Boosting Marketing ROI – Summary First Cut
The Brand Performance Engine
Marketing is in crisis
Advertising and marketing had their ‘moment in the sun’ from the 1960’s to the late 1980’s, advertising was integral to growth, marketing directors and their agencies were considered an asset to any organisation, it was the ‘hey day’ for ‘Mad Men’, you could advertise, using TV and be guaranteed to talk with a huge portion of your target market; we all know this.
Let’s contrast that with today, estimates vary but between 60-80% of CEO’s do not trust marketing, marketing directors or their agencies. The bare faced truth is that marketing is no longer considered a profession because marketeers are failing to deliver ROI. McKinsey is widely reported as saying that marketing dollars are rising year on year but the ROI is dropping, simply put, we’re having to spend more to get less.
This book is squarely aimed at bridging the gap between CEO’s and CMO”s and showing the ‘missing weapons’ or levers marketing has which many CMO’s and CEO’s aren’t aware of in detail. The book is based on my own personal experience (quick panel inset) but more importantly interviews with CMO’s, CEO’s (set target and show on inset panel) and a thorough review of the literature. (Panel showing sources/academics consulted.)
The ambition of this book is clear, to provide the IP to break the cycle of ‘spending more for less’ and to reassert the rightful importance of marketing as a central driver of business performance.
Marketing as a performance engine.
Training for marketeers can often be informal and usually focusses on managing communication to the detriment of learning about the core drivers of marketing ROI. It’s widely reported that many young marketeers are not trained in how to measure ROI. (Jake check my blog for the reference.) In spite of the promise of digital to track ROI, it’s becoming obfuscated by the chase for ‘Facebook likes’ and it’s increasingly difficult to connect digital ‘awareness’ spending with sales.
There are four ‘cylinders’ which drive the marketing ROI engineand a fifth factor which is a turbo booster.
There is a ‘mythology’, a gap between facts and belief around these factors which this book aims to conquer. The four factors are as follows – 1) Purpose driven organisations 2) Purpose driven employees 3) Word of Mouth marketing and 4) co-creation as a tool for improvements to existing or new products. Meanomathics, the empirical science of meaning, is a new tool which boosts communication cut through by finding the perfect balance point between standing in and standing out, looking enough like a beer to be trusted but distinctive enough to stand out.
1 & 2 Brand purpose – connecting employees’ life purpose with that of the organisation
Facts
Millward Brown Brandz TM have shown that a clear organisational purpose drives brand equity. In addition brand equity drives brand value. Of the four factors, this area is most salient in the minds of corporates, marketeers and CEO’s. Unilever, to cite one powerhouse, is putting a huge emphasis on providing ‘brand on purpose’. However there is a missing link. Our survey showed that only 20% of people have a clear life purpose outside of ‘family’. We know from Daniel Pink’s work (Drive) that money is not a critical driving force for stakeholders.
The Problem
If most people don’t know their own life purpose, how can they connect meaningfully with the that of the organisation? There is a disconnect between these two key cylinders, organisational purpose and individual purpose.We have developed an approach (using semiotics) to uncover the life purpose of people. We’ve been lucky enough to test the method with CEO’s in New York (where it scored 98% satisfaction with Vistage Members) and celebrities. To ensure the method ‘stood up’ we asked a top psychologist at ‘The Priory’ (a top European Mental Health organisation) to validate it; they did. So the myth is that you ‘randomly’ walk through life and discover your purpose and there is no fast track tool to sort it out.
The solution
The truth is there is now a method to fast track finding your life’s purpose. We believe organisations must help employees find their own life purpose in order to connect and drive the overall purpose of the organisation. The method gets an individual to produce their life story, through different senses. This allows people to produce, in the first instance, a mood board of their quiddity (their ‘youness), when they were being truly authentically ‘them’. This is the basis for creating a unique new word to describe their life purpose. (Shakespeare invented 500 words and everyone, is, truly individual.) This method then goes on to produce a digital symbol that represents their ‘quiddity’, it uses the science of semiotics to find their true self.
3. Word of Mouth Marketing – the unsung ROI hero of the marketing mix
The facts
The Keller Fay Group have shown that despite the rise of digital marketing, 80% of all brand conversations still occur in the real world. Furthermore if someone recommends a brand, product or service to a friend or stranger there is a one in three chance they will look into the product and buy it. The ROI is 0.33%, that’s by far the highest ROI of any other method of marketing. By contrast advertising’s conversion is between 0.001 and 0.01 %. These facts go to the heart of the issue in marketing, why aren’t companies spending more on Word of Mouth Marketing? On average 40-60% of marketing budget is spent on digital and advertising communication. If we are brutal about it, we’d have to say, in the face of the facts, this balance of spending is completely illogical if we look at the ROI. So why is it we don’t spend more on driving real world Word of Mouth?
The problem
Andy Sernovitz’s book “Word of Mouth Marketing” (WOM) is something of a bible for WOM, there are solid principles that drive WOM but the belief trumps the facts. The prevailing ‘wisdom’ amongst the majority of CEO’s and CMO’s is that word of mouth ‘just happens’, it’s a result of a good product (for fmcg) and good service (for telcos and banks etc), marketeers don’t know the science of Word of Mouth, in short it’s an issue of education and salience.
The solution
WOM is driven by three key factors – distinctive Signatures, relevant humour and ‘running your business like a Club.
In reality WOM is driven by relevant distinctive humour or ‘Signatures’. A signature is something a particular brand, service or organisation does consistently but it changes each time. Here’s a simple example, TV shows often have a regular segment, the Graham Norton show always starts with a parody of the guests – it’s a regular thing that always changes. Good restaurants might play a distinctive style of music, different from the norm, but not the same every time you visit. These signatures promote the following response:
“Oh yeah, they’re the restaurant who always serves Chai tea with a different tea pot every time.”
The popular ice bucket challenge (which went viral) was a signature, the same idea expressed in a myriad of different ways.
The second factor is humour and ‘common sense isn’t common’. The humour cannot be wacky humour as it disconnects with the brand. Humour is a key driver of WOM and yet few brands know how to produce humour that reflects the brand. In fact many brand owners, understandably don’t want their brand ‘laughed at’. This book will give the master class on how to find and create relevant ‘stand in-stand out humour’.
The third factor is arguably the most important. The metaphor is to run your business like a club. It follows 5 principles – exposure, experience, involvement, connection drives on-going referrals. Driving WOM starts with identifying your Referrers and they aren’t who you think. Most organisations make a fatal mistake, they assume that heavy users are loyal and talk a lot, driving WOM. This is a huge assumption and it’s often flawed. Here’s a simple example, picture yourself on business, you have a favourite restaurant in a city say 4 hours away. You visit the city once a month and you love it. Most restauranteurs will assume you ‘aren’t important’ because they don’t see you very often when in fact you are a broadcast medium to all your friends. In other words most organisations miss the key segment that drive word of mouth – low use high talk. Here’s a ‘negative example’, if your company has a contract with a particular Telcos, they often assume an executive who uses the phone a lot, has big bills etc. etc. are loyal. In fact, they may or may not be loyal at all, they are forced to use the Telcos because they have no choice. Most loyalty schemes are about bribery versus loyalty.
There is a sophisticated technique, based on behavioural data,that allows you to identify the customers critical to increasing word of mouth – low use/high talk. This segment, is usually undervalued and over looked and it forms the foundation for increasing Word of Mouth. Even saying a simple thank you to this segment means they talk about you three times as much. The empirical work here models how getting low use/high talk customers to increase their WOM creates a huge impact on sales.
4. Co-creation – an often misunderstood buzz-word which increases innovation success when properly executed
The facts
Co-creation is a bit of a ‘buzz-word’, what it means to organisations varies from ‘focus groups with post it notes’ to ‘chatting on Facebook’. For most organisations, co-creation is market research in disguise, customers are ‘mined’ for ideas spat out and subsequently uncontacted. In reality 250 corporations have successfully used co-creation to boost ROI so it’s not just ‘sexy digital start ups’ – co-creation has been embraced by insurance companies, banks, post offices, agricultural supply firms and well known blue chips firms such as Kellogg’s, Nestle and Cadbury.
The problem
Co-creation is not, however, widely understood by marketeers. Ramaswamy’s landmark book “Co-creation, building it with them”, makes it very clear that for co-creation to work well it must be an on-going dialogue between customers and the companies, people must feel valued and companies must act on the suggestions. Starbucks, Nike and Apple are the shining lights in this co-creative eco-system, however even these companies overlook one critical fact.
If you find the low use/high talk customers (see above in 3), you have to give to get. In our experience we’ve turned around flat commodity categories for large corporates, (like Danone), they turned to work differently because ‘all the usual suspects’ had not worked.
The solution
It’s simple, before asking customers to create ideas for you, you have to teach them de Bono and ideation techniques that are useful for cracking their own life problems. Picture yourself being invited to an evening where you get the opportunity to help design products and services for a company you love. Imagine how you would feel if that company took the time to teach you ideation techniques that would change your life, how would you feel about it? Our experience shows that if you take this approach people are totally enthused to help you, in short they feel they are part of a club as opposed to being ‘mined’ for ideas.
Most companies ‘use’ their customers for research. Even so called ‘co-creation’ can be mining in disguise – ‘we’re having a competition to come up with a new name for our new crisp flavour…’ the balance of benefit is in the favour of the company, not participants.
At it’s heart, it’s about respect and respect loops back to factor 1.
5. Meanomathics – the new empirical science of meaning – boosting communication cut through by 30%-50%
The facts
Market research is fatally flawed, even when researchers use a ‘statistically significant sample’. Now we are huge fans of market research but at its heart it has a huge problem. We take in about 4 million bits of data a second and we’re consciously aware of between 0.01 and 0.0001 % of it, the estimates vary but there is broad agreement that the sub-conscious holds the majority of the data.
The problem
The bottom line is that market research doesn’t and cannot measure what the subconscious mind takes in, market research has a massive sampling error,it is measuring a tiny part, tiny part of what we actually think. Since the visual cortex is the largest part of this data and communication is visual, this creates a huge problem, research is fake empiricism.
It is for this reason that ‘pre-testing campaigns’, while useful, is often hit and miss. Even P&G, arguably the best at quant ad testing in the world, doesn’t always get it right. Why?
This point is critical and a classic case of ‘common sense isn’t common’. Most brands have to produce communication that has to stand-in (with the category) and stand-out (as a brand.) At its heart communication has to be a paradox and it’s all about balance points. The problem is that communication agencies and marketeers, for the most part, don’t know what the group mind thinks of a category – visually, how can we find the perfect balance point for the imagery if we have no idea what people are thinking visually! For the most part, market research produces word associations around a category, like banks and yet communication is a largely visual language.
How can you create visual communication which strikes the perfect balance if you don’t have the ‘big data’ group mind visual of a category? How can you know?
The solution
The solution is Meanomathics. Meanomathics samples ‘big data’ visually to find out what the ‘group mind’ think of a category in visual terms. It’s widely known that advertising for categories has very clear ‘styles’ (what semioticians call codes.) We know the ‘type of ad’ on average within 2 seconds. Here are a couple of examples – perfume ads are all about the imagery of love and passion, it’s very consistent, the imagery plays on the ‘codes’ of showing women and man as ‘Gods’. Car advertisements often use long shots of cars in remote locations or weaving through urban traffic effortlessly.
Meanomathics pulls a massive sample of imagery from the world wide web, it’s the ‘ide’, the group mind’s visual imagery of a category, it’s visual empiricism. You actually know what people think of banks or beers – visually. It’s obvious but it isn’t done and because it isn’t, ads are becoming samey because we’re all playing safe and don’t have a means to justify being stand in/stand out.
That’s the problem that Millward Brown found. It’s as if we’ve found the ‘optimal aerodynamic shape’ for each category – a bit like cars, they increasingly look the same and we’re having to spend more and more money to get the same results because ads in a category are ‘samey’. The pressure on executives to avoid a mistake is often underestimated by their agencies, it’s incredibly hard to get something even slightly different ‘past the higher ups’.
That’s because we don’t have a science to discriminate between three types of ad. ‘Samey’ vs ‘Weird’ vs ‘Interesting’. Meanomathics provides the technology to put together styles with a slight twist, just enough to make your ad ‘cut-through’ but not too far as to be seen as ‘weird.’ The goals of advertising agencies and clients are often at odds, advertising agencies want a ‘good client’ who will be brave enough to push through ‘creative’ (sometimes ‘weird’ ads) as they can be awarded. Clients have the opposite pressure to conform. There is a constant ‘tug-of-war’, based largely on instinct to find the balance point.
In reality – ads that are ‘too creative’ alert the fear circuits in our brain it’s a ridiculously delicate balance point to find the stand in-stand out point, it’s a high wire tight rope point.
It has to stop, we need to find the perfect balance point and Meanomathics nails it because it allows us to create communication by twisting (but not tearing or scaring) the expected codes. It creates ads that are ‘interesting’ and ‘interesting’ is stand in-stand out.
In summary
This book aims to put the science back into marketing, we’re going to release this first book as an overview for CMO’s and CEO’s and then produce detailed ‘how-to-do-it’ books for each of the four ‘cylinders’ and the Meanomathic turbo charger so that brand managers and more junior staff now ‘how to do it’.
In short, this book aims, humbly to educate, persuade and make marketing aware of the key ROI drivers, that’s the first and key step. We will be releasing short videos as a 3 minute summary of the book – a taster, we’re going to ‘stand in and stand out’ by sharing the book as we go along, with the aim of allowing you to feel, that you are joining a Club, the Club will drive WOM, we hope co-creation…you get the picture.