CIM Sussex- Innovate with intelligence May 2012

CIM Sussex INNOVATE WITH INTELLIGENCE

Angela Dalrymple Daniel Rowles

Thursday 24th May 2012

Our agenda

Welcome from the CIM Sussex committee - Laura Winter Knowing your market better than it knows you – Angela Dalrymple Coffee Break Latest digital marketing techniques – Daniel Rowles Q&A

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CIM Sussex Knowing Your Market Better Than It Knows You

Angela Dalrymple – Presentation to CIM Sussex Senior Teaching Fellow, Imperial College Business School [email protected] Director – Prodata Partners Ltd [email protected] Tel: 0845 054 9929

Angela Dalrymple

Senior Teaching Fellow in Marketing at Imperial College Business School Associate Professor in Marketing with University of St Thomas Minnesota Lecturer in Marketing with Portsmouth University, London School of

Business & Finance, University of Wales & Open University Tutor on CIM Professional Diploma & Certificate courses with Oxford

College of Marketing MA & BA (Oxford University), MBA (Liverpool), DBA (Edinburgh Business

School) Senior Professional Member of CIM, MRS, IOD Board Director & senior marketing roles with AT&T UK, Thomson Reuters &

PricewaterhouseCoopers Director of Prodata Partners – market strategy & research consultancy 27 years’ experience in marketing and strategy 4

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Discussion Importance of knowing about ongoing market trends,

customer segments and competitor activities

Role of market research in effective marketing decision-making and marketing plans

Smart applications of secondary and primary research

Free & no/lo cost sources of useful market research

Reporter: ‘How do you sleep at night?’

CEO: ‘I sleep like a baby’

Reporter : ‘That’s wonderful’

CEO: ‘No no - I mean, I wake up every two hours and start crying’ (Roberto Guizeta, ex-CEO of Coca-Cola, quoted in Fortune)

Knowing Your Market Well Is A Tough Challenge

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Market Intelligence Audit – Show of Hands…

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But How Many of Us Really Know Our Market Better Than it Knows Us?

So What do You Need to Know About Your Market?

Key objectives are usually to: • Assess the market (e.g. attractiveness) • Understand its dynamics (e.g. trends, competitors) • Use this knowledge to implement a marketing plan

There are a number of dimensions which need to be considered, including: • Market size

• Look at total sales level • Consider the potential market

• Market growth • What will be the size of the market in the future?

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Key Dimensions of Market Analysis

Market size Market profitability Market growth trends Main products in the market Customer attitudes and buying behaviours Major competitors and market shares Distribution patterns Marketing strategies used in the market

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00/00/0000

Knowing Your Market Used to Seem so Easy… So What‘s Changed?

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How are customers changing through going digital?

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STATIC

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So What Do You Need to Know About Your Customers?

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Finding Realistic Customer Market Metrics is Becoming More Difficult Old metrics - examples • Return on marketing investment • Profit per customer • Return on promotional measures

New metrics - examples • Traffic / distribution • Response rates • Average order value • SEO • Customer acquisition costs • Integrated marketing campaigns / cross platform

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Types of Customer Data Which Can Help Us • Volunteered data – data provided by the customer, e.g.

by registering on a website • Behavioural data – data derived directly from the

behaviour of the customer, e.g. purchasing or bill payment patterns

• Attributed data – data which is extrapolated from the results of market research, e.g. by interviewing a cross section of prospective customers

• Profile data – data obtained by linking the organisation’s database with other sources of information, e.g.:- • Geo-demographic profiling data, such as MOSAIC and ACORN • Lifestyle databases, e.g. Claritas

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Role of Data in Knowing Our Customers • Customer database information can be used for profiling

customers in many different ways, e.g.:– • Timing and volume of purchases • Geographical location • Price preferences • Profitability

• Using data to profile customers can tell us:- • Which customers are most profitable & what their characteristics

are • How to create segments/groups of profitable customers with

similar characteristics • Which customers are most likely to respond to our

communications & marketing campaigns 18

Data Also Helps Us Know About Customer Lifetime Value • Customer Lifetime Value (CLV) is now used by many organisations

interested in retaining customers over the longer term, e.g. services organisations

• CLV= total contribution (revenues minus costs) of a customer over their lifetime with the organisation

• Enables organisations to calculate the future profitability of customers

• CLV forces organisations to focus more on customer service and long-term customer satisfaction, rather than short-term sales

• CLV helps organisations decide which customers to invest in long to gain a positive return on investment

• Customer databases play a key role in providing the data for this analysis

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We Can Use Data to Pull Customers up the Loyalty Ladder

Prospect

Customer

Client

Supporter

Advocate

Partner

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Word-of-mouth Referral & Customer Relationship Priorities

Reichheld (2006) Net-Promoter Score

Detractor Passive Promoter

Profitability

Low

Low High

High

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• The Net Promoter Score is obtained by asking customers on a 0 to 10 scale, where 10 is "extremely likely" and 0 is "not at all likely":

• "How likely is it that you would recommend our company to a friend or colleague?" • Respondents are categorized into one of three groups:

• Promoters (9–10 rating); Passives (7–8 rating); Detractors (0–6 rating) • The % of Detractors is then subtracted from the percentage of Promoters to obtain

a Net Promoter score (NPS) • An NPS that is positive (i.e. higher than zero) is good, an NPS of +50 is excellent

(Apple, Harley Davidson)

Brassington & Pettitt, 2006

We Also Need to Know About Customer Buying Influences

Situational influences

Individual influences

Group influences Marketing mix

Decision-making process

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Customers are subjected to a variety of influences on their buying decision process

Moving From Corporate Social Responsibility to Terminator Brands

During the “noughties”, consumer attitudes in many markets shifted towards societal concerns around ethics, sustainability and corporate social responsibility from marketers – The environment – Global warming – Recycling – Fair trade

However current marketing analysis shows consumers now prefer decisive “terminator” brands – Brands which take away the stress of everyday living, and “terminate”

consumer problems – E.g. Lynx, Sky, Nike etc. – “Sorted!”

So do your customers see you as Nurturers or Terminators??? 23

We Also Need to Know How to Scope Customer Segmentation

Segmentation represents an effort to identify and categorise groups of customers and countries according to common characteristics

10.5 million dogs are owned in the UK – what products can be targeted & positioned to this segment?

And in reality - who owns whom…..??? 24

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• Measurability • Accessibility • Substantiality • Profitability • Actionability

What do we need to know for effective customer segmentation?

Bases For Consumer Segmentation

Usage Behaviour Volume, Price, Usage Frequency

Judgmental Data Attitudes, Perceptions, Motivations, Preferences

Most appropriate for planning in stable market conditions

Better guide to behaviour under changing market conditions Market Descriptors

Demographic, Socio-Economic, Geographic, Lifestyle, Family life cycle

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Bases for Business Segmentation Macro Size

Location Usage rate

Micro Product

Applications Technology

Purchasing and decision-making processes

Buyer-seller relationships

How are these criteria changing?

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Do we know enough about our most dangerous competitors?

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Competitor Analysis is Getting Harder... We live in a world of hypercompetition

– A dynamic competitive environment, in which no action or advantage can be sustained for long

Competition unfolds in a number of key areas which we need to monitor amongst our competitors – E.g. price, quality, know-how, entry barriers, and

how deep their pockets are

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Knowing Your Competitors

• Need to focus on identifying threats, opportunities or strategic uncertainties created by existing or potential competitors

• Major steps:

1. Identify current and potential competitors 2. Understand competitors and their strategies

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Hollensen (2011) 31

Value Analysis: Competitor

Benchmarking

So overall, we need to know about three key information areas

1. Information on the market environment – E.g. PESTLE factors (Political, Economic, Social, Technological,

Environmental, Legal) 2. Information on customers

– Customer identification – Customer characteristics & segments – Main influences on what, where, when and how they buy the

product or service 3. Information on other organisations

– Gathering information on competitors and their actions – Comparison of performance to identify strengths and weaknesses

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Key Methods of Finding Out What we Need to Know Market research - market and sales forecasts / sales

potential Product research - R&D and product testing Attitude measurement Price research - price perception and sensitivity Distribution research Marketing Communications research Tracking studies e.g. customer satisfaction

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Collecting Secondary Data

Collection of secondary

data

Internal sources

External sources

• Accounting / sales records

• Marketing database

• Periodicals

• Census reports

• Government publications

• Internet

• Other

Dibb et al, 2006 34

Collecting Primary Data

Collection of primary

data

OBSERVATION

SURVEYS

• Personal

• Mechanical

• Mail

• E-mail /Internet

• Telephone

• Personal

Dibb et al, 2006 35

Internal Secondary Research Sources Customer databases – behavioural data, volunteered data

and profiling data Sales figures Operational data – stock levels, etc Customer satisfaction results Advertising spend Customer complaints records Effectiveness data from promotional campaigns Marketing research reports from past studies

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External Suppliers of Market Data List compilers/brokers

– Capture list of individuals and organisations and sell them to companies for marketing purposes

Full-service agencies – Offer a full range of research services and techniques – Able to undertake every stage of the research (research design

through to analysis and report writing) – Examples: TNS (www.tnsglobal.com), Ipsos (www.ipsos-mori.com)

Independent consultants – Offer a range of services from undertaking small surveys (B2B),

manage parts of marketing research process or advise on information collection, storage and retrieval

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External Secondary Research Sources Internet search engines Social media and networking tools Directories – Dun & Bradstreet, Financial Times company briefings Governments and Government Agencies (e.g. CIA Factbook) Published marketing research reports Trade Press (Editors and Journalists) Professional Institutes (CIM) Newspapers and magazines (national and local) Online news sources and aggregators (www.newsnow.co.uk, http://

uk.reuters.com Specialist libraries Market Research Agencies

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Sources of Information - Institutions

Business libraries University libraries Chambers of commerce International Market

Intelligence Centre (Trade Partners UK)

Business Links Embassies Banks Trade associations (CIM,

IOD, CBI)

Export councils Distributors Sales subsidiaries Foreign trade organisations

such as JETRO (Japanese Export Trade and Research Organisation)

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Online Sources of Information & Socialnomics Online communities, discussion

boards and blogs – Increasing number of blogs and

discussion forums present marketers with an opportunity to gain valuable insight into thoughts of consumers

Social networking e.g. Facebook, Twitter, LinkedIn – Provides an opportunity for

organisations to: • Gauge consumer reactions to

marketing campaigns • Monitor brand reputation • Analyse competitors • Gather insightful market research

40 AVG SMB Market Landscape Report 2011

Using online customer intelligence

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Sources of Information - Online Databases Brand data

– www.brandchannel.com – www.gbrands.com – www.globalstrategies.com

Business Week – www.businessweek.com

The Economist – www.economist.com

European Union – www.europa.eu.int

UK Trade and Investment – www.uktradeinvest.gov.uk

UK Chambers of Commerce – www.britishchambers.org.uk

United Nations – www.un.org

World Bank – www.worldbank.org

World Fact Book – www.cia.gov/cia/publications/factbook

World Trade Organisation – www.wto.org

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Primary Research Information

Focus groups

Surveys

Observation

In-depth interviews

Experimentation

Omnibus Surveys • Organisations pay to include one or more questions in a

survey being sent on behalf of several organisations. • Much cheaper means of surveying if only a few questions

are needed. • BUT the client is restricted by the sample that the

research company uses and cannot choose where its questions appear in the survey.

• Omnibus survey suppliers vary by sector, geographical coverage, costs, sample size, speed of turnaround, etc.

E.g. http://www.yougov.co.uk/omnibus 44

Panels • Used to collect data over a period of time from the same sample of

people. • Useful for analysing trends, changing attitudes to political parties,

preferences relating to new types of products or ways of purchasing e.g. online banking.

• Challenges include retaining the members of the panel over time and careful replacement of members who drop out.

• Online survey panels are increasing in popularity and will often recruit a large number of respondents from which it will sample to fulfil client quotas

www.toluna.co.uk

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Online PR Objective • Increase the number of online conversations about your brand • Drive targeted traffic to your website • Increase your thought leadership position

What is it? • Social Media • Social Bookmaking • Blogging • Microblogging • Forums • Video Sharing • Photo Sharing • Podcasts

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Other free sources of market information Freebie market research websites

– www.researchandmarkets.com – www.marketresearch.com – www.theregister.co.uk – www.techdirt.com – www.lightreading.com – www.totaltele.com – www.brandrepublic.com/ – www.b2bm.biz

Market research agencies – E.g. GFK, B2B International, Circle Research etc. – all publish free white papers / blogs with

market insights

Free survey tools – www.surveymonkey.com – www.surveyz.com

Discussion forums offering free market research – www.freemarketresearch.co.uk

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Free sources of market information Official market statistics

– www.fao.org – United Nations import / export data – www.ilo.org – international labour data – www.imf.org – international economic data – www.intracen.org – international trade statistics – www.worldgazetteer.com – international city, country & population data – www.statistics.gov.uk – UK business and consumer data – www.bankofengland.co.uk - UK financial information – www.hm-treasury.gov.uk – UK economic indicators and forecasts

http://www.youtube.com/watch?v=xTDN8cgCP3o

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So Do We Now Know More About Our Market Than It Knows About Us?

If not – let’s get researching!

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Thank You! Questions Welcome!

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Innovate with Intelligence: Latest Digital Marketing Techniques Daniel Rowles

Who Am I? • Daniel Rowles • CIM Course Director, Lead trainer for Econsultancy • 14 Years experience in digital marketing

– Both client and agency side • BBC, Vodafone, MasterCard, Warner Bros, Boots,

John Lewis, Aviva, Sony • @danielrowles

Show of Hands…..

Google (or any other) Analytics

Facebook LinkedIn Twitter Pinterest Google+

• Latest changes • Planning • Measurement (and pitfalls)

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What I’ll Cover

Digital Marketing in Perspective • 8 years of video are uploaded to YouTube every day

• Average view time of a YouTube video is 2.5 seconds

• The average Facebook user is 38 years old

• Google+ to reach 400M members by end 2012

• 92% of US children have some sort of web presence by the time they are 2 years old

• All Stats from http://www.google.co.uk/intl/en/landing/internetstats/

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http://www.google.com/insidesearch/plus.html

Bing Social Sidebar

Social Proof

Google Privacy Policy

‘we can tell you that you’ll be late for a meeting based on your location, your calendar and the local traffic conditions.’

Volume-based metrics • 10 Million ‘Likes’! • What does that mean?

– Engagement – Sentiment – Share of Voice – Revenue

EdgeRank

Google Goggles and visual search

http://www.google.com/mobile/goggles

Recognzr

http://www.tat.se/

SocialMention.com - FREE

Viralheat

Radian6

Listen

Build Relationships

Share Content

Engagement in action

Considering objectives

Goal • Sell Products/Services

Objective • Create Awareness and

Engagement

Measure

• Share of Voice • Audience Engagement

Tactics

Meaningful Information

Share of Voice

Mentions of Brand Total Mentions

Competitors and Brand

Audience Engagement

Comments Views

The Dangers of Last Click

Email Search Conversion

Search Conversion

Multi-Channel Funnels

Rule for Magnificent Web Success • For every $10 spent on analytics data • Spend $90 on people to tell you what it means

• Avinash Kaushik - Google

The path to ROI

Custom Dashboard

SEO

Email

Display

CRM PPC

Social Media

Affiliates

Same Fundamentals Apply

http://www.youtube.com/watch?v=CvVp7b5gzqU

Conclusions • Set objectives

• Select appropriate channels • Measure, engage and improve

Thank you

• @DanielRowles • [email protected] • www.targetinternet.com

Thank You

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