Lodestar Advisory Partners http://www.lodestarap.com Putting Intelligence to Work Tue, 07 Feb 2017 17:41:39 +0000 en-US hourly 1 https://wordpress.org/?v=4.8 68425056 Enrollment Research Finds Emotions Drive Enrollment Decisions http://www.lodestarap.com/2017/01/26/enrollment-research-finds-emotions-drive-enrollment-decisions/ Thu, 26 Jan 2017 19:42:57 +0000 http://www.lodestarap.com/?p=4107 Guest Blog by Patrick Toner, President, Customer Benefit Analytics and Lodestar Alliance Partner Key Takeaways: Benefits are purchased for a combination of emotion and rational motives Marketers need to connect on an emotional level to secure the enrollment My previous blog promoted how data analytics improves the benefits experience by making it more personal. The... Read More →

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Guest Blog by Patrick Toner, President, Customer Benefit Analytics and Lodestar Alliance Partner

Key Takeaways:

  • Benefits are purchased for a combination of emotion and rational motives
  • Marketers need to connect on an emotional level to secure the enrollment

My previous blog promoted how data analytics improves the benefits experience by making it more personal. The general idea is to collect data about employees as consumers. We build smarter buyer profiles that guide design of communications and engagement programs. Data for the buyer profile includes past benefits selections, demographic and lifestyle data, and psychographic data about WHY employee make the choices that they make. Good psychographic data is hard to find.

To get this psychographic data we commissioned our own study: Who Buys Voluntary and Why—2016 Benefits Enrollment Research. Employee Benefit News published some key findings from the research on its web site. It’s also available here. The psychographic data is as a revealing window into the employee’s enrollment mindset.

We asked 2,877 employees which benefits were offered, which they took and which they waived, and the reasons—including the primary reasons—for their choices. The findings showed clearly that employees “enroll” for benefits based on emotional drivers—primarily for a feeling of “peace of mind”. This may not be a total surprise for insurance products, or most other products for that matter. The research corroborates more extensive studies that consumers make purchase decisions based on “gut” instincts, and then support those decisions with more “rational” justifications.

Take voluntary Long Term Disability for example. Nearly half (43%) cited Peace of Mind as the single, primary reason for selecting the coverage. The leading rational response—Good Value for the Cost—was a distant second at 14%. Rational responses were relevant factors, however, as can we seen in the list of ALL reasons (Good Value for the Cost – 39%, Plan Details – 25%), but were not significant primary drivers.
Today, our industry communicates the value of LTD to employees with an over-reliance on rational approaches like calculators, comparison grids and lists of features and benefits. These devices have their place, but only after we connect with employees on an emotional level about how LTD will make them feel less anxious, and then reinforce their “gut” feelings with rational arguments to support buying LTD. Adapting our marketing communications to the emotional and rational needs of employees—as reveal through research—makes benefits more personal, and will likely lead to higher participation.


Patrick TonerMr. Toner is CEO of Customer Benefits Analytics (www.customerbenefitsanalytics.com), a New Providence, NJ-based firm that connects employees to the right benefits by using advanced analytics modeling of consumer-level data to provide rich customer insights and in-depth targeting. CBA’s prescriptive analytics optimize participation rates and premiums from benefits enrollment. Its user­friendly dashboards put customized, data-based recommendations at the fingertips of marketing, enrollment, and sales professionals.

Prior to founding CBA, Patrick spent 12 years of in employee benefits marketing, enrollment strategy, and ebusiness roles at Cigna and Metlife. He can be reached at ptoner@customerbenefitanalytics.com or 908.868.8382.

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10 Reasons to Establish and Nurture Emotional/Psychological Connections With Your Brand http://www.lodestarap.com/2016/03/25/10-reasons-to-establish-and-nurture-emotionalpsychological-connections-with-your-brand/ Fri, 25 Mar 2016 15:08:01 +0000 http://www.lodestarap.com/?p=4015 An important part of what a brand does is make promises, explicitly or implicitly, that users of its products and services will receive certain types of benefits. The expectation of and customers’ experiences of receiving rewarding and sought-after benefits through brand acquisition and usage in turn can foster  connections between the brand and users/customers of... Read More →

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An important part of what a brand does is make promises, explicitly or implicitly, that users of its products and services will receive certain types of benefits. The expectation of and customers’ experiences of receiving rewarding and sought-after benefits through brand acquisition and usage in turn can foster  connections between the brand and users/customers of the brand—connections that increase the probability of repurchase/re-use so that those benefits might continue to be received, and also yield other positive outcomes for the brand such as advocacy and overall strengthening of the brand in the marketplace.

The World Outside vs. the Pictures in Our Heads

Brand Benefit 3D Pyramid 3-24-16

There is an important distinction to be made between benefits and consequent connections that are based on direct physical, tangible outcomes for the user and those benefits that are based on psychological, emotional states of the user. For example, while a Rolex watch is expected to reliably tell time (a tangible, physical benefit of the product’s well-crafted mechanism), it also can, by virtue of its elegant design and by associations with the Rolex brand, be expected to satisfy a need for self-affirmation by signalling status, wealth, and sophistication of the wearer. The latter benefits do not directly accrue in the physical world, but rather in the minds of the customer and others, although they might (the customer may hope) as a consequence indirectly lead to actual physical benefits. Another example of a psychologically based connection is one arising from the emotional rewards of peace of mind and pleasure that a customer may feel when  staying at a branded hotel chain consistently found to understand and anticipate individual needs and wants. Such attention to anticipating customer needs that yields the psychological benefit of customer peace of mind might be in addition to the basic (and probably necessary)  provisioning of a clean, comfortable room to meet the customer’s physical needs. As a third example, a particular brand of smartphone or computer might particularly appeal to a person because it is thought to reflect their attitudes toward style and status and satisfy  their need for group affiliation with other users of the brand, leaving actual phone or computer features secondary in importance. Finally, an emotional connection that a person feels with a brand might not be based on a product or service aspect at all, concrete or otherwise, but rather be based on the reputation of the company behind the brand, a pleasing logo design or jingle, nostalgic childhood memories, or a host of other possible things. The basis for such connections may be obscure even to the individual.

While both types of connections—those based on physical benefits and those based on psychological benefits—have the potential to build and enhance brand loyalty and strengthen the brand in the marketplace, the importance of the distinction between physical/tangible benefits and psychological/emotional benefits is that there are a number of special aspects of the latter and the connections they foster that make them especially desirable for the brand owner to establish, nurture and maintain.

10 Reasons to Establish and Nurture Emotional/Psychological Connections With Your Brand

  1. Emotional connections can be more deeply and firmly attached to and interconnected with the user’s “self” and therefore more protected: Some aspects of psychologically based bonding with customers are tied up with how customers think about themselves—for example when associating with the brand is thought to help them portray the kind of person they think they are or want to be. When your brand becomes connected to a customer’s self-image, that makes it much harder for the bond to be broken and replaced with an alternative.
  2. Emotionally based connections can stimulate user advocacy and brand ambassadorship: When the brand is tied up with the self, promoting the brand to others is like affirming one’s own identity and worth. And acting on their own initiative, active “brand ambassadors” can be especially useful in defending your brand against detractors.
  3. Emotional connections may be maintained and strengthened by group and interpersonal processes (“self-maintained”): Bonds that you form with customers based on providing them with a “badge” that connects them with others—peer groups, aspirational demographic segments, etc.—can be strengthened through more than just your own actions, and even without your help. The group may do much of the work for you, emphasizing its common connections with you and constantly reaffirming your power to help each of them belong. As social media have risen in usage and importance these processes have become even more pronounced.
  4. Emotionally based connections can build stronger customer loyalty. Continued purchase and use of a brand’s products and services that is built solely on product/service features providing physical benefits may be like a “marriage of convenience”—more or less a transactional arrangement easily disrupted by an alternative offering similar features that comes along. In contrast, connections built on psychological benefits may more resemble “marrying for love” and therefore can be stronger and less prone to being broken.
  5. Emotionally based connections can build a “heat shield” that protects the brand in times of controversy: The strong ties of emotional connections with customers can, as with interpersonal relationships, lead to higher levels of understanding and forgiveness when problems arise.
  6. Emotionally based connections may enhance the ability to command a premium price: By engendering greater loyalty, connections based on emotional and psychological benefits may be more likely to give the brand “permission” to charge higher prices (as in “anything for love”).
  7. Some emotional benefits and connections may be more difficult for competitors to detect and recognize: Whereas compelling physical, functional features of a product or service are usually obvious and very often have attention drawn to them as part of marketing efforts, aspects that have psychological/emotional components that lead to bonding with customers may be less so, being for example based upon less obvious image and relationship building with customers over time.
  8. Some emotional benefits and bonds may be more difficult for competitors to duplicate/match: In many cases customer benefits arising from what may once have been unique and compelling functional, concrete features of a product or service are subject to being matched or even exceeded by competitors. In contrast, aspects of what you sell and do that build emotional connections with your customers tend not to be so easy for competitors to add to their own mix, especially in the short term—for example, in a case where a brand image of sophistication and elegance has been earned over time and through extensive image building.
  9. By not necessarily being based on physical features or aspects of products and services, building some psychologically based connections may not require expensive, long-term product engineering and development: In a way this is the other side of the coin to the point made above about the difficulty of building emotional connections from scratch, and which is more relevant will depend on the particular situation. In many cases providing compelling physical, functional benefits can be hard work—conducting R&D to craft a solution, engineering a design that meets functional needs, developing new manufacturing processes to build in features, remodeling facilities, and so on. In contrast, emotional benefits might be based on aspects of brand image or changes in how you interact with customers. Not to say that these are trivial—as noted above, advertising and other promotions to craft specific brand images can be expensive and take time (and can be difficult to design), and changing how you interact with customers can require many types of investments in personnel, facilities, training, and so on. But often those kinds of resources would be spent anyway, and the trick is to know exactly what to do to forge those psychological/emotional connections.
  10. Emotionally based connections may be more easily transferred to brand extensions: When unique and compelling benefits of your brand’s products/services are based on specific concrete features, or on aspects tightly tied to the specific category, successfully transferring those types of benefits associated with the brand to a new category may be difficult or even impossible, especially when there seems to be little relevance of existing benefits to the new category. In contrast, emotional benefits and connections are more often based not on concrete, functional product/service features, but rather on intangibles (e.g., status and sophistication or patriotism) that may be more logically and successfully applied to a new category.

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Truth and Consequences: Reputation Impacts of Management Decisions http://www.lodestarap.com/2016/01/20/truth-and-consequences-reputation-impacts-of-management-decisions/ Wed, 20 Jan 2016 13:24:22 +0000 http://www.lodestarap.com/?p=3921 Late last year a small private liberal arts college just down the street from me announced that it would make substantial cuts to its programs–dropping over a dozen majors, reducing others to minor status, laying off a number of full-time faculty and staff, and eliminating a number of open faculty positions.  Now here’s the spoiler:... Read More →

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reputation management word cloud on adigital tablet tablet against red woodLate last year a small private liberal arts college just down the street from me announced that it would make substantial cuts to its programs–dropping over a dozen majors, reducing others to minor status, laying off a number of full-time faculty and staff, and eliminating a number of open faculty positions.  Now here’s the spoiler: Two weeks later this decision was reversed. But what happened during that time and its potential implications for the future of the college’s reputation and its consequent fortunes provides a useful cautionary tale of how any organization, be it a college or a business of any sort, needs to tread carefully when making decisions that may negatively influence key stakeholder groups, even when the decisions are made in the normal course of business, after careful consideration and with the best of intentions.

Although a stunning move for the college, this initial decision to make major program reductions was not a unique event in the world of post-secondary education; it followed similar actions at some other American colleges, not all of them smaller private schools. Earlier in 2015 a large U.S. public university said it would cut dozens of programs across its system, following what the administration termed an analysis of “program productivity.” (It should be noted that even more drastic in the higher education sphere are the total closings of some colleges that have occurred over recent years, and there is fear of more, as evidenced in the 2015 Inside Higher Ed Survey of College & University Chief Business Officers, where nearly one in five of the respondents said they believe their institution may have to shut down in the coming decades, with 1% projecting that might happen in just the next  five years.)

The local college’s administrators made it clear that they considered the planned cuts a well-reasoned business decision in response to a substantial budget  shortfall (due in large part to declining enrollments) that they saw no other way of bridging. The school’s President was quoted as saying that they had considered student enrollment, market demand and potential cost savings when deciding what needed to be eliminated. Hence the targeted programs were said to be less in demand, with relatively few students enrolling in them. Similarly, at that large public university mentioned above a board member summed up their own situation up by saying “we’re capitalists, and we have to look at what the demand is, and we have to respond to the demand.”

Early reported reactions to the local college’s announcement among students, faculty, alumni, and other groups suggested an immediate shaking of confidence in and support for the school among  some members of those  key stakeholder groups. There were student rallies and protests, petitions calling for reversal of the decision, letters to the administration from individual students and alumni, and other critical commentary. For example, a current senior told a reporter “I don’t know how proud I’m going to be to say that I’m [an alum of the school].” A faculty member and union representative was quoted as saying that “our faculty is dispirited” and that “morale is completely destroyed. ” Perhaps the most extreme comment I saw, which shows how far reactions to these kinds of events can go, called the announcement the signal of  a “death spiral” for the school.

For two weeks the pot boiled; local and national media carried news of the announcement and reactions to it, and the news and resulting conversations coursed through social media channels.

Then the college announced that the cuts would not take place after all. This had followed intensive negotiations with the school’s faculty union that yielded concessions including a faculty wage freeze and incentives for early faculty retirements–concessions that apparently could not be agreed to before the public announcement of the cuts. Some days after that announcement of the reversal, as is often the case, online or elsewhere, it was much more difficult to find out about the “good news”–the decision’s reversal–than about the “bad news”–the initial announcement and its aftermath. An online search for entries about the decision at that time yielded a long list of news reports, social media commentary, etc. describing the cuts, with some reports and discussions speaking of them as if they already had been carried out and were not only announced plans. Only a very few descriptions of the reversal of the decision were sprinkled throughout that much longer list of results covering the initial announcement. Even now, some months later, there seem to be as many or more entries that only describe the initial decision as there are those mentioning the reversal. So to that extent some damage to how the college is perceived may have occurred in a short amount of time last Fall–especially disconcerting at times of the year when many college-bound students actively research and apply  to schools.

The actual longer-term consequences for this college and its reputation of course can’t be known now. Even though the targeted programs have escaped the axe for now, how confident will prospective students be to enroll in them and other programs? Will these events and the publicity regarding the school’s financial situation have a meaningful negative impact on its overall future application volumes and thus cause admission volumes to shrink even further?  More broadly, will this be seen as evidence the school’s leadership is (a) clear-headed and realistic or (b) desperate? And beyond the initial decision, does the reversal make them appear (a) indecisive or (b) flexible? Will confidence in the Question mark 3school among contributing alumni, partners, and investors  be shaken, with consequent erosion of the financial picture? These all seem to be aspects of the school’s reputation that are at risk to some degree. But perhaps it’s possible that, despite the elephantine memory of the Internet, these events will fade to such an extent that long-term consequences will be minimal. Or, future positive actions of the school may be able to  counteract reputation damage accruing from these recent events. Only time will tell.

So what’s the important broader lesson and reminder that I see in all of this? It’s that for any organization, not only schools, it should always be remembered that potential risks to reputation can arise not just from deliberate employee malfeasance or extraordinary events and circumstances deemed totally out of its control. Discussions of reputation risk often tend to focus most on the impacts of unplanned, discrete events–ethical lapses (such as insider trading), harmful actions initiated by outside forces (e.g., online and database security breaches among retailers), or accidental events (think oil spills or manufacturing plant mishaps). But the reputation and consequent fortunes of an organization and its brands also can suffer from well meaning and perhaps necessary actions motivated by legitimate business  concerns, and the impacts may be even more damaging in those cases.  For example, bad behavior of some employees and even top executives might be viewed as aberrations treatable by ousting the rascals (rather than as being symptomatic of deeper issues such as a sick corporate culture). But sometimes official management decisions–and, as in the college’s case, 180-degree turnarounds to decisions–may cast doubt upon the competence, quality,  and stability of the entire organization and can have implications with even more negative consequences for its reputation among important stakeholders than actions by “loose cannons.”  And while reactions among important stakeholders may in some cases be predictable, at other times such reactions may not be sufficiently anticipated and accounted for in the absence of proper due diligence prior to going public with decisions.Briefing room

Any organization needs to integrate its planning and strategies with thoughtful  consideration of the short- and long-term implications and risks arising out of what may be necessary, carefully considered, and above-board management actions that will be visible to key stakeholder groups. In some cases research can often be a wise and responsible part of planning, for example to better understand the potential implications of decisions among various audiences before they’re announced and acted on. Such knowledge gained up front can then better inform communications plans and implementation timetables, and may even lead to reconsideration of the exact nature of planned actions. As an example, and in the best tradition of armchair quarterbacking, one has to wonder whether the liberal arts college’s announcement was premature and should have been delayed until further more private internal discussions had occurred. This is especially so in light of the turnaround just two weeks later seemingly made possible because one key stakeholder group, the faculty, became convinced of the seriousness of the administration’s intentions only through the vehicle of the very public announcement of the substantial planned cuts. The cost of the official announcement preceding the  faculty decision to make concessions may well be some amount of damage to the reputation of the school that could be difficult to repair.

group of people with dialog speech bubblesFor a school, business, or any other type of organization, proper management of reputation risk includes keeping up to date, through careful listening and dialogue (via multiple channels), with the perceptions, attitudes, and intentions of the organization’s key stakeholder groups. This can be important to do not only in times of unplanned and accidental crises, but also, as this case reminds us, during the course of regular day-to-day management of the organization.

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A Great Tactic Is Not A Strategy http://www.lodestarap.com/2016/01/12/a-great-tactic-is-not-a-strategy/ Tue, 12 Jan 2016 21:22:44 +0000 http://www.lodestarap.com/?p=3896 Were you ever surprised by a poor outcome? Did a flawlessly executed plan fail to deliver? If so, you may have used a winning tactic without a winning strategy. We often don’t make the time, or even have the headspace, to think and plan strategically. If we throw out multiple tactics, something is bound to... Read More →

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darts, dart hit the mark

Were you ever surprised by a poor outcome? Did a flawlessly executed plan fail to deliver? If so, you may have used a winning tactic without a winning strategy.

We often don’t make the time, or even have the headspace, to think and plan strategically. If we throw out multiple tactics, something is bound to stick to the wall. Sadly, without an underlying strategy, the best tactical execution can miss the mark.

Perhaps one of the most frequent misconceptions is that Social Media is a strategy. Social Media is a marketing channel. Engagement, having fans and followers, can mean nothing if that engagement doesn’t support your business strategy. For example, I have a client with a sizable and growing set of Facebook fans, but those fans did not appear to be driving the desired business effect. By clearly stating our business goals and making changes to the type of posts to support those goals, we are turning the corner.

Great tactics are only great when they pull through a thoughtful STRATEGY:

  • Start by stating a clear campaign goal with a measurable outcome. Put Marketing Performance metrics in place.
  • Target a specific audience and craft
  • Relevant messages based upon
  • Analysis of the customer’s needs, the customer’s journey relative to the product (the buying process) and how the product meets the customer’s needs. This may require Market Research and leveraging a Marketing Science team to ensure you have asked the right questions and done work efficiently to understand your market and customers. Then,
  • Tell a story at the right time and through the right channel(s) to
  • Engage your customers and compel them to take the desired action.
  • Gather metrics during the campaign to ensure the goals are met and that they reinforce the value proposition of
  • Your brand

Understanding the value proposition of the product, how that value proposition is tied to the brand identity, and the “buying” process, or customer journey, is critical. I’ve had clients miss the mark because they targeted their message to the end user and ignored the customer journey and the gatekeeper that needed to be managed first. Even the best messages delivered through strong channels can have no impact if the intended customer doesn’t have access to the product. Others have missed the mark because they assumed the value proposition was the same for all customers. For example, low cost may connote value to one customer and poor quality to another.

Today there are more choices of channels than ever. Don’t let a tactic or an interesting channel fool you into believing you have a strategy.

Other resources: See Mark Schaefer’s deck, social media engagement is not a strategy, posted at http://www.slideshare.net/Rialta/social-media-engagement-is-not-a-strategy-36524665.

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The Future of Qualitative Research http://www.lodestarap.com/2016/01/07/the-future-of-qualitative-research/ Thu, 07 Jan 2016 17:05:57 +0000 http://www.lodestarap.com/?p=3900 QRCAViews_Winter2015_FutureOfMarketResearch

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imagesQRCAViews_Winter2015_FutureOfMarketResearch

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Managing Thought Leadership Part 2: 10 Reasons Why Companies Add Thought Leadership To Their Marketing Mix http://www.lodestarap.com/2015/12/14/managing-thought-leadership-part-2-10-reasons-why-companies-add-thought-leadership-to-their-marketing-mix/ Mon, 14 Dec 2015 21:29:04 +0000 http://www.lodestarap.com/?p=3888 This is the second in series of posts on Thought Leadership (TL) – what it is, how to manage it, how to integrate it into a company’s larger marketing efforts, and how to measure its performance and ROI. Last time I shared a definition of TL, compared and contrasted it with a variety of other... Read More →

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idea bulb

This is the second in series of posts on Thought Leadership (TL) – what it is, how to manage it, how to integrate it into a company’s larger marketing efforts, and how to measure its performance and ROI.

Last time I shared a definition of TL, compared and contrasted it with a variety of other related content-related marketing methods (sponsored content, advertorials, native advertising, etc.) and provided an overview of the complicated fragmented, and still evolving marketing content landscape. By the way, I recently heard Penton Media’s George Assimakopoulos offer an easy-to-remember distinction between these various forms:

“If it (a content-based marketing communication piece) primarily seeks to benefit your company, it’s branded or sponsored content; if it primarily seeks to benefit your customer, it’s thought leadership.”

Now I want to turn to the question of why TL in the B2B* context? Why have so many companies adopted TL strategies and programs in recent years? Why has TL increasingly become an indispensable element in many marketers’ toolkits?

In the course of Lodestar’s work with clients in improving their overall marketing performance and ROI, we often see them drawn to – or, in many cases, propelled toward – thought leadership for a variety of reasons. In our experience, here are ten of the most influential drivers of investments in TL.

  1. A great means of sharing good or interesting news. From time to time a company may have something particularly noteworthy to share with its customers and prospects, other external stakeholders, and the marketplace as a whole. Maybe it’s a new discovery, product, or service. Perhaps it is a process innovation that will allow customers to work smarter, not just harder, and possibly at a lower cost point. Or, it might be the results of recently conducted research that brings new insights and actionability to customers in their day-to-day work.  Regardless, at some point the question arises: how best to spread the news?

It turns out that the various vehicles for transmitting TL content (for example, white papers, webcasts, or a series of blogs) are ideally suited for communicating good news with clients and far more effective than other, more traditional marketing methods such a print advertising.

  1. Forced Into TL By Competitors’ Tactics. It can be unsettling and increasingly disturbing for a marketing team to watch from the sidelines while a competitor unleashes a comprehensive, sustained, and compelling thought leadership campaign. Many Lodestar clients ask for help in building TL programs because they fear that without making such an investment, they may lose increasing “share” of customer hearts, minds, and engagement to competitors’ TL tactics.
  1. Seeking Competitive Differentiation. When a given set of competitors all pretty much look alike, say the same things in their sales and marketing efforts, have basically interchangeable websites and social media strategies, offer similar, if not identical products, etc., the question a marketing team somewhere is going to ask is: how can we break out of the pack? How can we can critical competitive differentiation?

 Thought leadership strategies, well implemented, are ideally suited for creating differentiation and distinction in the minds of customers. These strategies can also be marketing game changers in the sense that TL is not so much about “hawking the goods” as it is about adding value to customers in their day-to-day work. TL can transform the provider-user relationship for the better.

  1. Customers Expect It or Demand Thought Leadership. Lodestar frequently reports out customer satisfaction, brand performance, and related research findings to clients where it is clear that their customers have come expect more than just a product/service purchase and usage relationship. They want – and in some cases demand – to do business with suppliers who 1) are demonstrably smart, innovative, and leading edge and 2) are willing share those “smarts”, inform, advise, and otherwise strive to help them be more effective in their day-to-day work. Thought leadership strategies are ideally suited to help marketers step up to these expectations.
  1. Other Stakeholders Value It Too. Savvy marketers know that they can strengthen relationships with their suppliers, distribution chain partners, and other alliance partners through thought leadership campaigns. Just like customers, channel entities want to be associated with industry leaders and “smart” partners – particularly those willing to share their knowledge and expertise. In this context, exercising thought leadership becomes a partnership-building investments.
  1. Improve Lead Generation & Sales Funnel Acceleration.  More traditional marketing investments – print and digital advertising, event sponsorship, etc. – can only take a marketing team so far in generating leads and driving sales. TL strategies offer new, value-added opportunities to drive awareness, consideration, initial purchase, and, later, deeper customer engagement.
  1. A More Nuanced, Compelling Brand Story. Far too many companies today still have a brand story that puts the company first and the customer a distant second. How many times have we seen positioning like the following?

Here’s who we are, here’s why we’re special, here are our products’ features and functions, here’s why you should do business with us, etc.?

Adding thought leadership to the marketing mix has the effect of starting to put the customer first – and in the process can greatly enhance the brand story. The TL-driven brand message becomes:

We are smart, we are committed to becoming increasingly smarter, we are willing to share our knowledge and expertise, and we are committed to helping you be more effective in your day-to-day work.

 That’s a far more customer-centric, compelling positioning to share with the marketplace.

  1. Attract, Retain, and Engagement Talent. More and more companies are using thought leadership strategies as a means of winning the War for Talent. Just like customers and other stakeholders, employees tend to be attracted to and remain with companies that are innovative, leading edge, and perceived industry thought leaders. (Who wants to work for a “dumb”, also-ran company?) So, we increasingly see HR executives partnering with their marketing counterparts to project a more compelling and differentiated story in the human capital marketplace via thought leadership campaigns.
  1. De-Commoditize Products/Services and Set Up Premium Pricing Strategies. As discussed earlier, thought leadership tends to alter the supplier-customer relationship in positive ways. It also alters customers’ perceptions of products and services. A product bundled with knowledge, expertise, and a supplier’s willingness to share it all is a de-commoditized, differentiated product. Thought leadership also reduces the risk of having to compete on lowest possible price; rather, it can help support premium pricing strategies.
  1. Lower Marketing Costs.  Finally, compared to more traditional forms of marketing, thought leadership is a bargain, offering marketers a low-cost, high impact and ROI platform. Think about it. TL content is delivered primarily through white papers, blogs, reports and case studies, e-newsletters, webcasts and other online presentations. All this can be done in-house, at low cost, and, with today’s digital tools, at a high level of quality. No agencies. No expensive ad or sponsorship spends.  Coupled with some of the other benefits we’ve explored here, TL emerges as one of the best values for the marketing dollar invested available to any marketing team.

* * * * *

Next time we will turn to the question of how to build, manage, and over time grow an effective thought leadership program and I’ll introduce Lodestar’s Five-Stage Thought Leadership Maturity Model as a useful tool for doing so.

 

* Thought leadership in the B2C context raises a significantly different set of issues, which will be addressed in a future post.

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Aggregate Models http://www.lodestarap.com/2015/12/07/aggregate-models/ Mon, 07 Dec 2015 17:00:43 +0000 http://www.lodestarap.com/?p=3877 There is a common issue in marketing science concerning what level of aggregation to use when estimating and using statistical models.  With the growing popularity of big data analytics, you may be faced with this issue more and more.  Often the decision is driven by practical considerations like data availability.  So, for instance, in marketing... Read More →

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AggregationThere is a common issue in marketing science concerning what level of aggregation to use when estimating and using statistical models.  With the growing popularity of big data analytics, you may be faced with this issue more and more.  Often the decision is driven by practical considerations like data availability.  So, for instance, in marketing mix modeling, aggregation is usually the only choice because, we usually have only aggregate-level data on customer spending (sales – the dependent variable) and exposure to the 4 P’s of marketing (price, product, promotion, place) sufficient to enable modeling in aggregate, with time periods and geography being the units of observation, rather than individual customers.  On the other hand, sometimes we have a choice, as in survey-based market research tracking studies over time, where brand overall ratings (of satisfaction, purchase intent, or willingness to recommend) are to be predicted from ratings of brands’ attributes, because we have both the individual respondent data, as well as aggregates across respondents within time periods or key segments.

Typically, in applied research, the analyst makes a choice about the level of aggregation to use, usually with accompanying assumptions, and proceeds.  There is little time, budget, or interest in comparing different levels of aggregation.  But I have always been curious.

The conclusions you draw from the model about which drivers are most important, and even the accuracy of the model at making predictions, can be affected by the choice of aggregation level.  Aggregation can obscure relationships among variables by putting together customers with very different responses to the drivers in the model.  Disaggregate data can also be considerably less stable and have more error than aggregated data, which can erode predictive accuracy.  But still I am curious how they might compare in practical situations.

Here is one real example.  Unfortunately, I cannot present actual results because the data are confidential.  It is a consumer product, with 6 major competing brands, ranging in share from very low to near 40%.  The results are from a survey, in which recent brand purchase was recorded, as well as attribute ratings for the subset of brands the respondent is aware of.  A tradeoff task similar to MaxDiff allowed me to estimate individual respondent attribute importances.  The objective is to develop a brand share model relating attribute perceptions to purchase, using a model that exploits the individual respondent attribute importances.  I ran logit choice models both on disaggregate respondent data, as well as using data aggregated to the full sample of respondents, where brand was the only unit of observation.  (The models are structured nearly identically, except for the level of aggregation for the predictions and of the errors in the model.  The numbers of parameters in both models are identical.)  Once I obtained the disaggregate model, I aggregated the disaggregate components by averaging across respondents, so that I could compare to aggregate results.  I observed the following conclusions about attribute impacts and prediction accuracy.

  • Attribute impacts (the contribution each attribute makes to brand share) are the same in aggregate.  Aggregate impacts were nearly perfectly correlated across attributes.
  • Brand share predictions at the aggregate level differ somewhat, with the largest share brand being under-estimated somewhat by the aggregate model, and moderate share brands being over-estimated.

I assume there will be cases where results differ much more dramatically depending on level of aggregation.  I have no illusions about how complicated this might be, but it would be very useful to have a systematic study of this issue.  Are there generalizations about the circumstances under which different levels of aggregation yield more accurate, generalizable results?  Does it depend on the type of model being considered (e.g., linear regression vs. non-linear logit)?  What practical rules can be established for choosing a level of aggregation when there is a choice possible?  When there is no choice about aggregation level because we only have a certain level available to us, can we assess the likelihood of producing undesirable models to avoid wasting time?

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Managing Thought Leadership: Part I – A Fragmented And Still Evolving Content Landscape http://www.lodestarap.com/2015/10/19/managing-thought-leadership-part-i-a-fragmented-and-still-evolving-content-landscape/ Mon, 19 Oct 2015 10:00:46 +0000 http://www.lodestarap.com/?p=3870 Here’s a little quiz. What, if anything, do the following increasingly observed marketing terms have to do with one another? Sponsored Content Research for Public Release Custom Content Branded Content Content Marketing/Management Expert Opinion Marketing Op-Ed Content Advertorials Native Advertising Thought Leadership At Lodestar we have spend a lot of time this year thinking about... Read More →

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idea bulb

Here’s a little quiz. What, if anything, do the following increasingly observed marketing terms have to do with one another?

Sponsored Content

Research for Public Release

Custom Content

Branded Content

Content Marketing/Management

Expert Opinion Marketing

Op-Ed Content

Advertorials

Native Advertising

Thought Leadership

At Lodestar we have spend a lot of time this year thinking about and investigating the use these terms – and the so-called “content landscape” in general. That’s because our clients are increasingly asking us for more tools, methods, and guidance to support their efforts to employ information and insight – content – to win the hearts and minds of their customers, prospects, and in many cases other stakeholder groups like employees, alliance partners, and Wall Street observers. This is the first in series of posts on what we’ve been working on and are in the process of bringing to the marketplace.

But, back to our quiz.

Trust me – any two people reading this post can quickly get into an extended debate on what each term actually means as well as its relationship to the others. That’s because our review of the content landscape makes clear that currently there is no commonly agreed on terminology or framework amongst marketers for the entity or construct these ten terms are all trying to converge on.

For example, in the media world, by far the most commonly employed term is Content Marketing. Our publishing clients are all about monetizing their content and helping their advertisers with Content Marketing. There is even an eponymous industry organization, The Content Marketing Institute, and a publication, Chief Content Officer.

But move into other industry or professional verticals – say, financial services, accounting, or law – and Content Marketing is rarely if ever used. Rather, the commonly used term is Thought Leadership. Move again, say, to healthcare, and while Thought Leadership is certainly in use, here it means something very different (involving the specialized use of outside thought leaders and KOLs) than it does most other verticals.   (Which brings up yet another issue: marketers frequently use the same term but mean very different things – sometimes within the same organization!)

Similarly, most of us have seen the terms Sponsored Content and Brand Content used across various industries. And, increasingly, we are getting questions about Native Advertising – what is it, how is it different than traditional advertising, how can we best leverage it, etc.?

Net-net, we currently have a Tower of Babel phenomenon at work here. Marketers of all ilk are working on the same task – putting content to use to advance the marketing agenda – but have yet to agreed on common terms, definitions, and usage. I think that will change, coalescence of thinking will come, but it’s going to take some time. And, however things eventually shake out, content management is rapidly becoming a formal new marketing discipline.

Back to our quiz one more time. To put a stake in the ground – and start the debate – I’m going to advocate that Thought Leadership is the appropriate “umbrella marketing construct” at work here and that the other nine terms, with the possible exception of Content Marketing, are only various facets (or methods, tactics, or channels) of Thought Leadership and how it is ultimately achieved.

To put another stake in ground, let me share what I think is the best definition of Thought Leadership I’ve see during Lodestar’s review of the associated academic and business literature:

“The act or process of exercising knowledge, skills and expertise to change perceptions and increase mindshare across a buying audience or market for a business purpose. The mission of thought leadership is to support the value proposition, core competencies and competitive differentiation upon which a brand is based.”

Compare that with how The Content Marketing Institute defines its term:

“Content marketing is the marketing and business process for creating and distributing relevant and valuable content to attract, acquire, and engage a clearly defined and understood target audience – with the objective of driving profitable customer action.”

Now, we can debate – again! – whether there is a distinction without a difference between these two definitions or whether significant differences do exist. At Lodestar, we do see differences and, as noted, think Thought Leadership is the stronger, more encompassing, and ultimately more useful construct going forward.

John Miller, VP of Product Marketing at Marketo has put the differences best:

“…both thought leadership and content marketing can very effectively build your awareness and brand, but true thought leadership is much rarer. Thought leadership consists of ideas that require attention, that offer guidance or clarity and that can lead people in unexpected, sometimes contrarian directions (think of Seth Godin). Thought leadership needs to be educational and, ideally, provocative; content marketing can simply be fun or entertaining.”

* * * * *

OK, whether you agree with the foregoing or not, at least it gets this discussion started. Next time, we will take a closer look at how marketers rate their current Thought Leadership performance.   Hint: not very strongly. And, I’ll introduce Lodestar’s recently released Thought Leadership Maturity Model, which clients can use to think about how best to ramp up their effectiveness in navigating the still evolving content landscape.

* * * * *

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Marketing Sciences Institute Opens To Public http://www.lodestarap.com/2015/10/13/marketing-sciences-institute-opens-to-public/ Tue, 13 Oct 2015 14:00:54 +0000 http://www.lodestarap.com/?p=3853 The Marketing Science Institute (MSI) has recently opened it membership to the public (well, OK, maybe it wasn’t all that recent, but I just found out about it).  If you are interested in marketing sciences as a discipline or as a useful support for marketers, you should be excited by this.  Here’s why. MSI is... Read More →

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MSIThe Marketing Science Institute (MSI) has recently opened it membership to the public (well, OK, maybe it wasn’t all that recent, but I just found out about it).  If you are interested in marketing sciences as a discipline or as a useful support for marketers, you should be excited by this.  Here’s why.

MSI is a top notch professional organization for cutting-edge-but-still-useful marketing sciences.  Their mission is to bring together academic theory and research in marketing sciences with professional practitioners.  They have accomplished this integration quite successfully and far better than most professional marketing organizations.  I can vouch for this from personal experience – in a past life, I was a corporate member of MSI, where I found their conferences, networking opportunities, and publications to be invaluable.  (I should add that I am not employed by MSI and have no stake in their success, other than as a consumer of their services.)

Their formula has been to invite marketing sciences academicians from accredited business schools all over the world to join for free, and to solicit sponsorship by over 70 corporations.  MSI uses the funding from sponsorships for research grants for academicians, relevant publications, and conferences and roundtables attended by all members, the topics for all the preceding being driven by the sponsoring companies based on regular feedback from them.  Furthermore, in their conferences and publications, MSI favors reports and research that are authored jointly by both academicians and practitioners.  This strategy incents active participation in MSI by both academicians and practitioners.

The result is an organization that consistently produces cutting edge marketing science papers, articles, and books, that are highly relevant to the working professional who practices marketing and marketing sciences.  Here are some examples.

  • Empirical Generalizations about Marketing Impact, 2nd ed., edited by Dominique Hanssens (UCLA).  Originally published in 2009 and updated this year, the book details research findings culled from decades of literature on 123 specific areas where the measurable impact of marketing actions on business performance has been established.  These areas range over advertising, pricing, the marketing mix, sales, service, and word-of-mouth and social influence.  If you are ever faced with questions like “Prove to me that marketing affects performance”, or if you just want to understand effects of the marketing levers you have available, this is a great place to start.
  • The Differential Effects of Peer and Expert Ratings on Choice, a working paper sponsored by MSI, authored by a PhD candidate and two marketing professors from a university in Amsterdam.  They present research findings from three studies of online reviews of hospitals, that show that consumers tend to be more influenced by peer (other consumer) ratings of a product than by experts when both are available to them, unless the number of peer ratings is small, and unless the expertise of the experts is on view for them.  While these results may or may not extend to other product categories, they certainly provide evidence that consumers use peer and expert ratings differently, and that how consumers use them can be affected by how they are presented.
  • 5 Things I Know About Marketing, a series of articles by leading academicians and business people in which each states the five things they believe they know about marketing.  The business authors are: a marketing VP at Facebook, the CMO of MillerCoors, the CMO of General Mills, a marketing EVP at Dr. Pepper/Snapple Group, the CMO of Adobe, and the CRO of CBS.  The academicians are professors from the business schools of Penn, Duke, Boston University, and UCLA.

Until recently, MSI membership was limited to qualified academicians and employees of sponsoring companies.  MSI now offers membership to the public, though without the full access that academic or sponsoring business members have.  Public members still have access to many of the newsletters, reports, conferences and conference summaries, and books published by MSI.  The opportunity for professional development offered by MSI is worth serious consideration.

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The best way to organize your information is … http://www.lodestarap.com/2015/09/29/the-best-way-to-organize-your-information-is/ Tue, 29 Sep 2015 05:19:31 +0000 http://www.lodestarap.com/?p=3841 by topic by date by client by type by whatever you think of at the time the information is created The default answer is usually 5. If you are talking about your personal information, this haphazard method usually works.  Until we have to collaborate or share multiple documents with someone else and we realize we think about information... Read More →

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Folders

  1. by topic
  2. by date
  3. by client
  4. by type
  5. by whatever you think of at the time the information is created

The default answer is usually 5. If you are talking about your personal information, this haphazard method usually works.  Until we have to collaborate or share multiple documents with someone else and we realize we think about information differently than they do.

People tend to have different mental models of the world and that is often reflected in how they organize their information and documents.  The problem is magnified as you add more people to your collaborators. This is where good information architecture can help.

Information Architecture

There are many ways to handle this collaboration problem, using what I call information architecture. There is no right or wrong way to handle this all too common problem. Handling it in a way that everyone understands is key to enhancing productivity of your team(s). Some ways to address the problem are listed below:

  1. Have the project leader dictate the folder structure. Simple and fast. May be a drag on productivity of users with different mental models than the leader.
  2. Get the team together and agree on a detailed folder structure. Takes time and mental effort. Requires no real complex technology to be implemented. Depending on the size of the project, can become very cumbersome. Team productivity might be better because team members have some buy in to the structure.
  3. Put everything in one folder and apply a search engine to it. Requires that some technology be implemented.  May be hard to find certain types of documents. How many of your presentations have the word ‘presentation’ in the document? May require the implementation of a naming conventions or keyword tagging to distinguish documents from each other.
  4. Combine a high level folder structure with a search engine. Simple and powerful but does require technology and some level of consenus.
  5. Implement a content or document management system. These systems typically combine dynamic folder structures and tagging for effective implementation. Requires expenditure of time and effort as well ongoing maintenance, but the most effective solution for complex situations.

Managing information well makes good business sense. The bottom line is that each organization needs to understand how its information supports its business goals. Once you know that, you can devise appropriate classification schemes or information architectures using methodologies like card sorting, tree testing and usability testing. Once you have a workable information architecture, you can apply the right technology to the problem be it search, or faceted navigation, or a full blown content management system.

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