Segmenting Markets: Overlooked attributes

I was chatting with a friend about a new product for which she is working to develop a go-to-market plan.  In this conversation, she was bouncing around ideas on how best to segment the markets at which the product is targeted.  She debated a geographic breakout as well as breakouts by distribution channel.

However, as she was thinking aloud, I started to see that the product she’s selling is a complex one that may require a different tack.  Often times, when marketing folks are segmenting their markets, one form of segmentation is often forgotten about and that is consumer behaviour.  It’s not just about demographics or even sales channel — it’s just as likely that two 55 year-old males have opposite buying behaviours and so segmenting by demographics has definite flaws.  Sometimes, one has to consider how it is that a customer makes their buying decision.

For example, if some of your customers require consultative sales versus someone who is an educated customer, then the skills required of your sales staff and the messaging you would craft to reach these two types of customers will need to be different.  It may be the case that such purchasing behaviours are accompanied by distinctive demographics that would allow you to segment based on physical characteristics of your audience, but it’s just as likely that this is not the case.

In the world of ecommerce and digital marketing, this would translate into the rationale for creating multiple landing pages and offering a multitude of ways a customer can search for a product on a website.  For example, allow your customers to sort product options by price, size, or location (for customers who have strong preferences).  Give suggestions on what others have bought on the website or allow customers to rate products (for those who care about what their peers are doing).  Organise your products into categories (for those who want to browse before deciding).  Include a search function (for those who know exactly what they want).  These ubiquitous tactics on ecommerce websites are meant to ensure that no matter who you are, there is likely a way for you to find what you want and decide whether you want it.

In fact, the ecommerce industry has done a very good job of using consumer behaviour as the basis for the design of its audience targeting strategies.  It’s time for other industries to view customers as more complex than simply generalised age groups.

Filed under: Marketing

Innovation: Don’t Forget the Other 3 P’s

Recently, I was asked to be part of the course development team for University of Toronto’s Business Innovation Certificate.  This came about during a conversation with the main lecturer for the course, when I openly wondered why the course materials were so heavily focused on product innovation.  In my mind, as a marketer, “product” is only one of 4 P’s (some will argue there are 6  but for simplicity I will use 4) that make for a successful strategy (the other 3 P’s being price, promotion, and placement), and surely there is plenty of innovation to be had within these other 3 P’s that were being overlooked.  In pricing, for example, the “freemium” and “micro transaction” models were forms of pricing innovation.  So why would an innovation course focus so heavily (and some, even exclusively) on product?

Call it the “Steve Jobs Effect”, if you will.  Apple’s sleek looking products that could do all sorts of neat tricks got people obsessed with technology and the gadgetry in innovation.  How quickly we forget, though, that Apple’s success was also due to innovation in the other 3 Ps:

• iTunes’ $0.99 per track was pricing genius
• The original iPod commercials with the dancing silhouettes and the Mac vs PC commercials proved to be simple but effective promotions for its products
• The use of Apple’s own retail stores allowed it to not only control the brand experience for its customers, but it also set Apple apart from its competitors by distinguishing itself as a true lifestyle brand, to be viewed in the same light as Nike or The Body Shop that sell from its own retail shops, as opposed to Fruit of the Loom or Nivea which are more commoditised brands available in a multitude of stores

The other reason I wanted to make sure that the innovation curriculum included discussion and analysis of the other 3 P’s is that I have often seen companies launch what they think is the best thing since sliced bread, only to have it flop and be a monumental disappointment.  There are usually two main culprits for this phenomenon: (1) the product was over-engineered and was therefore cumbersome or not exactly what users wanted, and (2) there was not enough understanding of the other P’s for the product to be a success — it was priced incorrectly, was not sold through the right channels, and so on.

So while I make no claims to being an expert in innovation, I hope my experience in marketing and communications can help to broaden the scope of what is taught in innovation.

Filed under: Marketing, Random, Small Business, Uncategorized

How Non-Profits Can Become Data-Driven and Transparent

I just got an email from a non-profit client who was eager to share the news that her organisation got named as a Top Charity Pick for 2011, whittled down from an initial list of 200.  Quite the honour, I’d say.  Not to mention that it’s a great public relations opportunity for them.

Apparently, the reason behind the honour was the immense effort the organisation went through to clean up its database, install systems to track client intake and outcomes, and the transparency with which it reports its activities.

A million hand-wavey motherhood statements can be made about how transparency and being data-driven are good things — I surely wouldn’t be the first to make such a point.  However, I think what is usually missing from this discourse is how to use that data and transparency to achieve organisational objectives.

So what are the objectives of a non-profit? For just about every non-profit, there are two core objectives: (1) to attract donor dollars, and (2) to provide services in the most efficient way possible without sacrificing service quality.

With regards to attracting donor dollars, there is one primary set of data that is relevant here: who your donors are.  Most organisations have a pretty good idea of what demographic audience(s) are their primary targets and even how much they tend to give each time.  The piece that’s often missing is why they are giving and this can be very valuable information with which to formulate key messages and shape highly targeted campaigns that will give you the most bang for your buck.  The premise here is that those who are giving because a family member suffered from a terminal illness versus those who are giving because of a civic obligation to do so will respond differently to different messages.  Therefore, the reason one gives can be an important way in which to segment audiences.

A second area of donor data that isn’t as well tracked by NPOs is the amount of effort or investment it takes to raise money.  I see a lot of organisations go through great pains to raise entirely non-impressive sums.  Many NPOs know what proportion of their revenues go to administrative costs versus programming.  This is a good aggregate number that donors find useful.  However, this doesn’t go far enough for managers to decide what activities generate the most amount of revenue for the least amount of effort and upfront investment.  For example, is it worthwhile to organise a bake sale or  a walk-a-thon?  It may seem like the former is easiest, but then how much money are you raising per hour of your staff’s time for each of these events?  Probably the walk-a-thon is a better bang for your buck.

As far as providing services in the most cost efficient way, many of the larger NPOs have good metrics here (especially ones dealing with healthcare).  However, many smaller organisations lack these numbers, or else these numbers are very crude and are time consuming to track and calculate, let alone analyse.  It’s great if an organisation is able to distribute much needed medicines to 5000 children, but at what cost at which points in their value chain, and how does that compare with similar organisations?  What if with extra data that would be fairly easy to get or calculate from existing data, the organisation is able to distribute medicines to 7000 children?

Where the transparency comes in is when the organisation has a lot of data, its successes (and failures) become more apparent.  And who doesn’t want to share those successes with the world (and manage failures accordingly)?

Filed under: Corporate Communications, Non-profits, Public Relations, Small Business

Individual Responsibility vs Collective Good: Let’s be Clear About the Role of Marketing

I wasn’t intending to do any more work on my bl0g today, but on Twitter I came across two interesting articles that riled me up.  The first was tweeted by JustMeans.com and talks about the concept of “sustainable marketing”; the second was tweeted by Ethical Corp and is an analysis of using marketing to achieve social progress.

The article from JustMeans.com is from a blog from Presidio University on Sustainable Marketing.  The article’s main crux is to use marketing principles to drive behaviour that promotes social good over individualistic desires.  I don’t disagree with the basic idea — if marketing principles can be used to promote individual interests, they can also be used to promote collective interests.  My problem with this article is that it somewhat implies what the article in Ethical Corp addresses, which is the thinking that marketers are at fault for society’s ills, as has already happened over and over again.

I agree that in some of the instances when marketers were blamed for a scourge, it was well placed blame (i.e., cigarette advertising that claimed health benefits and omitting consequences of smoking).  In other instances, like in you average consumer product advertising campaign, this blame is not appropriate.  Yes, marketers want to sell you things and want you to believe that buying their product or service will put you in with the “cool kids”.  But that’s their job and it is up to individuals to critically think about how advertisements affect them.

Personally, I don’t believe that marketing alone determines our consumer choices.  What good marketing is able to do is allow latent desires to manifest.  If we didn’t already have some propensity to act in a certain way, either by human nature or due to something in our upbringings, marketing has limited impact.  Therefore, marketing campaigns that promote sustainability will not in and of themselves, regardless of tactics used, be sufficient to induce the lifestyle changes that are required to achieve large-scale environmental or social sustainability.

Rather, an holistic approach is necessary — one that ensures that a social contract with greater emphasis on collective good is established.  This will require parents to bring up their children to think of others, it will require policy makers to reward behaviour that promotes social good, and it will require individuals to accept personal responsibility for their actions.  Only then can marketing principles become an instrument to promote collective interests.  Until then, society remains at the mercy of those who act in their own self interest, be they corporate marketers or individuals.

Filed under: Marketing, Random

2012 Predictions for Public Relations

I don’t generally like Top 10 lists or predictions, but this one from Affect seemed interesting, if only because it reinforces the trends that have been building for the past couple of years.  Specifically, the two “predictions” that resonate with me the most are numbers 4 and 5 — that metrics are a must, and that crises will continue.

I have addressed the metrics issue in previous posts here and here.  Essentially, the line between marketing and public relations will continue to blur with the advancement of digital media and as corporate brand and reputation play a greater role in consumer buying decisions.  Marketers have always relied on data to guide their strategic decisions, but public relations professionals have been somewhat behind the curve in this regard.  But communicators can no longer hide from the reality that data is now readily available in the form of digital analytics and advanced media monitoring mechanisms.  There is no doubt that communicators who are comfortable with numbers and who can interpret and ask the right questions when presented with data will be at a distinct advantage.

As far as the assertion that crises will continue, I think this is fairly obvious.  Bill Clinton presided over one of the most peaceful times in human history and since that time, economic and political crises and upheavals have been rampant.  With the ongoing political revolutions happening in the Middle East, parts of Europe on the brink of economic collapse, Iran and US at military loggerheads, and corporate scandals galore, we have certainly not yet hit the bottom.  In all of this the stakeholder landscape will become more complex and public relations professionals will be more in demand to help companies navigate these tricky waters.

Does this translate into job security for public relations professionals?  Maybe (hopefully?).  Out of this, I think two things will happen: (1) that business folks will need to get educated in public relations principles (as suggested in this previous post) or (2) more PR people will need to get educated in business principles.

Ultimately, no organisation can afford to leave corporate reputation to chance.

Filed under: Corporate Communications, Public Relations, Random

Business Schools to Add PR into Curricula

According to this article, a number of US business schools are experimenting with adding public relations courses to its curricula.  Perhaps I’m a bit biased but this move is long overdue.

When I first started my MBA, one of the most common questions everyone asked as an ice-breaker question was “so what did you do before coming to RSM?” I would answer that question by saying I owned my own company doing marketing and communications consulting.  More often than not, people would have a hard time understanding what my work would entail.  I eventually got pigeon-holed into being a “social media expert” (which is not something I would even list as one of my top 20 skills, to be honest), partly because I was helping the school with its Twitter presence, but also because I think it made what I did more tangible to them.  Many of them had no concept of what strategic communications was — that it is more than just being a glorified writer or overpaid graphic designer.  The conversation about my professional background often ended rather quickly as a result.

At RSM, we had only one lecture on crisis communications and the peril of poor brand and reputation management. There was an elective called “Brand Management” that looked more specifically at brand building from a marketing perspective.  The closest we came to discussing corporate reputation management from a PR perspective was in an elective entitled “Corporate Social Irresponsibility” that addressed non-market strategy more broadly.

In this Corporate Social Irresponsibility course, the professor said he believed that irresponsible behaviour by corporations is the single most significant source of value destruction.  Combined with the above infographic’s assertion that only 40% of recent MBA graduates have the skill set required to protect the corporate brand, it becomes clear that this is an area that is lacking in business school curricula.

Especially in this day and age, there is no shortage of examples of companies that have put significant dents in their corporate reputations and have dealt with the resulting media maelstrom in not-so-ideal ways. And with the immediacy of social media channels and the media savvy of activist and special interest groups, corporate reputation management will not be getting any easier.

Reputation risks may crop up at any time and often, companies are taken by surprise when it happens.  However, with proper scenario planning, stakeholder mapping, and crisis and emergency protocols set and rehearsed in advance, one can often dampen attacks to a brand or reputation.

Filed under: Corporate Communications, Public Relations, Random

Identifying Willing Donors

Having started my career in non-profit organisations and spent a good part of my life volunteering in various capacities, I feel I have some wisdom to share on fundraising, even if I don’t have the CFRP designation at the end of my name.  During my MBA I was actively involved in the RSM International Charity Foundation, which is the official charitable foundation of the school.  The foundation acts as a fundraising conduit for the charity(ies) that students at the school elect to support in a given academic year.  So for example, for 2011, all monies raised through the foundation were funneled to two charities, one in India and one in Russia, that were voted on by students at the start of the year.

In the past, fundraising efforts were always focused around doing bake sales and other events that targeted students who don’t generally have a lot of money.  Plus, students were always preoccupied with their studies, and therefore very little thought was dedicated to doing things differently.  As a result, fundraising revenues have always been rather dismal.

This year, although the revenues remain modest, we managed to double what was raised in 2010 and triple what was raised in 2009.  The increase was almost entirely due to the contribution of one corporate donor.

What was amazing about this was that this avenue of fundraising hadn’t been exploited very well in the past.  We were in a business school — presumably connections to corporations are abundant and primed.  However, where I believe previous cohorts may have fallen short in their efforts to connect with corporations is in identifying which donors to target with their asks.

Non-profits, like corporations, face competition.  They compete for donor dollars.  There are a million and one charities and causes that companies can support — why would they choose to support yours?  Therefore, a marketing approach must be used in positioning the ask in such a way that it resonates with the corporation’s mission and/or charitable giving objectives.

When we started out deciding which companies to target, we focused on two types of companies: (1) those whose charitable mandates focused on children, since the two charities were both children’s charities; (2) Dutch companies who had/were building business networks and partnerships in Russia or India.  What this ensured was that we spent our limited time and energy on companies that were most likely to want to give.

Luckily, through a networking event I attended, I was put in contact with a company that had both attributes, and in the end it became a generous donor to the project in India.

So what are the lessons from this?  Well, in my eyes, the lesson is that non-profit organisations have more in common with their for-profit counterparts than one expects — corporate strategies and best practices often apply to non-profits as well.

Filed under: Marketing, Non-profits

Lessons from the MBA: Communication and Leadership

In the past 12 months, I have been immersed in a world that no one who hasn’t experienced a full-time MBA abroad will really understand.  I was one of 140 students from around 50 countries, of whom about 97% of us were living in Holland for the first time.  The program’s official language of operation was English — all coursework and all communications at the school were conducted in English.

Presumably, many of the students whose first language was not English took a standardised exam to test their proficiency.  And while these tests are great in testing reading comprehension, technical aspects of grammar, and to a lesser extent, writing, many students struggled in the first few months and couldn’t participate in English conversation, let alone group work and class discussions.  What happened, predictably, was that many students split off into their language groups so they could be among people with whom they could communicate more easily.

Throughout the MBA, we were required to fill out a series of questionnaires to help us to map social networks, identifying key influencers and people who were the spokes in the wheels of the various social groups.  What was interesting, was that in the end, there were a handful of people from each language group who became influencers and the central figure within each clique.

So what, you ask?

Well, there are two observations to make here:

First, there were some people who were listed as key influencers whom I would have never guessed to be the case.  But that was because I did not speak the language they did and therefore did not witness their interactions with their compatriots.  They exercised influence over a group with whom they could communicate more easily.

Second, those who were identified as having larger spheres of influence, often spanning beyond their language group, were by and large native English speakers.  In an environment where English was the official language, those who could most effectively operate in that language had a natural advantage.

Essentially, this is further proof of what we have always known to be true: leadership and communication ability are inextricably tied.  Leaders need to be able to effectively express their ideas to others and have the ability to explain rationale and bring people “on board”.  As well, when operating in a language you’re comfortable with, it is far easier to come across as easy and genuine, as opposed to appearing to have to put effort into expressing yourself.  This also goes a long way to one’s ability to influence others as people respond favourably to people without pretension.

Of course, personality and cultural context play a role in determining who become key influencers and who do not.  But I think this is good evidence, nonetheless, that communication is a key element to good leadership.

Filed under: Random

Targeting audiences effectively

I found this in my blog drafts. Decided to publish it, though it was originally written in July 2010. I think it is still relevant now. Enjoy!

I was talking with an entrepreneur over the weekend who is trying to launch an eco-product that speeds up the process of composting food scraps and biodegradable wastes.  She told me that another friend of hers suggested she look into distributing the product through the City of Toronto’s Green Bin program, which collects compostable wastes from homes around the city.  Liking this idea, she went to the City of Toronto’s website and sent an inquiry to the email address posted on the site.  Predictably, she hasn’t received a response yet.

Her scenario is a classic case of not doing the background work to understanding the system (or market) in which she wants to operate.  She hasn’t identified the real decision makers in the system and how best to engage them.  The Green Bin program administrators she sent her email to likely have very little authority over what initiatives the municipality implements.  The real decision makers are the Councillors who sit on City Council.

Therefore, the advice I had for my friend was for her to put together a pilot project proposal that she can pitch to a councillor who has a history of supporting environmental initiatives.  She needs to get the attention of a councillor who can help her fashion the project into something that will appeal to City Council, and who can champion the idea amongst their political allies on Council and ultimately get the idea tabled and passed.

Alternatively, since it’s an election year, she can look at the field of Council candidates and pick one she thinks will be supportive of her cause and who has a good chance of being elected.  She can help the candidate’s campaign in whatever way she can to ensure that if and when this person is elected to Council that she has an ally on Council to help champion her idea.

In her pitch, I told her that she also needs to be clear about what the Councillor will gain from supporting her idea.  In an election year, it is imperative that a Councillor or Council candidate is strongly associated with innovative campaign ideas.  Therefore, if she can pitch her idea in such a way that supporting the idea helps a Councillor or a Council candidate seem more pragmatic, more cost-conscious, and more eco-conscious than their rivals, they are more likely to support her idea.  She needs to shape her pitch to appeal to the election hopes of her audience.

While this example involves government and green technology, the lesson here can be applied to any marketing scenario.  I can’t emphasize enough how important it is to be able to effectively identify your target audiences properly and understand the world they live in, and be able to help them see how your proposal will help make their world easier, faster, more profitable, or whatever your selling proposition happens to be.

Filed under: Marketing, Small Business, government initiatives, green technology, market research, small business, small business marketing

Thinking in brands and taglines

It’s been more than a year since I was last blogging actively. This was primarily because I spent the last 12 months pursuing an MBA in Europe. Good excuse, right?

At any rate, this past year has been a huge learning experience for me, not just in terms of course material, but also in terms of my own tendencies and preferences. Eventually, you find things about yourself that are hypocritical or ironic.

For me, I have always told my clients not to jump the gun and create snazzy marketing materials before defining target markets and benefits and features, and so on. But then I got the opportunity to work on a business idea with a couple of “regular collaborators” I have in my circle and the first thing I did was open up Adobe Illustrator and start brainstorming names, logos and taglines.
At one point, one of my collaborators told me to hold my horses and pull back. Whoa, what has this MBA done to you, I thought to myself.

In looking back, though, I can’t say I was much different before. When I started Murmur Communications, I did quite the same thing; I had a logo and name for the company worked out before I could articulate clearly what my service offerings would be.

What I have come to realise is that I think in brands and taglines. It sounds strange, but it really helps me to experiment and express what could be potential target audiences, core service offerings and unique positioning before I am able to articulate them in prose.

I guess some people learn visually. I think and brainstorm visually.

Filed under: Branding, Random