Author Archives: Chris Cowan

  1. Do brand advocacy schemes really work?

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    A few months ago I spoke at the annual TEDx London Business School conference on the topic of advocacy and how word of mouth actually works. Advocacy is a much used, oft-misused term in business. But what does it actually mean and what can it do?

    It’s really just word-of-mouth. If someone tells you something is to be tested or avoided, you might listen. If someone you trust tells you, it’s usually more powerful than a stranger from a marketing activity that you can spend your money on.

    We’ve been using word of mouth since we’ve been able to talk. Gossip was essentially social media 1.0. It spread slowly, from person-to-person and group-to-group, but word eventually got around whether it was true or not.

    This went on until print media and advertising changed it all. The ability for one source to reach out to multitudes across the world changed the landscape. It allowed a few people to dictate what many read, heard, and saw and put control of the narrative firmly in the hands of those very few. But now, social media has swung that balance of power back the other way.

    As individuals, we now have the ability to transmit our experiences and opinions to as wide an audience as any broadcaster, potentially reaching vast groups of people across the globe. They in turn can reach many more people, creating the potential for a viral spread of grass roots communication, the kind of communication that can raise hundreds of millions for charities, resurrect old brands, change a media exec’s decision on what to show on television, and make or break your business.

    As such, it comes as no surprise that businesses are scrambling to make the most out of social media; word of mouth marketing is worth billions to businesses, and there are many companies willing to pay good money in order to reach a larger audience this way. But the essential question that comes with this is working out if paying for positive word of mouth marketing is really worth it?

    Paid recommendations are changing the world of word-of-mouth marketing and we were very curious about the effects those changes are having and wanted to uncover exactly how money was influencing it. So, as a segmentation company, we decided to segment and look at the results.


    Types of recommendations

    We found that recommenders can be split into eight distinct segments, three of whom are motivated by reward, with one segment motivated purely by cold, hard cash. Importantly, this last cash-driven segment accounts for two thirds of all recommendations.

    This would make schemes like ‘recommend a friend’ programmes and similar, seem like really good return on investment for these people. But in reality, they aren’t. And to understand why, we need to understand how recommendations really work.


    How people respond to recommendation approaches

    We found three key attributes that drive recommendation effectiveness and they are, in order of importance:

    1. Timing: am I in the market for this recommended product/service right now?
    2. Expertise: do I trust the credibility of person recommending to me, that they really know what they’re talking about on this particular topic?
    3. Relationship: do I personally trust the person recommending to me enough to take seriously what they’re telling me?

    Even if people aren’t currently in the market, many still take up unsolicited recommendations. This is especially true for high interest categories like restaurants, music and films. But even in low interest categories such as insurance, one in ten have not just listened to, but even acted upon an unsolicited recommendation. So as long as the recommender was trusted as a credible source of information, these recommendations were likely to be effective and could even be passed on to other people, creating the much-sought viral effect.


    Why we should all respect genuine word of mouth

    Back to those people who recommend for cash: they might be lucky with timing (#1 above) but are unlikely to be trusted (#2 and #3). As a result, they deliver the lowest consideration levels amongst people at the receiving end of recommendations. In other words, they are the least effective recommenders, even though they are the most active ones and the ones companies buy and encourage. So while they account for a large number of recommendations, they account for very few recommendations actually acted upon, which entails a different story.

    In short, effective word-of-mouth marketing simply cannot be bought. So in order to find authentic recommenders, who may reach fewer people but do so far more effectively, the brand will need to examine their own unique business situation. It’s not just the numbers, it’s the people and the emotions behind them that will drive the real business value.

    Technology has brought word of mouth into the mass media arena. Individual recommendations, when genuine, can be a very powerful force for positive change and accelerate commercial success. The important thing to realise about the digital revolution is not that it connects you to your customers; but that it connects your customers to each other and to the world. And the way to collect and receive more recommendations that are effective and acted upon, is to be a brand worth recommending.


    Are you using influencer marketing? If so, how, and is it working for you? Drop us an email to if you’d like to discuss this article further.


  2. How your sales team can use segmentation

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    As the cliché goes, a great salesperson could sell ice to an Eskimo. But is that really effective as a sales strategy for your business?

    Companies cannot merely rely on ‘star players’ to sell products and services to customers, particularly to customers who are not well suited to the product. I mean, what good would selling an ill-suited product to a customer do for your company’s bottom-line and growth prospects? Instead, does it makes more sense to target customers who have a real need and desire for the product you offer?

    A good salesperson may be able to sell anything to anybody, but great sales teams have a knack of matching the right customer to the right brand, product or service.


    Approach with intelligence

    It’s not uncommon for businesses to think that driving sales is a matter of providing the right incentives for their salespeople and teams, and that the key to getting more sales is having a bigger sales team. Most often, they do not consider how sales teams can improve their performance with the right market intelligence.

    Generic approaches no longer work as well for sales as they previously have done, and sales teams often spend a great deal of time taking improperly identified leads through the sales funnel, only for them to drop out part way through.

    What has proven to be a more effective and efficient approach is understanding the customer base, their needs, and tailoring sales strategies to reach the appropriate market segments in ways that address their specific business needs.


    Divide and conquer, segment and convert!

    Segmentation allows salespeople to have a better understanding of who they’re targeting. This allows sales teams to target qualified leads more quickly and engage with them more effectively by using efficient strategies for each particular type of customer.

    For example, Manchester based Quayside Clothing Group, an online supplier of wholesale and personalised clothing, faced fierce competition from other SMEs in their market. Quayside’s Marketing Manager, Simon Turner, understood that in order for the company to continue to grow they would need to understand both their existing customers better, and learn where and how to find new customers. The company commissioned Clusters to deliver a segmentation and develop a customer targeting strategy. This brought about several improvements to their sales funnel, which included:


    1. Lower costs with increased ROI

    Clusters’ research showed the factors that influenced the buying decisions for clothing. For example, while some buyers were only interested in price, others were motivated by product range and quality. This allowed the Quayside sales teams to quickly identify customers’ motivations and provide the appropriate products and services for that customer, reducing the time taken to find and convert leads. This in turn led to better returns on man hour costs.

    Businesses and their sales teams can maximise their returns by tailoring efforts to specific groups, which in return reduces wasted expenditure on those who do not want or need their services or products.


    1. Targeted approach

    Insights from the market intelligence was used to build Quayside’s rebranding and targeting. The research revealed that company clothing decisions were made by many more decision makers than initially thought, and that credibility was an important criterion. The segmentation data allowed Quayside to tailor their tone of voice to better meet the expectations of different customer types.

    Without segmentation, the quality of the sales approach relies solely on the salesperson’s ability to intuit and modify their approach to fit the needs of the customer. Targeted sales allows a more strategic approach which anticipates specific and individual customer needs.


    1. New markets and growth opportunities

    Clusters’ research for Quayside revealed that while Quayside was only dealing with companies with between 10 and 50 employees, there were tremendous growth opportunities to be had with larger businesses. With this knowledge, their rebranding, and new targeted approach, Quayside managed to acquire a number of high profile corporate customers.

    Segmentation research can reveal hidden markets that have either been overlooked or are unidentified. These untapped markets provide huge growth opportunities, especially when targeted precisely and based on hard evidence as provided by a segmentation.


    An award winning performance

    Clusters’ research provided a strong foundation for Quayside Clothing’s growth. Market intelligence data combined with the effective rebranding and customer targeting saw a big improvement in traffic to their website and conversion rates.

    Expanding their market from SMEs to enterprise size companies landed Quayside deals with high profile clients like Skype and Google. These changes saw revenue increase by up to 80% and lead them to win the Best in Digital Award at the UK Customer Experience Awards.

    “The research definitely played a big part in helping us reach award winning standards.”

    Segmenting allows an organised approach to pursuing opportunities across industries and specific buying centres within them. When completed correctly, customer segmentation can be highly beneficial, leaving the sales team with no coverage gaps and maximising the conversion rate on the leads that they receive.

    Back to that salesperson who sold ice to an Eskimo. He probably got lucky and just happened to find the right Eskimo in the right segment to sell ice to. But today, we can help you identify that Eskimo. Contact us to find out more about what we can do for you.

  3. Why big data fails to provide big insights

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    In an increasingly global and competitive marketplace, no business can afford to ignore data about their customers. The growth of information technology has transformed market research, with a growing number of businesses learning about customer preferences and buying habits by mining massive sets of quantitative data. The buzzwords in market research are ‘advanced analytics’ and ‘big data’, but are these data analysis methods able to cover everything? Are traditional methods of data gathering no longer required?


    Big data

    Big data has existed for a long time now in organisations. At its most basic level, it could be considered the database of customer transactions. Some information gathered from big data includes: what customers purchase, when they purchase it, what they purchase along with it, their purchase loyalty, and their history. At the most sophisticated level, this can include massive data warehouses that collect real-time customer behavioural data, as well as dozens of other information streams from both internal and external sources.


    Advantages of big data

    Today’s relatively inexpensive computing power and data storage solutions have opened up new and more efficient analytical possibilities. This means businesses can apply all of the advanced analytics required to mine the data, predict behaviours, and implement real and practical business strategies. People are also becoming more comfortable with sharing their lives online. They are sharing more demographic information about themselves that can be collected and analysed. Big data also allows researchers to have shorter and more relevant surveys, with a focus on ‘why’ rather than ‘what’.


    Disadvantages of big data

    There are several disadvantages of big data, however, and businesses have to tolerate a certain level of inconclusiveness when working with it. It has a very strong bias towards quantifying behaviours and predicting future outcomes and results based on historical views. It tends to be only internal company data so ignores the competition. Plus, it lacks attitudinal information and psychographic data, as researchers can see what customers do and predict what they will do, but not know the how and why.

    Certain data is limited to those customers that readily provide access to personal information. Personal demographic metrics such as gender, age, and location can be misleading, as customers could have presented inaccurate information, or failed to keep it updated and current.


    What’s the alternative?

    What are customers thinking? Why are they behaving this way? What do they prefer and will they act if changes are made? How can I influence them to my advantage? These are the questions addressed by segmentation research, which pays particular attention to behaviours and motivations to identify meaningful segments. It identifies an opportunity, collects the needed information, then formulates an appropriate strategy.


    Advantages of segmentation research

    While big data concentrates on extracting predictive information about customers from large databases, segmentation research focuses on identifying factors that influence the buying decisions of customers. Relevant data can be collected through surveys, one-on-one interviews, observational research, and intercept surveys. Through this, researchers are able to get a better understanding of the consumer and their emotional triggers and reactions. With its focus on empirical figures, big data lacks the flexibility and versatility of segmentation research to find out more about the behavioural triggers or intrinsic motivations behind certain decisions made by your consumers. While it is all well and good to know what your customers are buying and how often they are buying, all this information is nothing but numbers on a spreadsheet. Finding out not just what your customer is doing, but they are doing it, empowers you to tailor your strategies in a manner that is relevant to your consumers.


    Disadvantages of segmentation research

    All of this comes at a price, however, as data from segmentation research is often complex, and requires an analyst with both experience and expertise in order to tease out key data points which the company can then act upon. Most companies likely lack a person well-equipped for this role, and will have to outsource it to an expert. In addition to that, a comprehensive and accurate segmentation research project also doesn’t come cheap, so it is important for CMOs who intend to undertake segmentation research to have a good-sized budget, as well as hold the support of their management team (if not the entire company).



    Big data and segmentation research face some limitations when examined as separate entities. Businesses need to understand that it’s not the existence of any particular data asset that ultimately matters, but rather the ability to answer pertinent questions about the business’ target audience. While the sheer volume of information big data provides is incredibly valuable, an in depth segmentation, when used in conjunction with big data, can provide a more comprehensive understanding of the consumer, which can only be good for a business.


    Is your business struggling to identify consumer behaviours which could help you to further refine your marketing strategy? Get in touch if you’d like to find out how customer segmentation can help optimise your business.