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Talk about complexity, I will never forget the day that I first learned about Turducken! For those of you who don’t know, a Turducken is exactly as it sounds; a chicken stuffed in a duck, stuffed in a turkey (http://en.wikipedia.org/wiki/Turducken). You know, the classical hierarchal relationship of meat taken to the extreme. They go for about US $100 after shipping, but the adventurer can stuff their own. When I think of customers I sometimes think of the Turducken – Let me break this down a bit.

I have always thought that the most important thing that a company can do is to keep their customers. Makes sense to me, after all there is that great concept that its “X times as expensive to attract a new customer than to keep one”. Now don’t get me wrong, I would walk on broken glass without shoes uphill in the snow to help my customer with their Oracle Forms 4.5 on top of a My Sql implementation in a Citrix environment running off of a 1982 walkman radio. But when businesses say customers, they know what they are really talking about. But let’s decompose this a bit more.

You all know those sayings – the ones we all know and love…

• Customers are great!
• The customer is always right!
• Customers may not be right but they are never wrong!
• Our Customers are number 1!

Well, over the years I have come to modify that statement a bit and here’s why. “Customer” is a large group to take into analysis at face value. Customers are a complex group. Companies shell out a lot of moolah to understand this group. After all, this group is responsible for the business’ inertia. When companies wish to understand who their customers are, they don’t simply run a ‘customer listing’ and read through it while attending some boring IT meetings about data governance. They spend big money and they head down the road that ultimately leads to … Segmentation.

Segmentation is the classification or taxonomy of the business’ customers. They are usually based on habits or lifestyles plus some kind of loyalty factor. This data is usually derived by their purchase behavior – at the purchase or cart level. There you go; you now have X-subsets of customer. The theory is that each has their own set of core beliefs, common principles and behaviors. The goal is to then approach them in a more intimate manner, allowing both a level of customization and attaining some economies of scale.

However, let’s take another look at customers. This time lets add two driving forces; Business Intelligence and a potential recession. The impending economic fear will be the catalyst for innovation, as it always is. To maintain market share or to at least out pace our competition, companies will need to do something different and the conditions seem to be perfect. Lets pick up the story from above and write the ending.

Tom is returning from lunch when he just happens to walk past the marketing folks. They are talking about how to approach the “young and fun city dwellers” segment and how that must be different than the “impoverished with kids in college” segment. As he rounds the corner, he passes the finance folks as they make mention that yesterday’s margins are down 3.2% and that translates to a need for some kind of new report because it will impact profitability. Almost back to his office, he passes the sales folks who are chattering about how the “young and fun city dweller” are buying more and that even the “impoverished with kids in college” seemed to spend their tax refunds this week. And it hits him…

What if we combine this data? What if we work together? What if we look at customer loyalty and segmentation, but we add a dimension called ‘profitability’? Like reading the last 20 pages in a good novel, Tom plays this through and nets out as follows:

If we look at our segmentation of customers, within each group:

• We have customers who are loyal and profitable – these are out best customers. Our number one job is to keep these customers. Things I can do are; understand who they are and engage them on a more intimate level, customized for them (special offerings, internet bindings, tools, tips, personalized greeting, etc…), surround them with rewards and incentives (redirecting the money spent on the next group).

• We have customers who are not loyal and not profitable – why do we waste our resources on these folks? Or maybe it makes sense to cut them off completely. Recently Sprint gave their top 1,000 problem customers the boot (http://www.washingtonpost.com/wp-dyn/content/article/2007/07/06/AR2007070602131.html). I’m not going to mention the online movie delivery service I use, but it seems the more I rent the longer it takes to get my movies. If I rent only a few, I get really good service. Coincidence?

• Now we need to understand how to make our profitable but non-loyal customers more loyal. How can we deliver better service, what promotes loyalty, maybe we should ask this subset?

• And we need to understand how to make our non profitable but loyal customers more profitable. Can we push higher margin items, does it make sense to engage them with alternatives, blend costs/products to move margin?

Of course this is only the beginning. BI can bring a depth of understanding to those who look across the enterprise to bring data together. The above scenario is only the tip of the ice berg – it’s the beginning point of an in-depth analysis that will deliver real and actionable information. Look for information to unhide and your customers will flock to your side!

Now for the perfect customer saying, feel free to quote me on this:

“Our best customers are best!”

It’s the perfect storm out there and BI just might be the generator that keeps your business’ lights on. If you do lose power, please make sure to eat up that Turducken – it only lasts a day in the fridge!

~ Scott Felten

In reality it took months to determine that there were in fact numerous clusters of our best customers, yet no master list that everyone could agree upon.  Marketing had its list, and so did sales, and accounting, and finance, and operations. Everyone was pulling different points of data from different systems, and thus getting radically different results.  We had multiple versions of the truth.  Sadly, we never did figure it out.  A month into the project, the company was bought out and we were pretty much all downsized out within a couple months – this actually ended up being a great thing for me.  Still, that experience has stuck with me, and taught me a valuable lesson – to be useful, data needs to present one version of the truth.

Had we been able to create this list quickly and accurately, we could have spent time trying to determine the best ways to serve our best customers.  We could have examined ways to get new customers that were similar to our best customers, convert good customers into great ones, and improved the results of the organization.  Instead we spent time and money simply trying to figure out whose list was the right list.  What a waste!

As the “marketing guy” I am not the utmost authority at LUCRUM on business intelligence and data architecture.  Still, having gone through that experience makes me genuinely appreciate the services we provide our customers.  I have been in their shoes – seeking the truth, seemingly finding it, wanting to move forward, only to have everything come to a screeching halt because of inconsistent, incomplete information.  It is a frustrating situation to be in, and I smile every time we solve such a problem for a Client.

If you are spending more time debating the truth as described by your data than you are determining what to actually do about it, you should talk to us.  We can deliver one accurate, actionable, complete, and timely version of the truth for you – saving you time, money, and a whole lot of aggravation.

“Social Media” is not the ends it is a means.  The question is like asking what is the ROI on a telephone system?  Well, it depends who you talk to, what you talk about, what you learn from the call and what you do about the things your conversations uncover?   Sure you can concoct ways to measure this generally, but to be useful you have to measure ROI based on the specifics of what you  do with social media, not on social media itself.

Well, what about web stats.  Can’t I simply measure increases in traffic or number of friends and use that as a gauge?  Maybe.  If the problem you are trying to solve is getting people to visit your web site, then absolutely that matters.  Yes, web stats are important.  Hits and views and pagerank and friends and followers matter.  They matter a lot.  Popularity has its advantages.  Still social media has power far beyond sheer volume.

Social media is not just about traffic and awareness, it is about closeness.  It is about tightening the relationship you have with the people that are most important to you.  Even if you choose to participate passively you can garner valuable insight just by listening.  You don’t need 5,000 friends or 10,000 followers to be able to listen and learn from myriad conversations that are taking place all across the web.  Conversations about you, your business, your competition, your industry, your suppliers, your city, your state, your elected officials, your biggest customers, your potential customers, strategic partners, etc… If you decide you want to communicate directly with people through social media, listening provides you with the ability to speak to them about what they are interested in as opposed to shouting at them about how awesome you are.  This is the nature of good conversation and ultimately conversations are full of rich data and insight.  Your ability to convert that data into clear and actionable information and to then make meaningful improvments to your product or service is paramount to your success and is the true measure of return on investment.

Suppose you are trying to drive innovation at your firm.  Social media can play a huge role in doing this, but to measure the return, you need to have tangible information on your business.  You could start by establishing a baseline for the number of truly successful & innovative ideas that your firm brought to market over the last 18 months.  Track the number of ideas,  where they came from, the time and resources it took to develop them, the time and resources it took to implement them, the speed and size of the adoption curve in the market, and the amount and type feedback your received from Clients.  You now have a baseline, from which you can construct a hypothesis.

Next, develop a strategy based on what you know to predict how social media will help you drive innovation.  Based on our data we believe that if we do x it will impact y by z.  This strategy  might include using social media to talk to your customers or your employees about what you need to do next.  Using social media tools to ask people about the problems they encounter and how you might solve them.  Listening to the discussions they have with and without you.  Using social media to identify thought leaders on the web, listening to their opinions, and engaging them in discussions.  Using social media to find out what your competition is planning to do.  Using social media to talk to prospective customers about what they might want.  Using social media to build trust, listen, and establish an ongoing channel for information.  Then take what you learn and do something with it.  As Goethe says ” to know and not to do is not to know.”   So if people tell you your product is awful, use their feedback to improve your product – then measure the ROI.  If people tell you that your employees are rude, train them to be more hospitable – then measure the ROI.

So how do you measure ROI on social media?  ROI on most good investments is something that builds in value over time.  Social media is no different.  Implemented strategically, managed properly, and utilized fully social media can deliver great value to any organization. Commit to it.  Give it time.  Then look at how social media and the knowledge it yields has helped you create meaningful change.  Measure the impact of that change.  Measure the increases or decreases in your key performance indicators.  Has social media helped you address key business problems?  How?  What was the change that resulted?  What does the data teach us?  If you listen, learn, and innovate based on the information you gather over time, the return on your investment is very likely to be lucrative.

In this episode of LUCRUM Radio, Kevin I discuss, among other things, snow emergencies, the rubber chicken lunch, the history of the Social Media Breakfast, the upcoming breakfast featuring Pandora’s Tim Westergren, the importance of social media, the ways in which social media is changing the dynamic of the workplace, and tips for people wondering how to join in the conversation.

Thanks to Kevin for taking time away from shoveling his driveway, sledding, being a social media guru, and getting actual work done on this snowy Ohio day to share some of his unique insights.  I hope that you enjoy this episode of LUCRUM radio as much as I enjoyed

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SMB Cincinnati

How could such data be used for good?  Suppose a company possessed information about where you are, what you are doing, and why; they could offer you real time incentives to purchase specific products.   It would be analogous to virtual haggling to get consumers to behave a certain way.  Need a pair of dress shoes?  Are you at the mall?  You wear a size 11 right?  Well suppose a retailer within the mall knew you were there looking for a size 11 dress shoe, which they just so happen to have an abundance of in stock.  They could text you a message stating that for the next 3 hours you could redeem the text on a new set of black loafers – size 11.  Not only that, they also know that your spouse has a birthday coming up, and will offer you buy one get one 1/2 off to incent you to purchase more footwear.  They know the correct size, and have the ability to make suggestions based on past purchases and the purchases of similar consumers.

Now suppose that this offer is passed up repeatedly by consumers within a period of time.  Just like that, the deal could be modified until the desired consumer behavior occurs. Hyperefficient capitalism at its best.

How could such data be used for not so good?  Well, that retailer or perhaps the credit card company,  may note that you are buying special shoes designed for people with circulatory issues as well as special clothing to help improve circulation in extremities.  They may also note that you are purchasing sugar free candy at the counter, and that you bought a sugar-free latte.  Later, their video might capture footage of you sitting on a bench eating a cookie and drinking juice you bought in the store.  Now suppose an insurance company is concerned about the cost of covering people with diabetes, and wanted to obtain data regarding consumers of specific items that those with diabetes might purchase.   They could follow your activities thorough data purchased from the retailer and make judgements about your risk profile.  This data could then be used to deny coverage to consumers. Hyperefficient capitalism at its worst.

Both of these scenarios are hypothetical in nature and admittedly oversimplified.  One involves the use of data to help a consumer get something they desire.  The other involves the use of similar data to deny a consumer from something they desire. Both involve the elimination of privacy as more and more data is collected about us – sometimes knowingly and sometimes not.

Still, it seems that people overall are not particularly concerned with the collection of personal data.  The attitude toward the loss of privacy in exchange for convenience is overwhelmingly laissez faire.  As Markoff ponders, in an age of Google, iphones, GPS, and Facebook, has privacy “become an anomaly?”

The question becomes what is your company doing with its data?  For most, the reality of today is likely nothing, or at best very little.  For all of the hype surrounding the potential use of data, much of this valuable information sits fallow within the servers, computers, and files of firms.  The big ideas are out there, and now it is a question of who will capitalize on them – good, bad, or otherwise.

Is your company formally gathering, processing and utilizing data to influence consumer behavior?  Could you?  Are you adequately protecting the privacy of your Clients?  Should you be?  Are individuals within your firm potentially accessing sensitive information for their own interests?  Is your competition doing a better job of mining the collective intelligence provided by data than you are?

The reality of today is that you have an amazing opportunity to impact the lives of those whom you serve through data.  How you do so is largely up to you.  For the record, I am a huge fan of size 10 Adidas Gazelles, and I would love a red pair.  The next time I am near your store, text me and let me know if you have a great deal for me.

You’re Leaving a Digital Trail. What About Privacy? – NYTimes.com

Scott Provancher is the current Vice President and Campaign Director for the Fine Arts Fund.  In this episode of LUCRUM Radio, Scott and I discuss the important role that the Fine Arts Fund plays in keeping the Cincinnati arts community vibrant.  Scott discusses the history of the organization, the role of the arts in the community, how technology is redefining his role and that of his organization, and why he loves to live, work, and play in Cincinnati.

Thanks to Scott for taking the time to speak with me and to share his thoughts with the world.

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My thanks to Mike for taking the time to share his story.

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On the eve of its release, I sit here utilizing Firefox 3 to craft this post.  As I do so, I am not consumed with some horrible browser problem for which I have a burning desire for Google to solve for me.  Thus, I wonder if if large numbers of people will move to adopt this product.  At this point it is hard to say.

In Google’s favor is the ability to leverage the Google homepage for marketing, ensuring that people will know about Chrome.  Better still is the fact that the product is free, so it will be easy to try.  From all accounts Chrome will also offer some unique features regarding stability, speed, efficiency, mobility, security, layout, the enhancement of web apps and the utilization of Google Gears.  They even created a comic book to describe the product – a very different and exremely cool approach to a product launch.

Still, Google faces a huge challenge in that the browser market is currently served pretty well.  Internet Explorer, Firefox, and Safari have been competing with one another for a long time in the browser world, and people generally have a favorite amongst the 3.  So for Chrome to succeed, Google needs to create a sense of dissatisfaction with the current browsing experience and then convince people that Chrome somehow addresses this dissatisfaction.  They need to provide people with a compelling reason to change.

While I can’t be certain as to the ultimate fate of Chrome, I do know this.  A few years ago, I had a Hotmail account and a Yahoo Mail account.  At that time, I did not have any problems with email.  Then I was invited to try Gmail, and I have not used either since.

How about you?  Do you plan on test driving Chrome?

Official Google Blog: A fresh take on the browser

There were a wide range of speakers present, and overall I was very pleased with my decision to attend the event.  Here are some of the highlights from my day:

• Met Pete Blackshaw – This guy is a Rock Star in the world of modern marketing, yet he was as polite and friendly, if not more so, than anyone else I met at the event.  More later on Pete.
• Made some new friends with interesting people like Brandon Ferris from zoneCG.
• Saw old friends like Alan See from Seapine, and John Atkinson from PimpMyNews.com
  
• Learned about some interesting  web 2.0 tools and ways to use them from Izea’s founder, Ted Murphy.
• Watched a presentation by RIM on the marketing of Blackberry – past, present, and future.
• Heard about some exciting new projects that Cincinnati Bell is developing.
• Attended sessions led by John Atkinson from PimpMyNews and Chris Heile from hyperQUAKE
  
• Closed the session with an outstanding keynote from Pete Blackshaw – which was outstanding.

My favorite part of the event was without a doubt Pete’s presentation entitled Consumers, Credibility, and Cincinnati.  His speech hit on many of the topics that he wrote about in his book,  Satisfied Customers Tell 3 Friends, Angry Ones Tell 3,000 .  If you haven’t picked up the book yet, it is a must read.  We have actually given it to several of our Clients as a gift.  It’s really that good.  Anyway…

In his presentation, Pete outlined 6 Drivers of Brand Credibility:

• Trust
• Authenticity
• Transparency
• Affirmation
• Listening
• Responsiveness

He then went on to explain the implications of these factors in the digital world in which we live and do business.  Bottom line – Do right by people or suffer the consequences.  The consumer is in charge, and you need to make sure that you are in touch with what is happening in the consumer marketplace relative to you, your brands, your products, and your reputation.  Word of Mouth is on steroids in the digital age, and negative word of mouth can be a company killer.

At the end of his presentation, Pete shifted gears and brought it back to Cincinnati.  He spoke of an idea he has formulated regarding the creation of an advertising museum in Cincinnati.  This would serve to re-establish Cincinnati as a central hub for advertising in the digital age by showcasing the immense heritage of the craft in the city, creating a connected community of current marketing professionals, and developing something uniquely aligned with the city and its business heritage.   I personally think the idea is great, and I hope that I can find some way to be a part of making it happen.

Overall the event was fun.  It could have been improved with some signage outside of Great American Ballpark to indicate where to go to get in. (I walked around that stadium twice this morning at 6:45 looking for the entrance to the Crossley Room.)  I was also slightly disappointed when they asked me to stop filming the event on my Flip cam 1/2 way through the 2nd speaker of the day.  I was informed that “there were arrangements made and I was not permitted to film at the event.”  I found it an odd policy for a summit focused on web 2.0, but complied none the less.   I managed to capture some great interview footage of people stating why they had come to the event – sort of a man on the street thing – that will sadly never make it to the web.  It is a shame because it would have been great to highlight my takes on the event, which I did enjoy.  I would have gladly posted the video on YouTube and other sites, providing free publicity to any and all included.  Alas, I know that some just are not ready for that yet.  In the grand scheme of things it’s not a big deal.

Thanks to all of the speakers, all the cool people I met, and the Cincinnati AMA for putting it all together.

Now I must get to work on implementing some of the great ideas I picked up today.

Is Your Marketing “Disco” or Digital? | AMA Cincinnati Chapter

While I think Seinfeld is hilarious, I question the wisdom of this decision.  Certainly there are plenty of exceptionally bright people at Microsoft.  I am quite sure they have good reason to believe that Jerry can help to change people’s perceptions of the company.   I do believe that whatever he does will probably be entertaining.  For $10 million it should be.  The problem is that people don’t need Microsoft to entertain them, they need Microsoft to care about them – or at least appear to care.

Microsoft should have invested that 300 million in making their products more reliable and useful, and in offering unparalleled service to its customers.  With the resources at its disposal, surely the company could offer support services so remarkable that no one in the world could compete with them.  “Vista not working right? – We’re on it.”  “Spreadsheet locked up? – No worries because you are with Microsoft.”  “Need help with that flyer? – we’ll create a portal for you and walk you through it.”  “We are Microsoft.”  “We are here to help you do more.”  “We know that you have choices when it comes to software, and we want you to choose us.”  “That is why we work to earn your trust and keep your business.”  Can you imagine the buzz this would generate?  It would be huge.

Microsoft could create a community of users supporting one another and leveraging technology to do it.  They could tap into the collective wisdom of the crowd to make improvements and to drive innovation.  They could build loyalty and trust.  They could exploit the weakness of other providers which is the perception of risk by removing risk from their own products.  If Microsoft was the safe, secure, trusted choice in the mind of the consumer, then the consumer would be willing to pay a premium.

They could have stores, mobile help, seminars, online support, help lines, surveys, blogs, and more… instead they will have very funny commercials.

Apple has had success because of innovative products, beautiful design, and smart campaigns geared to exploit the perceived weaknesses of Microsoft.  It is not that Apple is without flaw.  They have a very closed system.  They don’t always play nice with consumers.  They are expensive.  Recently they have had some high profile mistakes with the iPhone and Me.com.  They are not perfect, but they are smart.

It is my opinion that the smart thing for Microsoft to do would be to invest in the consumer and not the endorsement of a celebrity – even if it is Seinfeld.  Maybe they will get Lloyd Braun to sell some software from Mr. Costanza’s garage.  SERENITY NOW!

What do you think?  Is hiring Seinfeld a brilliant idea or big waste of time?