Engagement Used to Allocate Marketing Budgets

MY NICHOLS’ WORTH by Judith Nichols
ENGAGEMENT USED TO ALLOCATE MARKETING BUDGETS

If you're not tuned into customer engagement now, you soon will be, writes Robert Passikoff, Ph.D., president of marketing firm Brand Keys in Chief Marketer, February 13, 2006 (http://chiefmarketer.com/rules_engagement_02132006/). "Defined as the outcome of advertising and marketing activities that substantively increases a brand's strength in the eyes of the consumers (and if measured properly can actually predict sales and profitability), engagement is being used more and more to allocate marketing budgets," Passikoff writes.

Engagement also relates to a fact that many marketers overlook: People make decisions--in particular buying decisions--based less on what they think and more on what they feel. Engaging customers with your brand is definitely an emotional act.

Sometimes the buy-sell process involves just two parties – the buyer and the seller. Other times this exchange can include as many as six different parties:

Initiator: The person who first recognizes an unsatisfied want or need.

Influencer: The individual who provides information about how the want or need may be satisfied.

Decider: The person who finally chooses an alternative that will satisfy the want or need.

Buyer: The purchaser of the product.

Consumer: The user of the product.

Evaluator: The individual who provides feedback on the chosen product’s ability to satisfy.

The Portable MBA in Marketing, Charles D. Schewee and Alexander Hiam, John Wiley & Sons 1998.

Meeting the consumer's current needs isn't enough to guarantee success. The March 22, 2005 issue of Chief Marketer calls this proactive approach "consumer-focused innovation" and outlines its three basic principles:

1) "Consumers are active co-innovators." More and more, companies are using consumer insights to shape innovation from an embryonic concept to market testing. By way of example, think Nestle's "relationship centers" in France and Japan, where nutritionists, marketers, and execs respond to more than 200,000 queries and requests from consumers every year.

2) "Consumers' latent needs are as important as their explicit needs." This is a corollary to the rule of marketing that advises taking focus groups with a pillar of salt, since consumers often don't consciously know--let alone have the ability to tell you--what it is they want or need.

3) "Experience trumps products." Starbucks is the oft-cited example of how a company can distinguish itself by the experience in which it wraps its products. "Consumer products firms will avoid the commodity death spiral by selling experiences--not products."

Even though 59% of respondents claim "high loyalty" to the cause or charity they support, the survey reveals that 60% - 70% of all donors are NOT on the loyalty path you expect them to be. Among other key findings from Donor Loyalty: The Holy Grail of Fundraising, a white paper released February 16, 2006 by CMS and available free of charge at http://www.cravermathewssmith.com/:

ÿ Fewer than 3 out of 10 donors report limiting their giving to issues they follow closely; and fewer than 4 in 10 consider themselves "pretty familiar" with the groups doing the most effective work on the issues they care most about.

ÿ Only 12% of donors report that the reason they stop giving to organizations is because they’re not getting enough information to keep them sufficiently informed. Yet 30% - 40% cite disappointment in performance as the non-renewal reason. This may indicate that organizations are not effectively communicating their work, progress and accomplishments.

ÿ Public confidence in charitable and advocacy organizations is shakier than ever.

ÿ Although we live in a culture where personality is King, organizations today have become "faceless." Not since the glory days of Ralph Nader, Jacques Cousteau and Jerry Falwell have there been non-profit leaders who personified their causes and organizations.

NOTE: You can also download two other white papers, The Status of Online Giving in America and the Executive Summary on Generational Giving today, BOOMERS! Navigating the Generational Divide in Fundraising and Advocacy, from the Craver, Mathis Smith website at http://www.cravermathewssmith.com/:.