Marketers and the "us vs. them" illusion

As marketers there seems to exist a cognitive split between our work brains and our non-work brains, which I refer to as the "us vs. them illusion".

Our work brains view customers as "other"; an assemblage of abstract people whom we often glob together in our minds and try to "do things to" in order to influence their behaviors in ways that are beneficial for them as well as for the company. Under this mindset, which I have found to be a pervasive one among marketers, we forget that "we", in many ways are "them".

As a result of our inability to see ourselves in our customers, we often do not ask some of the most basic questions about the products & services that we market. For example, "would I buy my product? If so, why? When? If not, why not? What would have to happen, or how would the product have to be different for me to consider buying it?"

While it's very dangerous to project our answers to such questions onto our customers or prospects, and assume their answers are our answers, it's even more dangerous to not ask these questions at all.

As marketers, we need mechanisms & tools to help us comfortably "walk in our customers shoes", and minimize the cognitive divide that exists between our work brains and our non-work brains.

One such tool that I like to use is what I call the purchase journal. The journal helps me become more conscious and cognizant of why I purchase what I purchase; how I go about making these decisions, even the most subtle ones, such as the purchasing of a cup of coffee at Joe's deli instead of La Petite deli.

With the journal I am able to reflect on all of the nuanced and almost invisible, tiny forces that act on me and pave the way for a myriad of different purchase decisions that I make - the small ones and the big ones. I like to think of the approach as the consumer equivalent of getting in touch with your "inner consumer voice".

So what exactly is the purchase journal?
While I consider the purchase journal one of my many "trade secrets", in brief, it is essentially a log of the purchases you make over a period of time, including--most importantly--the reasons behind your purchase decisions.

As you build your purchase journal, you'll begin to tap into your "inner consumer voice", and in the process become a more mindful consumer. Buddhist analogies aside, as you cultivate this mindfulness, you'll significantly enhance your ability to move closer to "the truth" about how consumer decisions are made with a rich appreciation for the subtleties of many of these decisions.

Ultimately, this process will help you develop the skills for identifying insights about the consumers of your products - the types of insights that lead to more sustainable competitive advantage; the types of deep insights that can only be gleaned by becoming the Indiana Jones of your own consumer mind.

To learn more about the Purchase Journal - what it is and how to use it within your business, please feel free to contact me via email.

Related Posts

• Marketers and the "us vs. them" illusion... take 2
• Marketers and the "us vs. them" illusion... take 3

230 hp engine featuring Valvetronic technology, a 5-link rear suspension... huh? Focus on product benefits, NOT features!

Features, features, features... whether a product (e.g., a car) or a service (e.g., a vacation resort), it's sure to have plenty of features... bells & whistles... "goods"... "extras"...

I often find my eyes crossing as I read through descriptions of products or services. They often seem to be written for "insiders" - either people who work within the industry (e.g., car engineers, resort business managers) or the "pro-sumer" segment of the market (i.e., those consumers who are near experts when it comes to the product or service).

The challenge I find that many have within a given industry is remembering what it was like before one became an industry insider - i.e., to remember what it was like when one was simply "one of the masses".

When it comes to marketing a product or service, I find that this dynamic is one of the biggest challenges plaguing many who are in the business of marketing their products or services. The old adage of "putting yourself in your customers' shoes" is as necessary today as ever. Perhaps it is even more important given the pace at which new technologies and new products are introduced into the market.

The bottom line is that the more one lives & breathes a given industry, the more & more challenging it becomes to "put oneself in the shoes of one's customers". Industry jargon and features with non-intuitive benefits, begin to bleed into the marketing communications, leaving many consumers dumbfounded & confused.

Valvetronic technology... A 5-link/5-beam rear suspension... Does BMW expect me to know what these engineering terms refer to? I'm an average consumer with limited knowledge of cars. Words such as these make my eyes cross, and my brain hurt. They no doubt mean a lot to the engineers who developed the car; and likely to autophiles as well. But to me these terms resemble some form of early Greek. And I have neither the time nor the desire to learn a new language. My days are busy enough as it is.

So the burning question we are left with is how should BMW talk "Valetronic technology"? Clearly they're excited about it. So what should they say & do?...

CoNtEXT iS KiNg

All good marketing requires a rich understanding of context - environmental and personal.

We are always embedded in a context. The time of day; the weather; the people we are with or not with; our location - at home, at the doctor, in a store, at work; our present goals, objectives and activities; our current emotional states & energy levels... to name only a few dimensions...

When I am standing on a packed subway platform during my Monday morning commute to work, with coffee in my left hand and organizer in my right hand, I'm in an entirely different context than when I'm in upstate New York in the fall, walking through the woods with my lovely wife & our charming French Bulldog.

While I remain "Doug" in both situations, my environment and my state of mind could not be more different. While my values, beliefs & views of the world might remain relatively fixed in both situations, my needs, objectives, mental filters, and basic physiology likely diverge greatly.

In a nutshell, good marketing requires a deep, rich understanding of context. People's needs, objectives & mental filters are dramatically influenced & shaped by their environments. Given this basic tenet, marketers need to align their strategies with the environments in which their target (and existing) customers find themselves.

To give a basic example, if your main customer acquisition channel is direct snail mail, you need to develop your mailer with an understanding of the context/environment in which your mailers are likely to be viewed.

While research can help you identify the most common contexts in which people open up their mail, for the sake of this example let's say assume it's in the evening just after coming home from work. Let's also assume that people look through their mail in one sitting, and thus will view your mailer as part of quickly sifting through a stack of other mail, most of which will be quickly identified as "junk mail". Let's take our premise one step further and assume that the process of sifting through mail is a frustrating one as people try to "separate the wheat from the chaff".

So that's the context you need to keep in mind as you develop your mailer. All of the decisions that you make about the mailer (envelope, copy, design, cadence, pieces, sizes & shapes, colors, etc.) should be made keeping in mind this context, which should heavily influence your decisions.

to be continued...

What is customer segmentation?

Like so many buzz words in business & marketing, "customer segmentation" is one of those terms that is interpreted by folks to mean many different types of things. If the word "segmentation" were blurted out in a room of 20 business people, chances are it would conger up 20 different images.

So what is customer segmentation, and how can it be used to propel one's business?

Segmentation defined
Customer segmentation is a method for grouping customers based upon similarities they share with respect to any dimensions you deem relevant to your business - whether it be customer needs, channel preferences, interest in certain product features, customer profitability, etc.

The key is for you, the marketer, to first decide on what basis you wish to segment your customers (or prospects for that matter). And, the only way to answer this question is to first determine what your objective is for the segmentation, and thus what you want the segmentation to "do for you".

Common segmentation objectives

• Developing new products
  
• Creating differentiated marketing communications & ads
• Developing differentiated customer servicing & retention strategies
• Targeting prospects with the greatest profit potential
• Developing multi-channel distribution strategies

Once you have decided what your objective is for the segmentation, you can answer the question, "what do I want the segmentation to do for me?"


A brief example: segmenting for customer win-backs
Let's say you worked for a subscription-based magazine such as Newsweek. Your boss has asked you to optimize Newsweek's retention strategy utilizing the current save tactic of sending people who have recently canceled their subscriptions (aka "attritors") 1 of 3 "win-back" mailers. This existing save tactic has been employed by Newsweek for the past 2 years, and the method for determining which attritor receives which mailer has been based largely on "intuition" (aka random selection).

Step 1: Your first step in undertaking this project would be to clearly state your objective. Your objective, as per your boss, is to optimize Newsweek's retention strategy for recent attritors. This is shorthand for saying, "I want you to maximize your return on your retention-dollars invested".

Without getting into the nitty gritty of the approach, what you essentially want to do is determine the relative ROIs for each of the 3 mailers at the individual attritor level. For each mailer, you then want to identify those attritors with high ROIs (i.e., those attritors who re-instated their magazine subscriptions after receiving the mailer and provided you with future profits that well-exceeded the cost of the mailer).

Step 2: For each win-back mailer you want to identify those attributes which the high-ROI attritors have in common, essentially creating a profile for "high-ROI attritors" for each mailer.

Step 3: The final step is to operationalize the three profiles you've created so you can use them to determine which of the 3 mailers, if any, to send to future attritors. This essentially entails implementing a process in which new attritors are matched up against the 3 profiles to determine which, if any, best describe them.

A more sophisticated approach would be to build predictive models that would calculate the expected ROI for each mailer for each attritor, and then send out the mailer with the highest expected ROI to the attritor. And, for those attritors in which all 3 mailers have negative expected ROIs you might choose not to send any win-back mailers.

Closing thoughts on segmentation
In closing, segmentation can be tricky and complex, and no doubt requires a great deal of expertise & experience. Putting in place flawed segmentation strategies can be far more detrimental to a business than not having them at all. However, when designed the right way, segmentation strategies can provide tremendous returns relative to one-size-fits-all approaches.

In future posts I will tackle some other types of segmentation strategies, including those involving new product development and portfolio management. As always, feel free to email me with any of your questions, comments or thoughts.

As always, feel free to email me if you have any questions about segmentation and how to most effectively use it within your business.






More posts on segmentation & marketing strategy:

• Segmentation and targeting
• Using the 5Ws for segmentation & marketing innovation
• Using segmentation to develop your marketing strategy
• Marketing Strategy Framework to hang on your wall
  

Great books & articles on segmentation:

• Market Segmentation: How to do it, how to profit from it
  
• Counterintuitive Marketing: Achieving Great Results Using Common Sense
• Managing Customers as Investments: The Strategic Value of Customers in the Long Run
• Making Segmentation Work - (Monitor Group article)
  
  

Designing a Strategy - how should I view the world?

One of the most challenging aspects of setting a strategy at any level (whether the product level, BU, or company) is cultivating a rich, well-articulated view of the "world" -- from the super macro (what I call the astronaut view of earth) all the way down to the super micro (aka, the ground-level view).

I'm afraid that often times this development of a "point of view" (POV)--a crucial first step in the design of any strategy-- is ignored. Often instead one's "point of view" remains an unexpressed, implicit, almost pre-conscious construct which can influence "the plan" whether the individual is aware of it or not.

However, even more frequently the case, the individual never formulates a POV. Instead, he or she develops a "strategy" that is simply a composite of projects & tactics which in totality are expected to meet or exceed the financial growth targets established by senior management.