First, I think it’s probably important to get some definitions right. As the Forbes link above says, I think it’s fair to say that mobile-enabled e-commerce does not equal mobile commerce, at least strictly speaking. When you buy a book from Amazon on your iPad, you’re not engaging in mobile commerce per se – you’re using an e-commerce portal adapted for your mobile device. “Mobile commerce” is probably best described as shopping that takes advantage of unique properties of mobile devices.

So, why doesn’t it ever seem to happen – and when it does, why does the development in the space seem to happen so slowly?

VentureBeat took that subject on a few days ago. They posit that there are two big barriers to widespread adoption of mobile payments and commerce:

The lack of a developed, recognized standard. There is an industry-wide standard for credit cards, and processors work such that almost any credit card can be swiped at almost any retail point of sale, and the transaction will go through. The same is absolutely not true for mobile payments, at least not yet: retailers wishing to accept mobile payments have to guess what kind of phones their customers use, and potentially install multiple pieces of hardware to handle the transactions.

The significant cost of updating retail infrastructure. Hand in hand with the lack of certainty around a particular processing standard is the big cost retailers face in upgrading their infrastructure to handle mobile payments. Big retailers often use purpose-built or highly-customized point of sale software, designed to integrate smoothly with inventory and payment processing systems – positive qualities that make implementation of a new payment method prohibitively difficult and expensive. Included under this heading is the cost of training new staff to use the equipment – no small feat.

To this, I’d add one more: consumers just don’t seem to be interested. And I can’t entirely blame them. I might be being small-minded here, but it sounds like there’s no inherent advantage to whipping out one’s phone to pay for a retail transaction vs. whipping out one’s credit card. In the development of other forms of e-commerce, there was a real sticking point – the need to get up and go to a store to get books and other items, for instance – and there doesn’t appear to be one here. Unless it’s possible with mobile payments to walk out of a store without checking out – and it sounds like that day is very, very far in the future – I just don’t see the draw, at least in a retail setting.

So, I won’t go the easy pundit’s route, and say 2012 is the year of mobile commerce. I think 2012, and 2013 for that matter, will be years of mobile-enabled e-commerce – a series of incremental innovations designed to make the buying experience easier for mobile users. There’s real growth in that – maybe not whiz-bang growth, but growth nonetheless – and it’s something worth pursuing.

MLC members, for more on mobile, check out our Mobile Marketing Resource Center.

For an example, look no further than the auto industry. The recession years saw a few automakers nearly go out of business, while others, like Hyundai, Kia, and Subaru, posted double-digit increases in sales and market share – albeit in a seriously depressed market. In particular, Hyundai accomplished this by offering an excellent price-to-value proposition and with a few catchy campaigns that engendered a ton of consumer trust, like their Hyundai Assurance program – which allowed buyers to walk away from their car loans if they lost their income or were disabled during the term.

The recession years also saw serious pent-up demand for cars. The average age of an automobile driven in the US is now nearly 11 years, a record high, indicating that people are keeping their cars around longer and perhaps dealing with minor mechanical and aesthetic inconveniences in the process. But there’s evidence that the US economy is beginning to (modestly) rebound, and once demand returns to trend, cars should be flying off the lots – and due to the investments they made in the recession, challenger brands like Hyundai, Kia, and Subaru should be poised to take a bit more share than they otherwise would have.

That’s why it’s not surprising that Hyundai-Kia is planning two big moves for 2012: increasing overall production by around 8 percent, and bumping R&D spending by nearly 11 percent. The company wants to be ready for the return of flush consumers with an array of technologies and conveniences that compete with major players in the global market – and to have enough cars to meet the demand.

Don’t think the auto industry is an outlier. The average age of most durable goods has increased significantly during the recession, and CPGs aren’t immune either; recessionary brand-shifting won’t be forgotten the moment incomes return to trend. So, what should consumer marketers be doing to better lead innovation processes at their organizations?

First, I’d start with reading our 2010 work on radical innovation. It contains a number of insights, gleaned from the world’s most innovative companies, on how to best launch quick, protected innovations focused squarely on consumers’ higher-order needs.

Then, I’d go through our NPD and Innovation topic center, which houses the rest of our insights on innovation, including strategies for generating ideas, for managing a portfolio of innovation efforts, and finally for launching new products.

Finally, let us know in comments how you’re changing innovation processes this year to better meet consumer needs.

It’s the organizational part that’s more difficult, though – people naturally get stuck in routines, are averse to change, and executives are loath to take risks on projects that have uncertain chances of success. We’ve collected our best practices in getting organizations to adapt in our Make the Case to Invest in Social Media challenge center, and most of the lessons there hold true for channels like mobile, as well.

With that in mind, we also thought we’d take a second look at an interview we did a few years back with Susan Lavington, former SVP of Marketing at USA Today. She was at USA Today during the heyday of social adaption, and led that paper – a progressive one, by print journalism standards – through a difficult transition to social.

MLC members can read the interview in its entirety.

Usually, when the customer has an issue, customer service is there to help. But in this case, the reps are often as confused as the customer. As a rep at a national retailer recently told me when I called, the personalized ad “is not on our site so it’s Pandora’s ad not ours”. With personalization being a relatively new and under-regulated phenomenon, the chance to be exactly right is often counter balanced by the chance to be completely wrong. Sophisticated algorithms running in the background don’t guarantee success – any financial firm can tell you that.

As marketers rightly understand it, personalization is on their turf. While they are positioned to take the lead in delivering greater relevance to consumers, marketers can’t hope to ace it on their own. Here’s why:

• Personalization calls for inter-departmental coordination. Your interactive marketing vendor isn’t the only party you’ve got to work with. Not letting your left hand know what the right is doing when it comes to targeting customers is inviting trouble. At the very least, sales and customer service need to know what personalization is and be able to give a informed explanation when customers call with questions/comments ranging from “Why am I seeing this?” to “Stop spamming me!” To consumers, anything with your logo on it is your ad and hence your responsibility to explain / fix / make disappear. Having a short, scripted FAQ beforehand on how personalized ads work and how settings can be adjusted could save reps from coming up with their own explanations. For sales, integrating the detailed customer data your use for personalization into the CRM system could help them gain valuable context before each conversation and more willing to track additional consumers metrics for you next time around. The simple fact is, if you don’t talk to other departments beforehand about what’s going on, they’ll come back to you later about what’s going wrong.

• Personalization calls for coordination within marketing itself. In the same vein, marketers involved in personalization shouldn’t be allowed to sit in their own niche while keeping the rest of the department in the dark. Digital and social marketers can tell you who is poking around on brand’s Facebook and campaign pages; product managers can help you zoom in on purchase motivation in a particular segment; and market research analysts have primary research and tracked metrics that would add another layer of do’s and don’ts.

Hippocrates said, “First, do no harm.” Embarrassed or annoyed consumers aren’t likely to be loyal – they said as much in our recently concluded consumer survey on personalization and privacy. The bottom line: consumer data can be bought but consumer trust cannot. We’ll talk more about how you can get personalization done right in your segment so stay tuned for more insight.

So we’re currently trying to tease out, exactly, what people are using analytics for, and what ultimate goals those actions feed into. When we’re on the phone with members, overwhelmingly we’re hearing that data brings enterprises closer to the consumer, leading to all sorts of better outcomes: more resonant marcomms, higher margins through more effective price discrimination, and, for some companies, better products that arise through access to protected, proprietary data assets (like Nike+).

I could imagine two ways that data might feed into customer centricity (whether it’s helping or hurting). Story number one more or less goes: we as a company had very little idea who our customers were, what they liked, how they socialized and what kind of products they bought from others that they could be buying from us. When we integrated advanced marketing analytics and unstructured data, the numbers told us more about our customers than we already knew, and we became more customer-centric.

The other story goes: we as a company had very little idea who our customers were, and therefore we integrated big data and advanced analytics. But we couldn’t choose which data to use, and our analysts and marketers got caught up in a never-ending cycle of analysis paralysis. Moreover, thinking about the consumer as an abstract concept in data led to people forgetting the importance of experience and observation. In the process, we lost sight of the softer, qualitative ways that we learned about customers, and ended up becoming less customer-centric.

Which of these is more plausible? I’m not sure, but my gut says it’s the second story. I can count the number of companies with great, consumer-apparent uses of data on my fingers and toes, and analytics vendors have bigger appetites than that; there are surely hundreds of companies out there with data on their hands of varying effectiveness.

So, we thought we’d bring the question to you. Answer the poll below to let us know how you feel about data and analytics’ role in customer-centricity. Want to add some details? Let us know in the comments section.

That might work (and be necessary) for TV, a channel where ad buys have to be coordinated months in advance and audience preferences don’t change too much. But for social media, where channels change near-daily and audience behavior is still in flux? We think companies should be focused primarily on experimentation and flexibility – and that plans should optimize to those goals.

Our Social Media Plan on a Page will help get you there – it’s a five-step method for creating a world-class social media experimentation strategy, one that’s grounded in enterprise priorities and audience preferences. Here’s what you’ll do:

Ground strategy in business objectives. Pick – and fully understand –  your company’s 2-5 growth priorities for the year. This guards against wasting time and money by choosing projects that don’t mesh with enterprise-wide priorities.

Assess your audience dynamics. Dig deep, and understand how and why your target audience consumes social media. Make sure you have an idea of where consumption might be headed in the future by identifying your lead users and examining their behaviors.

Identify your strategic opportunities. Explore how social media can help your company accentuate its strengths, as well as meet customer needs in ways that are difficult for competitors to replicate.

Select the highest-potential experiments. Determine which near-term experiments in social media will help position your company to take advantage of longer-term strategic opportunities in social media.

Measure your social media efforts. Use a “Return on Objectives” approach to assess if and how your social media efforts are driving business results.

MLC members, you can download the full Social Media Plan on a Page template and get started on your social plan today.

But many brands struggle with the risk involved when using consumers to market the brand.  After all, giving consumers the license to share their thoughts on your brand allows them to share the bad along with the good.  In addition, it can be hard to select the right people to represent the brand.

Ford tackled these challenges to launch the U.S. model of the Ford Fiesta by using consumer advisors, or “agents.”  To ensure that both consumers and the brand could trust the agents, Ford implemented a rigorous selection process to ensure good brand fit and social media reach.  Ford selected a very diverse group of agents, so most consumers in the Fiesta’s target demographic can find agents like them.

A larger struggle for most brands, though, is giving up control over what the consumer advisors say.  Ford knew it needed to balance the need for some brand control with the need to generate authenticity by giving agents uncensored speech, so they assigned monthly missions to give some structure to the agents’ experiences. Ford then allowed the agents to use their own blogs, tweets, and YouTube channels to tell their stories in their own words, pictures, and videos.

In addition to providing structure for the agents, Ford further leveraged these missions by selecting some that highlighted the car’s features.  For example, one mission had one agent drive until his car ran out of gas, showcasing the car’s high gas mileage; other missions included turning the car into an ice-cream truck (showing off a large amount of trunk and storage space) and taking a road trip (to demonstrate its comfort over long distances).

Using the agents to tell the brand’s story had really positive results: Ford generated the same name awareness for the Fiesta as the Ford Edge and Flex had after two years of traditional advertising at just 10% the cost of a traditional media campaign.

After seeing such great success in the United States, Ford adopted the campaign for India.  MLC members, click here to read about how Ford used the agents to generate brand interest in an emerging market.

Payless, an American shoe retailer, faced this problem a few years back. Facing competitive threats from big-box discounters, a deteriorating customer experience, and a management team far-removed from the average customer, the company’s CMO tried to drive improvements in the customer experience but predictably failed due to lack of senior management buy-in.

Realizing that the company needed to make the lack of customer focus “real” to senior executives, Marketing arranges a series of executive-immersion sessions. They listen in on focus groups to learn the characteristics of core segments, then “act out” those segments in a series of visits to Payless and competitor stores – a constraint that forces them to remove their functional hats and view stores from the perspective of a consumer, rather than an operations or a finance executive.

A key part of the visits to Payless stores is that they are unannounced and incognito. Executives, assuming their roles as a particular customer persona, shop in the store as any other customer would, avoiding the problem of stores “preparing” for pre-announced visits.

The end result? Executives quickly figured out where the customer experience was lacking and identified a few key elements to fix, leading to higher same-store sales and increased foot traffic and customer satisfaction.

MLC members, check out the full case, or listen to this webinar replay on how companies – including Payless – have pioneered consistent, differenteated, and delightful customer experience.

This list was eerily reminiscent of the results from MLC’s Marketer Quick Poll from a couple of months ago.  Only in our case, we had asked marketers about their top challenges on the data management frontier.  If these challenges are so similar between such different subjects, then perhaps it’s time to reposition and take a step back to look at the broader marketing environment.

The easiest big-picture framework that came to me was the traditional supply-and-demand curves.  For simplicity’s sake, we can consider the consumer market for baby food.

Assume we hold the supply curve constant.  To increase the amount of consumer surplus under the demand curve, we can do one of two things:

1. Try to make our captured demand hug the full consumer demand closer.  (Gerber battles Baby’s Best!)
2. Attempt to shift both demand curves further out along the supply curve.  (Expand the economic pie – for instance: Gerber using analytics to discover that older adults without teeth were an underserved market)

Most marketers would agree that achieving both would be ideal, and if they had to pick, they’d aim for the latter.  But if we look at actual practices, most marketing departments are focusing their social media and analytics efforts in the first one.

Their thought process might go something like this:

Sure I’d like to just burst through the innovation bubble and find a whole new untouched consumer population…

But we don’t have the innovative power, and it certainly won’t be easy justifying riskier, creative ventures to the rest of the organization.

Besides, the consumer landscape is changing so fast, I’m having a hard-enough time just keeping up with my competitors!

So let’s just work on speeding up current activities and getting as much consumer information as possible.  Who knows, maybe we’ll get lucky and come across something that will push innovation forward!

However, while aiming for “real-time” relevance has its merits, it may not be the smartest way to secure customer value and loyalty.  Consider the following: are marginal increases in market share sustainable?  Are consumer preferences really changing so quickly, or does it just seem that way with recent technological/analytical advances?

We’ve recently been thinking that focusing on speed may lead to smaller marketing improvements with fleeting market advantage.   Keep an eye out for our survey in February, when we’ll be gauging Marketing Agility (speed, flexibility, and all the factors that represent entrepreneurial readiness).  Participating companies will get a benchmarking report.  Email me if you’re interested in taking the survey or learning more: yzhang@executiveboard.com

While it’s looking like 2012 might be a better year for business than 2011, it’s still essential that marketers focus on ways to ferret out waste and inefficiency in operations – both to minimize the impact on corporate bottom lines, but also to remain flexible for the new channels and investments that are sure to pop up in the coming 12 months.

And so, we measure everything – campaign effectiveness, brand investments, even the internal operations of the marketing function. But a marketing organization is a complex organism, and can be measured in an infinite number of ways – ways that might be contradictory or misleading.

Unsurprisingly, MLC members have come up with a number of ways to measure marketing’s effectiveness. Here are a few of our most popular strategies:

Measure adherence to the brand promise. Large organizations face inherent difficulties in consistently delivering on ambitious brand promises, and FedEx was no different; performance to brand promise was wildly inconsistent across channels and geographies.

In response, the company created a scorecard that boiled down the brand promise into discrete employee behaviors, incenting the front line to comply in the process. MLC members, read the full case here.

Measure marketing’s contribution to firm financial performance. This one can be difficult to figure out – it’s hard to determine, with any sort of certainty, which marketing activities have led to which performance benchmarks at the corporate level.

Xerox moved to this model after years of throwing large volumes of performance data at senior decision-makers. They used a lean Six Sigma process to arrive at a manageable number of insightful metrics aligned with broader firm performance, leading to higher levels of senior-staff buy-in. MLC members, read the full case here.

Measure marketing’s contribution to firm goals. We highlighted this case in this week’s post on sustainable brand growth, but it also explains a key insight into what Marketing should prioritize when it comes to effectiveness measurement. Given the somewhat ambiguous nature of marketing, it’s key that senior folks buy in – and most often, getting buy-in is contingent upon answering the question “What have you done for me lately?”.

One MLC member solved this problem by creating a purpose-built dashboard that shows exactly how marketing and branding initiatives align with and contribute to corporate goals. MLC members can see the whole case here. We’ve also blogged about this case.

Thinking, Fast and Slow. Just when you thought the cognitive-science fad in business circles was wearing out, Nobel winner Daniel Kahneman releases what is likely to be considered his magnum opus on the way people think and make decisions, particularly commercial ones.

In general, I think marketers intellectually know that consumers are not rational and will often make unexpected choices, but our models often assume a rational or quasi-rational consumer. I think that, in some respects, this book will help folks truly re-think what drives commercial behavior.

The Filter Bubble. Here’s one that describes a phenomenon marketers are (in part) responsible for: the splintering of society made possible by long-tail affiliations and the internet, and the resulting “bubble” most people find themselves in when it comes to news, information and products.

This is an important phenomenon that really does limit the kind of serendipity that drives a lot of product adoption and preference switching, and it’s worth looking in-depth at author Eli Pariser’s argument. His examples are primarily from the world of politics, but the parallels are clear: when algorithms and social circles control what one is exposed to, serendipity dies.

Steve Jobs. I’ll be honest – I’ve only just picked this one up, and I’m not quite sure I have well-developed thoughts on what the book has to offer folks. I have read a number of excerpts from the book, around the time it was released – and I can say that they paint a picture of an incredibly enigmatic leader, the kind whom we’re not likely to see again any time soon.

I think, if anything, the big takeaway from this book will be just how reliant Apple was in its early days on Jobs’ genius, and how other companies that compare their innovation and design acumen to Apple’s are likely chasing unicorns.

The Challenger Sale. You know we couldn’t write a post about the best recent business books without plugging our own. Matt Dixon and Brent Adamson, both of our sister program for sales executives, have a great new book out explaining how the relationship sales approach is becoming less effective, and how the best sales reps for the new environment are those that don’t acquiesce to the customer’s every demand, and who push back and remain in control of the sale.

The book teaches executives how to implement a Challenger sales strategy in their organization, and even includes great information on how marketers can help enable Challenger selling. Definitely worth a look.

Part of this strikes me as catch-up growth: for awhile, there were significant differences in the mobile offerings between various competing banks, here in the US. Just about any bank of size offers a few standard mobile features: balance check, transfers between same-bank accounts, bill pay – features that more or less mirror the offerings from online banking platforms. Now that the major players in the market have more or less adapted similar mobile platforms, I’d expect that the explosive returns TowerGroup found might not be as common as they once were.

To continue driving results and returns from mobile banking, then, banks are going to have to start getting innovative. I think that answering these two questions are a great place to start:

For our existing customers, what unique opportunities does mobile offer? TowerGroup’s report illustrates a real-life example of a European bank’s mobile platform in action: a customer, buying a television, is sent an SMS prompt to verify the transaction in real time; after the transaction is verified, the customer is then asked whether she’d like to put the television on a rotating line of credit. It’s more or less a win-win: for the bank, extending the offer comes at a near-zero marginal cost (everything is automated) and even a small conversion rate represents serious ROI; the customer walks away with the impression that her bank is helping her achieve her financial goals with relevant, real-time offers.

The smartphone gives banks a real window into the actual commercial habits and needs of their customers, and you could imagine banks using the channel to be a sort of financial guardian angel, protecting people from getting ripped off by more unscrupulous lenders or by losing money to their own cognitive faults and biases. It would represent an enormous added value to the customer, and an opportunity for banks to cement loyalty and higher-margin financial product utilization at the same time.

How do the lives of the unbanked differ from those of the banked, and how does mobile fit into their lives? Globally – and perhaps within some countries, including the United States – the biggest opportunity for banks, in terms of raw customer potential, is the population of people that have limited or no exposure to the banking system. In the US, the unbanked and underbanked make up around a quarter of US households (according to a Federal Reserve study) and there’s a variety of reasons they have less-than-ideal access to the banking system: paycheck-to-paycheck living, past negative experiences with banks, misunderstanding and misinformation about banks, and a perception that retailers (for instance, Walmart and check-cashing outlets) offer more convenience at lower prices than do traditional banks.

Inspiring confidence in the banking system is tough and sometimes counter-intuitive, but it strikes me that the always-on access to the customer that mobile provides could be a great way of tackling some of these fears. Unbanked and underbanked households worry about creating sustainable savings plans; why not help them out? Give them access to a platform to make financial goals and track progress – something like Beeminder – and SMS them when a purchasing decision puts them in danger of falling off the path to meeting their goal.

I don’t think banks have even scratched the surface of what’s possible in mobile, and I’m excited for what’s to come.

2011 Marketing Investment Benchmarks. Review select marketing, marcomm and digital spend and budget allocation benchmarks from our 2011 benchmarking initiative, including previews by business model, revenue size and marketing priority.

Marketing Automation: Lessons from the Front. In recent years, Marketing Automation has grown in prominence but as with any new technology, many marketers are struggling to separate fact from fiction when it comes to what these software-based tools can really help them accomplish.

Help Your Consumers Become Better Advocates. As many marketers know, word of mouth is one of the most trusted forms of marketing. However, even when consumers do advocate for a product or service, their recommendations often provide too little context and detail to convince shoppers to buy. Learn How to improve the quality of your advocates’ recommendations.

Managing the Transition to Head of Marketing. As marketing organizations take on a greater role in the functioning of the enterprise, and as enterprises themselves become more global in scope, the role of the CMO has become much more complex. Heads of marketing must now assume responsibility for a bigger basket of activities, from customer understanding to analytics to creative development, and are under even more pressure to show returns on those activities.

Improve NPD Opportunities: Know Your Customers’ Goals. Too often, customer understanding efforts end up yielding only incremental improvements in product and service. Here’s how one member company sought to understand what really drove their customers, super-charging their innovation efforts in the process.

Know What Your End-To-End Customer Experience Looks Like. Product and media proliferation make it harder than ever to maintain a consistent customer experience. Well-intentioned efforts to improve individual touchpoints based on customer feedback often sum to a disjointed experience for the customer. Moreover, even when acting on the same insights, independent functions’ approaches can clash with one another.

Citrix’s “Anti-Newsletter” Nurture Program. Citrix’s automated quarterly newsletter—a content catch-all including multiple calls to action—was not generating the quality or quantity of leads that Marketing or Sales needed. The solution was an “anti-newsletter”—a system of targeted, timely e-mails with discrete calls to action.

Teach Customers with Your Sales Pitch. Are your customers paying attention to your differentiators, or are they focusing on price and forcing you into the commodity bucket? Here’s how Volvo brings the conversation back to unique supplier benefits.

Make Your Touchpoints Resonate: Reverse Your Marketing Plan. In an age of media oversaturation, brands without principled touchpoint selection strategies risk irrelevance – or worse.

We thought we’d take you on a brief tour of four proven strategies for sustainable brand growth, as illustrated by MLC members:

Establish a repeatable brand-building framework. Think about it: a lot of dominant brands in various markets are dominant not necessarily because of planning and business acumen, but tradition and accidents of history.

American spirits manufacturer Brown-Forman, famous in particular for making Jack Daniels whiskey, arrived at a set of tools and processes to establish and build on a meaningful and differentiated brand position. MLC members, for more, click here.

Develop a marketing and brand plan that supports overall corporate strategy. It’s vitally important that your brand resonates with your actual consumers, yes. But almost as important is whether it resonates internally – if marketers can’t communicate their contribution to the corporate bottom line, it makes it pretty easy to cut a popular brand from the market.

One MLC member solved this problem by creating a purpose-built dashboard that shows exactly how marketing and branding initiatives align with and contribute to corporate goals. MLC members can see the whole case here. We’ve also blogged about this case.

Develop a clear, differentiated brand strategy. Many of our readers and members work for mature brands – ones that have been around for decades or centuries – and in the intervening years, brand promises and strategies can get muddled to the point of ineffectiveness.

Recognizing the problem, Clorox (which will be 100 years old next year) launched a study into what made brands consistently outperform their categories, and found that each had a single-minded growth strategy that all activities aligned with. They then created the HighFlyer program that helped brands find that growth strategy. MLC members can see the whole case here, our toolkit here, and we’ve blogged about it before, too.

Focus on consumer focus. Ultimately, we marketers are here because of customers and consumers, but the complexity of many firms’ business, our marketing plans often revolve around something else – the demands of television partners, for instance.

Kellogg’s, recognizing this, refocused its planning process to concentrate on measures of customer engagement and focus, leading to stronger, more sustainable brand growth. MLC members can see the whole case here or listen to a webinar replay.

First, some background, if you’re not knee deep in health-related social media circles. The US Food and Drug Administration, in addition to determining which pharmaceutical products should and shouldn’t be allowed in America’s pharmacies, also regulates the ways in which pharma companies are allowed to market to doctors and patients. Sounds smart, right? After all, we’re talking about potentially-dangerous drugs, here.

As such, they’ve developed guidelines and rules for the use of electronic marketing in a pharmaceutical setting. The only problem is, they haven’t been seriously updated since the late 1990s – and do not account for social media at all. This has put pharma companies in the weird position of being able to use social to broadcast certain messages but unable to have meaningful conversations with their customers, lest a side effect or adverse event is reported, setting off a chain of regulatory red tape.

The FDA listened and, in November 2009, held two days of hearings where pharma marketers, consultancies, doctors and scientific groups testified and gave suggestions on adapting the agency’s guidelines for a shifted communications landscape. And then, we waited – until Christmas Day 2011, when the FDA published this – entitled “Responding to Unsolicited Requests for Off-Label Information About Prescription Drugs and Medical Devices” - in the Federal Register, without even issuing a press release. This particular issue is one small facet of the pharma/social media problem, and it looks as though that the agency, rather than issuing sweeping guideline shifts that acknowledge a new communications landscape, is going to attack issues piecemeal.

But this specific guidance gives very little evidence that the FDA is thinking about social media as a systemic phenomenon, as opposed to a special case, capable of being dealt with with one-off regulations. First, the basic assumption is that marketers will be using social channels to “disseminate product information”, i.e., to advertise. That’s a given, but social offers organizations a lot more than just more space to plaster messages; we’ve talked about how social media trends mirror those in real life, and presumably the ability to listen to consumers better might lead to better health outcomes.

So here’s what I’d like out of future FDA guidances: an acknowledgement that social is a conversational medium, not a broadcast one; that it has benefits for pharmaceutical companies and broader public health outcomes beyond providing a place for Pharma to advertise; and that rigid rules on what Pharma can and can’t discuss in certain circumstances is bound to fail in a landscape where drugs are prescribed for all kinds of purposes.

Maybe we’ll get it, but I’m not hopeful.

But bridging the gap from data to action almost always requires an intermediate step – testing. And with big, real-time data, the B2C space just might be entering a golden age of testing and learning, as the test-to-results cycle speeds up and decisions can be made faster.

It’s important, though, to keep the possibilities here realistic – tweaking products, experiences, or messages will almost certainly produce marginal results, ones that might be eaten up by the macro factors at play in any business success – technological trends, the economy, that sort of thing. Case in point is Sears/KMart – a company that’s come on some hard times in the last few years, and one that recently announced that it would close between 100 and 120 stores in the coming year.

Of course, a lot of this has to do with economic and technological shifts facing all big-box retailers: the improving quality of mobile and e-commerce, easy price comparisons, an overall dip in consumer spending. But Sears hasn’t sat idly back, waiting for the waves of change to render it irrelevant – they’ve been extraordinarily active in testing different sales-floor formats, trying to figure out which resonates with consumers the best.

As Jesse Eisinger wrote in Portfolio a few years back:

Retailers experiment all the time. But Sears Holdings celebrates its test-and-learn culture as a matter of corporate pride. [Sears CEO Eddie] Lampert’s idea is that he can, using data and good business sense, eventually figure out what’s wrong and fix it. “One of the great advantages of having approximately 2,300 large-format stores…is that we can test concepts in a few stores before undertaking the risk and capital associated with rolling out the concept to a larger number of stores or to the entire chain,” he wrote in a letter to shareholders.

Lampert’s tests are peppered throughout the country. In Zephyrhills, Florida, the company put a Sears within a Kmart. In Houston, it’s trying out a huge home-appliance showroom. In Rockford, Illinois, Sunderland and his team are testing a new Kmart design that has an outdoor-marketplace feel. Duluth, Georgia, has a retro-themed store. Maureen McGuire, Sears Holdings’ chief of marketing, says that testing is now so embedded in the culture that the company put two different covers on its famous Christmas staple, the Sears Wish Book catalog, which it reintroduced this year after a 14-year hiatus. The blue one with stars tested better than the red one with pictures of Christmas cookies in the shapes of power drills and high-heeled shoes, she says.

The lesson? Sears designed smart tests and has learned a lot about what its customers like and do not like, but these tweaks to the experience did not – and probably could not – overcome the immense challenges all big-box retailers face in the next few years. That runs counter to a lot of our conversations with marketers, some of whom seem to believe that marginally-better customer understanding will lead to big step changes in revenue.

We’re still in the early stages of our work, but I think we’re going to find that one of the biggest challenges with data and analytics won’t be solving problems with data, but rather figuring out what problems to solve.

If there’s one thing the past few years have been notable for, for marketers, it’s instability and uncertainty. Core assumptions of the craft are being called into question by technological shifts, a growing impetus on globalization is running into geography-specific challenges, and it’s unclear whether consumers and business buyers will re-learn pre-recession habits.

A lot of these are longer-term issues, ones that we might not get clarity on for a few years. But some might be decided in 2012. Here are some things to look out for:

B2B social/digital media.In the B2B space, we think this might be the year that marketers gain a bit more visibility into how best to use social media in the business buying environment. A number of variables are falling into place: for instance, marketing automation technologies are helping marketers use social data and platforms more effectively and a greater percentage of buyers are becoming more comfortable with social media.

I’m not suggesting that we’ll learn “the answer” to all B2B social media related questions, but I think we’ll get quite a bit closer.

Geograhpic uncertainties.A number of the major markets big firms have invested in across the last 10 years are showing signs that idiosyncratic issues might affect consumer and business outcomes in the next year. In the United States, the November presidential election is very important for – among others – the finance and healthcare industries, as legislation passed under President Obama may be rolled back in the event a Republican unseats him. In Europe, the ongoing sovereign debt crisis still threatens big consequences for the Eurozone, and if the situation isn’t resolved well (and soon), consumers could feel the pain even worse than they do now.

In India, the government has begun to show signs of wariness towards Western business, such as shelving a plan to allow foreign retailers to open stores in the country. And in China, there are some signs that phenomenal economic growth may be slowing.

In general, firms have done a great job of hedging their bets geographically, but significant challenges in each of those geographies remain – challenges that may shake out between now and December 31.

Erosion of sticky recession habits. We’ve talked about it here before, but there’s significant evidence that it takes consumers and businesses quite some time to retreat from frugal habits learned in recessionary times – even if those habits aren’t strictly necessary anymore.

Those habits have created some pretty tough times for marketers, as margins have decreased, price comparison and individual research blunt the impact of messaging, and budget contractions have shrunken the spending pie.

We know that habits shift through some combination of changing economic circumstances and time. Will 2012 be the year your customers loosen the strings a bit?

Mobile and e-commerce. Pretty much everyone buys some things online these days, but in recent years, we’ve seen a vanguard of early adopters shift to doing most or all of their shopping online or with their phones (you can count me as one; I hate malls). With Amazon Prime and a subscription to a grocery delivery service like Peapod or FreshDirect, one can just about get away with never stepping into a retail store again.

Now, clearly, there are benefits to the retail environment that, for some, make up for the hassle of having to actually enter the store. I think this may be the year where brands and retailers figure out exactly what those things are, and find a limit on consumers’ willingness to shift their shopping online.

What have we missed? Let us know in the comments.

Give more than we take. Marketing’s job, at its most basic, is about a) gaining customer attention and b) converting that attention to dollars. The strategies for doing that vary, obviously – some firms opt for longer-term relationship and brand-building, deferring the attention to dollar conversion to a later date, while others choose shorter-term strategies.

Regardless, it’s worth remembering that that attention is as limited a resource as the money it leads to, and the best firms will do everything they can to extract the most value out of every minute of consumer brain time. For most, that will mean something that might be a bit revolutionary – positioning marketing efforts to add value to the life of the customer.

How to do it? Last year’s major research projects (B2B, B2C) suggested some examples of how big companies have made the buying decision easier and more valuable for customers.

Get empirical (well, as empirical as possible). “Data-driven marketing” is repeated so much by vendors and consultants that it’s nearly at the cliche level, but our initial impression of how large-enterprise marketing organizations use customer data is that there’s a lot of room to improve. In a number of organizations, we’re seeing that data is used mostly to give an empirical veneer to already-formed conclusions; that’s not what empiricism is about, to say the least.

Our best-practices research into this topic is ongoing, obviously, and subject to change. But one key area we think marketing organizations can pretty easily key in on is reducing the cost of being wrong. Why? Well, making fact-based decisions requires people willing to be proven wrong by data – the market is a complex place, and our assumptions about customer behavior, marcomm effectiveness, and any number of critical knowledge areas will sometimes – perhaps often – be wrong. If the stakes of being wrong aren’t quite as high, decision-makers will have more incentive to bring an open mind to customer data.

Forge better cross-functional connections. Critical to progressing on adding customer value and making the most out of data is an old Marketing bugaboo: forging effective relationships with other functions. For instance, making the best use of data requires an effective partnership with IT, at the very minimum, and incorporating added customer value into marketing activities likely requires us to play nice with customer service and R&D.

This is an old standby topic for MLC; for more, check out our cross-functional alignment topic center.

Get serious about establishing a truly global marketing organization. Most large enterprises have marketers around the world, but, judging from the best of the best, that’s not quite enough to call your marketing department “global” anymore. What’s needed, rather, is a focus on building out local marketing staffs and incorporating local practices and knowledge, to the extent possible and necessary.

Last year, we did a project on global marketing that lays out how some of the best companies are structuring their Marketing organizations to take advantage of all that a global footprint has to offer.

Do you have any marketing-related resolutions for the upcoming year? Let us know in comments.

(from guest blogger Jonathan Rudick, VP of Customer Experience at HSBC)

Good use of analytics is the only way to know what transactions are happening on a large scale.  Especially with financial services, data measures both transactions and behaviors, and leveraging this data can aggregate these trends and analyze them, providing a better understanding of the customer.  This deep customer understanding can help improve service across time, allowing the customer to develop a deeper and more loyal relationship with the brand.

Many marketers understand that analytics are creating more possibilities to understand the customer than before, but a recent IBM study found that 71% of CMOs aren’t prepared to use this data to help their business.  There are four main keys to getting the most out of data:

1. Hiring imaginative analysts. Analysts don’t just need to be good with numbers – they need to have enough imagination to look through and past the numbers to find the connections that are important, and have the industry and operational knowledge to know how insights relate back to the business.  One way to ensure that analysts have this breadth of skills is by hiring people who have worked in both marketing and operations; this diversity of experience encourages creative analysis without sacrificing quantitative skills.
2. Developing a taxonomy for unstructured data. Many analysts are now using the phrase “unstructured data” as a catch-all for everything that they don’t know how to structure.  HSBC develops taxonomies to give a bit of structure to unstructured data as we dig for insights – such taxonomies make the data much more useful.  We use these taxonomies in analyzing informal text and speech data where it has helped to uncover new insights that never would have been found without unstructured data.
3. Contextualizing all numbers. A common mistake is using numbers without explaining them, yet this can be very dangerous.  One manifestation of this is that numbers are considered outside of their original context; for example, if a number is one in a series, analyzing it on its own will remove all of the original context.  Another example: metrics created to measure a specific area of business activity are applied to other dissimilar activities; this is dangerous because it creates false certainty by numerically comparing the metrics – the “apples-and-oranges” trap.
4. Automating some analysis. There are some key metrics that are analyzed each and every month.  For many of these metrics, analytics teams have analyzed them so many times that they know exactly what they’re looking for, yet developing these monthly reports can take a lot of the team’s time.  Automating this analysis allows the analytics team to focus our time doing far more useful (and interesting) work, such as searching the data for new and sometimes counterintuitive insights that can help grow the business.  In an ideal world, a team would spend about 80% of time hunting for fresh insights – something that can only be accomplished through the application of human wisdom and perception.

From all of our conversations with marketers over the years, I think it’s safe to say that most marketers behave as if it’s 90% nurture and 10% nature.  In other words, most marketers believe that, if only their marketing were good enough, they could get most consumers to engage with the brand and be loyal.

I believe there’s a case to be made that genetics accounts for far more of consumer behavior than marketers appreciate.  I’d guess it’s more like 50/50 nature vs. nurture.  And if that is true, it ought to dramatically change who we market to and how we market to them.

So let me share some of what I’m seeing by way of evidence, and I’d love to get your reaction via comments below.  The evidence is by no means conclusive, but it is certainly provocative.

I’ll start with some fascinating empirical work that David Lykken and Auke Tellegen conducted back in the 1990s.  The study is called Happiness is a Stochastic Phenomenon (catchy, eh?).  The authors looked at pairs of identical twins (who by definition share the same genetic makeup) to understand how much of happiness is driven by nature vs. nurture.

If you’re like me, you would have guessed that the majority of happiness is driven by life experiences—in other words, nurture.  But Lykken and Tellegen found that about 50% of variability in happiness is explained by genetic factors.  Some of us humans are naturally predisposed to being happier people, and others of us are predisposed to being less happy.  That’s just the way it is.

So what’s the connection to marketing?  Bear with me here—I wanted to start with this research because it opens up the possibility that our assumptions about nature vs. nurture and what drives human emotions may be off.  We marketers care a lot about sparking and building emotional connections with consumers, after all.

Now consider this additional work, which addresses more directly a marketing outcome that we all shoot for: loyalty.

John Keaveney at Wunderman has been doing some interesting quantitative work looking at what drives humans to be loyal.  I’ll quote from Mobile Mania, a Wunderman e-book where I spotted this work e (p. 91):

Put simply, there are loyal people.

And there are disloyal people.

He [Keaveney] compared the attitudes of loyal and disloyal people to see why they differed.

He found that disloyal people wanted to pursue “a life of novelty and challenge” and enjoyed “taking risks.”

Whereas loyal people were the opposite.

Keaveney then examined personal relationships of these naturally loyal and disloyal people.  He found that loyals were more likely to value long term personal relationships.  Disloyals were much more likely to be single.  That carried through to sexual habits, as well, in terms of number of partners.  And it seems Keaveney controlled for age (for those of you thinking this is all a function of aging from our young, wild carefree selves to more settled-down mature adults).

Keaveney concludes that loyalty is less about some humans being true to some brands, and other humans being true to other brands.  Rather, loyalty is an “intimate facet” of who we are by nature.  Some consumers are loyal by nature, and will be loyal to brands and significant others.  Other consumers are not loyal by nature, and won’t be no matter how good the marketing is.

That brings us back to MLC’s work on relationships and loyalty.  In my last blog post (Consumers: They’re Just Not That Into You), I raised the possibility that some consumers are hardwired for certain kinds of engagement, while others are not.

If we marketers knew this to be the case—that nature accounts for far more than we think in consumer engagement and loyalty behaviors—we’d want to identify who is predisposed to be more loyal or enter into a brand “relationship”, and who isn’t.

If it’s something like half of the human population that is hardwired NOT to be loyal, imagine how much marketing cost and effort you could save by identifying those folks, implementing lower cost marketing approaches for them, and plowing the savings into higher ROI areas (such as improving the product or service experience itself).

The passage above from the Wunderman work even gives us hints about the kinds of questions you could use to identify and segment customers in this way.

“How important is it that you pursue a life of novelty and challenge?” (1-10 scale)

“How important is it that you take risks in your life?” (1-10 scale)

(FYI, I wouldn’t recommend asking about number of sexual partners as your segmenting question.  Big danger of self-reporting bias there…)

Do you find the evidence persuasive?  How would you pursue marketing differently if loyalty and engagement behaviors were more nature and less nurture?

MLC members, for more findings on engagement and relationships, see MLC’s work on decision simplicity and loyalty.