Marketing White Belt: Foundations of Creative Marketing

Posted by Christopher S Penn on Mar 24, 2011 in Advertising, Awakening, Marketing, White Belt | 2 comments

Marketing tends to be divided into two houses. One house is the analytical side, where data is the order of the day and results can be quantified with incredible precision. Return on investment is a straightforward financial calculation and campaign performance is measured by wonderful tools and methods.

The other house is the creative side, where data, analysis, and calculation can be incredibly counterproductive. Ideas rule the roost in the creative side of marketing, finding new and different ways to communicate to your audience. Data can provide some starting points for creative, but after that, it’s entirely about what appeals to our most human aspects.

At the risk of oversimplifying, great creative in marketing is founded entirely in passion and understanding.

You must deeply understand what it is you’re promoting in every practical way possible so that you can understand how it will appeal to different people. Part of that understanding is driven by product knowledge, and part is driven by understanding how people who currently love your stuff relate to it. There is no substitute for talking to customers here, no shortcuts you can take, no instant surveys you can deploy that will lend this insight. There’s also no substitute for actually using your products or services.

As a customer of what you have to offer, you can and should listen to yourself about the quality of experience you’re having. One thing you hear often about new Apple products just before they come out is that “Steve (Jobs) has been using it and loves it!”, which is high praise from the most difficult customer you could imagine.

The second area that drives creative marketing is passion. In order to construct marketing creative that will appeal to people, you must care deeply about what it is you have to offer. In an ideal situation, that extends to the organization you work for (non-profits are especially good at this) and the customers you serve. Being passionate about what you have to offer the world isn’t a skill that can be taught, any more than being passionate about a food you can like is something you can learn from a textbook.

Two areas where creative marketers tend to fall short with passion are simply not being passionate enough and being overly so to the point of blinding zealousness.

Lack of passion for a product, service, or company creates disconnected marketing, creative content that is confusing, and creative content that is undirected. It creates designs that are uninspired, ads that don’t catch attention, and marketing that fails to stir any emotion. You see this most often when design is attempted by a committee of people – the very process of design by committee often prohibits a passionate love for a product that is singularly expressed.

Ultimately, if your marketing design and creative lacks passion, you either have to retake the design process away from committee, or in the case of a single person or creative director, if you lack passion for your products, services, customers, and company, you may simply need to switch jobs to somewhere else.

Too much passion in creative marketing is equally problematic in that it tends to blind you to what will actually appeal to your customers. You’re so sure of what you’ve created that you fail to test, fail to have customer experiences yourself, fail to talk to customers, fail to accept any input at all. The cliche that love is blind is never more true than here.

I’ll leave you with two questions that can help clarify your level of passion to your products/services, company, and customers. Ideally, get your answers down to 140 characters or less. If these answers don’t flow easily, work on them until you achieve clarity. In the process of doing so, you’ll get a better understanding of where your passion lies and be able to transmit that in everything you design and build. Not enough passion and you’ll stumble for answers for a long time. Too much passion and you won’t be able to crystallize and condense your answers into a tight, compact form that you can easily communicate.

1. Why are you here? This is your mission statement. Not the cheesy “commitment to industry-leading best practice synergies” corporate-speak, but a real sense of mission, of what is wrong with the world that you intend to fix.

Example: At Blue Sky Factory, we acknowledge that most of the world, to be frank, really sucks at email marketing. That’s the ugly, honest truth. We aim to fix that. We aim to help you become a better marketer through effective email marketing.

2. What will the world look like after you’ve finished changing it? This is your vision statement. Again, not corporate-speak, but a very clear picture of how the world will look when you’re done changing it.

Example: At the Boston Martial Arts Center, we know we’ve succeeded not when someone straps on a piece of black cloth around their waist, but when they have been transformed from weak people – weak of body, weak of mind, weak of warrior spirit – into strong people, people who can go out in the world and bring their strength to others deeply in need of authentic leaders and heroes. In the words of Stephen K. Hayes, we unleash your potential.

Do you see how easy it would be to go to work every day with compact, powerful answers to these questions? Do you see how the answers can infuse every aspect of your marketing with the vibrance and energy it needs to leap off the page or out of the ad and grab consumers’ hearts and spirits? That’s what your marketing needs. Go forth and get it!

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Marketing White Belt: Marketing ROI

Posted by Christopher S Penn on Mar 22, 2011 in Advertising, Marketing, Metrics, Money, White Belt | 14 comments

Pick a term that is bandied about the most but understood the least and chances are it will be ROI, return on investment. Before we go any farther, let’s say a few things about ROI.

ROI is a financial term with an actual financial formula. There is no substitute for it and there are no factual, intelligent ways to weasel around it. Expressions like “return on influence”, “return on engagement”, and “return on conversation” are largely invented terms by people who don’t know how to calculate ROI.

That said, ROI is not the ultimate measure of marketing performance. ROI is an objective metric (an endgame metric that tells you if you’re there yet) only if cost containment is a priority for your marketing. If you are in a growth mode with an objective of capturing significant market share, ROI can actually be a hindrance to your marketing efforts because over-focus on it will prevent you from taking short-term losses in exchange for long-term potential gains.

So what is ROI? Simply put, it is the following formula:

Income Earned from Marketing Efforts – Marketing Expenses / Marketing Expenses = ROI

That is ROI. It’s a deceptively simple formula. The reason why it’s so deceptively simple is that there are a lot of components in each of the two areas.

Determining income earned from marketing efforts requires the use of a good CRM that allows you to track what marketing methods actually result in sales, and what the revenue of those sales is. For example, let’s say you sell chewing gum. To the best of your ability, you need to be able to track exactly how much gum you’ve sold to consumers at what price, by marketing channel. The last part is the catch. It’s easy to figure out how much gum you’ve sold, but much harder to figure out what marketing channel drove those sales. Online is relatively simple – using tools like Google Analytics to track checkouts at a virtual store makes that fairly straightforward. Offline is trickier and requires things like surveying and statistical sampling in order to accurately assess why someone bought a pack of gum.

Income can be even trickier to determine if it’s decoupled from marketing, as is often the case with wholesalers and resellers. If you manufacture alkaline batteries like Duracell or Energizer, there’s a good chance you use a distributor or reseller like a Walmart or Target to resell your goods. As a result, your marketing efforts to build your brand are decoupled from the actual transactions because someone else is handling the sales – and as a result, all of your brand-building effort may be for naught if a reseller fails to display your products effectively. One of the few methods that gets around this problem to some degree is coupon redemption. If a manufacturer issues a coupon, they can get an actual idea of a channel’s income generation potential by tracking how many coupons were issued vs. how many were redeemed from that channel.

The expense side of marketing is also fraught with danger, especially in fields like social media. Almost no one tracks the single largest expense in social media: time. Time is not free. Time has never been free. How much you spend in any marketing channel isn’t just a question of money leaving your bank account or corporate credit card, but time spent as money.

Here’s an example of determining time spent as money. Let’s say you’re in marketing and you earn $50,000 per year. The effective number of working hours you have per year is 52 weeks x 40 hours per week, or 2,080 hours. Your effective hourly pay, then, is $24.04 per hour. For every hour you spend on Twitter, Facebook, Quora, etc., you are effectively investing $24.04 of time as money in that marketing channel. Suddenly, channels like social media get very expensive.

So let’s put the two sides, income and expense, together in an example so that you can see what marketing ROI looks like.

Let’s say you decided to advertise using Google’s Adwords pay per click advertising. Let’s say you spent $500 in cash and 5 hours of your time (at a $50,000/year salary) to get Adwords up and running, and in turn, you earned $1,000 in sales of, let’s say citrus-scented headphones.

Do the preparation math:

• Income: $1,000
• Expense (cash): $500
• Expense (non-cash): $24.04 x 5 = $120.20
• Total Expense: $620.20

The ROI formula is Income – Expense / Expense, so $1,000 – $620.20 / $620.20 = 61.24%.

This is an excellent ROI. It states that for every dollar spent, you earned the dollar back plus 61.24 cents. Any business would be very pleased with that ROI and would likely ask you to invest a little more time and a lot more money if that result remains consistent.

Let’s try another example for the same person at the same company. Let’s say you’ve decided that Facebook is the hottest thing since sliced bread and you’re going to avoid outlaying cash on your Facebook efforts. You set up a Fan Page for your citrus-scented headphones, take 80 hours to set it up, administer it, manage the community, do outreach, etc. but you spend no money on it and you manage to sell $1,000 worth of those strange headphones. You’re feeling good about yourself – this social media stuff works, right?

Do the preparation math:

• Income: $1,000
• Expense (cash): $0
• Expense (non-cash): $24.04 x 80 = $1,923.20
• Total Expense: $1,923.20

The ROI formula shows $1,000 – $1,923.20 / $1,923.20 = -48% ROI. Uh oh. When you account for time spent as money, Facebook (in this example) is a money-loser. For every dollar of time you invest in it, you’re losing 48 cents.

This is where it’s decision time for you as a marketer.

Remember, if cost containment isn’t a primary goal, ROI isn’t the correct metric to be focusing on. If you’ve made the conscious and strategic decision to take a financial loss (in cash and time spent as money) in order to grow a long term opportunity, then this ROI of Facebook for citrus-scented headphones may be acceptable. However, if cost containment is a primary goal for your marketing department, you have to make the decision whether to adjust your Facebook strategy or cut it out and stop your losses.

Ultimately, ROI is just one way to measure marketing’s performance, but it’s one of the least well-understood ways of doing so. By walking through this calculation, you’ll realize just how difficult it is to calculate with great precision and how meticulous you must be in your tracking methods in order to capture even moderately good quality data. If you can do that effectively, ROI is yours to analyze, but if you can’t because of organizational structure or operational issues, then you’ll need to forego the use of ROI as a marketing metric.

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Marketing White Belt: Always Be Testing

Posted by Christopher S Penn on Mar 21, 2011 in Advertising, Marketing, White Belt | 0 comments

If there’s one piece of advice, one method of marketing that surpasses all others, it’s simply this: always be testing. One of the greatest mistakes a marketer can make is to assume that things stay the same. I’ve even heard executives of major corporations and agencies say, “We’ve tested enough, let’s just do this” or variations thereof. There is something to be said for just doing it, but it’s equally important to reject the false choice of test or ship. You can, and should, do both.

Why test? It seems like the ultimate rhetorical question, but it’s quite a serious one if you want to justify testing as an ongoing activity. There are two fundamental reasons to keep testing even after you’ve gotten statistically valid results: migration and fragmentation.

Migration is when your audience (remember that audience is at the top of your marketing funnel) moves from one place to another. This can happen over a long period of time (MySpace moves to Facebook) or a very short period of time (Q&A folks ditch everything else for Quora). Either way, if your market is moving (and it is, constantly), you will never know if you don’t test. What’s more, the speed of migrations is faster now than ever before because of the ease of moving from one platform to another.

Sometimes, however, you may be looking at more than a migration – you may be looking at a fragmentation, when your audience simply shatters into many pieces and there’s no clear move to an “heir”. MySpace ceded the game largely to Facebook, making it a migration. But when network television became cable television, there was no clear winner. All of ABC’s audience didn’t suddenly move to Home Shopping Network – that “Big 3″ audience shattered into a thousand small audiences across many channels. The digital landscape is the same, constantly fragmenting and shattering.

Testing is one of the few ways you can determine a massive change in your audience. Only through testing different marketing methods, advertising, content, and tactics on a constant basis can you continue to adapt to what your audience is doing.

The greatest danger that testing overcomes isn’t just a fragmentation or migration, but a relatively slow one. You will notice and know when a rapid migration in your audience happens, or when a medium shatters overnight. You’ll see massive drops in your analytics and know something is up worth investigating. What kills most corporations, most dominant players, is a slow migration, a la MySpace or Altavista, where change happens just slowly enough that you never really pay attention to it until it’s too late. Only testing can help you detect those subtle, small changes that nibble away your audience a percentage point at a time.

What should you test? That’s a fairly easy question to answer. Look at the marketing plan mind map from the previous white belt lesson. Each branch is not only an area of focus, it’s also a question to be answered with testing. Who is your audience? Test. What methods should you be using? Test. Where should you be marketing? Test.

The ground underneath your current marketing can shift in a minute. Unless you are constantly testing that ground, it could very well vanish and you might not know until your profits vanish from a withered funnel. Always be testing!

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Marketing White Belt: Basic Marketing Campaign Plan

Posted by Christopher S Penn on Mar 18, 2011 in Advertising, Marketing, Metrics, Strategy, White Belt | 1 comment

People are funny. In the absence of any map or plan, they’ll tend to follow the first person who appears to have even a marginally reliable plan of action or map, even if that map and plan is totally wrong. In order to be a successful marketer, you not only need to have a map and plan, you need to be out in front with yours, showing it to people so that they head in the general direction you want them to go. Let’s walk through the basic steps of creating your campaign plan so that you can have yours ready to go as quickly as possible.

click the image for a full size version

Creating a marketing campaign plan isn’t rocket surgery. Instead of creating an elaborate 500 page document that no one will read, start with as simple a map as possible and answer these 5 questions from Journalism 101:

Who? Who is the target audience for your campaign? What demographics and behavior will you be going after? Who are your marketing partners and vendors? Who on your team will be part of your plan and who is responsible for each area of stuff that needs to get done?

What? What stuff does your plan need? Obviously, you need a product, but you should also have an offer, some campaign materials and content, a budget, and your ads.

Where? Where will you be doing your outreach? Email? Social? If social, which channels? What about display ads like the side of a bus?

When? When is the campaign supposed to happen? Is the timetable fixed or flexible? Are you competing against other marketing campaigns or events? For example, if you wanted to do a digital outreach to entrepreneurs, doing it during the week of SxSW would ensure no one paid attention to you.

How? How will you know you’ve succeeded? What are your diagnostic and objective metrics that you’ll be using to measure your goals and progress?

The sixth question normally asked by journalists, why? is a meta-question in the plan. For each of the branches and nodes in the map, be able to explain why you made each choice.

Two things kill marketing campaigns: complexity and absence. Absence of a plan is easily solved, but an overly complex plan is a greater challenge, one you need to vigorously avoid when creating your campaign plan. You can and should frame out an entire marketing campaign plan on a single page of paper. Certainly, you’d want to flesh out the details separately, or when you assign pieces of work, but creating a single overview of your marketing campaign plan is a great way to quickly make sure you haven’t forgotten anything and everyone working with you can see the big picture for the campaign. Feel free to use the example above as a starting point for your own campaign plans and maps.

The last major warning when it comes to marketing plans is based on a cliche: best is very often the enemy of good enough. A perfect plan that lays in a 500-page binder somewhere and is never executed is worthless while a mediocre plan, vigorously executed, is far better for you and your company. Make a plan, make a map, and expect there to be the occasional diversion, the occasional area that doesn’t work out. Design your plan for the shortest practical duration so that you can iterate, improve, and change things for plan 2.0, 3.0, 4.0, etc. rather than trying to doggedly stick with things that aren’t working because the massive binder says you must stick it out until the bitter end of the plan.

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Marketing White Belt: Basic Methods of Making Money

Posted by Christopher S Penn on Mar 17, 2011 in Advertising, Marketing, Money, White Belt | 1 comment

At the end of the day, you have to make money in order to pay the bills and stay in business. There’s no avoiding that reality: somewhere, resources must be provided in order for you to do what you do, whether you’re a Little League baseball team or a Fortune 50 mega-brand.

In order to make money, you have to provide something in exchange. As marketers, it’s incumbent on us to understand how our businesses work so that we can understand where and how we provide value, then help share that value proposition with our customers.

While there are nearly limitless ways to provide value, most business strategies fall into four big categories:

1. Product. You make something and sell it. This could be your bestselling social media book, clay pottery, aged cheese, whatever. It can be polished goods or raw commodities, but whatever it is, it’s a thing you sell. In exchange for the goods, you receive money. For most of human history, people made stuff and sold it, and their business fit into this category.
2. Reseller. Someone else makes something and you buy it from them, then resell it. You’re not actually making anything, but chances are you package up the product or provide additional value-added services for it. For example, Walmart buys stuff from manufacturers and resells it to you. Their value-add is ubiquitous locations from which to buy stuff. Amazon does the same online.
3. Service Provider. You do something for someone. Maybe you’re a virtual assistant, a life coach, an email service provider, a stripper, a hotel, a stock broker, or an enterprise CRM in the cloud. You do something for someone, but don’t make any tangible good that you can hand over. In exchange for the service you provide, you receive a fee.
4. Media. While this could be considered a service, what makes the media model different is that the person you’re providing a service to isn’t necessarily the person who is paying you, and you’re not reselling something else. The word media is derived from Latin and literally means in between. In the media model, you aggregate the attention of an audience and then sell access to that audience, standing between buyers and sellers. Broadcast media, affiliate marketers, bloggers, and social media outlets all fit in this category.

Why are these basic archetypes important? Understanding where you’re starting from will lend insight as to where your business can go next and how you as a marketer can help illuminate your value. Businesses have ways to transform the value they provide, including customization and service. Understanding where you’re starting from can guide you where you need to go.

Customization is the act of taking something and giving customers the ability to add or remove things from it based on their needs. How would this look with these archetypes?

1. Product: You can order an iPad with a variety of different features, then add or remove apps to suit your needs.
2. Reseller: Customization is really hard for resellers because you’re not making the products. About the best you can do is package and bundle products together, offering different combinations of other people’s stuff.
3. Service Provider: Add or remove services you need or don’t need. Mobile phone companies have menus of different services that match the size and scope of fast food restaurants these days.
4. Media: As an audience member, you can customize the content and delivery you want, and as an advertiser, you can customize which audience you want to interact with.

Service is the act of taking something and providing helpful interaction with your business. Customer service is most often the basic service use case, but other services like education and training equally apply. How would service apply to the different archetypes?

1. Product: Obviously, customer service applies to fix broken products, but you can also provide education and training. Apple does this especially well with classes, the Genius Bar, and 1-to-1 training.
2. Reseller: Here’s where resellers can make their money – teaching people how to use and get the most out of other people’s products. Stores like Lowes do this especially well, with clinics on how to garden, paint, etc.
3. Service Provider: Service can exist on top of service. Blue Sky Factory, as an example, provides software as a service but adds a ton of customer service, strategy, and training on top of its software service.
4. Media: Most often, media doesn’t do much at all in the way of service, which is a critical mistake. Help your audience understand better what is available and how to make the most of the content you create, and help your advertisers be more strategic and effective in leveraging the audience you aggregate. As part of standing in between two parties, you can help both communicate more effectively with each other.

Finally, it’s important to note that few companies are pure plays in any one archetype. You can make your own products and resell others, or you can make a product and sell a service alongside it. You can be a media outlet and have product to sell directly to your audience. You can be a service provider and resell other services with yours.

The important part isn’t trying to pigeonhole your business into one category alone, but to try and understand which archetypes and models drive the most value for your business. Once you understand your core value propositions, you can be a much more effective marketer for your business.

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I recommend: for Twitter audience building.