Begin with the End in Mind with Big Data -5 of 10 Principles

Picture of Contrarian Marketing

Begin with the End in Mind with Big Data – 5 of 10 Marketing Principles

While the notion of Big Data (data from disparate data sources) is not necessarily new, what is significant is viewing Big Data from disparate sources on one integrated data platform and realigning your company’s departmental silos, so that they effectively work together to exploit new opportunities.  What Big Data enables is a quantum leap in predictive analytics – – integrating marketing,  sales, operations, competitive and behavioral data – – – from multiple sources, enabling your organization to predict your customers’s actions and prospects’s actions with a level of accuracy that has not been possible in the past.

The excerpt below on beginning with the end of mind with Big Data  is from Chapter 4 of Contrarian Marketing, and is instructive to building marketing skills to understand how contrarian marketing is ‘not magic’, but rather ‘just math‘.

We will share marketing principles #6 to #10 in our next post.

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Picture of Warren Buffett Quote - In the Business World, the Rearview Mirror is Always Clearer than the Windshield

Where is the best place to begin with the end in mind? Start by understanding these basic principles:

1. Successful marketing is 90 percent mathematical and ten percent creative.

Determine how much revenue and profits are generated from the top five percent and ten percent of your customer base and aim to clone your success with this group.  Establish marketing segmentations from here, basing the number of segmentations on your organization’s competencies.  Bring is as much data is possible on one integrated marketing platform (e.g. such as Teradata) (clicks, purchasing history, social media activity, competitive purchases, complaints, web site traffic, mobile data, location data, socio-economic data, etc.)

2. Sustaining a marketing campaign on predictable time-frames allows customers to expect information that is consistent and frequent.

The frequency of contact with your best customers and prospects is more important than getting “the message” right once. Know when to reach out to prospects according to the stages of their decision process.

  •  Once a week is too often; once a month not enough, according to research firm Marketing Sherpa. How to find the right balance should be based on the buying cycle, more over, you will know the answer from the predictive analytics that you establish with your segmentation models. For example, with a three-month buying cycle, send content roughly every 15 days, between day 10 and day 75 of the cycle.
  • At the beginning and end of each cycle, frequency should increase to every five to 10 days. If that doesn’t work well, ask your B-of-B customers how often they would like to be contacted and with what information (To learn more, search for Marketo’s guide to lead nurturing at www.marketo.com).

Many marketers make the mistake of not sticking to a marketing campaign over the long haul. You should consider all of the friendships you have made in your life, or even the new relationships, in which trust was established through the accumulation of many experiences over time as opposed to “love at first sight.”

3. Stick to the basics.

Advertisers have long considered a unique selling proposition (USP) as essential in making their communications actionable with the customer. The idea is that the advertisement must make clear that the product being promoted offers a single, compelling and relevant benefit if it is to change the behavior of the targeted buyer (See Reeves, Rosser (1961), Reality in Advertising, New York: Alfred A. Knopf, LCCN 61007118). The same is true of the Contrarian Marketing approach. Ideally, focus on one primary message:

  • Coca-Cola:  Refreshing.
  • Obama:  Change.
  • Volvo:  Safety.
  • Nike:  Just Do It.
  • BMW:  Ultimate Driving Machine.

Picture of Ultimate Selling Propositions for Coke, Obama, Volvo and Nike

Some good current examples of products with a clear USP are (source: Wikipedia):

a. Head & Shoulders: “You get rid of dandruff”

b. Oil of Olay: “You get younger-looking skin”

Some unique propositions that were pioneers when they were introduced:

a. Domino’s Pizza: “You get fresh, hot pizza delivered to your door in 30 minutes or less—or it’s free.”

b. FedEx: “When your package absolutely, positively has to get there overnight.”

Your customers’ time and attention span is extremely limited. They are bombarded daily by a non-stop flow of information from their business to their personal lives. Simplify, simplify, simplify your messaging, and you will exponentially multiply the chances that your campaign is remembered.  Tailor your USPs specifically to each of your segmentations.

4. Understand the Concept of Cost per Impression to evaluate marketing investments.

In many cases, marketers or business people gravitate to the wrong marketing media because their decision-making is over-influenced by what they are familiar with in their personal lives.

For example, TV has historically been one of the most powerful influencers of customer behavior because it’s engaging and has the ability to cover vast geographic areas. However, if your company is only targeting a few thousand customers within a market, why pay for impressions with the hundreds or thousands or millions who don’t have a need to ever purchase your company’s products or services?

A primary example of this type of error was made by MCI (when it was still a well-respected carrier) in approaching the B2B marketplace. In the early 1990s, MCI decided to expand its target market beyond customer households and into the business arena. Executives of the company determined that recruiting one major business to the MCI family would equal the revenues of thousands of households. They developed an advertisement that focused on surprising business customers about how many companies already are part of the MCI family. The ad showed an MCI executive on Wall St. touting the many firms that use MCI by having their logos join MCI on the Street. The ad scored very well with business prospects. The decision, however, to run the ad during Monday Night Football meant that millions of non-targeted customers were exposed to the ad. What happened Tuesday morning was that a record number of household customers switched from MCI to AT&T, as they believed that MCI was no longer going to serve them as part of their B-of-B set.

How do you calculate “cost per impression”? (This is defined as the cost to get your message to each person). Here are a couple of examples:

a. If a print and online advertisement costs $10,000 and reaches 2,000 people: the cost per impression is $5 ($10,000 divided by 2,000).

b. If a “Best of Best” customer event costs $10,000 and entertains 100 people: the cost per impression is $100 ($10,000 divided by $100).

5. Understand the Concept of ‘Cost per Qualified Lead’.

There is an important distinction between a qualified prospect and an unqualified prospect. Your focus, of course, should be on the qualified. A qualified prospect reasonably has the potential to purchase your product or service. As an example of seeking qualified prospects, Gulfstream Aviation, a manufacturer of private jets, once advertised frequently in the Wall Street Journal since the publication had a high concentration of readers that were CEOs and high net worth individuals. By contrast, Gulfstream is unlikely to ever advertise on TV as they would be paying to reach a vast amount of people who could never afford to purchase their premium product.

An unqualified prospect costs you in two ways:

a. The cost to market to an unqualified prospect.

b. The organizational resource (time spent by your staff) cost to learn that the prospect is not qualified.

In the next post, we will cover the final 6-10 basic marketing principles as they relate to Big Data.

Source:  Excerpt from the Contrarian Marketing Book  Chapter 4 – Begin With The End in Mind

By Nick Mavrick

You can find Nick Mavrick on Google+

Intelligent Response specializes in managing and securing Strategic Marketing and Web Development projects from start to finish in Washington DC.

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