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More Than Market Research - Gain The Information Advantage

Tom H. C. Anderson - Next Gen Market Research™ header image 6

Seth Godin talks to Tom H. C. Anderson about Marketing…

January 16th, 2009 · 15 Comments

Seth Godin talks to Tom H. C. Anderson about Marketing and Market Research

For the past few years Seth Godin has continued to be the top-of-mind business guru among marketing executives. Today I ask him a few questions about what he does, how he does it, and what some of his thoughts are on marketing research.

Tom: Being the top of mind business guru among marketing executives continuously must be hard work. What is your secret? Where do you get your inspiration from? What are your favorite business authors, blogs, and publications?

Seth: It’s not hard work, it’s consistent work, but a joy. I notice things, things that influence me or resonate with me, and then I write about them. Developing this habit isn’t easy, but once you do it, it sticks around for a while.

I spend six or eight hours a day reading and watching and interacting… being an omnivore is a key part of the process.

Tom: In a down economy such as this one, where do you think marketers can best invest their time and resources to maintain and grow their businesses?

Seth: In down economies, the only thing that’s going to change things is changing things. This is hard for a lot of marketers who are used to defending the status quo, but it’s truly the best option.

Tom: In one of our recent studies, many executive level marketers said that the buzz words they were most tired of hearing were “Web 2.0″, “Social Networks”, and “New Media”. Yet the relative importance of these marketing concepts did not decline. I believe they are important and part of the frustration lies in not having understood how to leverage them effectively yet. Do you agree? How do you think marketers could better leverage web 2.0/3.0 or whatever we end up calling it in the future?

Seth: I’m sure that people are tired of these phrases, because they’ve become empty buzz words, not useful ways to grow your business. But, and this is the essential but, ignoring it just because a lot of people don’t understand it is self-defeating. I wrote Meatball Sundae to address this very issue. You will not thrive merely because you are the incumbent. You will thrive going forward because you embrace the new forms of communication, not because you turn your nose up at them.

Tom: In market research one of the most important/strategic types of projects we engage in is customer segmentation. Some of these tend to be survey driven, others are done strictly based on CRM data, yet others, the ones we typically run involve a combination of survey research and data mining CRM data. Survey data tends to be better at creating 4-6 customer types and respective treatments while CRM data can technically be used to create a more personal 1-1 segmentation. However the latter is usually more difficult to act on at a strategic level. What is your view on customer segmentation? How should businesses best identify and manage against the needs of various customer groups? 

Seth: I think there are two conflicting forces at work here. First: treat different customers differently. Second: if you make your business too complex, your people will be unable to take responsibility for what they do because they don’t understand it. Small is the new big. No matter how big your business gets, you need to give individuals and small teams the ability to make a difference with whatever segment you describe.

Tom: As data availability continues to increase, I believe the importance of identifying/filtering and analyzing relevant data can be a powerful way to gain an information advantage over our competition. On the other hand the importance of the irrational, or emotional component of customer behavior is also increasing in interest. Techniques for better analyzing and understanding emotion are beginning to also become more important in market research. How do you view the importance of these two types of consumer understanding? Is one more important than the other?

Seth: Stories rule. Stories make us vote, or buy an iPod or give money to a charity. Stories trump science very time.

Tom: What is your overall opinion on market research. What do you think we can do better to serve other parts of marketing and ultimately the customer?

Seth: As long as market research is seen as a cost and a staff function, it will never meet its potential. Market research has to deliver practical home runs, insights that pay off far out of proportion of the expense and time invested.

Tom: Thanks for your insights Seth. We’ll continue to practice our swinging.

[Post to Twitter] 

Tags: Anderson Analytics · Branding · Business Guru · CGM · CMO · CRM · Customer Satisfaction · Interview · Market Research · Marketing · Marketing Guru · Segmentation · Surveys · seth godin · web 3.0

15 responses so far ↓

  • 1 paul howard // Jan 16, 2009 at 6:19 pm

    There are so many social media sites it is impossible to know what they all are let along be involved with them. I’ve just started to try to get a handle on a very few - Active Rain, Twitter, FriendFeed, FaceBook, LinkedIn for starters. I don’t really know how I’m going to be able to leverage what I learn for my business, yet I’m optimistic. Market research doesn’t tell me how to make use of social media - at least I haven’t been able to discover how. The bottom line is the effect being able to communicate in a social media world has on my business. Will it make me money? I’m working on trying to figure that out.

  • 2 Morten E. Wulff // Jan 20, 2009 at 6:09 pm

    In order to succeed—even survive—in our data-based world, you need to become statistically literate.

    I strongly believe that today the name of the game is DATA and thinking-by-the-numbers is new way to be smart.

    In field after field, traditional experts who base their predictions on intuition and experience are losing out to Super Crunchers - masters of the algorithmic mindset, who gathers and analyzes data in ways previously thought impossible.

    Take a look at e.g. Google or Amazon; both very much data-driven companies. They’re doing OK.

    It’s not a competition “stories” vs. “science”. Marketing is just not all stories anymore.

    Founder, TraceWorks

  • 3 Tom H C Anderson // Jan 20, 2009 at 10:08 pm

    Morten I agree with you. Statistics, Data and Text Mining, Modeling and simulation are all extremely important, and that is my business as well. However, good marketing is half science half art. So I think to be truly good both sides need to learn from and leverage each other. This is my goal.

    -Tom

  • 4 Edith Ohri // Jan 21, 2009 at 5:08 am

    Hello Tom,
    I agree much with your description of the role of data in marketing. In this regards, my analytics tool - GT data mining, can turn unsupervised data into a simulation like market survey. It diagnoses the patterns of behavior and characterizes them, producing lists of segments and factors. It is delivered a SaaS. It can be used on small data sets as well. Thought you might be interested to know.

    Edith

  • 5 Melissa Marcello // Jan 22, 2009 at 11:07 am

    Hi Tom,
    I very much agree with good marketing being “half science, half art.” I think the recipe varies depending upon the idea that’s cooking.
    Since we are dealing with human behavior, we are only measuring part of the story. Sometimes the most salient factors cannot be measured, they have to be imagined.
    Thanks for an interesting interview!
    Melissa

  • 6 Alan S. Michaels // Jan 24, 2009 at 8:08 pm

    Hello Tom,

    Your great questions:
    “What is your view on customer segmentation? How should businesses best identify and manage against the needs of various customer groups?”

    should maybe be the focus of an entire article.

  • 7 Tom H C Anderson // Jan 25, 2009 at 9:49 am

    Thanks Alan, I’ve been thinking about that. Will probably do something soon.

  • 8 Joseph V. Marigliano // Jan 27, 2009 at 2:57 pm

    Tom, one of the critical areas begging for good though around customer segmentation is pricing. Far too often, destructive pricing practices destroy corporate profits as the company can execute “desperation” pricing, or use pricing as the only lever to address deficiencies in product /service /quality / fulfillment issues. This is even truer in the current economic environment. Good, practical, customer segmentation for use in pricing is typically unused in many companies.

  • 9 Marston Gould // Jan 31, 2009 at 10:10 pm

    Having spent many years in the field of CRM (not to mention over a decade doing analytics at NASA) - I can appreciate and agree with most of what Mr. Godin claims. However, there is one thing that I disagree with - and that is the power of stories.

    While in principle/theory stories are excellent, in practice, they always fall short. Why? For a few specific reasons: First, stories are almost always either created by marketers or directly from consumers. The problem is no set of marketers or consumers can truly create a complete list of stories that help to guide/explain/manage the customer experience in all situations. There will always be situations that don’t fit. Depending on your product, the level and frequency of these outliers can defeat the very value of stories. Second - the use of stories would assume that marketers and consumers already know all the necessary facts to make create the story. When simply optimizing something - this can be useful, but it tends to not leave room for situations that include out of the box radical changes and/or innovations. Simply put - sometimes marketers and consumers don’t know what itch it is that is being scratched until after its already been created. In fact this is what often creates must have products. The very fact that some new product or service solves a problem or demand you didn’t even know you had. Stories won’t help you here much very often.

    So from a practical standpoint - what does this mean? Its hard to say. I personally believe that there will be greater synergies between the marketing/purchasing process and customers being given greater insights into managing their own individual ‘funnels’. Markets will move from managing a single or just a few ‘funnels’ to creating the ability for customers to interact more dynamically with their products and services.

  • 10 Tom O'Brien // Feb 10, 2009 at 11:43 am

    Tom:

    Nice interview. I just want to comment on segmentation.

    We often do segmentation in our projects - but it is very challenging for our clients, because our segmentation is done by looking at the naturally occurring peaks of passion in a category conversation.

    Think of it as mindset segmentation. Rarely do these naturally occurring segments match our client’s pre-existing segmentation.

    While this causes problems with communication and integration - I think that following the data to naturally occurring segmentation provides a really outside-in, consumer-centric view of the world.

    Tom O’Brien
    MotiveQuest LLC

  • 11 Brad Schafer // Feb 16, 2009 at 1:29 pm

    Tom,

    Does segmentation allow you to offer a better product to your customer?

    In the end isn’t that the goal?

    I think Seth stresses to develop something people want and can talk about.

    Seth has been preaching that for years.

    I guess since we’re all quite ‘techie’ we want to think there’s a technological solution to solving the emotional connection to the buying process.

    Perhaps there is, but my take on this is: Day one, I understood and recieved a direct value from Yahoo! (directory) and Google (search).

    I shared that information with friends.

    At the same time, I have yet to see a direct value from Facebook or LinkedIn (except that it makes address-book keeping, and friend finding a bit easier; and perhaps that is enough).

    Social Networking is a old concept, Social Networking Technology is the new animal, and I think the best adoption of it into the social fabric will take time just like cell-phones did.

    I also think that CRM segmentation can be misleading. Just because there’s an affinity to a persona, we gravitate to marketing to them.

    This creates a virtuous cycle of reinforcement to the early adopters. Perhaps we’re missing the larger audience only because we adapted our product offering to soon to meet the persona of the early adopters.

    Perhaps end the end what we’re learning is to let the customers drive the market, and those that ‘clue in’ on how to adapt to their needs best win.

    Great articles.. Keep up the thought leadership!

  • 12 Sean Dillon // Apr 6, 2009 at 11:59 pm

    As the head of a social media agency Seth’s point about being an omnivore hits home. Clients expect me to know what to do, how to do it and why, so I have to be ahead of the game. An expert is only as good as those he/she follows.

    Sean Dillon
    CYENTIST Social Media Agency

  • 13 Simon Shaw // Aug 18, 2009 at 12:59 pm

    As an accountant turned programmer, marketing my weak point. Being an omnivore and consuming as much knowledge as possible has significant improved my knowledge. Since I don’t come to the marketing world with any preconceived ideas - I am open - I am a sponge.
    So far LinkedIn has produced a number of converted leads, nothing from Facebook or Twitter.
    Blogging has driven more traffic to my site, mostly because I post helpful tips for using Excel.
    I have learned a lot from hubstpot.com

  • 14 GL // Oct 4, 2011 at 12:24 am

    There are 2 things that hit home: 1) Keep it small, and connect with your client. And 2) I believe that being an omnivore is key in your success in the marketing business. To be competitive or elevate your client’s success, you need to be spending the majority of your time reading, observing, and interacting with the public to see what moves them. Know your audience.

  • 15 Eden Haile // Oct 4, 2011 at 2:41 am

    It is interesting to here from Seth Godin that the best way to gather market research is simple: without statistics and databases. Here is an article from Business Week about how to conduct market research during a recession that I found interesting: http://www.businessweek.com/managing/content/may2009/ca20090519_237035.htm.
    It does support Godin’s recommendations. After, reading the comments above, maybe a balance of stories and statistics is best?

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