This week’s AH-ha! moment suggests marketing needs to focus more carefully on trends because there is much more than meets the naked eye.  Marketing’s idea of trends is to look back, set a benchmark and then set “trendlines.”  That used to work but not today and certainly not tomorrow.  Welcome to the future. 

Like it or not, we have entered a new world and we have to use the past as a reference but build “future lines” not trendlines.  This new world is complex and confusing for marketers – connected, networked, hyper-aware and filled with contradictions.  The challenge for businesses of all sizes is to harness the power of trends as we slide into the future.

We see trends in two dimensions.  There are MACRO trends and MICRO trends.  The micro trends evolve and grow and sometimes die within the macro trend.  Many of those micro trends are called fads by Wikipedia.  “A fad is any form of behavior that develops among a large population and is collectively followed with enthusiasm for some period, generally as a result of the behavior’s being perceived as novel in some way.”  Wikipedia suggests that the term trend can be used interchangeably with fad. We don’t believe that is a valid comparison.

Macro trends that once were stable are now dynamic.  Our view is to identify those macro trends that will drive business growth for the next five to ten years with the acute understanding that macro is driven by the micro trends that explode into the marketplace and whether they become grounded in the macro or fade away, they will make their current presence felt.

We are told that the big macro trend is technology.  We disagree and are sure eyes will roll.  However, technology should not be put on a platform but rather be broken up into micro parts and placed into the macro trends that generate growth.

We recently coined an interesting phrase that will someday become part of our company’s manifesto.  It defines how we go to market and simply said, “Technology is what makes business GO; marketing is what makes business HAPPEN.”  Steve Jobs is considered as a top-notch technology guru.  But when he said, “Let’s create products that people don’t know they want yet,” he became a top-notch marketer.

The Marketing Implications

The most basic trend that has to be marketing’s focus is people – consumers; your customers.  We need the future lines to understand how people are interacting with each other, the economic marketplace and technology.  Following the human trend and all the micro-trends that fuel it will position your business and brand for the future.  And understand that one size does not fit all situations.

We are doing business in the Age of NOW. Consumers are digital.  That’s a micro trend that is quickly redefining the human macro trend.  Knowledge is everywhere and most importantly, it is easy to tap into by just about every person on this planet.

Doing business in the Age of Yesterday meant analysis paralysis as we examined every piece of data that was available.  That data is still there, but it is today’s data and we have to focus on the future trends that shape and reshape our data every day.

Our view is that marketing is not about harnessing technology but harnessing the hearts and minds of consumers in order to influence the next sale.  It’s not easy because consumers are skeptical, vocal, savvy, and have every brand competing for their attention.  Brands that focus on the data and forget that those numbers are really people will be punished swiftly.  The micro trend that brands must exploit today is engagement and within the engagement micro trend are a slew of current and emerging technologies and data mining techniques that will allow brands to be interactive and transparent.

Maybe the next macro trend we need to create is listening – because before we can have engagement, the brand must listen to its customers, employees, investors and everyone else who is feeding input into the brand equation.  It’s this input that drives engagement and innovation.  So listen to the crowds because right now a new trend is being born and the brand that gets it first and responds quickly is one small step ahead of the competition.

This week, ask your team and your management what is the most important trend they see.  If they say technology, point them in a new direction.

Have a fantastic week.

Bart Foreman and the Best in Class Group 3 Marketing team.

Salon Today – 70% is Not a Good Number

CMO.com – Marketing In The Age Of Now

As we outgrew drawing numbered pictures we didn’t abandon the concept of connecting the dots.  According to the source of all knowledge, Wikipedia, “In adult discourse the phrase “connect the dots” can be used as a metaphor to illustrate an ability (or inability) to associate one idea with another, to find the “big picture”, or salient feature, in a mass of data.”

This week’s AH-ha! moment suggests that marketing needs to understand the dots before they can be connected. This is not an easy assignment because while all the dots are important there are inherent differences between the dots that as children we did not have to consider. All we needed then was a pencil.

 Today, the dots themselves pose many challenges:

1. They are not always visible to the naked eye.
2. They are often camouflaged and not readily apparent.
3. Some dots are strong – easily identified as part of our everyday metrics. Sales performance, traffic/transactions, market basket size, and a host of other easily captured NUMBERS.
4. For every strong dot, there are even more that we call “fuzzy” dots. We sort of know they are important but do not have a clear picture of how they will enhance the picture we are trying to develop in support of a brand’s growth.

Most marketing teams have a set of key performance indicators (KPIs) or metrics that are tracked and reported on as a testament to the health of the brand. Being a data driven/data focused marketing agency, we thrive on these numbers. But as our clients have learned, we also know that these metrics are never all the dots and we spend many after-hours sessions looking for the fuzzy dots and looking for the hidden and camouflaged dots.

In addition to focusing on the metrics of business, a stringent KPI at Group 3 Marketing is the customer and if you ever want to define a fuzzy dot, just think about your customers. Trying to line them up into a coherent dot pattern is like try to herd squirrels away from a bowl of corn. One day, we are told that we must harness the power of the Millennials because they are the new big cohort that will spend us out of our economic doldrums. The next day we read a white paper about what older people (like me) do on-line. Now my generation is being called the “social, silver surfers.” Just the other day, we were being told we were a bunch of tech-hating, bumbling luddites and now we find out we are not only still the largest population cohort (30%) but also the largest active wired group (35%).

The other big fuzzy dot that clouds a brand’s vision for the future is technology and it is changing daily.

Not only is it everywhere, but it’s a shape shifter. It has led marketers to talk about Big Data in new ways that are not often productive in analyzing the important drivers of brand growth. We are being asked to collect and parse vast amounts of consumer information from disparate channels and while “Big Data” has become the catchword darling of the year, it has also become a case of blind love causing marketers to lose sight of the important dots.

Technology is supposed to help us focus on the dots, but it is having the opposite effect.  According to a 2011 survey of 4,000 executives, 30 percent said their biggest challenge to analytics was that they didn’t know how to use the data and only a third had access to the information and analytics they need to do their job. According to Fast Company, companies are not using the basic data they already have in a way that engages consumers.Combining structured data (data warehouses, CRM software, and databases) with unstructured data (e-mail, social media, and consumer commentary) may be the most logical approach for claiming the shiny prize of Big Data, but extracting the true value of the combined information can remain a far-off dream.

The Marketing Implications

The dots are everywhere. They are not static. Each one impacts your brand in a different way.

The fuzzy dots are fuzzy because they cloud our vision. There are few big strong cohesive dots outside the brand’s own data warehouse. Most are internal. The external dots – customers and the technology we continually apply to bring them into focus to line them up so we can connect them – are elusive.

What we have learned is that the big fuzzy dots are made up of a lot of smaller dots and these are the ones that need to be analyzed.

This week, ask your team to identify the dots that drive your business and to also identify three dots that are not so clear but when brought into focus can have a significant impact on the brand. You might be surprised at the dots you uncover.

Have a fantastic week.

Bart Foreman and the Group 3 Marketing team of dot catchers

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About Group 3 Marketing:

Located in Wayzata, Minnesota, Group 3 Marketing is a full service direct marketing agency serving a wide variety of specialty retail and B2B clients. We are a strategic, analytically focused team that builds and executes database driven, marketing focused programs with the goal of influencing the next sale through our proprietary Sixth Star marketing strategy that puts your customers at the heart of your marketing plans. We do what everyone else talks about.

Group 3 Marketing will be attending Beauty Week in Las Vegas July 21-24, 2012.  As a key marketing resource to the beauty industry, G3M will be meeting with clients, publishers, associations and software vendors in addition to attending NAHA (North American Hairstyling Awards).  G3M was one of the judges for the NAHA MBA award that focuses on best business practices.

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About Group 3 Marketing:

Located in Wayzata, Minnesota, Group 3 Marketing is a full service direct marketing agency serving a wide variety of specialty retail and B2B clients. We are a strategic, analytically focused team that builds and executes database driven, marketing focused programs with the goal of influencing the next sale through our proprietary Sixth Star marketing strategy that puts your customers at the heart of your marketing plans. We do what everyone else talks about.

Smith discounts the idea of relationships between customers and brands because of the rising importance of connections and ultimately kinships. We agree that the notion of relationships and loyalty are overblown. We like the concept of kinships and we will no doubt hear more about them, but we have to challenge the validity of Smith’s concept, just as we did in 1994 when we said that the whole concept of the “Lifetime Value of the Customer” was based on smoke and mirrors thinking.

This week’s AH-ha! moment suggests that kinship means intimacy and we doubt that many customers really want an intimate relationship with a brand. Unlike families, there are no bloodlines between a brand and the customer. This is where most marketing strategies leave the track.

Brand marketing teams believe they can create strategies that will put their brand in a suspended state in front of their customers. The new marketing social media experts continue to build a case that the marketing process revolves around and through the power of social media interaction. They believe they have formed the kinship bridge that links the brand to the customer. Someone has to explain the facts to these experts that social networks are little more than a high tech version that goes down to the deepest human connection – connecting with others.

Human connections, connecting with others, are not the same as connecting with your brand. Kinships can play an important role in helping marketers create strategies that will influence the next sale, but not as Smith envisions. Our takeaway about kinships is they are family oriented and the key family nucleus is the bonding that comes from KNOWLEDGE. Strong families have emotional and blood ties that sometimes are handed down from generations of storytelling. While family facts and fiction sometimes become intertwined, knowledge is paramount.

In brand marketing, knowledge about customers is the equivalent of family kinship. In brand marketing, how we stay connected versus trying to build connections is vital in developing a brand growth strategy.

The Marketing Implications

We have always viewed staying connected as a one-way effort to try to stay close to customers on a regular basis. The idea is to keep them informed about brand happenings, promote opportunities to grow sales through data mining, and to reward desired behavior while staving off competitive inroads.  However, like family connections, we have to make an effort to listen and interact and build our knowledge base not just from the database of transactional activities but of listening for feedback as well and acting on it.

We know the marketplace is changing. Nothing is stable. As we noted a few issues ago, there is no more “blue water” as described in the book, “Blue Ocean Strategy.” The Great Recession was a disrupter. Disruptions cause waves and that changes everything. Social media arose as a fresh new avenue into the heart and mind of the customer as the Great Recession showed itself. However, much of what seems fresh and new is old wine in a new bottle. We believe our Sixth Star Marketing strategy is different because it is changing the operating model that marketers have relied on for the last 50 years.

Our Sixth Star strategy is at the heart of our new and innovative EVERYDAY Marketing program, Ei3. While it does not build kinships, it does build active connections in an almost real-time setting. Through real-time surveys we are opening up the two-way dialog soon after the sale. Real-time feedback tells the customer that service and product satisfaction is important. These are new metrics and new dynamics that are not only innovative but pinpoint where premium value will be found in the future.

This week, ask your team what they think about kinships as it relates to you brand and its marketing strategies. If this sounds foreign to them, bring them back to our Sixth Star marketing strategy of staying connected, and see if they view “staying connected” as a single one way dimension or a more multi-dimension opportunity.

Make this week fantastic.

Bart Foreman and the Group 3 Marketing Team

This week’s AH-ha! moment suggests maybe we’re not as bullet proof as we believe.  Our AH-ha! question this week is, “What would happen if you turned your marketing plan for 2012 UPSIDE DOWN?”  Would all the pieces of your carefully stitched plan unravel?  And if they do unravel, is that a good or bad thing?

Throughout the Great Recession, marketing plans were being turned upside down by social and economic forces and for many brands it was a painful experience.  Change is the driver in turning plans upside down.  Sometimes it is through internal organizational or process changes.  Best Buy and Regis Hair Salons are two companies we watch with great interest.  Neither is in immediate jeopardy of going out of business anytime soon but both will see their business models turned upside down by internal decisions that did not mirror the changing marketplace.

External changes are often blamed for turning business plans upside down.  We blame the rapid pace of technological changes for causing upheavals in marketing plans.  Companies that languish in legacy systems, whether they are computer systems or marketing systems, wonder why it is so difficult to compete and why they need marketing “war rooms” to plot strategy.  The immediate question is whether the shift was caused by our brand strategy, a competitive brand, or an external force – like Group 3 Marketing.

This might be an exaggeration and we have nothing to support this contention, but we would wager that more than 80% of non-product related marketing dialog revolves around social media, e-marketing and e-commerce.  Yet for most brands, spending allocations in social and digital media are less than 20% of the total marketing budgets.  No smart marketer is willing to flip media allocations and we agree with the smart marketers.  That would really be turning the marketing plan upside down.

The new marketing gurus who want to turn marketing upside down try to build a business case that propels brand thinking into the digital world because it’s there.  They claim that brands such as Coca-Cola, Disney, and Starbucks have been successful in creating powerful brand destinations within Facebook, with ever-growing fan bases of more than 20 million each.  The implication is that we should stop what we are doing and focus our brand resources on building fans (Facebook or otherwise).  That’s turning a marketing plan upside down.

As we close the year we will leave you with two quick thoughts:

1. Customers are not loyal and loyalty programs do not make them loyal.
2. Customers do not want a “relationship.”  We do; they don’t.

Have a Happy New Year and get ready to rock.

Since the glory days of Madison Avenue, advertising has become marketing and how brands get their messages to their customers or potential customers has gotten much more complex.

This week’s Ah-ha! moment suggests that the key metrics are no longer reach and frequency but rather reach and influence. Strategy is now based on metrics that are no longer tightly measured, making an ROI calculation very difficult.

The advent of social media has forever changed how we approach marketing. Consumers have always been talking about your brands, but before social media, that talking was local and limited. Unless the brand really screwed up, we didn’t care. That has all changed with the explosion of social media networking sites and other media channels. Consider these facts as you consider how marketing teams try to keep pace with social media momentum:

1. Social media site users spend an average of 5.4 hours per month engaged in networking sites and some of those users are talking about your brand.
2. Facebook attracts 734.2 million unique visitors a month (Did any of you read my Facebook post yesterday?)
3. Half of TV viewers tweet about TV shows and some of those tweets are about the ads they are watching, too.
4. Fifty-two percent of a brand’s reputation can be attributed to how social it is online and marketing executives predict that in the next three years, 65% of their brands’ reputations will be based on their on-line sociability.

The reach part of the new marketing equation has become much more complicated. No longer do we really know how many consumers we are reaching in the new electronic world of media, because it’s not just what you post on your brand’s Facebook page or Twitter feed – it’s what your customers write about you that explode the equation.

We call this the “Amplifying Effect.” When customers share a story about your business on Facebook, that story is published to their newsfeeds, as well as their friends’ newsfeeds. Because the average Facebook user has 130 friends, a company’s message can be shared exponentially, with the influence and impact of a personal review from a friend. Let’s not limit our thinking to Facebook.

There are a multitude of other sites that offer reviews and comments. Open Table for dining,  Yelp for a variety of business categories. Saturday evening, my friend Randy and I were searching for a deli in Ann Arbor. He “heard about” a deli called the Maize & Blue Deli. Yelp to the rescue. In two minutes, we discovered that is was a block from us, had 40 reviews, all excellent, and we were there. If the reviews had been less than fantastic, we probably would not have gone. How did he hear about it? From a friend on Facebook.

This is the power of the new media. Yes, it’s social, but it’s new and we have to consider its impact on influencing the next sale in this bright new light.

The Marketing Implications

For all the positives that new media avenues offer to progressive brands, there are serious downsides.

1. While social media sites are wildly popular, there are no marketing rules carved in stone and a majority of companies do not have standard frameworks in place to measure the value of social/new media, according to research done by the Altimeter Group.
2. IBM reports that nearly seven in ten (68%) of global chief marketing officers (CMOs) feel unprepared for the demands of social media. This is second only to the 71% who report being challenged by the explosion of data.

The new/social media channels are not going away and as marketers, we have to better understand how to use them to our advantage to influence future sales. This week, circle the wagons, not inward but outward and begin gathering as much data as possible. Here at Group 3 Marketing we are adding a new media specialist to our team in order to better address how new media impacts our clients’ business. We are launching a new Mobile Media Connection program for our clients and this new position will manage this process and also work with clients to help better understand how all the pieces fit together.

By the way, if any of your team members believe they are social media “experts,” challenge them because it is our opinion that there are few if any experts in this space and we are all learning and trying to formulate the rules.

Have a Happy Thanksgiving.  Drive safely and hug someone you love.

Bart Foreman and the Group 3 Marketing Team.

This week’s AH-ha! moment suggests that preferences drive buying habits and when brands do things to change our preferences, we defect.

This is a significant shift in thinking. Customers don’t always defect because something better enters the marketplace playing field. They change their buying habits and patterns because the brand they were buying either changed or it didn’t change. Worst of all, the brands that are at risk do not even realize it. Brands focusing on mass changes that are easy to measure miss the micro details that are fundamental to understanding the root causes of the changing dynamics impacting these brands.

For many years, I have been renting cars from Hertz. I am a Gold member and I have earned many rewards from Hertz. However, someone told me that Avis rentals were significantly less costly so I compared prices and was amazed at the cost difference. The cars were the same, clean and well serviced. Both have GPS and radio options. Both have loyalty programs. In other words, the category is more of a commodity rather than a specialty. The primary variable: Price.

Last summer, I switched to Avis. Hertz has responded by sending me emails reminding me that I still have unused points. I get direct mailings with discount coupons for upgrades and free days (with restrictions). They must suspect that I have either quit renting or have shifted brands. My preference changed; their response hasn’t changed and they are wasting money by sending me offers that do not offset their high cost.

According to Mark Johnson from Loyalty 360, customer data is one of a company’s greatest, yet often underutilized assets. We agree. Former CEO Jack Welch of GE once noted, “An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.” We agree.

The Marketing Implications

Before you assume that the challenge is a lack of data, assume again. Brands are swimming in data. Ninety-three percent of brands are collecting customer data. The challenge is that they either are not using it, using it incorrectly, or don’t know how to use it.

In their white paper “Turning Customer Data In to Action,” authors Mark Johnson and Erin Raese write that there is no disputing that the customer/brand relationship has changed – forever. In today’s consumer driven environment, marketing decisions can no longer be based on gut feelings or what worked in the past. Something causes brand preferences to shift one consumer at a time. Empowered customers demand highly personalized communication, offers and service. They want to receive the right message at the right time, through the right channel.

We have always argued that data is only the beginning and when used properly will become insight and greater knowledge of your customers’ preferences. Usually they won’t come out and tell us but we can create insight by monitoring their buying patterns and, as we said, observe and react to pattern shifts. This is the Sixth Star and with customer attention becoming an increasing scarce commodity, we have to focus on finding out what is changing. The good news is we have the tools and research methodologies to get up close and personal with customers who have had a pattern shift.

This week, ask your team how your brands are using data to monitor customer preference changes and what actions can be taken to recover lost customers. This isn’t easy but as we noted the tools are available. Ask your team to make a list of the tools and then build your own model to track preference changes down to the customer level. It won’t take long to turn the data into insight and influence the next sale.

Have a fantastic week,

Bart Foreman and the Group 3 Marketing Team.