MarketingExperiments Blog: Research-driven optimization, testing, and marketing ideas

Your customers may be flat out ignoring your latest news, offers, and ads. Don’t blame them. It’s simple human nature.

Take a quick look at your surroundings – your cubicle, your office, your solarium – wherever you’re reading this. How much do you notice what’s around you? I mean…really notice?

Not as much as you think you do, I’m guessing. Take a recent experiment run here in the labs. And by “experiment” I mean “practical joke run by our Associate Director of Optimization, Adam Lapp.”

Adam Photoshopped a picture of one of our Research Analysts, Ashley, posing with a friend. It’s the picture in this blog post. Perhaps it looks normal at first glance, but if you take a closer look, you can see that the blonde woman on the right looks a little, well, masculine.

That’s because Adam Photoshopped the face of a male Research Analyst over the face of Ashley’s female friend. He then replaced the photo she had hanging in her cubicle with this photo.

And, Ashley didn’t even notice her friend’s metamorphosis until someone pointed it out to her. Even though it was right in front of her face all day. Why?

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What do you get when you divide Jacksonville Beach, Fla. by Arden Hills, MN? I’m sure there’s a punch line in there somewhere. However, if you were tracking your customers’ ZIP codes in a database you would have 32250/55112, or 0.585.

Never mind that it doesn’t make any sense to you and me to divide one ZIP code by another, but a statistical software package is happy to do exactly that for us. Most software just isn’t smart enough to realize that each ZIP code holds a discrete meaning from the next. It sees them as numbers: values which can be sorted in order and used in any type of calculation.

That is why researchers and statistical software packages classify variables into four main types: Nominal, Ordinal, Interval and Ratio.

In this post, I’m going to describe each type of variable to help you understand how they should be used, let you know how this can help improve your data collection … and, while we’re at it, help you sound sharp the next time you’re chatting with your data analyst at the water cooler.

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Let’s take a quick look at the typical marketing funnel in 2011 to see how you can improve your results. If you’re like the average marketer, you spend a lot of money on media, such as:

-          Broadcast TV ads

-          Newspaper ads

-          Magazine ads

-          Outdoor advertising, such as billboards and transit advertising

-          Radio ads

-          Internet advertising, such as banner ads and pay-per-click ads

In fact, marketers spent $238 billion in just the first six months of 2010, according to Nielsen.

Why do companies spend so much on advertising?

That’s a lot of loot. And, of course, marketers are spending that money to sell a product. However, they aren’t truly selling a product or service at all … they’re actually spending that money to drive customers to a landing page. In fact, according to Econsultancy, 65% of all UK print and television advertising now includes a Web address.

Even when the ad don’t specifically include a URL, ad-inspired branded searches drive many customers to a website as the next logical point of contact.

In other words, you’re spending a lot of dough to funnel traffic to your landing pages.

If you’re a long-time reader of the MarketingExperiments blog, you already know about the power of LPO and you might as well stop reading now because I’m not going to share anything new today (although, feel free to forward this post to your boss, colleagues, and mother to show the value of what you do every day).

However, if you are looking to improve the performance of your marketing campaign and are not yet familiar with landing page optimization, I hope you’re starting to see why this practice can have such an impressive ROI.

Essentially, if you’re spending all of this money to drive potential customers to a website, investing just a little in increasing conversion on that site (more sales, more leads, etc.) can have an outsize impact, as you can see in this research from the MarketingSherpa 2011 Landing Page Optimization Benchmark Report:

Click to enlarge

After all, the deeper into the funnel you improve performance, the bigger an impact it has.

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As I prepare to wade through hundreds of submissions for the MarketingSherpa 2012 Marketing Wisdom Report, (sponsored by HubSpot) I was compelled to take a final glance at the 2011 edition.

While combing through the pages, many of last year’s submissions evoked some forward-thinking thoughts for 2012. Here are just a few of the standouts…

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What marketing errors are easiest to avoid? And how do we avoid making them?

My answer would be…those related to overconfidence. And, as to the second question, I’ll take the rest of this blog post to attempt to answer that.

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Are you too confident?

In the business world, as in marketing, we usually look at confidence as a good thing. But the “overconfidence bias” can seriously harm your performance.

Here’s how Jonah Lehrer, an American journalist who writes on the topics of psychology and neuroscience, describes this overconfidence bias in The Science of Irrationality: A Nobelist explains our fondness for not thinking…

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Consider the overconfidence bias, which drives many of our mistakes in decision-making. The best demonstration of the bias comes from the world of investing. Although many fund managers charge high fees to oversee stock portfolios, they routinely fail a basic test of skill: persistent achievement. As Mr. [Nobel Laureate, and professor of psychology at Princeton] Kahneman notes, the year-to-year correlation between the performance of the vast majority of funds is barely above zero, which suggests that most successful managers are banking on luck, not talent.

This shouldn’t be too surprising. The stock market is a case study in randomness, a system so complex that it’s impossible to predict. Nevertheless, professional investors routinely believe that they can see what others can’t. The end result is that they make far too many trades, with costly consequences.

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Sound familiar? Is marketing a product any less complex than trading on the stock market?

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How to bank on talent, not luck

I disagree with one aspect of Lehrer’s article. Not to put words into his mouth, but he seems to imply that there is no way to overcome the overconfidence bias. In marketing, I believe there is a way to do so (of course, perhaps that’s just me being …ahem … overconfident).

Let me explain what I mean, and let you be the judge… Read more…

For most of my life, I’ve held the opinion that marketing is bad.

I remember meeting someone in college who said they were majoring in marketing and advertising. I don’t remember my exact response, but I do remember saying something along the lines of:

“Oh … so you’re going to college to learn how to lie?”

I was so cynical about the way marketing usually gets done that I couldn’t help but respond with self-righteous disdain.

Luckily for me (and the people I come in contact each day), I’ve changed a little since college. In fact, if you ask me today whether I think marketing is good or not, I would probably argue that it’s one of the most honorable career disciplines a person could enter.

That’s because marketing, in its highest and most noble form, is fundamentally transparent marketing.

Transparent marketing is the kind of marketing that flows directly out of a value proposition. As long as a company can truthfully answer the question “If I am the ideal customer, why should I purchase from you rather than your competitors?” then marketing is merely a means of getting the truth out to people who need what the company offers. No exaggeration, no hype, and no outright lies necessary.

Of course, marketing has such a bad reputation these days because very few companies offer genuine value propositions. And as such, marketers are forced to inflate and hype their messaging to trick people into buying a sub-par product.

So what can you do if you’re a transparent marketer by nature who is stuck in a company without a value proposition? You have basically three options:

1. Discover your value proposition
2. Convince your CEO to deliver true value
3. Get a new job

Read more…