The year 2010 is coming to an end and the 2011 marketing plans are being drawn out by CMOs.I have often wondered how are budgets allocated year after year by CMOs and marketing managers. In fact, most CMOs use archiac methods of planning marketing spends? 

1. How much did I spend last year?
2. How much is the category or competitive brands spending during the same period?

Is there a better  method to plan and allocate marketing spends? I am sure time has come for us to look at this kind of an analytical framework.

I came across an interesting article on how this can be done and I found it very interesting. Here are some of the higlights of the approach:

Step #1: The first question the author says is for the CMO to determine or test their spend leverage.

Step # 2: Most often, the author comments, marketing departments are not in alignment with the overal organizational strategy - on margin improvement, new geography penetration, production innovation or redesign, alternative channel testing etc.. It sounded very familiar to me and it is an important item which CMOs & marketing teams need to revalidate as they build their marketing spend plans.

Step #3: To determine which marketing spends to "defund" based on impact to business over the last year.

Step #4: Then basis the above 3 steps build a strategic prioritization plan.Strategic prioritization means CMOs need to decide which geographies, which segments, which innovations, which programs need more or less monies.

Step #5:  The other interesting point made is that marketers should also look at risk issues around the environment as normally only GDP growth rates are looked at. The issues include terrosim issues, weather etc. which do pose a risk to marketing planning and spending.

I believe this is a great framework for a start to look at defining and planning marketing spends in a new year.

I often see a lot of digital marketing specialists treat social media data almost like traffic lights- a kind of sentiment monitor - Red, green and amber - here are the positive scores, negative scores etc. I wonder what marketing actionability does such visualization and presentation give to marketers. For the first few months, it may sound interesting to marketers, after that am 100% sure, they will get bored and start questioning the application and business impact of such data.

On the other hand, I see traditional direct marketers or database marketers or analytical professionals lost when it comes to social media. It is almost like finding their way in a maze and they often treat this as technology or a statistical problem that has no application in this medium. Also, they  have very little clue about this medium. There is  huge opportunity to apply  both powerful direct marketing principles, database marketing and analytical techniques to this social media data. In fact, digital marketing specialists too need learn from these  principles & techniques.

In fact here my view of how social media data is changing  all of this.

1. Direct marketing was always restricted because of lack of customer address, behavioural data and information - social media data changes all of that.
2. No more physical address is important. An address on the web, posts on social media sites can help identify the customer and their current behaviour, attitudes and concerns. Treat all of this as 'information for action'  rather than ' positive words or negative words of sentiment'. In fact sentiment on the web is dynamic. Action must be swift and dynamic to sentiments as they have a potential to make real-time impact.
3. Treat comments & posts data as response which can help build individual relationships and communities. This could have never been possible without social media.
4. Relationships in the past were based on only transactional data, today social media enables relationships based on individual behaviour - positive and negative emotions which can be deciphered. They need to managed as emotion-led customized campaigns with clear relationship metrics.

It was interesting see an article  by Bob Maclnnis & Sari Tamilio who also urges us to think similarly about social media data.

Do you agree? Would love to see your comments and thoughts on the same.

We all know the mobile will become the centre of what consumers do. In the recently concluded Mobile Future Summit, the impact of this device has been summarized quite well. There were several good speakers and here is the essence of what some of them had to say:

Steve David, was a keynote speaker. Steve spent over 30 years at P&G , the final assignment as P&G’s CIO responsible for their Internet Strategy.

Steve laid out the case for Advocacy being the new measure of marketing. It has a lasting impact on the brand, the sales, and the relationship with the consumer. Companies who have a better understanding of the customer via sophisticated analytics and can quickly take the solutions and products that consumer want and need gain long-term competitive advantage. Insights from the market must be processed in real-time that can empower decision making at every level of the company. And mobile is central to this strategic shift. Mobile is being used to attack the counterfeit problem worldwide, in formulating personal recommendations as trust in brands erodes, in collecting analytics, and engaging interactions with products and services using NFC, etc. 

In the session of The Balance of Privacy and Monetization from Consumer Data,  advertisers like adidas want to move from 1-2-many to 1-2-1 relationship with the consumer that increases the volume and quality of the transactions. The valuable variables to track are location, propensity to buy, past actions, traffic inputs, etc. Discovery and recommendations also become important part of the whole process.

I do believe the next phase of customer engagement is on the mobile. The ability to build relationships using content, engagement & micro-transactional engagement using analytics & interaction studies are going to determine the success of brands.

Most marketers have not forgotten the mass marketing principles and refuse to unlearn them for personal devices like mobiles which is increasingly becoming a marketing tool.

Off late, I have been bombarded with too many messages from retailers in India, just to inform me about their new arrivals or sale!  I dread to give away my mobile number to any retailer. The response from customers will only decrease over time if this is misused. It will become a case of message sent but just not seen at all - from OTS( Opportunity-to-See) to OTT( Opportunity-to-Trash) becoming huge!

E-marketer has an interesting research that tells a lot for grocery retailers but I do believe it is relevant for any marketer who's looking at the mobile medium.

Mobile is a great medium for dialogue, conversation and relationships. Don't treat it like a TV with lower costs of reach!

NY Times carried an article last week about the new kinds of banking services that are emerging in the post recession era! Some of the new names that they mention are SmartyPig, Kasasa, PerkStreet etc.

The concept is pretty simple these are simple online checking or savings accounts with an objective to save you from the grips of mega banks. They give you higher interest rates, help you achieve your goals with some smart savings plans, no surchage fee ATMs access etc.

I am not really sure how these new concepts work as we have seen online only banks, peer-to-peer banking come and go. But, surely what I seem to take out is that :

1. Customer are increasingly thinking more about savings today than spending
2. They don't want to pay for services that are hidden or having surprises. The need for transparency is becoming more and more important.
3. There is a need for these banking institutions to align their products to a customer's investment goals. Save-to-spend later is an interesting twist am seeing in these services or products.
4. There is a need to simplify banking and some of the services to make it more accessible to many.
5. It is also interesting to see community banks coming together to offer these services. The smaller banks looks like were far more closer to their customers than the bigger ones. But, clearly just transactional relationships will not be order of the day for the banking instituions.

I am bombarded in a day with hundreds of emails and SMSs- many of them are promotional emails and SMSs. I simply ignore them.

I sit in front of the TV to watch my favorite program and I see a ticker running with messages.Just fails to grab my attention.

I am out to watch a movie and suddenly I realize there are "product placements" intelligently( supposed to be) weaved with the script. My mind shuts immediately as I realize I am being marketed at.

Many consumers like me are getting a lot a savvier than ever before and in one of my conversations with my clients, she was telling me how the hell do I market in a world where most of my best prospects and customers are in Do-No-Call or Do-Not-Disturb lists! 

How does one do marketing in a world when the door is already shut?!

Welcome to the world of relevance marketing. This is increasingly becoming important as many marketing messages are just being ignored or it's money wasted as the consumer is just indifferent. How does one practice the art of relevance marketing.

1. It starts with being genuine and authentic. Facebook fan club/Apps has become a fad. Soon it will lose its relevance after the initial hysteria is over. May be start a help desk page in Facebook for your brand to answer any queries or may be even have a click-to-call service as an app in your Facebook page,twitter or mobile which connects the customer with your already existing call centre.
2. Follow the customer learning journey   - It is important to understand at what stage is your customer or prospect at. It is important not lose the communication script & trigger at each stage. As the customer or prospect knows more about your brand, the intensity of her queries or help is different. It pays to focus your attention to this detail. 
3. Bring the data together for the dialog - Many a times the availability of multi-channel options creates fragmented knowledge across the company among customer facing executives. How can we identify repeat customers or  visitors and make them know enterprise wide, how can you fuse the data available at the call centre with web, how can your link service data with customer billing/purchase data? Start the data journey with small experiments and accelerate them with quick wins. Knowing this can help relevance marketing greatly.

My friend Sandra Zoratti has written an interesting article on this topic:

Step 1.Consumers want precision marketing. On the brand side, this process must begin by first deciding what problem, or pain point, you are seeking to address.

Step 2. Next, marketers need to evaluate and then leverage the data and campaigns currently in place.

Step 3. The next step is to synchronize your campaigns and determine the best message for the channel.

Step 4. Once a test campaign has been launched, the next step is to measure the results based on a wide range of criteria and, most importantly, bottom-line measures.

Step 5. After the initial test, it's time to refine and repeat the above steps to produce the same or different results.

Read more here

With  zillions of data points becoming available in organizations today, there has been a lot of buzz around the following:

1. Using analytics in marketing campaigns driving relevance, immediacy, reducing wastage and optimizing spends
2. Making marketing more accountable using the power of data that's becoming available like never before
3. Getting analytics closer to business - Making it simpler and business manager friendly for action to be taken
4. Getting organizations more customer-centric as customers leave a lot of trail about their behaviour - likes and dislikes

I have been always of the belief that analytics is not worth its weight in gold, if you don't make it actionable. The key to this has always been taking this power to the ultimate decision maker where ever he or she is in the organization - it could be the tele-sales rep on the phone, the customer service executive on the field, the marketing manager at customer's office etc. To make that happen, this has to be linked with performance management of employees who ultimately play a role in making this happen on the ground. Peppers & Rogers too seem to make this point in their recent  Expert Opinion( Mark Selcow)article: 

Organizations are beginning to recognize that these massive volumes of data are valuable for more than the immediate insights they reveal: By leveraging metrics, dashboards, and other PM components, data can also be harnessed to change behavior and processes.

The connection between the growing interest in analytics and PM is not coincidental. Analytics is about mining data for patterns and insights – making big discoveries that help advance big ideas. PM is about turning operational data into metrics that show performance versus a goal on a task or process that matters. Simply put: Analysis, Action.

Here are a few quick thoughts on how analytics and PM can fit together in a single project initiative:

1. Select the best projects to execute against that will help advance a critical goal, such as customer churn reduction (analytics)
2. Determine what the metrics and goals should be in each project (analytics)
3. Uncover patterns that can be addressed with process reengineering or team/individual intervention (both analytics and PM)
4. Plan out the financial impacts of making operational change, such as modifying compensation, or tightening/relaxing SLAs (PM)
5. Operationalize the insights and plans by introducing to the organization, for example, in dashboards or in incentive systems (PM)
6. Measure and control performance (PM)

This will continue to be an area of growing interest in organizations as the results then get tangible, metrics then become a measure for evaluation of employees who are responsible for making this happen.

I have never seen this before - an agreement between the customer and the company.

It just outlines beautifully the organization-wide mission that employees have to adopt and the interesting twist is how customers agree to behave with  or treat the company!  I believe this makes imminent sense as relationships are a two way street anyway!

Tim O' Reilly tweeted about an interesting interactive feature on NY Times on using the popular movies rented data on Netflix by neighborhoods and zipcodes in the US! It's a lovely little application that tells movies marketers the kind of preferences consumers have had in 2009. 

This made me reflect on the infinite opportunities that are available on how data can be used in a number of ways imaginatively. Imagine the interesting applications of data:

1. Grocery stores - Households and neighbourhoods that are calorie conscious and like exotic foods. FMCG brands can then use this information to do interesting promotions across different zones based on consumption patterns.
2. Fitness Shops  - Zones that have different membership rates and ability to differentiate fitness freak zones from the not-so-fitness freak zones. Nike could use this effectively to build a community of fitness awarness champions across zipcodes to make the zones fitness conscious and the based on the number of people joining the fitness campaigns the 'heat maps' can become more and more red everyday!

CMO council has come-up with an interesting report that many marketers have faced as consumers themselves - irrelevant communication!  Many of these marketers talk about it but do nothing about it for their own brands or products. Here are some startling facts to think about:

• While 64 percent of consumers say promotional offers dominate both the email and traditional mail they receive, only 41 percent view these as must-read communications.
• 91 percent of consumers who opt out or unsubscribe to emails, 46 percent are driven to brand defection because the messages are simply not relevant.
• The threat of customer churn and disconnection intensifies as 41 percent of consumers say they would consider ending a brand relationship due to irrelevant promotions.
• An additional 22 percent say they would definitely defect from the brand!
• Nearly three quarters of consumers have received promotions for products they have previously purchased from the company
• 73 percent of consumers would be open to receiving print statements if mailed materials were recyclable or part of a sustainability program
• Nine out of ten consumers open monthly bills delivered via traditional mail, compared to 72 percent who open bills delivered via email
• When given the opportunity to choose, 51 percent of consumers prefer to receive product or service promotions via traditional mail while 44 percent prefer email.

It's really true esp.for myself  as a customer(as the report highlights)- I have seen many companies calling me to buy the product when am already their customer!

There is a need for marketers to add a relevance filter to their customer management process. It's high time they start integrating the channels of customer interaction & communication to make this happen.