September 2017 Archives /marketing-news-issues/september-2017/ The Essential Community for Marketers Mon, 22 Jan 2024 20:46:31 +0000 en-US hourly 1 https://wordpress.org/?v=7.0 /wp-content/uploads/2019/04/cropped-android-chrome-256x256.png?fit=32%2C32 September 2017 Archives /marketing-news-issues/september-2017/ 32 32 158097978 Avoiding the ‘Existential Threat’ of Disruption in the Middle Market /marketing-news/avoiding-the-existential-threat-of-disruption-in-the-middle-market/ Tue, 12 Sep 2017 20:51:34 +0000 /?post_type=ama_marketing_news&p=2396 Most midmarket companies will experience disruption, but that doesn’t have to mean an interruption of business

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Most midmarket companies will experience disruption, but that doesn’t have to mean an interruption of business

Amazon disrupted retail. Uber disrupted cabs and limos. Twitter disrupted an entire presidential election. Disruption has societal implications, forcing businesses to change from the outside-in to meet consumer needs and keep up with competition. 

The middle market is no exception, says Geoffrey Moore, an organizational theorist and author of . Manufacturers, doctors and lawyers will be disrupted by technology just the same as bookstores, New York cabbies and the American electorate. 

The disruption of digitalism is akin to the move from the Agricultural Revolution to the Industrial Revolution, Moore says. Instead of new farming techniques bolstering a larger and healthier population, the Digital Revolution is increasing business efficiency, easing communication and giving consumers push-button gratification. 

“You just can’t imagine any industry not eventually having this digital layer built into it,” Moore says. “It’s probably a 50-year journey for the entire economy, but there’s no going back.”

Midmarket executives know disruption is coming, per Capital One’s report. Nearly three-quarters (73%) of those surveyed say they expect to experience disruption in the next three years, pointing to Big Data analytics and the Internet of Things as the main culprits. However, many executives don’t see their businesses as being susceptible; although 43% say their industry is quite or extremely vulnerable to disruption, only 18% see their own company as vulnerable to disruption.

“One reason for this discrepancy is that an overwhelming number (79%) view disruption as an opportunity, not a threat,” the Capital One report finds.

Is Disruption an Existential Threat?

Midmarket companies must first know what disruption is before understanding if it presents a threat or an opportunity. , says he defines disruption as an event that can impact a company’s client base; he believes the Digital Revolution is the main disruptor. Moore, however, says disruption goes deeper: “[It’s] when a new technology takes the marginal cost of something that used to be expensive and hard to deploy and makes it virtually free and trivial to deploy.” 

Businesses may be able to take advantage of this new, virtually free technology. However, Moore says that when a business model is based on an older, expensive version of technology that is now nearly free, disruption can be a big threat. In most cases, newer technology can’t simply be plugged into the old model, so companies either become an early adopter of the new model and scrap the old technology or keep using the old model. The problem with the latter case is that companies based in this new technology and entering the market for the first time will have an advantage and immediately attack old-model businesses. 

These attacks, Moore says, can be an “existential threat” that midmarket companies cannot ignore: “A disruption creating an existential threat to our business, meaning if we don’t get out of the way, we are going to get run over and there’s no defense against it,” he says. “You have to figure out some way to work around it.”

​​“Existential threats” may be a reason why so many executives in smaller companies resist disruption. Capital One’s report finds that companies with annual revenue between $2 billion and $3 billion are more likely to see disruption as an opportunity and pursue disruptive strategies of their own, while midmarket companies in the $100 million to $499 million range tend to see disruption as a threat to avoid.

Financial resources may be the biggest factor in how midmarket companies react to disruption, McCarrick says. The Capital One report says 75% of executives believe they’ll need additional capital to stay competitive in the heat of industry disruption, which means they’ll need to find funding for R&D or digital adoption. However, Moore says middle market companies are more likely to divert funding from one operating expense to another. Both Moore and McCarrick agree that it is essential for midmarket executives to assess their company’s capital resources before planning for disruption. 

How the Middle Market Can Prepare for Disruption

The least companies can do to prepare for disruption, McCarrick says, is habitually think about it by asking questions like: What’s disruptive in their market? What could ruin their company? How could the company get left behind? Retailers, for example, should be thinking about how they can sell products online like Amazon. Many midmarket businesses seem to be OK with “the least” they can do, as Capital One’s report shows 89% are taking one or more measures to defend against disruption, but only one-sixth of midmarket executives feel quite or extremely unprepared to deal with a disruptive event. 

“Maybe the strategy is to do nothing right now and then see how this morphs because you think the demand for your particular product is not strong enough,” McCarrick says. “But if you’re not thinking about it at all and you don’t have some dedication to try to figure out what’s happening in the market, you’re at a much higher risk of being disrupted.”

Even though many executives feel underprepared for disruption, Moore says midmarket companies have an advantage to dealing with it because they can “dodge faster” than Fortune 2000 companies. Midmarket companies serve a smaller customer base, which can offset technological disadvantages. However, Moore says midmarket business owners need to start a piecemeal move toward the Digital Revolution if they hope to keep the doors open.

“The thing you can say is, ‘Look, we don’t have to outperform Amazon or Apple or these incredible disruptors. All we have to do is show our customers and our future prospects that we’re on the same path,’” Moore says. “‘We will listen to and observe what these people have done and we’re trying to absorb those lessons in a way that we can afford and that doesn’t throw our business into a tailspin.’ ”

In other words, companies should adopt disruptive technology according to what makes the customer’s experience easier and better. Moore suggests taking two or three tasks that both make the customer experience more attractive and move the company into the Digital Revolution. 

When to Be Disrupted 

Thus far, 15% of middle market companies have faced a disruption that sapped finances, per Capital One’s report. These companies likely didn’t have a choice, but others may. Moore says a business may find competitive advantage in adopting new technology early. However, midmarket companies also have a difficult time hiring high-quality talent for digital transformations, increasing the chance that a technological overhaul will fail. 

“My advice to most middle market companies is, don’t try to go early,” Moore says. “Then the question is, do you go when you have to go?” 

Companies in sectors under “direct digital assault” of disruption should do what they can to adapt to changing times, he says, as waiting to adopt new technology in these cases can put a company out of business. Dealing with disruption becomes a balancing act of not moving too soon, but certainly not moving too late, either. Most middle market companies, Moore says, are trapped in the middle. “One dramatic failure in a mid-market company is usually catastrophic.”

No matter which way a company moves into the Digital Revolution, it must stick with a single adoption strategy. Moore wrote in a 2016 essay for the National Center for the Middle Market, titled that picking one strategy and sticking to it gives midmarket companies a better chance of survival than trying to juggle two or more strategies.

Even when disruption goes well, midmarket companies may find themselves in a conundrum: New efficiencies may mean eliminating old jobs. Moore says this is something every middle market executive will need to think hard about, as they are likely very familiar with their employees.

“You have to be very thoughtful about what that means,” Moore says. “Many companies don’t lay off [at all], then they shut their doors because they just couldn’t make ends meet. You have to be very thoughtful by saying, ‘If that’s the situation we’re in, laying off some people in a timely manner is better than shutting our doors and laying everybody else off.’”​

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How to Hire Ethical Marketers and Become an Ethical Leader /marketing-news/how-to-hire-ethical-marketers-and-become-an-ethical-leader/ Tue, 12 Sep 2017 20:43:24 +0000 /?post_type=ama_marketing_news&p=2393 An ethical company may mean more sales and fewer costs. How can marketers hire more ethical employees and become more ethical leaders?

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An ethical company may mean more sales and fewer costs. How can marketers hire more ethical employees and become more ethical leaders?

If there were a business focus that lowered operating costs, increased sales and allowed companies to palatably charge more for their goods and services, they’d focus on it straightaway, right?

Not necessarily. Ethics check all three of these boxes, according to , but many businesses treat ethics as an afterthought. LRN, a consultancy that focuses on ethics and regulatory compliance, found in its Program Effectiveness Index Report that only 45% of C-suite executives surveyed engage ethics officers when making strategic decisions, and 49% consider ethics a prerequisite for employee promotion.

Most organizations make the mistake of overconfidence when hiring, per what , associate professor at the University of Michigan, . Mayer says companies think they know how to judge the good character of a potential employee during the interview process despite research that shows their judgment on good character is the same as an ordinary person’s judgment​. 

“One comprehensive review of the data found that, on average, we’re barely better lie detectors than sheer chance,” Mayer writes. 

To focus on ethics, companies must look to ethics research. To focus on ethics research, we turn to , CEO of Ethical Systems. is a collaboration of top researchers who believe that good ethics make good business. 

Marketing News spoke with Filabi about becoming an ethical leader, hiring ethical employees and how marketers can be more ethical. 

Q: First, tell me about your background in ethics. What led you to become CEO of Ethical Systems?

A: I have worked on issues impacting business from various perspectives for many years, including as a corporate transactional lawyer, a bank regulatory lawyer at the [Federal Reserve Bank of New York], an ethics officer and now as a researcher and CEO of Ethical Systems. I am also an adjunct professor at [New York University] where I teach undergraduate business students about the role and social responsibility of business in society.

As CEO of Ethical Systems, I work with the top experts in social and behavioral science to help companies tackle their ethics challenges through the lens of human behavior. Most companies aspire to improve ethics through codes of conduct and values statements, but many find that motivating ethical behavior among employees to reach those values is a larger challenge. Companies are complex organizations and to run an ethical business, leaders need to recognize that all people are highly susceptible to social influence. What this means for organizations is that they need to not just talk about the importance of culture and ethics—which is the first step—but to also actively manage it by assessing culture and considering interventions where there needs to be improvement.

Q: What is one piece of research you would show someone who is skeptical of the impact of ethics on business?

A: How about three avenues for impact? Research shows that ethics pays in various ways for companies, and I can point to areas of research in three specific instances: No. 1 enhancing corporate reputation; No. 2 illegal conduct can be very costly; and No. 3 good governance pays off financially. 

In today’s business environment, I would also highlight the recent ethics challenges at Wells Fargo and Volkswagen to demonstrate how an ethics scandal can have far-reaching impact on a company. We don’t often highlight negative stories about companies, but these are two examples where the organization’s culture was clearly misaligned with their stated values. They can make the case for why paying attention to ethical culture is of prime importance.

Q: Is there any ethical research specific to marketing?

A: Ethics in marketing often gets down to matters of disclosure. When you are starting a company and “fake it ‘til you make it” is the motto, where do you draw the line on projecting your future valuation? When you are selling a product that has a defect, how much do you disclose to your customers? For those in marketing, I think it’s important to consider the long-term horizon of the company’s brand and whether their efforts are contributing to upholding the company’s reputation. For companies that value the ethics of their brand, it’s important for leaders to be clear with their marketing and public relations teams that honesty in disclosure is vital.  

Q: What are the common traits of an ethical leader? How about an unethical leader?

A: Research shows that an ethical leader not only talks about ethics, but also models ethical behavior and manages for ethics. When managing for ethics, for example, leaders need to be aware of who they are promoting in the company and whether they have taken that individual’s ethical behavior into consideration. It also means thinking about the ethics of an organization’s compensation plan and the type of behavior the financial incentives are motivating. Some companies have gotten themselves into trouble by driving too hard on financial goals, thus incentivizing their employees to win at all costs.  

The expressed values and leadership of a company trickles down to affect all aspects of an organization. The model of ethical culture we often refer to, based on Professor Linda Treviño’s work, recognizes the complex formal and informal systems that comprise all companies and that the main job of a leader is to align all these systems. No company can be perfect in matters of ethics, but creating a culture where employees can talk about their ethical concerns and challenges and seek support to resolve them is a big step forward to leading for ethics.

Q: How can one become a more ethical leader?

A: Make ethics a clear priority. Being an ethical leader means going beyond being a good person. Ethical leaders make ethics a clear and consistent part of their agendas, set standards, model appropriate behavior and hold everyone accountable.

[Also], encourage, measure and reward ethical leadership at multiple levels. Ethical leadership from the top is very important because it creates an environment in which lower-level ethical leaders can flourish, but ethical leadership at the supervisory level has a huge impact on followers’ attitudes and behavior. In fact, mid-level managers often find promoting ethics a greater challenge than do senior executives. Mid-level managers should be encouraged to regularly communicate about ethics to employees in their work unit, ensure that ethics performance is adequately reflected in employee evaluations and compensation decisions, be alert to exemplary ethical behavior in the work unit and—as appropriate—praise that behavior to others in the units.


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Q: Do companies usually look for ethics when hiring new employees?

A: It is very important to talk about the company’s values when hiring employees. Bringing ethics up in interviews communicates to would-be employees that the cultural environment they will be joining values ethical behavior. Peer influence is important to fostering an ethical culture, so it’s vital to communicate effectively about ethics.  

It is also the first step of the on-boarding process for employees that you hire and provides social context for future work. But, as with all matters ethics-related, hiring managers must do this in a genuine way so that potential employees understand that the organization’s values are authentically integrated into how the company does business.

Q: How important is it to have ethics front-of-mind in the hiring process? Is there any research that supports this?

A: Followers who rate their leader as more ethical , such as job satisfaction and commitment. They are also less likely to report intentions to leave the organization. This is because followers are attracted to ethical role models who care about them, treat them fairly and set high ethical standards.

Ethical leadership is also associated with more helpful behavior from employees, perhaps because ethical leaders model helpful behavior [; and ]. Ethical leadership also reduces deviant or unethical behavior in followers []. Again, ethical leaders are role models, and followers learn how to behave by observing them, []. When unethical acts occur in the social environment, employees who have an ethical leader are more likely to report the wrongdoing to management because ethical leaders create a psychologically safe environment and are trusted to handle reports fairly and with care, [].

Q: How can a company ensure its hiring process is optimized for ethical employees?

A: Burnish a company reputation that emphasizes ethics—that will attract ethical candidates.

Q: Marketing is often seen by outsiders as a less-than-ethical industry. Should marketers showcase their ethics work or let it speak for itself? 

A: Marketers should absolutely highlight their ethics work, but only when it is authentic and reflects actual progress made within the organization. Promoting standards, values and reputation is a powerful way to ensure stakeholders and potential candidates are aware of their efforts in the ethics realm and [ensures] that you are attracting the right stakeholders and employees.  

It’s also important to be honest about ethical challenges that the company has considered but not yet been able to address. Patagonia is a good example of this approach; they have been transparent with the public about the results found in many of their and how they have been working to address those challenges.​

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It’s the End of Retail As We Know It: How Can Marketers Adapt? /marketing-news/its-the-end-of-retail-as-we-know-it-how-can-marketers-adapt/ Tue, 12 Sep 2017 20:43:23 +0000 /?post_type=ama_marketing_news&p=2392 The rise of mobile devices has ensured retail will never be the same. Companies must deliver a new customer experience or risk falling into the retail chasm.

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The rise of mobile devices has ensured retail will never be the same. Companies must deliver a new customer experience or risk falling into the retail chasm.

“Apocalypse.” “Meltdown.” “Disaster.”

These are the words used by analysts, journalists and industry professionals to describe the retail industry in 2017. In the first three months of 2017, five department stores—Macy’s, Kohl’s, Dillard’s, J.C. Penney and Nordstrom—collectively lost $4.6 billion in market value, . Nordstrom was downgraded by J.P. Morgan after executives at the retailer said bricks-and-mortar sales .

In addition, industry stalwarts Macy’s and Sears have closed hundreds of retail shops. . Meanwhile, e-commerce—namely Amazon—has boomed, making life easy for the casual shopper. Anyone who questions Amazon’s dominance can look at this startling number: , Internet Retailer reports.

Even with e-commerce’s boom and retail’s gloom, most consumers still enjoy leaving the house and shopping in physical stores. Nearly a third of consumers say they prefer touching, feeling and trying out items before they buy them, . Forty-nine percent say they like to take items home immediately, 18% say they still go shopping for the in-store experience and only 7% say online is the only way they shop. 

So why has retail slipped from decent to disaster? One reason: Customers are no longer happy with the “old model” of retail customer experience, according to . Many stores simply aren’t exciting to visit. Many provide poor customer experience—Harris Interactive reports that customer service agents fail to answer a customer’s questions 50% of the time. Bad service is made worse by bad revenue, as more salespeople are cut and fewer are in stores to help customers. With the massive overhead it takes to run a retail shop, competing on convenience against Amazon or price against Walmart is also difficult. 

“The question is, are we predicting the end of the physical stores? I don’t think anybody’s predicting that,” Kahn says. “But are we seeing a shift in shopping behavior? Of course.”

The Mobile Revolution 

There’s a “modern commerce revolution” in retail, according to Brian Solis, a principal analyst at Altimeter and author of . Consumers are empowered by the flexibility of smartphones and have either subconsciously or intentionally changed how they behave, what they value and how they make shopping decisions. “That’s where all of this disruption is stemming from,” Solis says. 

A report from Forrester found that in 2016 mobile devices drove approximately s—just greater than half of all retail sales. This means customers are researching on their devices and buying in stores. By 2021, Forrester predicts retail consumers will spend $152 billion via mobile phones—representing 24% of total online sales—and smartphone retail sales will grow 20.4% each year. 

Retailers have had trouble responding to this mobile disruption, Solis says, as they still operate in the same “old model” that Kahn referenced. The retail customer journey is now almost unrecognizable from just a few years ago, but many retailers are still trying to make the old customer journey work, Solis says. However, retailers are underinvesting in mobile devices, per Forrester’s report. Companies would have to spend tens, if not hundreds, of millions of dollars to adopt the technology necessary to appease digital-first customers with mobile store maps, mobile coupons and digital inventories. Many businesses simply aren’t doing any of this. Taking bets on digital investments now may mean staying in business in the future, Solis says. 

​​“There is a need to create a bridge between the digital and real world so that they blur and essentially coalesce with one another, but that takes experience, design and architecture, and to get there we have to understand customer modeling,” Solis says. “We have to understand how their favorite apps are impacting how they interact with information and then use that to redesign online experiences to be more like the Ubers and Tinders of their world.”

Physical retailers should strive for digital parity, says , a customer experience speaker and consultant. Transparency and ease of use have become essential retail qualities for many customers. Opaque businesses with wonky mobile experiences will risk making customers feel inconvenienced—not a driver of repeat business. “Having said that, streamlining isn’t everything,” Solomon says. “The customer experience—the reason people shop—is about entertainment and emotional engagement. You can’t streamline yourself into a successful business in physical retail unless you’re a convenience store at the perfect location. You need to offer something more.”

The Unknown, Changing Customer

That “something more” may lie in the new customer journey, but retail executives lack knowledge of who these customers are. This is deeply concerning, Solis says, as many business executives believe Amazon is sapping their traditional customers. However, he says Amazon is actually cultivating its own base of connected customers. This leaves traditional retailers—tilting at windmills like Don Quixote—trying to protect a customer who isn’t there anymore. The connected customer is different, likely young and has only ever known a digital world. In some cases, they are an older customer who has adopted a digital lifestyle. 


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“There’s very little expertise and experience within the executive ranks of these retailers because they’re still trying to compete against Amazon with existing resources,” Solis says. “Even when they acquire new companies, they’re still operating within a culture that doesn’t necessarily understand innovation, risk-taking and all of the elements that make innovations so compelling.”

As consumers get younger and become more technology-driven, retailers must understand how to innovate and meet their needs. Kelsie Marian, principal research analyst with Gartner, says Generation Z—or those born between the mid-1990s to the mid-2000s—will “drive unavoidable changes” in retail sooner than most retailers think. 

“[Generation Z] has grown up in an unpredictable world in which technology plays a significant role in helping them to be at ease with what’s happening around them,” she says. “To some extent, becoming like them will help bridge the gap from where retailers are now to the future of living in a world in which technology will play a defining role.”

One way to become like Generation Z—or at least know how they shop—is to study micro-moments. Coined by Google, the term refers to the brief seconds of decision when people turn to their mobile device to do, buy or learn something. Solis studied micro-moments with Google, researching how retail consumers use mobile devices to shop. 


“We were witnessing that consumers not only were becoming increasingly mobile-first, but if they had their druthers, they would be mobile-only,” Solis says. “What we learned is that the customer journey is incredibly fragmented, and it’s because of how [consumers] behave, but also frustrating because most customer journeys that exist today are not mobile-intuitive or mobile-native.”

Retailers have tried to bolt onto t​he existing experiences instead of speaking to the mobile native, Solis says. However, mobile’s supersaturation of the market has created a new set of expectations that piecemeal technology add-ons simply cannot meet. The linear customer funnel—as well as the customer in the funnel—that depended on brand loyalty have changed. Customers studied by Google had no brand in mind during 90% of their micro-moments. Seventy-three percent of consumers made a purchase decision based on which company was the most useful during their micro-moments of retail research. “We’ve watched an incredible shift,” Solis says.

“Read between the lines: Why would Google do this research?” Solis asks. His answer: Customers no longer spend time on traditional websites and have lost patience with horrible experiences on mobile devices. “This is a [consumer] who [retail] executives don’t know,” Solis says. 

The Frontier of Change

From the outside looking in, —the name for the online-first apparel company’s physical presence—looks like any other clothing store. Sundry, mass-produced framed pictures hang above neatly arranged clothing that lies folded on top of shelves. Eager salespeople sit behind a counter as electronic pop music streams through the speakers. A closer look reveals an odd difference, perhaps an augury of the future of retail: The usual stacks of clothing in different sizes and colors have been traded for a polychromatic arrangement of shirts and pants; there are no repeats among them.  

What makes Bonobos——different from the average retailer is that it is fashioned in showroom style, allowing customers to feel the fit of the clothing before they buy. “It’s nice to come into the store to see the fabric and feel it,” says Denis Guevara, a Guideshop assistant manager at Bonobos’ downtown Chicago store, echoing the sentiments of consumers in Retail Dive’s Consumer Survey.

Here’s how the customer experience at Bonobos works: Customers make an appointment online, go to the Guideshop and are immediately greeted by a warm-blooded salesperson who asks what they’re looking for. Customers try on clothing to find the best fit and are shown pictures of themselves in the outfit with a variety of color filters to see varicolored options. A customer profile is then created to help shoppers easily find the same fit next time they visit Bonobos. Once they buy, Bonobos ships the order to the customer within two days. For its efforts, Bonobos won the award for best . 

Cody Bauer, vice president of retail at Bonobos, says the company’s focus on customer service begins and ends with employees like Guevara, who are trained in finding the best fit and style for customers. 

“Bonobos was founded on the idea that we could create not only better-fitting men’s clothing but also provide a better customer experience,” Bauer says. “Our goal as a company is to provide an easy, hassle-free approach to shopping in every touch point you are able to buy Bonobos product.”

The appointment system allows Bonobos employees to work one-on-one with each customer to efficiently find what they’re looking for instead of letting them endlessly mill around. The expectation of great customer service in retail has never wavered, Bauer says, but brands are now under pressure to ensure customer service while quickly getting people what they want. “The new normal for brands is being able to consistently do both of those well,” he says. 

Many retailers, like Bonobos, are fighting to improve the customer’s experience to meet the ever-changing and -quickening shopper standards. Nordstrom—previously mentioned as one of the five companies falling in the first quarter of 2017—has seen its stock rise 17.5% over the past year while the rest of the retail industry’s stocks fell a collective 22.4%, . Nordstrom has done this via a long-term, customer-focused strategy and is on track to reach its growth target of $20 billion by 2020, Zacks says in its analysis. 

“Nordstrom is an example of a department store that is really trying some innovative stuff,” Wharton’s Kahn says. “They have a lot of pop-ups in their store. They feature lots of different stores within their stores, and they change what they have so there’re a lot of new [items]. There’s a lot of discovery.”


Best Buy is another company that has embraced the new-model customer experience. CNBC called the company —kids get to sample video games and adults get to play with the latest gadgets. For the digitally inclined, it’s real-life virtual reality. Best Buy’s stock rose more than 20% in May after analysts saw the company’s in-store sales soar past expectation. 

Kahn says Best Buy’s success is because it, like Bonobos, has embraced the showroom model. Years ago, this model actively hurt Best Buy—Kahn says it served more as “webrooming,” or a place where customers would research and try products before buying them on Amazon—but Best Buy has implemented a price match guarantee for all retail competitors and certain e-commerce websites, including Amazon, Newegg and TigerDirect. Instead of trying out a new iPad and buying it elsewhere, customers get to play with the iPad, find a better price online and instantly take their new tablet home at a discounted price.

Kahn says there are four strategies retailers are using to shift to a more successful customer experience model, including: 

  • ​Competing on price (think Walmart’s “Everyday Low Prices” or Best Buy’s price match guarantee). 
  • Convenience (think Amazon, which allows customers to buy from its physical retail shops by logging into the company app). 
  • Luxury experience (think the flagship, high-end shops of New York City’s 5th Avenue or Paris’ Avenue des Champs-Élysées, which tend to draw in equally high-end customers).
  • Vertical brands offering quality merchandise or product (think Bonobos, Warby Parker or Sephora offering physical versions of their e-commerce shops that serve as product showrooms).

There are other physical retail successes that don’t quite fit into any of these categories, Kahn says. , is a chain of gigantic stores stocking Italian-inspired food that intermixes grocery shopping with activities like cooking classes. —with the apropos tagline “Re-inventing Retail”—is a shape-shifting store that changes its merchandise and design every four to eight weeks. STORY’s website says it takes “the point of view of a magazine, changes like a gallery and sells things like a store.” 

“These retailers are the ones that people are really attracted to,” Kahn says. “They’re changing their shape. … If you don’t change with these changing shopping behaviors, you’re seeing lots of doors close.”

​​Little Bets for Big Change

Clearly, updates are needed in the physical retail space. Generation Z customers will soon have more spending power and will expect an integrated experience. Companies that don’t converge retail and online channels risk losing these young customers or, worse yet, losing their business. Every shop will need to have better online-offline integration, Kahn says. A big-box retailer like Walmart, for example, allows consumers to shop online and pick up items in the store, just as new-school retailer Bonobos allows its customers to buy in the store and have their outfits shipped home. 

“Both are this combination of understanding that it’s mobile first,” Kahn says. Other examples of mobile-first retail shopping are using geotargeting and smartphone alerts to notify customers of in-store deals. 

Amazon’s physical shops tie the mobile device into the experience so much that one cannot shop without it. “You use the phone to enter into the grocery store, then you walk around, take whatever you want and it’s all being recorded,” Kahn says. “When you leave, you just walk out and you’re billed on your phone. That’s an example of really sophisticated integration of online-offline, but I think you’re going to start seeing more of that as retailers start to get the hang of the way people are shopping.”

None of this is to forget the traditional customer, who is less familiar with digital shopping but still likely owns a smartphone. While modern, new-school retailers have the luxury of not reinventing their business models, Solis says they have trouble drawing in the traditional customer. This is where “classic” retailers may have a chance to survive and thrive: bridge the gap between the old and new; speak to both groups. 

Executives that want to address the gap between old and new may have to be bolder than usual. With the retail industry battered by disruption, Solis says leadership must not only understand what a more-digital customer wants, but must empower existing employees to create changes that meet the customer’s needs. 

“If you don’t change how your culture empowers and rewards employees for doing and learning new things, you’re always going to be stuck with the same center of reference,” Solis says. “There’s a need for new leadership, there’s a need for new mindsets and there’s a need for new metrics and goals. This has to come from the top down with great empowerment and strategic risk-taking in the same way any disrupter starts to disrupt.”

Marketing’s Role in the Future of Retail

Marketing must evolve with customer experience, Solis says. Many marketers still operate using traditional methods, but brands are being defined by customer experience. This gives marketing departments across the retail industry a chance to affect more than just messaging, but the entire customer experience. 

“I always define customer experience as [the] engagement a customer has with your brand in each moment of truth, then measured overall,” Solis says. “That means that marketing has a greater opportunity to reinvent itself and to become more valuable within the organization; it just has to be ready to accept that marketing is ready for its own transformation, which I think is a great thing and a catalyst to do that is extreme personalization.”

Extreme personalization means marketers must understand customer behaviors and seize the moment—quickly. Google recommends studying micro-moments, Solis says, to understand how different touch points affect different people, such as where, how, when and on which device consumers can be reached. This is where artificial intelligence can become marketing’s “knight in shining armor,” Solis says, as a sophisticated program can crunch numbers quickly and help marketers understand what the new customer journey looks like.

More important than any gadget, technology or customer experience shift is the mindset marketers and executives take into the process, Solis says. “What do you think your role is in customer experience? If you subscribe to the thought that customer experience is each moment and the sum of those moments and that’s what equates to the brand, then marketing should be responsible for uniting those touch points. … Marketers and executives need to really think like experience architects now.”

To avoid falling into the retail apocalypse, Solis says retailers must learn from the companies that failed. Instead of prioritizing shareholder return over customer experience like RadioShack did, for example, start taking small steps into the future even if some steps might mean failure and lost revenue.  

“There won’t be long-term shareholder value if you don’t deliver immediate customer experiences because that’s where the value lies,” Solis says. “Unilever was quite provocative when the CEO said, ‘We’re not going to cater to short-term shareholders. We have to transform in order to deliver long-term value. We’re going to make some big bets.’ And that’s what it’s going to take for them to be successful. But I think there are little bets that people can take.”

Whether executives, marketers and retailers start making bets, large or small on a digital world, Solis says that consumers will still have a digital experience. Will it be a good digital experience? That’s up to how much control marketers take of their company’s fate.

Solis’ advice to marketers is simple: “Integrate [experience] so that it’s complementary and additive to delivering that experience that you designed in the first place,” he says. “Brand becomes the experience.”​

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Sales Enablement Startup Node Aims to ‘Flip’ the Traditional Funnel with Matchmaking Algorithm /marketing-news/sales-enablement-startup-node-aims-to-flip-the-traditional-funnel-with-matchmaking-algorithm/ Fri, 01 Sep 2017 22:55:40 +0000 /?post_type=ama_marketing_news&p=3559 Falon Fatemi recently unveiled her newest company, Node, which she contends will “flip” the traditional sales funnel and, in the future, be the high-octane gasoline that powers "discovery" on every device and application

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first made waves in Silicon Valley when she was hired by Google at age 19. Six years later, she left to become an intermediary in the world of startups, facilitating key introductions between talent and investors. This specialized skill led her to create her own company, Node, which for the past two years has operated in secret with backing from tech luminary Mark Cuban and others. Node recently emerged from stealth mode in July to report more than $16 million in financing and a roster of clients who claim to have earned $100 million using the platform.    

Node relies on many proprietary algorithms to “accelerate serendipity.” Put less whimsically, it aspires to draw connections between users and companies that go unnoticed by traditional lead generation. If successful, Node could revitalize B-to-B marketing and prove to be a defining link on the path to advanced artificial intelligence. Marketing News spoke with Fatemi, who pitched Node with empathic declarations it would change the industry. 

Q: Using back-of-the-envelope terms, can you describe what exactly Node does?

A: Node helps sales and marketing organizations understand the world of people and companies they should sell or market to for the next five years, known as their total addressable market. They’re guessing at this [right now] because they’re purchasing incomplete lists of information from many different data vendors that all have limited coverage and quality. They might use a predictive tool to rank that list or rank those leads to prioritize them better and hope the right buyers come in and purchase their product. This results in what we commonly refer to as a funnel, where 80% of those prospects are the wrong people at the wrong companies at the wrong time being approached with the wrong message. 

We aim to flip that. The Node solution starts with identifying a company’s total addressable market. Then, Node will prioritize the execution on those markets that it has identified will drive more revenue per unit of time. In addition, Node provides all of the people and company intelligence required to tactically execute on the strategies it has prescribed. Node will proactively recommend the right prospects at the right time and even suggest the right message to reach out. It’s a truly end-to-end platform, from strategic to tactical, in terms of execution. We call it people-based intelligence. 

Q: Can you give me a sense of how this will change day-to-day operations for marketers?

A: We reduced the need for about 10 different point solutions on the market. We reduced the need for individual point solutions of data vendors, as well as predictive solutions. Customers of Node are able to recoup their cost of Node within the first eight weeks of deployment. 

To give you a sense of the breadth of this, to date we’ve generated recommendations that resulted in $100 million in closed business, more than $330 million in increased [sales] pipeline [or, the potential money in play as prospects move toward closing a deal], and our recommendations have driven 4.7 times higher deal sizes than the company average. We use Node internally, so all the customers we have are recommended by Node. 

Q: Don’t sales and marketing teams already have a pretty good idea of who they should be going after?

A: If that were the case, then we wouldn’t have an 80% failure rate, or a 1% conversion rate for marketing-qualified leads to deals closed, right? Sales and marketing teams are guessing. They’re doing the best that they can by utilizing these broken point solutions and vendors, as well as their own intuition, to identify what their ideal customer profile is. They’re missing 70% to 90% of the optimal customers that they should go after.

Q: Where did you first come up with the idea for Node?  

A: I’m a Silicon Valley native. I started working at Google when I was 19. I was one of the youngest employees at the company. I was there for six years. I spent six years in the startup world, as well. I’ve essentially spent more than a decade focused on go-to-market strategies, global expansion, as well as building strategic partnerships at Google, YouTube and in the startup world. The story behind Node really has to do with the last six years that I was in the startup world, where I was making a lot of introductions between people and companies. 


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I decided to do an analysis of all of the introductions that I’d made and uncovered that a lot of outcomes of those introductions had resulted in life-changing opportunities for both businesses and individuals. For example, I found out that my recommendations had led to millions of dollars in investment, a number of acquisitions, a number of sales and marketing partnerships, hires and so on. I was essentially acting as a Node within my network and facilitating discovery of those right opportunities at the right time. I started digging into my own matching algorithm.

I realized what could be done if I were to actually use technology to accelerate the serendipity that I was driving. That’s where I realized that a lot of the approaches that Google used to help us find the right information through search can be applied to solve this greater discovery problem. Sales and marketing is the first application of this. 

With the proliferation of information—90% of the information on the web was created in the last two years—there is now more information than we could possibly absorb in a lifetime. 

There’s all this data out there that’s relevant to us that we don’t know we should be searching for. We see the next 10 years being all about proactive and personalized discovery, and we aim to solve this bigger discovery problem by powering personalized recommendation. 

Q: When you say we don’t know what we should be searching for, could you elaborate on what you mean by that?

A: When we search, we already know what we’re looking for. It’s almost too late [for discovery] when we get to a search box. We essentially need to build machines that make sense of all of the people, companies and products on the web; understand what you care about; then facilitate discovery of those right opportunities, at the right time, in whatever application you’re in. 

We will know that we’ve succeeded when you can log in to any application and it will come with an understanding of you. That’s also the promise of AI. Powered by Node, you will receive recommendations for the people that you should know and why, the companies that you should know and why, the job opportunities to pursue, and even the articles you should read. Let’s say, in the future, you want to advise companies. You can actually enter in the type of opportunity you’re looking for, maybe in a particular location, and Node will proactively recommend who those people and companies are, why they are being recommended and how you can most effectively take advantage of that opportunity. 

To translate that, we will make a recommendation for a person—Penny Wilson, let’s say. We will state why we made that recommendation. So, we’ll say Penny was your former buyer. She used to work at your existing customer. She just moved to a new company that Node has identified has a higher deal-size potential, and exactly what those signals are. Not only that, here’s what you should say when you pick up the phone and call her. You should let her know that one of her direct competitors is a customer of yours. That you went to the same university and you worked at the same previous company as her. Oh, and by the way, she’s actually using a product you have an integration with. 

Q: How are you finding these links between your client and the leads you recommend? 

A: The infrastructure behind our system, the technology itself, you can think of as a search engine without a search box. We generate what that query should be, and then we translate that in a way that’s personalized to the individual. There’re three steps to our product value chain. The first step is, obviously, data acquisition, building these deep profiles on people and companies with high accuracy. We use natural links processing, which are a number of AI techniques to acquire that data using the web as our database. To date, we have more than half a billion profiles of both people and companies. While that is a challenging thing to do, that is not our core competency. Our core IP comes in the next two phases. The second step is connecting all of the relationships between those data points—essentially, building the Node graph—as well as prescribing, or making a recommendation. You can think of it as building a model for every person, then explaining why we made that recommendation and personalizing it to the end user. 

Q: What you describe seems like it would be very helpful for marketers in a small world. Would this work if somebody wanted to expand into a new market, and those personal connections aren’t there? 

A: That is what Mark Cuban loves to call “prescriptive” about what we do, where you could have zero presence, zero customers in an industry sector or a location. But because we know all the companies within those industry sectors or locations, and we identify that they exhibit attributes that will drive more revenue per unit of time, Node can recommend the next markets and opportunities for your business, and can also relate it in other ways. 

For example, knowing the industry that your company is in, understanding the competitors that you have, the customers that you may have and then looking at the customers of your competitors or other proxies, based on social proximity through our graph, we can make recommendations. 

Q: How are the customized sales scripts generated? 

A: It’s largely based on deep profiles that we have in our data layer and the modeling that we do. We have marketing teams that use our insights to do personal advertising as well. We’re leveraging social proximity algorithms, as well as our understanding of commonalities between people, companies and the relationships between them, to be able to then generate these scripts in real time. 


Q: How would you characterize your endeavors while operating Node in stealth mode?

A: We’ve been under the radar for the last two and a half years. Pretty tight-lipped about what we’re doing. We’re really excited to be publicly emerging and entering the market with real value that we’ve driven for our customers. Now is the time we’re ready to emerge and support customers worldwide and help them leverage the power of Node.

Q: You’ve secured $16.3 million in financing. How happy are you with that figure? 

A: With these funds, we’re essentially going to be doubling the size of the company. We’re at 22 employees today. We will also be leveraging these funds to invest in product development, as well as sales and marketing, to climax the amount of customers we have in the next 18 months or so. 

Q: How did you convince Mark Cuban to come on board? Did you know him prior to starting Node

A: We were introduced about six years ago through mutual friends. I believe he was most recently quoted saying, “The first trillionaire will be an AI entrepreneur.” He is a huge believer in the power of the technology, as well as our initial use case, and he has been a great supporter, almost selling Node for us, if you will. 

Q: Is Node completely different from anything that’s currently available on the market? Do you feel that you’re operating without any competitors? 

A: I would say we reduce the need for a number of point solutions that are utilized in the market, from individual point solutions and data vendors, or predictive solutions as well. That’s the closest proximity we have to light overlap. Data is a really important part of what we do. Obviously, we make really intelligent recommendations. But for the most part, the way in which we’re solving this problem is fundamentally different. We’re not trying to rank a bunch of stuff in your Salesforce; we ’re trying to identify the right people, companies and markets that you should go after that will take your business to the vision of the business you want to be. We’re building our system as a platform so that in the future you can imagine Node being fuel for other engines, applications or systems of record that today, when you purchase, come empty. 

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Combining NPS and Account-based Marketing for B-to-B Success /marketing-news/combining-nps-and-account-based-marketing-for-b-to-b-success/ Fri, 01 Sep 2017 22:43:30 +0000 /?post_type=ama_marketing_news&p=3557 Focusing on improving existing relationships, rather than looking for new ones, propelled Brocade to be one of the most successful operators in its sector​​​​​​​​

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Goal 

More business doesn’t always mean more customers. Heavy users of a product or service are apt to increase their investment over time, provided they remain sufficiently loyal. To nurture such customers, marketers must understand their needs and deliver more value to them, sometimes at the expense of finding new opportunities. 

That’s the strategic decision B-to-B communications company has embodied over the past several years. As an international data and network solutions provider that’s been in business since 1995, the company has thousands of potential clients it could forge a stronger relationship with. Rather than try to expand its appeal and draw in more customers, Brocade decided to redouble its efforts to take care of its core supporters. It tweaked its offering to meet the needs of its top 200 customers, which comprised 80% of sales.

This effort came to be known internally as Customer First. “This is the magic of a B-to-B company. In the marketing department, one of our jobs is to really understand our customers and our market,” says , Brocade’s CMO. “We wanted to make sure that everything the company was doing internally and externally was putting the best interests of the customer first.”

Action

“We began with the intent of being very customer-focused, but we weren’t sure what our initial starting point was,” Heckart says. “We needed a benchmark to know if we were terrible or OK.”

Brocade brought in a third-party evaluator, , to determine its Net Promoter Score, or NPS, a metric to assess customer loyalty. Customers are asked to respond, using a 10-point scale, to a limited series of questions around a single theme: How likely are you to recommend this company to another person? Respondents who answer with a nine or 10 are considered promoters, or unofficial advocates for a brand. A response of seven or eight indicates passiveness, while people whose answers fall between zero and six are considered detractors. The upshot of all this is a higher score, which likely means happier customers and a greater probability of word-of-mouth business acquisition. 


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Rather than commission a single NPS, Brocade decided early that the project would be a long-term effort involving annual assessments. In between surveys Brocade would work to understand feedback, incorporate it into processes and communicate it to clients.

“That was pragmatism taking over. I have a philosophy for any initiative and that is summarized as ‘Think big, start small and move fast,’ ” Heckart says.

For Brocade, starting small meant soliciting input from its top 50 clients. These 50 clients would serve as the model for all the initial prototyping before the program could expand to include the next 150 clients. Within six months, all 200 had been surveyed. The results were encouraging. In fact, the overall NPS of 51 placed Brocade among the best in class for this area.

Yet, while undoubtedly welcome news, the high scores posed a bit of problem moving forward: How do you improve on an A grade? 

“We started to worry that because the scores were already pretty high and customers were already pretty happy that maybe it would be really difficult to move the needle,” Heckart says. “Yet we had made a commitment to tie everyone’s compensation to this.”

Brocade’s answer was to push higher. “We made a goal to get to 52. It didn’t seem like much but that would have been on the average trend for improvements across all of Walker’s B-to-B database.”

To get there, Brocade looked at sales packages for each of the 200 customers included in the survey. Some clients had unique needs based on the nature of their business. Heckart’s team worked closely with sales to devise client-specific solutions for individual and cluster problems that would enhance the value of Brocade’s offerings to these customers. A package was developed for every single customer, incorporating the NPS feedback, and forwarded to the sales team to communicate how Brocade had developed individually tailored changes.

Additionally, there were broad-brush themes in some of the less satisfactory answers concerning Brocade’s performance. Armed with these commonalities, Brocade could address the issues in a way that would hopefully make its customers happier. When the company learned certain product lines, for instance, were perceived to lack sufficient customer support, the company beefed up its outreach efforts for those offerings. An engineering task force was created to enhance the code in lower-rated products. 

Noticeably lower scores also tended to follow patterns of geography. Brocade does business all over the world, and some of the companies included in the NPS are located in Japan and Germany, which historically tend to be much harder graders than Americans. But Brocade also reviewed its sales reps in these areas to ensure they were doing everything possible to obtain a maximum score. 

Results

A year later, Brocade administrated the NPS again. The results greatly surpassed initial expectations. The team blew past its self-imposed goal of 52 and leapt all the way to 62, higher than any company Walker had ever surveyed before.

That success has translated into increased revenue and more business for Brocade, as happier customers are proving to be more heavily invested customers. The second-round NPS results were released in August 2016 on the heels of third-quarter earnings for the company. That report showed a revenue increase of 7% over the previous year—the entire time the most intensive portions of the Customer First program were in effect—and a 13% increase quarter over quarter. For Heckart, there’s no doubt that the boost was due in part to Brocade’s efforts to concentrate on making its biggest clients its happiest clients.

“We do know … there is a correlation between purchasing and the rate at which these customers buy and the increases of purchasing and their level of satisfaction,” Heckart says. 

Mission accomplished. 

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Kotex Gives Its Consumers What They Want: A Frank Discussion on Periods /marketing-news/kotex-gives-its-consumers-what-they-want-a-frank-discussion-on-periods/ Fri, 01 Sep 2017 22:19:18 +0000 /?post_type=ama_marketing_news&p=2850 Billions of people have periods, but it took until very recently for feminine hygiene brands to balk at hidden meanings and talk straight with customers

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Billions of people have periods, but it took until very recently for feminine hygiene brands to balk at hidden meanings and talk straight with customers

The feminine hygiene aisle is a sea of monotony. It’s awash with light blues, purples and pinks, repeating choruses of “light, regular, heavy.” Consumers don’t browse or linger here, they grab and go.

Kimberly-Clark decided to change that experience seven years ago when it launched its U by Kotex brand. Not only has the packaging itself changed, creating a ripple on store shelves, but the way the brand talks to consumers has shifted. As in, it actually acknowledges and openly speaks to its customers about their periods. It’s no longer about absorbency demos and carefree women leaping in white pants; U by Kotex launched with a call to and end period stereotypes in advertising and elsewhere. The release of the new products came with in which the brand said advertisers “have been perpetuating this cultural stigma by emphasizing that the best menstrual period is one that is ignored.”

Kimberly-Clark has a pretty decent grasp on advertising period products, having been in the feminine hygiene market since 1920. The  for Kotex appeared in 1921 and was . The first draft actually featured mostly men and one woman, but was changed to include only one man and three women, with copy that nodded to science and World War I, where nurses began using wound dressings as sanitary napkins. The text never actually used the phrase “sanitary napkins,” and readers were left to guess what the “new use” of the product meant, thus ushering in the era of vague references to the menstrual cycle in advertising.

It took almost a century, but Kotex was finally ready for some straight talk with consumers. It started with a getting-to-know-you session.

“For a brand that has that rich history and legacy, it’s also important to be listening to the consumer, connecting with our audience and … putting her at the center of everything that we do,” says Melissa Jacobs, senior brand manager for U by Kotex. “We took a look at the brand and how we were connecting with consumers. The consumer had changed quite significantly over the years and the category really hadn’t. To connect with the consumer, in particular teens and younger women, it was important to reflect more of [their] reality and more of what was important to [them]. That’s why we made the decision to go in such a unique direction with the launch of U by Kotex.”

The change in the audience Jacobs identified was that consumers were now talking openly about periods, and they expected their brands to do the same. As a Newsweek cover story exclaimed in April 2016, “The Fight to End Period Shaming is Going Mainstream.” These consumers wanted brands to acknowledge the reality of their experiences and cater to them, not hide it and communicate in whispers.

“It fits with the evolution of fourth-wave feminism, which has seen feminism go from somewhat of an on-the-edge [movement] that brands wouldn’t necessarily engage with, to [a movement] that is part of mainstream culture and part of popular culture discourse,” says Lucie Greene, worldwide director of The Innovation Group, the in-house creative think tank at J. Walter Thompson Worldwide. “You see more open, frank dialogue around previously taboo aspects of femininity from sex to body hair to body image to menstruation, and [consumers are] demanding to be talked to on a different level by brands. It’s about female empowerment and … rejecting messaging that is lazy or not nuanced. [It should be] all-inclusive. That has reached a critical mass.”I

If the consumer wanted to be spoken to directly, the brand would need to first get their attention, so U by Kotex made a splash in the feminine hygiene aisle. Rather than producing yet another muted-tones box, the brand got loud: Its packaging now typically has a black background with neon details. Even the language has changed a bit. The products have names that could double as iPhone descriptors: Sleek, Click and Security, for example. Greene says the design appears to be in line with the popular athleisure trend—categorized as something designed for workouts and other athletic activities while also worn in other settings—among millennials, which made for an easy transition into U by Kotex’s latest fitness product line.

“The bright colors and the packaging were intended to make a statement, certainly within the category,” Jacobs says. “That all came from consumer insights. The category was treating women and periods in a certain way. We had been a part of that as well in our history. For us to reflect our consumer and do what was right for her [we needed] to say, ‘The way that periods have been treated—trying to hide them, have them be super traditionally girly—that’s not what our consumer is about.’ We’re about making sure that a period never gets in the way of what a woman wants to accomplish. We wanted the entire branding to reflect that. She doesn’t have to be about pastels or traditional girly stereotypes. She can be bold and have packaging and products that better fit her lifestyle and are more reflective of the attitudes that she carries forward.”

The brand’s website and social channels echo this with bright colors and menstrual cycle missives. The website is broken into pages that include product descriptions and reviews; info and advice (for periods, not just products); a period calculator; a fitness section with workouts, recipes and tips; and an entertainment section with social feeds and a web series, both of which are a big part of the brand’s content marketing push. U by Kotex is the executive producer of the web series  which follows college roommates who fall for one another as they try to uncover a disappearance. Plus, one of the roommates is a vampire (IMDb gives the show an 8.6/10 rating).

The products themselves also received an upgrade. For example, the U by Kotex Fitness tampons include a FitPak, a small carrying case to alleviate the common nuisance of tampons getting jumbled out of their packaging when tossed into the consumer’s bag. Many of the brand’s tampons have a compact applicator, taking the product down to about half of its original size. The Fitness products are also specifically designed to stay in place for those consumers who don’t plan to stay seated for the duration of their period (a concept so baked into culture that some yoga practices even suggest women withhold from doing inversions while menstruating, ). Products that can make the user’s activities easier or more care-free are a big part of the brand’s fight against shame and stereotypes.R

Reducing taboos on behalf of and in conjunction with its audience has been a major piece of the U by Kotex brand’s work since its inception. Most recently, the brand has been partnering with social media influencers to promote the Fitness products. It could be argued that Kotex was a bit of a pioneer in the influencer arena, as its advertisements in the 1920s encouraged readers of the Ladies’ Home Journal to call upon Kimberly-Clark staff nurse Ellen J. Buckland, also a brand ambassador, for advice and comments on the product.

The brand’s recent fight against stigmas is what drew , a yoga instructor and U by Kotex Fitness spokesperson, to the brand.

“I have always admired the brand’s courage to tackle hard conversations and act as a champion for those experiencing a period,” Stanley says. “The intent of the U by Kotex Fitness program is to open an honest dialogue about working out on your period and break stigma around that conversation. I am no stranger to honest conversations, which is why I was excited to team up with the brand to help launch the new product line.”

Jessamyn Stanley, a yoga instructor and U by Kotex Fitness spokesperson, was drawn to the brand’s fight against stigmas.

Jessamyn Stanley, a yoga instructor and U by Kotex Fitness spokesperson, was drawn to the brand’s fight against stigmas.

Stanley, who is also a body positivity advocate and writer, has spoken out against stereotypes herself and found an ally in U by Kotex and the brand’s messaging.

“I am excited about this partnership because of the parallels it has to the work that I’m already doing,” Stanley says. “If we’re not able to talk about sensitive issues like size or periods, we cannot remove the stigma. I believe that honest dialogue is the only way to move forward and am ready to open the conversation around periods and activity in partnership with U by Kotex Fitness.”

As it turns out, you don’t have to be an internationally recognized yoga teacher to partner with the brand. U by Kotex actively listens to its community online, Jacobs says, and it’s learning how normal it is for consumers to expect the brand to talk comfortably about periods. She points to other brands getting in on the conversation (which U by Kotex frequently retweets), including the likes of Teen Vogue.

In listening to its audience, U by Kotex started  a project series inspired and led by women that improves period experiences. The first project was The Period Shop, a pop-up store in New York City that was inspired by . The author of the post, college student Sarah Michaelson, bemoaned the dearth of stores specifically catering to periods (despite the existence of stores dedicated to things like containers or shaving needs). She went on to describe her ideal period shop and challenged someone to make it happen. U by Kotex reached out to make the idea a reality, and the first-ever Period Shop went up for three days in May 2016, featuring comfortable clothing, accessories, home goods, beauty products, food and U by Kotex products.

“With the pop-up store, they’re tapping into the fact that fourth-wave feminism has become a lifestyle, a dialogue, a way of talking,” Greene says. “Talking about this stuff has become a political imperative.”

All proceeds from the pop-up were donated to New York homeless women’s shelter Susan’s Place. As with Stanley, Michaelson was particularly appreciative of the brand’s willingness to confront period taboos.

“When U by Kotex told me they wanted to bring my idea to life, how could I say ‘no?’ ” Michaelson says. “I knew the period store would be important not just for me but for the thousands of women that get their periods but feel like they can’t talk about it. Ending the stigma that surrounds periods is so important to me. Like a lot of girls, I was uncomfortable with it for a time, but that has to stop if we’re going to make progress for women in other areas.”

Crystal Boersma, lead creative director on the project from Organic, the agency behind the shop, told Ad Week that consumers should have the same excitement in running out to buy new tampons or pads as they do when it’s time to replace a lipstick, for example. More than 5,800 people experienced the shop in person and almost 40,000 samples were requested over the weekend between the launch of “The Period Projects” and the opening of The Period Shop. The U by Kotex brand also gained nearly 1,400 new followers to its social platforms.

Inspired by a Tumblr post, The Period Shop in New York City drew more than 5,800 visitors.

Next up for “The Period Projects” was “Power to the Period,” a campaign, which ran July 14 to Sept. 30, 2016, and was the first-ever national period products drive, this time inspired by a tweet from Holly Sanchez and executed in partnership with DoSomething.org. The drive encouraged people to buy and donate an extra pack of period products to a homeless shelter. The event sparked 50,257 drives and collected 585,965 period products to donate to shelters all over the U.S.

Greene says the female consumer, particularly the millennial female consumer, expects her brands to participate in causes and purpose-driven efforts. U by Kotex wants just such a relationship with its customers.

“Certainly we’re hoping to make a connection with the consumer so that they build an affinity with our brand because they believe in and share the passions of the brand to continue to make those period experiences better,” Jacobs says. “For us, that’s a pretty good example of blending those two things: We want to do good, we want to help our consumer do good, but we want to build a relationship with them at the same time.”

In another effort to take its product to platforms other than the drugstore or grocery store aisle, the brand has partnered with Helloflo to include its products in the company’s mail-order period kits. The placement allows U by Kotex to put its product within a story (the two companies even worked on some ) and learn even more about its customers’ habits.

U by Kotex wants to be a part of the customer’s full period experience, but it may only be partway there. For one, the products themselves haven’t changed much. The brand continues to offer only the basics: pads, tampons and panty liners. Granted, these items have seen plenty of tweaks since their introductions, and the market for these products is worth $3.1 billion, according to Euromonitor. Despite the fact that these products likely won’t lose their places in bathrooms across the U.S., some consumers are opting for something different: menstrual cups (DivaCup or Luna Cup), period underwear (Thinx) or even an organic or natural pads and tampons (Lola or Conscious Period).

Jacobs says she is unable to comment on any innovation plans, but that the company is paying attention to the consumer’s needs and preferences. Greene suggests the tipping point for companies like Kimberly-Clark or Procter & Gamble would come if alternative brands create a new behavior that hits mass market. Instead, Greene argues that the U by Kotex brand could be doing more in terms of its packaging.

“When you look at a brand like Lola, they don’t obviously communicate being tampons at all, they’re very understated and very luxuriously designed,” Greene says. “You would think they were products that you could buy on the shelves of Sephora or in a boutique hotel, and you wouldn’t be ashamed to have them out in your bathroom. The cliché is you keep your tampons discreetly in a box in your bathroom, in a cabinet, but these new-wave brands have really redefined the visual language.”

Regardless of how the product looks and how present the brand may be on social media, consumers can’t send out a tweet if they’re stuck on the job, in the classroom or in any public restroom without a tampon or pad. In fact, this is the exact period experience most never forget and is often the most distressing.

https://www.youtube.com/watch?v=GidNjxjI0_E

“We’ve created this social norm where women are expected to have a tampon and a pad or something on them at any given point in time,” says Nancy Kramer, chief evangelist of IBM iX, and founder of Resource/Ammirati. “The truth is that all of us have had unexpected starts to periods or flow that’s heavier than we anticipated and we’ve run out of whatever.”

Kramer founded Free the Tampon, an organization that advocates with business owners and in the public policy arena for freely accessible menstrual support in restrooms out of the home. In other words, she believes tampons and pads should be provided in public restrooms in the same way toilet paper is expected to be. She clarifies that the product makers are not the ones expected to provide the items free of charge, but rather the same people who ensure toilet paper or seat covers are available in bathrooms.

Kramer has done her homework on social causes and chosen not to engage Free the Tampon with companies that make feminine hygiene products. She notes it could be a bit too self-serving for such brands. U by Kotex seems aware of this conflict of interest and acknowledges that access to products is an issue for many people.

“In terms of directly encouraging institutions to provide product to women, this can often be viewed with skepticism when coming from the company producing the product,” Jacobs says. “So, U by Kotex’s focus continues to be on delivering products that meet the needs of our consumer and supporting tremendous efforts like ‘Power to the Period.’ ”

The fact remains, however, that it’s a major part of the period experience. The impact of having free access to menstrual products has been documented: In New York City, one school  where it offered the products for free in bathrooms, and the school saw a 2.4% increase in attendance. New York City now funds the provision of menstrual supplies in all city public schools, prisons and homeless shelters.

“It’s going to take time for this to take hold, especially when people realize that these products are there and [aren’t stolen] in the same way people don’t steal toilet paper,” Kramer says. “You have an expectation that when you go into the bathroom there’s going to be toilet paper, you get frustrated when there’s not.”

Somewhat ironically, a video from U by Kotex about the Period Shop actually begins with a woman saying, “It’s what I wish every single public bathroom looked like.” Jacobs says the brand is focused on the conversations it has on its social platforms and with influencer partnerships to highlight positive change in the category, and to promote dialogue on key issues. Perhaps it will take more of its customers speaking out about being stuck without the menstrual products they need before an important meeting, or being sent to the nurse at school for a healthy bodily function before the brand finds a conflict-free way to get involved.

Until then, U by Kotex will be part of the period experience, so long as consumers remember to toss the products in their bag.

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3 Ways Marketers Can Navigate an Ad-free World /marketing-news/3-ways-marketers-can-navigate-an-ad-free-world/ Fri, 01 Sep 2017 22:12:26 +0000 /?post_type=ama_marketing_news&p=2847 Marketers should consider moving away from traditional advertising and closer to customers

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Marketers should consider moving away from traditional advertising and closer to customers

Consumers can typically recall advertisements from their childhood; they can hum a jingle or recite a slogan. The children of tomorrow, however, may only have one ad recollection: the quiet click of opting out.

Ad-free subscriptions are on the rise, leaving traditional advertising in the dust. For some perspective, consider  that suggests each Netflix subscriber avoids about 160 hours of commercial-watching annually by streaming content through the ad-free service. It’s not only television or movie content that is going ad-free. Music platforms Spotify and Pandora offer ad-free subscriptions, and operating systems such as Apple’s latest version of MacOS, High Sierra, will offer a reader mode that strips out ads. Google has also announced plans for a built-in ad blocker for its Chrome system.

Consumers are on board with giving ads the boot, due in large part to exhaustion. Although advertising has been around for decades, it feels more painful than ever because consumers’ attention has become limited, says Bob Gilbreath, co-founder and CEO of internet marketing agency Ahalogy.

“Advertising has always been a tax on our time and attention,” Gilbreath says. “As the demand on our attention goes up, the price of our attention goes up and that tax feels worse and worse.”

The advent of digital access—be it mobile, in-home or elsewhere—has also made consumers more selfish with their time and demands. The audience is used to getting what it wants, when it wants it, which makes advertisements feel jarring and generally disruptive.

Traditional advertising still has its purpose, but its placement has begun to slowly dissolve. Marketers need to shift gears as more consumers opt out. Consider three ways to adapt or perish.

1. Content Marketing

If consumers are tired of being interrupted, the obvious answer is to stop interrupting them and maybe even add some value to their lives with content marketing.

“It’s not interruptive,” Gilbreath says. “You might find ways to put your useful content in front of someone like paid media, a paid social post, but at the end of the day it’s about getting into the habit, building the models, getting the right team together, getting your software platforms together. It’s not about the new ways to interrupt people, but finding new ways where the marketing helps them in their lives and in their experience.”

Gilbreath says the B-to-B world has already begun to master content marketing, offering consumers white papers, blog posts, videos, how-tos or challenge sales, wherein a salesperson educates a client or prospect about a change in the market.

“By making [consumers] smarter, you’re able to present your product or service as a solution to the biggest business problems,” Gilbreath says. He predicts a rise in in-house content expertise whether through an R&D lab, what the company is doing in its field or joining forces with outside experts.

Creating and hosting original content has the added bonus of brand safety. There are degrees of separation between an advertisement’s creation, hosting and performance when it comes to media buys, and recent cybersecurity fraud issues have muddled click results. Self-publishing also allows the brand to avoid having its name stationed near other content that could be deemed controversial.

2. Direct Marketing

Removing ads from media platforms means a shift from fishing for customers to strengthening brand-consumer relationships. Where marketers may be jolted by the potential loss of basic data from media relationships, they may build a deeper set of data by getting to know their customers better.

“Everyone should aspire to be a direct marketer and not have to count on these random ads being strewn all about,” says Peter Fader, a professor of marketing at the Wharton School at the University of Pennsylvania. “Move to a bona fide relationship with customers and prospects. It’s hard and we don’t have the mindset or the infrastructure right now, but in the end, if we can do that well, we’ll make a whole lot of money and get better data than relying on the ad-based approach.”

Gilbreath says e-mails from a brand are a great direct marketing tactic, provided the e-mails contain useful content and inspiration. Fader, on the other hand, says the answer isn’t in finding a new platform to place ads on (“It was billboards, then magazines, then TVs and e-mail, then mobile, now let’s find ways to jam things into Snapchat.”), it’s about thinking of other ways to talk to the consumer.

This more direct attitude is what the subscription model is all about. For a fee, media companies offer consumers a better overall experience, which may happen to include the removal of advertisements. Fader argues that brands could take a cue from these platforms and join the subscription game. This could look like Blue Apron or Birchbox, or it could be a partnership with a company like Amazon, which offers a that allows customers to receive regularly scheduled deliveries of specific products at discounted rates.

“That approach is still in its infancy, but I think that’s what’s going to take off,” Fader says. “That’s when we’re talking about a bona fide relationship. It might be through an intermediary, through an Amazon or Instacart. From a brand such as Tide’s standpoint, the data they’d be getting about me would be so much better than anything they would get in a mass media advertising world. They would have a much better sense of which individual is buying which product and when.”

Fader acknowledges the role traditional advertising plays for introducing newer brands to consumers or spurring awareness and reminders. 

3. Improving Services

If marketers aren’t spending as much on traditional formats in the future, they may have the opportunity to use the money for improving products and services.

“If you look at what startups call marketing, they call it growth-hacking,” Gilbreath says. “The mindset there is, ‘I’m a startup, I don’t have tens of millions of dollars for advertising, so I need to find creative ways for my product to sell itself.’ Often that’s where you have to find ways to make the product viral or ways to spread it around.”

For established brands, product or service improvement shouldn’t be conducted for the mass market, Fader says. Instead, the improvements should be customer-centric and focus on acquiring or keeping the customers identified as more valuable than the rest.

Fader uses Electronic Arts as an example. The gaming company has stopped focusing on how many units of a new game it can sell and instead asks how the product can teach the company more about those buying it.

“If EA comes up with a game that’s going to help it acquire valuable new customers or [a game that] enhances the value of existing customers, then the value of that game to the firm is worth 100 times the number of units it sells,” Fader says. “Using products as a way to fish for and maintain relationships with the best customers, that’s what it’s all about.”

Companies can also boost their relationships with consumers through loyalty programs that keep the firm at the top of customers’ minds and track customer data. These aren’t the loyalty programs of yore that require a punch card and “get one free” incentives. Modern loyalty programs should be used to learn more about the individual customer’s needs and wants. Fader says offering gifts or promotions to loyal customers shows that the company is trying to learn more about the consumer’s interests and needs so it can better align its communications and offers to the individual or group.

“The real key to customer centricity isn’t only to cross-sell,” Fader says, “but it literally is to surround them with a variety of products and services from which you make no money to show that you really have their best interests in mind.”

Ad-free subscriptions may not have taken over (yet), but marketers need to refocus on customized content that reels in and maintains relationships with valuable customers. Customer engagement, like personalized subscriptions, can no longer be one-size-fits-all.

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5 Steps to Making Transformational Change Happen /marketing-news/5-steps-to-making-transformational-change-happen/ Fri, 01 Sep 2017 20:28:58 +0000 /?post_type=ama_marketing_news&p=1277 The best change management plan is futile unless it is wedded to a thoughtful communications effort

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The best change management plan is futile unless it is wedded to a thoughtful communications effort

Effective leadership is about managing change. It’s not about project management, although those skills may help propel leaders to larger offices. It’s not about mastery of details, although that is critical to understanding the big picture. Effective leaders instigate and manage change in their organizations that is designed to accomplish pivotal goals.

Supporting executives in massive change is part of what coaches do every day. The best change management plan is futile unless it is wedded to a thoughtful communications effort. Here’s how to get it right: 

1. Build the “big picture.”

Almost all executives have a massive binder in their office referred to as “shelfware.” Generally, this is a very expensive strategic plan designed with the help of bright and well-meaning consultants that never made its way to implementation or execution. This is why leaders tend to roll their eyes at talk about “getting the vision right.” They’ve been there too many times, and they are reluctant to go back.

In these cases, we pore over previous efforts for clues as we assess the organization’s readiness for change. We also spend a fair amount of time identifying the cultural catalysts that could derail the project’s success. These data points help pinpoint the right vision and ensure the entire leadership team is engaged in creating and communicating the effort.

To ensure that this vision doesn’t end up alongside previous shelfware, we work with our leaders to instill a new paradigm. Vision is dynamic. It will evolve and morph the closer you get to it. Leadership requires constantly reassessing and relaying where you are going and how far you have come in the process.

2. Remove the guess work.

Most change efforts overlook that employees often feel change is being forced upon them, leaving them voiceless and helpless in the process. Driving successful transformation requires identifying critical stakeholders at every level of the organization and bringing them onboard early. Talk to them. Try to link the change you are planning to things people already want. When done effectively, you’ll diminish active resistance and gain champions for your effort.

3. Get the message right.

Consider the story of a CEO who was fed up with the casual dress code at his company. He assembled his communications team to come up with a plan to help employees understand the difference between appropriate work attire and clothing better saved for a weekend at home.

Their idea: Paper dolls with cut-out clothes, along with a paper doll image of the CEO—in boxers. There were so many things right about this plan. It was clever and creative. But it didn’t get tested outside the room. If it had been, the team would have learned rather quickly that no one wants to see their CEO in boxers.


READ MORE:
GE’s First Chief Creative Officer Talks Commercials, Content and Change
A sea change is happening in the dynamic between ad agencies and brands. As more creative content is going on the web and becoming an integral part of brands’ identities, companies are bringing creative minds in house.


Getting the message right requires knowledge of many factors. Refer back to the stakeholder analysis to develop a balanced message that is visionary, believable, relevant and instructive. And always test the message on a representative group.

4. Prepare the stakeholders.

By faithfully executing steps one through three, there should be a good foundation in place for the change initiative. Arm the stakeholders to go forth and share the plan. Be reminded that change requires letting go of something to grasp something new. That can be difficult for some people. It is not possible to win everyone over. Don’t define success as 100% buy-in. It won’t happen.

People must become aware of change and be willing and able to change. Provide opportunities to shape change and develop solutions. Shape understanding of why change is necessary and include the cost and repercussions of not changing. Provide tools and training to enable change.

Acknowledge the human dimension of change, then provide tactical approaches and tools to manage the change. This is where the communications plan comes in with FAQ sheets, quick reference guides, training materials, briefing decks, articles, blogs and executive memos.

5. Evaluate the results.

Here is where the stakeholder analysis will pay dividends. Use key metrics from that data to evaluate the success of the initiative and make ongoing refinements.

The beauty of integrating the communications plan with change management is that it provides the opportunity to look at ongoing success metrics via a constant feedback mechanism.

In the end, the true measure of success will be the stories you hear from your people. What do they notice about how they are interacting with their work, their customers and one another? Almost every leader comes away with a collection of hallway conversations that reinforce the benefits of change and the transformation that is being created.

Adapted from The Method and The Magic; Every Leader’s Guide to Making Transformational Change Happenby Laurie Axelrod and Beth McDonald.

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Are You Designing for Human Experience? /marketing-news/are-you-designing-for-human-experience/ Fri, 01 Sep 2017 20:07:41 +0000 /?post_type=ama_marketing_news&p=1274 Human experience is the next frontier for winning over customers. Businesses must adapt to a new way of thinking to succeed in a highly competitive corporate environment

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Human experience is the next frontier for winning over customers. Businesses must adapt to a new way of thinking to succeed in a highly competitive corporate environment

The days when brands were able to operate without regard for customer feedback and social media commentary seem like the Dark Ages. How about life without Amazon, Uber, Facebook or Apple? These companies designed their business models around user experience (UX) and customer experience (CX).

CX once served as a source of unique competitive advantage. Today it is the cost of entry. Organizations are challenged to deliver compelling CX in the face of heightened customer expectations and a constantly evolving business environment.

CX has created a marketplace of consumers who value corporate conscience and a demonstration of corporate values. Corporate responsibility is as important to many consumers nowadays as are cost, quality and customer service. Meanwhile, technology and unprecedented access to information is driving a shift in power from companies to consumers. Modern marketers know that consumers create brand stories for companies in real time based on their interactions with products and services, not the other way around.

Don’t get me wrong, CX is still relevant. It makes processes easier for people to work with you. However, with CX alone, the brand is everywhere and meaning is nowhere. This can be confusing for your customers. Without a more human side, they don’t really know you or feel like you want to get to know them.

READ MORE:
UX Is a Digital Design Directive
As brands become more mobile-centric, the importance of impressive visual design must be balanced with more practical concerns.

HX is here. What is it?

While the vast majority of companies are toiling furiously to create a compelling customer experience, a few trailblazing organizations are already beginning to define what is next. These businesses are crafting and delivering a human experience (HX).

Companies focused on HX look beyond commercial needs to understand and meet human desires. Think freedom, identity, knowledge, friendship and creation. Companies that recognize and address fundamental human needs via HX, in addition to meeting functional and transactional needs via CX, are able to deliver meaningful experiences that build relevance and value with their customers, employees and partners.

The HX Evolution

HX is an evolution that demands a new mandate and a new operating structure inside your business, one obsessively focused on human relationships. It requires businesses to organize around purpose versus profit. It calls for emotional connections that go beyond basic consumer need or reason. 

There are core needs we all share as humans and from which businesses can learn and activate. How do you determine which ones matter to your customers? Learn what drives them by understanding their core needs, values and feelings. With an HX point of view, companies focus on human needs by listening and looking at the various target profiles of customers who use their products or services. This helps those companies understand the meanings and feelings that are important to different customer segments and address fundamental human needs, in addition to meeting functional and transactional needs. 

Successful companies look beyond commercial needs to understand and meet more meaningful human needs and values such as freedom, identity and creation.

People find meaning in creating things. If creation is the human value that is important to your customer segment, consider them as a group of creators. Give your target audience an opportunity to create something with your brand by delivering experience at the journey level. Coca-Cola’s freestyle machine is an excellent example where people can make choices and mix and match flavors based on their own preference and taste in the moment. It’s fun and it’s creative.

Coca-Cola Freestyle

How to Get There

The evolution from customer experience to human experience challenges businesses to be something more. Companies must put forth various hypotheses to understand their brand purpose and how it maps to human experience. Which human values and meanings do consumers associate with you? Create an experience and a user interface where these values show up.

Remember that UX + CX + HX is the winning combination. Next, test your HX plan with customers and prospects to find if you have an authentic match. Are customers giving you credit for tapping into their human values? Did you create an experience where your corporate values show up, not just your brand story?

Last, validate your plan with research. The method you use depends on how customers interact with your brand: focus groups, surveys and ethnographic research. Follow people in stores or in their homes or at work. Use whatever means you can until you uncover empathy and other human values. Continue to do so regularly because the listening and the journey never ends.

Here are five HX principles that you can adopt immediately, serving as the foundation for an HX transformation:

  • Live your purpose. Purpose is the bedrock of HX. Use purpose as a clear and enduring reason for customers and employees to belong to your company. Start first by examining or establishing your true reason for being.
  • Consciously align all that you do. Organizations that successfully deliver HX use their purpose as the driver and filter for every single business decision: growth strategy, service processes, supplier choices, product pipelining and HR policies.
  • Elevate interactions through cognitive understanding. Experiences are elevated by an organization’s ability to understand customers on levels that are conscious and unconscious, concrete and abstract, intuitive and conceptual. HX leaders must harness data, explore patterns, systematically study shifting human values, and expose future trends to explain, rationalize and predict customer needs, then design and deploy experiences accordingly.
  • Infuse insights across an adaptive ecosystem. Companies should rapidly respond to customer needs and evolve to meet changing market demands in a way that is apparent and valued by their customers and stakeholders. Test frequently, research, learn by doing and adjust constantly.
  • Invest in the now and the next. HX is a major shift in both internal and external relationships, and, like any relationship, it takes cultivation. Delivering HX requires organizational commitment. Figure out what’s not working, come up with ideas to fix it, and prioritize the ones that you can start today.

Go Human

HX is key to create brand loyalists and brand advocates. Your company may commit to social good as part of CX, but HX goes beyond purpose and into deep meaning. People design their lives around experiences and things that connect them to their values. Customers choose products and services that validate what is important to them. Harness your humanity, tap into your potential and position your company to thrive in an HX-driven economy. 

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Social Connectivity: the New Currency for Brands /marketing-news/social-connectivity-the-new-currency-for-brands/ Fri, 01 Sep 2017 16:42:18 +0000 /?post_type=ama_marketing_news&p=915 Forward-looking brands can get ahead by transacting in the economy of the future: social connections.

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Forward-looking brands can get ahead by transacting in the economy of the future: social connections.

There is a consensus among pundits of all stripes that the U.S. is falling apart at the seams. It is said that the country is more divided, more polarized, more fragmented, more disconnected than ever.

This is wrong.

In fact, America has never been more connected than it is today. People are more networked, more engaged, more joined up. The trend is more, not less, connection; more, not less, unification; more, not fewer, social ties.

This trend is easy to miss, though. It is assumed that social connection looks something like the days of Norman Rockwell or the halcyon decade of Congressional bipartisanship in the 1950s. With nothing like this in sight, the reflexive conclusion is that social connection is ebbing. However, the kind of connection on the rise today is different and thus hiding in plain sight.

The social connection that characterizes the U.S. today is not community in the conventional sense. Instead, it is better thought of as kinship. It is many smaller worlds. Though it is not community of a traditional sort, it is connection nonetheless.

Because social connection nowadays has the character of kinship, it comes with sharp elbows. It feels acrimonious, which is why pundits describe it as disconnection. But actually, it’s all about relationships, which is the underlying dynamic at work. Indeed, the kinship of smaller worlds is the central cultural phenomenon in the U.S. right now.

Perhaps the best way to see what’s at work is to think back on the evolution of the marketplace since World War II. The U.S. economy was a material marketplace immediately following the war. People had lived through two decades of austerity during the Great Depression and the war. Now they wanted stuff, to the extent that many public intellectuals worried that social values had been poisoned by materialism.

In the 1980s and ‘90s, experiences came to the forefront. It was less about material goods and more about intangible experiences. Today, our economy is a social marketplace. Paralleling this progression has been a shift in value. In the material marketplace, the locus of value was the product. As that became commoditized, value was found in services. In the social marketplace today, value is all about relationships.

American spending data tracked by the Bureau of Labor Statistics show the share of wallet commanded by services rose from roughly 50% in 1980 to two-thirds today. What’s now driving spending, though, is everything social. For example, the fastest-growing segment of e-commerce is social commerce, which is to say, relationship-based buying. It’s commerce transacted on social websites, and it’s the impact of social influence on all shopping. Relationships are driving spending. That’s how value is being exchanged.

The trend in evidence is an uprising of allegiances. It’s connection by people picking those to whom they’re loyal and then locking down on those social allegiances as reference points for identity, status and aspirations.

The intensity of today’s social connectedness is a big turnaround. Individuality at any cost has been in ascendance since the mid-1960s. Social conventions or social connections that got in the way were readily tossed aside. A marketer in the 1970s, 1980s or 1990s asking what kind of people—not consumers, but people—were being sold to would have answered: people seeking to fully express their individual selves. So for decades, marketers offered products and services to enable people to be as fully self-expressive as possible.

In the social marketplace today, priorities are different. Individuality hasn’t gone away, but social connection matters just as much. No more individuality at any cost. Today, a marketer describes consumers as people trying to fully express their social selves and social connections, so marketers should offer products and services that enable people to fully express their social selves.

This social resurgence is apparent everywhere. Certainly social media is one manifestation, but it’s more than that. It’s city spaces like the  or the  or the  in Detroit or  or the  in Minneapolis. It’s record numbers of farmers markets. It’s food trucks and cafés and coffee shops. It’s festivals. It’s “Buy local.” Critics today worry about over-sharing—social to the extreme—not under-sharing.

The High Line in New York City

None of this is the community of old, though. It’s kinship. Imagine a collection of individual points. Now imagine a circle that includes them all. That’s community in the classic sense—shared authority and broad engagement that commands fealty and provides a communal identity. Now erase that circle. The dots left are the era of individuality that arose in the 1960s.

Next, imagine all the dots encircled again, but not one circle. Rather, many circles, each inclusive of a small number of dots. That’s the kinship of today, or connection within smaller worlds. Not a big circle breaking apart as pundits like to portray it, but individuals coming together in many smaller circles or smaller worlds.

Community is a collection of differences. It’s a broad, diverse, integrated grouping of people who come together as part of a shared collective. Because differences abound, civility is a virtue and compromise a necessity, both done willingly.

Kinship is a collection of similarities. People have come together because they share something in common that they value and want to keep apart from others. They often resent those who don’t share their common interests or values, even viewing differences as a threat. But they have come together and are connected. They are joined up.

Kinship groups can form around many things, and kinship identities can overlap. Politics is the most visible way people have formed kinship collectives, but it’s all kinds of culture—food, music, health, humor, video, gender and the internet.

Technology abets kinship. Not just social media echo chambers, although that’s a big aspect of it. Even more important are the ways in which data, apps and algorithmic targeting enable people to divvy up and self-sort themselves into smaller groups of shared interests, values and desires. While these are smaller worlds, it’s all about more connection.

George Mason University economist  describes this sorting into smaller worlds as matching. He says that matching is the biggest source of unmeasured gains in quality of life. He argues that matching is the “grand project” of the next generation, equal in importance to the Manhattan Project, the Apollo space mission, the interstate highway system, the Cold War or even winning WWII.

At first blush, this sounds preposterous. But Cowen believes that this use of technology to improve the quality of life is grossly under-leveraged. He believes the underlying technology, while put to trivial uses today, is a fundamentally transformative platform that will spark a revolution of innovations to eliminate the inefficiencies, waste and dissatisfactions of bad matching.

The future is headed ever-deeper into a social marketplace of relationships. People want connection, but connection within smaller worlds. That’s how brands will have to play it in order to win, by making intimate kinship connections that resonate in a marketplace of smaller worlds.

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