Tuesday, December 12, 2006

Marketing in China

Last week I spent a few days in Shanghai to better understand the state of data-driven marketing in China. I don’t want to dive into the current stereotypical description of China as an economy with an untamed boom, more than 1 billion potential customers, the incessant focus on making money, and so on, but I will try to summarize some of my observations. All with the caveat that I didn’t spend sufficient time to dive deep into many of the described issues and opportunities but the time spent gave me a hint of what’s going on:
  • I was thoroughly impressed with the marketing expertise and knowledge of most marketers I met. The combination of strong influence from Hongkong, Taiwan, and other Asian countries, as well as the willingness to learn and improve with a strongly growing and demanding home market puts the Chinese marketer in the center of an upcoming dramatic revolution that will impact the marketing industry in North America, too. In a couple of years probably 20% of all marketers will be Chinese.
  • The hunger for more data and insight-driven marketing is enormous, but the expertise and qualification to deliver against this need is very small. The lack of expertise is driven by the almost non-existing focus of Chinese universities on the data marketing discipline as well as the fact that there are no real marketing-oriented apprenticeships within the large local companies. Only some of the multinationals provide data centric guidance and education of their marketers.
  • The currently 150 million members of the middle class will grow to approximately 300 million over the next 5 years. Most of them will have significant consumption capital. But most of these consumers will not be able to afford high-priced products, but they will be eager to buy low priced branded products. This will put an enormous cost pressure on all marketing activities and expenditures, including the generation of data-driven insights.
  • The lack of expertise in Marketing Strategy, including Strategic Planning, will become a serious challenge in developing world class marketers and marketing programs in China. Most companies are run by utterly success-driven entrepreneur types that have no training, understanding, or significant respect for the complex marketing discipline that we are accustomed to.

What are the key implications of this situation? Let me try three key ones:

  • We will need to deliver Data Intelligence at a fraction of our current cost structure that we are used to in North America and Europe. It’s not just about outsourcing basic analytical work to low cost labor countries but about rethinking our whole approach, methodologies, and applications with which we generate insights.
  • We have to think differently about scale, a 100 million customer data base will be merely average.
  • We need to find fast and smart solutions for training and educating Chinese Marketers in the data-driven discipline that we are exercising every day.

China and its growing community of marketers is definitely one of the most exciting challenges for us today. The success and failures of not just transporting our acquired knowledge of data-driven marketing to China but to initiate a 2-way dialogue will be critical in advancing our discipline. There are so many brilliant Chinese minds that should (and soon will) be part of our virtual marketing community. I can’t wait for my next visit to learn and observe even more.

Sunday, December 03, 2006

Dialog Intelligence

Sometimes I feel like someone who fought over the last years for a stronger recognition of data driven insights, but who suddenly realizes that he is wining that battle but without experiencing any sign of satisfaction. Why? The more data driven Marketing Insights are able to penetrate our work, the more the abundance of data enables analysts to decipher consumer behavior, the more everything seem to be statistically explainable, the more we are in danger of misusing our data driven and analytical marketing philosophy and work.

Fundamentally our work is not about providing the right answers but about enabling a smarter conversation. Why? The Data Intelligence generated Insights are just one although a very important ingredient of designing the right marketing solution, it should never provide the only and ultimate answer. How can it drive a smarter conversation? Three elements come into mind:
  • It ensures that we are discussing marketing solutions centered around the consumer, since the data driven insights are always either directly or indirectly correlated to consumer behavior, attitudes, thoughts, needs, etc.
  • It inspires new thoughts and new contributions within a dialog. These Insights are not functioning as absolute guidance but as texture and ingredients for inspiration and new thoughts
  • It anchors the dialog around several factual based insights and doesn’t allow for purely anecdotal driven conversations

Done right, this concept of enriching the dialogue instead of telling the “truth”, will enable the unthreatened participation of more and different dialog partners. The data driven conversations will not remain discussions within a narrow silo of the self selected few. Our work should be always about a Dialog Intelligence, never about an absolute answer.