Back Stop spray-and-pray marketing
D. Murali
PROMISCUOUS consumption, blueprinting the ideal shopper and consensual customer are among the words that Philip Kotler could pick as new from Precision Marketing by Jeff Zabin and Gresh Brebach, published by Wiley (www.wiley.com). "In the face of steadily declining profits, CEOs and CFOs are finally demanding accountability from their marketing organisations," writes Kotler in his foreword to the book. "They want to see tangible results _ not only in the form of increased brand awareness, but also in the form of real dollars."
Thus, the talk is about marketing ROI (return on investment) that calls for "a more scientific approach" to rigorously capture and analyse customer data. "And it means delivering narrowly defined messages that are differentiated, and designed to resonate with customers' specific wants and needs," notes the blurb. The usual `spray-and-pray marketing' drains hundreds of billions of dollars in mass media exercises that reach marketing messages to a large number of `wrong people' while only trickling in small measure to `right people.' The intro announces, without much ado, `a simple compelling fact': "We live in an unprecedented era of customer scarcity." For the accountant, this shows as non-moving goods and low inventory turnover, that splash red on the P&L. Shops emptily witness the death of sentimental or economic attachment to brands.
One may find the roots of precision marketing concept in what Wendell Smith suggested as `market segmentation.' Theodore Levitt developed the idea to talk about customers as "numerous small islands of distinctiveness." From the chronological chart that the book traces, you can study the evolution of Smith's idea from demographic focus to the current economic tilt, through geodemographic, behavioural, psychographic, and loyalty levels.
ROI is holy, but companies that want to measure marketing ROI are beaten "because of the simple rules of accounting." How? "Particularly vexing is the fact that the financial systems are often not set up to track payment for marketing programmes." What they track is `total shareholder value.' So, we need a director of `marketing economics,' decoupling the economic issues from the creative ones, and he would focus on "how to maximise dollars with ideas."
How good are companies in customer data management? Living in "the proverbial Dark Ages." Aaaarrh. So, storm the "Bastille of customer data," insist the authors. "The mission begins by addressing the problem of isolated data silos." A key milestone in the evolution of customer relationship management is when walls break and you have "integrated solutions that are channel agnostic" providing a holistic view of customer. The central memory of the company would be CRR _ short for customer relationship repository that "records information about every customer interaction in a single physical database."
Such a `corporate-wide root canal' is estimated to cost $50 million for MetLife: "By 2010, the system is expected to house data for upward of 100 million customers." Another example is of Microsoft, gathering 25 million customer records from its legacy databases plus 75 million transaction records, and about 2,000 getting added every day.
The traditional view of marketing, as a zerosum game, does not hold true in a techno-cultural economy, points out the book. "Collaboration. Partnerships. Trust. To make precision marketing a reality, companies need to capture and share customer data across the extended business network, work together to enhance the overall customer experience."
In the years to come, market researchers will increasingly resort to "complexity science and agent-based models to build rule-based decision simulations" and deploy "neuromarketing procedures." Yet, as the authors conclude, "Science is only half the battle won." So is marketing. Because after you get the horse to water, "water better taste pretty good." Moral: Don't just read the book and pray for customers to drop in.
Book courtesy: Fountainhead fhbooks@satyam.net.in
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