The theme of the recent Forrester Marketing Forum held in Los Angeles this past April was Adaptive Marketing: How to Design a Flexible Organization to Thrive on Change. As usual there were Forrester speakers and presentations by big brands who have been working to either adapt their own marketing efforts to the fast-changing consumer, or providing solutions for marketers to better adapt. This post summarizes the ideas, notes and quotes that struck a meaningful chord with me and epitomized in my mind the concept of adaptive marketing.
What is adaptive marketing? Forrester defines it this way.
A flexible approach in which marketers respond quickly to their environment to align customer and brand goals and maximize return on brand equity.
Ok, fine. But what does that mean and where do we begin? Well, it begins with data, and lots of it. More data than we as marketers have dealt with in the past. And we need it faster than we have received it before and must be willing to improve our agility and act on the data much closer to real time than ever before. It’s tricky because we have all been handcuffed in the past by analysis paralysis. By not knowing when we have enough data to make the decision. Being an adaptive marketer means giving up a little on the temptation to ask for one more cut of the data to make a perfect decision, and act now on making a good decision, then, well, adapt.
Why is adaptive marketing something we should be talking about today? I believe that it has a lot to do with the fact that consumers are enjoying their new found power of being at the helm, and becoming more comfortable with bypassing traditional channels to research and learn from others who have had real experiences with brands, products and services. It’s a new world for consumers and brands, and the consumers are moving ahead. But then again it’s much easier to be agile as a single person than it is an inertia-laden bureaucratic corporate dinosaur (oh, that felt good). The traditional marketing funnel is breaking down as consumers bounce out and check blogs, forums, networks and friends before making a buying decision. This activity is accelerating an an alarming pace. Power is shifting. Thus, marketers need to adapt or risk becoming irrelevant.
Let me be clear. I am not sounding an alarm or posting my version of the Mayan calendar. Today’s marketing machine is pretty darn good. But change happens faster with each passing year, and the consumer is like Benjamin Button, he’s getting younger all the time. Good firms tend to devote a lot of thought to the future. And a funny thing happens when you raise your head up and peer over the walled garden. You see what’s out there. Here’s a glimpse of what you’ll see.
Adaptive Marketing: Rethinking Marketing Methods in the Digital Age
Among a number of interesting things presented by David Cooperstein, VP of Forrester, was a brief history of media. He took us through radio, TV, and early as well as modern digital media. It was a clever parallel of media and marketing, and in fact he states Media = Marketing
- Viewers – customers
- Distribution = media fragmentation
- Journalists = marketers
The history lesson was backed up by data that shows new media has mass appeal and is being adopted very quickly. People consume different kinds of media simultaneously, but the content they consume is oftentimes different.
This has significant implications on marketing messages, especially advertising. The user’s attention is fragmented. Wireless networks combined with the powerful capabilities of smartphones means consumers multitask to the hilt. Not good news if you want to breakthrough with your new product release. This is an important point. If a marketer can stack their message cross various media and reach the consumer during this multi-tasking moment, it will improve consideration and conversion. An article in today’s New York Times states:
For the first time the amount of data in text, e-mail messages, streaming video, music and other services on mobile devices in 2009 surpassed the amount of voice data in cellphone calls.
Mr. Cooperstein lists three tenets of adaptability one should consider to deal with this new reality.
- Think and move differently
- Listen more, react intelligently
- Target people, not statistics
Probably to no one’s surprise, social plays a large part in adaptive marketing. And of course no Forrester forum would be complete without some new illustrative framework. The Social Intelligence Life Cycle was posited several times during the day and a half. It warns marketers that they must begin to manage the analysis of customer data from social sources, and use this data to activate and recalibrate marketing programs.
Now you may not be sold on the value and importance of social just yet. That’s fine. I would be the first to admit that it’s not mature and can’t compete head-to-head with traditional marketing practices. But there’s one fact no one can deny. It’s a treasure trove of data that marketers don’t usually work with. That’s a critical aspect of adaptive marketing. And yes, it’s 1,000 miles wide and one inch deep. Here are some guiding principles from Forrester.
- Adapt your process
- Plan iteratively and frequently
- Partner for creativity, not durability
- Use predictive metrics in addition to descriptive ones
Integrated Customer Marketing™: Technology And Services That Enable Adaptive Marketing
The Merkle Chairman and CEO, David Williams spouted some great ideas from the big stage. Merkle helps companies collect, manage and interpret all types of customer data. Here are some of his wise quotes.
- Adaption is how marketers can create competitive advantage.
- The digital revolution is enabling and accelerating the customer revolution.
- Competitive advantage in the future will live in how effectively an organization can understand, track, engage, measure and influence consumer behavior at the individual level
He showed a graphic depicting how one might leverage data to attain a competitive advantage. As marketers move from mass to conversation the data gets more granular. The more one can collect, understand and act on granular data, the greater the advantage they will have in the marketplace. Makes sense.
He offered the following advice to marketers:
- Push more money/spend into trigger marketing
- The next decade is about media, not channels.
- Real time data needs real time interactions
- Create strategies that optimize the value of consumers over time
- Move from a campaign mentality to a customer mentality
Mr. Williams had his twist on adaptive marketing termed Integrated Customer Marketing™. Defined as an optimization framework that maximizes customer portfolio value through targeted management of customer interactions across marketing sales and service throughout the customer lifecycle (there’s that word again). He spoke about managing a campaign inside a conversation (social). Interesting. If we could do that we would unlock tremendous value.
Know Me And Be Relevant: How Disney Creates Guest Relationships
I think we would all agree that Disney is a great marketing company. If you have ever been to their parks it gets hammered even further home. Tom Boyles, Senior Vice President Global Customer Managed Relationships for the Disney parks and resorts spoke about how they leverage customer data in a real time world. Here are some of his thoughts.
What is relevance and marketing? Knowing your customer well enough at any point in time or place that you would know exactly what to do next.
He shared real examples of how they are constantly adapting their data collection and marketing practices to improve the customer experience and impact business results.
- It’s not so much about did we get someone to the park. It’s more about did we get them back to the park.
- A customer never met a channel they didn’t like, so closely manage them all.
- Connect with your customers across all the channels and media on their terms.
- No one owns the customer, but everyone owns the moment.
- Our view is that it’s not just customer relationship management, but CCRM, continuous customer relationship management.
Transforming to a Real-Time Marketing Organization
Steve Sickel, Senior Vice President, Distribution and Relationship Marketing for Intercontinental Hotel Groups (IHG) took the stage. He was an outstanding speaker and had lots of information to share. As the largest hotel group in the world they have lots of experience with customers and data. For Mr. Sickel, it was all about moving his marketing team quickly into the digital world. He echoed what we constantly hear. That customers are more informed, they control the purchase process and demand greater relevance. Traditional media is the wrong tool for the job today because it’s too slow and generic. Customers behave in real time and IHG was behaving in batch. His formula for success: investment, technology and organization.
- Investment – Move traditional media to digital media. IHG has now shifted 85% of their media spend to non-traditional channels. This includes search marketing, online advertising, web retargeting, mobile and social.
- Technology – Automate marketing systems and transform them from slow, reactive and limited to “Right-Time” marketing where they can do thousands of personalized campaigns at a time.
- Organization – Break the silos of customer data and experience trapped in each individual channel and make accessible across the enterprise, as depicted below.
Old IHG Organization
New IHG Organization
Very clear, focused strategy to ensure IHG is poised to market to their future guests. Of all the presentations, this one laid out the best framework for how a company might go about adapting their marketing practices, systems and personnel.
Know Thy Customer: How Customer Intelligence Becomes a Strategic Weapon
The last keynote I’m going to mention came from Dave Frankland, Principal Analyst at Forrester. It was a perfect place for his talk. Much of what was said up until this moment was about data; specifically collecting, managing and acting on it. Mr. Frankland took it up a notch by challenging us to translate that data into customer intelligence for better decision making. He defines customer intelligence this way
The management and analysis of customer data from all sources, used to drive marketing performance and business strategy.
He parses the concept into three buckets.
- Functional intelligence
- Marketing intelligence
- Strategic intelligence
The way to do this, according to Dave, is to begin to look at your customers as assets and liabilities. Not all customers are alike. Overlay your business balance sheet on your existing customer segments and you will see who makes you money and who causes you to lose money. Here’s a great focusing fact from Larry Selden, Professor emeritus at Columbia University.
The bottom 20% of customers can drain profits by at least 80%… while the top 20% can generate 150% of a company’s profit.
He cited some case studies from Fresh Direct, Farmers Insurance, Best Buy and ESPN. All great examples of how going through this exercise transforms data into intelligence.
What I Didn’t Hear Enough About
Which brings me to something I didn’t hear enough about at the forum, but alluded to earlier in this post. Mr. Frankland’s presentation got at it extremely well. That is marketers must refine the art of knowing when enough data is enough. We don’t need reams of it. We need the right data fast and then we must be able to recognize that we’ve got enough, then act. It also goes beyond enough, into, is it the right data? Marketers need to also look for new sources of data, vs. looking at the same old reports. It’s implied in many of the keynotes and track sessions, but knowing when to stop asking for data and having an eye for knowing what data to collect (it’s not all data) is something we probably could all learn more about. Forrester people, I know you’re out there. Perhaps you can assist here.
I’m a veteran of Forrester Forums, and no matter how many I attend, I’m always rewarded with some great nuggets and outstanding networking opportunities. They excel at monitoring the vital signs of the marketplace and at delivering content right when it’s most useful. Keynotes here were very strong and consistent. Track sessions as always are more uneven.
Here’s my vote for best quote from the forum. I apologize that I am unable to attribute it.
Fast is fine, but accuracy is everything.
All slides are property of the firms that presented them. Content in this post originates from my notes taken during the forum combined with my personal perspective. All photos are mine.