Understanding the Digital Uniform

Social has changed the rules for retail: consumer groups will rule in 2010

I'm planning on dedicating more time to this topic in the coming weeks, but I thought I would put up a quick post to discuss a major change going on in retail.  Social media has made it very easy for people to congregate and form groups of interest (or as Seth Godin would say "tribes").  Currently, those groups are focused more on communication, digital media sharing and product reviews.  However, there is a logical next step that is going to change the face of retail, consumer group buying, and recently that movement took a BIG step forward.

Groupon, a high-profile start-up from Chicago, just closed a $30 million round from Accel Partners is now valued at close to $300 million.  The company is working with local businesses to provide deep discounts for groups of consumers.  The way the web site works, is that you get a deal of the day for the city you live in.  The deal of the day will be a significant discount on a product or service (ie. a $100 product for $50).  You then have the ability to visit the site and sign up for the deal.  However, the deal only goes through if you get the minimum number of people to participate.  This volume guarantee ensures that the local business can offer the discount promoted.  This is where social media comes in.  You now have the ability to tell your friends on social networks about the deal to ensure that it goes through, which in turn also promotes the site to a new audience.

The reviews and press coverage to date has been huge and I think you will see it continue to grow in 2010.  Look out for big things in this space in the New Year.  This concept of group buying is the future of retail and a perfect example of the power of social.  Congrats to the team at Groupon for getting on it early.  I'm excited to see where it goes from here.  I think you will see this trend show up consistently across all industries - remember, consumers own the relationship in a digital social society.

What do you think about Groupon and the movement towards consumer-group buying?

Free eBook from Seth Godin: What Matters Now

What do you think the big trend will be in 2010?

Seth Godin just released a new FREE ebook called What Matters Now, where Seth got a collection of more than 70 thought leaders (see word cloud on the side) to give a 1-page essay on topics to think about in the new year.

Have a read through some of the ebook and get some ideas for 2010.  Would you give this ebook away for free?

Download FREE ebook here

How do you spot the marketing diamond in the rough?

I recently watched a great TED talk from Rory Sutherland about perceived value.  I would highly recommend that you check it out after reading this posting.  The point of his talk is that most value associated with products and services is intangible value as oppose to intrinsic value.  Meaning that perceived value is actually much more important to us as consumers, than actual value.

Rory sites a few great examples of early marketing being done by Kings and Rulers to create perceived value with their followers, but a more recent example is the ad campaign for Shreddies in Canada. 

A concept was created to change the perception of Shreddies by offering two varieties - the original square shaped Shreddies and a new diamond shaped Shreddies (see campaign web site below).

Now we all know that it is the exact same product, however it is a smart way to add some perceived value to an old product and turn a plain old square into a bright new diamond.  Well done.

As way of another quick example, Rory discusses a research report that suggests that aside from the top 5-10% of wine drinkers that have an exceptional pallet for wine, most wine drinkers are directly influenced by the cost of the wine.  This perceived value effect is so strong that a large number of wine drinkers thought the same cheap wine tasted better when they were told it was more expensive.

So the moral of the story for Rory, is don't overlook simple ways to increase the perceived value of your products/services.  However, I have a slightly different take on these examples.  I think they carry-over very well to the world of relationship marketing.

Consumers have long been interrupted and shouted at by brands through mass media channels such as TV, print and radio.  However, there is an opportunity with digital marketing to re-build those relationships without adding to your budget.  Using new 1:1 marketing platforms, you have the ability to increase the perceived value of the marketing experience and the relationship with the brand.  Ultimately, this will result in much higher return on investment and customer satisfaction and loyalty.  This might just be your diamond in the rough?

As always, I'd love to hear your feedback.  Have you seen any great marketing campaigns recently?

Context, not content, is King!

I'm sure this post might spark a debate amongst my followers, but I think it helps to describe the shift that we are starting to see in marketing where the reigning King (Content) is being dethroned by the heir apparent (Context).  

I recently attended a regional TEC event focused on the current paradigm shift we are experiencing globally.  The guest speaker was a gentleman by the name of David Houle, a noted futurist and author of the book The Shift Age.  David had some interesting insights for the group on the future of key industries like Technology, Health Care and Energy as we shift from the information age to a new paradigm.  However, it was one seemingly minor point that he mentioned when describing the current technology evolution where I had an "aha" moment.

For the last few years, I have been trying to explain the importance of time, place and situational mindset on the consumption of content and marketing messages.  This has become especially important in a world where people access information through new and exciting channels in many new and different places.  My challenge has been trying to explain it in a way that will help people have their own "aha" moment.  After listening to David, I think I figured it out - X marks the spot.  It is only one letter that needs to change, but that letter makes all the difference in terms of how to look at your marketing strategy.  ConteNt is no longer King.  ConteXt is now King.

One of the more popular expressions in media and marketing over the last few decades is "Content is King".  This quick and simple 3 world statement indicates that in this new world of ubiquitous content and super connectivity where the playing field for distribution and access to content has been leveled, the quality of your content is the most important factor in your success as a marketer.  People will point to the success of viral videos and popular web sites such as YouTube as case studies for original and powerful content driving incredible results for brands.  This concept makes sense to most marketers, so they go to produce their own "viral video" to get the good exclusive content and put it out there for anyone to see and discuss.  There is no doubt that the quality, originality and relevance of the content is important to its success, however to advance the relationship between the brand and the individual consumers viewing the video, context is more important.

We need to start to focus more attention on understanding where consumers are at in the lifecycle with our brands.  Depending on the context of the relationship, we can start to determine what content might be appealing and more importantly, what type of content would be effective at deepening the quality and value of the relationship (ie. what content do we deliver to what segment on consumer to drive the highest possible ROI and customer satisfaction).

How to do I take advantage of this change in marketing?

1. Put a methodology in place to understand context - have a system for identifying the context of relationships with consumers on a 1:1 basis that takes into account self-reported and behavioural data.

2. Automate that methodology and apply it to your existing consumer database - Make sure you have a platform in place to automate the processes of collecting consumer data and applying your methodology to determine real-time context of each consumer relationship.

3. Tailor your marketing based on the context of each individual consumer relationship - Have an automated marketing platform in place to apply various marketing, communications and promotional treatments against individual consumers based on the context of each relationship.

If you follow the 3 steps noted above, you will significantly increase the lifetime value of your consumers, your acquisition and retention rates and the loyalty and long-term comittment to your brand.

Good luck!

Parenting vs. Marketing - they are more similar than you might think

I recently celebrated the birth of my first child, a daughter named Stephanie Allison Irvine.  As a first-time father I have learned a lot of about the challenges in communicating with and understanding the needs of my daughter.  However, over the last few months since her birth, I have learned to understand the nuances of her cries and the various behavioural cues that indicate what she needs.  I've also realized that despite all of her different behaviours, she always seeks a few basic solutions.  Namely to eat, to sleep, to be changed or to be burped.

Since I spend most of my days speaking with marketers about understanding consumer behaviour and the ways a brand could have influence over such behaviour, I got to thinking about the parallels between consumer marketing and taking care of a baby.  Shockingly, I found that the principles behind both were surprisingly similar.  For people that know me, I'm sure the fact that I'm making my subject matter analogous to a common day example would not be too surprising, but I think you will enjoy the comparison on this one.

                                Marketing                                                            Baby Care

Objective                - Get consumers to buy more                                - Get baby to sleep more

Tactics that
don't work              -  Advertising: yelling /talking at them                 - yelling / talking at them

Tactics that
do work                   - 1:1 Marketing: Understanding their needs          - understanding their needs
                                 and solving their individual problems                    and solving their problems

Measurement          - Sales, acquisition rate                                        - Sleep, crying rate

The challenge in both cases is that communication is usually strained and it makes it difficult for us to properly assess the problem and propose a solution.  However, what marketers can learn from babies is that you need to be more observant of the behaviours that indicate a problem and subsequently a successful solution.  If you can figure out the behaviour -> challenge -> solution -> goal achievement connection, you will be very successful in marketing (ie. you will adorned by many and showered with praise, the respect of others and a big bonus cheque each year).

Baby Example: Crying and trying to eat dad's collar bone = hungry = give her to mom = happy baby

Marketer Example: Calling in to inquire about canceling = at risk = triggered offer to stay = happy customer

The challenge is to make sure you have the tools and processes in place to properly identify, quality and interpret the consumer behaviors, so you can act quickly and cost-effectively to convert and retain more consumers.  At 80/20 Solutions, we have some great clients that have really grasped this concept, I'll be posting a few case studies that illustrate this point in the next few weeks.  Keep your eyes peeled.

Understanding the "Digital Uniform"

Uniforms have both a functional and a communicative purpose in our society.  It is most likely that you have worn a uniform in one form or another in your lifetime.  You might even be wearing one right now as you read this blog.  We commonly associate a uniform with organizations such as Police, Security and Armed Forces; a sports team such as NBA or NFL franchise; or an educational institution such as a private school or university.  In all of those cases, uniforms are intended to help you quickly identify a group of like individuals.  In the case of the armed forces, a uniform would also indicate the rank of the individual within the group.

What you probably don't realize is that you are wearing a digital uniform right now.  Your online behaviours and profile have helped smart marketers associate you with other like individuals in their community, essentially placing you in a digital uniform.  When you engage with the brand at any touch point (e-mail, web site, online promotion, coupon, e-commerce, SMS) your profile is enhanced, which may result in a change to your digital uniform.  All of this is happening behind the scenes, without your knowledge as a consumer, which is often seen as a bad thing.  However, the concept of the digital uniform is actually beneficial to both the brand and the consumer.  That being said, it must be executed properly to achieve the desired results.  I'll give you a quick example below. 

You visit a brand web site to get more information.  You are prompted to sign up for an insider program for special offers and exclusive content.  You fill in the registration form and you are now officially a part of the brand community.  You configure your preference center to indicate your interests and preferences towards certain types and channels of communication, basically stating the terms of your desired relationship with the brand.  The brand then automatically configures their current and future marketing campaigns to meet your individual needs.  You only get the offers that you are interested in, you get communicated to in the medium of your choice and you get opportunities presented to you that like-minded community members found valuable.  If at any point in your relationship with the brand, you change your mind and wish to be communicated to in another fashion, you have the ability to redefine the relationship and have those changes made immediately.  If you had such a positive experience with a brand wouldn't you want to tell your friends and colleagues about it?

As with most things in life, there is a catch.  The challenge lies in the technology needed by marketers to actually define the digital uniforms, build a central profile of the consumer and integrate the point solutions used to communicate with the consumer (e-mail, SMS, DM, etc.).  In most cases, the marketing solutions used by marketers are siloed point solutions such as e-mail, SMS, database management, contesting, couponing, etc.  All of which are exceptionally good at delivering a positive experience within their solution, but for the most part have no idea that other marketing solutions exist.  Therefore, there is not enough data in any one of the solutions to properly identify your digital uniform.  You can imagine the problems you might have in the real world if you confused someone wearing a police uniform from another wearing a prison uniform or worse, if you were forced to wear a prison uniform when you did not commit a crime.  That is the same challenge that exists today with the concept of the digital uniform; technology and integration challenges are preventing marketers from properly identifying your digital uniform, resulting in a largely negative consumer-brand experience.

So how do I properly execute on the concept of the digital uniform?

1. Collect - behavioural and profile information on your opted-in consumer community.
2. Understand - the marketing that drives certain groups of individuals to purchase or take action
3. Integrate- the various data sources and marketing point solutions to deliver a fluid consumer experience and properly identify the digital uniform of consumers
4. Action - Use the information you have collected and the concept of digital uniforms to drive higher ROI and lifetime value through relevant and targeted marketing and communications

There is one important point that I need to impart on you to truly understand the value of the digital uniform.  The digital uniform does not define you as an individual, rather it defines you in a group of like-minded or similar individuals.  It is still important to recognize that although a digital uniform can help to group individuals within a community, true connections are built by understanding the unique behaviours and traits of the individuals wearing that digital uniform.  It is important that the marketer can truly understand the key profile and behavioural attributes that define the digital uniform.  It is not good enough to just define me by my age or geographic location, make sure you also look at how I'm engaging with your brand.  It could be the difference betwen being fired or promoted.