Manhattan Marketing Maven

5 Marketing Lessons from Inventors

Inventors aren’t like you and me. They think about little things, odd things, manufactured things, and things that don’t yet exist; things that aren’t there. They operate on a different frequency.

They iterate, incubate, massage, manipulate and relentlessly test ideas. They seek to fix things and fill voids that you and I aren’t conscious about. Some ideas are radical, some incremental, some innovative, some ingenious, some simple, some complex, some inventive, some derivative, some sequential and some inexplicable. Some turn into real things. Others are just fantasies. Some become prototypes and some, though far fewer, become viable products.

Attending the 36^th Annual Salons Internationale des Inventions in

Geneva

reminds me how small the box, I try to think outside of, really is. Being in the company of engineers, mechanics, grease monkeys, practical thinkers, fantasists, futurists, gear heads, wizards,geeks, nerds, zods and nudniks has brought on a full marketing gestalt reminding me of fundamentals that are too often taken for granted. And seeing these people vie or attention and ways to commercialize ideas reinforces my understanding of how ruthless and competitive the marketplace for products and ideas truly is.

As a species we are incapable of standing still. There always has to be a better way. Inventors can’t rest. They can’t except the status quo. They have to fix it, find it, create it, built it, fabricate it, re-route it, re-wire it and make something new.

A good idea is just a starting point. Many good ideas die alone in the dark unknown, unfound and unfunded. A million guys will smile, nod and offer compliments. But it takes at least one guy with a hunch, a belief, some gumption and a checkbook to make the leap from good idea to serious product.

As you might expect there are incredible new inventions in the fields of energy utilization, ecology, bio-tech, electro-magnetics, mechanics, optics and the usual areas for scientific or industrial experimentation and discovery.  And yet tucked into this cornucopia are people with same mindset and methodologies tinkering with practical and silly ideas.

Among the inventions that caught my attention were … the self-making bed, the ironing board-step ladder combination, t-shirts made from bamboo fibers, a vagina tightening device, superglue for dentures, an anti-snoring pillow, artificial nose hair, a tool for making more whipped cream in less space, an automatic music page turner, anti-stink socks, chess sets for the blind and beach towels with pockets.

As I made my way through the hundreds of exhibits, here’s a quick summary of the lessons these guys either taught me or put me back in touch with.

Experience is Everything. We are sentient creatures. How we feel determines what we want and what we do. The feelings are the drivers not the rational arguments or the features and benefits. Marketers have to communicate or stimulate feelings to move the needle. On the flip side marketers have an incredibly difficult task if the experience is negative.

Everything is Filtered. There are no pure, new, fresh or free experiences. Everything is filtered by language, culture, anatomy, experience, media and context. Every communications choice – words, color, image, music, tone, face etc – hits pre-set buttons which condition the response. The woman in the Muslim head scarf, the guy with the waxed moustache, the dwarf, the giant, the black guy with the big ears each fires feelings and impressions that each individual carries with them.

Before we start, some part of the audience has already made up their mind. As high-minded as we’d like to be, we all bring a huge bag of pre-judgments to every experience and every message. And while we know that the most potent messages are rooted in nuance and idioms, they simultaneously exclude audiences who can’t or don’t get it. And their meaning changes over time as the marketplace and the media contexts change.

People React in Predictable Ways. There’s no better barometer of human nature than watching random consumers react to something new. You can almost see the mental gears grinding as people sort, filter, file and associate the new thing against their stored databank of information and experiences. And yet the range of responses is finite and somewhat predictable.

Some are surprised. They bug out their eyes, blush or gasp. Other’s are more demure but instantly articulate a “yeah” or “nay” opinion. Few are bashful. Some instinctively point out the flaws the limitations or the potential downsides while others take on the inventors’ perspective and instantly riff on the new thing adding features, changes, colors, applications and functions or connecting it to other things they like or associate with it.

Understanding the spectrum of predictable reactions, marketers can anticipate the experiences of the new and shape both the initial presentations and the immediate secondary follow-up messages.

We Live in a

Tower

of

Babel

. As if transmitting messages and insuring physical or mechanical reception weren’t enough, when you attend a global meeting you experience synchronous use of many languages sometimes in orderly translation but more likely it bits, pieces and fragments punctuated by wild spikes in voice modulation, random gestures and comedic pantomime. When you suppress the feeling of incredible stupidity because you barely speak one language when everyone around you has 3, 4 or 5, you realize how hard it is to frame a single idea and communicate it to a room full of people who comes from different places, think differently, use words differently and hear differently.

The inherent difficulty of framing and transmitting commercial messages hits you in the face. There are no common definitions for words, no common understandings about what is funny, cool, sad or ironic. It increases the challenge of copywriting and even creative thinking by a full magnitude.

It’s All About Differentiation. What’s new, what’s different, what’s better and why should I care are the inventors’ and the marketers’ benchmarks. If it isn’t different or different enough it dies. Marketers must exert as much effort and creativity into positioning and framing the difference as inventors must in creating something different.

Want Fries With That?

McDonald's didn't invent incremental selling. But they nearly perfected it by training their cadre to utter the most profitable phrase in the English language and in so doing proved that up-selling and cross-selling can be achieved at scale.

The beauty of the phrase, and the effort behind it, lies in it's confluence of simplicity, intention, timing, and context. In 4 words an average employee can change everything. Allow me to deconstruct the process.

Timing. Mcdonald's asks in the moment; during that surge of desire and need that prompts the initial purchase. Hormones and flavor receptors are pre-emptively firing as the counter person offers gently to add to the merriment. Who can resist the promise of much more happiness for just a few more cents.

The tactic holds true for anyone. Ask when they have bought, are happy and eager to take delivery and are open to an incremental experience. It helps when the person delivering the first bunch of good news offers the second. You fed me and saved me from hunger and now you're adding another goodie to my plate. The combination of timing and casting are very hard to resist. 

Limit the Ask. The McDonald's pitch trades less than a buck for added food. The intention is to extend the experience and sell an incremental amount. Both are designed to keep you coming back and build long term brand loyalty. These baby steps keep customers relaxed because they don't trigger a negative response and they don't feel too pushy. The absolute and relative amount of the ask, in cash and in decision-power, are small and incremental. They ask for the next logical thing which doesn't multiply the cost, makes sense and is probably something you were thinking about anyway.

Don't try to ram a huge deal down someone's throat after you make a small deal. Connect the dots for your customer and anticipate what he might need subsequent to the goods or services you are currently delivering. It also helps not to switch-pitch the personnel. Have the one they love make the pitch.

Simplicity. Everyone gets it. Anyone can say it. Served up in context two beats after you make your buy, It has a tentative feel to it. McDonald's can short circuit any negative reaction because its an implied service not a real sales pitch and its easy to quickly step back from a negative response with a no-harm/no-foul attitude. And if you don't buy right now, it doesn't matter. 

The best sales happen easily, logically and clearly. Everyone knows what is offered, instantly perceives the values in-play and can react easily and simply. Structure your pitch in this context. Anything that needs a big set-up and a complex rationalization won't fly as an up-sell or a cross-sell. Also it has to be perceived as if it doesn't matter all that much to the seller. No desperate sales get made this way.

Stand-Up for Yourself. Implicit in the phrase is the understanding that McDonald's has great food that  customers appreciate along with great service, prices and the brand. The ask leverages the brand equity and the brand experience in a way that is seamless.

Don't beg for the next deal. Drive it logically out of the value you've provided and the relationship you've built. Don't be bashful or reticent to ask happy customers to buy more of the good stuff you are providing and they need.      

The Universal Marketer's Fantasy: Unleashing The Next Big Thing

Every marketer fantasizes about initiating the next hot thing. Much of our experimentation with MySpace and Facebook and other social networks are attempts to unleash the next viral wave that creates  overnight worldwide awareness, excitement, sensation and demand.

As a fantasy its a good one -- meaty, excruciatingly difficult to do with an outside shot at success --  since no one has really defined or benchmarked how a single meme spreads exponentially and engulfs the mainstream like a virus or a forest fire. In fact many of us suspect that the big hits we've witnessed were random lucky events, like a lightening strike, rather than planned campaigns following a formula for success. The randomness of the intermittent and disproportionate smash hit makes the fantasy richer and stokes our jealousy for those who actually bring the world something new or different.

Yet according to Clive Thompson, writing in the February issue of Fast Company, the "Tipping Point" notion authored by Malcom Gladwell and extended to online and social network marketing to Influentials by Ed Keller, currently President of the Word of Mouth Marketing Association, and Jon Berry is being directly and seriously challenged by statistical analysis done by Duncan Watts, a former Columbia University sociologist now consulting with Yahoo. The debate and the reportage of the debate challenges some of the new orthodoxy among web marketers in search of the next big score.

Gladwell's theory is that when enough cool people embrace an idea it reaches the "tipping point" and gushes into the mainstream like a virus. Keller and Barry built on this idea and argue that if you zero in on Influentials-- well networked opinion-leaders and taste-makers -- and sell them first or capture their imaginations they'll spread the word for you faster and wider than you could do yourself.

Watts mapped influential networks to try to understand how these people operate and what exactly they do to persuade others. Having looked across campaigns, he argues its all random. That while Influentials may extend an idea or a campaign farther and faster than the average audience, they have no special or incremental role as initiators of a new idea.

Instead, on the basis of a bunch of experiments, he thinks that its not who starts or who blesses a trend, but rather its the receptivity of the network or the audience to the idea that creates a significant take off. His analogy is the forest fire. When the forest is very dry, when the winds are right in direction and velocity, when the fire starts in the right place and when fire fighting efforts are slow, stymied or ineffective, a small fire becomes an inferno. In other cases it burns itself out quickly. The critical element is not the transmission system, its the underlying conditions that prepare the ground. In case of humans, community sensibilities, readiness, genuine needs and openness to a new thing accelerates awareness, acceptance and pass-along.

His experimental data suggests that these are random events with no discernible pattern or reproducible formulas. It happens when it happens. There are no identified ways to artificially make it happen. "Its less a matter of finding the perfect hipster to infect and more a matter of gauging the public's mood,...The network effects in society are too complex - too weird and unpredictable - to work that way. If it were just a matter of tipping the crucial first adapters, why can't most companies do it reliably?" Watts is quoted as saying.

This shifts the marketers burden away from carefully targeting the network of influentials in favor of better understanding and tapping into the consciousness of the moment. This validates the gut hunch theory that has sustained the careers of a zillion traditional ad guys who are fighting a rear guard action against the data wonks of online marketing who are successfully eating their lunch. And it will kick the wind out of PR guys pitching corporations to give endless amounts of swag to Hollywood starlets in the hope of prompting global monkey-see/monkey-do buying sprees.

The 64 million dollar question is: Can you reproduce a hot trend? Can a marketer devise a series of activities to create, ignite and accelerate massive uptake of an idea, product or service? 

Watts thinks so and is working and consulting with clients for big bucks on a formula that looks n awful lot like mass advertising + targeted segments + viral idea = campaign. Not exactly the marketing equivalent of Einstein"s Theory of Relativity. Much more like the combination of tactics everyone is grappling with.

And yet this debate is comforting in an odd way. We still have our fantasy and our holy grail. These contentious theorists are exposing different facets of a problem we can all continue to try to solve in the fervent hope of accidentally starting a tidal wave that turns into the next big thing.

 

Monitor Mental Models to Drive Behavior

Don't underestimate the power or the value of intention. Don't assume you know what your team thinks they are doing. Direct their focus and orient their targeting.

I was struck this morning by the AM New York hawker at the subway station vocally calling attention to the ads in the free paper. She obviously was attempting to optimize the impact of rthe freebie paper to its clients. Though I wondered if she really knew what she was doing or if her bosses had tasked her to do this.

Then I thought about the CSRs at a client call center where I discovered that the management thinks the job is to sell incremental services but the workers think their job is to protect customers from the company and to issue refunds. People get an idea of what they are supposed to do and form a mental image of who the customer is. These mental models drive behavior. Assuming you want to apply the labor and energy of your team for maximum effect you need to know what they are thinking and shape the mental images that govern behavior.

In working with colleagues I am continuously surprised by the unexpected interpretations, unforseen mutations in meaning and the unexplainable individual riffs that emerge from what I thought were simple concepts and direct instructions. I've learned the hard way to routinely double-check to see that the message you think you transmitted was received and understood and that your intention, target and direction is being followed.

In calibrating expectations, there are several recurring themes:

1. Helping People. Most humans want to help others. Nobody wants to be the bad guy. Few want to sell things nobody wants. Fewer still like to collect money. Frame the task in terms of how it helps consumers though don't get too cute about it. Nobody believes that tryimng to collect money from a deadbeat customer to save them from a sherrif's lien is truly helping.

2. Flesh Out Customer Archectypes. At Ann Taylor everyobody understands who "Ann" is. They know her size, her taste, her favorite colors, her income, her habits, how she shops and what she thinks about. They  design goods to please her and shape the store and online experience to delight her. Creating a sense of the customer and setting the expectation that you want to engage customers and build sustaining, long term, relationships with them is a crucial first step.

3. Set and Reinforce Clear Goals. If the job is selling more you have an affirmative obligation to explain what you want them to sell and how much more. Remember few people can do more than 2 things well at the same time. Set clesar goals. Specify the order in which you want things done. Show how you will measure progress and results. Naturally if you can train them how to do it, provide appropriate coaching and support tools and overlay an incentive, you've got a dramatically better shot at meeting your numbers. But the baseline is defining, quantifying and clearly articulating exactly what you want.   

The more I learn about communicating the harder it is. But understanding how people process information and the mental map they draw for themselves is a necessary first step toward gewtting what you want.   

Marketing Lessons from the Hospital

Every profession has a dedicated language; those words, terms, phrases and concepts that serve as both a short-hand for practitioners and as a filter to keep outsiders at bay. In most cases these vocabularies are created or policed by professional bodies much like the medieval guilds protected the trade secrets and prerogatives of their members.

The best example of this can be found in any hospital where the medical argot is a mix of Latin, tech terms and centuries of practice, study and innovation. Doctor's language is a great wall of China for patients and their families; a barrier that instills fear and confusion as it fosters dependency which is further complicated by the methodology of medical practice driven by hospital's need and third-party insurers needs for efficiency, economies of scale, brad building and repeat business.

A visit to anyone in the hospital offers several clear directives to marketers:

1. Expose the Process. Everyone needs to understand the basic rules of the game. In the hospital you are on your own. Doctors, specialists, nurses, students, aides and schelpers of many stripes traipse into the room and do stuff. The plan, the sequence and the goals are rarely understandable or clear and nobody is incented to tell you. Finding out what is wrong with the patient, who is managing it, what are the issues and considerations and what is going to happen next is much harder than the most complicated video game and more frustrating than the best mystery novel.

2. Loose the Lingo. In real life most people get it and most things can be explained simply or by analogy. Consumers and patients aren't as dumb as we look. The professional nomenclature which marks guild membership is a turn-off and a barrier to effective care, especially in cases where the patient's family or friends need to give the medical team data, context or information. Without understanding what's going on and what the doctors are thinking about, patients and their loved ones edit the data they share which in turn can complicate or frustrate effective treatment. This holds true across many service businesses where professional ego and distance creates an unnecessary and counterproductive adversarial situation..

3. Consider Context. Every message to a human brain is processed through the state-of-mind filter. The hospital, by its nature, is a scary and disease filled place. Anxiety is ubiquitous. Add the scary visual of a loved one confined to a bed, near naked and uncomfortably hooked up to honking and beeping machines and your target customer is lost in a sci-fi world. You must factor in the emotional context of your target audience since all medical and stressful communication has to start with the understanding that the audience is disoriented, fearful, ignorant and anxious. Too often the medical professionals cool, professional and familiar context rather than the patient/family context drives the message and the communications style.    

4. Get Real. Humans are physically and emotionally sturdy. Evolution has wired us to nimbly handle threats and to instinctively process information. There is little or no point in withholding information or attempting to guild the lily, especially to people supporting patients with chronic or persistent ailments.Nobody thinks medicine is a precise science. Everyone understands that there are multiple variables at play. But few of us have the patience to slog through dis-information or the knowledge to piece together the real story from fragments and snippets of data and opinion parsed through a large and unknown cast of characters.

5. Tackle the Topline. Take charge of the communications burden and tell customers or patients the topline. You have the affirmative, proactive communications burden. It's not okay to hide, duck or wait till the customer or patient is red-faced, screaming or homicidal before sharing information. Everyone needs to understand where they are, what is happening next and what are the possible outcomes of the game. This is true if you are selling socs online, undertaking an eLearning exercise or supporting a chronically ill relative.

Optimizing Communication With Women

Men are on Mars. And women, who buy everything and are 8 of 10 marketers on this planet, have preferences in tone, manner and vocabulary that can spell the difference between effective and disastrous communication.

Its a given that women are socialized differently, that their brain functions operate differently and that the way they relate to each other and to men bears scrutiny and attention if the objective is to inform, educate, entertain or motivate them to do what they do best -- drive purchases of everything.

Ariad's "MarketSense" newsletter reports on a study done by MasterCard of Canada indicating that more than half of women are primary decision-makers for financial services. Suggesting ways to engage women in the style of Delia Passi, Ariad recommends that marketers take time to educate female clients, focus on the uses and implications of money choices, create mom and kid-friendly events and structure offices and meeting spaces to accommodate kids who frequently accompany mom's on their rounds.

Dr. Ellen Weber writing in the Brain Based Business blog offers the following ten tips for managing women:

1. Ask rather than tell.

2. Don't make gender-based assumptions.

3. Share something to build goodwill.

4. Ditch comparisons.

5. Counter cynicism with respect.

6. Catch a women's cadence.

7. Expect to be surprised

8. Try new leadership approaches

9. Seek women's help.

10. Laugh

She also presents a very interesting survey to test your Tone IQ. Yours truly, having been tamed and trained and by strong women scored well.

Bottom line -- you succeed in ads, at the point of sale and across the dinner table best in addressing women in the ways they prefer and in ways that engage rather than enrage them.

B2B Weenies Won't Win

Inertia, fear of failure and politics prevent B2B marketers from embracing new technologies and experimenting with new tactics. But ironically it is exactly these new technologies and tactics they desperately need to differentiate themselves from monkey-see-monkey-do competitors and to engage increasing shielded, skeptical customers and matrixed buying organizations. B2B weenies can't win in today's market.

Laura Ramos and crew at Forrester released the results of study that concluded "B2B marketers dip a toe into emerging tactics." She is especially polite because she makes her money buy selling data to the people she's surveying. Her survey of 160 B2B players found that while e-mail and paid search have become mainstay tactics, B2B marketers have been much slower than their B2C brethren to even experiment with rich media, online video, blogs and podcasts and social networking.

This confirms data developed by MarketingSherpa indicating that B2B marketers rely on telemarketing, search, white papers , webinars and e-mail as primary tactics which are increasing challenged as prospect decision teams increase in size, marketing decision cycles get longer and finding ways to get to and buyers with sufficient advanced buzz and a clear point of differentiation gets harder. In a system where the filtration of random inquiries to leads is 12%, where the number of leads that qualify is just 4 in 10 and that a mere 20% of those qualified leads end up buying, getting better spin and consideration or finding more impact ways to engage and energize prospects going into and during the sales process is essential. 

B2B marketers are active watchers but reluctant doers. 64% are thinking about mobile e-mail, 71% think RSS might be nice to have and 78% have listened to, but not necessarily produced a podcast. Only 41% are using min-sites geared to campaigns, just 33% are using blogs to generate leads or nurture them, and 14% are playing around with social networks and user generated content while hardly anyone is using games, mobile media, online video and behavioral targeting, all of which are becoming hot experimental areas for business-to-consumer marketing.

Now maybe you think these guys are justing being prudent and appropriately parsimonious with limited budgets. After all aren't all these new fangled ideas over hyped, under measured and unproven? The short answer is yes.

But that is precisely the point -- in parity markets where product features and benefits are similar and pricing is inevitably negotiated, anything new and different can set your brand apart. Plus each of these tactics can be tested in limited and measurable way us to assess acceptance, engagement and impact at manageable costs during each stage of the sales p0rocess. Not trying these tactics risks being perceived as either the same or as being locked into ancient approaches.

I am not issuing a blanket endorsement of any of these tactics or the annoying vendors flogging them. There is a lot of hype and a lot yet to be proven about each of these things. Remember when you got your first talking e-mail? When you clicked on your first landing page where you could download stuff? Or how about when a friend send you the viral dancing bunny? These tactics promise water-cooler events and some viral action. But doing exactly the same things as your competitors or doing exactly the same thing you did before (or doing less) and expecting dramatically better results is a fantasy. And as we move into 4Q when budgets get cut, doing nothing is the only guaranteed formula for getting nothing in return.

Maybe you think B2B guys should wait-and-see while others squander their time and their cash proving or disproving the value of new tactics and then swoop in and adopt just the winners. This tactic worked when the number of competitors and the intensity of competition was smaller. But today it is  prescription for inevitably playing follow-up.

If you snooze, you lose because the first guy with something dramatic and different, something people start talking about or something that intersects the real-life behavior of prospects and customers puts you at a distinct disadvantage where even a good response or a rapid reaction marks your brand as an also-ran or as a copycat.

Remember your B2B prospects are buying stuff online, getting viral videos from friends, using Blackberries and PDAs, crusing and using MySpace and LinkedIn, playing online games, subscribing to ezines and registering for online promotions. They have an intuitive understanding and awareness of these tools and tactics. Why not borrow this consciousness and serve them up a change-up pitch in terms of your B2B message? 

We live in a risk adverse marketing world where marketers work much harder at keeping their heads down and their jobs than in delivering successful results that could rock the boat.  But experimenting with emerging digital tactics is critical both to improve the efficiency of marketing communications and to upgrade the effectiveness of brand building and demand generation. In some ways its the point of differentiation that will help more marketers add genuine value to the sales process and their own careers. 

Blind Man's Bluff: Measuring the ROI of Lead Generation

Brian Carrol, the Eisenberg brothers -- Jeff and Bryan-- and Jim Kukral started an intramural tempest-in-a- teacup debate over measuring the value of lead generation and the utility of marketing dashboards which gives me a perfect opening to articulate and pontificate my POV.

This is a debate like the number of angels dancing on a pin. A huge percentage of companies and senior executives don't know the fundamental costs and values of customer acquisition and retention much less how to measure ROI. Vendors selling everything from pixels or snappy ads to complex software and marketing automation systems fling these terms around brazenly attempting to shame, browbeat or rush marketers or their bosses to invest in the proffered solution. Most of the calculations offered aren't worth the paper they are written on.

There are two basic measurement vectors for lead generation -- efficiency and effectiveness.

The former measures how quickly and cheaply you identify, engage and qualify your most likely prospects. Expressed as cost-per-lead (CPL) or cost-per-sale (CPS) the objective is to consistently assess process and creative impact versus costs to streamline the effort while increasing the qualified yield for the least money spent. Cost benefit analysis focuses on the absolute and incremental value of lists and target selects, the payoff from rich media, audio, video or using the creative flavor of the week, the quality of media selected and the prices negotiated plus the impact of integrating, sequencing and parsing messages across and among channels to achieve sufficient weight and awareness to drive large numbers of prospects to raise their hands and interact with your brand. 

The data is a barometer of how well a process is working and if the process is delivering on its intended objective. The implications are internal. The data answers the questions:

• Are we doing this right? Is there another way to skin this cat?
• Can we do this faster, cheaper or better?
• Is the system working? If yes, can it work better? If no, what do we fix?

The effectiveness measurement seeks to figure out if this Rube Goldberg marketing machinery is worth it. Does the lead generation machine crank out profitable deals?

Here is where ROI, defined many different ways, gets used and abused. The notion is that if you spend X,  to fill a funnel with leads that are then filtered down into a few deals you should end the day with 10X in your pocket. Ideally the done deals pay for the system (and all those leads thast don't turn into much) and yield not only healthy profits but a few marquee client names to dine out on.

Calculating ROI is a function of the culture, the senior personalities and the immediate financial picture of the company. These variables drive either a Talmudic debate or a poker-faced negotiation to determine which hard or soft costs are counted in determining the relative impact of the spending on the business result. In our blogger debate ROI has been set off against an even vaguer notion called "full accountability" which suggests that there are even more iterations of this shell game which, depending on the scrutiny of investors and the anxieties of CEOs and CFOs, can either be ignored or can become a rationale for executive change.

Bottom line: Most companies are happy with a rough calculation -- internal labor costs + system costs + creative + media + agency+ out of pocket costs divided by gross revenue realized from closed deals = ROI. This formula is good enough. Every other formula is fungible and mostly political.

Yet one thing is clear, without an efficient lead generation system that is understood and operated as a critical business process there is nothing to calculate ROI about.   

The Case for Outsourcing Marketing

Everyone thinks they’re a natural born marketer. Most businesspeople, executives and almost all entrepreneurs think they know how to sell their product or service better than anyone else. And while there’s no doubt that we are much more media and marketing savvy than ever before, the reality is that there is a genuine shortage of marketing experts capable of getting brands the attention they need in an intensely competitive, constantly evolving digital landscape.

Most companies seriously consider outsourcing tasks when functions or tasks require a)

considerable technical expertise and experience that is either expensive or in short supply; b) repetitive or complex business processes often in need of capital investment;  and c) performance –based compensation tied to service level agreements, which are almost impossible to extract from employees. Using these criteria many businesses should consider outsourcing all or part of the marketing function.   

   

The numbers of marketing professionals -- who can figure out how to define, differentiate and drive traffic for your product or service – or who can cost-effectively zero-in on the people most likely to buy from you is in short supply. Many of the best ones are already spoken for and many of the candidates in the market have been haphazardly trained or are the beneficiaries of rampant title inflation, which characterized the first Web bubble and is driving Web 2.0.

Knowing how to Google isn’t enough. Critical marketing functions like demand generation, viral marketing, experiments in social networking and online communities and search engine marketing are a complex mixture of art and science requiring experience, technology and media savvy. You can’t fake it. And learning on the job is expensive and often counterproductive. For these and other important discrete marketing tasks, outsourcing is often the most efficient and cost effective alternative.

Motivating employees, who are not salespeople, to meet performance benchmarks and compensating them on the basis of performance is almost impossible. Many businesses use outsourcing as much to finesse internal politics and structural silos as to accomplish specific tasks or meet specific financial or sales objectives because you can buy expertise on-demand, parse marketing spending and in some instances find outsourcers who will share both the risk and the rewards.

By outsourcing marketing you trade-off the illusion of control and the comfort of having a warm body at hand to receive your spontaneous enthusiasms, ideas and insights. Yet many outsourcers will put a staff member on your premises and given the widespread use of technology you can easily communicate an idea or an inspiration by voice or text around the corner or around the world in a nanosecond. 

Outsourcing often gets you much more for the money. Hiring a hundred thousand dollar per year Marketing Director gets you a mid-career professional with a mixed bag of skills and an overhead burden of 40-50%. Spending the same money with an outsourcer, you get a team of players ranging from a senior counselor to a very junior schlepper who may be better suited to think through, structure, create and practically manage the full range of marketing and communication tasks you need to accomplish.

7 Keys to Loyalty Marketing

Everybody wants loyal customers. Everybody wants to zero-in on that 20 percent of the customer base that drives 80 percent of profits. Finding and caring for the people who love you, buy a lot, buy often and tell everyone they know about you is the rationale for massive spending on customer loyalty programs, which for years were based on the rats-through-the-maze premise that points, air miles and rebates will guarantee and secure your best customers and turn half-hearted customers into brand loyalists and outspoken advocates.

But Colloquy's loyalty census suggests that the rush to set up programs has resulted in bloated lists of people who aren't really participating and who just aren't that loyal. Active program participation across all business sectors is 39.5 percent, a "dismal" result according to the researchers. The old metric of total program members seems a lot less meaningful than actively participating members, defined as those enrolled and actively changing behaviors to earn rewards.

Consider these highlights.

• American customer loyalty programs have enrolled 1.3 billion members -- 4 times the US population
• The average household is signed up in 12 programs but actively participate in just 4
• Airlines, credit cards, grocers and specialty retailers account for 57 percent of all loyalty program activity
• Gaming companies, leveraging significant usage data on members, are working hardest and making the most gains in using loyalty programs to drive profits.

The data suggests that marketers have defaulted to loyalty programs but haven't connected the dots in terms of meaningful data, insight or personalization to get them to pay off. In some sectors the mere existence of a loyalty program has been equated with the benefits of a well run program. But the bottom line is that customers have a limited amount of focus and attention. No one really has 12 favorite merchants and even when they have a favorite in each category, the interest and intensity of the relationship varies by circumstances, need, cost and time.

Its no wonder that categories with high repeat sales have the most actively engaged members. But given the ubiquity of credit card programs, its actually surprising how many customers feel that the rewards aren't worth the trouble or that the ratio of points to dollars spent are meaningless. We all know card holders that look at the reward catalogs make a quick calculation on the cost of goods and quickly conclude that the cost to acquire a toaster, a trip or a flat screen TV by redeeming points is much greater than buying the same item at retail.

The subsequent judgment, usually made with a healthy amount of skepticism and frustration, is that the loyalty program isn't worth it. So now you're in a program where you've amassed points that don't buy much or buy things at inflated prices so you're locked into a currency that's not worth redeeming and you head to Points.com to see if you can salvage the situation.

The net result is the opposite of the program's intention. You have high-value customers who invested in the brand and who are frustrated and sometimes angry, that you've saddled them with undervalued points. This isn't exactly the prescription for building brand loyalists and advocates and probably explains the relatively low engagement levels of program members.

It seems to me that loyalty programs work best when ...

1. They are geared to high frequency/high involvement purchases.

2. They integrate and leverage purchase histories and customer data or preferences to maximize personalization, There is zero trophy value in a one-size-fits-all reward.

3.  Point levels are set (and re-set) to drive specific behaviors. The do-this-and-win formula works. The trick is to make it simple, frequent and pay it off instantly. The classic RFM principle from direct marketing applies here big time.

4. Points must be awarded and communicated frequently. When members hit selected point levels they should be recognized and redemption options plus incentives to get to the next level ought to be presented. Recognition ("You are a PLATINUM member") is as much a part of the game as the one million points.

5. Members must perceive the points/merchandise relationship to be a good deal. Consumers have a knack for quickly assessing the value-for-money equation in any situation. You cannot get around this and you cannot cheap it out. And while it flies in the face of marketing orthodoxy, it probably helps if points are transferable or options exist to combine points from several programs to get a big ticket item. Brands can still get partial credit for the new car or the amazing family vacation even if they didn't do all their purchases with you.

6. Value propositions, messaging and the rewards themselves must be different and differentiating. Its no surprise some programs are experimenting with Broadway walk-on roles, customized vacations and narrowly targeted experiences and merchandise to resonate with specific groups of members.

7. Make a serious effort to engage and activate members. Then focus everything on the active players. If the 80/20 rule holds this will be the most effective marketing dollars you ever spend. Not everyone can or wants to have 12 best friends. If they pick you, reciprocate and disproportionately love them back.