Buying is irrational...like investing

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Tip: for marketing inspiration, read up on common traps in investment management psychology and behavioral finance. The same emotional wiring kicks in just about any time people buy stuff.

A quick example from both the Miller Heiman world of sales training and the Warren Buffett world of investment management:

Emotional capital.

Just like monetary capital, emotional capital is a finite resource. The more I expend, the more committed I am to my course of action. This can make an obviously bad deal difficult to unwind. It means that the further two (or more) parties go into a dealmaking process, the more either (or all) will be tempted to act against their own interests in order to reach a given outcome.

This is reportedly why Warren Buffett has played a lot of card games in the course of his career. He saves up emotional (and financial) capital for good deals by ignoring most deals as much as possible.

Savvy buyers and savvy sellers walk away as quickly as possible from deals, because they know that this conserves emotional capital. It helps hold down the error rate. We're only human, after all.

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Self indulgent personal statements are not marketing.

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People ask me all the time why I think marketing should be invisible. Here's one of those examples.

Did you see the 2008 Microsoft/Seinfeld ads? (If not, time for a quick trip to youtube.)

This campaign illustrates why many innocent young creatives go into advertising: to get their personal creative statements funded.

Now, the agency sounds reasonably intelligent and businesslike when talking ABOUT the campaign.

But just look at the ads. Pick someone who you think represents their target audience for those ads (say, a colleague in your office or a friend's college-age kid). Ponder the actions the company probably wants the audience to take. Contemplate what Microsoft wants us to believe about their company and products.

After seeing the ads, what do you think Microsoft achieved?

If you answered, "Awareness," who discovered Microsoft's existence through this campaign?

Here's what I think. Either Microsoft has nothing interesting to reveal, which I doubt, or Bogusky (the agency's creative leader) failed to understand Microsoft and their mojo, which I suspect. Perhaps Microsoft could not get behind a clear message strategy. Perhaps Bogusky's people failed to execute.

But I think the agency's responsibility to make the value of a company more visible through the marketing it creates. Or to bow out.

If Microsoft had spent the $30 million on direct response ad testing with niche markets, niche messages, and niche media where they think they have growth potential, would they have come out ahead? Maybe.

To know us is to love us - right?

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Awareness is a common goal of marketing.

The assumption, of course, is to know me is to buy from me. Image advertising. Being funny, memorable, businesslike, serious, whatever we think will help the customer remember us.

You know the textbook example of great awareness/brand marketing? Movie marketing for Snakes on a Plane. It went viral months before opening day. It had incredible word of mouth. Heck, half the movie was designed by the target audience. Prelaunch estimates projected box office earnings in excess of $100M.

The problem, of course, is that awareness did not translate into sales. Actual U.S. box office? $34M. If you account for both production budget and marketing expenses, the franchise broke even at best. A spectacularly successful failure.

That leap of faith between awareness and sales doesn't play well for marketing teams in tough times, either. How does marketing show me the money?

First, here are my assumptions:
- Your company doesn't already have a century-old storied brand.
- You don't have money or time to build one.
- You are under the gun to drive sales this fiscal year.
- You understand your customers well enough to talk to them in a manner they will consider directly and actionably relevant, or if you don't you're willing to roll up your sleeves and figure it you.

If those are your parameters, then the marketing answer, in my view, is two things.

Thing One: Strategic coordination between operations, marketing, and sales.
Someone is driving the conversation internally and externally so that your company is able to make promises it can keep and live up to the promises it does make. This isn't about perfection or even operational excellence. It's about understanding the reality of your operations, having some clue of your customers' mindset and needs, and being able to put your company in a relevant position between the two. If your marketing message makes either your operational delivery team or your customer facing sales people cringe (let alone complain openly), do some more work before you take it to market.

Thing Two: Direct marketing.
Direct marketing teaches us to question anything that (1) can't be measured, and (2) doesn't lead to revenue.

Run campaigns which intend to get a carefully identified set of persons to take specific actions to move through their buying processes. Measure what actually happens. Then tweak your approach based on prospects' behavior and feedback from sales people.

Awareness building tactics that help you gain credibility with your target buyers and influencers can help. But you should be able to draw a line from those awareness tactics to a step in your demand generation process or in your sales cycle, and identify some evidence of lift. Even if it's anecdotal.

The meat of your marketing budget should go into getting buyers and influencers to take concrete, measurable steps toward you, which lead to other measurable steps, which lead eventually to a sale.

Marketing voodoo...the fluff formerly known as collateral...and why we made the logo blue.

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A friend and colleague was recently describing common failings noticed at marketing departments, especially in startups, with a number of companies where he has consulted (not as a marketer).

His first observation:
What marketing VPs do often looks like voodoo to him. And a lot of it looks like a me-too game. "If I pull up our website, and a competitor's website, they sound like the same company. And I can't tell what either company actually does."

His second observation:
When he asks honest questions about the how and why of marketing tactics that are going out the door, he often gets a huffy response.

Now, even a patient professional (in any discipline) can tire of being second guessed within their zone of expertise. But I think my friend is correct in viewing these 2 observations as signs of trouble in a marketing effort. Here's why.

- Even if your strategy has all the validity in the world, if the rest of the company doesn't understand the marketing message, you're in trouble.

The rest of the company doesn't necessarily have to understand why the CIO picked Microsoft or why the COO closed the plant in Guangdong province. (Though it's better if I understand how these visible decisions serve the same larger strategy that my daily chores do.) However, the marketing message is closely tied to the entire company's strategic purpose. We shouldn't all parrot the same canned phrases to describe why customers buy from us. But if we really have no shared ideas about what our customers expect to get from us in exchange for their money and trust...that's going to breed problems in delivery. Marketing messages are greatly handicapped if they are concocted in a vaccuum. They are much more powerful when rooted in past operational results, and in companywide shared beliefs (okay, how about overlapping beliefs?) about customer needs.

- Differentiation isn't what I say it is in my meticulously crafted positioning statements. It is what my customers say it is.

Quite frankly, good line managers and strong sales people know more about the customer than their marketing executives do. They also know more about what the company does and how the sausage gets made. Carefully observe the reaction of your delivery organization and sales people to a big redesign of your website (or other marketing materials). I would argue that any silence, hesitation, question, or concern they express is a red flag.

If they want to know why the logo is blue, well, you may not need the most sophisticated of answers to that. If they think the logo is ugly, it's worth hearing why. If they don't understand your tactics, you can be gracious about others' lack of expertise in your profession. And not everyone has to love your tactics.

But if good people in other parts of the company don't see a connection between what you're telling your customers and what those people think the company is about, then drill down and understand that one.

Even if your campaign tactics and strategic approach are "right", getting questioned about them creates a chance to lead. You're never going to be through building that shared (OK, overlapping) vision of what the customer needs and what we're all supposed to be doing about it.

Attention B2B online marketers: one for the swipe file!

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For you non marketers, here's a secret of the trade. Many marketers maintain a little box called the Swipe File. It's just a collection of marketing tactics we've observed that caught our eye as an example of a good idea, good execution, clever humor, whatever.

My tip for your swipe file: Tatum LLC. They have a fantastic email newsletter targeting financial executives. (Full disclosure: I have no relationship with Tatum except for being buddies with some of their current and former team members.)

Regardless of our profession, all of us will be spending more time helping financial executives understand why we want their money for our various game-changing, must-have, do-it-right-now projects and tools.

Wondering how the financial executive thinks? What they're worried about? What language they speak? How they define value?

Or, are you simply a hapless B2B marketing looking for ideas that speak to the executive reader?

Check out Tatum's website & go sign up for their e-blasts. (And it wouldn't hurt to go brush up on financial ratios and Net Present Value, too.)

The end of top-down message control

For the corporate brand, online social media represent the end of top-down message control.

If media have gatekeepers, then messaging is a top-down event. To be heard, I have to make friends with gatekeepers. (In many markets/niches, that's not over. It's just not as powerful a channel as it once was.)

If media are democratically owned and accessed, then messaging is a 2-way conversation. That is the case in social media.

To get close to our customers in this 2-way conversation, we are going to have to assume that they are going to talk. We will not always sell more stuff during this conversation. We cannot control this conversation. It may not go where we want it to go.

But is this really different from the way it's always been? Conversation was always going on among our customers. It was going on in homes and bars and churches and schools and offices, where we couldn't hear it. We had to pay market researchers to extract a cross section of it and filter it into PowerPoint and data charts for us. We had 2-way glass and focus groups trying to hear those animal spirits in a lab setting.

The good news? Now we can hear what they are saying: faster, easier, and less expensively than listening has ever been. We can also respond faster, more relevantly, and more purposefully than ever.

Now, the group conversation influencing a B2B complex sale, especially at big companies, remains mostly invisible to outsiders. The CIO in the throes of an agonizing ERP implementation and the COO with a botched call center outsourcing program are not going to Twitter about it in real time. The risk of a big, tough decision is still spread across multiple stakeholder departments. Many people in the mix can still say "No" to a vendor even if they cannot greenlight the project itself. Social media won't bring me those dynamics. Gatekeepers are still with us.

However, an incredibly valuable stream of conversational chatter is available to an incredibly wide variety of companies. To which you can listen for free, participate openly, and influence more directly than ever. Here's a small but significant B2B example: Look how many professional industry analysts are on Twitter. Smart gatekeepers are mixing with this public conversation stream in order to stay relevant.

Will this new world of connectedness to our customers be more profitable than the old one-way world? Maybe. But this highly visible, faster-than-ever group conversation is here as long as Twitter and the other social media are around to host it.

Long-term impact requires short-term impact

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Fortune 100 marketers admitted to Marketing Sherpa that long-term "brand equity" campaigns are largely bunk. If a campaign does not produce a short-term lift, there will not be a long-term lift, either.

This doesn't mean that brand power doesn't exist. In a world that's looking for more marketing accountability, though, visibility is not an end in itself. If you don't have a strategy for monetizing that visibility... then your marketing spend is about something other than business, which is about ROI.