Building brands in emerging markets

Companies that harness word-of-mouth effects, emphasize in-store execution, and get their brands onto shoppers’ short lists for initial consideration are more likely to capture the loyalty of emerging-market consumers.

As the rapid growth of emerging markets gives millions of consumers new spending power, those consumers are encountering a marketing environment every bit as complex and swiftly evolving as its counterpart in developed countries. Product choices and communication channels are exploding; so is the potential of digital platforms; and, as everywhere, consumer empowerment is on the rise.

The impact of these changes has been so profound in developed markets that three years ago, our colleague David Court and his coauthors proposed a new approach for understanding consumer behavior.¹ On the basis of research involving 20,000 consumers across five industries and three continents, our colleagues suggested replacing the traditional metaphor of a “funnel” in which consumers start at the wide end, with a number of potential brands in mind, before narrowing their choices down to a final purchase. Envisioning consumer behavior as less of a linear march and more of a winding voyage with multiple feedback loops, our colleagues put forward an iterative framework, which they called the consumer decision journey, and identified four critical battlegrounds where marketers can win or lose.

These four battlegrounds are initial consideration, when a consumer first decides to buy a product or service and thinks of a few brands; active evaluation, when the consumer researches potential purchases; closure, when the consumer selects a brand at the moment of purchase; and postpurchase, when the consumer experiences the product or service selected. They are as relevant for emerging markets as they are elsewhere. As in developed markets, technology is unleashing the possibility of increasingly deep customer engagement at each phase of the journey, but with some important twists reflecting differences in the characteristics of emerging-market consumers, who generally don’t have the same level of experience with brands and product categories as their developed-market counterparts do. Many are still looking to buy their first car, first television, or first package of diapers, for example.

In this article, we highlight the implications of three key differences between emerging-and developed-market consumers that we’ve uncovered in our research (Exhibit 1). First, harnessing the power of word of mouth is invaluable, as it seems to play a disproportionate role in the decision journeys of emerging-market consumers. Second, getting brands into a consumer’s initial consideration set is even more important in emerging markets, because that phase of the journey appears to have an outsized impact on purchase decisions. Finally, companies need to place special emphasis on what happens when products reach the shelves of retailers, because the in-store phase of the consumer decision journey tends to be longer and more important in emerging markets than in developed ones.

Exhibit 1

Three factors in the consumer decision journey take on greater importance in emerging markets than in developed markets.

Harnessing word of mouth through geographic focus

Word of mouth plays a more central role in the decision journeys of emerging-market consumers than for those in developed markets. When we surveyed food and beverage consumers in a range of developed and emerging markets, roughly 30 to 40 percent of the respondents in the United Kingdom and the United States said they received recommendations from friends or family members before making purchases. Consumers in Africa and Asia reported higher, sometimes dramatically higher, figures: more than 70 percent in China and 90 percent in Egypt, for example (Exhibit 2). Similarly, 64 percent of the Chinese respondents said they would consider recommendations from friends and family for moisturizer, compared with less than 40 percent of respondents in the United States and the United Kingdom.

Exhibit 2

Purchase decisions of emerging-market consumers are heavily influenced by recommendations from friends and family members.

An important explanation for word of mouth’s outsized role is that in a land of consumer “firsts”—more than 60 percent of Chinese auto purchasers are buying their first car, and the comparable figure for laptops is 30 to 40 percent—few brands have been around long enough to ensure loyalty. Seeing a friend use a product is reassuring. Indeed, the less a consumer knows about a product and the more conspicuous the choice, the more the consumer is likely to care about the opinions of others. “The more people I know who are using a product,” consumers reason, “the more confident I can be that it will not fall apart, malfunction, or otherwise embarrass me.” The presence (or absence) of that confidence shapes the group of brands that consumers choose to evaluate. It is particularly influenced by the postpurchase experience of friends and family, along with their loyalty to a brand.

Often, word of mouth is a local phenomenon in emerging markets, partly because of the simple reality that emerging-market consumers generally live close to friends and family. In addition, word of mouth’s digital forms, which transcend geography and are growing rapidly in emerging markets, still have more limited reach and credibility there than in developed ones. According to our annual survey of Chinese consumers, just 53 percent found online recommendations credible—a far cry from the 93 percent who trusted recommendations from friends and family. That same survey showed that only 23 percent of Chinese consumers acquired information from the Internet about products they bought. For food, beverage, and consumer electronics consumers in the United States and the United Kingdom, that figure is around 60 percent.

Word of mouth’s relatively local nature means that companies in emerging markets are likely to reap higher returns if they pursue a strategy of geographic focus than if they spread marketing resources around thinly (targeting all big cities nationwide, for example). By attaining substantial market share in a cluster of cities in close proximity, a company can unleash a virtuous cycle: once a brand reaches a tipping point—usually at least a 10 to 15 percent market share—word of mouth from additional users quickly boosts its reputation, helping it to win yet more market share, without necessarily requiring higher marketing expenditures.

In China, the bottled water brand C’estbon has a very small national share, but a 25 percent to 30 percent market share, on average, in the southern part of the country. Most of the brand’s sales are to small stores and restaurants, where it has a dominant 45 to 50 percent share in that region. In India, this approach worked for P&G, with its Whisper brand of sanitary napkins, which the company introduced in targeted local communities by offering training and free samples to adolescent girls in schools. After successfully creating word of mouth in those communities, P&G gradually expanded the campaign to reach two million girls at 150,000 schools. The result was a drastic reduction in the use of cloth-based protection—to 6 percent, from 66 percent, among the targeted group, according to the company’s assessment.

Building brands that get considered

Emerging-market consumers tend to consider smaller sets of brands initially and, compared with consumers elsewhere, are less likely to switch later to a brand that was not in their initial set. For example, research we conducted in nine product categories (including food and beverages, consumer electronics, and home and personal-care products), indicated that Chinese consumers initially consider an average of three brands and purchase one of them about 60 percent of the time. The comparable figures in the United States and Europe are four brands, with a purchase rate of 30 to 40 percent.

To include a brand in the initial consideration set, consumers must obviously be aware of it, so achieving visibility through advertising on TV and other media is an essential first step. Here again, geographic focus is critical. Emerging-market consumers not only generally live close to friends and family but also tend to view local TV channels and read local newspapers rather than national ones. (China, for example, has about 3,000 mostly local TV stations.) Gaining a high share of voice through local outlets in targeted geographies can help create a sense that a company’s priority brands are in the forefront—which is valuable, because status-conscious, relatively inexperienced emerging-market consumers tend to prefer brands they perceive as leaders.

But spending heavily on advertising alone is not sufficient to ensure consideration. Companies also need to reach these consumers with messages that have been tailored to suit local market preferences and concerns, and are likely to be trusted. Testing messages—even those that have delivered powerful results in developed markets—is a key part of that equation. When Acer China tested its slogan “Simplify my life” in China, as part of a campaign emphasizing the low cost of its PCs, the message didn’t resonate. For typical Chinese consumers, a PC is a very big-ticket purchase, so they care chiefly about durability. Chinese purchasers of PCs also tend to be entertainment rather than productivity oriented. In focus groups, it became clear that Acer’s intended message of “great value for money” was arousing suspicion that the company’s products might not perform reliably. A change in Acer’s message to stress reliability rather than simplicity and productivity helped the company to build a more relevant and trusted brand, to get onto the short lists of more consumers, and to double its market share in less than two years.

Winning the in-store battle

The in-store phase of the consumer decision journey tends to be longer and more important in emerging markets than in developed ones. Emerging-market consumers have a penchant for visiting multiple stores multiple times and for collecting information methodically, especially when they purchase big-ticket items. The typical Chinese decision journey in one major consumer electronics category takes at least two months and involves more than four store visits. These consumers like to test products, interact with sales reps to collect product information, and negotiate with retailers to get the best deal.

As a result, in emerging markets there is significantly more room to influence and shape consumer decisions at the moment of purchase. We first quantified this distinction in 2008 (Exhibit 3). This finding has been reinforced by subsequent research revealing, for example, that the in-store experience is by far the biggest factor in finalizing emerging-market consumers’ flat-screen-TV purchase decisions and that Chinese consumers are almost two times more likely to switch brand preferences while shopping for fast-moving consumer goods than US consumers are.

Exhibit 3

In-store execution heavily influences consumer decisions in China.

Important as it is to control the in-store experience, the challenge can hardly be overstated. Products may be sold in tens of thousands of retail outlets after going through two or three layers of distributors. Companies often have limited visibility into what happens at the moment of purchase. Inconsistent merchandising, packaging, and in-store promotions can easily overshadow superior products and carefully crafted advertising strategies.

The first step in avoiding such waste is gaining a clear view of the retail landscape—how it is segmented and where the priority outlets are. Companies must then develop tailored control systems based on incentive schemes, collaboration with distributors, and retail-management programs. For priority outlets, companies must often deploy a heavy-control model using supervisors and mystery shoppers with supporting IT infrastructure to ensure that the performance of stores is visible enough to assess.

Unilever deploys massive resources in India to cover 1.5 million stores in tens of thousands of villages. Many of the salespeople carry a handheld device so that they can book replenishment orders anywhere, anytime, and synch their data with distributors. In Indonesia, Coca-Cola sells 40 percent of its volume directly to local retailers, with whom it collaborates closely. The lion’s share of Coke’s remaining Indonesian volume is sold to wholesalers with fewer than five employees and less than $100,000 in annual revenues. These wholesalers, in turn, distribute Coke products to small retailers. To improve in-store execution in the many outlets Coca-Cola doesn’t serve directly, the company deploys additional support, including supplying them with free coolers and dispensers and providing sales effectiveness training for merchants.

Although these principles—harnessing word of mouth, getting brands into a consumer’s initial consideration set, and emphasizing in-store execution—may sound obvious, acting on them is not easy. It requires bold investment decisions, efforts to build the skills of local teams, and the courage to operate in ways that are fundamentally different from what headquarters might regard as normal. Fortunately, the potential rewards are commensurate. When emerging-market consumers perceive a brand consistently and positively across the major touch points, including friends and family and the in-store experience, they are far more likely to choose that brand, profiting companies that spend smartly rather than heavily.

The coming era of ‘on-demand’ marketing

Emerging technologies are poised to personalize the consumer experience radically—in real time and almost everywhere. It’s not too early to prepare.

Digital marketing is about to enter more challenging territory. Building on the vast increase in consumer power brought on by the digital age, marketing is headed toward being on demand—not just always “on,” but also always relevant, responsive to the consumer’s desire for marketing that cuts through the noise with pinpoint delivery.

What’s fueling on-demand marketing is the continued, symbiotic evolution of technology and consumer expectations. Already, search technologies have made product information ubiquitous; social media encourages consumers to share, compare, and rate experiences; and mobile devices add a “wherever” dimension to the digital environment. Executives encounter this empowerment daily when, for example, cable customers push for video programming on any device at any time or travelers expect a few taps on a smartphone app to deliver a full complement of airline services.

Remarkably, all this is starting to seem common and routine. Most leading marketers know how to think through customer-search needs, and optimizing search positioning has become one of the biggest media outlays. Companies have ramped up their publishing and monitoring activities on social channels, hoping to create positive media experiences customers will share. They are even “engineering” advocacy by creating easy, automatic ways for consumers to post favorable reviews or to describe their engagement with brands.

But we’re just getting started. The developments pushing marketing experiences even further include the growth of mobile connectivity, better-designed online spaces created with the powerful new HTML5 Web language, the activation of the Internet of Things in many devices through inexpensive communications tags and microtransmitters, and advances in handling “big data.” Consumers may soon be able to search by image, voice, and gesture; automatically participate with others by taking pictures or making transactions; and discover new opportunities with devices that augment reality in their field of vision (think Google glasses).

As these digital capabilities multiply, consumer demands will rise in four areas:

1. Now: Consumers will want to interact anywhere at any time.

2. Can I: They will want to do truly new things as disparate kinds of information (from financial accounts to data on physical activity) are deployed more effectively in ways that create value for them.

3. For me: They will expect all data stored about them to be targeted precisely to their needs or used to personalize what they experience.

4. Simply: They will expect all interactions to be easy.

This article seeks to paint a picture of this new world and its implications for leaders across the enterprise. One thing is clear: the consumer’s experiences with brands and categories are set to become even more intense and defining. That matters profoundly because such experiences drive two-thirds of the decisions customers make, according to research by our colleagues; prices often drive the rest.²

It’s also apparent that each company as a whole must mobilize to deliver high-quality experiences across sales, service, product use, and marketing. Few companies can execute at this level today.³ As interactions multiply, companies will want to use techniques such as design thinking to shape consumer experiences. They also will need to be familiar with emerging tools for gathering the right data across the consumer decision journey. Finally, the marketing organization’s structure will need to be rethought as collaboration across functions and businesses becomes ever more essential.

What to expect in 2020

Over the next several years, we’re likely to see the consumer experience radically integrated across the physical and virtual environment. Most of the technologies needed to make this scenario happen are available now. One that’s gaining particular traction is near-field communication (NFC): embedded chips in phones exchange data on contact with objects that have NFC tags. The price of such tags is already as low as 15 cents, and new research could make them even cheaper, so more companies could build them into almost any device, generating a massive expansion of new interactive experiences. To understand that near future, review the infographic below and follow a hypothetical, tech-enabled consumer, Diane, who purchases an audio headset.

Taken together, the scenes from Diane’s consumer journey illustrate the four emerging areas of consumer demands we touched on above.

Now

Marketers have gotten a foretaste of the consumer’s desire for more urgency and ubiquity. Bank balances running low? Send the consumer an alert on her cell phone. A question about fees shows up on the bank’s Twitter handle? Post an immediate response. An executive of one major bank believes that the immediacy of smartphone apps has already made brick-and-mortar contact unnecessary for many young consumers, who use a range of mobile services to manage their accounts and rarely interact with the brand physically. Yet having an entire bank in your phone may be only a baseline for the experiences on the horizon. Consider one European beverage company’s beta test of beer coasters embedded with NFC technology. A club patron contemplating a new brew can tap a coaster with a cell phone and get a history of the beer, bars where it is served, upcoming promotions, and a list of friends who have given it a thumbs-up.

In this environment, a marketer’s “publishing” extends to virtualized media such as the coaster or Diane’s headphones, which become touch points for considering and evaluating products and services. Digital information technologies, operating behind the scenes to integrate data on all interactions a consumer has across the decision journey, will provide insights into the best influence pathways for companies, while also triggering new personalized experiences for consumers.

Can I

Most first-wave digital capabilities helped people access things they already did—shopping, banking, finding information. Consumers must often settle for compromises in their digital experiences. Yet robust programming, data-access, and interface possibilities now available could make every digital interaction an opportunity to deliver something exceptional.

Consider Commonwealth Bank of Australia’s new smartphone app, which changes the house-hunting experience. A prospective home buyer begins by taking a picture of a house he or she likes. Using image-recognition software and location-based technologies, the app identifies the house and provides the list price, taxes, and other information. It then connects with the buyer’s personal financial data and (with further links to lender databases) determines whether the buyer can be preapproved for a mortgage (and, if so, in what amount). This nearly instantaneous series of interactions cuts through the hassle of searching real-estate agents’ sites for houses and then connecting with the agents or with mortgage brokers for financing, which might take a week.

The mortgage app shows how the digital environment is now integrating disparate sources of information, at low cost and at scale, for many new domains. The challenge for companies is to look beyond today’s interfaces and interactions and to see that moving past compromises will require a rethinking of aspects of packaging, pricing, delivery, and products.

For me

Some online marketers already use features in devices such as cameras and touch screens to help consumers see what apparel and accessories may actually look like when worn. Web retailer Warby Parker, for example, offers hundreds of customized views of eyeglasses overlaid on a Webcam picture of the consumer.

In the future, demands for more personalized experiences will intensify. A phone tap, a click, or a stylus jot will instantly personalize offers, using information captured on “likes,” recent travel, income, what friends are doing or like, and much more. With each interaction, the consumer will be creating new data footprints and streams that complement existing digital portraits, sharpening their potential impact. Facebook will eventually be able to mine the world’s largest database of photographs, linking individual people to their activities. Smartphones have rich data on every place where you have traveled with one in your pocket. This is just a start, and the privacy, security, and general trust implications are staggering. Yet consumers consistently show a desire to provide more data when companies use captured information to provide truly helpful feedback (you’re over budget or you are doing well in your exercise program) or to offer recommendations, services, and customization tools rather than just push what might appear to be intrusive (and creepy) messaging.

Simply

The quest for simplicity led Amazon to create a subscriber model for delivering bulky repeat-buy items (such as diapers) and Starbucks to adopt a tap-and-go approach to mobile payments. Yet many interactions remain complex and fragmented: to name just a few, finding, organizing, and redeeming online coupons; turning weekly meal plans into online delivery orders; tracking your monthly cash flow; and staying on top of your health-insurance bills and reimbursements.

Evolving technologies and consumer behavior should make it easier to redesign many complex experiences. For example, companies offering inherently complicated products or services could overlay a game interface on certain Web pages, to let consumers play at trading off different options and prices. Visual-recognition technology could allow you to scan health-care bills, receipts, statements, and appointments into one integrated calendar and cash-management system. Already, start-ups in travel, expense, and sales-force management are experimenting with approaches that streamline processes and make interactions more inviting—using touch and swipe to make changes, gestures to activate large displays, and data in phones to recognize consumers and automatically customize interfaces.

Setting strategies and building capabilities

Consumers will soon make these demands of every interaction they have with companies. Although the marketing function may often be the best conduit to get customer input and to drive decisions about how to distinguish brands, coordinated efforts across the enterprise will be needed on three levels.

Designing interactions across the consumer decision journey

Today, many companies have successfully defined and addressed customer interactions across a few channels. What they need to be designing, however, is the entire story of how individuals encounter a brand and the steps they take to evaluate, purchase, and relate to it across the decision journey. Marketing or customer research can’t do this alone. At one apparel retailer, managers from multiple functions go together into the field to do deep ethnographic research— watching how customers shop, going into their homes, and uncovering the triggers and motivations that drive behavior. These managers look for the compromises that people face as they try to get things done, probing for their higher aspirations. And the managers watch how customers react as they interact with brands.

Among the findings, the managers identified seven key “use cases”—customer situations that lead to satisfaction along different decision journeys. They found a wide range of trigger points for choosing an “outfit solution” for a social occasion, learning that shoppers became frustrated, especially online, when they couldn’t see how items would look together. Customers wanted to drag and drop items on an on-screen model or to see great combinations in advance. But that required different merchants to work collectively and the stores to bring items together on sales floors.

Cross-functional teams also came together in workshops. With third parties such as fashion bloggers and thought leaders from online-media companies, they mapped out new ways to influence the decision journeys of customers with different attitudes toward the retailer’s brand or different kinds of spending behavior. One of the most valuable outcomes was clarity on how the store’s brand positioning could guide the design of new experiences. The teams knew that their story would always be “better value than the shopper expected, delivered in a friendly way.” That meant warm visuals and messaging on the company’s Web site and across various media to reinforce the story of value to the customer. And the teams explored new ways social media could help customers show off the value they received.

Out of the work came not only a shared, company-wide sense of the decision journeys of consumers but also immediate buy-in to a wide range of initiatives that could boost market share. These initiatives are on track to provide an 8 percent sales lift above what the existing plan envisioned and were implemented more quickly because of the management team’s shared sense of engagement.

Making data and discovery a nonstop cycle

To win over on-demand customers, you must know them, what they expect, and what works with them, and then have the ability to reach them with the right kind of interaction. Data lie at the heart of efforts to build that understanding—data to define and contextualize trends, data to measure the effectiveness of activities and investments at key points in the consumer decision journey, and data to understand how and why individuals move along those journeys. To realize that potential, companies need three distinct data lenses.

Telescope. A clear view of the broad trends in your market, category, and brand is essential. Digital sources that track what people are looking for (search), what people are saying (social monitoring), and what people are doing (tracking online, mobile, and in-store activities) represent rivers of input providing constant warning signs of trouble or signals of latent opportunity. Many companies are drowning in reports from vendors providing these types of information tools, yet few have much clarity on which things they need to look for and who needs to know what.

One packaged-goods company got a jump on competitors when it saw a spike in online conversations about the lack of natural ingredients in shampoos and then recognized a corresponding rise in search inquiries on the subject. A new line of natural hair care products, launched at record-breaking speed, has become a successful early mover in a growing segment. A telecommunications company has become similarly plugged in: it now has a war room to track every online comment anywhere. Besides being better able to address—in an open, friendly, and fast way—problems that could escalate, it now has a great frontline source of line-outage signals that trigger repair crews and increases in call-center capacity.

Binoculars. Against this backdrop of market activity, few companies have a complete, integrated picture of where they spend their money, which interactions actually happen, and what their outcomes are. Most direct-sales companies (retailers, banks, travel services) measure the performance of their spending through isolated last-attribution analyses that look narrowly at what consumers do after confronting a search link, an e-mail, or an advertisement. Branded-goods companies try to throw all of their media spending together into an econometric model assessing the effects of their media mix. In the world of on-demand marketing, where multiple interactions take place along multiple journeys, last-action attribution explains only part of the impact of media spending, and media-mix models fail to account for touches and costs outside of paid channels.

What’s next? Deploying tools that rapidly assemble databases of every customer contact with a brand, companies will need to push every customer-facing function to work together and form an integrated view of consumer decision journeys. With longitudinal pictures of customers’ touches and their outcomes, companies can model total costs per action, find the most effective decision-journey patterns, and spot points of leakage. As more contacts become digitized—and they will—the data will gradually get easier to create. Getting a head start can help companies build ongoing test labs where they tune the ability to create and analyze the right data and immediately learn where to add investments. One bank has already realized millions of dollars in added value from the knowledge that weak points in the customer on-boarding process were undermining major marketing programs. Only when branches, call centers, and marketing worked together could the bank find the right fixes, improve customer satisfaction, and raise marketing’s return on investment.

Microscope. Trust is essential, and personalization can show customers they matter. They expect a brand to be a good steward and user of data about them and, increasingly, have high expectations for what a brand should know. In the example described earlier, data about Diane powers the brand’s ability to make it easy for her to share photographs, to buy a headset, to set up and manage a free Spotify subscription, to receive information about a local event, to be recognized at it, and to get additional special offers. Information about Diane is the thread that keeps all of her brand interactions immediate (now), valuable (can I), relevant (for me), and easy (simply).

Yet given the laser focus on getting programs into the market to improve performance, few marketers (or even line executives) have stepped back and pulled their teams together to work through the scenarios and customer-data models they will now need to build. Even fewer have a strong sense of what the current plans of the company’s IT department will deliver in which time frame. One company that addressed these issues has identified over 20 types of consumer decision journeys as archetypes of experiences it must support over the next three years. From those decision journeys, it has derived a core set of information capabilities it will need to build and is well down a tight road map of development that has already enabled it to launch products in breakthrough ways.

Delivering with new skills and processes

To deliver these new experiences, executive teams must rethink the role and structure of the marketing organization and how it engages with other functions. The changes are likely to cut deeply, transforming the way companies manage campaigns and communities, measure performance, provide customer support, and interact with outside agencies. It’s still early days, but consider the breadth of recent efforts.

Raising a consumer-packaged-goods company’s digital game. A European CPG company started by creating a digital-analytics group with worldwide operations. Rather than sprinkle digital experts across the globe, the company developed a unified structure with common standards for roles, common training, and digital career tracks to build an arsenal of future talent. The analytics team is part of a broader digital center of excellence that provides service support to the business units and drives major upgrades in IT capabilities. Defined commitments from managers in finance, legal, and HR help the center deal with challenges that arise as it seeks to offer customers a richer digital experience.

The company also reviewed all of its e-commerce trade accounts and decided that it needed a much more granular approach to serving customers. Says one executive, “It is not just an issue of managing our relationship with pure-play e-commerce sellers versus our traditional channels; it also is an issue of managing the online versus brick-and-mortar sides of the same traditional partner.” A new e-commerce trade team with added digital-analytic support is helping both to enhance the online-merchandising mix and to improve the placement of the company’s products in the search engines of e-commerce providers.

Finally, marketing leaders established a novel customer-relationship-management (CRM) team because they realized that the growth of the company’s mobile services, coupon programs, sampling, and social communities was finally enabling it to gather huge amounts of direct data about how people interacted with its brands. (That information had previously been available only to retailers.) These structural and talent changes led the company to realize that it needed to reshuffle its agency relationships, replacing a single brand-and-ad agency with two agencies—one for brand programs, the other for digital and CRM direct marketing. The company also brought more media and digital analytics in-house.

Reorienting a bank. At one institution, a new understanding of emerging brand challenges led to a radical change in the status of the CMO. Marketing had earlier ranked low in this sales-driven organization, where the function’s leaders focused mostly on corporate communications and brand campaigns. Now, a new CMO, much closer to her peers on the executive board, has been charged with directing the full consumer experience.

Each month, the bank’s business-unit leaders gather to talk about their progress in improving different consumer decision journeys. As new products and campaigns are launched, these executives place a laminated card of such a journey at the center of a conference-room table. They discuss assumptions across the whole flow of the journey for different consumer segments and how various groups across functions should contribute to the campaign. Where should customer data be captured and reused later? How will the campaign flow from mass media to social media and to the bank’s Web site? What is the follow-up experience once a customer sets up an account?

The bank has created a corporate center of excellence for digital marketing to give the strategy a forward tilt and to plan for needed capabilities. It has also appointed a new team of full-time executives who focus on mobile and social technologies—executives who have become evangelists, helping business units to raise their digital game along a range of consumer interactions. The first wave of fixes and new programs has already generated tens of millions of dollars in the first six months, and the bank expects these efforts to add more than $100 million to its annual margins.

The forces enabling consumers to expect fulfillment on demand are unstoppable. Across the entire consumer decision journey, every touch is a brand experience, and those touches just keep multiplying in number. To mobilize for the on-demand challenges ahead, companies must:

• bring managers together from across the business to understand consumers’ decision journeys, to speculate about where they may lead, and to design experiences that will meet the consumer’s demands (Now, Can I, For me, andSimply)
• align the executive team around an explicit end-to-end data strategy across trends, performance, and people
• challenge the delivery processes behind every touch point—are the processes making the best use of your data and interaction opportunities and are they appropriately tailored to the speed required and to expectations about your brand?

Executive recruiters tell us that corporate boards are looking for more people who can challenge and improve a company’s approach to social media, big data, and the customer experience. Staying ahead of the design, data, and delivery requirements of on-demand customers is much more than a marketing issue—it will be a crucial basis for future competitive advantage.

Why marketers should keep sending you e-mails

There’s a reason your inbox always seems jam-packed: e-mail marketing works. But companies can get smarter about ensuring every message counts.

It’s a postholiday tradition up there with returning unwanted gifts and vowing to exercise more: spending a few hours cleaning out your e-mail inbox. If you’re wondering why marketers seem intent on e-mailing you more and more, there’s a simple explanation: it works. E-mail remains a significantly more effective way to acquire customers than social media—nearly 40 times that of Facebook and Twitter combined (exhibit). That’s because 91 percent of all US consumers still use e-mail daily,¹ and the rate at which e-mails prompt purchases is not only estimated to be at least three times that of social media, but the average order value is also 17 percent higher.

Exhibit

E-mail is still a significantly more effective way to acquire customers than social media.

Of course, we’re not saying marketers should bombard you with mindless spam. And consumer behavior is shifting: McKinsey’s iConsumer survey reported a 20 percent decline in e-mail usage between 2008 and 2012 as a share of time spent on communications, with the medium surrendering ground to social networks, instant messaging, and mobile-messaging apps. Investments in these new channels are absolutely necessary for marketers to make increasingly sophisticated use of social networks and other channels to engage with consumers and convert interest to sales. However, marketers shouldn’t be too hasty in shifting budgets away from e-mail—they just need to take a few steps to harness the full power of the inbox.

1. Focus on the journey, not the click

Marketers often obsess over every aspect of every e-mail sent, from the subject line to visuals to copy. And they should—so long as they remember that e-mail is merely the first click (literally) in a consumer’s decision journey. The e-mail is part of a series of interactions with a brand, and marketers should be just as obsessed with where an e-mail sends the user. Why invest so much time in an e-mail only to drop the user onto a generic home page? Customized landing pages—which send the user directly to the item or offer featured in the e-mail—can increase conversion rates by more than 25 percent. And don’t forget mobile. Nearly 45 percent of all marketing e-mails today are opened on a mobile device.⁴ Yet many marketers fail to optimize landing pages for the platform. If you think that’s no big deal, consider this: Google says 61 percent of users are unlikely to return to a mobile site they had trouble accessing. And, even worse, 40 percent visit a competitor’s site instead.

2. Share the lessons

The best marketing organizations view every e-mail as an opportunity to learn more about their consumer. They define clear learning objectives for each campaign, capture data, and share it within the marketing group and the rest of the organization. One apparel company that markets through multiple channels recently implemented a monthly review of its e-mail campaigns in which marketers share three “hits” and three “misses.” These reviews are attended by marketers, merchants, and brand teams, with top lessons broadcast on closed-circuit TV screens throughout its corporate campus. “We want our team to share every lesson,” the head of direct marketing said. “If what we’re doing doesn’t work, we should celebrate finding that out.” As a result of this continuous learning process, the company is on course to double e-commerce revenue as a percentage of total sales without increasing its number of e-mail campaigns.

3. Get personal

Standing out certainly has become more difficult. While e-mail usage has declined, the volume of messages continues to rise: the number of marketing e-mails was forecast to reach a record 838 billion in the United States in 2013, according to Forrester. It’s no wonder relevancy should be a priority for every marketer. The best e-mails feel personal—and they are. Flash-sale site Gilt Groupe sends more than 3,000 variations of its daily e-mail, for example, each tailored based on past user click-throughs, browsing history, and purchase history. Of course, building true customization and targeting abilities is a transformative process that requires specific capabilities and supporting infrastructure. Customer information often lives in different parts of the organization and must be aggregated to create a single view of each consumer. A targeting engine must be built to guide the right message to the right person. And operations need to be ready for the change; creating and sending 3,000 e-mails a day is very different from sending one mass e-mail blast. Although it’s a lot of work, it drives real returns: one financial institution increased revenue from target segments by 20 percent by using life-cycle events to trigger personalized e-mails to existing customers; home-goods retailer Williams-Sonoma reported a tenfold improvement in response rates by adopting personalized e-mail offerings based on individuals’ on-site and catalog shopping behavior.

The strength of ‘weak signals’

Snippets of information, often hidden in social-media streams, offer companies a valuable new tool for staying ahead.

As information thunders through the digital economy, it’s easy to miss valuable “weak signals” often hidden amid the noise. Arising primarily from social media, they represent snippets—not streams—of information and can help companies to figure out what customers want and to spot looming industry and market disruptions before competitors do. Sometimes, companies notice them during data-analytics number-crunching exercises. Or employees who apply methods more akin to art than to science might spot them and then do some further number crunching to test anomalies they’re seeing or hypotheses the signals suggest. In any case, companies are just beginning to recognize and capture their value. Here are a few principles that companies can follow to grasp and harness the power of weak signals.

Engaging at the top

For starters, given the fluid nature of the insights that surface, it’s often useful to get senior leaders actively involved with the social-media sources that give rise to weak signals. Executives who are curious and attuned to the themes emerging from social media are more likely to spot such insights.¹ For example, a global manufacturer whose high quality and low prices were the topic of one customer’s recent social-media post almost certainly would not have examined it but for a senior executive who was a sensitive social “listener” and found its implications intriguing. Did the company have an opportunity, the executive wondered, to increase prices or perhaps to seek market share more aggressively at the current prices?

To find out, the executive commissioned research to quantify what had started out as a qualitative hunch. Ultimately, the low-price perception turned out to be an anomaly, but the outsize perception of the product’s quality was widely held. In response, the company has started funneling marketing resources to the product in hopes of building its market share by capitalizing on its quality and differentiating it further from the offerings of competitors.

Listening and mapping

As the manufacturer’s example implies, spotting weak signals is more likely when companies can marshal dispersed networks of people who have a deep understanding of the business and act as listening posts. One global beverage company is considering including social-media awareness in its hiring criteria for some managers, to build its network and free its management team from “well-rehearsed habits.”

Weak signals are everywhere, of course, so deciding when and where to keep the antennae out is critical. One such situation involves a product, market, or service that doesn’t yet exist—but could. Consider the case of a global advertising company that was investigating (for one of its clients) a US growth opportunity related to child care. Because no one was offering the proposed service, keyword searches on social media (and on the web more broadly) wouldn’t work. Instead, the company looked to social-media platforms where it might find weak signals—finally discovering an online content service that allows users to create and share individualized newspapers.

In the child-care arena, digital-content channels are often curated by mothers and fathers, who invite conversations about their experiences and concerns, as well as assemble relevant articles by experts or government sources. Analysts used semantic clues to follow hundreds of fine-grained conversations on these sites. The exercise produced a wealth of relevant information about the types of services available in individual markets, the specific levels of service that parents sought, the prices they were willing to pay, the child-care options companies already sponsored, the strength of local providers (potential competitors), and the people in various communities who might become ambassadors for a new service. This wasn’t a number-crunching exercise; instead, it took an anthropological view of local child care—a mosaic formed from shards of information found only on social media. In the end, the weak signals helped the company to define the parameters of a not-yet-existing service.

Spotting visual clues

It’s also useful to search for weak signals when customers start engaging with products or services in new, tech-enabled ways, often simply by sharing perceptions about a company’s offerings and how they are using them. This can be hard for companies to relate to at first, as it’s quite removed from the usual practice of finding data patterns, clustering, and eliminating statistical noise. Spotting weak signals in such circumstances requires managers and employees to have the time and space to surf blogs or seek inspiration through services such as Tumblr or Instagram.

As intangible as these techniques may sound, they can deliver tangible results. US retailer Nordstrom, for example, took an early interest in the possibilities of Pinterest, the digital-scrapbooking site where users “pin” images they like on virtual boards and share them with a larger community. Displayed on Pinterest, the retailer’s products generate significant interest: the company currently has more than four million followers on the site.

Spotting an opportunity to share this online engagement with in-store shoppers, the company recently started displaying popular Pinterest items in two of its Seattle-area stores. When early results were encouraging, Nordstrom began rolling out the test more broadly to capitalize on the site’s appeal to customers as the “world’s largest ‘wish list,’” in the words of one executive.² The retailer continues to look for more ways to match other customer interactions on Pinterest with its products. Local salespeople already use an in-store app to match items popular on Pinterest with items in the retailer’s inventory. As the “spotting” ability of companies in other industries matures, we expect visual tools such as Pinterest to be increasingly useful in detecting and capitalizing on weak signals.

Crossing functions

As the Nordstrom example demonstrates, listening for weak signals isn’t enough—companies must channel what’s been learned to the appropriate part of the organization so the findings can influence product development and other operational activities. Interestingly, TomTom, a company that offers products and services for navigation and traffic, found that the mechanism for spotting weak signals proved useful in enhancing its product-development process.

As part of normal operations, TomTom monitored social media closely, mining conversations to feed into performance metrics for marketing and customer-service executives. The normal process changed after an attentive company analyst noted that users posting on a UK forum were focused on connectivity problems. Rather than let the tenuous comments get lost in the company’s performance statistics, he channeled them to product-development teams. To resolve the issue, the teams worked directly—and in real time—with customers. That helped short-circuit an otherwise costly process, which would have required drivers using TomTom’s offerings to check out connectivity issues in a number of locales. The broader payoff came in the form of new R&D and product-development processes: TomTom now taps directly into its driving community for ideas on design and product features, as well as to troubleshoot new offerings quickly.

At most companies, weak signals will be unfamiliar territory for senior management, so an up-front investment in leadership time will be needed to clarify the strategic, organizational, and resource implications of new initiatives. The new roles will require people who are comfortable navigating diverse, less corporate sources of information.

Regardless of where companies observe weak signals, the authority to act on them should reside as close to the front lines as possible. Weak signals are strategic enough to demand top-management attention. They are sufficiently important to the day-to-day work of customer-service, technical-development, and marketing teams to make anything other than deep organizational engagement unwise.

Strategy to be Followed by a New Entrant

A new brand has to follow a few strategies in order to compete with the top few brands on the chief networking sites. the chief networking sites where the popularity of the different brands can be measured are:

• Facebook
• Google+
• YouTube
• Linkedin

If a new brand wants to enter the digital market, it has to take up a few strategies , as mentioned earlier, in order to be among the top few brands on the social media sites. Some of the few strategies are:

• Boosting Brand Equity
• More time for engaging content
• Foster best practices

Now the next important factor is, creating a  strong social media content strategy. Some of the few strategies that can be followed for the same are:

- Align Content Development With Social Media Metrics and Goals

- Beef Up Your Content Strategy With a Big-Brand Mindset

- Concentrate on Increasing Daily Updates

- Delve Into Data From Social Media Channels

- Engage in Real Interactions

- Follow Facebook’s Changes

- Get Acquainted With the New Google Analytics Social Reports

- Help Users Find Your Content With Hashtags

- Introduce Content With Infographics

- Justify Frequent Updates and Posts

- Keep Klout in Perspective

- Look to the Future of Social Media

- Make Your Blog Mobile-Friendly

- Network in All the Right Places

- Outsource Content Development as Needed

- Present Your Human Side With Photos

- Question Readers for More Engagement

- Replicate Your Brand Identity From Platform to Platform

- Strengthen In-Person Events With Social Media Promotion

- Talk With Team Members to Keep Up Momentum and Morale

- Use a Conversational Tone to Engage Readers

- Visit a Number of Search Engines to Find the Perfect Image

- Widen Your Writing Style With Online Tools

- Expand Your Article With Relevant Tips

- Yield to Your Customer’s Journey

- Zero In on Your Customer’s Interests and Needs

How To Make A Good Web Analytics Report

How To Make A Good Web Analytics Report:

They say if your business is not online, it is as good as non-existent. Of all the business websites, less than 20% employ web analytics to track the performance of their site. One needs to remember that what a company needs from their website and what purpose the website actually serves may vastly differ. If you have a website, it is most crucial to study the visitor experience and analyze the data generated. The data gathered, however, can be overwhelming and vast and therefore knowing what information is worth tracking and what isn’t becomes extremely important if you want to use web analytics effectively.

The following seven points are crucial to create a significantly insightful web analytics report:

1. Basics: This includes tracking numbers that help you understand the visitor statistics and hence help you take necessary actions that may end-up making the website efficient and effective. How many people visited the site? From which traffic source did they come from? Who the users are? Which pages did the look at? Which pages did they spend most of their time on? The answers to these questions should then be compared to the goals that you set out with. Analysis of this data will help you figure out if your site is working. It will also hint toward what needs to be done for the site to work better and for your goals to be achieved in a faster and efficient manner. For example, if your site needs 2000 visitors a day, and web analytics show that most of your visitors currently come from a certain search engine, placing adverts and working on SEO would be the solution.
2. Performance: Visitors could be engaged more on a certain page but look carefully. Is it because the particular page takes too much time to load? If a certain page has more engagement rate and/or more clicks, is it because the page coughs up errors and hence requires reloading. This could damage the website’s and the company’s reputation in the long run. So, even though the data makes the performance seem good, it must be used to cross-check and make sure that the website is functioning well.
3. Campaign effectiveness and ROI: If you have a website, then you must invest in some marketing activities across the internet to get more traffic. However, your marketing campaigns and initiatives have to be measured. One has to understand how many visitors are being generated for every $ spent. Web analytics is the best way to track, measure, and optimize website traffic, conversion rate as a result of your online marketing initiatives. It can also play a key role in helping you decide which online campaign method to select, how much to spend, which campaigns are not performing  and which ones are high performing campaigns deserving higher budget allocations, etc.
4. Goal conversion rate: This will indicate the percentage of visitors that convert on at least one of the goals defined for the profile of the website. It tells you exactly how the website translates into business development. This is the ratio of site visitors against the goal set up by company, which can be number of form submissions, catalogue requests, trade enquiries, call back requests, actual sales, etc. It is this number that will tell you whether your website has helped your business at all.
5. Geographical stats: Knowing which geographical region gives you maximum traffic can help you understand your website user behavior better and also help you differentiate between your offline and online market. A popular calendar company’s website received majority of its hits from the US. After analyzing the data, they realized that their product had a huge market among Marathi immigrants to UK and US. They ended-up developing a soft copy of the calendar and this started generating revenues from their website.
6. Keyword phrases and search data: Knowing which keywords led the user to your site is crucial information that can help you with SEO. This data also holds a key to understand which key phrase is used most. Understanding what the visitors were looking for when they stumbled upon your site. Answers to questions like, are these relevant searches, if yes, is the website fulfilling the user’s need, will help you create a better user experience for your site.

Every website is different hence has different needs from web analytics data, however, generally speaking, the seven points mentioned above, should help you build a clear picture about your website’s performance.