First, Klout failed. With that out of the way…

A recently published article by Mohamed A. El-Erian on Bloomberg, What a Middling Uber Rating Might Say About You, caught my attention. Even the snippet is intriguing:

It’s an opportunity to gather useful information for improving personal and professional interactions.

The article describes a woman, a friend of El-Erian, who is worried about her “low” Uber score of “4.5 out of a possible 5.” The story basically a real-life example of the Nosedive episode from Black Mirror.

Mathematically, to me at least, 4.5/5 = 90%, which in the U.S. gets you an academic A-; the second best letter score that you can earn: 90-93 = A-; 94-100 = A. The vast majority of people would really enjoy getting an A-.

El-Erian that proceeds to give advice to help rectify the situation:

If [your score is] below 4.7, ask yourself why, and not just by looking in the mirror. It may be less about how you believe you come across to others and more about how others actually perceive you. So, seek the frank assessment of trusted friends and acquaintances. You may well learn something that is useful for improving a broad range of personal and professional interactions.

In translation: there is something wrong with you, and you’d better find out what it is. And that’s just false.

The article makes mention that the his friend is an international traveler. Perceptions, ratings, and scoring thresholds vary greatly across the globe. Some cultures are additive, some subtractive. Meaning, in some cultures you start with 0 and work your way up; in other cultures you start with 5 (or 100), and work your way down.

The U.S. is a subtractive culture. You start will a full score and points are taken off. However, in additive cultures an average performance will give you an average score. Meaning, that if you do everything that’s expected of you, in a non-exceptional way, you’ll score right in the middle, not at the top. So, if the scale goes from 1-5, as it does with Uber, and you behaved perfectly normal, you’ll probably score a three in an additive culture. So, if you tip and tipping is normal, that’s a “3.”

In my EMBA program, during group projects, we had to score our teammates on a scale from 1-5. I live in a subtractive culture, but come from an additive culture, which I applied in my scoring. So, if your work was perfectly adequate you’d earn a 3 on my scale; if you work was very good you’d earn another point; and if you voluntarily assumed a leadership role in the project you could earn your final point. My average-performing teammates were not pleased…

And let me tell you, if you get 10% wrong on a test in an additive culture, you do NOT earn the equivalent of an A-. You’d barely get a pat on the back.

Back to the article. If a woman—this has to be pointed out, because few cultures treat women fairly—manages to attain and maintain a global Uber score of 4.5, spanning both subtractive and additive cultures, that is an excellent achievement. Yes, ideally gender would not matter. Ideally, and normally, women should also earn equal pay…

So, friend of Mohamed El-Erian, THERE IS NOTHING WRONG WITH YOU. You’re totally crushing it. In fact, you’re probably awesome! That’s the best human rating you can get.

Also, don’t let Silicon Valley ruin your sense of self-worth.

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I haven’t written in a long time. Mostly because beyond technology there isn’t anything interesting going on in marketing. And in an arms race, if everyone has access to the same merchants and weaponry, there really can’t be any winners. So how do you win?

I’ve been spending most of my time on the strategy side. Remember, one the the first axioms I’ve published is “If you are not marketing strategically, you are not marketing.”

Most people don’t grasp strategy; they confuse it with mission, goals, or tactics. Yes, you need all of these to have or execute a strategy, but also as I’ve written before, sameness is not a strategy. So, trying to out-do your competitors by being marginally better is not a strategy—it’s actually hopium.

But this piece isn’t about explaining what strategy is, but simply to give you one.

In combination, three recent articles foretell where services and digital products companies are heading (or need to be!):

  1. “Why Salesforce.com, Workday And ServiceNow Are Obsessing Over This New Cloud Metric”
  2. “Outcome-based Business Models for Enterprise Software”
  3. “New Decades, New Rules: Focus on the New Scarcity!”

Individually, there’s isn’t anything earth-shatteringly new here:

  1. It’s customer success, not satisfaction or loyalty.
  2. Having skin in the game and acting as a partner, rather than vendor, is good business.
  3. Data analytics, machine learning, and AI will power insights and value.

But when the three approaches—obsessing over customer success; implementing and outcomes-based business model; and leveraging AI and deep analytics—are combined and exuded as corporate culture and go-to-market paradigms, then competitors will be completely unhinged.

1) Bob Evans’ point is that creating lifetime customer loyalty creates incredible value that drops to the bottom line. This is validated by the three “case studies”—Salesforce.com, Workday, and ServiceNow—which despite their already enormous size, continue to grow between 20-40% year over year.

2) Bill McBeath advocates for revising pricing, so that remuneration is based on measurable outcomes. Basically, you establish the current willingness to pay (the present cost of the problem), define the metrics you want as outcomes, and then mutually agree to the value of the solution to be implemented.

3) And the evergreen Geoffrey Moore predicts that CRM will overtake ERP “as the most prominent information system.” Why? Because, again and as above, customer intimacy creates loyalty, which creates revenues.

We all know that churn kills. Or, as Jason Lemkin says, “Customers don’t churn, they quit you.”

So, in an age of low switching costs, annual contract renewals, dwindling loyalty, and increasing automation, what’s your strategy for competing and winning?

If you want to achieve zero customer churn, you need to walk and map your value chain backward, and examine each and every piece to see how it connects to creating lifetime customer loyalty (or fix it).

The other day I was on the webinar, “The Definitive Guide to B2B Marketing Operations,” produced by Bizible. Eight SAAS vendors—Bizible, Datanyze, DemandBase, Infer, Invoca, Optimizely, ReachForce, and Tealium—each briefly talked about what their product provides and what benefits one can expect. While familiar myself with most of these vendors, and all the capabilities, I still made it a point to tune. You never know what you don’t know.

It was a very good webinar if you have no to little knowledge of marketing automation and analytics. In the end I didn’t learn much new, but did thoroughly enjoy myself, because the webinar was well produced and had a good pace. You can view the recording here.

But I did thank Dave Rigotti, head of marketing at Bizible, via email for producing the event. And he responded asking how at my job we are thinking about the interrelation of technology and our marketing needs?

Which got me thinking…

What are marketers trying to achieve? And more importantly, how are we trying to achieve these things?

The first answer is simple: we are trying to profitably increase market share. We’re not in the business of lead generation, brand awareness, or customer satisfaction—we are in the business of making money. The activities just mentioned help serve the outcome of profitability.

There is nothing new about knowing that happy customers beget new customers. Caveat: but do you know which of your happy customers are profitable for your company?

Also, personalized information helps qualify and speed lead flow to purchasing decisions. Caveat: do you have the correct persona segmentation and attribution model?

Every single vendor on this webinar has a piece to the vast marketing puzzle. And if I were to purchase every single solution out there, which I would really like to—and I’m also looking at Drift, Totango, UserIQ, Influtitve, 6sense, Inboundli, Radius, InsightSquared, Amplero—I’d be broke. And I’m already spending a mint on CRM, sales force automation, marketing automation, a webinar platform, professional b2b video hosting, and data sources.

Every single tool mentioned above is to help marketing departments make great decisions through insights. Insights that would usually take a cadre of experts to distill can now be had without needing to have these resident experts.

Even if I had the money to buy every tool I want, I’d never be successful in deploying them all, regardless of how much assistance the vendors offer. Time and other resources are not on my side to get it all done. More tools require more work. It’s as simple as that.

Here’s a little known, and never-communicated fact: marketing automation isn’t automatic. It comes from the operations axiom that removing one bottleneck always creates another one. Marketing automation is wonderful; it lets you do more by shifting manual labor typically performed in the sales department to an automated process in the marketing department. But it’s never automatic! Creating well segmented, branching, and insightful marketing campaigns is huge work. The content creation alone is near overwhelming.

To extrapolate and hypothesize: let’s assume for a moment that all these tools could be implemented with little effort, and that optimized results started flowing quickly. Where does that leave us? Every marketing department is now the best it could ever hope to be. We would just cancel each other out and create buyer paralysis in the process.

The problem is that buyers are still bound in their purchasing decisions by limited resources. And if we’re all perfect in marketing, the buyer still has to make a choice between multiple offerings. They don’t even have to be similar offerings; a company can only afford to buy so much in a year.

I don’t think the problem is solved by technology (although I always lust for more tools to do a better job). And I full well know not every marketing department that I am competitive with will execute at its best. That leaves me the hope that I can sway my prospects’ vendor decision in my favor. But entering the marketing technology arms race does not guarantee success.

I solve this problem with people. Not a lot of people, but great people.

I’m not saying they’re data scientists. I’m saying they understand the product, the industry, and the needs of the individual. With the help of a few great people we create original content so targeted and compelling that prospects can’t help but contact us for more information. By being subject matter experts in our customers’ industry, our marketing benefits from insightfulness and authenticity, which fosters trust. Trust puts you on shortlists and accelerates sales cycles.

And while you cannot buy customer happiness and word of mouth buzz, you can make sure you hire great people that enable the second best marketing: industry trust. And this is something that no automation or analytics platform can create for you.

Today’s takeaway: your most important asset is your customers, but your most important investment is your people.

(But I still want my toys, too.)

America’s favorite chocolate has a new logo. What’s good about it? They got rid of the faux 3D, cleared up the font mismatch between the brand and company, incorporated the company nicely into the logo, unified all three elements (brand, company, Kiss), and made the whole thing scalable.

Hershey

That said, some people think Hershey’s new logo looks similar to an emoji. That didn’t come to my mind, but I’m guessing it’ll take Fox News about 24 hours until it claims that America’s favorite chocolate-maker is run by Arab terrorists, because the Kiss looks a little like a prayer mosque.

The Ice Bucket Challenge (IBC) is a fad—a good fad, to be sure, as it [hopefully] raises funds for and [probably] awareness of Amyotrophic lateral sclerosis (ALS), “a progressive neurodegenerative disease that affects nerve cells in the brain and the spinal cord.”

But what has made the campaign so successful?

Selfies are not a new phenomenon, but research shows that they don’t go viral as much as if someone else were to either take or post that exact same picture of you. So, you can still take that photo or movie of yourself, but someone else should post it; we used to call this “earned media,” and today more likely “native advertising.”

There’s an unwritten rule among Millennials (and other younguns) that the more outrageous the selfie image/situation, the less socially acceptable it is to post the photo yourself. So, while selfies are neither passé nor blasé, if we want to keep the respect of our peers—and, more importantly, preserve the chance of the image going viral—we must behave as though they are.

But what is this urge to be seen in these [often staged] situations, and the need to have this go viral? It’s not a need for self-publishing, it’s a need for recognition.

We all want for our lives to mean something and have our existence acknowledged by those whose opinion (and own existence) we respect. Today, however, social circles are larger; the definition of “friend” has changed. Because of that you no longer needed to have been there to believe it, as social media now bridge that gap and in near-real time make others experience the same event.

The IBC, however, has now given everyone an out from the self-promotion restriction rule, and turned it on its head. You can literally buy your way out, raise your own status in the process, and self-publish an ever-escalating stream of outrageous behavior in the name of doing good. It’s becoming the greatest club of exhibitionists and voyeurs that have ever found each other.

And that’s the real marketing lesson here: What can you do in your campaigns that turns customers into exhibitionists, and prospects into voyeurs? We’re not talking Net Promoter Score here; that scale only goes to 10, and Exhibitionists score an 11.

GoPro has been doing an excellent job of accomplishing this (just check out their YouTube channel). Even Red Bull, the world’s most self promotional company, touts the virtues of GoPro. Just think about this for a second: without GoPro there wouldn’t be a Red Bull.

But the point here isn’t to send your customers GoPro cameras, but to turn yourself into a media company, regardless of what your product is. And then you feature your customers and nurture and enable them to participate themselves.

In the meantime, after you’ve donated to ALS research, there’s another water project that needs your attention.

the-other-water-bucket-challenge

Marketing is the art of making others believe your idea is their idea.

I have previously referred to Fred Wilson’s pronouncement that “marketing is for companies with crappy products,” and what he means by that.

It’s very refreshing then to read an article about a company that really gets it right.

The July 15, 2015 issue of  Food Business News features an article (“Making insects inviting to eat“) about Chapul, and the company’s go-to-market strategy in introducing insects as a viable protein source in the Western diet.

I don’t know what Patrick Crowley’s (director/co-founder of Chapul) background is—he says he didn’t go to business school; maybe that’s a really good thing—but he groks the fundamentals of marketing:

Grasp a needs-driven opportunity, even if the market hasn’t yet caught on. It’s difficult or impossible to feed the world’s population sustainably and nutritionally given the current approach; at least is it’s practice in the West.

Develop a product for the opportunity that solves the need. Chapul has done its research and learned that insects (specifically crickets) are high in protein, can be cheaply and sustainably sourced, and are already an ingredient in the global diet.

Understand your market and audience. Chapul knows eating insects is a difficult sell in the U.S., but there there are audiences (segmentation!) receptive to the message.

Get others to market for you (Fred Wilson’s point). Chapul hasn’t received a lot of media attention, but it got the right attention in the right places, and now the message is being carried by varying strata of influencers: sustainability reporters; product converts; net promoters, etc. Remember, “Marketing is, and always has been, about influencing the influencer,” was the first marketing axiom I published.

I’m not sure if Chapul is starting a trend or latching on to one, but they’re definitely very early in the game. Challenges ahead all relate to supply chain and scalability (a bit of business school knowledge might help here, but they’re all easily predicted): procurement/availability/pricing (maybe even currency hedging), quality/safety, distribution/demand, alternate supply/country risk, etc.

And then it will be time to spend money on marketing.

It’ll be fun to watch, not just the company, but the space itself (public perception, new entrants, VC funding). Neat!

So, do read the article (link at top), not because it talks about eating insects, but because it’s simply a very good, well written go-to-market case study that addresses the modern core marketing principles highlighted here.

You can’t outsource your brand.

word-of-mouth-marketing

Sent to me by @jennbrusco (LinkedIn). Original here.

Not to rehash previous posts in their entirety, but I once more take the approach that marketing is the process of getting your product to and into the market—a larger discipline that includes R&D, sales, and customer care, not just promotion and advertising. Marketing also includes pricing and margin optimization, which can often mean needing to reinvent or reposition existing products with a new spin.

To be successful, marketing needs to take the customer’s side—to paraphrase a saying that has popped up at the top of my LinkedIn feed for the past week, marketing needs to listen to learn, not just listen to answer. What is the psychological driver that causes product adoption? Yes, a need is surely a driver, but among myriad choices, what differences matter to whom?

Therefore, both customer satisfaction and customer loyalty are critical measures of marketing’s success. However, satisfaction ≠ loyalty. You can have extremely satisfied customers, but if they buy based on price, and you raise your prices, they may not stay loyal. Thus, loyalty measured in price elasticity is an important metric to track.

Which brings me to Delta Airlines’ brilliant decision to revamp its frequent flyer loyalty program, and start rewarding travelers based on how much they spend, not on how far they travel. This shift has received tremendously negative attention in the press, I’m guessing because muckraking is fun, and business acumen is not required to write a compelling story.

Let’s first cite a different example. Grocery retailers reward their worst customers the best—those who spend the least get the quickest lines. But those who spend the most need to queue up in long lines while the ice cream is melting in their shopping carts. Grocery retailers are well advised to treat “high rollers” just as well, if not better than the “quickies.” The tactics supporting this strategy would be quite simple to implement.

Delta has grasped this. To date, like all airline loyalty programs, bargain shopping has been the most efficient way to maximize the value of a frequent traveler loyalty program—in fact, infrequent travelers are rewarded the best, needing just a few cheap cross-country flights to earn the right to a free flight. Those who need to travel last-minute, and thus pay the most, get no additional benefits. Their ice cream is melting.

Instead, Delta will be re-programming travelers’ mindsets from spend-less-get-more to spend-more-get-more. Bargain hunting will die a quick death with those who want to maximize the value of their loyalty program membership. And Delta’s profits will soar. They may lose some travelers, so revenues may stay flat, but margins will be better. Less work = more money; employees and stockholders love this!

And I even question the loss of travelers. Most airports have one anchor airline, maybe two. But in the end you need to get to where you are traveling in the most efficient and expeditious manner, regardless of who you want to be loyal to. My own attempt to switch from US Airways to United Airlines—because I desperately want to stay with the Star Alliance loyalty program after US Airways merges with American Airlines’ One World loyalty program—has been an utter failure, because US Airways dominates PHX, and can get me to most destinations more quickly.

I bet that’s what Delta is counting on: increased happiness from its best customers (those who spend the most, most frequently), and the inability of the least good customers to make serious changes to their travel needs, while still giving them the ability to earn the same level of rewards they are used to (by simply spending more).

That’s pretty damn good marketing—the process of getting your product into the market at a higher profit margin, while offering the disenfranchised the opportunity to stay engaged.

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