MarketingSherpa Blog

I want to be a good person. Chances are, you do too. So sometimes it bothers me when people stigmatize marketers as spammers and manipulators for money. (This happened to one of my colleagues here at MarketingSherpa, Daniel Burstein, recently.)

But marketing is a neutral term. It is simply the way we speak to customers. How we use marketing is up to us. We can be ethical, or not. We can influence people for good, or bad. We can choose to appeal to the best in us or instead, appeal to the beast in us. Actually, when you think of it, marketers wield a lot of power.

It’s true that there are marketers who choose to sell a product by appealing to our baser instincts of greed, selfishness, pride and lust, but you and I don’t have to, and we can still be successful. We can understand our customers as people and tap into their emotions, become a part of the story they want for their lives, not just pushing the goals we have for our business.

That’s why I was really encouraged when I listened to some major insights gleaned from the databank of The Institute of Practitioners in Advertising UK. IPA has nearly 1,400 case studies showcasing the most successful advertising campaigns across 30 years, and discovered the most successful marketing campaigns were utilizing emotional marketing that brings out the best in people as opposed to those that simply focus on the surface-level, material desires we may have.

What really drives consumer decisions

The IPA is one of the world’s pre-eminent trade bodies for marketing communications agencies. Marie Oldham, Chief Strategy Officer, Havas Media, stated that the evidence suggests deeper, meaningful need states are driving consumer decisions.

The strongest ones [campaigns] were the ones [that] fully understood how the world has changed since 2008 and the whole credit crunch, how it destroyed some of the things that we thought were the dominant things in life, having a bigger car, getting a bigger job, getting on in life … [instead, customers said] ‘time spent with families and friends or reconnecting with our passions in our communities is really important.’ 

The winning entry for 2012 and also for 2016 IPA effectiveness awards was a TV ad from John Lewis. This chain of high-end department stores has repeatedly created extremely successful advertising campaigns.

The company traditionally used product-focused advertising but decided to shift to an emotional strategy, focusing on the consumers’ higher motivations for buying. It’s not about furnishing a house but building a home. It’s about creating a safe, inspiring and stimulating environment for their children; it’s about realizing their dreams for their family, their health and wealth. It’s not about getting rich, but about living a richer life.

The following advertisement was an immediate success going viral throughout television and social media platforms and catapulting their business forward as a leader in their industry in the UK.

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We frequently receive questions from our email subscribers asking marketing advice. Instead of hiding those answers in a one-to-one email communication, we occasionally publish some of them here on the MarketingSherpa blog so they can help other readers as well. If you have any questions, let us know.

Dear MarketingSherpa: Hi Daniel, I’m following up on the conversation started on Twitter about your blog post. My questions are:

– What was the main realization that took you to write this article?

– Do you think that this works for businesses in any industry? For example, some businesses are mostly offline, is it wise to invest time in creating a funnel for those as well?

FYI, this is the article I’m talking about — Marketing 101: What is funnel creation?

Looking forward to hearing back from you.

Thanks.

Dear Reader: I wrote the article because I received questions following the publication of this article: Website Development: How a small natural foods CPG company increased revenue 18% with a site redesign

Yes, the funnel works for any fairly complex purchase. This was true before the internet. Think about buying a car before the internet. First you saw the ad. Then maybe you filled out a business reply (BRC) card. Got invited in for a test drive. Test drove cars at competitors. Get to price negotiations. Etc, etc.

The funnel is a human decision-making phenomenon

I’ll go a step further. The funnel works for any fairly complex human decision, not just purchases, and certainly not just online. For example, you don’t instantly decide someone you meet in college is going to be your best friend. There’s a process.

And that begins with exposure to that person in the first place. You made micro-decisions to attend the same club meeting that person did, you approached them after the meeting, you had a good conversation, you invited them to hang out with your buddies, your buddies liked that person (third-party verification), you hung out more and more, you confided trust in that person (form fill with annual revenue info), that person confided trust in you … 40 years down that funnel, your best friend is giving a toast at your daughter’s wedding (the final purchase).

In a vacuum, the funnel still exists

The reader asked if it is it wise to create a funnel. It’s important to note that the funnel exists whether you choose to actively manage it or not. Take the example above. Your best friend didn’t choose to create a funnel to end up giving a toast at your daughter’s wedding. There were a set of decisions that you naturally made to get to that point.

It’s the same with the buyer’s journey. If you’re selling a car, there are a series of decisions a buyer will make on the path to deciding whether to purchase that car, whether you’ve set up a funnel or not.

What you can do is try to discover what these paths to purchase are, and then how you can use your marketing, sales and other resources to help them make that decision.

Let’s look at an example where we map business activities in a funnel to a set of conclusions a prospect has to reach for a B2B services contract.

Prospect conclusion funnel example

[Click here for an instant, free download of a PDF version of the Prospect Conclusion Funnel Example]

Let’s break down the example.

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Marketing has a language all its own. This is our latest in a series of posts aimed at helping new marketers learn that language. What term do you find yourself explaining most often to new hires during onboarding? Let us know.

The entire global marketplace is built on transactions. And those transactions occur because a buyer perceives that the value of a product or service justifies the cost (and a major part of that cost is monetary price).

I bring this up because many business and marketing folks think they set the price of their products. Well, they don’t. In a capitalist system, only the market sets the price for your product.

Of course, business and marketing professionals have an essential role in this process …

Marketers present the price, they don’t set the price

This is an important distinction because it’s not only the monetary amount of the price that affects how well it will be perceived and thus how likely it is to be accepted.

It’s how that price is presented.

Which brings us to some common price and value presentation tactics.

Price anchoring

When I learned Economics 101 in high school, one of the first things I learned was that the supply and demand set the price in the market. You can even plot it out with simple curves. When the demand shifts up — boom — the price goes up.

Demand curve shift via Silverstar

It all seems so logical. Just crunch the numbers.

But it’s not. Because supply and demand don’t only set price, price itself can influence demand. And price influences demand because humans don’t run a logical calculation for every transaction they face every day. That is far too complex. We’ve got other things to do.

So we look for shortcuts. We look for signals. And one of them is this: What should the price of this product be?

Here’s where price anchoring comes in. Let’s say you see a box of cereal in a store. It costs $3. Is that a lot or a little? A good price or a bad price?

Wait, there’s some more information. Actually, the regular price of that cereal is $4. And it is on sale for $3. In fact, if you buy this cereal today, you’re saving a whole dollar compared to what it normally costs.

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I usually watch “Curb Your Enthusiasm” through the eyes of a fan. But recently I watched the popular HBO show through the eyes of a marketer.

And it struck me — Larry David is an extremely valuable customer. And not just because he has all of that “Seinfeld” money (some $900 million of it, according to Adweek).

Larry is valuable because he actually tells brands what he is thinking. Commonly derided as “complaints” or “rants,” in reality, Larry is offering up valuable customer intelligence.

Complaints are business intelligence

In a recent episode, Larry is staying at a hotel. When asked by the front desk employee if he had any feedback on his stay, he suggests that they shouldn’t tuck the sheets in so tight when making the bed. Who sleeps like that?

But Larry isn’t the normal, quiet customer. He’s a super-suggester. And he goes far beyond replying to a question from an employee asking for feedback. He offers unsolicited advice on topics the hotel doesn’t even think to ask about.

While the hotel brags about cookies made by its pastry chef, Larry isn’t buying it. He says the cookies are from Pepperidge Farm.

And Larry is none too happy about the cookie retrieval system the hotel has set up in its lobby. Larry doesn’t want to use tongs to grab the cookies — he is afraid the cookie will get crushed — and he suggests a wider cookie layout system so guests can pick cookies with their bare hands without touching an adjacent cookie.

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When measuring customer satisfaction after the purchase of your products, it’s all too easy to think of the process in a linear fashion:

• I produce marketing and advertising that sets an expectation for my product
• A customer then buys and uses my product
• I will then ask that customer if they are satisfied with the product

However, while reading Customer Expectations: 7 Types All Exceptional Researchers Must Understand by Scott Smith, Ph.D., as part of my studies in the University of Florida/MECLABS Institute Communicating Value and Web Conversion graduate certificate program, there was a line from Dr. Smith that really stood out to me: “The product purchaser, influencer and user may have each been a different type of individual, each having different expectations.”

Notice he doesn’t just say a different individual, but a different type of individual. The key lesson here is that you should not only segment your marketing but segment your customer satisfaction measurement as well.

And while many B2B marketers will see how this is instantly applicable to them, it likely applies to many B2C and nonprofit marketers as well.

Let’s take a look at each type of customer, with an example for each type of marketer.

                                                                                Photo courtesy Flickr CC Village9991

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As a student in the Communicating Value and Web Conversion graduate certificate program from the University of Florida and MECLABS Institute, I recently read the ebook “Winning the Zero Moment of Truth” by Jim Lecinski.

Even though it is obvious content marketing for Google, it’s still a very good book. It’s six years old at this point, so I’m sure you’ve heard the term Zero Moment of Truth (ZMOT) by now, but there are still many good ideas you can get from the book to improve your content and other digital marketing.

The power of ratings and reviews

As he explains in the book, Lecinski’s ZMOT term is a play off a quote from Procter & Gamble CEO A.G. Lafley (p. 11, Lecinski, 2011):

The best brands consistently win two moments of truth. The first moment occurs at the store shelf, when a consumer decides whether to buy one brand or another. The second occurs at home, when she uses the brand — and is delighted, or isn’t.

That got me thinking of creating my own play off of ZMOT that ties into Lafley’s Second Moment of Truth.

In much of the book, Lecinski explains how important ratings and reviews are for a range of products thanks to how friction-free getting this information is on the internet versus the pre-internet days. No longer are people only reading the print edition of Consumer Reports to get reviews on cars and washing machines, now they search reviews on everything.

“When I go to a presentation at, say, a Hilton Hotel, I tell the audience this: ‘There are more reviews online for the Bounce Dryer Bar than there are for the hotel we’re sitting in right now.’” he says (p. 38, Lecinski, 2011) He says that 70% of Americans now say they look at product reviews before making a purchase (p. 10, Lecinski, 2011).

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Marketing has a language all its own. This is our latest in a series of posts aimed at helping new marketers learn that language. What term do you find yourself explaining most often to new hires during onboarding? Let us know.

Conversion rate optimization, often abbreviated as CRO, is the practice of improving the conversion rate in any advertising, marketing, sales or other business practice that has a goal of getting a person to take an action. (The conversion rate measures the number of prospects who take an action that you’re requesting.)

For example, let’s say you have an email that asks people to click to a landing page to buy a product. CRO would focus on getting more people to click on that email (improving the conversion rate of clickthrough), in addition to getting more people to purchase on the landing page.

CRO (or at least elements of it) is sometimes also referred to as marketing optimization, website optimization, landing page optimization (LPO), growth hacking, optimization and testing, customer experience (CX), usability (UX) or marketing experimentation.

Despite the prevalent use of the word “optimization,” it is a very different discipline from search engine optimization (SEO). CRO is focused on optimizing for human behavior, and SEO is focused on optimizing for machine behavior.

Web design, copywriting and analytics interpretation are key skills that go hand-in-hand with CRO. This is because many CRO changes are either to design or copy. Also, the ability to understand analytics will (1) give ideas on where in the conversion process you should make CRO changes to have the biggest impact, and once you’ve made the changes, (2) how impactful they have been to your conversion goals.

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One of my favorite music videos is “No Rain” by ‘90s band Blind Melon. In it, a young girl dressed in a bee costume roams around her town, clearly misunderstood by everybody she encounters.

Until …

One day …

… bee girl encounters an entire field full of people in bee costumes. She had clearly found her tribe.

I’ve seen that same delight when those engaged in customer-first marketing and customer-first science meet. And I certainly felt it myself getting to work with Catharine Hays for a few months on the Beyond Advertising: Creating Value Through all Email and Mobile Touchpoints webinar.

Hays is Executive Director of The Wharton Future of Advertising Program and recently interviewed myself along with Flint McGlaughlin, CEO and Managing Director of MECLABS Institute (the parent research organization of MarketingSherpa) on Marketing Matters, a show she co-hosts on the Business Radio channel on Sirius XM powered by the Wharton School.

If you’re a fellow traveler on the path of customer-first marketing and customer-first science, listen to the recording of the radio show below. Or read the below transcript (I called out key concepts with bolded headlines to allow for easy skimming). I hope you feel that same delight of finding your tribe.

And if you do, feel free to let Flint or myself know through Twitter — @FlintsNotes and @DanielBurstein   — since we won’t be able to hear you shouting in agreement through your headphone or speakers.

Catharine Hays: You’re listening to Marketing Matters on Business Radio, powered by the Wharton School.

Welcome back. This is Marketing Matters on Sirius XM’s Business Radio 111. I’m Catharine Hays. I’m the Executive Director of the Wharton Future of Advertising program here. And we’re going to shift gears a little bit to welcome our next guests.

Really, the theme of the show today has been on customer-first marketing, really putting the customer at the front of your marketing and putting the individual, rather than thinking of them as a consumer. So, we spent the last hour really kind of honing in on the Hispanic market and with our last guest, talking about really seeing them from a cultural lens and how open or closed they are to cultural influences, new and old. So, that was pretty interesting.

So, what we’re going to do next is shift gears a little bit, but still have this theme but talk about it more broadly with two wonderful guests. First, we have Flint McGlaughlin. He’s the CEO and Managing Director of MECLABS Institute. Welcome, Flint.

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Every week (as the name suggests), I write the Marketing Sherpa Chart of the Week email newsletter. And so, every week, I come across interesting research and data, along with sources that add analysis and color to that research.

Usually, that analysis is confined to the MarketingSherpa Chart article. However, this week, my cup especially runneth over with good ideas and analysis that I thought you might find helpful on your ecommerce sites, especially as you set the groundwork for your holiday marketing initiatives.

When I interviewed Tom Collinger, the Executive Director of the Spiegel Research Center at Northwestern University, and Edward Malthouse, professor at Medill Northwestern and the Research Director of the Spiegel Center, we went well over our allotted time.

You can see their data and some of their analysis in this week’s Chart of the Week article — Ecommerce Chart: Star ratings’ impact on purchase probability. But if you’d like a deeper understanding of their research into how online reviews affect sales, I’ve included a lightly edited transcript of our conversation below. To make the transcript easily scannable for you, I call out key points with bolded subheads

Bringing evidence to the answer of how newer forms of consumer engagement with brands drive financial impact

Daniel Burstein: Why don’t we jump in and you give me a high level of the type of work you’re doing here? I believe, Tom, we may have had you as a source in the past at one point.

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The focus at MarketingSherpa Summit 2017 was inspirational stories of customer-first marketing, and so we mostly shared in person, live versions of the in-depth case studies we report on from your peers.

However, previous attendees have told us that they also want quick ideas for improving their customer-first marketing.

So in this quick-hitting session, my Summit co-host, Pamela Jesseau, and I shared ideas for improving your marketing from industry experts, your marketing peers and MarketingSherpa Award entrants who had outstanding ideas.

Sit back and watch the entire 30-minute video to get several different ideas. Or, if you’d like to jump ahead to a specific topic in a specific section, our copy editor Linda Johnson, put together these timestamp links for you.

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