Is This a Golden Era for Marketing Productivity?
This should be a good time to be a marketer and a consumer as well, suggests Jim Heskett. More focused sales, less waste in advertising, an industry in tune with its best customers. Is this your experience? Do you think marketing has hit its stride? Can it?
Questions raised in this month's column about the possibility of an era of marketing productivity based on innovative research techniques evoked a number of skeptical comments. However, in defense of such techniques, B. V. Krishnamurthy pointed out that research has shown that "95 percent of new products fail within five years ... To the extent that a few, well-chosen customers might provide valuable insights into what would improve the quality of life, Professor Zaltman's ideas might be just what marketing has been looking for..."
A more common line of thinking among respondents concerned the misuse of such techniques. As Tom Henkel put it, "I'm sure the same companies that wasted time and money on poorly designed surveys and focus groups will engage in similarly misguided neuroscience and psychological marketing initiatives."
Svetodar Yosifov raised an equally interesting question of whether it is more important to obtain the thinking of a few potential customers or to focus on dissatisfied current users of a product or service. As he said, "Improving the ways in which a company listens to its customers and actually implements the customers' 'voice' into action is the way to reach a 'golden era' in marketing productivity."
Whether the real potential for improvement in marketing productivity primarily lies in the minds and behaviors of existing or potential customers will be a continuing source of debate. To the extent that both groups are important to a marketing organization, which group is addressed most effectively by emerging techniques relying on neuroscience, particularly the exploration of the subconscious feelings that may or may not drive behavior? Will such techniques enable an organization to anticipate the desires and needs of significant numbers of customers? Or will it lead to the introduction of new products and services that fail because they are ahead of their time or based on misinterpretations of consumers' subconscious thoughts? What do you think?
Work on several fronts suggests that we should be experiencing a resurgence of productivity in marketing, measured in terms of less waste in advertising, more clearly focused sales effort, and fewer product, service, and brand failures. However, it also raises interesting questions.
The 80/20 rule describes many phenomena faced by management. That is, for example, roughly 20 percent of employees experience 80 percent of accidents on the job. And roughly 20 percent of customers provide 80 percent of sales. Focused strategies can be based on this kind of information. Recently, managers in many businesses are concluding that the proportion of a firm's customers that account for nearly all of its profits may not exceed 10 percent when one takes into account the significant impact of so-called "apostle/owners" on a business. These are customers who are loyal, "viral" in the sense that they tell many others of their satisfaction, and influential enough to change others' buying patterns.
They are also customers who identify so closely with a product, service, or company that they provide valuable advice concerning product improvements and even new product ideas. The identification and "employment" of a relatively small number of these customers on behalf of a product or service can greatly improve both the efficiency and effectiveness of a marketing strategy. And it is made increasingly viable by Internet-based services.
Similarly, the search for more effective ways of developing and positioning brands, directing marketing messages, and improving products and services may be leading away from vast surveys or focus group inquiries of consumers' conscious reactions. Instead, they may increasingly be replaced with interviews of small numbers of individuals whose unconscious thoughts and reactions, often unknown even to them, are "unlocked" through concepts based on neuroscience and psychology.
That is one conclusion that can be drawn from Professor Gerald Zaltman's thought-provoking new book, How Customers Think. Why not mine ideas in the subconscious, what Zaltman calls the "mind/brain," where 95 percent of our thinking takes place? Zaltman maintains that with relatively small numbers of in-depth individual interviews employing carefully-designed questions posed to customers representative of selected market segments, insights can be gained to increase the probability of success in building brands and positioning products and services. The process is effective in terms of both results and costs.
All of this suggests that what we experience as consumers may be influenced by fewer and fewer "voices" from the market. The promise is that we will like what we experience, because it will involve such things as fewer irrelevant messages, better availability of products and services, and product performance geared to our real needs.
Is this really likely to happen? Will these phenomena and concepts fuel a golden era for marketing productivity? Or are tendencies to place our brand, product, and service futures in the hands of so few an overreaction to the perceived waste resulting from traditional approaches to the design of marketing strategies? What do you think?