MarketingSherpa Blog

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 edited excerpts of some of these conversations here on the MarketingSherpa blog so they can help other readers as well. If you have any questions, let us know.

Dear MarketingSherpa: Hi there Daniel,

I quite like the sequence you have built, it’s quite relevant and well refined.

With regards to the personal note, very well done. I am guessing you get a mixed bag from this one.

I would like to ask a question, in your opinion, where do you think CRO is in the adoption lifecycle?

As an industry/set of processes do you think it is still early days or are we nearing the end or somewhere in the middle?

From: Kaleb Ufton, Director of Technology and Digital Marketing Strategy, EKOH Marketing

MarketingSherpa responds: The sequence Kaleb is referring to is the welcome email drip sequence, which includes emails written with a direct and personal tone, that marketers receive after subscribing to the MarketingSherpa email newsletter.

But then he asks a thoughtful and provocative question about conversion rate optimization (CRO). If you’ve read previous Ask MarketingSherpa columns, you know they are usually how-to questions about topics like value proposition communication or finding clients.

Kaleb’s question is more challenging. It essentially requires the ability to predict the future. I needed a little help with this one.

Fortunately, I work every day with one of the pioneers of the conversion rate optimization industry—Flint McGlaughlin. So I walked down the hall to get his take on this question, and here’s what he had to say …

Moving away from just testing pages to testing for new products

I think CRO is in the advanced segment of the first stage and beginning to move into the second. I’ll explain:

When we began our research, no one had a conversion budget; there was no one to hire to do conversion work. There was no training available for conversion. Now companies everywhere hire conversion optimization experts and are testing, but they do it very poorly. Stage 1 has matured to the point where it has become a common practice, but the quality of the execution is definitely lacking.

Tests are often run with major validity errors that no one detects. The testing tools are still primitive, and the biggest problem in the industry is that people don’t know what to test. Having a tool doesn’t help you if you don’t know how to really use it. So I think we are in the advanced segment of Stage 1, and Stage 1 would represent the general adoption of conversion optimization. Clearly some industries are far, far beyond, but in general, things have advanced significantly.

Now, how far do we have to go?

We have a long way to go. Conversion as it relates to personalization is not even close to being executed properly. The next phase in conversion will come through the advanced development of existing technologies. AI (artificial intelligence) is making big promises but delivering far less in practice. There will come a time when it can do more.

In addition, conversion is moving away from just testing pages to testing for new products and also testing for entrepreneurial software rollouts (full stack testing). These are new fields with greater opportunity. I think there is a stage coming where the practice moves to new areas, and then there is a stage coming where technology makes new possibilities.

— Flint McGlaughlin, Managing Director and CEO, MECLABS Institute (parent organization of MarketingSherpa and MarketingExperiments), and author of the book The Marketer as Philosopher

Since this question requires essentially making a prediction, I wanted to leverage the wisdom of the crowds and get a few other opinions as well from your marketing peers and CRO practitioners. So here are some other thoughts on the state of the CRO industry …

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If you’re not careful, “customer-first marketing” could just be mere words. You could deceive yourself and label anything as customer-first marketing just to make yourself feel good.

To get deep for a moment, I was thinking about this recently because it is the season of repentance in my tradition. A chance to re-evaluate not just our words, but our actions.

Rabbi Steve Fox, the chief executive of the Central Conference of American Rabbis has explained it as, “Certainly the High Holiday call and the time of the holy days is a chance to reflect upon what’s in our hearts and to see if our actions match our own self-perception of who we are and what we do.”

Wouldn’t it be great if we had a similar tradition in marketing? To help you get beyond mere buzzwords and make that evaluation of where your company is on its path toward strategic, customer-first marketing, we created this simple look at the five levels of marketing maturity based on our research with 2,400 consumers.

The five levels of marketing maturity (and the 54% increase in revenue realized at the highest level)

When we were creating this framework, we knew we needed a methodology to reference that would clearly communicate the different levels. After thinking about it and debating it, we realized we had a pretty good model to base it on from MarketingSherpa’s parent research organization, MECLABS Institute.

The patented MECLABS Institute Conversion Heuristic has been discovered from and validated by more than 15 years of real-world behavioral experimentation. It brings a cognitive framework to the factors that affect the probably of conversion. This heuristic was released in 2007 and is quite well known at this point, so you may have seen it before:

Until now, the heuristic has always been displayed linearly, as you see above. However, we realized if we stacked the elements of the heuristic, it would be a clear representation of the levels of marketing maturity. Each level is inclusive of the level that came before it and builds on it.

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In a 2016 MarketingSherpa study, we split 2,400 consumers into two groups. We asked half of the respondents to name a company they were satisfied with, and we asked the other 1,200 to name a company they were unsatisfied with.

The most popular response from satisfied customers — 42% of respondents — said that their chosen company’s marketing puts their needs before its business goals.

For unsatisfied customers, the most popular responses — 30% of respondents in each case — were that the company they were unsatisfied with “sometimes” or “seldom” puts their needs before its business goals.

How does this translate into email marketing? Examining the ratio of company-first emails (heavily transactional) to customer-first emails.

We’ll do this by reviewing two case studies featuring marketers who decided to dedicate significant time and effort into producing an email send where the goal wasn’t to drive revenue.

Case study #1: Marriott International

“It felt like we had the opportunity to really do something that was much more member-centric, and really use all the data that we’ve got on our members and present it to them in an interesting, fun way that they might not expect from us,” Clark Cummings, Senior Manager of Member Marketing, Marriott International.

Clark said that in the interview for his published case study for MarketingSherpa, where he was describing Marriott’s Year in Review campaign.

That send — which was non-transactional in nature — helped triple the December average of revenue per message delivered and contributed to making Marriott’s Q4 of 2014 the most successful fourth quarter in three years.

The Year in Review campaign led with a video that summarized several of the Marriott-specific highlights of 2014. This video was customized to each Rewards member.

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It’s all too easy to think of our jobs narrowly: “I’m a marketer. I’m in ecommerce. I’m in the apparel industry. I work in tech.”

But what we really do, or at least what we should be doing, is much too big to be constrained by a single job title or industry.

To give you an example, I came across an interesting story while conducting interviews at the MarketingSherpa Media Center at IRCE 2016. As you would expect, most of the interviews focused around hot ecommerce topics like Amazon Marketplace, Snapchat, and funding a startup.

But I had a deeper conversation with Joe Peppers, the Ecommerce Market Sector Leader at The Weitz Company.

But previously, Joe went to West Point and served three tours of duty in Iraq as a Captain in the U.S. Army, before going on to work in ecommerce for Amazon, Apple, Fanatics.com, and now The Weitz Company.

I discovered some interesting lessons from military service that can be applied to ecommerce, so we sat down to talk about it…

Personally, I have two big takeaways from this conversation.

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Fiduciary duty. These words have been in the news lately, as the government seeks to require that financial advisors have a fiduciary duty to their customers in certain cases.

A fiduciary duty is a legal duty to act solely in another party’s interests. So what this new regulation essentially means is, financial advisors must put customer’s interests before their own. And the financial industry has been fighting this.

As marketers – this should be crazy to us! This is what we should do every day: Put our customer’s interests before our own. How can a business, much less an entire industry, be against the customer?

Remember: You are not your customers

Customer-first marketing begins with the realization that our desires and goals are not necessarily the same as our customers’.

Let me give you an example. Mary Abrahamson is an Email Marketing Specialist at Ferguson Enterprises.

Usually if you go to marketing industry events, and a mobile vendor asks, “Who has a smartphone?” we see that everybody raises their hands. And so the vendor says – “See, everyone has smartphones.”

Well Mary realized – she wasn’t her customer. Her customers were plumbers and HVAC professionals. These people often had flip phones. So, when she launched a mobile campaign, she made sure that text messaging was an important part of her campaign … not just apps. The campaign ultimately generated more than $10 million in online revenue.

So next time you’re launching a campaign – take a fiduciary responsibility with your customers. Think of their needs … and not just your own.

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MarketingSherpa Summit 2017 will be here before you know it, and our team is hard at work planning the agenda, with a special emphasis on customer-centric strategies and approaches.

As we select our keynotes, the team has conducted in-depth research and gained some interesting takeaways from both academic and marketing practitioners.  We highlighted the first five takeaways earlier this week, and we have five more thought-proving insights again for you today.

Takeaway #6. Build habit forming products

Many of the products we use in our daily routine have influenced our routines.

Nir Eyal, author of best-selling book Hooked: How to Build Habit-Forming Products, has identified a design pattern in habit forming products. He describes this design pattern, “the hook,” as “an experience designed to connect the users’ problems to your solution with enough frequency to form a habit.”

The hook is comprised of cycle of triggers, actions, rewards and investments. The triggers can be internal or external, but must evoke motivation to act.

For instance, customers need to anticipate the reward for their action or they will not engage. The more involved a customer becomes with a product, the more likely he or she will develop a loyalty to the product.

Nir explains, “Products that create successive cycles through the hook help customers’ preferences, tastes, and habits develop.”

This engagement is what makes these products better, it’s not necessarily the quality of the products.

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At MarketingSherpa, we’re in the planning phase for MarketingSherpa Summit 2017. With the interest of our customers’ experience at the core of our every decision, we conduct extensive research to select the most thought-provoking and applicable keynote sessions for our attendees.

During our research phase, we have identified 10 key takeaways from leading experts (both academics and practitioners) in marketing. That’s a lot of key takeaways, so we’re breaking it up into two digestible bites. Read on today for insights around customer centricity, empathetic marketing and “less is more.”

Takeaway #1. Customer centricity does not mean doing exactly what the customers want

Dr. Peter Fader, Professor of Marketing at University of Pennsylvania and Co-director of the Wharton Customer Analytics Institute, explains that while performing at the level of meeting or exceeding customers’ expectations is a component of customer centricity, it should not be a blanketed approach for all customers.

According to Fader, truly customer-centric organizations do not treat all customers the same because they do not provide equal value to the company. Most of us are aware that we should identify different segments of customers. Fader establishes that while segmentation itself is not a new idea, how it is conducted has evolved from simple demographics to customer lifetime value. He suggests companies organize themselves around different customer segments rather than different products. Then, organizations can deliver products appropriate to their segments of customers.

In summation, to truly become customer centric, companies need to identify and invest in the right customers.

Recently, I wrote about our need to guard against company logic. I argued that it is very easy for us as marketers to slip into a mindset that ignores the ultimate desires of the customer. This is a struggle experienced by all companies, big or small, new or old, well-known or unknown.

Ironically, as one commenter posted, perhaps even my blog post suffered from a little company logic as it seemed to focus on what I wanted to say rather than what would have most served the audience: more application. Knowing myself, and the tendency that I have just like anyone else, it may very well be true. I can also relate to wanting to know not just the “what” of a thing but also the “how.”

So, in the spirit of taking my own medicine, I would like to attempt being a little more customer centric and suggest four ways in which we can practically guard against company logic and become more customer-centric marketers. These are not the only four ways, but they are a good place to start.

#1. Listen

Learning the discipline of listening to your customer is essential for all marketers. This is where a marketer should always start. Listening to customers was once much more difficult, but today there is so much feedback our customer is giving to us. With the prevailing social dynamic of the Internet, our customers are constantly talking to us (directly or indirectly). We just have to make sure we are listening.

Many marketers are tempted to fear social feedback. I mean, who really wants to hear someone else critique you? However, if we are really doing our job, we will embrace both pleasant and painful insights that we gain from hearing from the customer. It is so easy to become insular and solicit feedback only from our peers, but we must force ourselves to hear the customer’s feedback. Sometimes that comes in the form of them talking directly to us, and other times it comes in the form of customers talking to one another. Nonetheless, our customers are talking, and we must learn to listen.

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There are two ways for a business to be successful in the short term.

Option 1 is to do anything you can to generate revenue. Sometimes it’s something small like sending that one extra promotional email — it will get unsubscribes, sure, but at least it will push your numbers up this quarter. Or it might be something huge like holding a monopoly position in the marketplace. It could even be slowly making the product just a little bit worse to boost margins.

Option 2 is to relentlessly serve customers better than your competitors. Those are the case studies and stories we share on MarketingSherpa. Likewise, you see this in Zappos walking away from drop shipping, even though it produced 25% of its revenue. Or Optum reorganizing its marketing team around educating the customer, instead of one-and-done marketing techniques that attempted to generate leads but didn’t serve the customer.

And, frankly, most companies are a combination of the two. But every day, with every decision you make as a marketer, you decide where on the spectrum your company lies. Will you push your company closer to the customer or farther away?

Of course, if it was easy, everyone would be doing it. Let’s take a look at why customer-first marketing is so important, and why it’s so hard.

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We will be evolving this year to keep up with our audience — you.

This year’s MarketingSherpa Awards extend beyond just email marketing and include marketing campaigns across all disciplines. All year long, MarketingSherpa covers compelling stories in the B2C, B2B, email and inbound spheres, so why shouldn’t our yearly awards?

The three-month process of rewarding talent is a serious endeavor. The selection process included 50 hours of pre-screening more than 300 submissions, followed by 15 hours of group deliberation by our panel of five judges. As we searched through stacks of awards and speaking applications, we were looking for a team that could carry on the legacy of previous years’ winners.

It’s now your turn. We’ve narrowed the submissions down to four of the best campaigns, and you can now vote for your Readers’ Choice Award winner through November 10. After voting, please share your favorite nominee or insight on social media.

All of the campaigns met our judging criteria:

• Be transformative
• Be customer-centric
• Be innovative
• Offer transferable principles that marketing peers can apply to their efforts
• Display strong results

From here, it’s up to you to decide which one deserves top honors.

Have different criteria? Thoughts to share on any of the campaigns? Let us know in the comments.

Among many others, here are four lessons you can expect to take from this year’s Awards:

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