Using Influence Mapping To Optimize Marketing ROI

marketing

The two hottest topics in marketing today are “Social Marketing” and “Marketing ROI.” In this paper, you will see how understanding the true nature of Social Marketing points to a methodology — Influence Mapping — that provides marketing managers with a means to optimize their Marketing ROI.

“Social Marketing is the Answer!” (What was the Question?)

It is impossible today to have a conversation about marketing without including the social side of things: networking, Facebook, Linked-In, blogs, Twitter, podcasts, and more. These are powerful tools that, as part of an integrated campaign, can help deliver marketing’s message. Social Marketing has impacted virtually all aspects of marketing and allowed new and different messaging and positioning; it is part of most marketing campaigns. According to many social marketers, “Print-based marketing is dead; long live the web!”

The problem is not with Social Marketing (or social marketers): it is with those who equate “Social Marketing” to Marketing.” Social Marketing is a means to an end; Marketing defines that end. Social is a tool to reach targets; Marketing defines the target and their values. Social is a tactic; Marketing is a strategy.

Marketing, 21st Century Style

Though many of last century’s basic Marketing 101’s tools are still valid and usable today, their application is hugely different than it was a mere ten or fifteen years ago:

  • ‘Targeting’ was all about penetrating a large segment (mass market); now it’s about owning a small or micro segment and replicating it (mass customization)
  • ‘Price’ was typically driven by cost to produce; now the market determines the price and companies have to find ways to make a profit within that constraint
  • ‘Marketing’ was about products and their features; now it’s about solutions and value to the customer
  • ‘Brand’ was cerebral in that it was what customers thought about the brand (or what marketing told them it meant); now it’s visceral based on how customers feel about or experience the brand.

All of this and more is driven by the fact that power has shifted from the manufacturer (in the mid-1900s) to the advertiser (late 1900s) to the customer (21st century); we’re not finished. Do you sometimes wonder how we did business without the Internet (now 25 years old) or smartphones (now 15 years old)? In another 5 years, we will look back at today and wonder how we survived without_____________________ . Marketers no longer can dictate their positioning to customers; they can only suggest it — if it’s heard at all.

The problem is clutter. Target customers are swimming (drowning?) in information; they can pick and choose what and who they want to listen to. They form their own opinions based on a mix of what marketing says, what their peers say, and (gasp!) what they think individually. Influence has shifted away from classic advertising/PR-based tactics and towards more social, self-forming networks. So, if’ Social Marketing’ is the answer, it’s up to classical marketing to determine what the right question is.

To Whom Are We Speaking?

Traditionally, marketing has focused on the Decision Maker (DM); the person who could say “yes” or “no” to buying something. Marketing used segmentation to identify and describe targets (using demographics, psychographics, and behavioral), then used the Marketing Mix (price, product, place, and promotion) to communicate to them. Virtually all of the marketing was focused on two fundamental goals:

  • Create a distinct position in the target DM’s mind about the brand or offering; and
  • Induce the DM to take action, to buy

Is it not obvious that marketing’s ability to reach and impact the DM has greatly diminished, perhaps to unsustainable levels? Marketing can no longer control — or even have much influence on — where DMs go for information or what they do with it. Customers shop as they choose where they want to; seek input from whatever sources they value; decide what to believe and reject on their own; they are more autonomous than ever (and it’s a growing trend). In other words, classic marketing’s influence on the DM is greatly diluted, and it is diminishing more every day.

Enter the realm of the Decision Influencer (DI) … and welcome to 21st-century marketing! Let’s start by defining some common terms in today’s marketing environment:

Decision Used in a marketing context, decision used to be synonymous with ‘Purchase’ or ‘Buy’; it was a singular event, the end of a successful marketing/sales campaign. We now know that the ultimate decision to buy something is predicted by many other pre-purchase decisions: what information to use; where to shop and where to buy (two separate decisions); what solutions to consider; the competitive landscape, and more. “Decision” has been replaced by “buy process,” and contemporary marketing needs to have an impact on — to influence — each step of the buying process to optimize the final outcomes. Put another way, marketing must now embrace the target customer’s entire shopping process, not just the point of sale.

Decision Maker Every purchase decision (but not necessarily those predicting it) is made by a human being. Segments, companies, and demographics do not buy, people do: b2b or b2c, it’s always a person who makes die ultimate decision to buy. [The only real exception to this is government procurement, where legal formulas may trump human decision making.]

Pro-purchase decisions, however, can be more arbitrary or systematic (as all salespeople know quite well). For example: in the business world, a vendor often must be on the “Approved Vendor List” before purchasing can buy anything horn them. If the Quality group (that often controls this list) is too busy to add a new vendor, then the ultimate buying ’decision’ has been made by Quality’s workload

Also, note that Decision Maker’ is a singular term: though there are often multiple people involved in reaching a final purchase decision (see Decision Influence™ below), in the vast majority of situations a single person makes each decision.

Decision Influencers  Each DM is impacted by a multitude of influencers from near and far. There are two types of influences: people and things, and they can be either internal or external to the DWs unit (family for b2c, company or division for b2b). Thus, there are four types of DIs impacting every DM; some examples of Decision Influences can be seen in the table below.

marketing

To summarize: the buying process has become far more complex and longer. DM1s are harder to roach, and there are far more influence points with greater impact than ever before. Combined with constraints cm marketing budgets and the demand for ROI justification of any new initiative, it is dear that marketing as it used to be won’t work any longer.

More and more, marketing’s task is shifting from directly reaching the DM to influencing the DIs, How to do that cost-effectively, with little or no budget increase, is perhaps the most daunting challenge that marketing has faced.

What’s the Question?

Fundamentally, Social Marketing is getting others — friends, family, thought Leaden, etc, — to influence target DMs. It is a tactic, however, that needs to be part of an over-arching strategy. It is a tactic, however, that needs to be part of an over-arching strategy. Is Social an efficient and effective means of reaching defined target DMs? Social marketing includes everything from posting an article on the AARP website to having a Facebook page and more; which is right for a given situation? How much resource should you put into the effort? How do you measure the results (and what should the metrics be)?

In short, what’s the question that marketing is trying to answer?

Traditionally, marketing has sought to directly influence the DM through ads, PR, shows, placements, branding, and all the other tools marketing uses. But it’s too noisy for that to work as well as it used to; people have access to far more information than they used to; DMs value the inputs from peers and opinion leaders far more than what the producers say. So, the contemporary question for marketing is: How does marketing efficiently reach and influence die DIs?

Marketing Today; the ‘Department of Influence’1

Marketing’s world has changed forever, and organizations that ignore it do so at their peril… and possible demise. Consider the changes in scope when marketing’s target changes from reaching the DM to reaching and impacting all the DIs:

marketing1 While this might be a more accurate name for today’s marketing function we are not suggesting that anyone really make this change.

The range of DIs on a DM regarding any decision can be huge and diverse, yet ignoring any of them may dramatically reduce your chances of success. Which would you rather be:

  • Vendor A who has a good relationship with the target DM, but no knowledge of where the DM goes for information or advice.
  • Vendor B who has a cordial relationship with the target DM, but is deeply involved with many of the people who the DM relies on.

Beyond knowing the DM, marketing must learn who and what influences the DM in their decision making. Learning how to influence the influences is the next big thing for marketing.

Influence Mapping

Influence Mapping is a process for coordinating and optimizing your efforts to influence the influences. Specifically, it helps you:

  • Identify which DIs need to be addressed, and
  • Who will address each of the important DIs, and
  • How to best allocate scarce resources for optimum ROI

Influence Mapping is comprehensive in that it covers multiple aspects of an organization’s marketing/promotion efforts (channel, PR, trade shows, advertising, online, corporate communications, etc.), yet highly focused in that it looks at micro-segments of (or even individual) DMs and how to have an on impact their decision.

Since an organization’s influence on a DM is spread across many functional groups (sales, marketing, brand, etc.), a successful Influence Mapping effort requires input from each of these groups. Fundamentally, the process works as follows:

  1. Identify the target DM2 and what you are offering them; this focuses the participants on a specific situation and minimizes diversions. At the completion of this step, you will have a clear, detailed description of your target and their derived value.
  2. List all DIs that impact the DM relative to this decision, even the ones that seem quite farfetched. This is a classical brainstorming session that has no “wrong” answers; people should build on each other’s ideas with no real constraints. At the completion of this step, you will have a comprehensive list of all possible DIs for this situation.

2 Focusing on the right DM is critical to the success of any Influence Mapping exercise; there are some ‘rules’ about selecting and defining the target DM that help:

  • Having a single DM is the ultimate approach (mass customization); using a DM that represents a larger segment is acceptable, but the smaller the segment size die better
  • Make the DM human: give it a name and demographics that are consistent with your target segment
  • Throughout die entire Influence Mapping process, think like the defined DM (not like a marketing person or how you would react as the DM)
  1. Group or Subordinate the DIs to eliminate redundancies and identify DIs that are subordinate to others (this is optional depending on the length and complexity of the DI list). At the completion of this step, you will have an actionable list of DIs.
  2. Assign relative weights to each DI so that you know which influences are more potent than others; this is the heart of the Influence Mapping Start by selecting the one or two most powerful influences and giving them a weight of 10. For each other DI, give it a weight from 0-9 relative to the most powerful ones. Next, consider whether each DI is a positive (it pushes the DM towards your offering) or negative (pushes the DM away from your decision) and assign each a + or – accordingly. (Example: if a teenage girl is the target, her mother may have a weight of -5 in that the more mom says, “Don’t do it,” the more likely her daughter is to do it.) At the completion of this step, you will have a prioritized list of DIs to address.
  3. Develop a Strategic Plan for addressing the DIs based on the above priority; this builds synergy and eliminates waste. For efficiency (and Marketing ROI), you can see what to do less of to fund what you need to do more of. At the completion of this step, you will have a detailed strategic plan for addressing the defined situation.
  4. Develop Tactical Plans to influence the highest impact DIs. At the completion of this step, you will have actionable plans, using minimum resources, to achieve a successful outcome.

Influence Mapping can be applied in many different situations such as:

  • Optimizing resources to have maximum impact on a segment of DMs
  • Identifying potential competitive vulnerabilities in a sales opportunity
  • Balancing a restricted marketing budget to maximize impact while minimizing resource spending
  • Developing an Integrated Marketing Communications (IMC) plan and culture within an organization

Finally, Influence Mapping works from a totally customer-centric (rather than product- centric) perspective. Marketing today is not about products; it’s all about delivering more value to your customer than your competition does. Consider the facts mentioned earlier in this paper:

  • The brand has moved from being cerebral to visceral; it’s what a target feels about the brand experience
  • Price has shifted from being ‘producer cost’ based on ‘customer value’ based
  • Directly influencing DM’s is increasingly difficult (read: expensive); influencing the DIs is the next leverage point for marketing
  • Marketing tactics like Social Marketing are valuable only if they have a high positive impact on the DM, and a waste of resources if they do not

Marketing ROI: It’s all Relative

Unless there is a breakthrough in how to read people’s minds and quantitatively analyze them, ROI will never be as precise for marketing as it is for operations or product development. In those disciplines, you can measure the precise inputs required and the results those inputs produce; varying one input (production capacity, for example) directly and specifically drives an output (units produced).

In marketing we deal with human actions; the line between an ad (input) and revenue (output) is imprecise at best. How can you measure the specific impact on brand perception of any one specific ad?

A slight paradigm shift is all that is needed: Operational ROI is quantitative in nature, while Marketing ROI is more qualitative. By viewing the return on an individual marketing investment relative to other possible marketing investments we can learn what has better or lesser outcomes — and that leads to optimizing the allocation of resources.

There is another fundamental difference Marketing ROI faces. In most other disciplines,

ROI involves choosing which incremental investment to make; in marketing, it often involves doing less of something so that you can do more of something else. It’s more about shifting resources than merely adding new ones. A good way to view this is to consider Marketing ROI as Relative ROI: you are comparing the efficacy of one action to another rather than calculating the precise impact it will have.

The primary result of Influence Mapping is a list of marketing’s activities in descending order of their efficacy. It clearly shows what to do more of and what to do less of; it is a strategic roadmap that a marketing manager simply should not live without.

More Information

If you’d like more information about how to apply a process to improve your marketing/sales function, simply contact us and we’d be happy to help you get started. From sweeping marketing/sales management process strategies to specific branding or product launch services, Customer Manufacturing Group can help.

If you’d like to learn more about Customer Manufacturing Group, or for a complimentary subscription to Customer Manufacturing Updates, give us a call at (800) 947-0140, fax us at (408) 727-3949, visit our website at www.customermanufacturing.com, or e-mail us at info@customermfg.com.

We have offices in major cities in the United States, and our experts travel extensively throughout the world. If you’d like to schedule a meeting when we’re in your area, just let us know.

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