. Some seem to be afraid of what the data will show, that perhaps the valuation isn’t as good as you’d like. However, this shouldn’t be something to be feared as the first time you measure it you are creating a baseline. The goal is simply to be able to figure out how to improve the valuation over time.

Marketing KPIs

The good news is that there are relatively simple and straightforward ways to get started. Many marketing Key Performance Indicators (KPIs) can be captured on spreadsheets and don’t require lots of additional data or technology investments. The key is to start with something simple and evolve over time.

While there are many different marketing KPIs, two stand out as perhaps the most important: Customer Lifetime Value and Return on Marketing Investment. Let’s explore each of these in turn.

Customer Lifetime Value (CLTV)

Calculating the lifetime value of a customer can create significant new insights for marketers. Customer Lifetime Value, or CLTV, is simply the projected profits from a customer over the entire relationship with that customer. CLTV helps organizations understand the upper limit on how much they should spend to acquire a customer.

Some marketers calculate the average CLTV across their entire customer base. However, this can cover up some of the interesting insights happening below the surface. As Don Peppers and Martha Rogers often advise: “not all customers are created equal.”  CLTV is also important in driving an improved understanding across the organization of how much more valuable certain customers or customer segments are than others. For example:

Customers in Segment A have a CLTV four times higher than the average customer. Even if it costs more to acquire customers in this segment, it can be highly valuable to target and acquire them.

While there is no standard calculation of CLTV, it is possible to begin with relatively simple calculations and evolve from there. Harvard Business School Publishing has made an online CLTV calculator available at: http://hbsp.harvard.edu/multimedia/flashtools/cltv/customer_lifetime_value.swf

Return on Marketing Investment (ROMI)

Return on Marketing Investment, or ROMI, is simply a measure of financial contribution attributable to marketing.  It is a measure of the net revenue attributable to marketing divided by the cost of the marketing effort. It can be calculated as:

ROMI = (Revenue attributable to marketing – cost of marketing) / cost of marketing

For example, consider a company that spends $75K on a new marketing campaign that results in $500K in new sales. ROMI would be calculated as:

($500K – $75K) / $75K = 5.7

So for every $1 invested in the marketing campaign, the campaign returned over $5.

ROMI is a powerful way for marketing to begin connecting with the language of the CFO and quantify financial contribution. And, it is a great place to start when moving down the path of data-driven marketing.

The Path Forward

For many marketers, the best approach will involve starting with simple versions of relatively few metrics. Most of these metrics can be calculated in little time using spreadsheets. It is also important to learn from what other marketers are doing. There is little value in re-inventing the wheel. Seek out other marketers and discuss marketing metrics that they have put into place. Take part in marketing networking groups and share your knowledge.

Marketing is changing at a rapid rate. Key to success going forward will be our ability to learn as individuals and help our organizations increase the number of “learning cycles” we complete each year. What are your successes and lessons learned with marketing metrics? What is your experience with the best way to get started?

The way consumers are researching and buying products has shifted significantly in recently years. Consumers have taken control of their purchase process. With websites, blogs, Facebook updates, online reviews and more, they use almost twice as many sources of information to make decisions as they did in the past.  They know what they want to purchase, when they want to purchase it, and they resent any attempt to force-feed them messages. Because of this dramatic shift, the traditional marketing funnel paradigm is being replaced.

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The new paradigm for marketing is the customer lifecycle that places customer needs, not business needs, at the forefront. The customer lifecycle considers the overall experience that a customer has with a brand and how that contributes to loyalty (or not). It also better reflects the ability of each individual to influence the purchase decisions of others to an unparalleled extent. The lifecycle also illustrates the fact that the consumer journey is not a linear path. Today, consumers flow easily across stages in an iterative cycle.
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Discover

In this stage, consumers discover an unmet need. They begin to think about a relatively narrow set of products and services that might meet this need. Most consumers start their decision process with brands they are already familiar with.

Explore

In the next stage, consumers begin to actively explore and evaluate their options. The consumer is intent on purchasing. They begin to explore on the Internet, research options, read reviews, and pay closer attention to advertisements and promotions. In this stage, it is critical for brands to ensure that review and comparison information is widely available.

Buy

The third stage of the process involves the consumer’s decision and actual purchase. Consumers tend to make their purchases in the most convenient channel.

Engage

In the Engage stage, consumers engage with the product or service they’ve purchased. The experience that consumers have during this stage determines loyalty and whether positive or negative feedback is shared via reviews and social media. They may also engage with customer service or a user community to receive support. Consumer activity during this stage can also help companies identify other potential needs.

Advocate

During the Advocate stage, consumers share their experiences of the product or service with others. They may do this through reviews, social media or direct word of mouth. Companies can encourage this by providing invectives to consumers to provide reviews.

What do Pandora, Netflix and Amazon all have in common? All three are world-class “segmenters.”

- Brian Halligan, CEO and Co-Founder of HubSpot

Another significant change in marketing is a growing understanding of how consumer behavior is increasingly varied, even within the same demographic segments. This has given rise to the concept of microsegments. Microsegments represent a more precise slice of a market and are typically identified through advanced technology and analytics techniques. Microsegments contain fewer consumers which allows for highly personalized predictive analysis and marketing optimization.

For years, marketers used demographic segments–not because this was the optimal approach but simply because demographic data was the only data readily available. Today, digital touchpoints provide much more information about consumer behavior, and this data can be combined with demographic data to create microsegments. For an example of the limitations associated with traditional demographic segmentation, see the illustration below comparing two individuals with similar demographic profiles.

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Once marketers have defined microsegments, they can use quantitative and qualitative analysis to understand how each microsegment behaves at each stage of the customer lifecycle. Marketing investments can be allocated where they will have the greatest impact.

For example, consider the hypothetical case of a company that has made significant investments in its website and website content updates. By using data to better understand its most valuable microsegments, the company finds that only a small percentage actually visit the website during the customer lifecycle. Instead, the company finds that these consumers tend to visit online review and comparison sites during the Explore stage. The company is then able to shift resources from the website to content provided to comparison sites. Better product images, information and reviews have a significant impact on the purchase decisions of these microsegments, and the company experiences a near-term revenue increase.

One of the most powerful ways that data and analytics can be used in modern marketing is in helping marketers define microsegments and then analyze the behavior of these microsegments during each stage of the customer lifecycle. The insights gained from this analysis provide a strategic overview and roadmap for marketing that guides activities and investments and helps deliver significant financial results.

As we look ahead to 2014, we expect the pace of change in marketing to only continue to accelerate. It seems like you can’t leave your desk these days to grab a cup of coffee without coming back to another change–a new marketing software entrant, an acquisition announcement, a major shift in consumer behavior, or an advance in marketing analytics. However, there are a few broader trends and patterns that have emerged. Here are 5 trends we believe will continue to have a significant impact on digital marketing in the new year.

#1 – Rise of Marketing Technologists

CMOs will increase hiring of marketing technologist and marketing operations roles.

The growing importance of software to almost every facet of marketing is giving rise to a new role in many companies: the Chief Marketing Technology Officer. A cross between the traditional Chief Marketing Officer and Chief Technology Officer roles, the CMTO provides strategic guidance to how to best take advantage of the growing number of marketing technologies. These include traditional technologies such as customer relationship management as well as analytics, marketing automation, mobile marketing and social media marketing. Marketing technologists and marketing operations pros bring technology and analytics skills as well as deep marketing skills.

#2 – Trust and the Social Era

Businesses will invest in ways to measure and increase levels of trust with their customers.

In the past decade, behavioral economists have changed the way we look at consumer buying behavior. The image of the consumer making unfettered “rational” choices has given way to a greater understanding of economic activity and the many “irrational” factors that influence purchase decisions. We’ve learned that economic life is pervaded by culture and also depends on moral bonds of social trust. Today, companies with strong brands are winning in the marketplace because they understand a simple yet profound truth: that the social capital represented by trust is just as important as physical capital. In the Social Era, cultivating trust is one of the most important activities that companies pursue.

#3 – Advanced Marketing Analytics

Progressive firms will invest in predictive analytics, prospect scoring and defining customer lifetime value. 

The world is quickly being divided into the “haves” and “have nots” of marketing analytics. Firms that have moved toward data-driven marketing will continue to develop and advance their analytics capabilities. In 2014, we’ll see more marketing organizations move beyond traditional web analytics and into true marketing analytics and marketing intelligence capabilities. This will include advances in the ability to predict responses, understand customers, and quantify the lifetime value of different customer segments.

#4 – Marketing Agility

Marketing organizations will shift a greater portion of their budgets into “test and learn” and agile marketing tactics.

Agile is a discipline picked up from software developers and it’s being applied to marketing teams. Agile teams follow core principles that shape the way they work. Those principles include:

  • a bias toward action;
  • responding to change;
  • emphasis on collaboration (people and their interactions) and,
  • iterative work cycles that deliver something of value.

Companies are finding that the best way to approach the integration of creativity and analytics is through agile marketing techniques. Many are investing 30 percent or more of their marketing budgets into these types of “test and learn” tactics. With agile marketing, teams of creative and analytics pros work together to create ideas and then use data to inform and test as they are introduced.

#5 – Smarter Content Marketing

Marketers will improve their content marketing programs by using data to target content to specific segments and evaluate content effectiveness. 

Content marketing will continue to be a focus for many marketers in 2014. However, many will turn their attention to improving the quality of content rather than creating more and more of it. Central to this effort will be the use of data and analytics to better target specific content and to evaluate how well each piece of content is performing. Marketers will improve their ability to provide the right content, at the right time, via the right channels to the right customer segments.

 “If we look back just ten years, the CMO’s job was 90 percent creativity and 10 percent science. I think now we’re at 50-50.”

- Michael Lazerow, CMO of Salesforce Marketing Cloud

As marketing becomes increasingly data driven, the landscape and the types of professionals involved in marketing are evolving at a rapid rate. This has led to many online discussions and water cooler conversations debating topics such as right-brain vs. left-brain thinking and art vs. science. However, we strongly believe that this isn’t a question of “either / or.” It is a question the best ways to combine both capabilities. The success stories are emerging daily of companies that are blending creativity and analytics in order to create breakthrough results.

When new marketing concepts are being considered, there are the typical questions of “who are we trying to reach?,” “what is the context?,” and “what behavior are we trying to drive?” Creative thinking is required to come up with the right message, imagery, and experience that will support these goals.

Companies are finding that the best way to approach the integration of creativity and analytics is through agile marketing techniques. Many are investing 30 percent or more of their marketing budgets into these types of “test and learn” tactics. With agile marketing, teams of creative and analytics pros work together to create ideas and then use data to inform and test as they are introduced.

“Good design is about clarity over style, and accountability over indifference.”

- John Maeda

For example, marketing analytics team members can use data to help the team understand customer segments at a more granular level. Data about customers can provide insights into micro-segments based on behaviors, needs and goals. Marketing analysts are also able to leverage data to calculate the potential value of each micro-segment and how they behave across each stage of the consumer decision journey.

All of this can be used as input into the creative process. Creative professionals can generate ideas based on a more comprehensive customer understanding. Demographics, needs, behaviors, and context are all available to inform the creative process.

Once the idea and creative elements have been developed, the marketing can be packaged and launched, sometimes in the form of a pilot. Agile marketing teams begin to gather and analyze data almost immediately about how this is performing. Based on the data, the creative concept and elements can either be refined or introduced to a broader group.

Perhaps the most compelling example of the power of combining creativity with analytics is in content marketing. Content marketing is now the rage in marketing groups across the globe. With more channels than ever available, marketers are focused on creating more and more content to fill each each channel. However, more of the same content is almost always not the best solution.

There is a growing body of evidence that content aimed at the needs and interests of customers and prospects is much more effective than traditional product-focused content. As creative professionals develop new content, data and analytics can help determine how effective that content is in achieving goals such as engagement and conversion. Analytics can also help marketers understand the best timing, channel, segment and consumer decision journey stage for each piece of content.

When we look ahead to the future of marketing, one thing is abundantly clear–it won’t be a matter of “creatives” vs. “scientists;” it will be a matter of blending both.

One of the interesting developments that we’ve noticed recently is that more and more companies are making significant investments in their enterprise marketing technology stack. It’s no secret that direct, digital relationships with customers are now more critical to company success than ever before. Companies have responded by ramping up their spending on technologies that enable this. These include technologies such as inbound marketing platforms, social listening tools, content management systems and web analytics platforms.

While these technologies hold much promise, there are some dark clouds on the horizon. In the rush to build out digital marketing capabilities, some companies have over-invested in technology and their enterprise marketing infrastructure. There is a widespread belief in business that technology alone can solve business problems, and this has been the case over many years and many cycles of technology adoption. It is no different today.

Too many companies over-invest in marketing infrastructure. This isn’t because the systems are overly expensive or that they don’t deliver spectacular new capabilities. It’s simply temping to invest in bells and whistles that the organization isn’t yet ready to use.

Could this be the case in your organization? Here are several classic signs to look for:

1. Lack of clear ROI

When done well, investments in the enterprise marketing stack should show clear ROI. Perhaps even more importantly, they should enable the CMO to quantify the value of marketing, something increasingly important to marketers who want the respect of other executives.  As Wharton’s David Reibstein recently remarked in an interview with CMO.com, “A lot has been written about the importance of marketers being able to connect their efforts to financial outcomes. I believe that marketers’ inability to do this has cost them their seat [at the executive table].”

If your company’s investments in enterprise marketing technology–and particularly investments in analytics platforms–have not enabled this important outcome, it is a clear signal that something is wrong. Enterprise marketing technology should link marketing activities to key financial outcomes. If this hasn’t happened, it may be time to pause and take a closer look at technology investments and the approach.

2. “Big bang” technology implementations 

Investments in enterprise marketing technology are sometimes made with a “check the box” mentality. Need a content management system? Checked it off. A new analytics platform? Yes, we’ve added that too.

There are two challenges with this approach: 1) decisions are sometimes made on a “one off” basis rather than in consideration of the full enterprise marketing stack and 2) the implementation of these of these solutions often takes the form of a “big bang,” monolithic approach with long cycle times.

If anything is certain in marketing these days it’s that change is a constant. Marketing needs will change. Keep projects short and focused.

3. Little or no talent development/acquisition

Many companies fail to examine how far they have evolved their talent and how this impacts the types of technology investments that are appropriate. There is a good analogy in car buying: smart car buyers don’t get a Ferrari when a Mini Cooper will do. Because marketing has changed so much in such a short period of time, many in marketing are struggling to catch up. Those who rose through the ranks of traditional marketing are now faced with the need to develop very different skills and mindsets.

Consider the importance of data and analytics in marketing today. Companies that invest in new analytics platforms but fail to develop their marketing talent struggle to achieve the intended results. This may not necessarily be because they’ve over-invested in technology. It may simply be because they have underinvested in developing their talent or bringing in new talent. Given the pace of change in marketing, the marketing department should have some of the highest levels of investment in professional development anywhere in the organization.

4. Cross-functional, efficient digital marketing processes are non existent 

It is unfortunately common to find companies with new technologies and old business processes. Are marketing and IT still struggling to agree on the best interaction model? Are business processes taking longer to complete than needed? Are the handoffs between marketing and sales inconsistent?

All of these may be signs that investments in optimizing business processes haven’t kept pace with investments in marketing technology. Optimized processes lead to better working relationships between marketing and IT and marketing and sales, happier employees, and rapid cycle times.

5. The marketing department is not in the driver’s seat. 

Finally, a classic sign of an overbuilt marketing infrastructure is when marketing is not front and center, understanding and driving digital marketing, from content creation and management to analytics.  The IT department is a critical enabler of marketing technology. However, the role of IT should be to manage and provide the technology capability. How that capability gets used must be in the hands of marketers. When this is not the case, it indicates that technology investments have gotten ahead of organizational readiness.

If you’ve considered some of these examples, and you find them present in your organization, the question then becomes, “how do we respond?” The good news is that when companies over-invest in marketing technology relative to other critical enablers, it often presents a great opportunity. By turning to people and process enhancements, it is possible to unlock the value of previous technology investments. We’ve found incredible success with this approach recently.

And, what CEO or CFO wouldn’t like to see that? Significant financial return by leveraging much of what already exists. It is certainly a big step towards earning marketing, and the CMO, a seat at the executive table.

When I learned the news of Seamus Heaney’s death a few weeks ago, I was instantly reminded of an essay he wrote in the New York Times a few weeks before the terrorist attacks of September 11, 2001. In the essay, he wrote eloquently about the power of poetry, using the poem “Incantation” by Czeslaw Milosz as an example. It was during this time that Mr. Heaney provided such a timeless illustration of how great poetry–and great art in general–can lift up, inspire and help people endure and prevail in challenging times.

The fact that I still remembered Mr. Heaney’s essay so clearly after so many years speaks to the power of his words. In fact, I can clearly recall sitting in the kitchen with my father-in-law, relaxing with the family on a Sunday afternoon, when he reached across the table and handed me a section of the newspaper. “This essay,” he said, “is remarkable.”

I read and then re-read the essay several times. And, perhaps it’s impact on my thinking would have been left in the past, limited in my memory to a few weeks in 2001. However, in the months that followed, I often turned and returned to Mr. Heaney’s essay and Mr. Milosz’s beautiful poem. The tumultuous next few months included my move to a new city, the 9-11 terrorist attacks, the rapid decline of the IT consulting firm I had helped to start and resulting layoffs of good friends, and, most traumatically, my mother’s death after a protracted battle with cancer. Their words bolstered me during this time, proving the truth of Mr. Heaney’s central thesis and deepening my love of poetry.

Mr. Heaney’s essay begins with a few lines from “Incantation” and a description of the thoughts and feelings they evoke.

Human reason is beautiful and invincible.

No bars, no barbed wire, no pulping of books,

No sentence of banishment can prevail against it.

It puts what should be above things as they are.

It does not know Jew from Greek nor slave from master.

.

It is thrilling to hear the ideal possibilities of human life stated so unambiguously and unrepentantly. For a moment, the dirty slate of history seems to have been wiped clean. The lines return us to the bliss of beginnings. They tempt us to credit all over again liberations promised by the Enlightenment and harmonies envisaged by the scholastics, to believe that the deep well of religious and humanist value may still be unpolluted.

Despite their power, Mr. Heaney describes these lines as problematic, for the weight of history runs counter to them. The rest of the poem, he tells us, has a certain frantic, and even comic, meter and pitch when read in the original Polish. This bit of irony saves the poem from illusion and sentimentality. As Mr. Heaney puts it, “…the tragic understanding that coexists with the apparent innocence of his claims only makes those claims all the more unyielding and indispensable.”

He goes on to argue that great poetry remains answerable to things “that should be” above “what they are.”  This, I believe, is where poetry can bolster and support leaders. Anyone who desires to lead is forced to acknowledge the prevalence of numerous obstacles while maintaining faith in the possibility of a desired future.

When William Faulkner accepted the Nobel prize for The Sound and the Fury and As I Lay Dying in 1950, he also spoke of the need for poetry and literature to nurture the human spirit–a spirit capable of compassion and sacrifice and endurance.

The poet’s, writer’s, duty is to write about these things. It is his privilege to help man endure by lifting his heart, by reminding him of the courage and honor and hope and pride and compassion and pity and sacrifice which have been the glory of his past.

As the economist and writer Umair Haque often advocates, “Read the good stuff, daily…Don’t fill your mind up with junk food.” Poetry can help leaders inspire, endure and prevail. It can help them become “artists of human possibility.”

Mr. Heaney concludes his essay with the final lines of “Incantation” and a reminder of a conviction that most of us share–a conviction that could be adopted as a text by leaders everywhere.

Beautiful and very young are Philo-Sophia

And poetry, her ally in the service of the good.

As late as yesterday Nature celebrated their birth.

The news was brought to the mountains by a unicorn and an echo.

Their friendship will be glorious, their time has no limit.

Their enemies have delivered themselves to destruction.

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