For years marketers have taken prescribed actions immediately upon observing specific triggers, most often some form of customer engagement like a phone call, purchase or direct mail inquiry. Of course, prior to the public introduction of the internet most of these automatically prescribed actions took a while to reach the customer, sometimes weeks or more as we were conditioned to “allow 6-8 weeks for delivery” of our rebates, rewards and even certain products and services. Today we are less patient as customers and are demanding that even our small, local businesses react to our demands immediately.

90′s – Enterprise

Large enterprises set the tone in the 90′s as the web and email allowed them to automatically respond to opt-in’s, e-commerce purchases, phone calls and even in-person requests within minutes or seconds. Airlines and other travel companies, for example, were engaging us in their loyalty programs through a combination of in-person, phone, email and web services that taught us to expect our latest purchase to be reflected across channels in short order so that we could control the travel management experience to our liking. Of course, the platforms supporting these levels of marketing and service integration cost these firms millions of dollars and were often developed and/or managed by outside experts like Epsilon, Digitas and (my firm) Targetbase.

00′s – Mid-Tier

As we moved into the 00′s, the shift to cloud computing (or SaaS) solutions brought the cost of marketing automation down considerably – over 90% in many cases. This enabled mid-tier enterprises to jump into data-driven marketing automation at costs well below $100,000 per year. Now even smaller firms with marketing budgets of under $500,000 could spend under 20% of their budget to produce and support integrated, automated email and web marketing solutions converting prospects to customers, up-selling customers immediately after purchase and accelerating customers into their next purchase cycle. The comprehensive suite of cloud-based services for these marketers included data cleansing, database management, email marketing, text messaging, direct mail support, social integration, business intelligence and reporting and more. Companies leading this phase of marketing automation are still growing rapidly and include Responsys, Eloqua  and (my firm) ClickSquared.

10′s – Small Business

Now, in 2012, marketing automation is hitting the mainstream, and main street, such that we can begin to expect our small, local businesses to provide us with the types of services only the biggest companies in the world provided only fifteen years ago. For a modest, up front investment of perhaps a few thousand dollars, followed by an ongoing cost of a few hundred dollars a month, small businesses can automate many aspects of their business, integrating e-commerce, database management, email marketing and more. A leader in this space is Infusionsoft – (sadly, not my firm).

Small Business Conference for Marketing Automation

Last week, at the invitation of a friend in senior management at the Gilbert (Phoenix), Arizona based firm, I attended InfusionCon, witnessing the release of the newest version of the platform and the reaction of hundreds of Infusionsoft customers. In short, I was impressed with the leap in usability the product is making versus where it had been over the past couple of years. Their latest version, in fact, can enable the dedicated small business owner to realize tremendous value from the platform. I emphasize can,as there is no doubt the platform is powerful and low cost, but no small business owner should under-estimate how hard it is to successfully automate marketing (to customers’ delight) regardless of the tool. The successful small business will either engage an Infusionsoft certified partner and/or dedicate someone on their small team to mastering Infusionsoft and, more important, thinking through precisely what should be automated and how these automated actions will be fine-tuned over time. So, as Infusionsoft appears to be a (the?) leader in the charge to bring marketing automation to small business, the burden is now (finally) on the small business to adopt marketing automation and take its game to a higher level.

With the work I do in my home state of Arizona via non-profits and universities I am regularly faced with questions from startups and small businesses about whether, and how, to use social media to drive their businesses. These questions are especially challenging for those with businesses that are not internet-based or focused on marketing services. With the rapid growth and changes occurring in social media it’s often hard to steer these entrepreneurs in the right direction and arm them with solid reference materials. Today I found at least one small tool that helps frame the opening discussion. The infographic below is from Flowtown, a site that regularly produces blog content to help demystify marketing. Enjoy and share.

Flowtown – Social Media Marketing Application

I’m worn out from reading predictions as we race into 2012. Though I am excited about all the new things we’ll witness (CMO.com provides a nice sample of digital marketing predictions from 32 luminaries), I do not think we will make much progress on one of the bigger challenges faced by data-driven, or digital, marketers – converting “big data” into prescriptive, profitable marketing action. We’re lost in the trees, thrashing through a lot of data. Without some clear architecture for how we will apply our analysis to individual customers. We have lots of interesting findings, but less insight and little resulting action. What we need are clear hypotheses and frameworks for applying the data to marketing action that goes beyond a single purchase event and into the longer-term relationship with the customer.

Long before we had “big data” we studied our customer life cycles and each purchase, or event, cycle closely. Marketing researchers have been doing this for decades. We still do, but we don’t often architect prescriptive, individual treatments (marketing touches) in a manner that is thoughtfully-aligned with the life cycle and each event cycle. Some of us do, like top flight travel marketers and a few e-commerce brands like amazon.com, but most are not doing the tedious scenario planning necessary to link event triggers (data points from transactions, marketing, social media, search and service) with real-time analysis and decision rules that automatically trigger individual, contextual marketing action (content and offers). Examples of such actions include automatically triggering an email, a phone call, a personalized web page, or front-line staff to personalize the sale across the counter and so on.

I hope I’m wrong – maybe you (?) can point me to some marketers that are routinely using analytics, scenario planning and prescriptive marketing actions to improve sales among eager customers (up-selling), while just as ably recovering with proactive service among jaded customers. Surely we’ll witness a few comprehensive deployments of intelligent marketing automation in 2012… but not many.

“Big data” is trending up as a catch phrase describing the challenges and opportunities presented by the virtual mountains of data generated every second of your day. As evidence of the popularity of this new buzzword, search Twitter for #bigdata and you’ll get a peek at the dialog surrounding this very old problem, now exacerbated by the ease with which one can compile data as humans become more digital. [NOTE: At this moment, Oracle even has a sponsored tweet at the top of these search results as seen here.]

By saying this is a “very old problem” I’m drawing attention to the fact that we’ve virtually always had the challenge of converting data into insight, and even action. Further, the amount of data has always exceeded our ability to “process” it and apply our insights before a window of opportunity closes. So, the “big data” catch phrase is now trending, but what we really need to see trending is “big insight.”

I’ve got this in mind as I prep for a marketing research summit at the University of Georgia, where graduate education in marketing research began 30 years ago (a bit before I graduated from the program).  The agenda looks great and I’m looking forward to the insights I’ll gain from the summit while connecting with friends on the forefront of converting data to insight. Here’s to #biginsight .

It is that time of year – time to touch on marketing budget allocation by media type, including digital ad dollars. The rapid shift in spending toward digital media continues and is creating a booming digital advertising market.

Rob Gonda - The Digital Advertising Landscape 2015

Ad Age just reported on Forrester’s latest projections for digital spending as follows…

“The pool of digital ad dollars is soon expected to rival current levels of TV spending, according to Forrester Research. U.S. interactive marketing spending will reach $76.6 billion by 2016, equal to TV spending this year, and will grab 35% of total ad budgets. That’s up from digital accounting for 19% of all spending in 2011.”

Last year about this time I reported on the “barbell” effect unfolding in the distribution of ad budgets. Forrester’s recent research seems to further underscore this trend – one where TV and digital spending are increasing while other media forms are caught in the middle and shrinking as slices of the pie (newspaper, print, etc.).

Two years ago I lamented that “advertisers continue to spend too little on digital media – by half.” Data from the middle to late “oughts” (~2004-2009) reflected digital ad budgets reaching only about half the levels of digital media consumption. In other words, consumers spent twice as much time with digital media as advertisers spent advertising with digital media.

If Forrester’s projections for 2016 are even close, digital spending will continue to be on a tear, nearly doubling every few years in its share of total ad budget. At this rate, digital ad spending may finally catch up with consumers’ share of attention to digital media.

Update: The Wall Street Journal’s online edition published a story today (9/21) underscoring the shift in spending to TV and digital. Even as TV audiences “scatter” TV is luring more spending and higher ad rates.

Innovation is all the rage – we’ve always known we have to focus on innovation but the media, businesses and even our politicians seem to be amping up the volume of late. Whether it’s harnessing and creating fire to warm one’s cave, pondering “The Innovator’s Dilemma” or seeking “The New New Thing,” the quest for innovation is the foundation of human progress and better lives through job creation, economic growth and self-actualization.

I recently jotted a note to myself as fodder for this blog post that most times recognizing an innovation is every bit the barrier to its adoption as the innovation’s creation itself. My experiences creating and selling database marketing solutions (80’s) and then interactive marketing solutions (90’s) certainly paints my view. In the early days the sales cycles were long and the testing cycles before bigger spending were even longer. Businesses were cautious about shifting funds from mass media to the newer data-driven marketing channels. In some cases it took shocks to the system (like recession) to spur adoption among large brands. Faster change often comes out of chaos.

My experience is far from unique, of course, as pioneers, inventors, entrepreneurs and change agents can all share tales of how their missionary zeal was often met with skepticism or even hostility. There are even popular myths about innovation gone unnoticed or “topping out.” One such myth, attributed to IBM’s Chairman Tom Watson, with various citations and conflicting dates, is “I think there is a world market for about five computers.” Another is “Everything that can be invented has been invented” attributed to Charles H. Duell, Commissioner of the US Patent and Trademark Office in 1899. Though these broadly referenced quotes have been debunked as myths, they underscore the challenge faced by innovators.

Though we have dismissed myths of old, adoption of innovations faces other challenges. Just this week I picked up Wired magazine’s August issue and enjoyed Clive Thompson’s article on “The Breakthrough Myth” that points out that innovations often languish in relative anonymity as market conditions and people gradually come around to facilitate their adoption. As Thompson relates, this is contrary to the popular myth that innovation is a special form of genius, demonstrated by a breakthrough that rips through the marketplace with rapid adoption. His examples include the “pinch-and-zoom” gesture used on Apple’s iPhone, pioneered in 1983, and Microsoft Kinect taking gesture-based sensing and controls to levels beyond the motion detecting activation of automatic retail store doors, lights and alarm systems. The iPhone gesture and Kinect just seem like new innovations as they finally burst into mainstream consciousness through new applications of the original innovation.

So how do we do a better job of recognizing innovation to spur its adoption and adaptation in order to accelerate human progress? Universities, consultants, businesses, politicians and economists are among those all trying to crack the code. The only simple answer I can suggest is to start with what is still the most powerful computing device we know – an open mind.

After sharing a recent article from MIT Sloan Management Review with various colleagues a few times I’ve decided to share it with you as well.

“Why CRM Fails – and How to Fix It” by Stan Maklan, Simon Knox and Joe Peppard of Cranfield University does not pose a new hypothesis for CRM failure, but references the authors’ research and describes two cases (BMW and Flutter) to factually support what many hold to be the failings of CRM – namely putting capital investment in technology ahead of changes in business practice and the creation of marketing capabilities that can leverage such investments. Billions have been spent on capital investments over the past several years (the article footnotes the sources) while repeated studies have indicated that 55% to 75% of these initiatives failed to meet expected returns.

The insights from the authors’ research and the cases they studied are detailed in the article under the following headings:

• Capabilities are the precursor of CRM investment and not vice versa
• The rate at which capabilities develop varies between companies (as underscored by their two cases)
• CRM cannot always be driven top-down (top management won’t create the capabilities, but can too easily write the checks for the technology)
• Hard work and commitment are what it takes to develop marketing capabilities

A final gem related to the last point before you launch into this solid article on why CRM so often fails… the authors call for “leading radical change – with patience.” Well said. If it were as easy as writing a check for software, we’d all be ecstatic customers.

Why CRM Fails – and How to Fix It,” MIT Sloan Management Review June, 2011 - Maklan, Knox, Peppard

Any gripes, agreement, experiences or insights you care to add about why CRM fails?

A friend recently asked me for a brief example of how I approach marketing automation (via the web, email, SMS, social media and other direct forms of customer investment) along with a representative example, or case study. Here is an adaptation of my submission to his compilation…

Burj Al Arab - Iconic Luxury Hotel in Dubai

Having spent half of this year working in the Middle East, including some time witnessing the “Arab Spring” firsthand, I feel fortunate to have learned a lot from an area of the world I had never previously visited. Though I was based in Riyadh, Saudi Arabia I also spent time in Dubai, Bahrain, Istanbul and Cairo. A colleague and I actually dropped into Cairo only a few days after President Mubarak stepped down from power, so the scenes from Tahrir Square are imprinted in my memory for life. One such scene was captured by my colleague here, where the soldier’s sign says “No Photos Allowed.” We only learned this translation later from our guffawing, Arabic speaking friends back in Riyadh.

Soldier's Sign "No Photos Allowed" by CZ

Even though my travel adventures make for intriguing stories, I’ll focus here on some of my observations from a marketing point of view:

• Marketing is Everything – Even in developing markets, “marketing is everything” as Regis McKenna once spelled out brilliantly in the Harvard Business Review. Though distribution is often the primary challenge in emerging markets, there is plenty of competition for most products and services in the major cities so advertising and promotion are just as prevalent in these markets as in many developed markets. From my own work (on an early stage airline), I know first hand how important it is to get the word out through traditional media, PR, channel support and digital media in order to drive awareness and purchase. Whether marketing existing services or launching routes to new cities like Karachi, Pakistan, our team operated much the same as marketing teams anywhere else. Further, suppliers are plentiful in many disciplines, though digital agencies are far less developed and force one to shop in Dubai or Beirut for the deeper talent pool in some cases.

Travel Agency and Store - Open for Business on Tahrir Square

• Consumers are Online, Social and Mobile – The youth market in particular is just as glued to their phones and smart phones as they are in the US and Europe. Further, social media use is growing rapidly. Its use has been heavily documented since it has played a big role in enabling organizers of the protests to, well, organize. Now that the “genie is out of the bottle” regarding social media, so to speak, more and more people are using it and mobile technologies for communications and commerce. For instance, it is very common to see women, in particular, walking heads down in their full abayas side-by-side, each pecking away on their iPhone or Blackberry (a picture of this would have been great, but also culturally inappropriate).
• Location-aware technologies are beginning to take root – Throughout the cities I visited I found that people were “checking in” at restaurants, offices, public building, hotels and more. Interestingly, I learned that Gowalla has an early lead on foursquare in Riyadh, which I never would have guessed. Though consumers are checking in, brands are slightly behind the US in offering specials for checkins. There were a few doing so, to be fair, and this form of marketing is brand new to marketers even in the US where the applications took root.
• American Brands are Everywhere, But Local Versions and Knock Off Brands are Rising – For every KFC there is an ALBAIK. Giving credit where it is due, one will notice on ALBAIK’s website that it is an original brand protecting its IP from trademark infringement even on their home turf (Jeddah, Kingdom of Saudi Arabia Est. 1986). A warning appears on their website for those that may be duped by an illegal franchisor of their trademark – so the brand thieves don’t just focus on stealing Western brands. Though ALBAIK is obviously not a copy of KFC, there are plenty of brands and stores in the region that just flat out use the brand name they want to copy in all it’s “glory,” though somehow they always seem to do so in way that leaves little doubt they are not the real thing.

One thing is for sure, the market and marketing, are changing rapidly in the Middle East, at least in the major urban areas. Seeing the market from the perch of a low cost, regional airline carrier taught me another important lesson – air travel in the Middle East is booming, and not just regionally. The geographic advantage of the Middle East, combined with low cost fuel, is enabling the bigger players in the region to win market share from carriers in Europe, for example, for long haul traffic between Asia, Europe, Africa and the Americas. These brands (Emirates, Etihad and Qatar foremost among them) are second to none in terms of quality service. Brands like these have lessons to teach the established brands of the Western world, so don’t be fooled… it is easy to underestimate emerging market brands and their marketing talent.

If you are anywhere near Arizona on April 7, come to this workshop. And who wouldn’t want to be here in early April when the weather will be awesome?!

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