Media buying is complex. Why are brands not buying early stage digital media? It would still occur if they saw results.
If you think about a customer journey, the earliest stage is awareness. In the old days, traditional media was very good at driving awareness and consideration. It had reach, frequency, and duration that fueled results into direct response channels. Today, we are missing tradition media ‘air cover’ for brand value creation. Digital is not yet capable of driving the awareness and consideration stage efficiently due to cost and market dynamics.
The downside is publishers are more than happy to target but don’t we see in-store conversion rates? Media is oversold.
Its possible to find people who have a ‘job to be done’ if you can find predict their reason to buy, using theories of why they decide. You can avoid early stage media and drop into an excellent customer base, removing 90%+ of the media based methods.
Using predictive personality traits of people, combined with CRM data, you can create a look-a-like audience and reach people using the later stages of the customer journey.
I created a simple way to predict which business types will do well over the next 5 years. Looking at the results does line up well with retail news. For example, cosmetics and shaving contact lenses, contraceptives, hair loss, anti-aging, and skin care all fit well into a self-focused category. These businesses are predicted to do well and challenger brands, as well as market leaders, appeared to be holding their own. Some of the large incumbents are also a challenging the status quo and redefining how these products are sold.
While some of the categories at the bottom of the list are challenging, no one is immune to disruption or opportunity. Such topics as luggage, socks, and bedding all face uncertain futures. For example, bedding is ripe for disruption once distribution is solved for the better. Furniture feels like a difficult topic on many levels. Some of the market leaders are not performing well as lifestyle habits change in America.
While this data is not conclusive or tactical it may give insight into where to place bets for venture capital. Who is weaker could be disrupted with the technology core or investing in the top of the scale can see big revenue opportunities where are you see gaps in the market.
It’s always the big brands. They build the skills and capabilities needed to drive sustainable growth. It’s not early on that they do this it’s usually much later in their history do they find a need to define people and segment according to something unique.
Netflix has been the leader. They have gone out of their way to create products based on a deep meaning of who people are and predict what they will need. Can you imagine building an entire show and series based on the prediction of a customer?
Regular Hollywood is starting to do that, but it’s leaders like Netflix that are paving the way for many others.
Is your company a market leader or disruptor that is trying to find a deep understanding of who people are? Are you using data from the past to do it for creating predictive models based on nothing from their purchase history or click history?
In the next five years, we will see more disruption proportional to organizations that commit to a deep understanding of people and their ‘jobs to be done.’ The theories are grand but having the technology to execute at an ever faster pace is where this is all going. Buckle up.
By the 1960s consumer-oriented marketing begins to take shape. I was privileged to meet one of the first “mad women,” a real Madison Avenue Ad executive. She told me her favorite story was salvaging the message and marketing of the 747. The elements of early consumer marketing were taking hold.
As early as 2006, consumer-driven answers started to take shape with the advent of more advanced CMS and precision targeting. A big factor was media was still cheap, and the economy was great.
Today the consumer is in the driver seat. Social, ratings And a host of other democratized answers give us a flood of data about products and services. The downside is there’s far too much data, and it takes a great effort to learn the actual story. For example how many 4.0 or above restaurants have you been to lately but just don’t fit who you are?
It’s great that the customers in control and people are thinking customer centricity and personalization. As media costs keep rising, We need to bring CRM and look-alike CRM to the table.
While media companies need to make profits, overreaching 95% is not tolerable for many smaller businesses. Companies need to precisely create look-alike audiences based on CRM and theories of why people buy. It’s Jobs to be Done Theory, but the execution must be through media channels and creative for profits to be realized.
If you’re not creating a look-alike CRM, you’re in a fools game of overreaching people that will never buy. Never. If your conversion rate is not acceptable, you’re overreaching. If your cost per acquisition is not acceptable, you’re buying far too much media.
This is an in-between time. A lot of things have been done and done well, but it’s time to focus on who the customer is and their Job to be Done. It can be discovered by understanding their traits, not demographics. It can be realized through one-to-one media not based on the KPI’s of the past but based on theories of people, their traits and personalities.
At its core, the current client-server architecture is broken. In today’s applications, the server is at the center of trust and authority.
To trust the server, you have to trust the millions of lines of code that form these servers and the operating systems they depend on. Far worse, we also have to depend on all the people that maintain the systems, the systems those people depend on, and so on. Internally, you have to trust your own IT staff, admins, and others who have the ability to access data they lack the legal or policy authority to see. In classified spaces, you see an example of this with system administrators being granted special clearances to be able to administer conventional services such as wikis and email.
Any one compromise within the system — from security bugs in the server source code to a compromise with any of the innumerable vendors in use within the modern enterprise, to compromised or malicious internal privileged users, can bring the entire system crashing down. The data in the modern environment is too important to have single points of failure for the entire system.
A secure software platform for effortlessly building communication and collaboration software in mission-critical environments.
Software for Mission Critical Collaboration
Meeting the mission needs in the modern world requires tools that enable collaboration, communication, and coordination with greater ease and flexibility. These tools need to not just serve individual teams but must be flexible enough to work with mission partners, other companies, and other governmental organizations. No more can one team “go it alone” and expect success, but a wealth of knowledge and communication between a wide variety of actors is necessary.
Traditionally, it has been seen that making communication and collaboration easier has meant making it less secure, or greater security necessarily means decreasing ease of collaboration.
At SpiderOak we believe that the 21st-century mission requires tools enabling both greater collaboration and rock-solid assurances of data confidentiality, integrity, and authority.
Is the year-end review and yearly planning working for you? Startups and SMBs might not know what this is but big business does and it’s not working like it once did. This document talks about the fix but why is it not working?
Things move too fast now. Management process and the theories that drove it well a few decades ago are struggling to keep up with the speed of technology….again. It’s different this time. How people decide is changing, a new generation that has many options can take an old product line out within a few years. Example: BHT in cereals — not cool anymore. No yearly review is going to adjust fast enough.
Around 33,000 products are launched each year and around 30,000 never see next year.
For startups, this process seems useless. Things move too fast and the problems associated with slow-moving decisions are all too obvious. For big companies, growth and production are more systematic. This study indicates big is trying to think small. It might work if they hire and retain the right people, nurture the thinking of innovators and most important, embrace understanding people at a much deeper level.
The revised system explained in this deck is worthy of attention for anyone. No more annual reviewed, 360 feedback but all speed, agility and real-time feedback are great ideas in the right environment. IMO, the best way to make this possible is to create a company around segments of customers and potential customers. Having a source of truth and a deep theory of customers needs and ‘jobs to be done’, tied to results is the start.
Constant learning becomes centered on new ways to learn about customers and people who should be customers — not marketing metrics but people metrics. What is in it for them? If you cant define that, stop.
Understand people at a deep level
Connect the results of your theories to sales data
Have theories combined with data from the past. No one way is the absolute answer.
Then, read this revised material and apply it appropriately.
How can technology deliver happiness to the organization and its customers?
My mission is to seek a ‘balance of delight’ between the people within the organization and its customers. Without this balance, things are temporary.
Throughout my 23 years, I have helped build organizational capabilities to integrate, disrupt and scale revenue by finding and implementing a technology core.
By converting business theories into practical answers for organizations, understanding the people, product, customers and their needs, a business and its customers can be delighted and happy. An organization that overfocused on certainly is doomed to fail. An organization with no certainty is picked off by competitors. The right OS is designed to avoid the edges.
As Gary Kelly, CEO of Southwest says “all roads lead nowhere if you don’t know where you are going.” You can interpret this number ways. If you’re over focus where you want to go, you’re building a dirt road. If you’re creating more prediction, designed around your capabilities and the demands of customers, you have the ability to scale. I have made it a core belief by combining predictions of the future with real-time data and data from the past. No one version of data is better than the other. Its the combination of different sets that don’t always like to fit together. The overarching operating system that combines them all, as needed, where needed, is what organizations need. I have made an effort to build these systems. First, manually, then by consulting and finally using core technology built into the organization itself. It’s the same way you live life, the way you drive, the way things happen in the real world. We don’t write it down, and in business, we need to start. That core technology begins with who the customer should be and why they buy.
And it’s not consulting. We have to convert business practices into software. I learned from the masters such as David Oreck, who utilized the Sarnoff principles, as well as Clayton Christensen of Harvard. Their theories and practice are part of the way business operating systems should work. They don’t have a technology core but that does not mean you can’t make one.
I helped transform Performics from a 3rd place affiliate marketing technology into the world’s largest search engine marketing company. It became such because I utilized the Sarnoff concepts and scaled search beyond expectations. Brands embraced it, and we grew a company worthy of sale to Google itself.
My company, MakBuzz got 350+ brands online, worldwide, even before the platforms (namely Google itself) was ready. We pushed the limits of what digital was designed for. Built as a direct response medium, digital was and still is limited in driving the complete customer journey. In 2000, we challenged that, broke it and create hundreds of millions in value by 2004. We helped eCommerce establish itself and once drove a sizable amount of eCommerce transactions. But we did not sit still.
At Vodafone, I develop digital best practices in 18 counties. This work touched the majority of their 350 million customers at the time. By 2012, we changed how they measured digital, built global dashboards, created goals, means, and methods, which drove acquisition and how they valued a new customer.
Not content to remain a digital marketing practice, I saw the problems and limitations of digital marketing and moved onto sales intelligence automation and digital transformation. You cant do just one part of the business. The whole is far greater and more interesting.
I helped convert several brands from siloed digital practices into integrated organizations. By understanding the impact of all media to eCommerce, store and call center, I found a way to ‘right size’ the complete customer journey. By 2013, we presented our findings on Google’s main stage in Mountain View and several other venues worldwide. It was then the limitations of digital became apparent. As long as digital eys are cheap, it works. Not so much when the cost of a sale exceeds other means. When looking at CLV, the story gets complicated.
In 2015, I applied our advanced CRM technology at several organizations, discovering something media could never solve — why people buy and what delights customers. By segmenting people based on desire and need, I found a way to bypass media altogether. Creating a look-a-like CRM redefines how big the company is and where to prioritize departments and budgets.
Today, my focus is on running businesses. Many great ideas need sales intelligence and automation and a far better understanding of why people buy. No one part is more significant than any other part of the business. Knowing what to prioritize, And how much can be well-defined by understanding a precise, total addressable market. Not designed for and by media but in a way to solve customer delight and long-term profitability of the organization.
Significant opportunities exist to grow organizations. Most organizations operate at a fraction of capacity (like 20 to 30%) and thus, unlocking that value is happiness for many.
In my career, I have seen moments of pure happiness between the organization and its customers. Those are the times when people talk about what you sell, willingly, without incentive, without fear. The organization roars. It’s loud. Growth and profits come. The best of those times come with predictability. You know where you be in a month, a year and beyond. Confidence and certainty abound. The organization is not ripping people off and found a way to have balance, happiness, and scale.
Is this random? Nope. Organizations that don’t adjust to competitors and customers needs find themselves flat, lost. It’s the classic definition of disruptive innovation.
Understanding the various segments of customers and why they buy, what delights them, we can build an organization that is predictable. That same concept and software define the total addressable market; it defines budgeting and where investment should be spent to yield the most significant results.
To repurpose and distribute budgets and profits based on combining ‘data of the past’ with ‘theories of the future’ is the practical side of the modern organization. A budget is not a yearly event — its based on a genuine, total addressable market that is living and breathing in real time. It is the foundation of where the organization can go.
Just think: your dog knows where the Frisbee will go yet does not know polynomial math. How can the dog predict? Imagine the same for business. Built-in growth OS, not piecemeal point solutions.
When we communicate one-on-one, we learn a lot about people, who they are and what they will do next. Think about friends and family. You know their next moves. You know what they will like and what they don’t and your ability to predict gets pretty darn good in a short period of time. How many times have you heard “I know him like a brother”.
Some people will claim that they can figure a person out within minutes. How do they do it? What is it that allows us to predict? It has a lot to do with how we interpret language. We can read body language but more likely it is the words we use and in what order that lets us form deep thoughts about a person’s traits. Have you ever called someone an ‘old soul’? Those are hints at traits.
Very often people are judging others by what they say. We are naturally programmed to listen to language and judge people by word usage and patterns.
I found a way to use the power of psycholinguistics and Trait theory for good.
It’s not about selling people the wrong things or trying to trick them into voting for somebody or worst, trick them into spending far too much time within an app; it’s about giving people a choice based on who they are and what they deeply desire.
In our day-to-day lives, jobs arise. Sadly, we have to wade through swamps of misinformed marketing, dull messaging, and noise to try to figure out if the product and services we are pushed to look at will solve our needs. Clayton Christensen calls this ‘shopping’.
In my research, we have to determine that Psycholinguistics and Trait Theory are causal to profits and revenue. We shop and decide much faster if the product matches who we are first.
For example, if we are deeply introverted, we are not likely to ‘hire’ a red convertible on a trip and attend a party to make us happy. Those products may solve a need, but they are almost never hired by certain people even if it is clear they can make us happy. So we would suggest those people need to be more adaptable or challenge themselves.
Our research also suggests there are very few personality types that will hire any given product, profitably. The calculations so far suggest 1 in 5 is the upper bound of who will hire any given product. Most average marketing organizations tend to ‘spray and pray,’ even if they have sophisticated marketing people. The is a dreadful ‘averaging’ of very different people. This results in more downward pressure to profitability find people who will hire your products. The wrong money on the wrong customer takes away time and effort to reach those who will hire our products.
We also found that the differential from best to the worst customer is 10:1. 10x is no small odd yet when we look at net new customers and the actual cost of acquisition, we should do something different.
Given these two metrics, it is no surprise that conversion rates are single digits online.
It is also no surprise that store conversion rates are better because salespeople can adapt and stores can lay out many different ways to solve our jobs to be done.
Why people buy is encoded in our personalities and traits. These are things that are thousands of years old. Who we are is how we form societies and tribes. It’s what makes us live and work together. In an age of many choices to solve our jobs to be done, we need better ways to execute jobs to be done, give better choices and not abuse our customers and their needs.
Cutting lawns means many different things to many different people.
Electric equipment has the possibility to change how people see lawn care: the days of gas and long extension cords are coming to an end. The right company that focuses on understanding customer segments in a very different way will seize market share and own the market.
Currently, equipment is sold by facts and figures. But this is not the way people emotionally embrace change.
Psycholinguistics tells us along with the trait theory that people are buying products for very different reasons.
What is your reason for choosing this product?
Environment
Convenience
Noise
Safety versus gas and the electric wire
Status
Efficiency
Less maintenance
Each reason may or may not have a big connection to the other reason. For instance, somebody interested in reducing emissions and creating more efficiency when cutting the grass might not have any connection to a person interested in reducing noise and safety concerns.
Marketing needs products based on facts and figures. This solves some conversion rates but not all. The dramatic change in conversion rates reminds me of when Walmart promoted the CFL in 2006. They dramatically shifted the market from incandescent to CFL by launching a series of campaigns they change the perception of the light bulb.
The same can be said for Apple over a variety of products, over many years. They began selling products based on an idea to “think different”. The RAM, storage, and capabilities were second to the philosophy that Apple sells to this day.
The manufacturer or the reseller is in position to do this now.
Understanding psycholinguistics changes the ad copy, but more importantly, it changes conversion.
By segmenting people based on why they decide and why they would change from traditional to battery-powered lawn care is where the manufacturer and the reseller need to go.
Psycholinguistics of gardening in the State of Iowa (just the over-indexing traits):
Gardening on a surface level may be a relaxing hobby, but when you go into the psycholinguistics of it, it says a lot about the people who garden.
Gardeners focus on personal concerns and feelings. They’re socially oriented around family, and they are perceptive. They live in the present often have high expertise and confidence. They tend to be not as concerned about money and do not think analytically or logically, thus using feelings to guide their decisions.
Over-indexing in certain personality traits has many different meanings the quick review of gardeners in Iowa indicate intellectual curiosity open to emotion sensitive to beauty, considerate trusting and trustworthy, yet open to or are vulnerable to stress. Sometimes ordinary situations can be threatening. Generally, they have positive emotions, are assertive and see stimulation from others. There’s great appreciation for art, adventure, imagination, and curiosity.
They don’t make fast decisions. They’re not controlling or focused on themselves.
By understanding psycholinguistics and personality traits, we can better understand what makes a gardener garden. By understanding the gardener at a deeper level, we better understand what marketing copy and messaging we’ll convince them to move from traditional power equipment two battery. It’s not always about saving the environment nor is it still about efficiency. It just depends on the person. By segmenting people and messaging hey brand stands a far better chance to improve conversion and market share dramatically. Dominating this market allows your brand to expand to other areas in the future and build a long road toward success for years to come.
We plan on helping your brand succeed. Please write so we can provide more information about how to approach the market and how to create market share growth. By doing these things, we create customer delight along with customer equity. We predict what comes next and we build potent experiences for both the company and your customers.
