I recently gave a presentation to the Digital Analytics Association Symposium on the evolution of Machine Learning and how it will transform the work that digital analysts due in the near future. I’m extremely interested in how machine learning and predictive analytics can improve digital marketing performance through personalization while moving us closer to the original digital marketing vision of right message to the right person at the right time.
Philmont Boy Scout Ranch is located in Northwest New Mexico and is the largest of the four major high adventure camps run by the Boy Scouts at over 144,000 acres. Philmont is a working ranch that hosts 23,000 scouts, advisors and staff every summer – that is almost 400 people in and out of Philmont every day through the summer hiking season. In order for Philmont to host and process this many people across 90 different camps on the property, it must run like a machine in order to both give the scouts and advisors the best back country experience possible as well as teach the crews how to Leave No Trace behind in order to preserve the land for future generations.
I traveled with Troop 186 from Seattle to Philmont at the end of July for a 12 day stay at the ranch with my son and 42 other scouts and dads. I left with a deep respect for the operational proficiency and the systematic training of leadership skills for the scouts. The lessons to be shared in this post can be divided into four major categories: Preparation, Process, Training and Communication.
The preparation for a 12 day backpacking trip to Philmont starts a full year in advance with the selection of a pre-trip leader who is responsible for coordinating the troop and setting us up for success upon arrival. Who’s going, recruiting help to take on specific trip tasks, travel arrangements, costs and organizing crews (groups of scouts and adult advisors no larger than 12 people with a max of 4 adults).
Individual & team preparation included:
- Gearing up by acquiring and packing just what was on the provided list of items down to a specific number of shirts, shorts, socks & underwear
- Medical check ups to be within a certain boundary of physical fitness. A particular concern was weight to height ratio and blood pressure restrictions due to altitude and physical stress
- Each crew selecting their crew leader, chaplains aid (morale) and wilderness gia (leave no trace policy enforcer)
From the moment we step onto the grounds of the base camp of Philmont we’re guided through a orchestrated series of activities designed to create group cohesion, ensure we’re ready to spend 11 days in the back country and set up for success.
It all starts with meeting our Ranger at the welcome center who spent the next three days teaching us the Philmont way. He had a large checklist of items for us to start executing against and communicated primarily to scout crew leader to begin the leadership training with the adult advisor in tow. We visited the administration office to pay final amount, the clinic for everyone to turn in medical forms and get a quick check-up, provisioning to get our first ration of back country food, bear bags + line, the commissary, logistics for the hike (where and when to pick up food, sleep, do cool stuff, etc.) and our accommodations (cowboy tents and cots) for the first evening before heading out the following morning.
I am amazed at the number of people the base camp supports, the amount of paperwork we handled quickly, the number of tasks we accomplished on a tight timeline. The process was amazing. Again, very clear steps, well documented time tables, a few key pieces of paper with several supporting documents. Checklists and timetables ruled the day.
Philmont dedicates a Ranger to each crew to teach the Philmont way. The Ranger spends three full days going through a checklist that covers everything from how to tie up your food on bear wires to how to cook your meals + clean out your pots (fun fact: involves drinking the food residue in the pots vs dumping into the bushes) to how to poop/pee in the backcountry (hint: only poop and paper in the backcountry toilets – no pee).
The compelling elements of training that I found included:
- He was very methodical with the instructions. Clearly he had been given a lot of training himself.
- He made it relevant and engaging. Even the bit about how to poop/pee in the woods was funny.
- He taught us once on the first day on the trail and then watched us set up camp without guidance to ensure we had it on the second day.
Communication was a key factor in the success of our trip. The expectation setting from Philmont prior to arriving and the clear guidance once we arrived and got set-up has been covered. The other major dynamic of the trip was having a 14 year old scout lead the entire 12 person crew (including 4 adults). One of the challenges of Philmont is blending together hikers with different physical ability on a 70 mile 11 day hike and different spans of attention – 14 year old boys that need to get tasks done while have fun.
Several key approaches helped with both situations:
- Roles and Responsibilities – the successful crews had a clear guide on who was doing what when such as setting up the fly-tarp, pulling up the bear bags, cooking, cleaning and retrieving water.
- Communicating from the back of the hike line to the front of the line. Invariably, the navigational leader for the day would hike too fast for some of the slower hikers (adults included) which meant the middle and back of the hike line would need to let the front know to slow it up. The leader of our crew made the decision to have one person set the pace who had the right speed once we found him.
- In the evenings, to difuse frustrations and improve team work we would go around in the circle to share Start, Stop & Continue
- Start – what should we start doing
- Stop – what should we stop doing
- Continue – what should we continue doing
- We also shared daily roses, thorns and buds to connect and remind ourselves of the beauty and challenge of the day.
- Roses – what you loved that day
- Thorns – what you didn’t like
- Buds – what you are looking forward to the next day
The other major lesson I learned is how teams evolve. I would say the flow below is pretty accurate and by the end of the trip we were definitely in the norm stage with hints towards perform.
- Form – teams assemble out of organizational necessity
- Storm – conflict as roles bounce against each other to figure out who does what and why
- Norm – normalization of duties and roles within the team
- Perform – when a team is firing on all cylinders
The Philmont Scout Ranch is an operational and logistic machine. The incredible number of young scouts and semi-out of shape men who successfully complete 65 – 90 mile adventures in the New Mexico high country is a testament to organizational effectiveness and planning. We all learned a ton and grew tremendously on the trail.
If you’re interested in photos from the trip – click here to go to the album in Google Photos.
Always an interesting look at where the internet has been and where it’s going.
I recently posted this re-cap from the #NetFinance conference in Miami on how Digital is Rocking the Financial Services world. Let me know what you think!
We just returned from wonderfully warm Miami and the Net.Finance conference – a gathering of 500 banking, financial services, credit union and technology vendors discussing the challenges of understanding and leveraging digital in one of the oldest industries known to mankind.
In listening to the dozens of presentations and having some great conversations with folks in the industry, I came away with the following major themes:
1) Established companies require visionary and bold leadership to make bets on integrating digital into their organization. Decades of relying solely on traditional marketing tactics, local business relationships and physical bank branches result in an entrenched “prove it to me before I try it” mentality. I spoke to people who expended a lot of effort just to get a website built and have presidents who believe mobile is “not quite there yet.” I also spoke to leaders who embrace digital as a way to understand the customer better.
It’s 2014. It’s time to get in front of the digital wave. Data leads to customer insights. Customer insights lead to ideas for communicating with customers. Relevant communication leads to loyalty. It’s not that hard to comprehend.
2) Incrementalism vs revolution. Incrementalists try to integrate digital in a way that enhances the branch experience while piling on technology to improve the customer experience IF they have forward thinking leadership (see point one). Revolutionaries are banks like Simple and Moven with digital as the ONLY option. These types of new banks are clearly aiming at the mobile-centric Millenials and tech-forward Gen X and Y’s with a completely new way of providing financial services.
We need to find a way for incrementalists to be more revolutionary. I get that you can’t erase the past, get rid of all your current customers and start over – but to keep patching things here and there with a bit of digital won’t work forever.
3) Legal and compliance is a drag on innovation. Any organization needs to be concerned about legal exposure and industries like financial services and insurance have a higher burden than ever, after the financial crisis of 2008.
However, companies that are proactive about working with legal and compliancy teams in a cooperative environment are able to stay within the law and innovate. I spoke to one person who has an agreement with their legal/compliance team on social media communication that has clear outlines on what can/can’t be said in different situations (standard social governance best practice) but ALSO has a two-hour SLA on turnaround time for unforeseen issues. Internal partnerships can solve problems.
4) It’s a service, not a product business. The financial industry thinks in terms of products which drives siloes within an organization. The rise of social media and the shifting of power to the consumer have brought brand communication and interaction back to the forefront of the customer engagement.
Collaboration is absolutely essential. Consumers expect you to be consistent in your communications. Tear down those walls!
5) Everyone struggles with data. Whether you are trying to connect marketing engagements across devices, harness the unbelievable amount of data available or figure out what the right KPIs are to put in a dashboard to your CMO – data is hard. Big, small, smart – whatever. I heard a lot of different models on how to think about data and I met some vendors with ways to harness data, but unless you’re a pretty data/tech savvy person, it’s going to go over your head. I feel sorry for the smaller organizations that have a digital vision but not the funds or personnel to dig into the data issues.
Not to sell ourselves too hard here, but you can buy expertise. We work as partners with our clients. And our counsel and strategy more than pays for itself.
6) The importance of good design and UI can’t be overstated. Consumers expect their interactions with brands to look good, be intuitive and just work. It is just as important in the banking and financial services business as it is in the telecom or entertainment business.
Again, if you don’t have in-house expertise, get a marketing partner. Make sure that your partner understands both design and strategy, though. A beautiful mobile site that doesn’t sell or a pretty app that no one wants is a waste of your resources.
Presenting a unified customer experience across all touch points is hard work, but pays off handsomely with increased loyalty, greater share of wallet and more advocates promoting your brand. Building an environment of collaboration and innovation – starting with leadership – is critical in making this happen.
The financial services sector has similar challenges to everyone else with an industry history longer than 10 years. Digital is here, social is changing the nature of customer interaction and mobile is driving vast behavior change in the millennial and Gen X-Y demographics. The opportunities are huge and the companies that put customer centricity and innovation at the front of the conversation will be the ones who survive.
Here’s the first post on The Hacker Group website located here. I think it sets a good foundation for making the argument as to why direct response agencies should be more successful than pure digital agencies in using digital marketing.
We view marketing in two distinct modes – Brand or Direct Response. While both communicate the value of a product, service or company, the key performance indicators and core drivers of success are different. Brand marketing focuses on improving the awareness, perception and likeability of a product, while direct response marketing is about generating a measurable sale or consumer action. Both are important.
Digital marketing can be either brand or direct response. But digital has much more in common with data-centric direct response than brand marketing.
Why? Direct response marketing is built on the following four core capabilities:
Data Management for Response and Attribution
It takes massive amounts of data to build response models, understand user preferences, deliver media, attribute sales and optimize performance in direct marketing. The ability to process, store, analyze, report and execute campaigns based on data is core to successful direct marketing. Data provides transparency, results discussions, progress metrics and accountability.
Data as a Digital Imperative – Digital marketing is at its most powerful and effective when data is captured, analyzed and used for optimization. Understanding how data is created, how it is transferred from one organization to another, how to store the data, how to report data and, most important, how to use data to improve performance, is core to digital marketing.
Segmentation and Targeting
Selecting the right prospect profile to target is critical in direct marketing due to the cost of producing mail packages, print ads, and TV and radio commercials. The overlay of analysis and predictive modeling to determine the right group of people to mail, email or show direct TV spots to with the right message is critical for achieving a positive return on investment.
Segmentation and Targeting in the digital world is also critical to improving ROI on marketing spend. In the online world targeting can mean anything from serving ads against specific keywords to real-time optimization of display ads to a specific action on a website. The advantage of segmentation and targeting online is how fast you can collect data and optimize campaigns – many times automatically – vs. waiting for weeks or months for the sales results of direct mail. The discipline of targeting campaigns up front in the direct marketing world when applied to digital marketing gives us a better starting point for optimization.
Testing and Optimization
In direct marketing, testing and optimization requires setting a control group that gets consistent treatment against test groups that get new treatments, in order to quantify lift. You optimize by repeatedly incorporating winning elements into the control and striving for new champions. It is iterative.
The digital version of testing and optimization can happen with much smaller data sets at greater speed and a lower cost since you don’t need to print and mail anything. Many digital-only companies fail to incorporate this discipline into their DNA.
Creative that Sells
Direct marketing creative is built to elicit a response – including special offers targeted to specific segments. Combining successful targeting with a compelling offer is 80% of the success or failure of direct marketing, as a rule of thumb.
In the digital world, specific offers are also a critical piece of a test matrix. Determining which offer performs best both in immediate response and on-going lifetime value requires the data, targeting and optimization to all work together.
The high cost of planning and executing a direct mail, DRTV or other campaign creates accountability and precision in direct marketers. That ethos drives a higher level of execution excellence in digital campaigns as well. The cost of failure is much higher with direct marketing campaigns given the cost of production and extended lead time needed. Companies raised purely on digital don’t have this type of discipline because of the inexpensive flexibility to test, pause and optimize in-line.
Wrap it up!
Digital marketing benefits more from the core capabilities of direct response marketing than brand marketing. Data-centric digital channels easily lend themselves to the response and optimization nature of direct marketing. Digital excels when data, targeting, testing and specific offers come together to meet a specific audience.