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- Customer Insight Three Ways
B2B Marketing Confidential | Sep 08, 2010 | Permalink
Customer insight is important to marketers for many reasons. Understanding your customers helps you in formulating market strategy. It helps in campaign design. It helps the sales force understand how to approach acquisition targets or retain existing customers. It is the raw material out of which great marketing happens. In the B2C space, customer insight is well understood, and whole industries and many great companies have made it their business. Segmentation schemes that provide predictive lift in product design, creative design, and direct marketing campaigns make billions of dollars a year for companies like Axciom and Claritas. However, in the B2B space, customer insight still has a long way to go. The reason is simple. Companies are a lot more complex than individuals or househo...
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- Scott Cross (Office Depot) Talks Efficient Customer Response, Customer-Centri...
B2B Marketing Confidential | Sep 08, 2010 | Permalink
I recently interviewed Scott Cross for an upcoming issue of MarketBridge's client email newsletter (Minds Over Markets). Scott is Director of Strategic Campaigns at Office Depot. Scott's a super smart guy who's tried a lot of innovative things and has a firm grasp on the big picture of B2B Marketing.---------------------------------------------------AH: Talk a little about how customer data is being used to bring together vendors, manufacturers, retailers and distributors in a more customer focused strategy, and where that’s headed from a B2B perspective.

SC: The manufacturers don’t really understand who is making the decisions and what information is available within the network of their distributors and retailers. A lot of them aren’t set up to understand the information,...
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- Verticalizing Internet Marketing
B2B Marketing Confidential | Sep 08, 2010 | Permalink
The hottest thing in direct marketing today is targeting individuals online vs. targeting via publishers or content. The idea that we can "know" a user and target them frees up the 90% of online inventory currently referred to as "remnant" space-- e.g. the space left over after GM, Microsoft and Coke buy the top page banners at Washington Post and NY Times. The remnant space can be just as valuable as the prime space if we only knew who the users were. A user interested in gourmet cooking is still a user interested in gourmet cooking when she leaves the NY Times food page and goes to her hotmail account or to her son's preschool website.Verticalizing the internet is a potential solution. Or rather, verticalizing internet users. The internet is already as verticalized as it's ever...
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- Thoughts on and Definition of Inbound Marketing (Listening)
B2B Marketing Confidential | Sep 07, 2010 | Permalink
Marketing is a word that has lost its meaning, and marketing is a discipline that has lost its way. When I say “marketing� to most people on the street, the first words that are mentioned are overwhelmingly negative. Marketing is thought of as “advertising�, “spam�, “pushy offers�, or “tricks�.Here's an ironic and unlikely hypothesis--marketing accountability has driven this trend. This is meant to be a controversial statement. Marketing accountability, otherwise known as “ROMI (return on marketing investment) measurement�, has forced the marketing function into a single role driven by a single metric—driving incremental, short-term revenue. Of course, this is an oversimplification. Many companies think “long-term� and do care about their long-term customer...
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- Segmenting Segmentation
B2B Marketing Confidential | Sep 07, 2010 | Permalink
The problem with the word "segmentation" is that it has lost its meaning. Like "analytics", a marketer saying "segmentation" can mean virtually anything. This isn't necessarily a problem, if we are simply using "segmentation" to mean "the parsing of customers in some way", but often people mean something very specific when they say the word, while the people listening interpret something very specific as well, but something specifically totally different.I've often tried to come up with ways to segment the word segmentation. And yes, I am guilty of the same sin the "Two Bobs" made in Office Space when they wrote "plan to plan" on the whiteboard, but I'm still going down this tautological road. "He's a real straight shooter, that Andy Hasselwander. He segments his segmentations"So, here ...
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- Customer Insight Three Ways
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![](http://digg.com/submit?phase=2&url=http://b2bmarketingconfidential.blogspot.com/2009/07/customer-insight-three-ways.html&title=Customer-Insight-Three-Ways&bodytext=Customer insight is important to marketers for many reasons. Understanding your customers helps you in formulating market strategy. It helps in campaign design. It helps the sales force understand how to approach acquisition targets or retain existing customers. It is the raw material out of which great marketing happens. <div/><br/><div>In the B2C space, customer insight is well understood, and whole industries and many great companies have made it their business. Segmentation schemes that provide predictive lift in product design, creative design, and direct marketing campaigns make billions of dollars a year for companies like Axciom and Claritas. However, in the B2B space, customer insight still has a long way to go. </div><div/><br/><div>The reason is simple. Companies are a lot more complex than individuals or households. For one thing, companies can be very small--say one worker--or very large. For another, companies have different locations with different functions. Capturing all of this diversity is difficult. </div><a href='http://4.bp.blogspot.com/_30veOO2AATQ/SmXJkkFy8YI/AAAAAAAAAFI/5Uz11VofPzo/s1600-h/ThreeAudiences.jpg'><img src='http://4.bp.blogspot.com/_30veOO2AATQ/SmXJkkFy8YI/AAAAAAAAAFI/5Uz11VofPzo/s400/ThreeAudiences.jpg' id='BLOGGER_PHOTO_ID_5360912561454903682' border='0' alt='' style='width: 400px; height: 242px; cursor: hand;'/></a><br/><div/><br/><div>A good way to start simplifying the customer insight question in B2B is to focus on three key dimensions. First, <strong>what products are companies buying</strong>? Second, how is the company structured from a <strong>decision making perspective</strong>? Third, what <strong>information channels</strong> do decision makers and influencers in the company use to make decisions? This simple triad--product / audience / channel--can be very helpful as a "check off" list when thinking about marketing strategy. How would this approach work in a simple marketing campaign to say, sell a new type of tool to construction companies?</div><div/><br/><div>First, the <strong>product dimension</strong> kicks in. What companies currently have similar tools? What types of industries would need this tool? If the tool is very expensive, is there a lower bound on company size? A marketer could use data on product sales to build a predictive model of the most likely firms to purchase this new tool. It's important to note than in most cases, the product dimension is relevant at the firm and not the contact level.</div><div/><br/><div>Then, the <strong>audience</strong> <strong>dimension </strong>comes into play. Who is going to make the decision to purchase this tool? Are there key influencers to the purchase, the actual users of the tool? What are the features of the tool that will be most appealing to them? A marketer could create a contact strategy that hits each audience with the selling points that make the most impact--price on the buyer, value on the CFO, features on the users, for example. </div><div/><br/><div>Finally, the <strong>channel dimension </strong>is used to understand how marketing and sales should be executed. Do buyers and influencers read a specific type of publication to understand more about this family of tools? Are there influential communities that they listen to that we need to plug into? Are there key distributors that must carry the product for it to penetrate the market?</div><div/><br/><div>Of course, getting customer insight--the raw information--across these three dimensions is difficult. Doing this requires at the very least a qualitative market research study. However, by beginning to think in terms of these three dimensions, marketers will make better decisions and begin to collect information on their B2B customers that they can use over and over again.</div><div class='blogger-post-footer'><img src='https://blogger.googleusercontent.com/tracker/36395142-959196577683935418?l=b2bmarketingconfidential.blogspot.com' height='1' alt='' width='1'/></div>
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![](http://digg.com/submit?phase=2&url=http://b2bmarketingconfidential.blogspot.com/2009/10/segmenting-segmentation.html&title=Segmenting-Segmentation&bodytext=The problem with the word "segmentation" is that it has lost its meaning. Like "analytics", a marketer saying "segmentation<a href='http://3.bp.blogspot.com/_30veOO2AATQ/SuYMSIgOVsI/AAAAAAAAAGI/hiGNb9bvK-c/s1600-h/Office+Space.jpg'/>" can mean virtually anything. This isn't necessarily a problem, if we are simply using "segmentation" to mean "the parsing of customers in some way", but often people mean something very specific when they say the word, while the people listening interpret something very specific as well, but something specifically totally different.<br/><div/><br/><div>I've often tried to come up with ways to segment the word segmentation. And yes, I am guilty of the same sin the "Two Bobs" made in Office Space when they wrote "plan to plan" on the whiteboard, but I'm still going down this tautological road. </div><div><a href='http://3.bp.blogspot.com/_30veOO2AATQ/SuYMSIgOVsI/AAAAAAAAAGI/hiGNb9bvK-c/s1600-h/Office+Space.jpg'/></div><br/><div><a href='http://3.bp.blogspot.com/_30veOO2AATQ/SuYMeHz2VII/AAAAAAAAAGQ/YJAwcSyXlW8/s1600-h/Office+Space.jpg'><img src='http://3.bp.blogspot.com/_30veOO2AATQ/SuYMeHz2VII/AAAAAAAAAGQ/YJAwcSyXlW8/s400/Office+Space.jpg' id='BLOGGER_PHOTO_ID_5397014915082245250' border='0' alt='' style='width: 400px; height: 194px; cursor: hand;'/></a></div><br/><div><strong>"He's a real straight shooter, that Andy Hasselwander. He segments his segmentations"</strong></div><div><br/>So, here we go. In my view, any segmentation starts out with business goals. What is the company itself trying to do with its customers? Are we trying to grow profit? Grow revenue? Are we trying to do it in a specific area? Do we have multiple goals? What are their priorities? Ignoring these questions and just going down the path of segmentation without context is a big problem. So start by understanding business goals. The two Bobs would be proud of you, even just doing this.<br/><a href='http://1.bp.blogspot.com/_30veOO2AATQ/SuYYhLK8S9I/AAAAAAAAAGY/SgeacLkQfDU/s1600-h/SegmentationTree.png'><img src='http://1.bp.blogspot.com/_30veOO2AATQ/SuYYhLK8S9I/AAAAAAAAAGY/SgeacLkQfDU/s400/SegmentationTree.png' id='BLOGGER_PHOTO_ID_5397028161663552466' border='0' alt='' style='width: 400px; height: 258px; cursor: hand;'/></a></div><div>Then, we get to the actual source insight. This is before we do any segmentation. What I mean by insight is pulling all of the stuff we do and can know about customers that would make meeting the business goals defined above easier, and putting them in a giant bin. This can mean old and new market research, qualitative or quantitative, data mining, management hypotheses... it's everything.</div><div/><br/><div>Only then do we get to segmentation. Now here I think there's an important thing to consider, which is that "value" segmentation kind of supercedes all the others. The reason is that if we want to do anything to customers, we <em>first need to understand how valuable these customers are. </em>So, I'd argue that segmenting customers first by value--whether customer lifetime value or something less sophisticated--has to happen first before you do anything else. This is probably somewhat controversial, among the 150 people who regularly read this blog. So, I encourage people to engage in a heated, uncivil debate on the topic.</div><br/><div>Then, I'll put forth four key "types" of segmentation, in addition to value-based:<br/></div><ul><li><strong>Product. </strong>What customers want and need from a product or service. Sometimes called "needs-based segmentation"<br/></li><li><strong>Creative.</strong> How customers respond to different visuals, animation, etc. Some of the cool things going on in biometric research are very useful here.</li><br/><li><strong>Promotion. </strong>How customers respond to different types of incentives... price, points, free shipping, etc.</li><br/><li><strong>Channel. </strong>Which customers use which channels, and which they prefer.</li><br/><li><strong>Targeting / Finding. </strong>Where to actually find customers wherever they are<br/></li></ul><p>This is represented in my little "segmentation tree" as a continuum, and that's deliberate. This is because the left side of the tree--needs-based segmentation--is really hard to combine with the right side of the tree. Also, making a segmentation scheme do all five things at once is almost impossible. There are two reasons for this:<br/></p><ol><li>A statistical problem called "assignment" which means that you can't make one segmentation based on needs, generated from a survey, fully predict or "find" individual customers</li><br/><li>A scope problem that in any one study, you can't possibly combine all elements of "segmentation" into one uber-model. It's just impossible.<br/></li></ol><p>One way around this is with behavioral segmentation, or "deterministic" segmentation. This means you just start out segmenting your customers into groups 100% defined by their behavior, and then define the six attributes in the tree post-facto. This way, you're always certain you can target a customer. It might not be perfectively descriptive, but it's guaranteed to be perfectly actionable.<br/></p><p>Later everyone.</p><div class='blogger-post-footer'><img src='https://blogger.googleusercontent.com/tracker/36395142-5038670146139135884?l=b2bmarketingconfidential.blogspot.com' height='1' alt='' width='1'/></div>
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