You'll Never Get Everyone to Love You!

This blog is going to go against your every human instinct. Though it will logically make sense, many of you will disagree. That's good, I'd love some good ol' fashioned argument here -- change my mind!

We all have an innate need for the approval of others. We want people to like us. Many of us take it personally if even one person doesn't find us groovy.

"It's not personal, Sonny ... It's strictly business."

~ Michael Corleone

But as marketers, it isn't personal ... it's strictly business. Yet, we focus so much of our attention and energies on trying to make sure that every single person in our communities love us. Seriously, how many times have you discussed changing a policy because 3 or 4 people complained?

“Criticism is something you can easily avoid by 

saying nothing, doing nothing, being nothing.” 

~Aristotle

Aristotle ... if nothing else, THAT cat knew branding!

From a branding perspective, we are trying too hard to be all things to all people and trying so hard to avoid criticism that we become branding's brown paper bags.

So, here's the beautiful truth ... as a public service to help you sleep better at night.

In most larger markets, if you have only 30% market share, you will be the largest institution in town.  With only 15% market share, you'll typically be #2.

Whew! Think about the weight that just lifted! If 1 in every 3 people like you enough to do business with you ... You win! If 1 in 10 like you, you're doing GREAT!

To have an impactful brand, stop trying to appease everyone and be something meaningful to a focused group of people.

So now that we know that not everyone will ever love us, who do we focus on?

Check out these blogs on segmentation:

• 8 Life Stage You Should Market To
• Mirror Modeling and Birds of a Feather

Identify who your desired target is, learn what they want from you, determine if you can provide it, then make darn sure that you are THAT thing down to your very soul. With every interaction, every new hire, every policy and every message.

We bring these marketing philosophies to credit unions and community banks nationwide, and would love to bring them to your institution too. Contact us to see how.

Nearing 240,000 visits worldwide, we hope that you enjoy this blog.  If you find it helpful, please share it with your colleagues. Also, check out our YouTube Channel for short video blogs about financial marketing.  

MarketMatch is also a nationally and internationally requested speaker. Contact us to bring our marketing ideas to your next conference.

Here are the conferences where you can find MarketMatch.

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937-426-9848

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Banks and Credit Unions Must Improve Cross-Selling Efforts

Despite the fact that banks and credit unions have talked about the importance of cross-selling for decades, few institutions have a disciplined process to take advantage of cross-selling opportunities that can grow operating revenue from existing customers. 

For those organizations that do have a process in place, studies show that many are not targeting the offers to reflect insights readily available, thereby annoying some of the best customers.

Outside of an improved interest rate spread (which is unlikely in the foreseeable future), banks can only create revenue by adding new customers or by deepening existing relationships. At a time when competition for new customers has never been greater from both traditional and non-traditional players, the only sustainable opportunity is to sell more to the customers a bank or credit union already has.

While the findings differ a bit by study, research shows that U.S. adults own between 8-12 financial products each, with ownership of services increasing with age (until age 54), by channel (online users have more products) and by type or institution (credit unions and smaller banks do better cross-selling).

Forrester: North American Technographics Benchmark Survey, 2009

Forrester: North American Technographics Benchmark Survey, 2009

While the number of products held by a typical household hovers around 10, most customers only hold 2-3 services at any one institution. Only the very best organizations sell more than four services to any one customer (not including 'go with' services such as debit cards). How can banks improve their penetration within their current customer base?

Sources of Sales

According to the most recent Gallup U.S. Retail Banking Survey, which asked 9,000 financial service customers how they engage with their bank when they purchase a product or service, one in every five customers opened a new account or signed up for a new service from their bank in the last six months. The vast majority of these sales (59%) came from customer already planning to open an account or buy a new service (the bank did not need to do any marketing to these customers since they were going to take this action without any selling).

The rest of the potential customers include 1) those who were considering opening an account but needed additional prompting (33%), and 2) those who were not considering opening an account, but did so with some prompting (8%).

Source: 2013 Gallup U.S. Retail Banking Survey 

What is important about the 33% of customers who are considering buying a product, but hesitate until they receive something from the bank or are talked to, is that the bank that 'wins' is usually the bank that understands the timing of the decision, has the best relationship and knows the offer that will best resonate with the potential buyer.

Not to be ignored are the 13% of the customers who Gallup found at one time considered buying an additional product or service at the bank, but opted not to do so. These are lost opportunities as well.

Gallup also found that customers who are 'fully engaged' with a financial institution are much more likely to buy an additional product from the bank or credit union than those who are just 'satisfied'. This makes sense when you consider that a customer could be very satisfied with a financial institution that they have an account with but don't do much with the account (mortgage only customers, CD customers without checking accounts, etc.).

For example, while less than 45% of 'satisfied' households surveyed by Gallup said they would consider their bank or credit union the next time they needed a product or service, that consideration increased to 83% among customers who were both satisfied and 'engaged'. In fact, customers who are engaged said they were more likely to open a new account, add ancillary products and services and/or obtain planning advice than those customers who are just satisfied.

Source: 2013 Gallup U.S. Retail Banking Survey

The Buying Process

As has been discussed in several other research studies in the past couple years, banking and credit union customers do a significant amount of research before purchasing a product or service. In the Gallup research, it was found that more than half of the customers considering buying a new product seek out information prior to the time of purchase. In fact, the research found that customers who looked for information had a 17% lift in eventual sales conversion rates.

The key for financial institutions is to identify the most influential information sources for converting the 'pondering' customer to being a 'sold' customer. Not surprisingly, the Gallup research found that social media was the most effective channel used by customers that lead to a sales conversion. What may be a surprise to many is that written material (direct mail and email) was the second most effective selling tool for banks and credit unions.

Source: 2013 Gallup U.S. Retail Banking Survey

Interestingly, the channels with the highest cost to the bank (speaking to someone in the branch or a customer service representative over the phone) provided a relatively smaller lift in sales conversion even though they are primary sources of information for potential customers.

The requirement for banks and credit unions to manage multiple communication channels to effectively and efficiently move potential customers through the sales funnel is a difficult challenge. Gallup believes financial marketers should ask themselves the following questions as they allocate resources.

• Do we know where our customers, specifically, are looking for information prior to purchasing?
• Are we delivering a consistent message across sales information channels?
• How do we balance our resources between those channels that are high impact in conversion but low in usage (i.e. social media) vs. those that are high in usage but have lower impact in conversation (i.e. spoke to someone in a branch)?
• Do we know what our customers value in a bank and are we delivering on the message at every touch point?
• Do we know what actions we need to take to increase conversion rates in each channel?

Improving The Cross-Sell Process

While what qualifies as a 'cross-sell' may differ between financial organizations, the cross-sell ratio is still the number of products and services sold divided by the number of customers (or households). The key to boosting the ratio is to accelerate the rate and effectiveness of sales conversations. While I have covered some ideas around cross-selling in previous Bank Marketing Strategy posts (here, here, here and here), Gallup provided some great insights into how to improve cross-selling effectiveness.

1. Define and measure cross-selling: As I mentioned above, there are many ways to define products or customers as it relates to cross-selling. Since there are no industry standards, it is difficult to compare different institutions. It is not difficult to set a definition for your bank, however. The primary decisions are whether to include 'go with' services within the product category (debit card, online banking, mobile banking, bill pay, direct deposit, etc) and whether a cross-sell ratio includes only retail banking products and customers/households or small business, investment services and commercial customers/products as well. The key is to keep the measurement within your organization consistent and meaningful.

2. Analyze the drivers of cross-selling: How is your organization's cross-selling ratio trending over time? What is impacting your cross-selling trend? Your trend is most likely impacted by the following:

• New customer acquisition: As new customers are acquired, the cross-sell ratio decreases if your team is not cross-selling new customers at or above the current cross-sell rate.
• New customer cross-selling: There is no more important time to cross-sell than during the onboarding process. If your institution does not have a multichannel, onboarding process with multiple 'touches', new customer acquisition is probably negatively impacting your cross-selling ratio.
• Existing customer attrition: Attrition of established relationships due to moves, etc. can negatively impact your cross-sell ratio if the relationship is not replaced with a similarly strong engagement. On the other hand, the culling of low engagement, single service relationships can dramatically improve your cross-sell ratio.
• Existing customer cross-selling: Building a proactive, targeted and consistent cross-selling strategy can improve your cross-sell ratio over time and set the stage for improved revenues and lower attrition (customers with more services are less likely to attrite).

3. Build the cross-sell message into your vision and values: Cross-selling requires more than lip service. To be effective, senior management must embrace and continuously communicate to importance of cross-selling to both the bank and the customer. It should be published, posted, presented and reinforced continuously both within the bank and to the general public. Wells Fargo has made cross-selling part of their internal mission statement and vision for more than a decade. It is posted for their employees and is made public on their web site and presented as part of every investor meeting (see Wells Fargo case study below).

4. Provide metrics for employees to measure performance: Building an employee measurement and performance component to your cross-sell process is imperative to success since employee engagement is required for cross-selling to be effective. Setting standards for employees on a customer level will improve cross-selling and ultimately increase revenues.  

5. Identify and share branch level best practices: When measurement is done on a branch and regional level, causes of variations begin to become clear. While some of the variations are out of a branch's control (market differences, branch location, etc.), other variations are caused by controllable factors such as leadership, employee engagement, training, etc. It is important to find 'success stories' and share them across the organization to improve results across the board.

6. Improve the cross-sell communication process: As can be expected, the effectiveness of any cross-sell process depends on the quality of customer communication through every channel. This obviously includes improving the employee-customer engagement but also includes every marketing engagement with the customer through all channels.

Unfortunately, according to the Gallup study, financial marketers could definitely improve cross-sell communications with current customers. Sixty-six percent of 'fully engaged' customers felt the offers they receive are 'general' in nature, 41% found the offer annoying, and stunningly, 53% of customers already had the product being promoted (Ouch!). Of significant concern is that the most engaged customers (the ones most likely to buy) felt they were targeted worse than those who were less engaged.

Source: 2013 Gallup U.S. Retail Banking Survey

Gallup suggested several keys to making your cross-sell marketing program more effective:

• Identify the most engaged customers (accounts held, transactions made, etc.) and review the products already held with your institution
• Model the best relationships as the foundation for building similar relationships with less engaged households
• Make product recommendations based on event-triggers, account ownership trends, market changes, etc. Increase insight gathering from customers to improve this process.
• Make sure marketing offers are customized based on the customer relationship regardless of channel being used for marketing (provide flexibility to employees and personalize all marketing communication).
• Leverage analytics on previous behaviors on the customer/household level to improve targeting, timing and offer selection.

7. Implement a short-cycle sales management process: Promote an environment that cultivates immediacy, focus and continuous improvement through daily huddles, short term result monitoring (weekly as opposed to quarterly). Breaking down major initiatives into 'bite sized' portions makes the accomplishment of major goals palatable on the individual level and promotes team engagement. Both actions and outcomes should be broken down in this manner. Commitments from individuals and teams are easier to measure as well.

8. Recognize and reward: Simplicity and frequency are the key. Most financial institutions over-complicate recognition and incentives, diluting the potential impact of the program. All activities and behaviors that drive cross-selling should be recognized and rewarded. Money may not be the only reward either. Sometimes recognition can be just as impactful, especially for shorter term accomplishments.

Improving cross-selling is difficult to do and even more difficult to maintain over time. Since returns on investment are sometimes slower and more incremental than major product promotions, financial institutions often place cross-sell initiatives further back on the burner or give these initiatives less attention. This has been seen with onboarding and event-trigger programs that represent 'easy money' once implemented.

Unfortunately, given the current rate and revenue environment, banks and credit unions can no longer implement cross-sell programs as a short-term focus or miss opportunities that are there for the taking on a daily basis. All marketing channels need to focus on selling current customers the right product, at the right time, through the right channel leveraging the insight we have on each individual customer.

If we don't, our competitors will.

Case Study of Financial Cross-Sell Success: Wells Fargo

Wells Fargo's obsession with cross-selling is legendary and starts at the top of the organization. The vision of the bank is that service and salesmanship are at the core of how the bank can continue to be successful and that if silos within the bank are broken down, cross-selling will flourish.

As opposed to just saying cross-selling is important, however, senior management continues to make this effort a primary focus of the bank and goes out of its way to show the value of cross-selling for both the bank and the customer. 

In fact, within the published vision of the bank that is available on the Wells Fargo web site is the bank's published strategy around cross-selling which illustrates the connection of value to the customer:

"The core of our vision-based strategy is 'cross-selling'— the process of offering customers the products and services they need, when they need them, to help them succeed financially. The more we give our customers what they need, the more we know about them. The more we know about their financial needs, the easier it is for us to work together for them to bring us more of their business. The more business they do with us, the better value they receive and the more loyal they become. The longer they stay with us, the more opportunities we have to satisfy even more of their financial needs. That’s the mutual benefit of cross-sell."

In a presentation at the 2013 Citi Financial Services Conference, Senior EVP and CFO Tim Sloan reinforced this overarching strategy and showed that Wells Fargo continues to achieve industry leading cross-sell rates, with their average customer having 6 products at the bank and their top region approaching a cross-sell rate of 8 products per household.

Source: Wells Fargo Investor Presentation at Citi Financial Services Conference (March 2013)

According to Sloan, "We've remained focused and have continued to grow cross-sell across our business lines. We have successfully grown cross-sell in our retail bank overall, and as tenure with the bank increases, the customer has more products with us. But, we also have many opportunities to continue to grow cross-sell with our average customer as we look at the potential of the average household." (note: Wells Fargo includes 'go with' services in their cross-sell measurements)

Source: Wells Fargo Investor Presentation at Citi Financial Services Conference (March 2013)

Sloan continued in his Investor Day comments, "We believe we can continue to grow cross-selling because we have many opportunities to increase penetration across our product lines. For instance, we've continued to increase the penetration of certain consumer lending products in our retail household base since last year's Investor Day. In particular, we've had great success in our credit card area, with new credit card account penetration increasing to 33% of our retail household base. Despite this success, we believe the penetration is still too low."

Source: Wells Fargo Investor Presentation at Citi Financial Services Conference (March 2013)

Wells Fargo's commitment to cross-selling extends beyond the retail customer base and is measured in the Wholesale Banking, Investment Banking, and Wealth, Brokerage and Retirement (WBR) areas of the bank. The impact of this cross-sell focus is that fees at Wells Fargo continue to grow in all areas of the bank as new relationships are established and current relationships are expanded.

Source: Wells Fargo Investor Presentation at Citi Financial Services Conference (March 2013)

Wells continues to improve cross-selling without being the lowest cost option in the marketplace. According to Sloan, it is because the people on the front line are focused first on building the overall customer relationship.

Here is a direct quote from his Investor Day presentation:

"You don't build long-term sustainable value to shareholders by just being the lowest price option, you have to offer an entire relationship to a customer.

So when we go out, we want to win business. And sometimes to win the business in terms of providing credit for example, you have to be competitive on price. Sometimes that means you're lower, sometimes it means you're in the mix and sometimes you might be towards the higher end. But the reason that we've been able to demonstrate these returns, even if we are aren't very competitive on price is because we have a relationship focus and you've seen what we've been able to do in terms of broadening those relationships over time.

So when I was out on the line or when I think about pricing today, I don't think about it as, geez, this is the loan pricing. I think about what's the total relationship worth? And does it make sense to make some sort of investment to bring the business over so we can get the rest of the products and services over time without [tiring] obviously, but the rest of products and services over time and being able to grow that relationship. 

Because we have confidence in our team because they've been able to demonstrate to do that, that's an easy bet to make every day of the week."

Additional Resources

Banks: Stop Missing Sales Opportunities - Gallup Blogs (May, 2013)

The Secret Weapon Banks Aren't Using - Gallup Business Journal (May 2013)

2013 Citi U.S. Financial Services Conference Presentation (Tim Sloan Slides) - (March 2013)

Banks Can Do Better Than Modest Revenue - Gallup Business Journal (May 2013)

Banks: If You Want More From Your Customers, Rethink Your Marketing Efforts - Gallup Blogs (May 2013)

Banks That Only Measure Satisfaction Are Leaving Money On The Table - Gallup Blogs (May 2013)

The Bank That Works - Forbes (February 2012)

Solving The Cross-Sell Imperative In Financial Services - Forrester Research (September 2009)

Keys To Cross-Selling Success - BAI Banking Strategies (September 2011)

Demographics No Longer Effective For Financial Direct Marketing

Bank and credit union marketers have traditionally relied on the use of demographic segmentation as a means of targeting customers for product and service communication. 

Recent studies, however, provide growing evidence that changes in product delivery, communication channels and competition may have made a demographic-based targeting approach much less effective compared to other approaches that use additional data sources.

Marketing segmentation is one of the most widely used marketing tools and has long played a crucial role in identifying and treating differences among customers. For decades, bank and credit union marketers have used demographic segmentation for product development, product positioning, marketing communication and results measurement. Traditionally, this segmentation has been done based on characteristics such as age, income, gender, family life stage, occupation, education, race, etc.

The reason for using demographic segmentation is that it is relatively easy to use for most financial institutions due to relatively accessible customer databases and because this form of segmentation is continuously referenced by both academic and trade literature. While it is still true that there are differences in the use of financial services across demographic segments, however, research as far back as the 1960s has suggested that demographic variables are only remote proxies for differences in buying styles, decision processes or sensitivity to promotional influences (A Two Dimensional Concept of Brand Loyalty).

A more recent research paper in the Journal of Financial Services Marketing entitled, Suboptimal Segmentation: Assessing The Use of Demographics In Financial Services Advertising found that there is little support for the reliance on demographic variables for bank marketing. Despite continuing popularity, the research found that while demographics can explain broad behaviors, they play a weak role in explaining brand preference, product purchasing, innovation adoption, channel use and technology uptake.

The explanation provided by the research indicates that customers today are better educated, more individualistic, more marketing literate and more influenced by the convenience of new channels and product offers than the customers of the 1960s and 1970s (when demographic modeling first came into vogue). The result is a significant fragmentation of the marketplace into much smaller groups that can't be defined by age, income, and other simplistic variables.

For the research, customers of the banks analyzed importance scales on 28 service related comments that related to nine key financial service factors such as website appeal, trust, customer service (pre- and post-sale), how the customer gathers insight, ease of contact, appeal of marketing, appeal of personalization (both in marketing and on the website), brand image and products used. The responses were analyzed against five demographic measures:

• Age
• Gender
• Income
• Occupation
• Education

Overwhelmingly, significant differences between demographic groups were not found, suggesting that demographic segmentation is a suboptimal basis for targeting marketing to customers. This should not be a total surprise to bank marketers if they were to do a simply straw poll of their demographically similar friends to see what services they hold, how they transact their banking, how much they trust the banking industry and their willingness to try new technologies.

More than ever, interests, opinions and overt behaviors are a much better indicator of customer demand according to the recent studies around the use of 'big data'. How does the customer save, spend, and transact is a much more powerful determinant of future financial product purchase and use patterns than the demographic profile of a customer.

Beyond Demographic Segmentation - External Tools

Part of the challenge of going beyond demographics for financial services segmentation is that some key data elements may be missing on a banks customer database or may be difficult to collect for modeling purposes due to internal data silos (product use, channel use, spend and payment data, etc.). Secondly, the difficulty and/or cost of acquiring some primary customer data may be prohibitive (social insights, credit insights).

In response to these needs, some tools have been developed using census-based (non-personal) insights. Many of these have been marketed by credit bureaus and other providers, providing more accurate geodemographic classifications that can be overlaid on customer profiles for better targeting and analysis. A summary of the segmentation advances made by bank marketers can be found in another research paper entitled, The Evolution of Segmentation Methods in Financial Services within the Journal of Financial services Marketing.

Within the context of the evolution of bank segmentation, some financial organizations have created needs-based segmentation that combines, age, family structure, age of children, etc. While some of this data is difficult to compile, it helps in the determination of produce needs and use. PriZm from Nielsen is a good example of segmentation based on lifestyle and lifestage. As with the geodemographic segmentation above, this type of lifestyle segmentation is not done at the household level but is approximated based on neighborhood insight. The power of this type of tool, therefore, will depend on how it is used (modeling, analysis) and how important personalized data is to the needs of the marketer.

Beyond Demographic Segmentation - CRM Tools

At its core, CRM is primarily concerned with obtaining knowledge about the customer at three levels:

• Understanding the demographic composition of the customer
• Understanding how the customer interacts with the bank (what products are held, what is the balance of the accounts and how do they use the service(s)
• Understanding channel use and preferences
• Understanding how to leverage this insight to sell more and prevent attrition

Understanding a customer's channel preference for purchasing new products and transacting with current products is invaluable for banks and credit unions that have both extensive physical networks but also evolving online and mobile channels that impact a customer experience. 

Organizations without channel preference insight from a marketing perspective are at a competitive disadvantage and are apt to be wasting significant marketing dollars. Similarly, those banks that simply defer to email and/or online or digital channel are also missing significant opportunities from consumers who prefer traditional channels. 

While third party tools have been developed to approximate consumer channel preferences, research has shown that channel preferences differ between most other industries (retail) and financial services. By understanding customer demand for each channel, institutions are able to optimize channel mix and allocate resources accordingly.

Behavioral Segmentation

Behavioral marketing is gaining followers within the marketing community while the dimensions of how to segment based on behavior differs from institution to institution. While some organizations will segment based on internal purchase, payments, and/or use dynamics, others are expanding the realm of behavior captured to include digital and/or social behavior. 

Decisions as to what behavior to include usually is based on access to insight and ability to process the insight. As was intended by demographic segmentation, the goal of behavioral segmentation is to divide the customer (or prospect) base into quasi-homogeneous groups that align with a bank marketers' business strategies.

A new report from Aite Group entitled, A Behavioral Segmentation of Banking Customers, uses a customer's financial activity to distinguish between segments, providing insights into purchase behavior, likelihood of referrals, interest in deals, revenue potential, risk of attrition, etc. By assigning a score to the frequency of various financial activities, insight can be gained regarding marketing opportunities (and risks) by segment.

"Segmenting consumers by how many products they own or whether they are of a certain age, income classification or educational status does very little to help banks or credit unions improve marketing effectiveness," stated Ron Shevlin, senior analyst for Aite Group and author of the report (available here). "Tracking customers' engagement is a much better predictor of customer relationship growth and referral behavior, and it helps banks and credit unions improve the relevance and focus of their marketing communications."

Interestingly, as with any segmentation or grouping of customers, there are risks to making broad assumptions with the insight. For instance, in the Aite report, highly active customers provided both an excellent source of relationship growth and referrals but also were more likely to attrite (consistent with their high activity and comfort level with channels). That said, the report found ways to make this highly active group more engaged through Personal Financial Management (PFM) tools which are valued by the highly active segment.

Bringing It All Together

While any one segmentation process can be powerful as a tool for bank marketers, many of the larger financial organizations combine many of these tools to provide a multi-dimensional view of their customers and their needs. An example of this type of segmentation was provided by the The Financial Services Club blog in a presentation by AdKit as shown below.

Options For Financial Marketers

In an era where information is prevalent and relatively easy to obtain, it is imperative that advanced segmentation dimensions be identified, tested and utilized for more effective (and efficient) marketing. With increased competition and ever-tightening margins, firms that are not able to successfully pinpoint potential customers, cross-sell indicators and income opportunities will be at a significant disadvantage to those more progressive organizations.

It is time to pursue targeting of customers and prospects that goes well beyond demographic variables that have been proven to be suboptimal. This will require testing and mirroring what is being done by the best in the financial services industry as well as other industries.

For some best-in-breed ideas beyond what was discussed above, I suggest following the IBM Big Data Hub that provides an amazing wealth of insights, case studies, technical overviews as well as interactive tools to assist any bank or credit union marketer.

Additional Resources

A Two Dimensional Concept of Brand Loyalty: Journal of Advertising Research 9(3) 29-35 (1969)

Suboptimal Segmentation - Assessing The Use of Demographics In Financial Services Advertising: Journal of Financial Services Marketing (Volume 16, 173-182)

Segmentation of Bank Customers By Expected Benefits and Attitudes: International Journal of Bank Marketing (Volume 19, 6-17)

A Behavioral Segmentation of Banking Customers: Aite Group (April 2013)

The Evolution of Segmentation Methods in Financial Services: Journal of Financial Services Marketing (Volume 7, 27-74)

Segmenting Retail Banking Customers: Journal of Financial Services Marketing (Volume 10, 179-191)

The Big Data Hub: IBM

Retail Banking Customer Segmentation in Worldwide Banking: The Financial Services Club Blog (2011)

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Modcloth and Inflection Drive Performance with Next-Gen Keyword Contextual Targeting

Advertisers use contextual targeting on the Google Display Network to reach new customers as they browse content related to their products and services. In March we launched Next-Gen Keyword Contextual Targeting, which enabled our display advertisers to manage their contextual campaigns with the same level of precision and granularity as search. In a few short months we’ve been delighted to see how it’s translated into real results for our customers, and today we’d like to shine a light on two specific examples.

Modcloth, an online retailer selling vintage inspired clothing, had been using contextual targeting on the Google Display Network as a way to scale their message across a wide variety of sites. Their challenge was figuring out which keywords were triggering which conversions across their multiple product lines. With keyword level reporting and optimization levers, Theresa Rockovich, Modcloth’s SEM Manager, was excited to finally put her SEM skills to work. “Before the ability to target and bid on keywords, we were barely making these campaigns profitable. Now that we’ve been able to adjust our bids and see which keywords are driving performance, margins are the healthiest they’ve ever been.” In nine weeks, their keyword-level optimizations helped turn three unprofitable contextual campaigns into some of their highest performers. Their jewelry lines saw a 460% increase in click-through-rates and their dresses campaign saw a 700% increase in ROI.

Andrew Wong, Marketing Director at Inflection, similarly took a search-focused approach to managing their contextual campaigns. “We took the shell of our search campaigns and copied them onto the Google Display Network” and created specific page URLs for each product line. After a few weeks of generating traffic, they turned on the Display Campaign Optimizer – the Google Display Network’s auto-optimization tool that automatically manages targeting and bidding – and the results were phenomenal. With the help of DCO, they increased conversions by 480% at a cost-per-action 10% lower than the rest of their display campaigns.

Keyword level targeting is one of the many reasons why our Display Campaign Optimizer  has improved in both accuracy and efficiency the past year. We've seen advertisers are usually able to reach their target cost-per-acquisition (CPA) in about two weeks, versus the two months it often took before these changes. Coupled with new bidding capabilities, such as real-time bidding, MaxCPC and Enhanced CPC, DCO is now available to use on ‘hybrid’ search and display campaigns.

And it gets even better

In addition to keyword targeting, bidding and reporting, today we’re announcing  new keyword status messages to assist advertisers troubleshoot for more effective and consistent keyword matching and delivery. Now you’ll know if a keyword is pointing to a suspended site, has been disapproved, or if it matches too few pages (Few Page Matches). We’ve also added a notification that alerts users with display-only campaigns when a Display Network bid - which overrides keyword bids when ads are shown on the Google Display Network - is in place. We recommend removing the Display Network Bid in display-only campaigns to take advantage of keyword level bidding. Click here to learn how.

Learn More

We look forward to seeing even more success stories as we continue to roll out these new features! To learn more about how to implement these strategies into your display campaigns, download the Google Display Network Guide here!

Posted by Katie Hamilton, Product Marketing Manager Google Display Network

The Art of War...and Marketing (Part 3)

The Art of War is an ancient Chinese military document attributed to Sun Tzu a high-ranking military general, strategist and tactician.  It is composed of 13 chapters, each devoted to one aspect of warfare. It is commonly known to be the definitive work on military strategy and tactics of its time. 

These writings have helped countless military leaders win land, riches and infamy … and in a wonderful twist of irony, we will focus on how it can help you win your customer’s hearts.

This is Part III in a series of blogs that breaks down each chapter.  The brief chapter summaries are from Wikipedia, but the marketing commentary is all MarketMatch!

To read Part 1, click here.

To read Part 2, click here. 

10. Situational Positioning looks at the general areas of resistance (distance, dangers, and barriers) and the types of ground positions that arise from them.

As you are continually measuring against your objectives, you may find that you are not tracking as well as you’d like.  What are the dangers and barriers to your success?

• Awareness: Are people aware that you exist, what you sell and what you stand for?
• Perception: Are you too small, too big or confusing to the market?  Does your brand align with market wants? 
• Access: Does your target pass several competitors to get to you? We have a client who is literally one block away from heavy traffic and has a hard time generating momentum.  What about your e-access?  If you have it, is it easy to use?  Do your customers know about it?
• Price: You don’t need to be the lowest price, but this is always a discussion criterion to consider and analyze.
• Attrition:Analyze the attrition of key products within each branch.  Are they new or old relationships that are leaving you? 

11. The Nine Situations describes the nine common situations (or stages) in a campaign, and the specific focus needed in order to successfully navigate them.

The 9 stages of a campaign as I see them are:

1. Set measurable objectives: Define what success will look like
2. Determine desired action: Know what you want your target to do.  What product, how quickly and what is the desired entry point?
3. Define target: Who best fits the mold for this product?  Be as specific as possible. Where do they live?  What do they want?  What do they think?
4. Determine how best to reach target: The goal is frequency, not necessarily reach.  How can you reach the best percentage of your target at least 3 times?
5. Create messaging: Be clear, stand out and differentiate.
6. Train staff:The worst thing that can happen is for an employee to hear about a new promotion from a customer.  Be sure that your team is aware of the message, what it promotes, who you’re targeting, what you expect and how they should communicate once the customer comes in or calls.
7. Launch: Make it happen
8. Measure: Don’t wait until the campaign is over to track.  By tracking progress along the way, you’ll know if you need to make any adjustments.
9. Adjust: If needed, tweak your approach.  Is a lower cost tactic pulling better than an expensive one?  Is the target misunderstanding the message?  Is the call to action clear?

12. The Attack by Fire explains the general use of weapons and the specific use of the environment as a weapon.

As a marketer, you have a lot of weapons at your disposal:

• Traditional: Newspaper, radio, TV – these are best used to build awareness with limited segmentation.  Usually your best cost-per-impression.
• Direct:Targeted direct mail, outbound calls, email, text – though more expensive per impression, these allow for a more one-on-one conversation.  By narrowing your target focus, you can speak to specific needs. Expect a higher response rate.
• Web-based: Pay per click SEO, web banners on partner sites, micro sites, QR codes – this category is evolving every day.  This allows for a more interactive experience.  Being electronic, this is typically also highly measurable.
• Guerrilla: This is where you can use the environment as a weapon. Guerrilla marketing hits the target when they are not expecting to be sold.  An example from the MarketMatch files is when we “lost” 100 wallets (in strategic locations) around a market.  In the wallets was a message to return the wallet to a given branch for a $20 reward.  The campaign was successful in driving new foot traffic, awareness and word-of-mouth.

An army of only tanks, though powerful, would not be successful.  For true success you need to control the air, the land and the sea.  Each tactic has it’s own strengths and weaknesses.  The magic is finding the right mix for the given target that fits your budget.

13. The Use of Intelligence focuses on the importance of developing good information sources.

We have talked a lot about the importance of measurement and analysis.  Where you obtain your data is as important as what you measure.  MCIF systems are very useful here, but not vital.  For most in-house data, you’ll want to buddy-up with IT and Finance.  Clearly define what it is that you want to measure and brainstorm with your team on how best to pull it.

Aside from in-house numbers, there are countless online resources and survey techniques to gather what you need.  The emphasis should be more on WHAT to measure than HOW.

Aside from basic growth numbers, you can also consider:branch-by-branch or market-by-market analysis, attrition in key products, accounts per customer/household, debit card usage, awareness/perception, product usage trends, percentage of referrals, web site usage/effectiveness, application-to-loan conversion ratios, profitability, media channel effectiveness, cross-sell per employee, referrals across business units.  The options are limitless and should be tied to completing your key objectives.  (See “What’s the Big R.O.Idea” for more info) 

There you have it ... how The Art of War can help you take over the marketing world.  Remember, with great power comes great responsibility.  I trust that you won’t go all Napoleon on us with this information!


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