CHAPTER 11
WORLDS THAT SELL
Constructing a Storyscape That Is Sensing and Adaptive
Whether you are an entrepreneur, a business owner, a marketer, or an agency type, at the end of the day, your role is to create perceptions and/or shift behaviors. These worlds we create must ultimately be tuned to driving commerce. This is projected by creating brand preference or simply building awareness, driving new customer acquisition, cross-selling products and services, focusing on client retention, and of course, encouraging fanatical customer advocacy.
Building Worlds That Are Sensing. The consumers’ world—that of everyday experience—is an ecosystem rich in perceptions, attitudes, expectations, beliefs, interactions, actions, habits, and things. Business has only been able to capture, record, and measure a small (but useful) slice of that richness. We’re changing that. We’re changing that to enable dynamic application of marketing efforts through Storyscaping. As such, we will explore five perspectives for creating worlds that sell: instrumented ecosystems, adapting worlds, brand response, marketing mix optimization, and return on Storyscapes.
Typically we’ve leveraged survey data, point of sale data, purchase history, demographics, and very limited psychographics. We’re now widening the aperture: converging new data sources and metrics from a broad range of consumer touch points, both physical and digital. We now have the ability to measure not only bits around people but now also places and things. We’re changing the approach to Web-style analytics for the real world to provide actionable, “real-time,” live labs, and real-world workbenches.
Today we learn much more by creating new, strategically significant, proprietary data sources from customers’ interactions and experiences with things and places. As discussed in Chapter 8, we now employ sensors and other instruments that collect and process information in the real world in order to gain the most knowledge about consumer behavior today. This is in addition to the qualitative and quantitative data sources, which include social listening. This combination of research provides us with a much fuller picture. We can also build always-on, dynamic models of behaviors, interactions, contexts, and markets that are all wired with a robust ecosystem of analytic tools for making sense of it all.
Building Instrumented Ecosystems. These days we can focus on long-term deployments of related sensors into contexts of everyday life or instrumented ecosystems. This provides a way of creating connected proprietary communities for the long-term development and evaluation of products, services, and communications. Sound complex? Observe the overlay of behavioral and mental models depicted earlier. These data points were easily obtained from a captive community of instrumented participants. Imagine if you had that kind of firsthand knowledge of how your customer gets through the day. Could this help you create better experiences, more relevant communications, or perhaps even more useful products and more effective Storyscapes? We believe it can and will.
Building Worlds That Are Adapting. There are two dimensions to this notion of adapting worlds. The first is adapting a set of experiences to more efficiently yield a behavior such as “get more people to buy.” The second is adapting a set of experiences to make a more memorable experience. In Storyscaping, you need to do both effectively, and sometimes they are at odds with each other. Here is a simple story and example we use to teach Web designers how to think about this conflict. We’ll start in with a question: “Have you ever heard the story where Walt Disney walks up to one of the groundskeepers shortly after the opening of Disneyland and says, “I’ve seen you out here all week. Why do you keep having to replant these flowers?” The groundskeeper responds, “Sir, the guests keep ruining this particular flowerbed; they’re using it as a shortcut to get to the concession stand—but don’t worry sir, I’m going to build a white picket fence around it.” To this Walt responded, “Forget the fence; pave the path.” Although we are not quite sure if that actually happened that way, we use it as a good example of user-centered design thinking. The challenge we find is that this line of thinking is about “enabling natural behaviors” as opposed to “shifting or manipulating” behaviors. We feel it’s much more difficult to get someone to do something they were not already planning to do and then feel good about the experience.
That was the story, and here is the real-world example we use to demonstrate the pitfalls. Let’s explore an online credit card application. If you took 100 Web designers, information architects, and user-experience designers, 90 percent of them would tell you that a one-step, one-page application, with the least number of questions possible, provides the “best experience.” If you were to ask 100 consumers the same question, they would agree completely. The facts, however, tell a different tale. The performance facts say that a three-step application is optimal and even a five-step application will convert a higher number of prospects from start to finish, ultimately ending in the prospect applying for an account. The behavioral insight is that asking for a social security number is a “deal breaker” question—people get nervous and abandon the process. That said, if the progress bar shows you are on step three of three, then you are “invested” and are therefore more likely to press the “Submit” button; this translates into many more new customers. If it’s difficult to get professional Web designers to make that connection to performance marketing, then ask yourself if this pitfall could be happening in your organization. Is the team who is running your digital properties focused on “usability” or sales?
The second dimension is that we can perform multivariate testing for creative, offer, placement, time, and you name it. Behavioral targeting, day parting, personalization should not be relegated to “search” and “digital display” marketing. The physical and virtual worlds and the technologies that measure and move content and provide servicing and support are all being connected. Imagine all of the window displays at various stores in the mall. Why couldn’t we measure and optimize how well each of them drives sales? Digital displays are not necessary. The same old posters and mannequins that exist there today would still work. With a few cameras and some cheap software, we could track just how many people walk in front of each store (impressions) and we could anonymously assess whether they are male or female and provide an approximate age. We could observe whether they are a solo visitor or if they arrived in various packs. We could easily measure if they stop and linger in front of the window (engagement), and of course, we could tell if they went into the store. With a bit more work and investment, we could even confirm whether they made a purchase and we could calculate the average check. All of this is possible. Now, if we did have those digital displays, we could also serve content to them—imagine the possibilities. We could customize the windows to promote the excess inventory that our system reports confirm we have sitting in the back storage area. We could test creative. We could optimize to average check. We could enhance the dwell experience by providing more content if someone stops to look at the display. How many opportunities are out there like this for your business?
Technologists should never be relegated to just building the platforms that measure or enable what creatives conjure up. They must be part of the creative team that is imagining what’s possible. Gathering data is one thing, but using real-time data as actionable insights and triggers for optimizing your return and enhancing the experience often through technology is what Storyscaping is all about.
A World of Brand Response. Are you a “brand-centered” or “response-centered” marketer? Over the years, we’ve observed that clients big and small, old or new, tend to lean one way or the other, but seldom, and we mean very seldom, do we find a marketer who truly breaks those boundaries and connects both of those two worlds. We believe this type of connected thinking breeds the best kind of marketer. When asked this question, most people immediately jump to say they are one of those chosen few that embrace both worlds and we will always challenge that. Understanding and appreciating the differences between brand and direct marketing is one thing, but truly understanding the interdependencies between the two is different. It’s like being left- or right-handed; people favor one over the other. In this new Storyscaping world, the real opportunity lies in this connection. Today someone can become aware of a product, research it further, and purchase that product on his or her smartphone–all within a few minutes. We’ve come to know that there is more than just brand marketing and direct response; there is some great gooey stuff in the middle. We call this Brand Response.
Breaking down boundaries between brand marketing thinking and direct response thinking is just the beginning. Additionally, there is a very obvious relationship and a clear balance that must be managed between demand generation, demand harvesting and demand satisfaction. Storyscaping requires a ton of boundary breaking. There are lots of collaborations and cross-channel and discipline connections that need to be made. Because so many businesses are already finding themselves facing an increasingly interconnected set of big strategic questions that need to be answered, we suggest that you proactively choose to blur these boundaries.
WORLDS THAT LINK COMMUNICATIONS TO COMMERCE
We have come to a point in time when the value created by connections can overshadow any core capability. Consider this a bit further. Can you create great communications without understanding the role of experience, leveraging the insights derived from analytics, and harnessing the power of technology? Can you create a great immersive experience without leveraging the power of story or having some level of mastery on enabling technologies? Consumers move seamlessly through physical and virtual spaces and emotional states. Therefore, you need to as well. This takes a new and evolved set of skills.
Media Mix Modeling versus Marketing Mix Optimization. In the previous chapter, we discussed the basic need to take inventory and then prioritize touch points according to your business objectives. We uncovered the need to avoid media myopia and instead operate with a broader aperture. At the most basic level, this holds true even if you have the means and can employ advanced modeling techniques. Avoid putting too much focus on media mix alone and step up to marketing mix intelligence. There are real challenges facing legacy solutions for media mix, such as relying on swim lane analytics. If you follow this path, you will continue struggling to capture cross-media effects and thus make it impossible to quantify how offline and online work together. Without comparable and consistent metrics, you will never get a true and holistic view of the marketplace and your insight generation will crawl along very slowly.
Advancements in marketing mix modeling can answer certain questions for us: How does social and nontraditional marketing amplify other channels? What are the marketing efficiencies across the portfolio of channels and initiatives? What is your return on investment (or value) driven from nontraditional marketing? Because this information is actually modeled across channels, it offers a true, holistic view of the results. In addition to the direct impact on sales, we can also evaluate the interconnectivity of the entire Experience Space. This includes the paid, owned, and earned within digital media and holistically across all media channels. When you can clearly see, understand, and compare these impacts, you will never again underestimate how the removal of one channel influences all of the channels. This leads to more effective and efficient decision making.
Measuring Return on Storyscapes. Throughout this book, we have shared stories and insight into the fact that the digital revolution ushered in the information age, and along with it came a huge number of changes in the way we all experience everyday life. This shift and its respective consequences continues unabated because of the ever-expanding array of electronic and digital technologies, which bring us computing and communication tools such as smartphones, tablets, social media, and almost everything we can imagine. All of these continue to contribute to our ability to have whole new forms of interaction, activity, and expectations.
For those of us in the business of marketing and the marketing of business, the digital revolution is also forcing upon us a reexamination of underlying assumptions and models for how brands connect with customers and, most important, how we measure and value that. We have also explained that the long-held assumption that companies unilaterally control their brand and that consumers are merely recipients of our well-crafted corporate messages is no longer valid. The balance of control has shifted to consumers who have extremely high expectations. This is creating the need for more sophisticated ways of shaping their expectations and experiences and, more important, better ways to gauge their efforts in doing so.
The upshot for marketing is that we are moving from a push-driven traditional brand-centric view of the world to an experience and engagement economy for connected experiences that are co-owned by brand and consumer. Therefore, we must also re imagine how we measure the value of investments.
There is also a fascinating and ongoing debate about the role of technology (media and the channels themselves) and how it has become a shaping force in the practice of marketing. Some argue that marketing-related technologies (TV, radio, or other mass media/channels) have largely dictated how marketing, including products and brands of all shapes and sizes, operates as it does today. Decades of practice have led inexorably toward conclusions about how the constituent parts of the company-customer link (brand, product, message, company, media, receiver, audience, etc.) relate to one another. Over time, launching ads through mass media and mass channels has become a method of working. This underlying model can be characterized through the notion of a sender, a channel, and a receiver, totaling a process of pushing messages toward consumers. In this model, consumers are assumed to be mere recipients of a product or brand story and are exemplified as “eyeballs,” “targets,” and “audiences.” that must be penetrated and then measured by recall, impressions, and mindshare. This method has proved effective in cases where the story comes alive, appears clever, sticks, or gets retold; the brand gets stronger and the company gains a new customer.
As we explore more of the consumer and brand connection in the Experience Space, two limits to this historical approach have come into sharp relief. The first is a limit in the media itself. We haven’t historically understood much about what is actually going on out there after the push. It’s a launch-and-leave world where companies only have a surface-level knowledge of their customer’s story. In some sense, we didn’t need to know more than that; the thinnest possible report from the field sufficed by answering the basics: How many consumer targets increased awareness of the brand? How many prospects became customers?
Yet, even if companies want to know more about what happened after the push, they couldn’t learn much because it was limited by the nature of the media. What can be known in a push world of static media and channels? With the shift toward an always-on consumer who is connected in new ways, both socially and digitally, companies need to develop new ways to connect to their customers now more than ever.
The second limit is the implicit assumption that people are simple, passive recipients of messages. They are no such thing. They are willing participants in a world of experience with your brand, products, and services. People are using the things companies make and sell to tell stories to one another about who they are. And in that telling, people get other ideas, they discover new things to do and new ways to be who they are, and they are always looking for ways to make those stories new, better, and more compelling. This is why we need to understand them, their frames of reference, and their language.
BEYOND PUSH AND PULL
Measuring—Is It the New Black? We have introduced a measurement model that recognizes the new reality of commerce and marketing. It was created by building onto old models that still work, and then adding a new way to think about, optimize, and measure the value of experiences—the overall return of an investment in building a Storyscape.
This shift in the ways we can connect brands and consumers through Storyscaping requires a parallel shift, one that offers new and better ways to instrument, measure, and model these connections. Having these helps paint a more accurate picture of people’s actual experience.
MEASURING RETURN IN THE NEW ERA
The model to the left shows how business creates value across connected experiences and how that value can be followed and measured into individual moments. It is composed of three parts:
Brand and Marketing ROI. First, let’s discuss the return on investment (ROI) of brand and marketing, which is a variety of business analytics used to evaluate return and efficiencies at the aggregate level. These are classic measures, such as ROI analyses, market share, cost/benefit, or balanced scorecard.
Nike tells a compelling story in the aggregate. In the past three years, Nike’s print and ad spend has decreased 40 percent, while their overall annual marketing budget has increased to $2.4 billion1 (CNN Money, February 12, 2012). Where are the Nike dollars going? The money funds the building of ecosystems where customers can experience products, digital environments, apps, and websites. Stefan Olander, vice president of digital sport at Nike, explains this shift in spending: “When you have millions of people that come back and reconnect with your brand multiple times a week, you realize that that connection is more valuable and powerful than any traditionally pushed marketing message.”2 He’s talking about the value of the Nike experience. If you can get a customer to continue engaging with your brand multiple times a week, the effects soar beyond any traditional marketing campaign.
Using our model, you can see the bigger picture. Nike wasn’t getting enough return out of their media spend, so it shifted it to a bigger spend on experience. This improved the return on media and channels, making everything more efficient. Raising the return on experience (RoX) gave that spend greater legs, resulting in a maximized ROI.
Olander also stated, “The biggest audience Nike had on any given day was when 200 million tuned into the Super Bowl. Now, across all its sites and social media communities, it can hit that figure any given day.”3
Return on Media and Channels. The second element of our model addresses return on media and channels. Recent developments in the field of media mix modeling use sophisticated next generation algorithms (mathematical models) to quantify cross-media effects of marketing.
Traditionally, media mix modeling measures a given channel’s direct effect on sales. Yet, if we apply new era thinking to this scenario, thinking that comprehends how experience connects media, a flaw in the traditional thinking is revealed. During an average day, there are perhaps several hundred touch points living across a huge variety of media and channels, none of which, by the way, happen with people who think they are having a multichannel experience; they are simply going about the day, living out their story.
There is a need for a new media measurement model that effectively optimizes across channels and stays consistent with how people actually live. Through capabilities, such as (m)PHASIZE’s (a SapientNitro company) marketing mix modeling tools, we can bring to bare custom-built, proprietary analytics tools and services that help marketing executives make optimal budget allocation and planning decisions based on they way people move and respond throughout their days and across their ecosystem. Innovative predictive forecasting models enable you to run what-if scenarios that simulate how targeted consumers will respond to different variables. This offers an ability to quantify cross-channel impacts while taking into account the interplay between traditional media (radio, print, TV) and digital (search, display, social, mobile) at a brand and category level. This wide-angle approach enables clients to continuously measure and calibrate marketing investments to generate incremental ROI in today’s dynamic, always-on marketplace.
Experience Optimization. Advanced media analytics propel us a little further into consumer engagement with media and channels, but still provide no insight into actions within channels or with media. Optimizing a budget around media and channels only to draw people to a place where they will have a mediocre experience is a waste of efforts and a missed opportunity.
Therefore, we extend our capabilities to measure experience and optimize how we build for it. Again, Nike’s Stefan Olander provides an excellent example that illustrates the value of understanding the other: “We don’t start with technology or the potential profit, we always start with the athlete. I think that’s an important distinction, because when you do that, the other things follow.”4
The current means for assessing experience don’t do justice to the nuance and range of how people act, connect with others, or sense (and make sense of) their world. For starters, there is a need for better sources of data and ways to harvest it. In the era of big data, there exists a deluge of inputs, but volumes of data alone do not tell the story. Complementary and comprehensive data is needed, not only on how people behave (of which there are many sources), but also from data collected from the objects they use and the environments they inhabit over time.
As discussed and illustrated in some Chapter 8 stories, everyday consumer products—homes, offices, retail spaces, civil infrastructure, and even the natural environment—all have the capacity to communicate. With applied technology through sensors, they deliver huge volumes of real-time data at a level of detail never before possible. These data can be used alone or correlated with other quantitative or qualitative sources to deliver a powerful new kind of business intelligence, thus turning these new information pathways into real business value. Greater depth and detail is reached, and it changes as the world and people change. Granular data, combined with advanced analytics and visualization techniques, make for better, faster, cheaper data upon which we can ultimately build connections between brands and customers.
To more precisely measure the dimensions of experience in this step, we developed a new model of experience. It was originally developed for urban planning by Kevin Lynch in Good City Form5 and then modified by our teams for use within brand strategy and experience design. We’ve identified five experience dimensions that are used to assess how well a particular campaign, design, interaction, or environment, performs in terms of experience. These dimensions include control, access, fit, sense, and continuity.
These experience dimensions form the core of the experience assessment used in our approach to experience design and strategy.
Return in the New Era of Marketing. Many of yesterday’s and even today’s marketing and branding efforts seek empathic messages that resonate with consumers’ stories. But even the best of these, pushed through static channels, won’t meet the requirements of engagement and participation that people expect. “Engagement” is a mantra that must be chanted, recited, and repeated throughout all dimensions of business execution—from products, messages, services, and environments to media, channels, and eventually toward topline business results.
It’s vital to have a comprehensive picture of the consumer as a person. The old view of people as objects of commerce provides a very limited understanding, and it tells only a fraction of the full story. We must leverage the power of information technologies and the “digital exhaust” they produce in order to dig more deeply into their story. The goal is to mine these realities, use them to fuel creative execution, and to inform the dynamic application of Systems Thinking for the most effective worlds of experience.
We appreciate that mastering these five perspectives is no walk in the park. It takes diverse skill sets and capabilities. It also takes a certain spirit and culture to inspire these necessary, changed perspectives and fuel adoption. In other words, you need to shock your culture.