12 July 2017

The everyday fallacies of marketing technology

I am often amazed about the lack of business logic when people talk about marketing

technology.

Herein I cover a few of the more serious issues I have come across

1. Marketing technology fundamentally changes organisations, it is not (only) a new set of tools

It all started with:

ORGANISATIONAL

AUTOMATION

=

EFFICIENCY (with a few prominent CRM systems )

Now moved to:

CUSTOMER

CENTRICITY

=

EFFECTIVENESS

NEW

BUSINESS

OPERATING

MODELS

How the organisation

needs to organise its operations around the customer

The move from old to new

technology

Data unlocks: • Retention & growth targeting.• Customer & behavioural insight.• Resource focus.• Product, service, message and creative targeting.• Channel alignment.• Attribution. • Agility and appropriate re-targeting. • More agile content, placement and potentially better

targeted channel decisions.

2. Unless executive management is involved in marketing technology, nothing will change

Marketing technology is not only a

CIO issue

The CEO & CMO must both

engage with technology

Whilst the organisational view must be from the

“outside-in” it needs to be designed from

the “inside out”

The executive priorities & KPI’s

needs to be realigned: most

organisationswill fail at this

It is an overall IT systems

issue

Consumers do not discriminate between hi-tech

& hi-touch interfaces, they

want them seamless

3. Creativity of content is now MORE important than ever before = relevance, impact & sharing

This is one of the more astounding comments I hear, that creativity of message expression is no longer important today, hence that the role of agency suppliers in that respect is redundant. That technology supersedes creativity.

Frankly, it may be the only role they will have left in some time.

SIMPLE QUESTION: DO YOU READ A BORING FACEBOOK POST, TWITTER FEED OR LINKEDIN POST? Even from a good friend?

THAT’S YOUR ANSWER.

The higher the “noise”, the greater the challenge to break through it…

In developed countries, a person may be exposed to 10 000 to 20 000 pieces of communications a day…

Historically, there has been a high correlation between marketing creativity and brand sales.

Not always, but generally creative ads are more effective.

Yet, “uncreative” ads were often successful because brands could simply spend so much money on exposing them, that their sheer dominance worked. Or they became controversial.

In social media, it is even clearer, original, relevant, good and creative content is shared, weak content is not.

The best examples of social media impact, has always been because of actuality, relevance, originality, usefulness or humour.

With the sheer VOLUME of content today, creating impact will just become increasingly difficult.

This means there is almost an inverse correlation between the availability of channels, the number of messages of and the degree of impact of any given message.

4. Brands are now more important than before: strong brands are more profitable than weak brands

Apple is more profitable than Samsung. Most if it has to do with the integrity built into the products of the brand. Both have similar technology access. Yet, one uses technology better and the brand is worth more as a result. It is not the technology that is available, it is how it is used.

YET, may brands are in serious trouble and they will find it very hard to create sufficient differentiation not to simply become commoditised. This predominantly includes sectors like those listed below, but it will expand fast: this is one of the greatest challenges the digital age brought to brands, how to create consumer value consumers will pay for.

As long as the basis of investment lies in returns, brands will

need to create better value than their rivals… how?

5. Comparative sites reduce many brands to commodities: you simply buy the cheapest: this is almost the converse of the creativity argument!

Whilst comparative sites offer value, brands want to create preference. Often, innovation is a driving force that enables that.

Should all brands become “equalised” through dis-intermediation, it will change the entire supply & demand landscape and marketing in totality. All categories will commoditise.

Whilst there is a real possibility that this will happen and that it is already happening in some categories, it will also mean the nature of competition and resource deployment by companies will totally change.

Whilst not all consumers will “fall” for the value offering, many will. Hence there will always remain space for niche and specialist brands aimed at specific target market segments.

Yet, the commoditisation of many product & service categories is a real possibility. This may be the biggest change brought about by technology. It is far easier to do, than for a company to become customer-centric.

6. Brand choice has become commoditised, bland and downright boring, price is all that matters, even if it is easy to compare –but what does that do to brand differentiation? Simple fact, the large will get larger

Yet, to do this well, means brands will have to move beyond simple predictive analytics. The fact that I went to Paris last week does not mean I want to go again this week. Re-targeting needs a serious review.

7. Brand functionality remains paramount, a simple personal story will illustrate this

Much has been made about Unilever acquiring Dollar Shave Club. Mainly to give it access to the consumer data.

I must admit, the brand is well designed & positioned.

I have been using a similar UK product for the last year now, and just stopped using it. Why?1. Despite great packaging and design, the product does not work any better

than the best brands in the trade. It is basically the same. 2. The packaging is too big, albeit beautifully designed, so I need to collect it

from the Post Office if I am not at home when it is being delivered. This is not convenient.

3. Despite them trying to sell me other products, I don’t need them. They may off course offer me some products I will buy, but I will only buy those if they offer functionality I am not receiving anywhere else.

4. Timing is an issue, whereas I bought shaving blades when I did shopping anyway, I found that my usage frequencies vary depending upon the number of times I use it in a given month – and even if these are similar, they are not identical.

8. The tech vendor explosion means the industry is not customer focused, but vendor focused. That means clients may start with the solution without fully understanding the challenge

Both with marketers and consumers, greater choice has brought greater complexity. With marketers, more roles, more suppliers, more technology, more demands about campaign attribution.

The problem with this is fourfold:

1. Client confusion as to the best solutions. There are so many and more every day. Like in industry today, you don’t have to be “big” to be clever.

2. Vendors are all “pushing” their solutions as the best. In most industries, no one vendor is the best at everything. Hence, hybrids are almost a given.

3. The discussion is dominated not by solutions, but by vendor offers. So how does a given client make a given vendor solution work, not the question of what vendor offers the best solution first. Some vendors are simply too powerful now, even though they may be very good.

4. Vendors become increasingly important marketing suppliers, in fact, at the core of it all.

Each year, the so called Lumascape of vendor technology software exponentially grows…

9. Despite the former, a few vendors dominate, therein lies a danger, regardless of how good they are

10. Even with the available technology, most agency partners are not able to align output to create seamless customer engagements, still creating fragmented customer experiences

11. Technology will solve all organisational ills –as the by now famous Business Model Canvas states, delivering a customer value proposition requires aligning many resources

Organisations are not structurally or culturally adapted to new communications technology

• Despite words like ”customer service”, customer needs surveys, NPS scores, large segmentation studies being used for years, most companies are not consumer-centric. Even if technology is able to overcome this, will the real intent and organisational alignment follow?

• Lack of empowerment of most staff, even senior staff.

• Most companies cannot interact 24/7/365 with its stakeholders.

• Silo’s means a “disconnect” between what happens in organisations and the value it delivers to stakeholders and end-users. What we produce and what we do, are not the same!– How does every action contribute to stakeholder satisfaction?

– Many CEO’s cannot even answer that!

• It will require an “unpacking” and “repacking” of how value is created.

• Business technology & marketing technology are intricately linked. This means in the new era, marketing IS the business.

Companies will have to move from “closed” to “open” systems. Most are not able to do that. This means “re-building” the business around the consumer with greater agility to respond to environmental changes

Closed systems…

• Most organisations are still hierarchical.

• Even competitively they are “closed systems” – Gary Hamel says “99% of what you need to know about the future, happens outside of your industry”.

• Most organisations are silo’d. Divisional.

• There is often no clarity between what staff does in their daily tasks - and what the customer experiences. The purpose of what staff does, is unclear. How does every action satisfy consumer needs?

• Information flows, purposes, accuracy, access are silo’d and not usable, mostly built around other purposes (financial reporting systems) not around consumers.

• Technology is also often bought without a proper assessment of requirements. Hence there are many redundant systems in companies. Or badly integrated systems.

12. A brand is more than the sum of its parts – it is the whole experience the customer has

• Steve Jobs, Apple Inc. Akia Morita, Sony. These two people are icons of great product design, the one in the last century, the former more recently. – Strong brands are valuable value-propositions. They really offer something that is good

and that works.

– Strong brands use intuition, listening, innovation to interpret… so even though these kinds of people do not do formal consumer research, they are intuitively attuned with their environment and the people they design products for.

• Brand is often still seen as “a marketing, advertising or identity thing” –that whilst strong brands have inherent integrity or functionality.

• It was not different before and is no different now, the only difference is that lack on integration between brand touch points are more evident faster. – Apple is a fully “integrated” brand, see overleaf how all its aspects combine to deliver

one distinctive value proposition with real profit margin value.

Apps

iTunes

Marketing

Stores

StaffiCloud

ApplePay

Packaging

Television

All aspects of the Apple brand are

integrated around a single customer value

value proposition

So what?

• Whilst some new brands will just be “flanking irritations” to the large brands, many industries will entirely disrupt.

• Where brands have no discerning benefits, they will simply die.

• How will hi-tech & hi-touch combine? Will consumers still experience fragmented touchpoints?

• Will executives be willing and able to truly transform their entire organisations around the consumer? Despite the risks both ways?

• Will technology dominate rather than what the company customers really need and want? Within the history of technology, systems were often bought without proper analysis of the unique needs of the organisations.

• Will many organisations start new ventures using new technology and run those in conjunction with their existing one’s?

What we do know, is that uncertainty is the greatest

certainty today.

Rebels thrive in uncertainty, risk averse people and companies fail.