BLOG #3 - Paper Topic

PAPER TOPIC IDEA:

My paper topic is on data mining and predictive analytics as a marketing tool.  The study of how consumers ACT in the marketplace can often be very different from what consumers think and say about what they want.  What are the implications of these revelations?  When a company gains insights about their customers in such a way, are they invading our privacy? Maximizing profit? Taking advantage of our subconscious? or simply providing a service that eliminates superfluous advertisements and gives us what we really want.

People say they eat healthy, but they buy junk food.  People think they have a discerning taste when it comes to wine, but they often can’t tell the difference between a $50 bottle and $10 bottle.  People think they aren’t affected by advertisements, by packaging, by brand names, by price, but each influences purchase decisions in conscious and subconscious ways. If predictive analytics can give a company insight into how a consumer is going to act without necessarily understanding why consumers act the way they do, is that risky? What is the company missing if they don’t analyze the qualitative alongside the quantitative?

WHY THE TOPIC INTERESTS ME:

The topic interests me because in my previous job, I worked for a startup marketing / public relations firm that primarily used ‘micro-targeting’ and other predictive analytics to allow companies to spend their marketing dollars in the most effective way possible.  Instead of analyzing purchase history and other customer data, we used extensive survey data correlated with demographic research and other consumer data (subscriptions, vehicle ownership, donations, etc) in order to extrapolate customer insights to the population at large.

The idea of a corporate ‘big brother’ is foreign to me, but very real for some of my friends.  Personally I could care less what a company thinks they know about me…as long as they are endeavoring to send me fewer coupons for crap I’m not interested in, I’ll be happy.  On the other hand, I do want to understand where those ‘pessimistic’ friends of mine are coming from and what really worries them about Target knowing they like crunchy peanut butter…or that their wife is pregnant. 

In addition, I simply find it fascinating to know how these companies engage in predictive analytics, what they use it for, and how effective it can be…especially when it discovers behavior that a consumer has difficulty articulating an explanation for.

CONNECTION TO CUSTOMER INSIGHTS / EXPERIENCE:

Analyzing large amounts of data to give us insight into customer behavior (and how and why they consume the way they do) can give us a unique understanding of how best to design a valuable customer experience that can sometimes be in opposition to what customers think they are looking for.  Data mining is essentially the study of massive amounts of data that reflect actions: a purchase, a subscription, the use of a coupon, the frequency of visits, the frequency of purchases, the consistency of purchases, the duration of product use, changes in shopping habits, and all sorts of other information.  If a company can analyze that data in a meaningful way, they can gain a better understanding of who their customer is and what they really want (not just what they say they want). 

A Duke University study on the subject estimates that “habits, rather than conscious decision-making, shape 45% of the choices we make every day”.  Other studies describe ‘habit’ as a conservation of brain energy during which we go into an auto-pilot state where we no longer weigh the pros and cons of a decision, we simply follow a routine.  If this is the case, designing a valuable customer experience must be highly adapted to facilitating ‘habitual’ purchases as well as creating new ‘habits’.  If a company can achieve this level of analysis and translate it into revenue without ‘freaking out’ its customers, it will be massively successful.

REFERENCE ARTICLE:

An interesting article on the subject was recently published in the New York Times by Charles Duhigg called “How Companies Learn Your Secrets”

http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html?_r=3&hp&pagewanted=all

BLOG #2 - Qualitative Research of Online Social Behavior

I’m not an outlier when it comes to social media…at least I don’t think I am.  I have a Facebook page which I visit numerous times a day; I post once a week and “like” 2-3 times a week. I have around 600 Facebook friends, but don’t “like” any brands, and the only non-friends I follow are musicians.  I have a Linkedin account, but other than setting up my page, my only activity is accepting contact requests.  I have a Spotify account which I use every day to listen to and find new music and I frequently send and receive tracks with my Spotify (Facebook) friends.  I read blogs but don’t write my own; I use Yelp but don’t post myself; and I don’t have a twitter account (and I’m confused by people who do).  I’m pretty sure I’m right in the middle of the bell curve of social media consumption and maybe farther down when it comes to production of social media.

If we assume I am a ‘typical’ user and producer of social media it doesn’t bode well for the companies that attempt to target me on the web.  Although I am relatively active online, I have NEVER clicked on an ad (be it on Facebook or anywhere else on the web).  Moreover, I don’t list very much information about myself other than the day (not year) I was born, my sex, where I live, and the bands I like.  Clearly a company could ‘mine’ my Facebook wall and learn more about me, but as of now, I don’t think that technology is very robust. 

Now, while some people find it ‘creepy’ to see that advertisements on Gmail or Facebook have clearly been directed at one of their ‘public’ interests, I find it almost quaint.   Let me explain.  I dream of a web experience where I get to benefit from the free use of robust, well-designed and customized applications and websites in exchange for viewing advertisements for products and services that I am really interested in.  Currently, this happens about 1% of the time and, as a result, I don’t engage in these ‘targeted’ advertisements.  So long as advertisers only make use of information I have shared publicly, I have no problem at all with them using that information to help educate me on what’s available in the marketplace.  In fact, I wish they would do it a lot better. 

Currently, the advertisements that I (and people like me) have learned to ignore on the web have no added value for us.  In fact, unless you count that they are paying for the free services I use, they currently have a negative value in that they take up space that could otherwise be used more effectively.  I look forward to the day when the ads I view online help inform me and facilitate purchases that improve my life.

On the other hand, advertisements are only a small piece of a company’s interaction with users like me on the web.  Until they can do a better job targeting ads and discounts to exactly the people who are interested in them, companies can use social media to target customers like me in two ways: via CONTENT and via SUPPORT. 

First let’s discuss ‘content’.  I spend more time on the web than I do on any other form of media.  If a company can entertain me on the web, I will pay attention to them and evangelize their brand.   I’ll repost, email, and share their ‘content’ for my friends to see.  This is the goal of every ‘viral’ web campaign out there, and for me it makes a lot more sense than a generic banner ad.  It builds brand awareness and it has its own intrinsic value separate from the product it is advertising.  As a consumer, if one brand can entertain me for 30 seconds on the web, I’m going to have a positive view of them compared to their competitor who wasted my time with a generic ad that I had to scroll past or suffer through in order to get to the content I was looking for.  Some brands that consistently excel at this in my mind are Audi, Old Spice, and Redbull, among others.

Second, there is ‘support’.  This type of social media interaction is targeted at existing and high-potential users.  These people either own the product or are actively researching the product for a potential purchase.  The aim here is to keep current customers happy and convince potential customers who are still on the fence.  In order to keep me as a customer, a company must have a way to answer my questions quickly and easily on the web.  I don’t just want a company representative, I want to hear from other users like me.  When I am researching a purchase, ads no longer hold any value.  I want to hear from existing users and learn how positive/negative their experience has been.  Apple is the gold standard in this regard.

It all comes down to trust in the end.  Social media users like me trust their friends and rely on their opinions.  We trust companies that we perceive to be smart, funny and stylish because, in the end, the products we use reflect on us.  I look forward to the day when I am no longer forced to suffer through ads, promotions, and discounts for products I have no interest in.  I realize that this will never happen completely, but currently, there is a lot of room for improvement.

BLOG #1 – Creating a Persona

“Kate” – A friend’s younger sister who is 7 years my junior.

            Kate is 24 and living in Washington, DC having recently moved there from New York City.  She grew up in Boston and just started to work for a new company (her second job since graduating from college).  Kate moved to DC on the suggestion of her cousin who lives in DC with her husband and young daughter.  Kate is an outgoing and attractive girl who recently broke up with her boyfriend in NYC.  She has more of a hipster style than the typical preppy girls who live in her Georgetown neighborhood and she has as many (or more) close male friends as female friends.  She loves live music and knows all the up and coming artists.  She lives with a roommate whom she has known since high school.  She doesn’t own a car or even have a driver’s license.

1. What does she think and feel?

           

At this point in her life, Kate is starting to think more about her career, but she also wants to have fun.  She is single in a new city and believes DC will be a fresh start.  Family is important to Kate.  She is very close with her brother who she left behind in NYC, but she is also very close with her cousin whom she views as an older sister / second mother.  She loves that her relationship with her cousin’s family gives her a sense of home in an unfamiliar city. 

Given that she just started a new job, Kate is preoccupied with making a good impression at work, learning the company culture, and understanding how she fits into it.  She wants to make friends at work and get to know them outside of work.  On the other hand she still wants to have fun in DC and meet cool new people.

She worries about making it to work on time and “leaning how not to fuck up” on the job.  She doesn’t expect this company to be her career and, to a certain extent, feels she needs to “fake it till you make it” at work.  She aspires to learn all she can and then move on to the next challenge.

           

2. What does she see?

Kate lives with her friend from Boston in a small apartment in Georgetown.  She goes out every weekend and often to work happy hours.  She works out every day at a local gym and runs home.  She takes the bus to work (or a cab when she is running late). 

            Other than her roommate, she has one other close friend in DC who went to Georgetown University and has a large social circle.  Social activities outside of work normally revolve around that group in local restaurants and bars that offer a myriad of specials and experiences tailored for her demographic.

            Kate lives and works in the same upscale neighborhood that boasts numerous shopping opportunities and significant temptation for someone living on her budget.  This is a “losing battle” according to her.

3. What does she say and do?

Kate appears to be a very confident individual.  She has her own style and generally does not feel the need to conform.  Others respect her for her individuality and sense of self.  She “spends way too much on clothing” and adopts a “work hard, play hard” attitude.  She likes to party and drinks most weekends.  She smokes pot occasionally among good friends and has not dabbled in anything harder since leaving New York (and her ex).

At work Kate feels the need to “tone down” her personality and sometimes has trouble switching into her “work persona”.   As a result, she feels less confident about how to act in the office.  She admits she is a bit naïve and bit gullible. 

           

4. What does she hear?

Kate listens most to her brother and her cousin.  She speaks to her brother daily and they are more than siblings, they are best friends.  He works in the music industry and she takes most of her cues from him when it comes to style, art, and music.  Kate’s cousin is her career mentor and she has sought advice from her frequently during the first month at her new job.  Her cousin is a very successful working mother and is, in many ways, her template for who she wants to be in ten years.

Kate’s boss is also a good mentor and luckily, laid back in his approach.  He encourages her to ask questions and is very honest with his advice (which sometimes contradicts what might be in the company’s best interest).

           

5. What are her pain points?

Privately, Kate worries about fitting in, about making new friends, about succeeding at work and being respected.  She is unsure of her abilities and unsure of her direction in life.  She is often frustrated by her weak will when it comes to spending more money than she should and freely admits she lives in the here-and-now more than she thinks about the future.  She worries about not taking the ‘real world’ seriously enough.

           

6. What does she hope to gain?

Kate wants her independence and will fight for it.  She would prefer an apartment of her own but can’t afford it.  She needs more money and would much prefer a salary that could cover the lifestyle she is trying to live in DC…this is her #1 obstacle.  Salary is certainly a measure of success for her and, although she feels lucky to have a good job, she feels the same stress about earning a good salary as she did when she was applying to college.

On the other hand, she does NOT want to be a slave to her job right now.  Kate enjoys living life and having fun (which she reminds me is what everyone older than her suggests she do).  In general her goals are more short term (for now).