Drawing boundaries on what information can be shared

A lot of what happens in Washington gets hidden behind red tape, incredibly long bills, and inane babble. As a result the general public has largely tuned out its activity...to its own detriment. But these laws affect us, even those in marketing, and it is in our best interest to pay attention.

The Best Practices Act (H.R. 5777) is one of those examples. At its core, the bill seeks to place parameters around what information can and cannot be shared for things like market research. Bobby Rush, Chairman of the Energy and Commerce Committee put it this way, "The BEST PRACTICES Act speaks to a host of issues affecting consumer privacy, including consumers' expectations as to how their personal information should be handled, shared, and disclosed to third parties...and how to calibrate penalties and other possible legal causes of action without chilling industry incentives to innovate and grow their businesses."

Even though the bill has yet to be passed it is creating a bit of a stir within the market research community. Our friends at Quirks.com have posted a great article that represents their perspective.

We all understand how valuable data is in terms of understanding consumer behavior. We also understand the importance of maintaining privacy of certain information. A middle ground can be achieved that accomplishes both aims. It will be very interesting to see how this thing plays out. But be patient, it will probably take awhile.

The outsourcing of America...and making it work

Here's a great link from the USA Today to an article that discusses how individuals and corporations are coping with current economic realities through outsourced and contract work. And if USA Today is reporting on the matter it must be prevalent and it must already be a firmly established trend.

Lacuna was created a few years ago to capitalize on this trend. Companies, facing quarterly expectations and profit pressure, are turning to contractors and partners as a means to ensure quality but minimize cost. Marketing is one realm of business that is at the forefront of change. Initially it was graphic design work or advertising that was given to outside parties and now it has expanded to include everything from demand generation functions to overall marketing strategy. We have a client whose sole remaining marketing employee is essentially a project manager who oversees the myriad contractor relationships and ensures consistency with the brand.

This is no longer a trend to observe but a firmly entrenched reality. If you are a service provider it behooves you to understand the reasons why a company outsources its work and what areas are most likely to be outsourced. Figure out what it is you do well and differentiate yourself. Land 5-6 regular clients and, like a mutual fund, diversify your income streams and embrace the freedom that comes with the new business model.

How "intelligent" is your intelligence?

I would venture to guess that your organization values pertinent information surrounding its industry. I would also assume that you have someone in your organization who was given the responsibility to gather and collect competitive information, likely through industry sites and tools like "Google Alerts."

So we've established that you are interested in competitive intel and that you likely have someone gathering it. What's next?

Well, what is the quality of your information? Is it fact or hearsay? The quality of your intel can drastically impact the effectiveness of your strategy....just ask Hans Blix or Collin Powell. In a perfect world every bit of information is fact and easily verifiable. In the real world you are likely required to use a little bit of your gut in determining whether or not the information is good enough to act upon.

The folks in the intelligence community have been wrestling with this issue for years. To that end they developed the Admiralty Rating Scheme. It is a code that essentially allows intelligence analysts to rate information on its reliability and credibility.

While there isn't any kind of uniform rating system in the private sector, most astute companies apply some kind of grade to the gathered intelligence. And these companies follow a similar outline. How reliable is the source of information? (Industry expert or arm chair blog hack?) And, how credible is the information. (Can it be validated elsewhere or does it make sense given everything else that you know?)

The application of a simple rating system can drastically improve your ability to turn information into intelligence that is worthy to run a strategy off of. We all know that decision making can be difficult for many companies. So when it is time for one, make sure that you are basing it on good intel.

How companies use marketing analytics

We've spent the better part of the last several years trumpeting the benefits of analytics for marketing. Yes, there are benefits....very tangible benefits that make your CFO happy and your bottom line bigger.

The wonderful folks at the Adberdeen Group recently published a white paper highlighting the best practices of leading companies in regards to marketing. It is very insightful and serves as a great sales pitch for firms, like Lacuna, that specialize in marketing analytics.

One graph stood out. It is featured below. It highlights the top priorities for leading companies in relation to marketing analysis. It can serve as a road map for those companies that are looking to get their analytical operations off the ground.

Take a look at the list below. Spend some time on it. Would the insights that these tools can create be of value to your organization? I bet they would. Now, get to work and make your efforts more effective!

Early warning for your competitive intelligence

I just attended a presentation sponsored by Frost & Sullivan that discussed the importance of creating an "Early Warning" system for companies so that they can effectively manage and prepare for possible events. While most of the presentation was pretty academic and vague there was one topic and slide that left a mark.

Here we go...

The graph, shown above, illustrates a valid concept. It was part of a piece shared by Ken Sawka of the firm Outward Insights. Essentially the concept states that the closer one gets to a "decision threshold", the less flexible his or her options are.

What does that mean?

He gave the following example to illuminate the point. Let's say you are a weatherman. If you receive intelligence that indicates that there will be rain in three days you can adequate prepare for the coming weather. However, if you receive that news as you are leaving for the office, you probably couldn't even of had time to grab an umbrella. Your options are limited. Point made?


What does that mean, specifically, for your business?

It is best to be able to take a longer term perspective of the threats and opportunities that surround you. By doing this and setting up potential contingency plans you can be adequately prepared should those anticipated events come to pass. It's this type of planning that could of helped....I don't know....British Petroleum.

Threats or opportunities can come in the form of many things. Deregulation, competition, technological changes, supply chain, or larger economic events are all examples of things that can drastically change your competitive environment. And the closer you get to these anticipated events the less able you are to deal with them.

So be a good boy scout, be prepared, and stay on top of your market.

Smart Segmentation

By now we know that we can't treat all of our customers the same. We understand the value of segmenting our market into relatively homogeneous groups based on things like Geography, Demographics, Psycho graphics, Purchase History, or Behavioral Responses.

We also have a wide array of tools, online and otherwise, that make the task of understanding your market much easier. The top companies are not only utilizing these tools and techniques, they are also creating an analysis-driven culture.

What are leading companies doing that the others can follow? In the fall of 2008 the Aberdeen Group published a great white-paper that outlined the characteristics of customer analytics efforts of top organizations.

The following framework is a good starting point for organizations that are beginning to lay out their road map.













At the end of the day, the linchpin of success for any analytic based solution is the quality of input data. To that end the top companies have a centralized database of customer information so that they can ensure a single view of the customer. That old and over-used adage, "garbage in- garbage out" rings very true.

With a quality infrastructure in place your organization can do fun and beneficial things like RFM and Propensity Analysis. That's where the real value and profit is.

Turning data into gold

The internet has been both a blessing and a curse for those of us who are in the business of turning data and information into actionable intelligence. On the plus side, we have more and more information than we could have ever wanted. Not surprisingly, this is also the downside. Plus we will also need to spend more time validating discovered information because most of it is second rate.

Here is the standard hierarchy associated with knowledge management within firms. (From least to most important)

1. Data: Facts and Observations. Ex. 1st Qtr Sales for company X are up 5% over last year.
2. Information: Collection and some synthesis of the data. Ex. The sales growth was attributed to the launch of product Y.
3. Knowledge: The mix of information, experience, and context obtained in a value adding process. Ex. The launch of product Y by Company X represents an aggressive strategy towards attacking a new market and taking on a new set of competitors.
   

An experienced practitioner of competitive intelligence will know how to effectively mine information and data so that a solid hypothesis can be created and tested. These hypotheses will ultimately guide and direct strategic decision making.

More importantly, companies need to create an environment where every employee is capable of contributing to the overall knowledge management mechanism. This involves creating an appropriate culture, providing in the necessary infrastructure, and enabling efforts through the right IT support.

A previous blog entry mentioned the Chatter tool by Salesforce.com as an excellent platform for information gathering and sharing. We've also talked about the importance of promoting information gathering and sharing through every aspect of business activity. Finally, has the organization made the gathering and synthesis of information as easy as possible for employees through a proper infrastructure.

This graph, taken from McKinsey, outlines a proper framework for designing the appropriate knowledge management or competitive intelligence program.

Predictive Analytics for Marketing

In the past couple of years the light has gone off and companies have started to finally value what predictive analytics and data visualization can do for their marketing efforts. Now these tools have expanded beyond the realm of direct marketing and they have begun to permeate to other fertile grounds where there is sufficient data to be mined.

Laura Patterson and MarketingProfs.com have done a great job of summarizing the most commonly used predictive analytics tools when it comes to marketing. Check out the link.

Salesforce.com, Chatter, and Competitive Intelligence

We are exceptionally excited to use the new Salesforce.com offering, Chatter, once it launches. Why? Because it has the potential to be an incredible platform for gathering and disseminating competitive intelligence. If it is half as cool as the presentation, it will run circles around Share Point and the other current offerings.

Take a look...

Beating the Odds as a New Venture

We are spending more and more time working with companies on the far left end of the growth curve. These are nascent enterprises that are fueled by a great idea and a desire to shake up the market place. They are enterprises that are willing to take risks in their journey of growth.

Fellow BYU alum Clark Gilbert writes a great piece for the Harvard Business Review here.
It explains that while there are many risks naturally inherent in starting a new venture, most of the successful ones are able to identify certain risks and manage them. By discovering and managing their myriad risks they are able to see a better overall result.

One of the big risks that can be minimized? A proper understanding of one's competitive environment. Hint, Hint....just sayin'.

Tough Times and the Competition: Making a Case for Competitive Intelligence

Tough Times and the Competition: Making a Case for Competitive Intelligence

Read this great article from my mentor and Thunderbird professor extraordinaire, Paul Kinsinger. Some very relevant insights regarding how competitive intelligence needs to be used during tough times like the present.

How to elicit competitive intelligence

Here is an interesting presentation from fellow T-Bird alum, Stephen Hernan. It is a general discussion on various tactics that can be employed when trying to elicit intelligence from the people managing the organizations that you might be following.

Discussion regarding the ethics of some of these recommendations aside, he does a good job of explaining how human interactions can be manipulated for the sake of gaining intelligence. As anyone who has spent time gathering competitive intelligence will tell you, getting actual actionable intelligence from a living, breathing human being is quite a more difficult and unpredictable challenge than just relying solely on secondary sources.

Lifting the veil and really understanding your consumer

Being "customer-centric" is one of the most overly used and lightly treated buzz words generated by executives today. It's the type of thing the CEO mentions in an annual report to make the company seem relevant and progressive. But beyond the blank commitment to the phrase, what does it mean to be truly "consumer centric"?

A recent article from the Harvard Business Review (view here) helps separate the posers from the players by outlining what some leading companies are doing in order to be truly customer oriented. And the positive results of their actions help lend credence to the notion that listening to the customer is good for business.

It specifically highlights how "Best Buy for Business" was able to distinguish itself from its competition and thrive in a difficult retail environment because it of its core commitment to responding to consumer needs. As someone who has helped lead marketing efforts for "Best Buy for Business" I can attest to how in tune they are with their various and different customers. Their genuine commitment is tangible and acknowledged by most who shop there.

One other thing regarding the use of consumer research to the benefit of marketing and product development programs. Companies need to leverage both internally led and external information sources for their efforts. Most larger companies that I work with have some sort of consumer research mechanism that queries their customer base. But you would be surprised at how few of them monitor the wider universe for what consumers are saying about their brands outside of the control of a focus group.

Social media and internet search capabilities now provide companies with an incredible ability to hear the unfiltered and unsolicited opinions of their valued consumers. This is the truest and most accurate way to measure the pulse of the brand. More and more companies are acknowledging this and developing programs to monitor these groups.

The bottom line is technology is enabling us with more and more means to connect with our customers. And companies that connect with customers are the ones that last and that case studies are written about.

Good CI resource

We are always out looking for relevant resources that can enhance our understanding of important concepts. JTHawes Consulting has a great blog that delves into matters of competitive intelligence. It's worth a look.

JTHawes Blog

Tough Times and the Competition

Here is a portion of an interview given by Paul Kinsinger that is featured in the most recent edition of McKinsey Quarterly. He is a long-time pioneer in the field of Competitive Intelligence and a personal favorite professor from my days at Thunderbird.


Here is the link

Analytics at Work

We often refer our clients and potential clients to the great Davenport/Harris work, "Competing on Analytics". It does an incredible job of explaining the value generated by creating a culture of analysis that can be understood by the average executive.

Davenport has recently created a follow-up and we can't wait to see how it can add value to our engagements. If it is half as informative as the original we will be more than satisfied.

Check out this recent interview(link below) with Mr. Davenport and then head over to Amazon.com to make your purchase. The fate of your company might rest on your ability to leverage your data for strategic gain.

Interview: Moving On With Analytics

President Obama, Terrorism, and Corporate Intelligence

We were all disturbed when we heard of the alleged terrorist plot that took place on Northwest Flight 253 on Christmas day. While the plot ultimately failed it unnerved a sensitive public that is forever scarred by September 11th. Almost immediately the media, policy makers, politicians, and members of the intelligence community quickly jumped into the fray to mete out blame and determine fault. This was especially disturbing considering that the intelligence community reportedly had credible intelligence on this man and possible threats to the U.S.

President Obama said it well when he stated "The system has failed in a potentially disastrous way,...The bottom line is this: The U.S. government had sufficient information to have uncovered this plot and potentially disrupt the Christmas Day attack,...But our intelligence community failed to connect those dots." Very chilling words.

Now international terrorism is far more serious, important, and wide reaching then corporate intelligence but there is still a lesson for the business community to learn. It is one thing to collect competitive information and it is a whole other thing to actively analyze and respond to this new found knowledge. We simply can't be satisfied that we are gathering information from the internet or trade shows. We need to adequately digest all of the information that we gather and act on what the intelligence says. Your inaction can lead to some serious negative consequences.

All companies should perform an internal audit to determine whether or not their current CI infrastructure is capable of connecting and acting on the disparate and distant dots that form actionable intelligence. Because we all know that it is one thing to passively monitor your competitive landscape and it is a completely other thing to harness this information in the development of sound corporate strategy.