Learn to Extract Marketing Insights from Data

by Eric Tsai

Learn to Extract Marketing Insights from Data
In working with many smart business people and analysts in the past few months, I came to appreciate the ease of accessing web analytics.

Who knew that math and data would become a main revenue driving force for businesses big and small?

Every business is fast becoming a data-generating machine.

From upstream to downstream, data rewards us with actionable insights to make profitable decisions via controlled experiments allowing us to advance our business models.

And yet, this is just the beginning as the number of people connected to the web continues to grow, so too does the vast amount of information about those individuals.

According to McKinsey Global Institute, “collecting, storing, and mining big data for insights can create significant value for the world economy, enhancing the productivity and competitiveness of companies and the public sector and creating a substantial economic surplus for consumers.”

Big data: The next frontier for innovation, competition, and productivity

Collect and Analyzing Data for ROI

We can’t mine data we don’t have, so now is the time to focus on data gathering.

Simply put, data will produce new value for businesses whether it’s setting up web analytics, collecting email addresses or compiling transaction data, the ability to turn data into actionable insights equals the ability to make money on the social web.

In addition data is the foundation for business return on investment (ROI) that enables predictive analysis to explore highly targeted and optimized marketing campaigns.

ROI-centric businesses focus on maximizing the lifetime value of a customer, which in many cases refers to customer retention and the cost of sale.

That means leveraging weighted algorithms and attribution models to target and re-target the “next-best” opportunity.

The key is to put data in context and “translate” them into meaningful key performance indicators (KPIs).

For example, a controversial topic that I often come across is the concept of social media ROI.

In reality, social media analytics and engagement data do not have a transparent cause-and-effect ROI so analyst Jeremiah Owyang of Altimeter Group came up with a simple formula to look at social media ROI.

By focusing on business goals, he recommended companies to develop a standardized way to measure first based on objectives, a fundamental starting point to put ROI in context.

An important aspect of reporting ROI is to put data in perspective for everyone involve. It’s indicative that social media ROI requires mapping the right data to the right role because different data sets mean different ways of measuring, segmenting and analyzing.

The Increasingly Social Search: Social Media Data

Although search engines such as Google, Bing and Yahoo have provided tremendous insights into customer behavior, the rise of actionable social media data is adding fuel to the explosive growth of digital information.

Now that Search engines are integrating social signals into their algorithms, social is going to play an important role to increase efficiency in targeting.

Facebook, LinkedIn and Twitter can help generate even more granular, multifaceted customer segmentation from profiles, posts, click histories, and usage logs by identifying influencers and leaders within social groups, as well as their followers and outliers.

Not only can Social media distribute marketing messages out faster, they allow companies to gain deeper insight into customer behavior in much more detailed than it has ever been.

In addition, social media enters into early majority phase of adoption according to a recent survey by Regus, more firms are using social media to engage with existing customers than a year ago, with the following highlights:

50% of businesses in the U.S. use websites such as Twitter to engage, connect with and inform existing customers
In the U.S., 55% of firms encourage their employees to join social networks such as Linkedin and Xing
38% of U.S. companies dedicate up to 20 percent of their marketing budget to business social networking activity
Globally, the survey reported a seven percent increase in the proportion of businesses successfully recruiting new customers through social networks such as Facebook

Geolocation: Adding Space and Time to Data

Local data is one of the most valuable forms of data because it can put local business in touch with potential customers while they’re in the vicinity of the business.

Do you wonder why all of a sudden people are “checking in” on Foursquare, Yelp, Facebook and Twitter?

According to IBM Engineer Jeff Jonas, “With roughly 600 billion data transactions from cellular phones on a daily basis, adding space and time to traditional data objects can help predict where someone will be on a given day and time with up to 87 percent accuracy, for example. Adding space-time works because, oddly enough, of physics.”

Watch live streaming video from gigaombigdata at livestream.com

The Take Away

The bottom line is that it is about giving youself the highest chance of marketing success by targeting customers that fit your business model.

Needless to say that it is important to collect the right data (context counts!), but the intrinsic value is in your ability to extract actionable insights beyond trends and patterns that reveal profitable opportunities.

The only question that remains for you is this – what data are you collecting, why, and how does that fit into the big picture?

I recently gave an interview to Adobe’s CMO.com about this topic.
Check it out: McKinsey Report Calls For New Generation Of Web Marketing Analysts

What Is Adding Value And How It Applies To Social Networking

by Eric Tsai

As a social media advocate I often discuss adding value to the conversations, to the communities or to the relationships. I guess I assumed everyone already knew what the term means and how it applies to them until I started to get questions from people.

So what exactly is adding value and how? Is it just an over-used marketing jargon? An illusion of a feel-good emotion? The more I use the term “value” the more I feel like it’s loosing its soul (I’m guilty as charge at times).

One of my favorite artists, the awesome Hugh MacLeod had a great piece about Adding Value with the quote, “The aim of “adding value” is a hard one to argue with… who doesn’t want to add value to their current enterprise? But it’s also utterly meaningless…”

Well, obviously there are many ways to look at it but here is how I perceive the meaning of adding value.

Let’s face it, most businesses wants to add value to the bottom line which means making sales and growing profits.

In sales, adding value used to mean networking in the best interest of your company or your career which is to sell, sell, sell!

Today it means helping people to make informed decisions, finding out their needs first and showing an interest to solve their problems not yours. The one way sales pitch broadcasting simply becomes part of the meaningless noise in a sea of noises.

The Meaning of Knowledge

In sales, either the product sells itself (more of an affirmation and emotional validation) or it’s selling via education (information and data).

A Porsche salesman don’t sell the 911 Turbo, they sell the experience of buying a Porsche (great products drives emotions). On the other hand, a Honda salesman sells the features and benefits against competitors like Toyota and Nissan (value proposition, more needs than wants).

In both scenarios, the goal is to ensure that the person feels good about the decisions that they’ve made (or going to make) on the purchase which leads to trust building. And trust is built on relationships from knowledge and actions.

The more knowledge you have, the less fear you have, the less stress you feel and the better you feel about your decision making process.

You could think of having knowledge as freedom from limitations and having information is empowerment. The ability to make your own decision is valuable because who wants to be pressured into buying?

Emotion Trumps Logic

Now you know the importance of adding value through knowledge transfer, you then need to know how to take actions with your knowledge.

Besides physically helping someone, the action part comes down to communication. And because emotions are the essence of the communication, marketers need to focus on the emotional needs of the customers at the time when feelings are vivid. This mean to empathize with your customers and truly focus on how to make their lives better.

You can not make people’s lives better if you don’t understand their lives.

When you solve someone’s problem, they’ll usually remember it not because of the facts but because of how they felt when it was happening. Simply put, memory is tied to emotions and emotions are more real than thoughts.

Now apply that to marketing and you’ll realize that providing useful and meaningful information does exactly that – it makes people remember you if you satisfy their needs by providing value!

This is why the increasingly Social Web is a great place to find those that are in need of knowledge (also why information product sells). When you need an answer, you want it now, you Google it (you can Yahoo or Bing it too of course).

The online conversation across all social networks are as authentic as it gets, besides the offline in-person engagements, because it’s taking place when people are still feeling the emotions dealing with their problems – what is, how-to, why is, who can…you get the point.

The rest of it is about the context of adding value, at the right place at the right time.

The optimal time to email your subscribers, the suitable LinkedIn group to contribute knowledge or the people you engage on Twitter – they’re all channels to add your value to the conversation within the communities to forge solid relationships.

Motives and Actions

The last point in adding value is the motives behind such actions. Why are you doing this? Why are businesses embracing the freemium model?

Most of the time the objective is to create brand awareness, build credibility and what I keep pounding the table on: to create social proof around the topics of health, wealth and relationships.

However; there is always a trade-off, you get free Gmail with all the awesome features of other Google Apps because Google advertises around your inbox.The same applies to most of the social networks like Facebook and LinkedIn. You’re exchanging personal information to use their products.

My take is that if you’re honest about your intentions and focus on serving only those that matters to your business, you will attract the customers you want.

Like what Seth Godin wrote in his book Purple Cow, “the key to failure is trying to please everyone.” Well, he’s right, everyone is NOT your customers.

And the science behind motivation isn’t as clear cut as features and benefits or even monetary rewards. Checkout this video by RSA animation adapted from Dan Pink’s talk at the RSA on “The surprising truth about what motivates us.”

The take away: Identify your customer’s problem is where adding value starts. And listening when they talk is your opportunity to fill the value gaps.

Think of it as facilitating the process of buying on their terms not yours. You have to create the right environment that entices people, and if you do it well, then they will show up and join the party.

It is only by adding value you will be remembered, reciprocated and passed on (via word-of-mouth).

There are simply too much information and too little time. Marketing messages are everywhere and people have developed ad blindness, seeing doesn’t mean retaining.

Are you adding value?

Interview with an Expert: Anne Simons of Brandeo

by Eric Tsai

Today, I spoke with Anne Simons, who is the blogger behind Brandeo and the President of TBD Brand Ventures.

In this interview, Anne talks about what brands are doing today to stay competitive, her perspective of social media on branding, and advice for marketing professionals.

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5 Easy Steps to Build a Solid Social Media Profile

by Eric Tsai

Whether it’s your business or your personal brand, people always connect with people on a personal level. It’s all about engaging in a dynamic relationship.

Brands are not logos or commercials, they are the perception and emotion of people built on trust and credibility.

A successful brand cultivates extensive user experience and encourages interaction that creates meaningful dialogues.

In order to foster strong relationships you must be trusted. And to earn trust, you need to allow others to become aware of you.

This concept also applies to the art of social networking, particularly with the shift from face-to-face communication to more online communication.

There are literally thousands of social media websites on the internet with hundreds more popping up every week.

The strategy is to focus on the ones that suit your niche.

Setup a blog

I recommend setting up a blog if you don’t already have a website.

Even if you have a website such as your company or product website, incorporating a blog will enhance your online presence because blogs are typically search engine friendly, and they allow for rapid content indexing on the internet.

You can easily sign up for a free account on Blogger, WordPress, or TypePad and start blogging away on whatever topic you want. It’s not required that you have a blog but it provides another source to learn about you or your company on a personal level.

The latest phenomenon is the development of ‘micro-blogging” – a form of blogging that allows users to send brief updates either to be viewed by anyone or by a restricted group which can be chosen by the user.

This feature is available in Facebook and LinkedIn as status updates and by far the most popular one now is Twitter.

Sign up social networking accounts

For professional and business related social profile, the ideal website to use is LinkedIn. LinkedIn is a professional community that shares your credentials in a resume format.

It has an unique format for users to browse and connect with a person’s and all of his/her contacts.

You can aggregate your blog content right on your personal profile page too so whenever you post new entries, it will update automatically.

And for connecting with family and friends, Facebook would be the choice because it focuses on displaying photos and allows for more personal dialogues and interactions.

Both LinkedIn and Facebook has a “groups” function that lets you create, join and interaction in sub-communities of your choice.

You can create a group for your company so all your employees can join, or if your hobby is photography you can join a photography group.

This feature encourages networking and brings liked-minded people with simliar interest together.

Follow the 5 steps below to learn how to build your social media profile:

1. Register your account

This requires a username, email, and password. It’s important to use the same username and email across all social media websites so people can search for you if they’re already connected with you in another websites.

For business profile, use your company name, for personal profile go with your real name.

You can use an alias if you like but keep in mind you need consistency and recognition.

Registration process should take no more than a few minutes.

2. Input the right information

Privacy is a priority in social media so typically there will be settings to manage your privacy such as opt in to receive updates, newsletters, or allow/disallow certain information about you to be exposed in the community. If you’re not sure, test it out and play around with the settings until your satisfaction.

3. Add your immediate friends and colleagues

Once you’ve setup an account, take a few moments to search for your family, friends and colleagues and add them to your network.

People gravitate towards popular names and like to know that you’re not the only friend they have, it’s a simple perception of social proof.

4. Search for people you like and study their profile

– After adding everyone you know that exists in the social network, it’s time to search for new connections.

This is a tricky task because just like email spam, there are lots of spammers on social network sending unsolicited messages.

If you are a fan of someone or want to get to know them, the best way is to build up your profile so they can review then decide if they want to connect with you; or you can get introduced through one of their existing connection.

Either way, you need to study their profile and have valid reasons to be part of their network.

This applies to groups as well, and most social network groups require the group administrator to approve your request to join.

5.Participate, contribute and share

– After you connect with someone you can receive updates on that person via the status update feature.

This allows you to participate in their conversation, add comments, or share your updates with them.

The key is to build and maintain common ground by bringing value to the conversation.

Interacting with your friends with comments like “good job” or “I like it” is fine but not in the professional communities where preeminence and expertise are realized.

You must demonstrate your value in those professional forums to optimize your social profile.

The Unspoken Rules Of Social Media

42-17678818 The following rules are self-explanatory and will take you a long way.

Do’s:

Do speak your mind and contribute
Do bring value to the network
Do share and learn from others
Do keep in touch

Don’ts:

Don’t just focus on yourself
Don’t be afraid to ask
Don’t abuse social networking relationships
Don’t use social media to spam

Many businesses use social media as a part of their marketing strategy while others enjoy the experience for personal reasons.

Focus on your desire outcome and try to have fun too. There are plenty of opportunities to build your rolodex by embracing this new tool.

Have you started your social media journey? Connect with me to discuss more.

Twitter: www.twitter.com/designdamage
LinkedIn: www.linkedin.com/in/erictsai

What is Social Media and Why Should I use it

by Eric Tsai

How can social networking help my business? Is it a complete waste of my time or can it really do something for me? Those are the same questions I asked only a few months ago.

Instead of following the hype, I signed up for some of the most popular social media tools and have since become a believer.

socialnetwork02 Bottom line: I wish I had started using it earlier!

If you’re using social media tools such as Facebook, LinkedIn, and Twitter you should already know the value they bring to the table. If you’re still struggling to understand and how to best utilize them, keep reading.

What is Social Media?

In plain simple words, social media is a platform allowing people to interact and share information with each other online. It encourages dialogues (many to many) instead of monologues (one to many) by facilitating the discovery, participation and sharing of content.

You can become your own broadcasting station distributing information in the form of audio, video or written content. Instead of just going to a website and read a piece of content, you can now comment on it, redistribute it, or share it with other people.

Why Should I Use Social Media?

Social media allows people to connect online to form relationships for personal and business reasons. It’s often refer to as social networking. Business can engage their customers faster and individuals can reach other individuals easier.

Why Businesses use social media

Business Branding – Businesses are using social media to build trust and gain creditability for their brand via interactions with their customers. It’s a new tool for people to learn about the company and social media profile is the new “brochure” to find in-depth information about what the company is all about.
Networking – Social media creates new business opportunities and leverages word-of-mouth marketing to build a communication channel that can help generate sales leads. Social media enables businesses to connect to millions of people they otherwise wouldn’t have. It’s a new way to distribute information between businesses and people.
Customer Feedback – Companies are responding to customer questions directly via social media which can improve customer satisfactions and customer retention. Most social media sites have search function, so companies can search and see what people are saying about their products and services. It creates awareness and helps to improve the overall experience with the brand which can lead to direct sales.

Why individuals use social media

Personal Branding – Similar to a business you can leverage interaction between you and other individuals to strengthen your personal brand. In addition, you can influence them by becoming their fan, keeping them informed on what’s going on, or endorsing them through commentaries. Many individuals today are web celebrities because they constantly publish their expertise on a specific topic and became known for it and people perceived them as experts. Even mainstream high profile individuals are using social media to build a solid online fan base to take their personal brand further.
Personal Networking – You can use social media to network with others to find opportunities for jobs, joint venture projects, market your personal brand, as well as get the latest news on the topics of your interest. It’s a fantastic way to start conversations, learn from notable peers by participating, and get free advice. It’s also easy to reach someone and find answers or resources you need.

So now you understand why businesses and individuals use social media, next I will show you how to use them to benefit your business or personal brand.

8 Tips on How to Add Value to Your Brand Effectively

by Eric Tsai

This weekend, I went to my usual barber shop to get a haircut. When I got done, my barber gave me a customer rewards card for one free haircut after I get nine.

Interestingly, I’ve been going to this same barber shop for 10 years and it’s the first time they’ve started a rewards program of any kind.

The purpose of such a program is to keep the customers returning. It’s a simple tactic to create stickiness by recompensing the loyal clients.

This is a proven marketing tactic that increases the impression of value – the trick is knowing what value means to your customers.

What Does Value Mean To Your Customers?

Most business owners already understand the importance of continually adding value to their business. It’s by knowing and consistently adding value, brands remains competitive and have the opportunity to grow. Companies must focus on:

Increasing customer retention
Knowing what value means to your customer not to you

So what does value mean to your prospective buyers? Is it the competitive pricing? The free add-on services ? Or is it the customer loyalty program?

The answer: focus on customer needs and always demonstrate value through trust. In my article on “How Opinions Disrupt and Transform,” I observed that public opinions are good indicators of what’s important to consumers, especially when opinions shift from “wants” to “needs” like it is now.

Creating value is about staying relevant in your customer’s minds. It enables you to connect with what you do with what they value so your message resonate with them emotionally.

You’re not going to stop a consumer from purchasing generic soup over Campbell’s or picking up no-name tissues over Kleenex. You can either compete on price, value or both.

Here is a sample comparison for the two types of customers:

Buy Name Brand

42-15556081 – Quality is priority
– Price is important but not the main concern, it should meet my needs
– Had good experience in the past, going to stick with what I know
– Saw lots of marketing about it, going to try it
– Heard good things about it from trusted source

Buy Generic Brand

– Price is priority
– Quality is important but I’ll settle for second – it should meet my budget
– Had good experience with generic brands in other categories
– I may get more value with generic brands since all the money goes into the product instead of marketing
– Fits my basic needs – I am willing to try if it means I save money

Clearly the two types of customers have very different needs.

Depending on the product or service, a customer may choose name brand at times and generic under other circumstances.

Pricing competition will shrink profit margins over time. Competing on value must be consistent with the change in the perception of value. This goes back to knowing your customer’s needs and bridging the gap between their needs and wants.

For example: a few years back Coca-Cola started selling the 8 ounce mini-cans. They anticipated a consumer trend towards counting calories and becoming more health conscious.

Per ounce, the mini-can isn’t cheaper than the regular can. In some cases the price could even be the same as the regular 12 ounce can.

So why would someone pay the same stuff for less?

Don’t we all want a deal?

Coke did its homework and found that the mini-cans reduced the amount of guilt that a consumer felt for snacking while minimizing the chances of overeating.

Coke realized that consumers were no longer relying on the value-for-money as the sole factor for deciding to buy.

Instead, consumers wanted to eat smaller portions, particularly in the sub-100 calories area which Kraft originally started with its mini snack packs of chips, cookies and crackers.

The company understood the emotional needs of their customers and they provided a solution to solve their problem without loosing their brand integrity or customer perceived value. The product is still the same…just smaller portions.

In similar fashion, the smaller portion strategy has recently been implemented by many fast food chains.

Jack-in-the-Box’s “mini sirloin burgers,” Burger king’s “BK Burger Shots” and Quiznos “Toasty Torpedo,” are all tactics to tempt consumer.

Consumers who are spending less on meals away from home due to the recession NOT for health reasons.

8 Tips to Increase Your Brand Value

Here are 8 tips on what you can do to have an immediate impact on adding value to your brand:

1. Stay on top of your customer needs – Be “high touch” with your A-level customers, build solid relationships, and keep tabs on their problems.

Setup Google alerts, search on Twitter or discussion forums, read all reviews (yes, don’t ignore them!).

Visit customers regularly not only when they need something, and attend network events are great ways to strengthen the relationship and expand your reach at the same time.

2. Be visible to your customers – Make sure they’re aware of your value continuously; try to remind them of your value strategically.

Offering an updated version of your product or tagging on a free service are good ways of letting your customer know you are constantly improving.

Convince your customer that your existence makes their lives easier, better, happier by providing them with information they value and care for.

3. Know your competition – Always be on the lookout for what others are doing out there. Be ready to explain your value proposition versus your competitors’.

You must be able to provide the facts to back up your claims.

It will make you more competitive if you can level the playing field just like how all the restaurants are offering smaller portion meals in their own way.

4. Go the extra mile – Do things that are outside the scope of your business. Go above and beyond your normal routine by solving their “other” problems.

This will help you stand out from the competition.

5. Reward loyalty – Similar to the rewards program, give your customer something more for sticking with you or using your products and services.

It could be tickets to a baseball game, gift certificates or discounts for doing business with you in the future. You want to build a relationship that extends as long as possible so focus on customer lifetime value.

6. Try new ideas – If you’re in a highly commoditized market, you need to think about where you make your profits. Most of times there is no point in competing on price or service alone.

Try new ideas like the “freemium model” where it may be worth it to give some of your products or services away for free and charge for value-adds or premium account later in exchange for maintaining the relationship.

Gmail is free because Google makes their money from ads displayed in Gmail, giving them more advertising channels. Some Apple iPhone basic apps are free because they have a full version that will cost money.

7. Improve experience – The entire experience in doing business with your company should be present from start to finish.

Try to make every step as frictionless as possible and think from your customer’s perspective.

They should know that they can contact you with their concerns with the expectation that you will respond quickly and effectively.

This also creates great leverage for word-of-mouth marketing.

8. Include a human element – Many companies don’t focus enough on humanizing their brand. As a result, customers can feel out of touch.

They need to feel like they are more than customers.

Logos, slogans, taglines and websites are just references, they’re marketing vehicles.

Besides receiving your newsletters, brochures, emails and phone calls, allowing your customer to reach you in other engaging ways can help your company grow.

Don’t be afraid to be creative about it; throw events, create a blog, or connect via social networking tools such as Twitter, LinkedIn and Facebook.