Branding

Channel Surfing for Influencers: Social Media

In my third of four posts about which channels work best to reach and engage influencers, I take a look at the new kid on the block: social media.

Marketers are sometimes torn between doing what has worked most effectively in the past and testing out new technologies and channels that have the potential to be real game-changers in the future.

The bright shiny object of the last few years is, of course, social media, a channel that’s still not completely understood but that has, in theory, the potential to radically change the way we market.

Why? Well, to start with, based on our research, influencers are spending 7 hours per week in the US and 9 in Canada on social media sites like Facebook, Twitter and blogs. That’s already impressive but when you add to that the finding that influencers are connected, on average, to 108 (US) and 137 (Canada) people in their own social media network, that’s something that gets the attention of marketers – as it should.

While social media shares ease of use with the email channel, it’s this community or network that may hold the key to the channel’s true potential. These individuals have chosen to be connected based on an affinity for a particular community, and are actively engaged with others in it and outside that community too.

Bill McCloskey at ClickZ offers some fascinating examples about the potential power of social media, including this one:

“…look at Marvel Comics, which is one of the top performing ‘advertisers’ in the Twitter space. As of right now, Marvel has around 44,000 followers [63,000+ as I write this post]. But over the last few weeks, it sent out 151 Twitter offers. But more than that: 246 ‘influencers’ have directly rebroadcast that message to their followers. Add it all up and Marvel has exposed its offer to over 66 million eyeballs over the past few weeks!”

Those are some impressive numbers and just a hint of the potential opportunities social media offers marketers. However we do need to distinguish the difference between influencers: some will talk; others will pass along information (as per above) and of utmost value are those that truly influence others – by eliciting action. So whether on social media sites or via email or on the phone, you must understand what you are trying to achieve and ensure that you have designed appropriately.

One more thing bares repeating from my last two posts: even if some channels are better than others to reach particular consumers in particular ways, the fact is these channels work best for marketers when they work together.

For instance, email messages that offer a social-sharing option (like Twitter and Facebook) generate a 30% higher click-through rate than emails without it, according to a new study by email marketing company Get Response. And if the email includes three or more social-sharing options, that click-through rate jumps to 55%.

The bottom line? Social media offers a unique and advantageous opportunity to find, reach, engage and have a continuous dialogue with individuals – both within their social media communities and in their network at large. Just needs to be done right!

In the fourth and final part of this series, I’ll blog about the true answer to the question – which channel is most effective at finding, reaching, engaging and motivating influencers?

Gillian MacPherson

Branding to Gen Y – Part II

Referring back to our previous post, we received some interesting comments on what your experiences were like in marketing to Gen Y. With this blog posting, we delve further into the subject and offer some insight as to which events we think have helped to define this generation.

There is a tendency for Gen Y to actively seek out unique businesses, particularly those who produce hand-made items or market themselves as an ethical practice. Think of local boutiques or businesses like Lululemon and the Body Shop. This generation is willing to pay a premium for their products. Why? Perhaps it is that Gen Y is very aware of socially responsible activities and they want to hold companies responsible...by voting with their dollars.

We also stated in our previous post that Gen Y is socially connected all the time - simply because technology enables them to do so. With that social connectedness comes a greater interest in word of mouth peer reviews and viral trends. This generation is exposed to more ads and brands at an ever increasing rate. As a result, Gen Y is extremely media savvy and out of necessity, they have quickly learned to filter out to the content that THEY want to see. This in turn has led to websites focused on content which is customized to what Gen Y wants. Think of personal Facebook newsfeeds where you can control what kinds of stories show up, Twitter streams where you can choose to follow who you want, or blogs that you can decide to subscribe to. As we move to customizable content, the greater the expectations to cater to the individual.

What are your own ideas as to what has helped form the unique characteristics of this generation?

Patricia McQuillan

Personal Branding

I know I'm aging myself when I say I've been in the business for 16 years. Over this time, I've noticed a slow migration from the importance of an agency's brand and reputation to an individual's personal brand and reputation. I attribute this to social networking.

Before the days of Facebook and LinkedIn, when job hunting, we were most attracted to the agency with the best reputation, who did the best work and who had the best brand in the industry. Now, we put just as much emphasis on the people who work for an agency and what their personal brand represents. This works both ways. Employers also seek employees whose personal brand would be a good fit for their agency.

I can't write a blog about personal branding without giving a shout out to Tony Chapman. Know him? Sure you do. Love him or hate him, in my opinion he is the industry leader in personal branding.

Glenn Swan recently conducted a poll on LinkedIn asking "Do you feel a strong personal brand is important for job seekers?" 86% of those polled said yes. 13% said it depends on the position.

So, how do you create your personal brand? Treat it the same way you would a client's brand. You can start by asking yourself these questions:

What do I want to be known for? What am I good at? Am I uniquely valuable? What can I bring to an employer that other's can't? What are other people doing and how can I do it better? Who do I want to target? How am I going to reach them? What is my "elevator pitch?"

It's also crucial to be transparent. The industry is a small one and by now, you've probably developed a reputation along the way. Be honest and sincere in your abilities and experience.

By the way, this personal brand is for hire.

Jennifer Morozowich

The Quest for Community

There is a lot of discussion among marketers about the importance of community in today's networked world. The "quest for community", as Robert Nisbet, American sociologist and Vice-Chancellor at the University of California puts it, is "a nostalgia for a compassable and integral living unit". It has to do with changes in the way we interact and communicate.

The critical question is not whether community is important but how the definition of community has evolved and whether our lives have become more jangled and fragmented which has led to a desire for new connections with strangers. A lot has been written about the trend. But the trend isn’t just restricted to online communities.

The success of Starbucks has been built on the desire of consumers for a "third place”- away from work and home. Ray Oldenburg talked about it in “The Great Good Place: Cafes, Coffee Shops, Bookstores, Bars, Hair Salons, and Other Hangouts at the Heart of a Community”.

The success of Credit Unions is also built on this concept. In a recent interview, Ms. Christine Zalzal, AVP, Sales and Marketing, FirstOntario Credit Union, said that the grassroots strategy of a Credit Union is about being part of the community and staying for the long run in those communities.

What does this mean for marketers? They should look at the "quest for community" as an integral part of their marketing plans – at a strategic level. Different age groups and consumer segments have very different definitions of community. Often, “community” is quickly translated into a tactic- a presence on Facebook, Twitter and Myspace in a marketing plan. It is really more about understanding what defines a sense of community for your most profitable consumers and leveraging this insight for a deeper connection with them. The question to ask is what is the "third place" for your brand?

A tapestry segmentation system can help. It combines the “who” of lifestyle demography with the “where” of local neighborhood geography to create a model of various lifestyle classifications or segments of actual neighborhoods with addresses—distinct behavioral market segments. Adding the layer of a deeper understanding of the context of their "quest for community" can open up new opportunities to create a more meaningful dialogue with your brand with or without the constraint of geography.

Merril Mascarenhas

Branding to Gen Y

How do you reach out to a media-saturated generation with a short attention span known as Gen Y ? They fast forward through TV commercials, text their way through movie previews, and skip radio ads by downloading music. Yet, as seemingly tuned out as they may be, this is also one of the most brand-savvy, socially-connected generations to date.

With new books being published like The Secrets of Advertising to Gen Y Consumers by Aiden Livingston (2010) or Small is the New Big by Seth Godin (2006) it’s a clear trend the way we brand ourselves is changing. The brand strategies of the past are simply not as effective when it comes to Gen Y. Previous generations flocked to well-established brand names in the belief that they produced superior products. Branding campaigns were broader and the commercial goals more obvious. In contrast, Gen Y tends to view big box retailers as firms that value its bottom line over its people. This is a generation who will actively seek out small businesses in the belief that hand-made or unique means higher quality. Subtlety, irony, and humor are now the name of the game. Campaigns try to stay local and more than ever, are fully customized to its consumers.

Mass-produced and mainstream is not what Gen Y looks for when deciding how to spend their money. In order to stay relevant to them, branding strategies have to become edgier and more risk-tolerant. This target audience interacts heavily with social media; seeking online reviews or reading blogs in the hopes of kick starting the newest trend amongst their peers. Constantly connected and always on the go, Gen Y has a short attention span.

What has your experience been marketing to Gen-Y?

Patricia McQuillan

Building Brand Trust Online and in the Mind

Last week the topic of trust was raised in a Harvard Business Review post titled, “What trust brings to Amazon, Zappos and USAA.” The author, Peter Merholz, described how being bold, and proactively trusting your customers, can contribute to a company’s online success.

The article was very well written, and the examples were thought provoking, but for me there was something missing. Beyond examples, what evidence exists that proactively trusting your customers can contribute to online success?

What Neuroscience has shown

At Claremont Graduate University, the neuroconomist Prof. Paul Zac has been studying the topic of trust for a number of years. Looking at the role of trust in macro and micro economics, his studies have begun to focus on the brain chemical oxytocin, and how it can influence trust.

In 2005, Zac published studies showing that when a person sends a trust signal to another person, it causes a release of oxytocin in their brain, which can induce a social obligation to reciprocate that trust. Put simply, his research showed that trust leads to trust, and it provides strong support for the idea of proactively trusting your customers.

What Morphological Research has shown

Morphological research has also been used to study the phenomenon of trust. In fact, in a recent study of 1000 North Americans, Concerto Marketing Group set out to uncover the benefits and drivers of trust in businesses and brands (link to the study here if you are interested).

Through our research we managed to uncover six equally correlated drivers of brand trust. Two of these drivers have particular relevance to this discussion; Relationship and Practical Value. In order for people to trust a brand, it needs to provide some sort of Relationship. Furthermore, in order for that Relationship to be strong, it must deliver some sort of Practical Value.

Based on these two drivers, our research would also support the idea of proactively trusting your customer. When Amazon gives a customer the power to provide product reviews, or when USAA lets a customer deposit checks by email, they are delivering Practical Value, strengthening their Relationship, and ultimately building brand trust.

Building Brand Trust Online

For many companies and consumers, the online environment can embody the best and worst of humanity. It can provide facts and friendship on the one hand; on the other hand it can harbor lies and fraud.

Extending proactive trust to your customers is a powerful way to cut through this mess and build a strong brand. In fact, it would seem that Peter Merholz was on to something in his recent post; being bold and proactively trusting your customers can contribute to a company’s online success.

Nick Black

Consumers Are Ready But Is Your Brand Ready?

You have decided to build an online brand community and are now ready to get started. Before you begin developing a communication strategy and pulling the appropriate resources together, you will have to take a step back and evaluate what your company is ready for. In doing so, you will essentially save yourself some of the unnecessary headaches and aggravation that you would encounter if you were to skip the step altogether.

What is “social media”, “web 2.0”, “new media” and what is the ROI?

These are the questions that many in your organization may and will be asking. To present a comprehensive community development strategy to a team who may not be as well versed in the space will ultimately result in roadblocks, dilution of strategy and resistance that could quickly put a halt to any “knock ‘em out of the park” solutions that you may be able to put in front of them.

If they don’t get it, they won’t buy it.

Remember that the social web is growing rapidly and may be intimidating to some. The advertising industry is realizing a major shift and marketers are being forced to not only give up control to consumers but also to their subordinates who may be better versed in the channel and may be considered a threat to their own job security.

As a result, you may choose to follow these steps:

1. Conduct an organizational readiness test. Begin by assessing your current organizational culture. You can use this simple Readiness Quiz to help you identify existing gaps that may pose a challenge to your efforts while allowing you the ability to set realistic expectations to how quickly your vision can be realized.
2. Identify key stakeholders and understand their fears and concerns. To advance your mandate forward you will need the support and approval from various stakeholders across different departments. Due to the nature of the social web, legal, marketing, customer service and other groups will want to ensure their interests are being addressed. To neglect any one of them could result in costly delays and unnecessary friction.
3. Create an internal communication plan. You will need to define a champion who can lead this initiative and can see it to fruition. That person will be required to educate the various teams not only on the benefits of developing an online brand community but also on how it will impact their roles, department and the company at large.

   This will need to be a collaborative effort and will take time. Some will jump on board immediately while others will take time to come around. Patience, perseverance and consistent messaging will be the key ingredients to realizing success in this stage.

4. Identify and recruit champions. Similar to dealing with consumers, you will find your early adopters, influencers, mavens as well as your detractors when dealing with co-workers. Recognize who the engaged ones are and assign them a contributing role. Encourage those who are motivated to help as they will recognize the career growth opportunities and will serve as a much needed support in your efforts towards converting the cynics.
5. Define Rules of Engagement. This stage will require multiple departments at the table. Any action, role, responsibility as it relates to how employees, partners and associates engage online should be clearly defined. When someone posts a negative comment about the brand, how does the company respond, who is responsible for reaching out and where will the communication be made?

   Answering these types of questions will provide a feeling of comfort to parties throughout the organization and creates clear lines of responsibilities which will ultimately calm any concerns about job security should any issues arise.

6. Crawl, walk, run. Once you have been able to build a team with the appropriate top level support you may begin testing the waters. To jump into the social web with both feet right out of the gate may not be the best move while moving too slowly may result in a competitive disadvantage depending on the industry and category that your company plays in.

   Depending on your organization’s comfort level at this stage you will have to gauge how aggressive you should be at first before building momentum and handing control over to the consumers at large. Don’t forget to set the expectation that it takes time to build trust with your consumers although the payoff in the end will provide better business results if done properly.

7. Measure, learn and build momentum. At this point you will need to demonstrate quick wins while staying on track towards achieving the greater vision. Make sure to clearly define the key performance indicators and track them throughout the process. Such metrics could include engagement levels, net promoter score, brand sentiment, sales and even volume of brand chatter in social circles.

   These should be customized based on your objectives and should serve to provide a snapshot of how your communications are performing. Take what is working and build upon it while recognizing where the gaps lie so that you may work on filling them in.

   As you can see from above, the development of an online brand community involves much more than strictly creating a strategy to connect with consumers online. There are many moving parts with several different perspectives and interests that need to be addressed in order to move things forward. It truly needs to become a team effort to be done well!.

   Jeff Pontes

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The Increasing Complexity of B2B Products

And the hidden Challenges of B2B Branding.

The first time I ever noticed Little Giant ladders was in a series of Billy-Mays-type television ads the campaign featured a serious looking ladder that could be adjusted into 24 different configurations: the traditional A-frame look; the scaffold for uneven terrains; the extension to reach tree tops...and so on. You wouldn’t even consider taking this ladder out of the box without reviewing a demo video. Nobody in my household will climb a ladder higher than 4 feet – but I didn’t care. I just thought it would make a wonderful house accessory regardless of practicality.

A few years later a research project on industrial ladders warranted a closer look at this market: industrial ladders are a very serious business on both sides of the U.S./Canada border:
• Serious buyers (such as contractors) rely on serious (and complicated) looking comparison charts – detailing three or four basic ladder categories grouped by key factors (such as weight and height limits). In Canada these are based on CSA ratings and classifications.
• Ladder companies don’t sell ladders – they sell ladder systems. Even the 24-in-1 is available in three different models.
• And don’t forget key features – like tip and glide wheels and triple locking hinges and Light Wave Technology.

Little Giant is not much of a competitor in Canada’s industrial market but the company has developed a unique marketing (and branding) approach:
• It leverages its corporate brand name especially with the 24-in-1 ladder (which is targeted at consumers).
• On the industrial side the company has developed some sub-brands – the Synergy; the Big Trex; the Skyscraper.
• Little Giant also markets a whole series of ladder accessories: leg levellers; wing spans (for uneven surfaces); ladder racks.
• And there’s an info centre: with instructional and demonstration videos focussing on ladder configurations, ladder safety and ladder maintenance???
• Major players in the Canadian market adopt similar approaches – but not to the same extent.

There are many industrial product categories that have become more complex – the residential basement insulation market in the U.S. is dominated by three types of products: tar; membrane sprays; the much more complicated air gap drainage systems. Air gap products are fairly new to this market and are much harder to market.

There are several implications for the marketing of more complex business products. There has to be more of an emphasis on:
• Communication strategy - making sure target audiences understand all aspects of the product category (think about the home insulation company that realized its sales staff did not understand how its product worked).
• Target audience priorities - what messages to articulate and emphasize (think the marketer of construction materials emphasizing a 40-year warranty to homeowners who move every five years).
• Differing priorities among various groups – for ladders this could mean owners versus purchasers versus users.
• Understanding the difference between purchase requirements versus brand differentiators.
• The role and importance of the various distribution channels in the purchase process, as a source of product information; as a source of influence (think about research where we underestimated the role of retailers like Home Depot in the distribution chain).

The Humanity and Biology of Brands

First a confession: When I was at University, I struggled with the concept of branding. An odd thing for someone in the business of building brands to admit, but it’s true; as a concept branding never made much sense. Every book had a different theory, every agency offered a different approach and every expert had some unique model or metric. Depending on who you talked to, or what you read, a brand could be a pyramid or a personality, an experience or an equation.

It seemed that branding was either the most compelling and complicated topic in marketing, or it was a load of crap.

Now an insight: Brands are like human beings. They exist as a mirror of our motivations, reflecting our ideals and dreams, fears and frailties. Nothing can exist in branding that doesn’t already exist in our everyday lives. In fact, if we want to better understand brands, we don’t need more complicated metrics, we need to better understand ourselves.

So how can we gain a better understanding? We need to go back to basics and re-consider the psychological and biological parallels between human beings and human brands.

Just like people, brands are born. Where a brand is born and to whom, are important factors in determining its development. A brand may have great nature (visual appeal or personality) but without the right nurture (parental support and security) it may never survive. As marketers, what type of parent are you and how will that affect the development of your brand?

Just like people, brands go through adolescence. Very few brands can become an overnight success; indeed it takes time to establish an identity and become independent. Attempting to circumvent this process can be as detrimental for a brand as it is for a person; the childhood stars of today are the forgotten failures of tomorrow (think Macaulay Culkin or Extreme Football League). What was your brand’s adolescence like; did it experiment and gain experience?

Just like people, brands need the right environment. As Prof. Richard Florida found in his study of cities, “the place we choose to live affects every aspect of our being. It can determine the income we earn, the people we meet, the friends we make, the partners we choose.” The same can be said for a brand. A brand must pick a place that will help it build relationships and earn the income it needs to survive. Is your brand in the right environment, an environment that matches its motivations?

Just like people, brands can get sick. We like to believe that we, and the things we create, are invincible - but nothing could be further from the truth. Human beings and brands are fragile and prone to illness. Even the strongest leaders can get sick (Bill Clinton or Toyota) and without proper treatment they may die (Michael Jackson or Pontiac). When was your last brand check-up, do you have insurance, or are you working your golden goose to death?

Just like people, brands must reproduce. Reproduction isn’t just fun, it’s fundamental to our survival. By reproducing we allow our species to adapt to the environment and evolve. A brand must also reproduce; it must adapt and evolve itself in order to maintain relevance and to respond to changes in the environment. Is your brand ready to reproduce?

As a brand strategist, having worked across three continents with many multinational clients, I believe there is something missing in our understanding of branding. As a morphological researcher, I believe what’s missing is an understanding of their humanity. Because brands are more than a metric or a model, they are a mirror of our psychological and biological motivations; and to properly understand them, we must better understand ourselves.

By Nick Black, Vice-President of Strategic Insight, Concerto Marketing Group

The Tribe has Spoken - Are You Listening?

I met Marty Neumeier (renown speaker and author of Zag, Brand Gap) when he was conducting a workshop at the Design Exchange. In conversation, Marty shared that he began his career implementing brand strategies only to realize there were a lot of flawed strategies that execution couldn’t fix. This prompted Marty to focus his effort on brand differentiation – the #1 strategy of a successful brand in Marty’s eyes. If you’re looking for verification of the power of differentiation think IPOD. 4th to market in the MP3 player category, Apple has 72% market share, a price point that is 2 to 5 times higher than the competitors....well I think you get the idea. High performance brands are way out in front in terms of loyalty, profitability and they’re tough to beat – unless of course you find your own unique way of differentiating.

One of the first rules is you can’t be all things to all people. In the session Marty talked about knowing your “tribe”. I caught up with Marty to get further clarity on why the tribe matters. “You have said the emphasis today needs to be on the Unique Buying Tribe rather than the Unique Selling Proposition. Can you explain that?”

Marty Neumeier: The Unique Selling Proposition was the brainchild of Rosser Reeves, an advertising genius from the "Mad Men" days. He worked for the Ted Bates agency and wrote a bestseller called, "Reality in Advertising." His thesis was simple: Advertisers need to focus all their energy on one strong claim or one strong concept. In a time when the industry believed "the more you tell, the more you sell," this was a refreshing idea that caught on almost immediately. It was so powerful, in fact, that to this day advertisers search high and low for "the big idea" to hang their campaigns on.

There's nothing inherently wrong with this inclination, as far as it goes. Without a unique value proposition, your campaign---and your business---will lose focus and have no compelling point of differentiation. The problem is that the principle now seems dated. Customers today don't like to be sold. What they like to do is buy, and they buy in tribes. Every brand has a tribe that supports it. If you talk WITH your tribe, they may well continue to support it. If you talk AT your tribe-using manipulative one-way conversations-they'll tune out in a New York second.

So rather than focusing on a Unique Selling Proposition, focus on a Unique Buying Tribe. If you find the right tribe and give it the right stuff, you'll get enough love to sustain your brand. People crave tribal identity. What they want to know is, "If I buy this product, what will this make me?"

Thanks Marty for sharing your insights. Marty is currently Director of Transformation at Liquid Agency.

Who Won the Superbowl?

Okay, I admit it. While you're reading this during the week at some point after the SuperBowl aired and know who won, I'm sitting here writing this blog entry on SuperBowl Sunday instead of watching the big game. And while I'll be interested to hear who won (Go Saints?), I, like you, will go online tomorrow to find out who advertised and which spot was the funniest or most outlandish. And then I'll go on with my day and probably never think about those spots ever again.

However, the Superbowl is the most watched televised event of the year with some 100 Million people expected to watch. According to a recently televised report, a 30 second spot on American TV during the Superbowl will go for between $2.5 and $2.8 Million. That's about $80,000 a second!

But the larger question being asked these days, especially by a lot of young people I know, is whether that money could be better spent. Especially with everything that's going on in the world right now.

Now after years of producing some of the most memorable Superbowl ads in history, PEPSI is asking the same question and has decided not to run an ad. Instead, they're going online with "The Pepsi Refresh Project". http://www.refresheverything.com/

According to their "refresh everything" site, they're looking for people, businesses, and non-profits with ideas that will have a positive impact. "Look around your community and think about how you want to change it." Submit your ideas and vote on your favourites. Those chosen will be awarded up to $250,000 in grants in categories ranging from Health, Arts & Culture, and Food & Shelter to the Planet, Neighbourhoods and Education.

And the so-called Pepsi Generation is eating it up. This is just one example of what's going on right now. We saw the impact the internet and social media had and is having post-Haiti. This is more of the same great trend. The NetGeneration is getting involved and looking for something more fulfilling than a gratuitous 30-second spot where the money spent to buy the media could eradicate so many issues affecting Haiti, Cambodia and the Congo to name a few -- and those affecting us right here at home. Pepsi is on to something and other brands ignore the trend at their peril.

Green Marketing and Brand Strategy

The latest research indicates that uncertain economic conditions have resulted in a decline in the core group of “Green Involved” consumers who would pay a premium for green products (17% in 2008 to 15% in 2009). The study (nationally representative sample of 2,465 adults, ages 18+) indicates that 2.7% of shoppers account for 70% of “informed and conscious green” purchases. Moreover, only 1 in 10 “green” shoppers is an “organic” shopper. Grocery transactions tend to be larger when green products are in the cart. In addition, 38% (45% in 2008) of Canadian consumers feel "highly concerned" about environmental issues. Even though consumers who feel “highly knowledgeable” about these issues increased to 29% (26% in 2008).

Transition to the mainstream

The transition has been driven by mainstream brands. Today, green has become another product attribute in a matrix of good-better-best benefit hierarchies. Tide has "biodegradable" ingredients. Others are labelled concentrates and cold water detergents. These are add-on benefits and enhance the core value proposition of the brand. They do not replace that core value proposition (superior product performance).

Today's customers are more demanding. They don’t believe all the claims being made by marketers- a fall out of greenwashing. Consumer scepticism has led marketers to include eco labels in their communication strategies. North America has over 350 eco-labels offered by trusted third parties. Marketers have laucnhed blogs and social networks with "fans" who contribute new product ideas. Method has its own Facebook page complete with a wall of comments from many of their 7,415 "fans" and a Twitter following of 3,284 users. Tide has 104,235 Facebook fans.

Please email me for additional insights from Arcus Consulting Group's studies on changing market drivers & successful strategic responses.

Confirmation Bias and Brand Loyalty

Our minds hate change. Several studies have shown that people are twice as likely to seek information that confirms their beliefs than they are to consider evidence that contradicts them. This "confirmation bias" can influence how consumers and marketers make decisions.

Henry Ford famously said, "If I had asked my customers what they wanted, they'd have asked for a faster horse." In other words, the road to true innovation is rarely illuminated by customers telling you what to do next; they may often not know what they want next or rely on a "confirmation bias" about their preferences.

Most innovative marketers say that fighting confirmation bias is a never-ending battle. But if you can't conquer this gremlin of your own mind, you don't stand a chance of outwitting your competitors.

We see this behaviour in all our decisions. A case in point is how retail investors hold on to stocks in a falling market, believing that the markets will rise, without any empirical evidence that this is likely to happen. Consumer confidence is a big driver of purchase behaviour. If consumers believe this recession will last a lot longer than it will because they recently lost their jobs, they are likely to scale back discretionary spending even after they find a new job because of a "confirmation bias".

In short, the human mind acts like a compulsive yes-man who echoes whatever you want to believe. Psychologists call this mental gremlin the "confirmation bias". A recent analysis of psychological studies with nearly 8,000 participants concluded that people are twice as likely to seek information that confirms what they already believe as they are to consider evidence that would challenge those beliefs.

Why is a mind-made-up so hard to penetrate?

Psychologists say its easier for consumers to repeat decisions than to take new ones. Whatever decisions consumers are inclined to make, are the decisions consumers are likely to go about justifying. It's simply easier to focus our attention on data that supports our preferences, rather than to seek out evidence that might disprove it. "Confirmation bias" is one of the biggest drivers and often under reported influencers of brand loyalty. It transcends the usual influencers such as product performance, emotional empathy and brand recognition.

It also is easier for people to rationalize than to be rational. Consumers and marketers are very good at cooking up post-hoc explanations of why our predictions didn't work or why we made some decisions. We tend to reinterpret our failures as near-misses.

The more you learn, the more certain you become that you are right. While gathering more data makes people more confident, it doesn't make their predictions much more accurate. Each new fact makes you more inclined to find another fact that resembles it, reducing the diversity and value of your information.

Confirmation bias contaminates the thinking of brand preferences of consumers. A lot of psychological traps can be combated with humility, but on this one, that doesn't help. For example, several North American auto companies missed the significant growth opportunity in fuel efficient cars because they clung to outdated strategies for gas guzzling SUVs and eroded brand value with carrots such as 'employee pricing'.

So how can marketers counteract confirmation bias?

A way to approach it is to imagine that you have looked into a crystal ball and have seen that your strategy has gone bust. Next, come up with the most compelling explanations you can find for the failure. This exercise, which some of the most innovative and successful marketers have integrated into their research process, can help you realize that your beliefs regarding why consumers might or might not prefer your brand might not be as solid as you thought.

Try estimating the odds that your analysis is wrong. Let us say that you reckon there is a 20% chance of an adverse outcome; that is like saying you will be proven wrong one in every five times. This way, if the investment does go awry, you will be less likely to dig in your analytical heels and desperately try to prove that you are still right. This procedure provides "psychological cover for admitting that you're wrong."

Show your ideas and strategies to another person you respect whose ego isn't already invested in the decision. Ask: If you didn't have to take this decision, would you still agree with it?

Run an imaginary strategy alongside your real one. There, you can change it at will, with no risk to your brand portfolio. On that blank slate, would you do more—or less—of your existing approach to strategy and consumer engagement? Some organizations require each team member to run a stress test of their brand portfolio and to justify any differences between their paper strategies and the company’s real-world plans. It helps senior executives know what people really think.

Before you decide on a marketing or business strategy in the first place, write down a statement of what would compel you to change your view of the strategy. If any of those influencers come to pass, the written record will make it harder for you to pretend nothing has changed or that you don't have to do anything in response.

Please email me if you would like to receive Arcus Consulting Group's series on "Better consumer engagement strategies".

Watch This...

http://www.youtube.com/watch?v=sIFYPQjYhv8

Are you in?

Marketing Through Customer Engagement

Over a last 6 months I’ve been hearing a lot of companies talk about changes in marketing, changes in the way we target and communicate with our customers. Recently, I attended a conference where the focus was on Customer Engagement Agency Model. The conference included good representation, with recognized industry leaders and speakers, both on the marketing service provider (MSP) and client side.

Several years ago marketers were ahead of technology, coming up with ideas and strategies that couldn’t be executed as the technology that existed then did not support most of their initiatives. Today, most if not all marketers, in order to be competitive, need to catch-up with ever-growing technology. With online marketing, especially social media, customers have more channels to share their comments and feedback more quickly, reaching millions of potential viewers instantly. New marketing models allow companies to integrate online and offline channels and, through social medial listening tools, marketers will be able to react quicker to consumers’ needs and feedback. Twitter, Facebook, My Space and other channels provide consumers with many ways to get feedback from other consumers (not from product companies directly) and to read reviews of products they are about to buy. People trust their friends and colleagues more than marketers.

The end goal is for consumers to become brand advocates and help companies market and sell their products. Online analytics coupled with technology and marketing strategies will help marketers reach out to the right people at the right time with the right offer.

Is your marketing strategy changing in order to stay ahead your competitors?

Jacob Ciesielski, Partner at FSA Datalytics, is a member of CMA’s Marketing Technology and Database Intelligence Council