Your end customer is the most important thing in digital marketing, and the more you understand them, the better your marketing program can be. Across every point of the digital campaign, from strategy development to evaluating success, understanding your audience can improve your process and performance. Eric Layland from the Matters Group joins to share his insight on how to better understand your audience.
Learn more about the Matters Group at thematters.group.
Learn more about Fujisan Marketing here or email your questions/comments to contact@fujisanmarketing.com.
Full episode transcript:
Preston Parshall 00:15
Welcome to The Digital Marketers Guide Podcast where we break down digital marketing topics into bite sized episodes that can help make your marketing program and you a little better. I’m Preston Parshall, the founder and CEO Fujisan Marketing. We’re here today with Eric Layland to discuss how to better understand your audience. Eric hired me into digital marketing in 2008. At my previous agency point, it is mentor friend and an old boss. But currently Eric runs The Matters Group, a consultancy focused on a data driven approach in dealing with growth-oriented programs. Welcome to the show, Eric.
Eric Layland
Thanks, Preston.
Preston Parshall
So Eric, how does understanding consumer motivation help in your work as a digital marketer?
Eric Layland
Well, I think it’s really marketing is about knowledge, knowledge of markets, knowledge of customers, consumers, what motivates them, what drives them to make the decisions that they do. And understanding what it is that drives those motivations, is then becomes the input for campaign likes, I would step back strategy development, selection of tactics that are designed to execute that strategy, which then goes into creative which goes into messaging, which even goes all the way down into how you’re going to assess how a program did, what are the metrics that are most appropriate for that. But I think, you know, it’s really becomes a, the starting point is to have a starting point of knowledge. And having a starting point of knowledge becomes an asset, and a strength that is then carried through the campaign as it’s developed, and then taken to market. So what work do you do to understand customer motivation? Well, you know, there’s, there’s a number of ways that that’s done. I think, one of the ones that is maybe undervalued that I am still a proponent of is good qualitative, quantitative market research. I think sometimes in the current approach to marketing, it’s come up with a bunch of ideas, throw them up on the wall, or, you know, into the channel as the case may be, and look at the data and then determine what’s effective, what’s not. When you do that, you one, there’s initially at least there’s going to be a fair amount of waste, there’s going to be a fair amount of messaging that’s off target, that doesn’t resonate. And so if you have that understanding of what motivates the audience, whether it’s in consumer or even a b2b consumer, you’re going to know what they’re after what are they try trying to achieve. And if when you understand that, and you understand what their motivations are for making a decision, you can deliver that message in a way that they’re going to respond to it. Now, they may not necessarily agree with them, they might say, well, this product or service is not for me, that’s actually okay. To have someone understand that, you know, this is not the right product or service for me, because the messaging really resonates. They understand that I get what this is about. And it’s just not for me. That can save if you look at the cost of sales, which ultimately if you have a high end salesperson that is pursuing somebody for possibly months, what if they never had to do that, what they were just focused on opportunities that were at least aligned with the messaging, and there was a way to kind of weed out those that weren’t, you know, that that’s sort of what I how I look at it is that it’s it’s both a time saver, and that time that you save is reinvested in those opportunities that are most likely to come to successful. And for both the agency for the client, and the end buyer.
Preston Parshall
I agree with you completely. Why do you think clients try and for lack of a better term cheap out on research so frequently?
Eric Layland
I think because they feel it’s expensive. And there was definitely a time when, yeah, a small scale market research program might take months, hundreds of 1000s of dollars. That’s come down drastically. There’s certainly online tools is enabled that I think also the ability to get data quickly. You don’t necessarily have to have a moderator, or your market research team do. It can be done relatively cost effectively. Or you can go on up to whatever you need to get those results you’re looking for. You can still spend hundreds of 1000s of dollars and maybe that’s worthwhile given the market opportunity but yeah, I think it’s it. It is unfortunate, generally, and I don’t know really where this comes from, but marketing has traditionally been seen as an expense. And often, you know, CMOs controllers or CFOs, go head-to-head, like, Hey, we got to make cuts, cut marketing. I don’t think you have to take a real big step back to say, Wait, stop, wait a minute, what is marketing? Marketing is really an investment in future revenues. So why would you do that?
05:29
So you want to make wise choices, you want to find good research partners, you want to find good research methods and ways that are effective and efficient. And you can do that cost effectively within a budget. So let’s not skip that point. Let’s get that done. Let’s get off the campaign strategy, development, whatever it happens to be off to the best start possible, and then evolve it from there.
Preston Parshall
Yeah. What’s interesting is, for traditional campaigns, they almost always used to have some sort of research component associated with it. And it was one of those big upfront costs that an advertising agencies would put on clients. And now we’re running all these digital campaigns, and there’s no research being done. So it’s almost the opposite. Right?
Eric Layland
Are you that research is from those initial months of the campaign? What are you learning? And while I can see there’s value in that there, I think there’s more value in kind of measuring twice, cutting once type of approach.
Preston Parshall
Cool. Can you talk about a time, customer research played an important role in success when working with a client?
Eric Layland
I’ll actually can flip that around, and where it was not a success. We’re not doing the research. Really. I mean, it we’re talking probably hundreds of 1000s, hundreds of millions, if not more, in opportunity lost. This is recently within the past year, I finished an engagement looking at a multinational retailer in the grocery space. And quite a large media budget, quite a large agency budget, ran three campaigns a year, proximately 100 million apiece in media, the agency retainer for the year was 50 million, not including all the other the headcount involved. And we’re talking about hundreds of people involved in the campaign development and execution. And, unfortunately,
07:23
it was a number of unfortunate aspects to this campaign. And this particular organization, there was nobody with an upper leadership that came from marketing, all folks from operations, which has a benefit. They were very data driven, very numbers oriented, very looking at the data to make future decisions, but they never apply that to the marketing side. And so what happened with that is that they never while they had a data and insights team, that data and insights team was really focused on store performance, region, performance, brand performance, never really focused on the what the consumers were interested in. Why would you not go to this brand of grocer, but you’d go to these other ones? What about the retail environment was interesting to draw people in, but would not necessarily elevate that grocery option to become one of the the two or three stores that most households typically go to? So by not knowing that there was a gap in the strategy, and that was applied to developing campaigns? Because there was no strategy? It was, we need a campaign. Okay, it’s spring, what are we going to advertise Well, vegetables and things that people put on their barbecue. And there’s this organization had a benefit of, of the grocery industry is tied to the calendar and what people eat. So there’s kind of a way to anchor the campaigns during the course of the year. But where brands becomes more noticed is when they stand out. And they were unable to execute and research to understand the consumer to understand the nuances of why these consumers while they would occasionally visit this grocer, it was never really cracked into their top one or two choices. Even though on a price basis, they did have a strategy to be the price leader in a given market whenever they entered that market. But what they missed out on was really understanding the consumer and what motivated them to make these choices. So then we get down into campaign development. Client side marketing team doesn’t really have a good idea other than Hey, we know in the spring, we do vegetables and meat. In the fall we start to do
09:50
fall oriented things that culminates with thanksgiving and then in the last quarter of the Year, Christmas and New Year’s resolutions are sort of the big thing.
10:00
Once again, lots of media, lots of people, lots of agency time involved. And when that isn’t known, there’s it becomes harder for that brand to stand out as every grocer is at the same time advertising for Thanksgiving, buy your turkey, by your hand by your mashed potatoes by your green beans here. So you start to get lost in the mix. Grocers notoriously have very thin margins, single digits, high single digits is good. It most of them operate in the low single digits. By understanding what drives that consumer. And having a media that’s more efficient, having messaging that resonates more closely, having an understanding what would stand out to the consumer, if we put this message out there, and we’re able to offer and deliver that product to them. Could we move the needle, a percentage point, or two or three, maybe. And you look at that, across a $30 billion enterprise in North America not including what they do overseas. That’s a significant amount of money. And so not doing that research upfront, to have a strategy that addresses the needs of the consumer, that is then translated into a campaign and all the resources that goes to execute that campaign. It’s, it’s, again, it’s lost revenue. It’s the cost of rework. It’s the cost of do we have the right channels activated for this campaign? There is a whole sort of cascade of events that are impacted, because you didn’t do your homework upfront.
Preston Parshall
And you touched on it a little bit, just now. But what are some of the biggest challenges you see in understanding consumer motivations?
Eric Layland
You know, beyond some of the resistance from making that initial upfront investment, you know, there’s certainly a skill set that’s, that’s required to be able to conduct good qualitative, quantitative research, to be able to analyze that data in a way that really delivers insights and values. But you know, I think kind of the biggest thing is laziness. It’s, you know, oh, well, we sign this client, we got to get this thing going ASAP. Okay, well, if you waited two or three months, is that really going to derail the entire campaign, it may actually set it up for a greater level of success. So it’s from somebody that I kind of came in to the marketing space in the early days of digital. And
12:40
I was aware of how research was done mainly through schooling and then as kind of a junior person at the time. And then these great tools on the digital side came out. And it seemed like, everybody jumped into digital because they could bypass this big research exercise. And it’s just it’s, if anything, it’s kind of frustrating that people tend to see that investment of time. Maybe it’s time really, that’s the bigger kind of bugaboo that kind of puts people off that way. Oh, we have to, we can’t get in to do when what we do we need to wait to collect this information to understand let these.
13:20
quant people go in and figure out who needs to target and how. And we know whether it’s creatives, whether it’s account managers, campaign developers, they want to get to work. And I think there’s often the leadership it wants to get to work.
13:40
and deliver something rather than again, taking that time to do the homework upfront.
Preston Parshall
Everyone’s favorite topic, what role does AI play in understanding customer motivations?
Eric Layland
Well, I think there’s, I mean, where it’s at, if we’re even at the tip of the iceberg of AI, I mean, it’s so it’s hard to say, but AI itself has been around for decades. It’s been deployed. I think one of the things step up just a second, there is AI, that is getting the headlines. Now, that is generative AI, that is not the same thing as more predictive analytics, or machine learning, deep learning, really digging into the data and looking for trends that on the surface may be imperceptible or you might have variables that interplay with each other that you do not necessarily recognize those if you’re not utilizing some of these current technologies, which are, they’re very data intensive. They require a lot of computer power, things that weren’t around back in the day, so to speak. Now, I’m not going to go down the rabbit hole of you know, are these different types of AI technologies? I don’t really think they are when you get down to the root.
15:00
It’s all about predicting that next best, most likely option, but in the AI space and applying it to market research, like being able to see very subtle trends, trends that maybe don’t return, immediate returns, but over the long term return greater returns, I’ve had the opportunity to work with a brilliant market researcher in the area, his name is Jerry Johnson with Cascade strategies. And I’ve partnered with him for maybe 10 or 12 years on things and he’s been doing this for, for decades, literally. And with great success, but he’s also on an end to a lot of challenges. That again, it’s something that most marketers don’t have that mindset for, I think that’s becoming more prevalent. And people are now seeing the benefits of AI and really doing some heavy lift on the data and analytics side, and what that can deliver.
16:03
But on the market research and understanding consumers, I think that that’s still kind of a realm that most CMOS don’t necessarily get, I think they totally get generative AI, that’s it’s an easy sell. It’s something that’s tangible. They can say, oh, okay, well, I don’t necessarily need this skill set, or I can be more efficient, or I can move some of these skill sets into new roles and produce an output at a lower cost. It’s a different type of asked aspect of marketing. And I think that that’s one of the things that
16:36
it’s just for most people, it’s just not it’s not on their radar, it’s not in their history, it’s not something they’ve gone through. So, you know, it’s, it’s an area that I think AI is has room to grow into, and kind of reassert itself on the analytic side. And that’s just it’s a matter of time, it’ll, it’ll come. But I think right now, a lot of headlines have been garnered by generative because it delivers something tangible immediately. And it’s something that people can understand. Yeah, I understand a picture. I do not understand this, your spreadsheet. Exactly.
Preston Parshall
What other trends do you see impacting the way we research and understand our customers? You know, I think there’s new channels that are emerging.
Eric Layland 17:24
You know, they’ve been here, whether, you know, it’s in some of the streaming, and the changing of devices, changing of channels. I mean, everything is omni channel now. And it’s hard, it is not easy. It’s a hell of a lot easier to sell, hey, we’re on the channel specialists. Okay. Great. Cool. We’ll bring you in, take over everything. Okay. Now, how do you understand the interactions between these various channels? There’s, whether it’s media, whether it’s distribution, whether it’s customized products that are becoming more prevalent? How does that translate into delivering the message to the audience, looking at personalization, that’s not an easy thing to do? Yeah, there are bits and pieces, you can now put somebody’s first name in their email header and say, Hey, Bob, thanks for opening this email. That’s, you know, at very low level, really kind of developing it at the enterprise level, and sort of the expectations that some CMOS may have, based upon what they’ve read and heard and from most sales folks, mainly technology sales, folks, it’s, I think there’s a lot of promise, it’s kind of like the early days of the Internet, where thing a lot of promises made, results, not so much, eventually, they caught up. And I think that’s where we’re now. You know, there’s I’ve seen a stat recently where the budget or the dollar spent on technology has shifted from it to marketing that now, marketing spends more on technology than it. So, marketing has shifted, it’s become less about the artistic, creative aspects, although still important. And it’s got this whole other angle, that’s data driven, that’s technology driven, that there’s a whole lot of different skill set that’s required. And I think that there’s, there’s some challenges in there. I mean, I think it’s hard for a graphic designer to evolve and I shouldn’t say evolve but change into a personalization expert. You know, that’s not typically a career path, you there, and those career paths have changed. I think in a good way. There’s a lot more variety, a lot more diversity of skills, which brings in different groups of people to help with a marketing effort. But I think, I guess I’d probably lean towards technology is kind of being one of the bigger challenges it’s just it’s evolving quickly.
20:00
It’s getting more sophisticated. I think at a certain point, it will start to be, say dumbed down for for users. But I think right now we’re, we’re not there. And so we have a lot of IT products that have been forced into the marketing stack, that may not necessarily be ideal, the way they’re currently configured for that user audience. And there’s a different type of audience. There’s a user audience and marketing. There’s a user audience and it those are, those are types, kind of different types of people.
20:32
So I think that’s, that’s a challenge. And you know, there’s just there’s so much more media out there. I mean, there’s ads are going on everything. And I don’t know that that’s a good thing. But that’s what it is. And everything is, is being monetized and everything’s being tracked. So that’s, that’s kind of where we’re at in this.
Preston Parshall
There’s just a lot more to be on top of. Thanks, Eric. And thanks for listening to The Digital Marketers Guide podcast. Be sure to subscribe to stay up to date when a new episode is released. If you have any feedback or topics you’d like to see covered, email us at contact at Fujisanmarketing.com or learn more about us at Fujisanmarketing.com. See you next time.
