How breaking a promise can break your brand: the story of AT&T

25 Sep AT&T

While not a true crisis, a Texas lightning storm last week provided a striking example of how far off track a big company can go and how smart a start-up can be. It should be the other way around but too many big companies seem unable to get the customer experience right. At the same time, I’m amazed at how many small startups are super customer savvy.

The storm that swept across Texas was a big one. It dropped 6 inches of rain in a couple of hours and brought strong lightning, wind and thunder. Apparently, the lightning was close enough to bring down our power, Internet, and cable TV. While the power company restored power in less than a day, it’s been more than a week since we’ve had Internet or TV.

When our Internet went down, it took with it a variety of Internet-connected devices including light switches, thermostats, and music players. They all worked but they could no longer communicate back to the companies that service them. The day after the outage, I received a personal note from support at a company called Rachio which makes an Internet connected sprinkler system that I use. They are a small company and they could see that our device went offline. They proactively checked in to make sure that everything was working well with their device and whether I needed any assistance. This is truly amazing customer service considering the fact that they don’t have anything else to sell me and since they don’t earn any ongoing revenue from their device.

On the other end of the spectrum was AT&T — who I pay thousands of dollars per year — who should have the resources to turn this small crisis into an opportunity to strengthen our relationship. During a crisis, the best companies are proactive, share information, work hard to over-deliver on commitments, treat customers with respect, and are generous to make things good when unexpected events create new problems. Like Rachio, AT&T has the data they need to be proactive with support. They certainly have the financial resources to create a great customer service experience if they choose.

When we called AT&T after the storm they set up a appointment 3 days later on Monday at 8am to fix our Internet and TV. To our surprise, nobody came to make the repair and nobody called us to provide an update. We called again and were told that their window was extended to 7pm. Again, nobody came and nobody called.  At 7pm we called them and were told that they weren’t going to come and that, in fact, nobody had even been assigned to our ticket. They could not estimate when anybody would come. They would not schedule another appointment. They blamed dispatch and said they had no access to information.

As infuriating as this experience was, it was just the beginning. Tuesday, Wednesday, and Thursday were exactly the same: each day an AT&T representative would commit to send someone and nobody would ever come or call. They systematically made and broke promises. They lied to us. We spoke to managers and supervisors but there was no path of escalation and no accountability.  More than a dozen AT&T employees made promises to call us back or to take an action and then failed to honor their commitments. They made it our job to spend hours on the phone.

In these interactions, AT&T committed the two most fatal brand mistakes: they created a bad customer experience and they broke their own promises. While it is inevitable that customer service mistakes happen, it’s clear that AT&T’s problems are structural. They are a choice. AT&T has decided they are going to save costs by providing limited customer service. Further proof of this can be seen in their crediting policies. Surprisingly, they didn’t proactively offer to credit us for the service they weren’t providing. When we asked for a credit, they still wanted us to pay for part of each of the days that they were unable to provide service. We now must call back every day to get additional daily credits for the outage.

On Tuesday they sent us a customer satisfaction survey which allowed us to write, at length, about the promises they made and broke. The survey was smart: it clearly asked if our issue had not been resolved. When we said it hadn’t, the survey asked us to provide a phone number so that someone could immediately reach out to address our issue. This was a great opportunity for AT&T to escalate our issues and get the relationship back on track. We provided the number and requested follow-up but nobody called.

As a marketer, I know the work that it takes to build a great brand. AT&T’s CMO certainly understands that their brand is only as good as the promises they keep and the experiences that they create. AT&T’s broader executive team, no doubt, speaks personally about the importance of honesty, integrity, and keeping promises. They have all the data they need to spot problems and proactively help customers. They have the data they need to spot customers who they have let down. Why is it that they are unable to treat customers with honesty and integrity? Why don’t they invest to save customer relationships that are worth thousands of dollars when they know they are at risk? How much financial damage does this cost them in any given year?

The difference between AT&T and Rachio runs very very deep. Rachio is clearly being built from the start as a company that values an exceptional customer experience. Like Apple, Tesla, AirBNB, Zappos and other strong companies, they are using the customer experience as a tool to build their brand. AT&T has never been this type of company and it’s probably impossible to change the culture enough to positively impact the brand.

For Chief Marketing Officers, it’s important to remember that building a great brand almost never starts with great marketing. It starts with building a great product and a great customer experience. Your brand is the promises you make. When you break those promises, there is no amount of advertising spend that can get your reputation back.

Brand Strategy for a Product Company: the Story of Indeed’s First Global Campaign

11 May

This week we’re rolling out the first global brand campaign for Indeed. It’s a big step for Indeed because we’ve traditionally eschewed these types of investments. We’re not a flashy company. We’re purpose-driven and product-focused. We’re passionately focused on helping people get jobs.

Indeed: How the World Works

“How the World Works” — Indeed’s first global brand campaign

Over the last decade, we’ve been lucky to grow at an amazing rate by helping more and more job seekers find the right job every year. Now, every month, more than 140 million unique users in more than 50 countries visit Indeed. We’re the number one job site in the world as well as the #1 site in the U.S., UK, Canada, Brazil, France, the Netherlands, Italy, South Africa, and many other countries. We’re the #1 job app in iOS and Android in more than 20 countries around the world.

So why launch a brand campaign now? It’s a question that we’ve thought about a lot. The online job industry grew up with major job boards in every country, many of which made money by luring job seekers to small pools of paid postings using large TV-driven brand campaigns. Unfortunately, the industry has been dominated by humor-driven ads that mock the workplace and play to employee frustrations.

It’s in this context that Indeed has quietly grown to become the world’s leading job site by focusing on the needs of job seekers. As a search engine, we try to find every job in the world and show them to job seekers on our site — whether or not the employer is an Indeed customer. Today we have more than 16 million jobs on Indeed covering all occupations, roles, and levels. Most of Indeed’s growth derives from the fact that the product is simple, relevant, and comprehensive. We work hard to make the site easy for job seekers to find and use online or with their mobile device.

As we thought about diversifying our strategy to include brand investments, the decision came back to our purpose: helping people find jobs. 140 million people is an enormous amount of job seekers — but it’s a small portion of the world’s 7.2 billion inhabitants. There are still many more jobs offline than online. And there are still many people who don’t know Indeed. It was these factors that encouraged us to develop our first campaign.

In building our first campaign, it was important to tell the story in a way that felt authentic for Indeed, our clients, and job seekers. The campaign’s theme is ‘How the World Works’.  It celebrates the importance of every job, and showcases how Indeed helps millions of job seekers and employers find the right fit.  All of the creative elements within the campaign tell the story of how diverse jobs combine to make something work – from a simple cup of coffee, to the complex workings of the London Underground or the global stock market.

The campaign centerpiece is a television commercial which is a visual representation of the core campaign message. In the ad, the camera quickly turns from the staged advertisement to focus on the workers behind the scenes: the people that come together to make a commercial happen.

Here is the story of how the commercial was made, and what happened when we brought these amazing people together from around the world:

 

To source talent for the commercial, Indeed posted 26 job openings on its website – from accountant, to nurse, to mechanical engineer, to  IT Consultant. It was a great chance for us to showcase what Indeed does best. Within 48 hours, a staggering 1,500 applications were received for the roles.  Indeed then conducted more than 200 interviews in just 14 days resulting in a total cost per hire of $217. Once a selection was made, industry professionals from six different countries – UK, US, Canada, Czech Republic, Australia and Germany – traveled to Prague for filming and production.

While there are many more pieces to the campaign, here is the final commercial which will start showing this week in the United Kingdom, our first brand launch country:

 

As a company, we’ve come to conclusion that both product and brand awareness have an important role in helping people find jobs.  As more people discover our product and as the product continues to evolve, we’ll be able to help more job seekers find the job that is the perfect fit and we’ll be able to help more employers find the right talent for their organization.

Like everything else we do, we’ll be measuring the campaign on many dimensions. One of the most important will be how many new people find a job on Indeed.

How Tropicana Misled You: The Story of a Bad Brand

4 Aug

I hope I’m not the first person to tell you that Tropicana orange juice would be flavorless without the help of a New Jersey perfume company. It probably all made sense 40 or 50 years ago when food and brands were manufactured in similar ways. But over the last 50 years, the core philosophy of corporate branding has shifted from “the story that you tell” to “the promise that you keep.” Tropicana never evolved.

Tropicana Orange Juice: Fresh and Pure?

Decades ago, big brands focused on manufacturing a brand image. Before the Internet and social media, brand building focused on telling a story about a product or service that made people want to experience it. Broadcast media was trusted by the public and Madison Avenue agencies were wizards at building brand stories that everyone believed. During this bygone era, truthfulness was a secondary consideration.

Tropicana: “Fresh from the Grove”

Some of these brands are still alive and strong today. My favorite example is Tropicana.  Many people my age have enjoyed Tropicana orange juice for years based on its unique taste and brand promise of premium orange juice “fresh from the grove.” Tropicana’s story was that the orange juice was fresh, never frozen, and never from concentrate. I judged the taste of other orange juice brands by the taste of Tropicana and wondered why other brands couldn’t match its fresh taste.

Tropicana was very good at creating slogans that highlighted the freshness of its product:

  • Tropicana. Straight from the fruit.
  • Orange juice direct from oranges, not from concentrate.
  • 100% pure squeezed sunshine.
  • Feel pure good. Everyday.
  • If it tasted any fresher it would still be on the tree.
  • Tropicana’s got the taste that shows on your face.
  • Specially made for healthy bodies, healthy lives, healthy kids.

It turns out that the reality of Tropicana’s product is very different from the story told by the company’s slogans. The secret to Tropicana’s success is an innovative manufacturing process that preserves orange juice by removing oxygen from the freshly squeezed juice. Removing oxygen allows Tropicana to store the juice for long periods of time without freezing or reducing to concentrate. Unfortunately, it also permanently removes all of the natural flavor of the juice. Here is a summary from Civileats.com:

“The technology of choice at the moment is aseptic storage, which involves stripping the juice of oxygen, a process known as ‘deaeration,’ so it doesn’t oxidize in the million gallon tanks in which it can be kept for upwards of a year. When the juice is stripped of oxygen it is also stripped of flavor providing chemicals. Juice companies therefore hire flavor and fragrance companies, the same ones that formulate perfumes for Dior and Calvin Klein, to engineer flavor packs to add back to the juice to make it taste fresh. Flavor packs aren’t listed as an ingredient on the label because technically they are derived from orange essence and oil. Yet those in the industry will tell you that the flavor packs, whether made for reconstituted or pasteurized orange juice, resemble nothing found in nature. The packs added to juice earmarked for the North American market tend to contain high amounts of ethyl butyrate, a chemical in the fragrance of fresh squeezed orange juice that, juice companies have discovered, Americans favor. Mexicans and Brazilians have a different palate. Flavor packs fabricated for juice geared to these markets therefore highlight different chemicals, the decanals say, or terpene compounds such as valencine.”

In the food industry of the 1960s, 1970s, and 1980s, new production techniques made it possible to create highly-processed mass-produced food products that could be produced consistently, shipped globally, and sold everywhere. Tropicana created something new: a manufactured juice product whose premium price was driven by marketing and technology. Tropicana combined a strong brand with a unique taste and claims that were legally protected. For a generation of consumers, Tropicana was the benchmark for fresh.

Tropicana: A Broken Brand Promise

By today’s standards, however, Tropicana is a bad brand. Why? Because Tropicana broke its most core brand promise of a product described as fresh and pure.  While Tropicana’s claims might be legally and technically true (the perfume flavor is made by isolating chemicals found in oranges and reassembling them into the flavor of Tropicana), the reality of the Tropicana manufacturing process leaves customers feeling betrayed.  Once a loyal Tropicana customer learns the truth, the product never tastes the same.

There is no good escape for brands built on false stories. Consumers take implicit brand promises seriously and are quick to shift brand loyalty when false or misleading claims are exposed. Good brands built on lies can become bad brands very fast. In the case of Tropicana, disappointed consumers have filed more than 20 lawsuits against the company.

Today’s most successful brand builders make promises that they can keep. They highlight unique, authentic elements of their business that are meaningful to consumers. They make sure that product development delivers on the commitments they make.

The best brands are built on trust. If your brand story is built on half-truths and misleading statements, it’s going to be a tough ride.

Tesla Model S: The Disruptive Marketing of an Electric Car

20 Jan

The most interesting thing about Tesla — the niche luxury electric car maker — is the role of marketing in selling electric cars that cost $100,000 or more. Many people have tried to change the auto industry over the last 40 years and none have succeeded. The process of buying a car is essentially the same as it was a generation ago. And the process has remained unpopular for decades: the typical car dealer receives just 2 or 3 stars on Yelp.

Tesla Model S and Tesla Roadster: Tesla has figured out how to market an electric car

Tesla is creatively using marketing to upend the auto industry business model:

  • There are no Tesla dealers
  • There are no commissioned sales people
  • Tesla cars are marketed and not aggressively sold
  • Tesla transactions are conducted online
  • The price is the price: no negotiation
  • There is no inventory: the Tesla Model S is built to order
  • You can’t test drive a Tesla unless you put down a $5,000 deposit
  • In many parts of the country, you can’t see or drive the car before you buy even if you place a deposit
  • You have to wait in line for months or years to get a car

And the marketing challenges are incredibly difficult:

  • They are building a new luxury brand from scratch
  • They are evangelizing a new type of vehicle: an electric car
  • They are selling a $60,000 – $100,000+ car that can’t go on a road trip
  • They must sell an entirely new model of buying and owning a car

While Tesla is starting with expensive vehicles, they clearly have mainstream ambitions. They are investing to build a big car company.  How hard is it to build and sell cars in the USA? Look at it this way: Tesla is the second oldest publicly traded  auto company in the United States behind Ford. GM went bankrupt and went public four months after Tesla. Chrysler remains private following its own reorganization.

While Tesla has a long way to go to be profitable, producing cars in volume, and moving towards the mainstream, their first home-built product — the Model S — is a success. They have 10,000 – 20,000 orders and have swept the auto industry awards, winning the most recent round of Motor Trend, Automobile, and Yahoo Autos awards for car of the year. Tesla is the first startup car company, and the Model S is the first electric car, to win these awards.

So what can we learn from Tesla marketing?

(1) Start with a great product – Tesla would be dead today if they didn’t build the best car available today. There are too many obstacles — range, lack of road trips, and buyer confusion to name a few. Tesla used electric technology to build a car that can’t be reproduced with a combustion engine. It’s as fast as a Porsche and gets the equivalent of 100 miles per gallon. It has very few moving parts. It is the most aerodynamic car made and has the most cargo space of any car in its class. It’s a sports car that seats seven.

(2) Start high and work your way down — It’s a lot easier to build a lust-inducing $100,000 car than a cheaper model. Tesla started with the $100K plus roadster built on a modified Lotus platform. With the Model S, they started with production of $100K vehicles and are working their way towards the $60K entry-luxury models. By starting high, Tesla is letting early adopters fund technology development. As volume increases, prices are coming down. The early super cars are media darlings endlessly discussed in waves of free Tesla publicity.

(3) Turn auto industry strengths into weaknesses — Historically, luxury cars have been sold and justified based on the quality of their engineering. Most luxury automobile companies tout “performance through engineering” as the one thing that makes them special and desirable. Tesla marketing focuses on performance through technology while touting the simplicity of the platform. The Tesla Model S pitch reframes the auto industry strength as a weakness. Through the highly-effective Tesla marketing lens, traditional gas cars are dirty, complex, unreliable, and difficult to maintain. In a bold marketing move, Tesla service centers are designed with white floors to reinforce that electric cars don’t have oil and other dirty fluids that leak on the floor.

The Tesla powertrain is marketed as simple, reliable, and effective

The Tesla powertrain is marketed as simple, reliable, and effective

Traditional luxury auto makers focus on "engineering" -- Through the Tesla marketing lens, educated viewers see complexity, maintenance, and antiquated technology

Traditional luxury auto makers focus on “engineering” — Through the Tesla marketing lens, educated viewers see complexity, maintenance, and antiquated technology

Tesla Service centers have impractical white floors to highlight that the cars run clean without messy oil and fluids

Tesla Service centers have impractical white floors to highlight that the cars run clean without messy oil and fluids

(4) Create a new multi-channel model: Tesla decided not to build a traditional car dealer network. Nobody likes car dealers: even buying and servicing a high-end car like a Porsche is a dreadful experience. Tesla looked at the car buying process and optimized its sales model to fit the way people buy cars today. Since people start online, Tesla designed their process around online information, commerce, and community. Their site is unusually clear, clean, and effective. For people who want to see the car, they are building kiosk stores in malls with Tesla experts who can’t sell cars and who aren’t commissioned. When a buyer is ready, they place a refundable deposit online. If they want to drive a car, they can arrange a test drive after they’ve placed a deposit. Essentially, Tesla is selling cars the same way Apple sells the iPhone.

(5) Build the community & focus on the experience: From the beginning, Tesla has made user forums and user community a key part of the online experience. Tesla marketing highlights the unique Tesla buying and ownership experience and encourages owners to interact with the company and each other in full public view on the Tesla site. This provides a rich base of content — and owner passion — on view for prospective buyers.

(6) Leverage the media and traditional press: While much is new about the Tesla Model S and the accompanying sales and marketing model, one thing is not: the dependence on traditional media. Tesla has been a master at driving press coverage, reviews, and awards for its cars. It’s clear that the company has worked hard to position the brand with the media and to make sure the right messages come through. The company’s #1 message is that they are trying to build the best car ever made and not just the best electric car. This message is frequently repeated by the press.

Tesla Marketing: Likely more lessons to come

While it’s early and many many risks remain, Tesla is the first company to have the potential to become the Apple computer of the car industry. Like Apple, they are selling a product that is very different than what has come before. Both companies focus on great products and innovation. They are both building their own ecosystem (Tesla’s super charger network is akin to Apple’s build-out of iTunes and the Apple Store) and both are challenging traditional sales models with their own direct distribution system. In fact, Tesla hired Apple’s previous retail chief to build out the new distribution model.

Whatever does happen with Tesla, the marketing lessons to come are certain to fascinate.

Revenue Marketing: 6 Essential Rules for Success

30 Oct

Over the last decade, I’ve helped to build B2B revenue marketing teams spanning from a few marketers supporting a few sales people to global models supporting 10,000+ sales representatives. While the challenges of different organizations are often unique, I think there are a few key revenue marketing rules that transcend B2B organization size.

In my last post, I walked through an overview of B2B Revenue Marketing. Now, here are my five key tenets to making sure that your revenue marketing programs are as good as they can be:

(1) Focus on revenue: While this seems incredibly obvious, most B2B marketing organizations focus on other things. While leads and pipeline often lead to revenue, focusing on leads and pipeline metrics can create conflict between marketing and sales. The most important metrics for revenue marketers are (a) the amount of marketing-sourced revenue driven by marketing programs and (b) the effectiveness of the marketing investment (ROI). While pipeline goals are important to see how thing are progressing — they are not a substitute for revenue goals. In my experience, lead goals such as the quantity of leads or the number of qualified leads tend to be completely counterproductive.

(2) Sign-up for accountability: Revenue marketers should be paid like sales people. They should have a  quota based on the level of investment that they control and a significant portion of their pay should be variable based on performance (i.e. revenue). Great revenue marketers should be highly compensated. the key to this, however, is true marketing accountability for revenue and results.

(3) Make marketing & sales as a single integrated function: Every dollar spent on revenue marketing is a dollar that could have been spent on sales. For revenue marketing to make sense, it needs to provide leverage to the sales team and allow the sales organization to scale cost-effectively. If you are a young company and want to grow sales at 100% or more per year, you’ll need to get the right balance of sales and marketing investment to support hyper-growth. No matter what your goals are, it’s important to look at marketing and sales as a single continuous function (hopefully with different owners), with joint planning, shared goals, and a clear model for resource allocation.

(4) Design a process that eliminates conflict: Too often, marketing organizations sabotage themselves by putting in place lead generation processes that create conflict with sales. A bad lead process creates a rapid death spiral that looks like this: (a) marketing sends tons of leads, (b) sales says the leads are weak, (c) sales stops calling the leads, (d) marketing says sales is weak, (e) marketing stops getting any ROI from its investments, (f) people get fired.

From my experience, the number one source of friction tends to be the definition of a qualified lead. If sales and marketing are arguing over whether a lead is really qualified — or whether lead quality is high enough — you likely need to fix your definitions and processes. You can find my thoughts on lead qualification best practices here.

Continue reading

Revenue Marketing: The Future of B2B

17 Oct

Marketing means different things to different people. For me, marketing is about solving business problems. Sometimes that means building awareness, sometimes it means better understanding customer requirements, sometimes it means investing to generate revenue, and sometimes it means galvanizing employees around a common purpose.

But over the last decade, B2B marketers have made an unprecedented shift of resources to focus on revenue generation. Today, B2B marketing program managers, lead generation experts, event teams, search marketers, content creators, and database marketers all align to drive revenue with the highest possible ROI. This is the core of “Revenue Marketing.”

What is Revenue Marketing?

Revenue Marketing is the development of repeatable prospecting programs that new drive customer acquisition and measurable sales.  The key to revenue marketing is a predictable return on investment: if you know the impact of marketing investment then it’s possible to link marketing plans to specific revenue objectives.

The rise of Revenue Marketing as a discipline is the direct result of new CRM tools and models. In sales-driven B2B companies, marketers have earned a seat at the table by tracking the bottom-line impact of every dollar invested.  CRM systems now make it easy to track how campaign investments generate leads, how leads become opportunities, and how opportunities become revenue-paying customers. The result is a new focus on ROI: optimizing the marketing mix to drive as much revenue as possible from a given marketing investment.

In the most sophisticated companies, revenue marketing now drives the entire sales pipeline. Sales people don’t make cold calls. Instead, inbound leads are automatically nurtured until they are right for sales. In these companies, marketing programs people are paid like sales: they have pipeline and revenue goals and substantial at-risk compensation built around these goals. The quarterly planning process begins with the revenue goal and backs into required marketing program investments and sales staffing.

The Revenue-Focused CMO

Over the last few months, I’ve had the opportunity to talk to dozens of B2B marketing and sales executives about their approach to revenue generation. I was surprised to see how similar revenue marketing practices are across a diverse set of companies. The tools, roles, tactics, language, and best practices are becoming firmly entrenched. Today in B2B, revenue marketing is a clearly-defined discipline. And like any high-value, growth discipline, expert practitioners are both hard to find and well-paid.

This new focus on revenue is one of the reasons that CMO influence is on the rise. Continue reading

Facebook Email Targeting & CRM Retargeting: Important New Tools for Marketers

1 Oct Facebook to allow email targeting of display advertising

Email marketing is a delicate art. In today’s world, fewer than 1/5 of recipients will open a commercial email message. For every 10 people who click on an email link, one person permanently opts out. While new subscribers are likely to open and click, results fall-off by 65% or more within just 4 months of email list subscription.

For most marketing organizations, email lists are full of high-potential contacts who no longer wish to receive email. In B2B, this is particularly an issue in businesses with  long sales cycles and high levels of lifetime customer value. While a prospect may be interested in a product or solution, they may not want to receive any commercial email.

A few weeks ago, Facebook rolled out a new advertising feature that allows marketers to display ads to targeted recipients selected via email address, phone number, or Facebook user ID. The new feature allows a self-service advertiser to upload an encrypted list of 20 or more contacts with the ad they want to show. Facebook will automatically target the supplied ad to the specified contacts.

This type of marketing, often referred to as CRM retargeting, allows advertisers to invest in building awareness or driving conversion within a known group of contacts. A large IT provider, for example, could drive an online campaign targeting known CIO’s who arbitrate buying decisions for their firms. A telecom company could market new devices to customers on expired contracts. Concert promoters can promote shows to people who have purchased tickets in the past. And all of this can be done using a prospect’s email address or phone number but without sending an email.

For B2B marketers focused on nurture marketing or content marketing, CRM retargeting enables marketers to reach prospects with relevant messages and content through an additional channel. It makes is possible to invest in advertising specifically targeting people who would prefer to not receive email. For companies with very large accounts, it would be possible to build account-targeted campaigns that deliver a unique message to representatives of a specific company. For companies looking to build a Facebook follower base, the new model allows them to promote their brands directly to a list of customers or fans who are most likely to engage online.

While others have attempted to use email as a filtering method for display advertising, two things makes Facebook’s new service unique: a billion member reach and a collection of multiple address for many of their members. For people with multiple addresses — work, home, school — Facebook is likely to have a match for whatever address might be in your CRM system.

Why Mobile Display Advertising Doesn’t Work

17 Sep

It seems that the fate of the major advertising-driven consumer Internet companies will be determined by the success of mobile advertising. As people spend more time on smartphones and less time on PC’s, a healthy mobile advertising market is needed to monetize the great free applications and Internet services that we all enjoy. For FaceBook, in particular, mobile advertising metrics seem to be closely linked to enterprise valuation.

But here is the big problem: mobile display advertising doesn’t work. This is why mobile ads sell for as little as 20% of their web display peers and at a small fraction of the per-impression cost of more traditional media.

How can such a promising new media business model be so fundamentally broken? Here is why mobile display advertising simply doesn’t work:

  • Lack of Cookie Support = Minimal Targeting: In the online display world, browser-based cookies enable powerful tools for segmenting users based on interests or previous interactions. For example, when you abandon an online shopping cart, advertiser’s can track you with ads designed to lure you back into their online store. These cookie-based behavioral and contextual capabilities don’t exist today on mobile platforms. In fact, if your user is on an iphone, they are probably using Safari which turns off cookies by default. This means that ad targeting is incredibly difficult and only marginally relevant.
  • Ad Click  = User Experience Disruption: Clicking on an application or browser-based mobile advertisement is an unpredictable experience. It’s not clear where the ad will take you or how a user will return to where they want to be. The only thing that is predictable is that an ad click will disrupt whatever task the user was previously trying to accomplish. This is particularly important because mobile device usage tends to be highly task oriented: users typically engage with a browser or application with an end in mind.
  • Tiny Ads = Useless Brand Experience: Tiny standard 1/3 inch by 2 inch mobile ads are too small to engage prospects with a compelling message. As Gilad De Vries wrote in Forbes (describing online display), “you can add all the bells and whistles you want to banner ads, but they’ll never truly create the kind of emotional experience that gets consumers excited about your brand.” This is infinitely more true for mobile display ads.
  • Bad Measurement = Underperformance: If you’ve ever tried to navigate around a 1/3 inch ad on a touch display, it’s very easy to accidentally click. In fact, research has shown that 40% of online clicks are either accidental or fraud. In a domain where advertisers relentlessly measure performance and return-on-investment, the math of mobile display doesn’t work.
  • Application Fragmentation = Limited Ad Interaction: As a marketer, my hope is that an ad click will result in a rewarding experience or a useful transaction. In a mobile world of purpose-built applications, it’s very difficult to deliver ads in context that drives any sort of meaningful interaction. When a user does interact, the many mobile platform, application, and screen limitations make it very difficult to create a positive experience for a mobile prospect.

So where do we go from here? Some big vendors will figure out new ways to monetize mobile that don’t rely on display. A great example of this is promoted tweets that appear on mobile Twitter clients. But for the ecosystem to thrive, there needs to be industry-standard advertising mechanisms that deliver real results. Otherwise, there will be many fewer ad-supported free products and services for users to choose from.

Predictive Analytics Will Transform B2B Sales & Marketing Execution

11 Sep predictive_analytics

Consumer marketers have become adept at driving revenue based on predictive analytics. Potential customers are routinely scored on a wide variety of attributes from lifestyle to promotion receptiveness.  These scores allow consumers to be  segmented into groups based on shared interests, purchase likelihood, and total buying power. By starting with highly differentiated segments, marketers can design programs that are highly relevant and effective.

This is not the way that B2B sales and marketing works in most organizations today.

Yet, B2B is a ripe environment for predictive analytics: selling costs are high, sales probability is low, and resources are very expensive. While the language of B2B marketing and sales is full of references to probability — customer funnels, response rates, conversion rates, close rates, call-to-close ratios — it’s rare to see B2B organizations leverage prospect and customer data to score customer attributes, build discrete segments, and allocate resources to maximize the conversion and revenue.

But all of this is about to change. Over the next five years, common consumer marketing techniques will find a happy home in many B2B marketing and sales organizations.

Here are 6 reasons why:

  • Electronic sales processes are creating massive amounts of useful data: Today, B2B buyers spend more time interacting with companies online than they do with sales people in person or over the phone. For every successful sales call they attend, a typical prospect may spend hours interacting with content, reading forums and blogs, and testing sample products. In today’s world, every buyer action leaves a trail of digital clues that signal their context, needs, purpose, and intent.
  • Prospect attributes can be easily deduced from observable data: Most B2B organizations with CRM and content marketing capabilities have enough data to score prospects on purchase probability, likely problems or interests, and potential solution needs.
  • Relevancy matters: Even as the typical portfolio of products and solutions becomes more varied and complex, B2B sales and marketing messages tend to be narrow and simplistic. The patterns that work most consistently are destined to be forever repeated. For prospects, this means that they are often hit with messages and a pitch that ignore the nuance of their particular needs and segmentation. For many prospects, this is a turn-off that is difficult to reverse.
  • Sales & marketing funnels are based on probability: Typically, 2% of targets respond to a marketing campaign, 60% of leads are accepted by sales, 50% of accepted leads become opportunities, and 25% of opportunities close. When you look at the full marketing and sales funnel, a pathetic 1:667 targets becomes a closed deal. Using predictive analytics to improve any stage of the funnel has the potential to create incredible value. Continue reading
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