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Month: July 2015

How to Leverage Products (Like Content) In Your Inbound Strategy
Today I’d like for you to take off your content marketing hat and put on a different kind of hat — your product hat.

You’re likely already contributing to your company’s product in a very significant way— through the content you’re creating for an audience that’s hungry to learn about the product you sell and the problem(s) your company solves.

The content you create is an extension of the product and personality that your company is selling, especially if it’s education-driven to expose audiences to your brand, what it is you do and how your product makes people’s lives better.

But traditional content, such as the blog posts, infographics and micro content that we see around the blogosphere, isn’t the only way to reach new audiences and generate new business for your company. You can also build and distribute products to bring in the same results as content.

Delivering world class products, whether apps, physical/digital content or otherwise, requires a deep understanding, commitment and investment. But it’s worth the time, resources and risk if you’re committed to creating something amazing and useful that can withstand the test of time in order to reap the benefits to come.

Examples of “products as content” in action

Established companies like Shopify, MailChimp and HubSpot have already been doing this for years, building free and useful tools that are still being used today.

Examples of the free products include:
- Shopify’ invoice generator
- HubSpot’s Marketing Grader
- Moz’s Mozcast
- Pablo by Buffer
- Mailchimp’s Chimpadeedoo app
- SumoMe‘s suite of free tools that were built to grow AppSumo
These products and tools help their core business, but they’re not their primary offering. Whether enhancing eCommerce stores, sending emails, or making marketing experiences better, they strengthen the value of their core product and make the lives of users easier.

Case in point: HubSpot’s Marketing Grader (formerly Website Grader) garnered 4 million unique visitors between 2006 to 2011. You can imagine how many leads they captured and funneled back to their core HubSpot product.

Keep in mind that “products” don’t need to be apps. It could be content as well, in the form of eBooks, physical books, and online courses (video, email or gated structured content). Some examples include Basecamp’s (formerly 37Signals’) Getting Real book, Taplytics Mobile Growth Academy and Shopify’s Drop Shipping Guide that are bringing awareness to each of their respective businesses.

Typically these products are laser-focused in what they accomplish. They educate the user and, most important, provide utility in a way that makes exchanging contact info feel frictionless because it is built into the experience.

Want a free report evaluating whether your website is optimized for SEO? You’ll have to enter your email and some other detail to get it.

Want to get a free email course? You’ll have to enter your email.

Want to get a free ebook on how 37Signals brings their products to market? You’ll have to trade your email for it.

Do you notice the pattern here?

Why build free products?

While the end result is lead generation, more users and growth, it shouldn’t be the primary and only motivation for building products as part of your content strategy.

The primary motivation should be to add more value to users’ lives — value so good that people can’t help but want to sign up for the new product or service, give up their contact info, and share it with their friends and colleagues.

All the fun and sexy stuff, like a consistent stream of new leads, traffic, social media mentions, business, brand awareness and such, is the end result of the value that you create by going above and beyond anything the market has ever seen. That’s the bar you want to hold yourself accountable to when shipping a product.

But let’s be straight — building a product isn’t easy. And that’s exactly why you should considering making it part of your strategy, because it’s a defensible tactic and the barriers to entry are pretty high for competitors to copy you and get exactly the same results.

How to get started

If you’re new to building products, the hardest part is understanding the exact problem you’re trying to solve. Solve for that in an exceptional way, whether it’s by providing a step-by-step guide or building a tool in app format that takes some kind of pain out of people’s lives.

Experiment with side projects

Maybe you need to start fresh and with a clean slate to shake things up. Much like how Google had famously offered 20% company time to empower their employees to work on innovative projects, your company can take your own unique spin on it, whether through hackathons or doing stuff on your free time and showing it to team members.

At Uberflip we have quarterly“Flip The Switch” events where we harness the creativity and energy of the entire Uberflip team to work on a high-level problem together for half a day and execute experiments based on the results.

People love to try out the most bleeding edge products that arise from skunkworks-style projects, as it shows creativity, innovation, and hustle. That’s what gave rise to Google Labs projects when it existed.

By trying new things and experimenting rigorously, you might just be surprised by the results.

Create email drip courses

Perhaps you’ve created a ton of content already and you want to generate more leads. You can do this by creating an email course and timing your drip campaign to content, such as PDFs or existing blog posts, so your subscribers get a new lesson once a week or every few days. You can fine-tune the cadence so it makes sense and doesn’t overwhelm a subscriber’s inbox.

Email drip courses have entered a new golden age where the quality of courses is out of this world, especially when you consider they’re being given away for free. A perfect example is Noah Kagan’s Summer of Marketing course or Justin Mares’ Programming for Marketers email course.

Offer eBooks

If you haven’t tried creating eBooks before, they’re a great way to leverage a body of knowledge and distill your deep expertise into something that people want and will gladly share their contact info to get that value.

A perfect example of this is Intercom.io and the series of eBooks they’ve released: one on Product Management and the other on Customer Engagement. The beauty of their eBooks (apart from their excellent design) is that they were leveraging existing blog posts as single compilation, nicely packaged and designed for some of their buyer personas: product managers and customer success teams.

Build apps

If you’re solving a problem, such as understanding the volatility of Google’s algorithms (like Moz’s Mozcast), tackling it through content alone might be a bit tricky. It becomes even more complicated if you’re tasking non-technical people to figure out that problem in a way that informs your audience and customers of what’s going on in the search world.

A great way to tackle this is to create an application (app) that will tackle a specific laser-focused problem.

The problem with this however, is that you’ll need to rope in some technical help to build out your product.

While apps are commonly thought of as mobile apps, it doesn’t necessarily have to be a native mobile app (like iOS). You’re severely limiting your audience if you decide to go with any specific technology, unless that’s the intended audience you’re targeting.

If you’re familiar with the Lean Startup methodology, the point of using the methodology is to move as fast as possible to learn about your market and build something of value to the point where you reach product-market fit.

This is the sweet spot where you’ve discovered that what you’ve created actually has a market. The point of using this methodology is to promote less waste of our most precious resources: time, money and people figuring out whether what you’re building has any legs by building out minimum viable products, which can come in the form of something as simple as a Google spreadsheet, much like how the folks at Distilled have done to find out anybody’s email address.

If the problem is much more complex, only then you’ll think of building out web or mobile apps.

Stuff you need to know before going down this road

You’ll need dedicated engineers in terms of actively developing these products. At the minimum you need to maintain these products so they perform their function and are bug free if a minimum viable product has been shipped out to public for use.

Support: Unless you make it explicitly clear to your customers and users that support for the product is going to be minimal or non-existent, you should have a legal disclaimer in place to cover your butts in case anything goes awry.

Buy-in from the top down: Eventually your skunkworks project might catch the attention of the higher-ups of your bosses or executive management team. Going under the radar can only last for so long. There will come a time where you’ll have to present your results (and hopefully they’re very promising) to get more resources to continue your efforts in order to maintain or expand the scope of your project, so be prepared to pitch your boss like a boss.

Final Words

Know this: The potential upside of using products to marketing your business is huge. It will be challenging and push you to create some of the best work of your career because some people will actually depend on the products that you create and help you gain even more users in the process if your product is that damn good.

So, what products will you create? 😉

Original Source – Uberflip.com
July 19, 2015
The Psychology of E-commerce Sales: Taking Advantage of Sunk Cost Effect

If you’ve ever signed up for a gym membership, then you’re already well aware of the power of sunk cost effect. Basically, every time you sigh and grumble your way to the gym to power up the elliptical, you’re falling prey to this phenomenon that says we’re reluctant to pull out of something that we’ve already put a lot of time, money, or effort into.

The sunk cost effect is obviously a very real thing, as you’ve experienced for yourself. There are also studies surrounding other items that prove the phenomenon exists outside of the physical improvement realm. One study centered on an imagined scenario with ski tickets. Participants were asked to imagine they’d accidentally double booked for two excursions. One was more expensive and decidedly less fun. The other was cheaper and guaranteed a good time. Most went with the snoozefest so as not to waste all that money.

Why would people do that? The sunk cost effect. And you can harness that power for your own e-commerce efforts.

Subscription Services

The sunk cost effect is why subscription services are so very popular right now. Most offer the opportunity to save money by signing up for multiple months and paying up front. The buyers who take advantage of the savings realize very quickly that they have to find some way to enjoy the products that are delivered.

Because they’ve already put so much money into their subscription deliveries, they’ll often sing the praises of the products they receive. Whether by sharing on social media, starting their own review blog, or just telling everyone they know, buyers will always attempt to justify the cost.

Branding Benefits

Because people are willing to pay more money for brands they perceive as higher quality, you can also get a big benefit out of the sunk cost effect. When consumers pay the higher price for your goods, they will become convinced they’re better than others of a lower price.

Again, once they’ve paid the higher price, buyers are determined to believe they haven’t wasted money. They’ll share their experience with your products as a way of convincing themselves and others that the cost was worth it. And they’ll likely return for future purposes once they’ve determined your brand is better.

Upselling Assistance

Once buyers have paid a hefty sum for your products, they can often be persuaded to kick in a little more for a truly stellar experience. For instance, if they purchase a laptop, they’re primed for upselling the virus protection software to protect their investment. If they purchase a seat on a plane, they might be convinced to add a little more for greater legroom or a seat in business class.

The reason they’re primed for the upsell at this point is that they must consider how much they’ve already paid before they approach the possibility of paying more. As they contemplate the price of the laptop, they realize they’ve already put a lot of money into the purchase. Something as irritating as a virus could ruin that investment in no time. With the economy plane seat, buyers realize they’ve already paid a big chunk. A little extra to ensure a comfy flight doesn’t seem like such a big deal.

Original Source – HubSpot

July 19, 2015
10 Brilliant Tips From Conversion Rate Optimization Experts
We’ve all been there.

You have a website, a customer acquisition team, and a really great product — but people aren’t getting on board. Or worse yet, they hop on, check things out, and jump ship.

But it doesn’t have to be this way. There are ways to turn visitors into customers — you just have to know which best practices you should start following.

Recently, the conversion rate optimization experts at Unbounce hosted an AMA at Inbound.org to chat about all things conversion. There were far too many things to sum up in one blog post, but we compiled some of their top tips for designing a great experience that, you know, converts people into leads and customers.

Check em’ out below.

1) Use Tailor-Made Pages for Custom Campaigns

NSAMCWADLP: Never. Start. A. Marketing. Campaign. Without. A. Dedicated. Landing. Page.

Copy informs design, not the other way around. Write your campaign copy first, then design an experience to communicate it visually. When you work hard on a design without copy, you are blind to its meaning. When the copy comes along and doesn’t fit/work, the designer is left feeling like they didn’t do a good enough job — which is not fair and not true.”

~Oli Gardner, Co-Founder

2) Don’t Sell It If You Can’t Solve It

Message Match is the most significant ways to reduce bounce rate, improve time on page, and ultimately, improve conversion.”

~Ryan Engley, Director of Customer Success

3) Mine Customer Comments for Copywriting Gold

One of my favourite takeaways that I always come back to (with product marketing specifically) is from Joanna Wiebe. [It’s] her classic copywriting hack of mining Amazon customer reviews for copy. Using your customers’ words directly to speak to your other customers is such a powerful tool. I find myself doing this when we launch new features in the product — I’ll go back to old community posts from customers originally requesting the feature or describing their problems, and pull out quotes to use in the launch messaging.”

~Carter Gilchrist, Co-Founder

4) TL;DR — Keep It Short

We think of our emails the same way we do landing pages — one page (or email in this case, duh) one purpose. As a rule, we try to provide enough information that someone would need in order to click the call-to-action. No more, no less. It works well for us. As a side, I’m of course super sensitive to lengthy emails hitting my inbox, so I imagine our subscribers are, too.”

~Georgiana Laudi, VP of Marketing

5) Use a Process for Approving Copy

We do our best to make sure nothing goes out the door without at least two people giving it a sanity check. Two (or more) heads are better than one. Is it clear? Is it actionable? Is it delightful? Does it sound like us? Back in the day, Oli used to write really off-the-wall copy, and I’d pull it back to make sure the messaging was clear, but that we weren’t losing our personality. It was a great process that’s stuck with us even though there are now multiple people contributing.”

~Georgiana Laudi, VP of Marketing

6) Have a Specific Flow for Your Content Creation

We always start out by asking ourselves a few questions:

1) Who is this piece of content for? What kind of marketer are they? Where do they fit into our customer lifecycle?

2) What problem is this piece of content solving for that marketer? How will this help them create better marketing experiences?

3) What marketing goal is this piece helping us achieve? What’s the call-to-action?

From there, we determine which channel is most suited to the content and the workflow varies accordingly. To keep track of all the moving pieces, we use a combination of Google Docs (for post drafts), Google Spreadsheets (where our multi-tabbed editorial calendar lives), Trello (for brainstorming content ideas and assigning them internally), Google Calendar (to keep track of deadlines), and Basecamp (for projects that involve multiple teams, like ebooks, webinars and Page Fights). WordPress is our content management system, our webinars are hosted on GoToWebinar, and our podcasts live on iTunes and Soundcloud.

Although the quantity of content we produce has increased considerably, we’re determined not to compromise on quality. Each post draft, webinar slide deck, or podcast episode goes through multiple edits and reviews and our golden rule is to never launch anything that doesn’t meet our editorial standards — even if that means not launching it at all. Put another way, everything we publish needs to serve our audience’s needs and expectations as well as our marketing goals. I realize this sounds super intense, but we have a ton of fun creating this stuff and strive to make our content as delightful and entertaining — in addition to educational — as possible. I hope that it shows.”

~Dan J. Levy, Content Strategist

7) Help Your Customers Be Successful

Customer Support offers both general service support and advanced technical support, including some custom coding and troubleshooting for advanced features like Webhooks. They’re available by phone, chat, email, and just about any other way you’d wanna get in touch. They are primarily evaluated on Net Promoter Score as a measure for how happy our customers are with us, and how likely they are to tell friends/colleagues about Unbounce based on their experience.

Customer Engagement is what you might consider a typical customer success team. They work directly with our customers from pre-signup, through trial, adoption, and ultimately retention. The team focuses on three different buckets of the customer lifecycle, so the KPIs are slightly different depending on the bucket. More or less, they’re here to make sure that our customers know what they’re doing, continue to see value, and hopefully stay with us.

Customer Education is primarily a content and communications team. They produce the content for Unbounce Academy and manage our customer communications, including things like in-app messages, emails, and community posts. The team’s primary KPIs are adoption and retentionm, though with our annual/quarterly goal planning, we might dig into more specifics if we’re trying to improve adoption of particular features.”

~Ryan Engley, Director of Customer Success

8) Don’t “Wing It” When It Comes to Onboarding

Unbounce divides their customers into three groups:

Pre-trial includes anyone who has not signed up for an account, anyone on free, and anyone currently on trial. We don’t have a typical sales team, but this would be the most sales-like focus we have. Our Onboarding team’s primary goal is to vet/educate potential high lifetime value customers on Unbounce and to get them to sign up. The evaluation here is number of signups, retention, and percentage of customers who sign up for annual prepayment. Is is technically sales? Yes. But our focus is far more on education and product adoption than just pipeline and deals. Most of our customers pay us $99 per month on no contract — it’s hard to warrant a full fledged sales team with a deal of that size, and moreover, someone who doesn’t fully see the value of Unbounce will churn anyway. So in a way, our Onboarding team exists to sell value.

Launching customers are those who have finished a trial but have been with us for four months or less. During this period, it’s pretty important that we help new customers launch their first few campaigns and continue to see value. We haven’t had anyone on our Customer Success team fully own this period (it’s been a shared responsibility so far), but it will be a focus for us in the next quarter.

Adopted customers have been with us four months or more. These should be customers who understand the value of Unbounce and are continuing to grow their use. Here we want to drive feature adoption and grow product use overall. The more successful we can help our customers be in their marketing campaigns and the more value they get from Unbounce’s features, the more likely they are to stick with us and tell their friends/colleagues about our service.”

~Ryan Engley, Director of Customer Success

9) Stop Turning & Burning Your Customers

[Design] an experience for your ideal customer vs. just a customer. We used to have two cheaper pricing plans and would have people signing up who were just getting started in marketing or didn’t really understand marketing. This caused a huge support burden and resulted in high churn. By raising our prices, we effectively isolated a more ideal customer profile (professional marketers with a budget), which ultimately lowered churn. Churn is always a problem though, and right now as it happens, we have a new team (a guild actually) dedicated entirely to battling churn. It’ll be interesting to see what comes out of that in the next 6 months.”

~Oli Gardner, Co-Founder

10) Your Landing Page Better Have These Things

If you could only have three elements on your landing page, here’s what you should include:
1) You need a CTA, so that’s a given.

2) I think some killer persuasive copy in your headline and subhead could do the heavy lifting.

3) If you have to sacrifice everything else, maybe a video to serve as your hero shot, feature/benefits, and social proof?

But ultimately, every landing page needs five things to do the best job possible:
1. Hero shot
2. Headline & subhead
3. Features & benefits
4. Social proof
5. Call to action”
~Ryan Engley, Director of Customer Success
So there you have it: the best conversion rate optimization tips from the experts at Unbounce. We had a blast having them hang out on Inbound.org and if you want to really dig into ALL of the tips they gave out, make sure you check out all 177 comments, questions, and answers right here.

Original source – HubSpot
July 19, 2015
How To Use Video Throughout The Buying Journey To Boost Conversions And Engagement
Don’t stop with a simple introductory video. Columnist Michael Litt explains how to create powerful content for every stage of the buying process.

The play button is quickly becoming the most compelling call-to-action on the Web. Odds are you’ve been drawn in by that shiny triangle just begging you to click it.

While many marketers have started to see the power of video to engage audiences and educate potential customers about their brands, I still see way too many who create a broad introductory video and then call it quits. That, my friends, is a huge missed opportunity.

Yes, a top-of-funnel explainer video is important. Featuring it on your home page gives people a fast, easy and fun way to learn about what your company does and what your culture is like.

But if you’re going to close deals, you need to do more than make a good first impression. Today’s customers go through more than half — and often much more — of the buying process on their own, so it’s imperative that you have a complete video journey on your website to guide prospects along the path.

I’ll go into detail about what type of video content best fits with different points of the buying journey — or the “funnel,” as it’s commonly known — but first a quick word about how much content you need at different points.

As a general rule, you’ll need the smallest amount of content at the top of the funnel — my recommendation is roughly 15 percent. Then, I’d recommend about 25 percent for the educational stage. The bulk of your content — about 40 percent — should address the evaluation stage in the middle of the process. Finally, another 20 percent should help buyers justify the purchase.

What Goes At The Top?

To get people’s initial interest, you need to aim wide. Create videos on high-level topics with broad appeal. Be authentic and talk about how you can help viewers reach their goals rather than push your specific products.
- Fun Content Showcasing Your Company Culture. Show off your quirks. Include shots of a wide variety of your team. Do not, I repeat do not, just feature your CEO standing in front of the camera telling the audience about the company.
- Thought Leadership Interviews. I know I just said not to feature your CEO standing in front of the camera, but a frank one-on-one chat with the boss, other execs or stars of your industry can be very appealing and help browsing customers understand your company’s vision and expertise. Plus, those types of videos tend to be shared widely on social networks.
- How-To Content. Here’s another opportunity to showcase your expertise with some deeper content showing how your products or services address a variety of needs for customers.
These videos should be quick and to the point. Optimal length is about 30 to 90 seconds, and I’d encourage you to keep them to a minute unless you really have something important to say that takes more time.

At the top of the funnel, video can also be a great tool for lead generation. You probably don’t want to gate content when you’re trying to make that first impression, but you should definitely use calls to action during and at the end of a video to refer prospects to more in-depth content, which could require them to provide a name and email address for access.

Heading Toward The Middle Of The Funnel

Now that you’ve guided your audience to the point where they’re seriously considering paying for your services, it’s time to help them evaluate what you have to offer.

This is a great time to give them the tools they’ll need to justify a purchase to their bosses, and the way to do that is to show them you know what you’re talking about down to the deepest details and showcase how you’ve done it for others already.
- Repurposed Webinar Content. Record your webinars and break them down into chapters so people can quickly find the topics they need. It will make you top-of-mind for authoritative content within your industry.
- Detailed Product Demos. Show them how it all works. Give them a tour of what’s under the hood. Let them see how much effort you’ve put in and how you’ve given attention to detail while building your solution.
- Client Testimonials And Video Case Studies. Assuming you already have a few satisfied customers, you can feature them here. There’s no better advocate than a satisfied customer. Let them sing your praises for you. Set up what their business problem was, and walk viewers through how you helped them solve it. Bonus points for providing hard metrics on the results.
- Integration Demos. In this day and age, odds are good that your service works even better when paired up with someone else’s products or services. No doubt there is a key service in your customers’ ecosystem. Show how you can help them get more out of the services they’re already using.
Optimal length ranges from 2 to 10 minutes, depending on the content. It’s probably not realistic to expect someone at this stage to commit to more than that.

Take that hour-long webinar and break it into six different chapters. Keep that customer testimonial to a minute or two.

The middle of the funnel is also a good place to start introducing email gates to collect contact information. Don’t worry about scaring your buyers away. At this point, they’ve already invested time to learn what they can, and they’ll be ready for some direct contact and more targeted content.

Sealing The Deal

Videos can be extremely helpful when prospects get closer to becoming paying customers, and after the fact, videos can reinforce their feeling that they made the right choice.
- Nurture Campaign Videos. Keep in touch with videos tied to specific campaigns. Know someone is going to attend an event? Create a nurture video to encourage a meet-up, or promote how your service connects to that of the event sponsor.
- A Good FAQ Video can come in really handy as a follow-up to a conversation with a prospect who’s getting close to a decision. Send a note thanking them for the chat, and refer them to the FAQs to learn more.
- Check-ins. Use a personalized video to check in with new customers. Ask them how the ramp-up has been. Are they starting to see the benefits? Do they have any questions? Do they need any specialized instruction?
- Instructional Videos. Getting up and running with a new service often leads to a bunch of new questions that hadn’t come up before. This is a great time to cover specific issues and also to showcase your amazing support team.
Optimal length here can vary quite a bit. Obviously, these viewers are looking for more detailed information and are more likely to consume a 5- or 10-minute video.

As with any content, you need to keep your audience in mind and respect their time. Just because someone wants a deep instructional video doesn’t mean they want it to last 45 minutes when it could be done concisely in 15.

The end of the customer journey is a great time to use calls to action to promote related materials — demos, free trials, FAQs. While you’ll want to make yourself easy to reach for your new customers, there will be times when you’re not available. A good video addressing their needs can serve as a good substitute in the meantime.

Video is powerful and persuasive. Done well, it can help buyers work their way down the path to purchase at their own pace and complement your other sales and marketing efforts.

Just make sure you map your content to that path, build the right mix of content, and be ready to start connecting your video marketing to that all-important bottom line.

Original source – MarketingLand.com
July 19, 2015
30 Effective Social Media Tactics Worth Testing for Yourself [Infographic]

You never know for sure which social media tactics are going to deliver for you.

Even the task of defining “effective” is a challenge. Your definition of success may differ from, well, anyone’s. Social media evolves at the speed of screen flicker. There simply are no steadfast rules.

So in order to find what works for you you need to keep experimenting. In this post we will try to provide you with some new ideas to try in your social media engagement efforts.

Based on 2015 Social Media Marketing Industry Report and additional research conducted by Barry Feldman, here is a an infographic on 30 Effective Social Media Tactics.

We hope you find this information useful!

Written by Barry Feldman for HubSpot

July 19, 2015
Market Intelligence Is Evolving. Are You Ready?

A director of market intelligence at a Fortune 50 company called me last week. He wanted my advice about how to recharge the competitive intelligence process in his company. I have been getting more calls like that in the last six months than in the last decade. It seems that competition has intensified for many global companies, yet their available competitive intelligence is no longer sufficient. They erroneously think that it’s a matter of getting more competitor data. They are dead wrong.

The director from that company, a global powerhouse in its industry and a household name around the globe, was tasked with providing competitive intelligence to the marketing organization of two units of his company, and the two units had a completely different view of what constituted competitive intelligence. He was lost.

Dominant Players Accepting Death

One of the units in that Fortune 50’s company was the “cash cow” with a dominant market share and slowly declining but still enormously profitable business. Its marketers considered competitive intelligence to be market “news,” mostly product and technical tidbits about competitors. When the director sent them this “news,” they only occasionally followed up with questions. I call this the “push” model.

Since the users had little actual use for the data and reports, the director’s job performance was assessed by productivity: the number of reports sent per period. This is typical in many marketing organizations in leading (and often complacent) companies. It’s also a complete waste of money. Only data worshippers think that is a good use for scarce corporate resources. My director client knew that it was a waste of time and money, but his audience—the dominant unit’s senior marketers and product managers—were too set in their ways to ask tough questions about the value of such “competitive intelligence.” In short, this gigantic unit accepted its continuous march toward death and basically waited it out. The marketers didn’t see any other use for competitive intelligence aside from cursory monitoring of competitors’ moves.

The SEW Process

The other unit was the “star” of this company and garnered a lot of attention from top management, Wall Street and the press. The unit was in a hotly contested competitive arena, coming from behind, and analysts regarded its success as crucial to the company’s future prospects. The top executive in this unit wanted strategic intelligence, not “news.” As he said it, he can read The Wall Street Journal for news. The director was asked to run a war game known as Landscape to help create the strategy going forward for that unit. The success of the war game established his credibility. With credibility came a willingness to rethink the whole market intelligence paradigm. Instead of a costly competitor data dump, the director started implementing a strategic early warning (SEW) process. The principles behind a SEW are simple and powerful if done correctly: Replace the volume of “reports” with substance and replace a “nice to have” mindset with measurable impact on projects and decisions. This is what I call the “pull” model.

Do you remember Continental Light? No? There’s a reason for it. In the ’90s, as discount airlines started to make an impact, Continental Airlines decided to join the game and operate a low-cost unit, Continental Light. After two short years and a loss of $300 million, the company learned the hard way that it was impossible to run high-quality and low-quality operations under the same roof.

It’s the same for market intelligence, and marketers should heed this lesson: Buying a lot of data, and crawling the Internet and social media for competitor data, doesn’t provide one iota of strategic insight. It provides mostly noise at a high price. If you have money to spare, keep going.

The Abuse of Competitive Intelligence

Close to 60% of competitive intelligence positions are in marketing organizations. The natural tendency of marketers is to consume a large amount of tactical “news”—not because it actually affects their decisions or their ultimate performance, but because this is the nature of work in a large company. Few question the fundamental value of the mountain of information that they receive, despite evidence that it is the lack of big-picture competitive insight, which is a major cause of decline, not the insufficient detailed information on competitors. Sony, Hitachi, P&G and McDonald’s are just a few examples of companies that fell on hard times despite heaps of marketing information available to their management.

The irony is that a strategic early warning process is cheaper—both in human resources required and in budget—than the old “push” model of competitor minutia. CMOs need strategic insight on a macro competitive arena scale. One company’s CMO instructed his analyst to provide data on close to 100 competitors. What type of data can make a difference if you think 100 companies are worthy of close attention as competitors?

What’s Common to Twitter and FAO Schwarz?

The lack of understanding of competitive intelligence by marketing organizations can have consequences far beyond just wasting scarce corporate resources. Take two recent examples: Twitter and FAO Schwarz. Twitter’s marketers achieved a remarkable feat of 90% brand awareness. FAO Schwarz is a brand with a 150-year legacy with unparalleled name recognition in toys. By all traditional measures, marketing has done a tremendous job with both brands. Yet last month, Twitter’s CFO was appointed its CMO because the company hasn’t found a way to monetize its brand power. FAO Schwarz’s iconic store location in New York is closing in July. The owner, Toys “R” Us, admitted that the huge traffic in the store never translated into purchasing.

Here are some questions that an astute CMO reading about Twitter and FAO should ask himself or herself, the kinds of questions that would lead to gathering the right kinds of competitive intelligence:

· Am I responsible for profitability or only for increasing market share/brand awareness? The answer depends on how strategic the marketing function is.

· Do I have an objective perspective on the big-picture competition out there? The answer depends on what CMOs consider “big-picture.” Many mistake it for direct competitors.

· Do I get a reading on early signs of trouble and windows of opportunity? The answer depends on how CMOs define “early” and their tolerance for uncertainty.

· If I knew every detail of my direct competitors’ plans for the next five years, would it make a difference in my strategy? To answer that, think hard: Have any of your five-year plans made it through market changes?

· What is the role of market intelligence in my organization? Is it a glorified Flipboard? A data junkie’s dream? Is it worth the investment?

What’s Next?

In recent years, I’ve witnessed a re-thinking of competitive intelligence’s role, scope and design, starting with a CFO taking over SEW from the marketing organization as part of enterprise risk management. Maybe this is the solution, though my experience is that some CFOs tend to be too narrowly focused on short-term cash flow risks alone. Given the prevalence of “market intelligence” positions in marketing organizations, a better solution is for more strategic CMOs to redesign the market intelligence process from scratch to venture beyond competitor minutia.

In helping to redesign the intelligence process at the Fortune 50’s company mentioned above, the first advice that I gave the director was to simply stop sending competitors’ tidbits to the marketers at the dominant unit and see what happens. Care to guess how that played out?

Benjamin Gilad is president and CEO of the Boston-based Fuld-Gilad-Herring Academy of Competitive Intelligence and author of Business War Games.

July 1, 2015