If you wanted to find somebody to marry, would you start by just proposing to everyone in the world and see who accepts? Of course not. But according to Neil Hoyne, Chief Measurement Strategist at Google, today’s digital marketers do something similar—and similarly misguided—in their approach to selling.
Delving further into this tongue-in-cheek scenario, Hoyne asked the Baker Retailing Speaker Series audience to imagine what would happen if marketers applied the techniques they use with customers to their dating life. Would they ask a thousand strangers to marry them—a strong “call to action”—in order to get a few people to say yes, then ask a thousand more in order to collect a few more willing individuals, and so on?
We all know this is ridiculous, Hoyne said: there has to be a progression. You have to meet potential partners, form connections, and let individuals respond at their own pace. Why isn’t our marketing like that, he asked? “Why [are marketers] going to everyone saying, ‘buy this airline ticket right now’ or ‘buy this shirt right now’? Even retail purchases—the easiest to purchase relative to other things—still take three or four conversations until somebody’s ready to buy.”
“Let’s remember that customers are not just hits or unique visitors or clicks. You’re talking to people, you’re building relationships…” By adopting this mindset, Hoyne said, marketers will discover a wealth of opportunity, and learn how to execute the process at scale.
Finding Treasure in Academic Papers
Hoyne identified this approach as based on Wharton marketing professor Pete Fader’s work on customer lifetime value and customer-centric measurement. He commented to Fader, who interviewed him at the talk, “Pete, you’ve been working on [customer centricity] for decades and we see that it’s powerful, that it works.”
In addition to discussing the importance of Fader’s concepts, Hoyne advised the audience to stay abreast of academic marketing research in general. Such articles have been proven, published, and peer-reviewed, he reminded them. And even if some papers are a tough read for non-professors, one can glean insights from the abstract, discussion, and conclusion.
Hoyne explained that because there’s a gap of about six years before academic findings reach the commercial domain, a marketer can jump ahead of the game by exploring them now. “You are going to have better ideas, better starting points than most of your peers.”
In his talk, Hoyne shared details about his role at Google. He works with Google’s largest advertisers—over 2,000 companies—to help them use customer data to create business growth. He works across verticals, including retail, consumer packaged goods, nonprofits, and governments. He is also the author of a new book, Converted: The Data-Driven Way to Win Customers’ Hearts.
Hoyne observed that while many firms believe that capturing a lot of data is a good thing, they often don’t know how to use it or what to expect from their data scientists. “That’s where we fit in,” he said. “To work with CEOs, CMOs, and boards, to say, ‘Let’s actually point you in the right direction. Let’s try to find a strategy that allows you to take all this data and make some sense and some money out of it.’”
According to Hoyne’s research, the average company still only makes data-driven decisions about six out of every hundred decisions. And there remains a disconnect between executives and their data analytics teams. While it’s not hard these days to find someone who can do basic analysis or Python or R, what companies really lack is people who are good at “the storytelling aspect of data, which is to say: when you learn something, you can explain it to other people.”
A Wake-Up Call to Digital Marketers
Things are starting to move in the right direction, though, in Hoyne’s view. Marketers are waking up to the need to use data for customer centricity and customer loyalty, not just short-term transactions. This sea change is partly a result of the pandemic, when some e-commerce firms experienced a flood of online buyers, only to see those waters recede as people started to return to in-person shopping. Businesses have begun thinking more about how to retain customers and create lasting value.
“I’ve been inspired to find that… we’re no longer needing basic conversations about what customer lifetime value is and why it’s important,” Hoyne said of his client base. “Now we’re seeing the next-level question, ‘Hey Google, we know lifetime value is important, but we don’t have the skills [to implement it]. Help us figure out where to start.’”