If you could, you would drop impressions selectively for each consumer closer to the next purchase than the last one. Now in the digital age, you can do exactly that.

The principle of recency implies that the sales response to ad spending (called ad elasticity in economics-speak) can be thought of as an average of no effect from the ad that is unfortunate enough to air right after a given consumer’s purchase, averaged in with twice the effect for an ad that is lucky enough to air right BEFORE the next purchase.

Why does this math matter?  Because if you could find advertising vehicles that were “recency-tilted” by their nature, that is, they are more likely to deliver impressions closer to the purchase, you will get greater ad response…practically guaranteed.

“The acceptance of Recency, (or closeness to purchase), as a key variable in advertising inspired sales makes the point.  The digital…messages reach the ‘readier’ to purchase consumer.” Erwin Ephron, 2011

So how do we reach the “readier” to purchase consumer? How do we recency-tilt? Digital activities that are self-directed, e.g. search or visiting a brand’s website or a site like coupons.com are mostly done with shopping purpose in mind.  In other words, such digital brand communications give you recency because the consumer is controlling the timing of the impression not the marketer.

Digital display advertising can also be recency tilted if marketers change their prevailing approaches to display.  Remarketing has been proven to provide greater lift and that is certainly recency tilted.  Advertising served by ShareThis has been shown to provide greater conversion and it is also recency tilted because advertising is selectively served to people who share content that is relevant to them at the time, implying for many that they are about to make a purchase decision. Digital media’s ability to deliver recency will get magnified as smart mobility becomes a constant part of the shopping process.

But digital isn’t the only way to tilt the odds in your favor. Obviously, all shopper marketing is recency tilted. Another option for recency is special interest magazines in print or digital form.   Especially for magazines like Car and Driver, many are buying the magazine almost as much for the ads to help a purchasing process along.

Finally, let’s think about how media and marketers calculate reach.  Now, that should be adjusted also. If impressions unfortunate enough to be delivered right after the last purchase aren’t worth much, then their contribution to reach isn’t worth much either. Marketers should measure reach from those impressions delivered closer to the NEXT purchase than those closer to the LAST purchase. I want to know “recency reach”.  Once you start calculating recency reach, you will find that the touchpoints that deliver this are different and it will help to guide marketers’ strategic media investment decisions in ways that will improve sales response.

With some straightforward experimentation, I believe the logical conclusions here will be confirmed. And then, the way we plan media will be profoundly affected.

Akio Morita, co-founder of Sony, is often quoted as saying, “We don’t ask people what they want; they don’t know.” People usually interpret this to mean that Morita-san did not value consumer insights, and they use it as a reason for not doing research or ignoring its results.

But nothing could be further from the truth.  Morita-san was a diligent student of consumers; he simply rejected traditional research methodologies, preferring to observe people and engage in informal discussions with them throughout the course of his day.  He would translate the insights he gleaned into product ideas and strategies that created some of the greatest technological breakthroughs of our time including the Walkman and the VCR.

In the same way, marketers should have a natural curiosity about consumers and actively pursue consumer understanding – not data that assuages a risk-averse CEO, or results that document performance for the record, not even analyses that purportedly assesses the ROI of certain marketing programs.  Instead marketers should seek out true insights that lead to proprietary perspectives on market opportunities and to new ideas that spark creativity and innovation.

The problem is, the role of data is misunderstood.

Many business leaders expect research to tell them what to do.  They want to data that makes it explicitly clear which new product idea is the winner, exactly how much they should raise prices, or a precise ROI calculation on a marketing investment. Not only is this an unrealistic expectation, it’s also a lazy approach.  Steve Jobs, another technology pioneer known to disdain market research, got it right when he said, “It isn’t the consumers’ job to know what they want.” It’s the marketer’s job to interpret consumer understanding into ideas of what consumers want.

People also expect research to predict the future.  Although great strides in database capabilities have been made and significant advances in predictive technologies are underway, most organizations don’t currently have the data or the capabilities to generate truly predictive data.  So they must rely on data that only tells them about the past.  Marketers must then translate what happened in the past into future projections. Like it or not, this requires creative thinking, assumptions, and leaps of faith.

Data definitely can inform these efforts.  Research, particularly anthropologically-based methods, helps marketers understand consumers’ lives and their needs and desires.  And prototype testing shows whether and how innovations fit with the way people currently live, think, and act.  This kind of understanding can lead to hypotheses about how people will react to new offerings.

Database analytics yield rich behavioral profiles and customer valuations.  These should guide targeting strategies and marketing investments.

And, research if designed well can also indicate how to communicate with consumers effectively – which messages trigger interest, how resonance varies between groups, how people interpret different communications approaches.  But importantly, data shouldn’t dictate creative strategy. By definition, creativity is original not derived.

In the end, the role of research is to inform.  The role of a marketer is to develop ideas.  That’s why business should be “data-informed, idea-led.”

“A novel manifestation of something that has unlocked or serviced an existing (and hardly ever changing) consumer need*, desire, want, or value.”

“At the core of this statement is the assumption that human beings, and thus consumers…deep seated needs remain the same, yet can be unlocked in new ways.”

So now let’s talk mobile. While mobile life is a trend, the device technologies and software have been fads so far.  Remember Palm and graffiti? Blackberry has a fraction of the share it once had in the US.  Apple iPhone is now being passed by a collection of Droids.  Smart devices now come as tablets not just phones.

So how about mobile as a marketing platform?  I think it has gotten off on the wrong foot.  Yes, people have a need to be social and Facebook is heavily accessed via apps from mobile devices. Foursquare appeals to the gamer in us and really only makes sense on a mobile device.  But people don’t shop with these tools much yet which will greatly limit their advertising and promotional value.

While social and the diversion of playing games are enduring human needs they are trumped by simplification and value when we are in shopper mode.  In particular, I believe that the tipping point for mobile as an advertiser “must-have” in their media mix will come when we move from gamification to simplification as our main marketing idea for how to use mobile. Forget the badges.

Download the main apps today that could have relevance to shopping and then try to shop with them.  Try using Facebook, Stickybits, shopkick, etc. as you grocery shop.  The first thing you will notice is that it adds a substantial amount of time to the shopping trip.  That will never fly. Shoppers are time compressed and want to get out of the store faster, and retailers want you to be more efficient so you have more time to add more stuff to the shopping cart. Foursquare doesn’t add much time, but it doesn’t currently add much value either.  Have you noticed that the tips people leave about places are often a year old?  We are getting bored with checking in for points and badges.

I spoke at the Mobile Marketing Association Forum in NY last week and said that the promise of mobile for advertisers is simplification of our shopping choices.  This would service an existing and hardly changing need, meeting the requirement of a trend. Make exactly the right offer at the right time to the right person in a way that gives them value and reduces shopper decision making time.  .

I saw hopeful signs of this at the Mobile Marketing Association forum.  Modiv is moving their mobile shopper tool currently deployed in Stop & Shop from a dedicated device to an app for iPhone and Droid that serves offers based on exactly where you are in the store and your prior shopper preferences.  Someone else demo-ed an imaginative solution for digital coupons being read by existing store scanner equipment.  Of course, we heard from numerous speakers and exhibitors about coming mobile payment solutions.

By the way, it isn’t too late for Foursquare or Facebook to get in on this.  Imagine checking in when you arrive at a store and getting a $5 off coupon on a total purchase of $50 or more and redeeming this offer electronically.  That would drive footfall to a retailer, something which is precious to their business growth.

I don’t think that mobile will ever be a preferred platform to tell your brand story but I do think it can be the future of promotional marketing.  That would be a trend.

So, which is it?  Are consumers creatures of habit or active decision-makers? And why does this matter to marketers?  Let’s dig deeper…

The definition of “habits” from Wikipedia:

Habits are routines of behavior that are repeated regularly and tend to occur subconsciously.^[1][2][3] Habitual behavior often goes unnoticed in persons exhibiting it, because a person does not need to engage in self-analysis when undertaking routine tasks. .. Features of an automatic behavior are all or some of: efficiency, lack of awareness, unintentionality, uncontrollability.

Makes sense: habits are about behavior, going unnoticed, and gives the reward of efficiency.

The efficiency of forming habits might be the most important point. Habits simplify our lives that would otherwise be incredibly complex.  As Gregory Berns, author of Iconoclast says, “the brain is fundamentally a lazy piece of meat”.

Deciding how we will decide. So, our habits might not refer to always making the same choice in a given situation, but to making choices the same way.  The way we decide what to have for breakfast could be habitual, even if we eat different things some mornings.  I might have a different brand of coffee some mornings but there is no thought…I must have coffee! The decision about how you will shop a product category is critical for marketers of branded goods who are fighting commoditization. Will a shopper buy a brand they perceive as right for them or will they continue to adopt a more functional “fit for purpose” approach and increasingly gravitate towards store brands? Marketers need to learn about the opportunities inherent in influencing what Cass Sunstein, co-author of Nudge, calls second-order decision strategies (or deciding how we are going to decide.)

InsightsNow President Dave Lundahl refers to the behaviors of sensing vs. seeking.  If people are sensing, they are responding in a semi-conscious way to cues and not really thinking much about their behaviors.  There is little room for getting a new product into the mix if there are no new behaviors…if people are sensing. Adoption of new choice-making requires breaking habits and getting consumers into seeking mode. In this way, marketing is fundamentally about disruption.  When you launch a new product, you must disrupt either the choices that a consumer perceives or the very way in which they make those decisions.

Disrupting habits. Why would someone give up their habits regarding a given behavior when they need to simplify decisions for their lazy piece of meat?  Again, let’s go to Wikipedia…

The habit–goal interface is…characterized by the slow, incremental accrual of information over time in procedural memory. Habits can either benefit or hurt the goals a person sets for themselves. Goals guide habits most fundamentally by providing the initial outcome-oriented impetus for response repetition. In this sense, habits often are a vestige of past goal pursuit.

So, here’s where all this takes me.  Five guidelines for disruption marketing:

1. Consumers are creatures of habit
2. Habits are more often about being on auto-pilot regarding how we make shopping and consumption decisions than the specific choices we make
3. Marketing is about finding ways of disrupting those habits
4. The potential for disruption is greatest when the habits are out of synch with consumers’ contemporary goals or when the cueing system is disrupted.
5. Traditional new product research methods are not useful for disruption marketing and must change as they bypass the study of how we decide, and force respondents into choices assuming they are already in seeking mode.

These ideas will be discussed at an upcoming webinar on May 25^th that I will participate in.  Check this blog or here for details.

If so, Marketers are missing powerful insights into brand health and growth strategies, especially in a digital marketing age.  

Brand health. Brand equity is your biggest asset. So it follows that brand health is your most important analysis because it is about understanding if that equity is poised to grow or decline over time and what you can do about it. Like the beautiful symmetry of a baseball diamond, there is a certain geometry to a brand.  If that geometry is intact, the brand is healthy.  If the geometry is broken, it looks just as wrong as having different distances between the bases. The geometry includes relationships such as the following. The market leader must have the highest repeat rate, and the greatest number of buyers. The geometry encompasses attitudinal patterns, where attribute ratings for a leading brand are always higher across the board, referred to as the “halo effect”.  Brand geometry relationships can be modeled with a high degree of statistical accuracy. When that geometry is broken, your brand’s market share is going to move back to an equilibrium point.  For example, if a leading brand’s repeat rate is not commensurately higher, or if it does NOT have commensurately higher attribute ratings its share will almost certainly decline over time.

Segmenting your buyers based on loyalty. To direct optimal strategies in digital, the most targetable of all media, we need to first extend these “macro” relationships between loyalty and market share to the micro or individual level because different loyalty groups require different marketing approaches. Let’s segment your buyers by loyalty level into, say, 4 groups based on their probability of purchase towards your brand.  Let’s make the top group those consumers who buy your brand 75% of the time.  The next group buys you 50-75% of the time.  The third group buys you 25-50% of the time and the fourth group buys you a small percent of the time probably because they are loyal to some other brand.  Where does a higher repeat rate for a market leader come from?  It comes from having disproportionately more of its buyers being in the top two loyalty groups vs. a smaller brand.  Again, if this is not the case, a leader will decline.

Brand loyalty and digital brand growth strategies. Now, let’s apply loyalty segmentation to digital behaviors.  With this loyalty segmentation in mind, what do you think the distribution of fans to your brand’s Facebook page is proportionately distributed?  Probably not; it is unlikely that someone who rarely buys your brand will friend or follow you.  How about the middle two groups?  Are they more likely to be visiting the coupon-related shopping sites? What do people search for that leads them to visit your brand microsite?  Are the referring search terms different for loyal vs. marginal buyers?  Probably there is more trademark search for loyal buyers and more discounts, comparison, and issue-related searches for less loyal buyers.  Have you optimized search with this in mind? What does each loyalty segment say about you in social media conversation?  Is it the same pool of comments or are they saying very different things? (I bet they are.)

Some marketers, in the era of engagement thinking might believe that you don’t have to care so much about the less loyal buyers except how to make them “engaged”.  This is actually a mathematical mistake.  If you analyze the sales changes from the four loyalty groups of a growing brand you will see a remarkable thing.  Sales actually must increase from every one of the loyalty groups!  (For the readers who are a bit wonky, as I proudly am, I am happy to describe this one on one if you contact me.) In other words, your brand growth marketing strategies must have a customized component that addresses each group, even the less loyal buyers.

Brand loyalty analysis proves that approaches which are exclusively based on building brand engagement are incomplete. I hope to bring back brand loyalty analysis for a digital marketing age.  It’s throwback, but with a modern marketing twist.