Author:Stephen Baker

Summary: The Numerati weaves a story that’s as potentially compelling to marketers as it may be chilling to consumers. Every time we subscribe to a magazine, use a credit card, visit a website, or use a supermarket rewards card, data points are created that this new breed of entrepreneurial mathematicians can use to profile us and our habits, building predictive models that make companies smarter about their markets, expose buying habits, and present opportunities for ever more targeted marketing and segmentation efforts. Even more compelling from a societal perspective (though a bit forward-looking) are applications in health care and food delivery, though this will also (you guessed it) make it easier for companies to sell things.

You’ll love this book if: You’re looking for an easy read on the heavy topics of statistics and data, and are interested in how the data trail we all leave has the potential to transform everything from dating, shopping, politics and marketing, to healthcare and the workplace.

You’ll hate this book if: You get freaked out by how much privacy we’re each giving up simply by participating in an interconnected, always- on economy.  If ignorance is bliss for you, don’t touch this book.

Words of Wisdom: With the global information store doubling every 18 months or so, the amount of digital data available to help us better see patterns and understand behavior may actually benefit consumers and corporations. Through better targeting of customer segments and marketing messages, consumers see more of what matters to them.  Corporations reduce costs and increase profits.  But the downside risk – lack of privacy and the potential ethical issues of these insights – is disquieting at best.

Why we think this book is important: While understanding people is hard work, quantifying their actions through numbers and analysis does allow us to draw powerful connections and conclusions. Managed well, the work of the Numerati may actually benefit us all.

The Economy has slowed, but it has not (completely) stalled. Even as we plough through the unemployment statistics and wait for what most believe will be a long climb out of the “Great Recession,” as long as there are companies and people doing business, things will continue to be bought and sold. That’s why for many smart businesses, now is the time to grab this opportunity to increase customer loyalty, solidify market position, and get new customers.

The evidence is in, and supported by studies of every major slowdown since 1970: Marketing wins market share in recessionary times.

Studies conducted by organizations ranging from Business Week and Harvard Business Review to The Wall Street Journal support this contention, underlining the importance – and value – of marketing in an economic downturn.

In a study of U.S. recessions, McGraw-Hill Research analyzed 600 companies from 1980 to 1985 and concluded that at the end of 1985, “…firms that had maintained or increased their advertising during the 1981-1982 recession could boast an average sales growth of 275% over the preceding five years. Those who cut advertising realized a paltry increase of only 19%.”

Management Review asked AMA member firms about spending during the 1990-1991 recession. “Fortune follows the brave,” it announced, noting that the data showed that most firms that raised their marketing budgets enjoyed gains in market share.

And Harvard Business Review chimes in with this: “The rationale that a company can afford a cutback in advertising because everybody else is cutting back [is fallacious]. Rather than wait for business to return to normal, top executives should cash in on the opportunity that the rival companies are creating for them. The company courageous enough to stay in the fight when everyone else is playing safe can bring about a dramatic change in market position.”

The tipping point: where fear and opportunity collide

In spite of this overwhelming evidence, many companies are still tightening their belts, and the marketing budget is typically an early casualty. This is a mistake for two primary reasons. First, if you reduce spending on marketing, you will reduce the number of new customers. Direct marketing drives direct sales. And consistent brand presence is critical to keeping – and increasing – customer loyalty and prospect awareness. Second, (a direct result of the first reason) it is much easier to gain ground against competitors who have cut back on marketing. Why? It’s easier to drop below buyer radar as a result of decreased market presence.

This said, we recognize costs do need to be cut. So marketing smarter is more important than ever. From strategically leveraging social media tools to doing a better job of tracking brand, marketing and customer experience ROI, there are many ways to scale back dollars without dropping off the radar.

What’s the worst that can happen if you don’t step up your customer acquisition and recession activities?

You slowly leak customers and profits, and can’t keep the doors open long enough to participate in the recovery. It’s happened to plenty of companies already and there are many more to follow before we’re through. Or maybe you and your current competitor’s scale back your marketing, only to find a competitor you didn’t know existed come from behind to take over your market.

Today, the phrase “for every loser, there is a winner” has particular relevance. Your organization may be staying the course, cutting back or (let’s hope!) using this opportunity to aggressively dominate its market. No matter which direction you’re headed at the moment, it’s not too late to take steps to make sure you’re one of the winners. But don’t leave it too long…

C-Suite execs share concerns across sectors, size and geographies.

In our business, we talk to key executives literally every time we’re engaged to help address an issue. Usually in the areas of brand, touchpoint, loyalty and customer experience improvement, we hear many of the same questions and concerns from the “C” suite, across industries, company size and geography. This insights and concerns have also been surprisingly consistent for the past several years, indicating to us (on a qualitative basis) that they may be universal, and that many struggle to resolve them.

Why should brand and marketing performance be tracked “by the numbers?”

Though not all, a small majority of executives we speak with feel that – overall – their brand and marketing programs are at best only somewhat effective. We think this perception is driven by the lack of clear metrics to show what’s working, and what isn’t – and why. To improve both perceived and actual performance, marketers must be clear on their objectives, and relentlessly work to improve their programs and measure their success.

Where does marketing (and the voice of your customer) get to sit in your boardroom?

This is particularly prevalent in organizations where marketing might not have as “big” a seat at the board table as other groups. Though more and more executives are coming from marketing and sales backgrounds, the ability to quantify performance is key to assessing effectiveness.

If you’re part of a company that “gets it” then good for you. Keep it up. But if you’re not tracking the “soft stuff” by the numbers, there are some questions you can ask that may begin to get you there.

• Does your organization have an overall philosophy of encouraging and rewarding performance?
• How does marketing specifically support the CEO’s agenda, and deliver the results to support his or her strategic objectives?
• Whose “agenda” is marketing tasked with pursuing?
• Are there any informational barriers between the marketing department and the CFO’s suite?
• Has your organization begun thinking about the benefits of tracking brand and marketing performance, and being able to improve performance over time as a result?

We think that the challenge many marketers face is to become more strategic and accountable in nature, focusing more on financial and customer value metrics – without sacrificing the creativity inherent in successful brand and marketing initiatives that truly “connect” with and engage your audiences.

You may know it. I certainly know it. But many brand experts don’t know that customers can provide you with a myriad of intriguing insights into building your brand –– and boosting your business. You just have to offer them an open channel of communications.

After all, once you’re privy to what your customers are thinking through ongoing customer research, you can truly enhance their relationship with your brand.

• After inventing the minivan 25 years ago, Chrysler approached IDEO to re-imagine the minivan.
  

  Inspired by multipurpose family rooms, Chrysler’s popular Town and Country minivan features new interior configuration concepts that allow passengers to talk, work, eat or play together in transit, shifting the minivan’s image from a human cargo vehicle to one that enables quality interactions.

  The result? At this week’s 2009 North American Auto Show, a panel of 100 consumer-minded Detroit News reader-judges — rather than industry professionals — selected the 2009 Chrysler Town & Country as the best family vehicle at the 2009 North American International Auto Show.

• General Motors is listening, too. Check out GM’s blog, FastLane:
  

  Amid growing concerns about the economy, our long-term energy security, driving cars that have less of an impact on our planet, and ever-expanding urban congestion, we all seem to be coming to the conclusion that the automobile as we know it — powered by a combustion engine — must eventually go the way of the horse and buggy. It is simply not sustainable.

These are just a few examples of being able to measure relevant customer metrics over the long-term to gain accurate, actionable results. Brand research helps you understand more about your prospects, your customers, your shareholders, and others, so you can step up your sales pitch to the loyal ones and stop wasting your money on those who aren’t as faithful.

With the right tools and the proper step-by-step guides to improve your research practices, you can more easily capture, codify and interpret information to move your marketing strategy forward.

So whether you need to present perceptual brand attributes to a data-oriented board, to make a case to extend a product line, or to justify some long-delayed pricing updates, brand research can serve as the foundation to build your case, get better mileage out of your marketing budget, and enjoy more sales.

With over 100,000 new blogs being created each day, blogging is here to stay. And with that, our entry seems to be not only reasonable, but timely.

Our goal with this blog is to discuss the things we think about every day in our professional roles as brand and marketing consultants. As it says on our website, MCorp. is a Strategic Brand and Marketing Consultancy. The contributors to Brand Perspectives are our partners, associates and friends.

Though we’ll do our best to avoid promoting ourselves, we’re sure that some of our expertise and points-of-view will make their way into this dialogue. After all, we’re marketers at heart. As the scorpion said to the frog “it’s my nature…” We’ll subtly provide more info on us as the Blog progresses.

In the meantime, we’re not sure where this is going to go. A lifetime of carefully crafting each thought, message and word long before they “see the light” is about to take a sharp turn down a road less traveled. We’re just hoping we don’t hit a tree. So if there’s anyone on board with us, we hope you enjoy the ride.