Image Credit

Effective product marketing requires that you really know your customers

As product managers we spend a lot of time creating ways to tell customers all about our fantastic product. Too bad that often the brochures, white papers, direct mail, and case studies often fall on deaf ears. It turns out that we’re actually doing a couple of things wrong: we’re not listening to our customers and we’re not talking to them in the way that they want us to. Looks like we’ve got some work to do here…

Step 1: Find Out How To Talk To Your Customers

When someone buys one of our products, you would think that we’d take the time as part of the purchase process to find out what the best way to contact them in the future would be. However, it turns out that more than often we just get their email and phone number and proceed to use them willy-nilly.

What we should be doing is asking our customers what the best way to contact them is. While we’re doing that we should probably also be asking them how often we should be contacting them. I can tell you that too many of us aren’t doing either of these things.

The good folks over at Forrester Research did a study in 2009 in which they asked product marketers what contact information they collected on their customers. Here’s the depressing information on what they found out:

• <33% captured a customer's preferred method of delivery
• 29% captured the type of content that the customer wanted to receive
• 12% captured the customer’s desired frequency for receiving emails
• 8% captured the customer’s desired frequency for receiving direct mail and telemarketing calls
• 30% of marketers who captured at least one type of preference data took no action based on that customer preference.

Step 2: Personalize Your Communications With Your Customers

I’m going to hope that everyone understands that the more that you personalize your communications with your customers, the better the results of those communications will be. However, all too often product managers either can’t or don’t pull together the customer information that is needed to do this job well.

The sad part about this is that more often than not we have all the data that we need. However, that data is not stored neatly in one place. Rather it may be spread across multiple databases within the company.

This can include critical personalization information such as when they made their last purchase. If you can’t get you hands on this data, then you’re going to end up doing the classic ineffective marketing technique of sending out product information in a “spray and pray” fashion.

Example: The Ford F-150 Pickup Truck

An example of how to do things correctly comes from the Ford motor company’s product managers. They wanted to offer their extended warrantee product to their F-150 pickup truck customers; however, their impersonal approach in which they simply used the customer’s name just wasn’t doing the trick: they had a 2.5% response rate.

Determined to make their customer contact more personal, the Ford product managers went back to the company’s databases and pulled together all of the information that they could on the people who had bought their F-150 truck. This included things such as vehicle type, how long they had owned it, address, age, income and gender.

Using this type of information they were able to personalize how they interacted with each customer. This went so far as being able to send them material that contained a picture of a correct gender person standing in front of the correct model F-150 which was painted the same color as the customer’s.

By doing this, Ford saw a 5.7% increase in their response rates and a whopping 35.7% increase in their sales penetration. Not bad results for what was basically some behind-the-scenes database work.

What All Of This Means For You

Product managers will forever be responsible for creating material that will be used to interact with your customers. As long as you are going to go to the effort of creating these flyers, white papers, mailers, etc., you may as well make them as effective as possible.

The best way to do this is to take steps to personalize your interaction with your customers. You can start doing this by collecting information on how they want you to contact them. Additionally you’ll want to find out how often they are willing to allow you to reach out to them. Finally, you’ll need to pull together all of the information that your company has on your customers and use that when creating material to send to them.

Personalizing your interaction with your customers is not impossible to do. However, it does take some work on your part and you will need to collect data that may be stored in multiple locations. Take the time to do this right and the rewards will make the effort well worth your time.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Once you’ve collected all of your customer information, what’s the best way to keep it up to date?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

If you asked a product manager what the scariest part of their job is, I think that you’d get a lot of them telling you “pricing”. It’s sorta a black hole – you make a guess, cross your fingers, and then hope that enough customers buy your product at a given price and that you’re not leaving money on the table. On top of all of this, it turns out that there are 7 common pricing mistakes that product managers make – are you guilty of making any of these?

No related posts.

Image Credit

There Have Got To Be Some Limits On How Much We Know About Customers

It’s sorta the Holy Grail of product management – to become so intimate with our customers that we can almost read their minds. Now while that may sound like a great idea, have any of us taken the time to consider what our customers might be thinking about us doing this?

Information Blending: Good Thing Or Bad Thing?

This whole question about having lots and lots of information on our customers has only really started to surface in the past few years as computers have gotten faster and the Internet has made sharing information almost ridiculously easy. However, just because something is easy to do, doesn’t necessarily mean that we should be doing it.
Emily Steel reports that a company called EXelate Media is in the process of creating an alliance with a company that we all know: Nielsen – you know, the company that keeps track of who watches what on TV. The reason that this announcement is generating so much interest among product managers is because really for the first time, EXelate’s captured information on 150 million web surfers will be able to be combined with Nielson’s captured behavior information on 115 million American households.
What this means for your customers is that when they go online, now there is the possibility that they may be seeing very, very targeted ads. Just think about for a moment: if you know a web surfer’s age, race, gender, profession, and marital status and you knew where they had been surfing in the last month or even year, what would your product’s ad look like?
The way that EXelate has collected their information on your customer’s web surfing habits is not really rocket science. What they’ve done is to strike deals with lots and lots of web sites and then they’ve scanned all of the registration data that you and I entered when we registered to use those web sites.
They next created web “cookies” that are placed on a user’s hard drive when they visit one of the sites that they’ve registered to use. This cookie allows surfers to be identified to other sites that have subscribed to EXelate’s service – when you drop by, they can look up a lot of information about you.

The Down Side To Too Much Information

As you may have already guessed, this explosion of personal data being made available to marketers is starting to cause some concerns. The Federal Trade Commission (FTC) has started to hold meetings to talk about this very issue.
Just because I like the color purple and I eat lots and lots of lime Jolly Ranchers doesn’t mean that I’m going to appreciate seeing ads starting to pop up on my browser for your blue widget product telling me that “4 out of 5″ purple loving, line Jolly Rancher eating people have bought your blue widget. In fact, when consumers start to realize that data is being combined from multiple sources, they may flat out rebel.
For right now, marketing firms are saying that they understand the issue and that they handle consumer’s personal data very carefully. They say that no individual can be identified by the data that they have because they’ve stripped out any identifying info.

What All Of This Means For You

Yes, knowing more about your potential customers is always a good thing for product managers to do. However, in this modern age it may be possible to know too much about them.
The arrival of firms that track consumer’s online surfing habits and their alliances with traditional consumer behavior tracking firms has created a super tracker hybrid firm. All of a sudden, a great deal of information may be known about any customer that visits a web site.
If consumers believe that you know too much about them, they will push back. Product manager realize that as with all powerful tools, they are going to have to go slow and make sure that they don’t spook their customers by knowing too much…

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Help™

Question For You: If you had the opportunity to know what your customer’s web surfing habits were, would you use that info to reach them?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

Into every product manager’s life will arrive opportunities to make decisions, really, really important decisions. When this time comes, will you chose to take your product the right way or the wrong way? Perhaps more importantly, will you allow your customer to make the wrong decision with your product?

No related posts.

Product Mangers Need To Monitor Social Networks

Boy, oh boy do I have a story for you today. I’ve been working with one of my customers who has decided that they need to improve how they communicate with their customers. Having read all of the industry rags, they’ve decided that they need to set up a social networking site for their company / product. Sounds good so far doesn’t it?

This is where the problem comes in: they want to control the discussions. Oops, looks like someone doesn’t quite get the “social” side of social networking. Yes, having your customers talk about your product can be a very good thing. However, in exchange for this potential goodness, you’ve got to give up some control.

No matter whether you set up your own social networking site or if you just use exiting ones such as Digg.com, Del.icio.us, FaceBook, MySpace, or LinkedIn, as a product manager you’ve got your work cut out for you. Since you can’t control the content on public social networks (and shouldn’t on your own), you need to be a participant. Replying to their comments and posting your own suggestions will make you a part of their social network.

Don’t make the mistake that some product mangers have made and try to pass yourself off as a happy and satisfied user – it generally comes across as quite lame.

Listening to what your customers are saying about your product can provide valuable information on changes that you need to make to your pricing, features, etc. What you’d really like to be able to identify are bloggers or commenter’s who are sources of power – others listen to them.

If you can find these people, it would be worth your time to cultivate a relationship with them. Offering them free copies of your next product with no strings attached can be a great way to get a (hopefully) positive review out there just as your next version launches. However, keep in mind that you can’t control the review!

I ended up working with my customer to make them understand that the value of a social networking site for their customers that their customers trusted (no content edited by the firm), was so valuable that it was worth the risk of the occasional negative product comment. They went ahead and implemented it and have been thrilled with the results that they have seen so far.

Do you watch the social networking sites to see if people are talking about your product? Have you set up your own social networking site? How do you deal with negative comments about your product? Do you interact with power commenters? Leave me a comment and let me know what you are thinking.

No related posts.

Product Managers Need To Use Probability Models Along With Data Mining Tools

Data, data, who’s got the data? Thanks to our luck of being product managers in the 21st Century we are privileged to have access to quantities of data about our product and our customers that product managers of old could only dream about. However, is this really a good thing?

Dr. Peter Fader is a professor of marketing at the University of Pennsylvania’s Wharton School. He spends his days studying how to use behavioral data to forecast product sales and manage customer relationships. What really made him famous was way back in 2000 when he testified at the Napster trial and said that Napster had actually boosted music sales!

Fader really knows his stuff and he’s got some stern words for us product mangers. When it comes to collecting data on our products and our customers, we’ve been doing a pretty good job. However, Fader says that how we’ve been using this data is not so good. He says that we’ve been attempting to make conclusions and future predictions that just don’t hold up. Oh, oh. Looks like it’s time for us to go back to school…

Fader says that what we are doing wrong is that we’ve just been doing simple data mining of our data. He says that what we need to be doing is to combine data mining with probability models. Can you say “math”?

Data mining is a great way to classify data. Specifically, if you are trying to figure out WHY one group of people is different from another group, then data mining tools and techniques are the way to go. However, data mining is not very good at saying WHEN things will happen.

That being said, data mining can be used to answer certain time-sensitive questions like what customers will order  a given product during the holiday season. Where it will fall down is when you want to make a forecast about about what particular customers might do in the future – not just what product they are likely to buy next.

What product managers have been missing is that our customers are creatures with random behavior. No matter how much data you collect about them or your product, you’ll never collect enough information to accurately answer these sorts of questions.

At the end of the day, Fader reminds us that there’s only so much that we can ever hope to nail down just by capturing more data.

What Fader suggests that product managers start to do is to use probability models along with data mining. What he’s getting at is that for all of our talk about one-to-one marketing, we’ve really been missing the ball. Fader says because people are random, we can’t really say what any one customer is going to do. However, we can say what a group of customers will do (just not what any specific customer will do).

Fader says that by using probability models, product managers can answer three important questions about their products: timing – how long will it be until something happens, counting – how much of something (arrivals, purchases, etc.) will we see over some period of time, and choice – if we give our customers an opportunity to do something, how many of them will actually do it?

If you take these three questions, you can combine them in a number of interesting ways in order to get answers to more complex questions. For example, how long someone spends on your web site during a month is really two timing counts put together: number of visits and duration of each visit.

So, to wrap this discussion up, what Fader is suggesting that we do is to start with probability models to create forecasts for how long a customer will stay with our company or how many times they will buy from us this year. Once you have this basic behavior captured, then use data mining to get an understanding of why groups of customers who have different behavioral tendencies are so different from each other.

Do you use data mining to try to better understand your customers today? How has that been working out for you? Do you use probability models today? Do you think that they would work well with your data mining tools? Leave me a comment and let me know what you are thinking.

No related posts.