Rebecca Weeks: My name is Rebecca Weeks. I am the content director of iMedia Summits. This morning you have heard from top executives in Yahoo!, MasterCard, and Electronic Arts talk about the interactive opportunities and their value in targeting. But, we have yet to learn how to target our brand's most profitable customers, and how to value them. So, we need deep, intimate knowledge about consumers. And, this is where our next keynote speaker, Jeff Zabin, comes to our rescue.
Jeff Zabin is well known for his customer data capture and marketing techniques. Currently, Jeff is the Director of Marketing at Fair Isaac Corporation, a company whose analytics help brands acquire customers more efficiently. Jeff is also the co-author of two books: The Seven Steps to Nirvana, and Precision Marketing.
In today's presentation, Jeff is going to teach us how to capture, integrate and enhance relevant customer information so that we can determine our brand's value to those customers and before investing our marketing dollars. So, please help me welcome Jeff Zabin. (Applause)
Jeff Zabin: I come from a company called Fair Isaac -- just a quick show of hands, how many people here have heard of Fair Isaac? Okay, let me ask you another question. How many people here have ever applied for a credit card, or re-mortgaged their house, or borrowed money from a bank? Oh, a surprising number of you. (Laughter) Well, then you have probably heard of what is called a FICA score, and that stands for Fair Isaac Corporation. So, that is our heritage. I am part of a division of Fair Isaac, and we are focused exclusively on delivering marketing solutions and we work with a number of the world's largest brands, helping them to catapult their marketing programs to higher levels of effectiveness.
Let me tell you a bit about myself, at least, what is relevant in the context of being here today. I wrote two books. The first book I won't talk about other than to point out that it has the number "Seven" in the title, and I think that is important, because if you think about the number seven, it is really a universal number, whether it is the seven deadly sins, or the seven notes in the musical scale, or the seven days of the week. You know, you see the number everywhere, everywhere you turn. And, I just wanted you to know that it is no coincidence that today is the seventh of February, and that I am speaking here.
The other book I want to talk about is Precision Marketing and this is the book we will focus on for the duration of this talk. Or, at least I will allude to it from time to time. And, you know, the interesting thing about writing these books is that you are always trying to strike that balance between timeliness and timelessness. That's the hard part about writing a business book -- by the time the ink dries, half the book can be obsolete. Hopefully -- this book was actually published a year ago -- I like to think that I am so far ahead of the curve that some of it is still relevant today even though, you know, internet time is light years.
But, when I write these books, what I strive to do is to, again, look for universal prescriptions of wisdom. So, in my case, I am always looking toward Zen, and African folklore, and ancient Indian proverbs, and even Aesop's fables. And, I will tell you an Aesop's fable in a second.
I love this quote from Paul Arden, he is a guru, British guru, advertising guru -- I think he was with Saatchi and Saatchi, and Ogilvy and Mathers -- his quote is, "To be original, seek your inspiration from unexpected sources." I really like that quote. I think it is great. You know, even as you are benchmarking best practices, if you are with a CPG company, think about what they are doing over in financial services, or telecoms, or retail, or other knowledge domains.
Anyway, let me tell you this Aesop's fable. It is about a doe, you know like "doe a deer?" The story is that there is this doe, and it is on an island, and it is blind in one eye, so it always keeps its good eye facing inward, toward the land, trying to keep an eye out for poachers or hunters who might come up to it and shoot it dead. Well, one day the poachers get the idea to come around the island from the other side. They charter a rowboat and they then shoot it dead from that direction. It is really a tragic story. (Laughter)
But, the important point is, you know, I mean what is the moral of the story? That is the question. You never know where your competition is going to come from. And, if you think about that classic Harvard Business Review article by Ted Levitt, called "Marketing Myopia," you know, he said back in the 1920s, the railroad tycoons, like Union Pacific, they were all worried about other railroad tycoons eating their lunch. Well, in fact, all they had to do was look up in the sky and they could see that it was the airline industry that was ultimately going to steal their passenger base.
So, when you think about "Who is going to take my customers away from me?" And, you think about it in the context of what is going on today in CPGs and Consumer Branded Goods, what you find, obviously, is that it is not so much Unilever versus Johnson & Johnson, versus Kraft, versus P&G, versus SC Johnson and so on, and so forth, it is more the store brands, right? It is the private label brands that we have to watch out for -- they are capturing more and more market share. And, by the way, there is not a whole lot of … you know, the market is saturated. The circle has almost reached its maximum circumference. So, we are seeing some emerging trends, and hopefully you are all fully aware of these trends. I assume this is a refresher for you, but I think it sets the stage for what I want to talk about. I mean, we are seeing the decline of mass marketing effectiveness. Brand disloyalty. Again, there is not a huge differentiation between brands these days.
I did a little contest with my son a couple of weeks ago. I gave him an Oreo and I gave him a bunch of those store branded cookies, and I asked him if he could tell the difference in a blind taste test. And, the only difference it turns out (and hopefully there are not any people from Kraft here), is the word "Oreo," right? So, there's a lot of other knock-offs that are masquerading quite effectively as Oreo cookies. Customer scarcity is a big problem. Customer expectations are through the roof. I always think of that children's book character, Eloise at the Plaza Hotel, calling room service: "Get it to me now, and charge it, please." That sort of insouciance.
Customer touch points are proliferating. There are lots and lots of ways to interact and transact with your customers. That's good news, but it is also bad news. You have to make sure you break down your data silos; that they are all talking to each other; that you have a 360-degree view of your customer relationships; and, that the customer experience is consistent across all touchpoints.
Media and attention fragmentation: you know this as well as I do. We are seeing a whole bunch of new technologies. There are hundreds of channels: satellite channels, cable channels, coming into people's homes these days. The rise of TiVo and other DVR-like technologies, which are allowing people to fast forward through 30-second commercials. I was just reading a Merrill Lynch report that 70 percent of people who have TiVo skip commercials today. They are predicting that by the end of the decade, almost half of TV households will have some sort of DVR technology -- 58 million households. So, that is a reason, you know, for concern.
And, then, customer fatigue. You know, people are tired and all of the junk mail that piles up in the foyer goes into the kitty litter box. You know, we are inundated with messages and offers every day, and it is exhausting. I am exhausted just thinking about it.
So, let me talk about Precision Marketing. (Excuse me one second.) So, precision marketing: I like the word "precision." Let's think about that word for a second: precision. It is really the condition of being accurate and exact, right? You think about a precision scale, it tells your accurate and exact weight. Precision components adhere to accurate and exact standards. Think about precision clocks. So, GPS satellites have atomic clocks and they are regulated by the electronic oscillation of Cesium atoms, and they gain or lose no more than one-tenths of a second every 30,000 years. So, to me, that is a good example of precision. Now, obviously, you are not going to get anywhere near there with your marketing programs, but it is always good to have that North Star in mind, to which you are navigating.
So, when I think about precision marketing, when it comes to marketing, it is really about context sensitive offers (we will talk about "context" later). Just-in-time, to use a manufacturing term, instead of just-in-case marketing.
Customer intimacy. You know, we are all trying to get intimate/personal with our customer. That is obviously a driving force today, trying to create that "one-to-one" intimacy (to borrow a term from Peppers and Rogers). Few customers are equal. Maybe in the Constitution, or the Bill of Rights "all people are created equal," but the reality of the situation is that not all customers contribute equally to the profitability.
And, marketing ROI. We all know that marketing organizations are under more pressure than ever to demonstrate ROI, to reallocate their marketing dollars in ways that are going to drive top-line revenue growth. And, that's actually a fairly new phenomenon. Ten years ago, it was all just about "Let's do something really cool and creative." Now it is about, "Oh, God, we actually have to account for those dollars?"
Scientific marketing is sort of the outcome of that need. Companies can't really just think in terms of, let's do something intuitive and on an ad hoc basis, and let's be really creative. That is never going to go away. But, in addition, you need to be a little bit more scientific and regimented and calculated about how you measure your marketing expenditures. And, we are going to talk about scientific marketing.
Then finally, I want to talk about the complimentary nature of mass media marketing and precision marketing because I really think they go hand in hand. It is not an either/or proposition. If you look at the historic analogues of technology innovation, you begin to realize the truth in this, that very often when you have a new technology, the pendulum swings to an extreme, but ultimately it settles in the middle.
Think about the VCR -- you remember the precursor of the DVR -- which began to come into people's homes in the early 1980s. And, initially, movie moguls were up in arms, right? They were like, "Oh, no, people aren't going to go to theatrical viewings of our movies anymore. They are just going to stay at home and watch them on TV." Well, as we all know, that didn't happen, and the only reason the movie business is doing so well and the rentals of DVRs and videos is $2 billion, is because they go hand in hand, right? They are complimentary.
The same is true for the microwave oven, which came into people's kitchens around the same time. People actually thought that was the end of stovetop conventional cooking. "We'll get rid of our stove. We will cook all our meals in the microwave." Well, you know, that is silly, and now it is hard to imagine a kitchen that has either one or the other. So, you know I call this the myth of substitution. It is not as though when a new technology comes into existence the old one exits stage left, or stage right.
By the same token, as you start thinking about precision marketing, you start thinking about online channels and offline channels. It is good to think about, "Well, how do these actually compliment each other? How can we … what are the synergies between our offline and online programs?" This is old news to all of you. You have been thinking about this for a while.
The truth in this lies in, I think, Isabel Breyers Miggs, I'm sorry Isabel Briggs Myers, (her test was called Myers Briggs, I believe) and you know, she is a cognitive scientist. And, she basically said that people process information through a variety of ways. Some people are better at processing information verbally. Some people are better at reading it. Some people are better visually. You know, lots of different ways to process information, but at the end of the day, all of these become reinforcing components of a learning experience that ultimately, in this case, will culminate in understanding the information better. But in this case, if you see a product in a catalogue, and you see the same product on the web, and then you walk into a physical store, well they all, again, culminate into a purchase decision, and all these channels work together.
Monday: Three enablers of the precision marketing circle.
