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Ernan’s Insights on Marketing Best Practices

Monday, April 3, 2017

Stop (ONLY) Marketing To Millennials

Article by Ernan Roman
Featured on CustomerThink.com
“There’s both ageism in our culture and ageism in our profession of marketing. But some of it’s not even malicious ageism. Some of it is just, ‘I want my brand to feel young and modern and youthful, and the only way to do that is to be targeting it to the young and modern and youthful.’ But that’s simplistic thinking.” This according to Denise Fedewa, Executive Vice President/Strategy Director, Leo Burnett.”
Many marketers have invested significant portions of their budget chasing the millennial consumer. But, here’s a fact that might make some rethink that strategy. According to DataMentors, while Millennials do make up the largest generation today (86 Million), Baby Boomers still take second place (77 Million.)
If marketers are putting all their chips on Millennials, they could be in for a surprising loss when they realize just how much they are leaving on the table by excluding other demographic groups in their marketing mix and messaging.
But marketers are just not marketing to this lucrative “older” consumer: “[Baby Boomers] can sustain and be a strong driver of the consumer economy over the next five to ten years especially the upper-income households. They have the money to spend. It’s a different mindset …now saying, I’ve got to spend it while I’m here,” says Doug Hermanson, principal economist at Kantar Retail.
  • The Boston Consulting Group (BCG) calculates that less than 15% of firms have developed a business strategy focused on the elderly.
  • The Economist Intelligence Unit found that only 31% of firms took increased longevity into account when making plans for sales and marketing.
  • A report by the McKinsey Global Institute points out that older consumers are one of the few engines of growth in an otherwise sluggish global economy.
  • According to DMN3, online research shows an overwhelming 82.3% of Boomers belong to at least once social networking site and over half of Boomers who use social networking sites will visit a company website or continue their search on a search engine as a result of seeing something on social media
According to Morgan Stanley, “As consumers age, their spending increases, with the U.S. consumer’s peak earnings, spending, and investing years between ages 35 and 55. Boomer generation will still maintain enormous spending muscle. In the next two decades, spending by Americans over 50 is projected to increase by 58%, whereas spending by Americans 25-50 will grow by 24%…”
In learnings from 15,000+ hours of VoC research interviews, consumers have told us again and again that they want needs-based personalization that connects with them at a human and genuine level. To develop relationships with all consumers, marketers need to devise personalization that drives engagement by increasing conversion rates and return visits because the consumer feels that the brand understands them. But unfortunately for many age brackets, this is not the case.
“Most of the female baby boomers feel as if marketers don’t really understand them, and they’re not making a really strong, concerted effort to speak to them as an individual,” says Dave Austin, managing director of marketing agency Influent50 “There’s this misnomer that boomers are not… digital-savvy, which is just not true. They’re one of the first generations to use technology in every portion of their life.”
However, a savvy few companies have tapped into the digital-loving Baby Boomer market, such as Stitch, an online dating, activity and travel community for those over 50. According to founder, Marcie Rogo, “[Boomers are] brand loyal. This is what I love about them. They like the real talk. If they trust you as a brand, they will stay with you. They’re not going to hop around like millennials.”
L’Oreal has recently announced that it has added 69 year old actress, Susan Sarandon, to its roster of over 50 brand ambassadors for its beauty product line, which has made a choice to have a representative from each generation to portray their message that beauty ‘transcends age’. In their “senior marketing” the company notes that their new brand ambassadors, “embody the new kind of radiant 60-something women.”
TakeAways:
1. Millennials represent significant buying power, but they are not the only ones. When marketers put most of their marketing eggs in one demographic basket they are missing opportunities and revenue from other segments that feel the brand does not want their business.
2. Marketers must make the effort to understand the needs, actions, and buying patterns of every demographic group.
3. Marketing needs to “speak” to consumers in a voice that is both authentic and genuine. If the message is stereotypical, consumers have no reason to identify with a brand they feel does not accurately understand their needs or lifestyle.
One of the key lines from Madonna’s Billboard “Woman of the Year” acceptance speech was, “The most controversial thing I’ve done is stick around.” Marketers have fallen in love with the pursuit of a digital demographic at the exclusion of other demographic age groups. Now, the key is for marketers to see past the obvious to gain a deeper understanding that all age groups are digital—and have big buying power.

Thursday, March 2, 2017

Your Data Is Your Strategic Firewall Against Competition

Article by Ernan Roman
Featured on CMO.com
“Rivals cannot unlock or simulate your data. Data is the defensible barrier—not algorithms.” These are the words of Andrew Ng of Chinese search giant Baidu in a recent New York Times article.
The article also stated: “For decades, dominance in the technology industry was based on software or hardware. Now it is increasingly based on who owns the best data.”
Data Is A Competitive Advantage—If Used To Improve Customer Experience
Data is the competitive differentiator in terms of preference-driven customer experience and personalization. It is also a strategic firewall against competition.
Your competition cannot duplicate or simulate your data. But data sitting idly in your servers or used only for sales messaging will not catapult your company to the next level. It is the customer insights in your data that are your competitive uniqueness. Success will be based not only on the quality of data, but its creative utilization.
In an Infosys whitepaper, “Transforming Big Data Analytics into a Competitive Advantage for Insurers,” it was noted: “Having access to rich sources of data and using that data to enable effective decision-making are two separate aspects.”
Per VoC research conducted by our firm, today’s personalization is broken. It relies on implicit data, i.e., web browsing behavior, data mined from social media, data modeling, and purchase-based behaviors. These are not providing the necessary depth of information to drive relevant communications and offers. As a result, most attempts at personalization simply do not drive the expected increases in response.
Marketers must now make a profound shift and move to human data, which is based on explicit, self-profiled, opt-in preference data. Human data personalization is unique in that it lends itself to segmentation based on self-described personality types, attitudes, and life stages. Human data-based personalization is consistently driving double-digit response rates.
New Data Collaboration Partnerships Are Essential
The acquisition of LinkedIn by Microsoft was an innovative strategic data-based move. With the acquisition, Microsoft can now leverage the approximately 467 million names in LinkedIn’s database to market its products, such as Office 365. According to Bill Phillips, vice president business applications at Microsoft, the LinkedIn database along with other sources “will power a set of insights that we think is unprecedented.”
Realizing the importance of the data it has mined, Progressive Insurance joined forces with European insurance company The Generali Group to enter into a research and development collaboration to improve their individual data analytics capabilities.
“Collaborating internationally with Generali allows us to further expand and deepen our customer insights,“ said Pat Callahan, personal lines president of Progressive Insurance. And Valter Trevisani, chief insurance officer of Generali, said: “The collaboration with Progressive allows Generali to accelerate the execution of the strategy in regards to connected insurance and advanced analytics.”
Advanced Human Data: The Ultimate Tool For Preference And Customization
In a McKinsey & Company report, the following points were noted:
  • “Advanced data analytics is a means to an end. It’s a discriminating tool to identify, and then implement, a value-driving answer. And you’re much likelier to land on a meaningful [answer] if you’re clear on the purpose of your data.”
  • “The impact of big data analytics is often manifested by ... incrementally small improvements. If an organization can atomize a single process into its smallest parts and implement advances where possible, the payoffs can be profound.”
There is a consumer expectation gap between what consumers want delivered and what is actually being presented to them. In findings from our own VoC research, we have identified the following requirements:
  • Marketers must rethink data strategies to provide “smart” personalization that goes past short-term implicit data to long-term, relationship-building human data.
  • Every department and channel must respect customer preferences.
  • B2B and B2C customers are willing to provide trusted brands with deep business and personal information in exchange for more personalized offers and communications.
Sportswear manufacturer Adidas has committed to improving customer relationships by merging previously siloed data to enable the company to move away from atomistic bits of data to an interconnected 360-degree approach. Per senior project manager Sokratis Kartelias, the data overhaul uses “shared metadata service to deliver the most compelling, relevant, and relatable content to the right consumers. The company plans to do this by processing their consumers’ responses database to continually update personalization to be as relevant as possible.”
For years, data was something collected and used primarily for outbound sales. Recently, marketers are expanding the vast possibilities that human data provides for customer insights, product development, new channels of engagement, deep-level personalization, and so much more. This high-value data will help propel your business to the next level and serve as a formidable firewall against competition.

Monday, February 20, 2017

TIAA CMO Connie Weaver Answers 4 Questions for Marketing Innovators

Connie Weaver is an expert in brand transformation, customer analytics, and digital strategy. Her approach combines the “art and science” of branding by establishing data and measurement as a key complement to on-going innovation. Currently the Chief Marketing Officer for investment giant TIAA, she has led marketing efforts for a range of Fortune 100 companies, start-ups, and non-profit organizations.
Connie recently participated in our "4 Questions for Marketing Innovators" series.
1. What is one marketing topic that is most important to you as an innovator?
Breaking down the barriers to innovation, no question. It can be easy to fall into the trap of thinking that it’s too difficult to innovate in a complex environment. This is the kind of shackled thinking that drives innovators crazy! Not only is this constrained confidence bad for you as a leader, it’s terrible for your organization.
Look at TIAA. Look at financial services. We are a nearly 100-year-old company in an industry loaded with many more guardrails than you’ll find elsewhere. FINRA, banking regulations, insurance compliance standards – the list goes on.
Yet we were able to innovate beyond even our own expectations throughout all phases of our transformation. We placed the customer at the center of every decision and asked, “How does our brand make the customer feel? How can we enhance that emotional connection?” We dramatically streamlined our website and online experience. Our marketing function collaborated with our legal and compliance groups to make sure our new “radically simple” language still fit within industry regulations.
And yes, there were barriers along every step. One of the keys to overcoming the pain points is to remember that you can innovate anywhere, anytime. If you make the customer a priority and passionately stand behind your mission, there is always a path. Sure, you may need to test and learn, walk before you run. We all do. But stay resolute in your efforts to be innovative and you will move the needle.
2. Why is this so important?
The results that you can drive through innovation make all of the effort worth it. Since rebranding TIAA, we have seen major improvements not only in awareness of our brand, but deeper understanding of what our brand stands for and how it can support the customer’s needs. We’ve also seen great leaps in online traffic and doubled the time visitors spend on our site.
These are major wins. And they have all occurred because of our commitment to innovate with the customer in mind. We continue to meet customers where they are in their financial journeys and provide them with the tools they need to reach major milestones. If we hadn’t decided to set off on this quest for innovation and transformation, we could possibly be falling behind our customers and what they need from us.
3. How can this improve the customer experience?
The experiences we are fostering for our customers are always top of mind for us. And that comes out of trust, loyalty and total transparency. We sat in the living rooms of customers to talk about their financial fears and trepidations. We took our focus way “off Broadway” and traveled to cities across the country to uncover major insights.
If customers feel front and center – and that you’re willing to innovate to help them and not just yourselves – then they are more likely to engage with your brand. And, we can achieve our goal of making our customers feel more confident in their financial futures.
4. How will this improve the effectiveness of marketing?
If there is true buy-in, innovation can galvanize an organization. This TIAA transformation was not about one single person being an innovator or one single idea being innovative. This has been about driving change for our customers and getting a lot of people to help us along the way.
From the beginning, we thought outside of the financial services box and stoked up partnerships internally. We worked hand-in-hand with sales, legal and compliance, finance, and strategic agencies.
And this all-in engagement is what has made me the most proud. I have led many successful brand transformations in all sorts of crisis and change, but never before have I seen this type of impact in such a short period of time. Our entire organization has rallied behind our customers. Ninety-six percent of our employees now understand the TIAA brand and what it represents. And we are excited to continue delivering innovation for 100 more years.
Bonus Question: What is your favorite activity outside of work?
I love working with nonprofit organizations to help them rebrand and become more customer-relevant. Making a difference matters to me and I’m lucky enough to serve on the boards of the national Make-A-Wish Foundation, Bushnell Center for the Performing Arts, and the University of Connecticut Foundation. Let’s not forget roller coasters, skiing and hiking – as if my professional life isn’t exciting enough!
For additional Marketing Innovator stories, click here.