facts or gut instincts? what makes for better marketing decision-making?

(The following is the first in a two-part blog-exchange on brand decision-making.  It is written by Joel Rubinson, the President and Founder of Rubinson Partners, Inc., a marketing and research consultancy, and former Chief Research Officer at The ARF.  Having met Joel years ago, I find he always inspires and challenges me with his insights and provocative thinking — this post is no exception.  My perspective on facts vs. guts will appear on his blog next week — stay tuned.)

What color is your brand decision-making?

Edward de Bono is a leader in creative thinking processes who authored a book on the Six Thinking Hats.  Two of the hats are:
• Information: (White) – considering purely what information is available, what are the facts?
• Emotions (Red) – instinctive gut reaction or statements of emotional feeling

I find that organizations tend to be made up of people who are either white hat or red hat and they often do not work well with each other. Consumer insights and sensory researchers are generally white hat while the brand and customer marketing teams and designers are red hat (“my instincts got me here”). Media researchers are often analytics-driven white hat folks while creatives and agency planners are usually red hat. Brand and innovation teams often prefer to create an innovation initiative based on their instincts or consultants they work with who are rooted in careful ethnographic study of 12 people delaying the dreaded moment of the researcher conducting the concept or ad copy test.  Not a good dynamic.

Well, I’d like to propose a different model.

Consider that 80% of new products fail, 50% of ad campaigns never show sales lift, yet researchers test things at the 90% confidence level.  I mean, huh??  Obviously marketing is game of hunches but if we can ground those hunches in facts, we’re onto something.

We need to use the past but not be shackled by it.  The media world which managers rely on to bring their brand communications to consumers is evolving way too fast.  If you wait for hard evidence on something like leveraging advertising possibilities in smart mobility you will be last in.  You need some creative leaps.

So the model I propose is that we think in terms of belief repositories that are fueled by hard evidence but that these beliefs can lead marketing teams to make investments where no experiment or marketing mix model has yet been run.  Very Bayesian and actually, I believe this is how marketing teams need to think anyway.  If the insights team is going to have an impact they need to embrace this model.  Prove a new belief or disprove an old one but let marketers still act on their instincts based on these beliefs.

Here’s an example of how this works.  Many believe that Facebook is a place where a marketer can build engagement for their brand because what can be more enduring than getting someone to friend your brand on Facebook?  BFF, right?  Well actually, I have gotten some ahas by showing marketers that digital engagement marketing is really about getting people to spend time with your brand and then showing that this does NOT occur in Facebook.  For brands I looked at, mostly, less that 1% of fans revisit the brand page in a given month, meaning that mostly, brand friending gives the marketer a broadcast channel for updates.  On the other hand, people spend lots of time when they visit your website (usually in the 3-10 minute range per visit).  A case I looked at is Starbucks.  From the data I’ve seen, Starbucks has more than 10 times the fans on Facebook as it has visitors to its website, yet those website visits generate 10 times the number of minutes that people spend with the brand.  A new belief about building brand engagement is born in this way, rooted in evidence.

Marketing decision making is about taking actions whose consequences live in the unknowable future. The belief repository system calls for hard evidence (e.g. study the data on time with brand) that changes the beliefs (e.g. owned media is where I build customer engagement) and then you make marketing decisions from there.

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