Converted: The Data-Driven Way to Win Customers' Hearts

ISBN-13: 9780593420652

Media Type: Hardcover

Publisher: Penguin Publishing Group

Publication Date: 02-22-2022

Pages: 240

Product Dimensions: 5.20(w) x 7.10(h) x 1.00(d)

Neil has served as an analyst, researcher, inventor, lecturer and, in his words, the father of many forgettable slides of glossy funnels and Venn diagrams. A witness to and participant in billion-dollar successes, and instructive failures, all in the pursuit of building indestructible customer relationships through digital media. A key player in the executive rallying cry to be more “data driven.” As Google’s Chief Measurement Strategist, Neil has had the privilege to lead more than 2,500 engagements with the world’s biggest advertisers. His efforts have helped these companies acquire millions of customers, improve conversion rates by more than 400 percent and generate billions in incremental revenue. Immensely proud of the degrees he’s earned from Purdue University and UCLA, Neil returned to academia in 2018 as a Senior Fellow at the Wharton School of the University of Pennsylvania. This is his first book. He hopes you like it.

Read an Excerpt

Chapter 1: Let's Talk

It's a Saturday afternoon and a woman walks into a boutique shoe store, eyeing a pair of heels. Inevitably, she's approached by a salesperson. "Do you need any help?" The woman ignores the employee, lingers a moment longer on the high heels, and then exits the store.

Perhaps it's the style, the exorbitant price, or simply the inevitable pain of actually wearing them, but whatever her reason, she isn't interested in making the purchase. Or is she?

The woman returns later in the day and the same scene unfolds. The greeting, the fleeting interest, the quick exit. A third time, a fourth, a fifth, and then the next day, the same thing happens, and again the day after that. The staff keep adjusting their approach. A smile this time. A compliment the next. Anything to get her to buy the shoes she's been eyeing this whole time.

And then it happens. Nearly two weeks after her initial visit.

Those $450 worth of three-inch heels. Sold!

What happened differently this time? Most important, what lessons did the store take away to repeat this winning result? Not a thing. In reality, this woman never left home. Each of her-wait for it-262 visits occurred on the store's website. And nobody noticed. Nobody intervened. Nobody learned. Her experiences were lost in a spreadsheet filled with countless others-mothers, husbands, lifelong friends, and consummate professionals reduced to "conversions."

The store was able to track each of her visits. That was trivial. But they welcomed her with the same experience each time. Every visit was interpreted as interest, driving up their investment as they chased her with more online ads. Sure, they sold the shoes in the end. But even with their 40 percent margins, they ended up in the red.

And they never knew it.

The fact is digital marketers-myself included-are better at making statements than conversation. It's not hard to picture us at a bar, approaching strangers with the strongest possible thirty-second call to action and an almost painful sense of urgency. "You should marry me right now. Only one of me left!" God help you if you reply. We might even follow you around to other bars for the next two weeks. You know, just in case.

The first product sold through Google was a lobster. Someone sat at their computer in California, clicked on a search ad for a fresh Maine lobster, and bought a two-pounder. The next day, a live lobster was delivered in a box to their door, confused as hell about the past twenty-four hours.

It was a conversation that worked for that time.

But now that same person has dozens of devices and no shortage of options for their next purchase. Lobster-comparison sites. Lobster coupon codes. Lobster reviews. There are more than 4.8 million posts on Instagram hoping to inspire you with different ways to prepare your lobster. One lobster even became a social media influencer, which makes a telling statement about the influencer industry as a whole.

Today's conversations aren't so simple. They're bursting with nuance and opportunity. And most businesses haven't kept up, locked in the legacy that measuring the value of single interactions-"Marry me, now!"-must be more important than reaping the returns of a broader relationship over time.

Does it have to be this way? Absolutely not. We have conversations all the time in daily life. It's how human beings work. We read, we listen, we engage. Our ancestors were brought together by campfires, eliciting understanding, trust, and sympathy. We have dinner with somebody, we get to know them; we spend time with family. We do it in business too; all the keynotes, Zoom video conferences, and trade shows with vendors handing out cheap plastic pens.

People think of brands and websites the same way. They talk about them almost as if they were people. I love this company! I hate that company. I love this website!

But does the company reciprocate that love? Probably not.

If any of this reminds you of your company's marketing, it's not your fault. I get it. Marketing has the decades-long pressure to prove its results, in order to justify its growth in good times and defend budgets in the bad. And, in between, to fend off the misplaced belief that marketing is merely a cost center.

It only works until it doesn't. If customers see the same short messages and are pursued by the same relentless tracking everywhere they go, it's easier to be apathetic toward it all. But marketers are starting to see the value of conversation-not only because of the wealth of customer information it provides but also because it separates them from the competition. They stand out, and they triumph.

That makes a larger shift all but inevitable. Interactions between the best companies and their customers are changing from quick messages demanding an immediate response to deeper, more lasting conversations. "Buy now" behavior that would flop in a bar will get you left behind online too. You just won't survive as a marketing leader if you can't learn and respond to the signals customers are giving you.

At the end of the day, this is about looking at marketing through a different lens: the very human lens of conversation. We know how to do it already. We only need to learn how to do it in a different context.

Chapter 2: Starting Simple

Isat at a noisy vegetarian bistro with a handful of retail marketing execs who had been trying to turn around their stale but promising brand. The CMO and his team had teased some rather lofty ambitions. They brought me in to offer feedback on their journey to a better place.

"We're excited about the opportunity here," they said. "We're going to digitally transform our business."

Usually, this is where I get concerned. Digital transformation is quickly earning its place in the upper echelons of bullshit business-speak, right next to innovation, acceleration, and amplification. Too often these kinds of grandiose ambitions end merely with a refreshed app icon and launching curbside pickup.

What this team unveiled was arguably worse: a $70 million software engagement to build out the most comprehensive data-management program the company had ever seen, uniting all their customer data, every touch point, everything imaginable.

It would be ready in only two and a half years.

I was appalled. What's going on here? These were skillful marketers, after all.

"Well!" they said. "It doesn't make a lot of sense to do anything until we get all of the data in place. Once we do, we'll be able to hire hundreds of data scientists to streamline all of our decision making."

They were really proud of this. Like it was a legitimate plan.

I couldn't help myself. "So you have a multimillion-dollar project, you got the board to make this huge capital investment, you're not going to show any returns for three years-and you think this makes sense?"

"Well, yes, because the data has to be perfect first!"

I sat there thinking, But what about your retail stores, which don't share any customer data back with you? Where is that coming from? Where does your brand value fit in? Or word of mouth? You'll still be missing large pieces of the conversation. What about the value of the data you have on customers today? Are you happy to give that opportunity up?

The company's ambitions never played out. It took too long just to set up all the pieces. The board grew tired of waiting for results. The CMO is gone, and the brand shuffled between a few more private equity groups. But the legacy remains. Nobody will touch a similar project again.

Why You Need to Start Simple

When people feel they've lost control of circumstances, they tend to turn to high-involvement products that require hard work to fix things. It's that January-gym-membership effect. Signing up feels like a tangible result, and that's what you're looking for. Does it work? Not really. Eighty percent of those new customers won't make it past April.

That's why the retailer was so proud of its software child. That's where most companies that are trying to tie together their data start. It's where they stop, too. Ask executives if their CRM system is helping business grow, and 90 percent will say no.

Customer conversations are not about capturing every single interaction. That's exactly where most companies start with data, and it doesn't make sense.

Understanding your customers isn't about capturing every nuance of their behavior-every product they look at, and for how many milliseconds; how many times they place something in their shopping cart, then put it back on the shelf-without any sense of what actually matters. The fact is that the more information you try to gather, the more you miss, and the more you spend. Learn to recognize the signals that are important-and learn what not to obsess over. A marketer who can focus on what's necessary to move a business forward today is ten times more valuable than one who gushes about the latest opportunity to connect everything in life to the internet. Come on. My flip-flops don't need to be connected to the internet, but I'm sure that someone somewhere is pitching that right now.

How to Start Simple

We have three principles to embrace. Nothing extravagant. This is about focus.

GET MOVING

The priority is simplicity. The more complicated the approach gets, the harder it is for us to make progress, the harder it is for us to have accurate data, and the harder it is for us to pull it. Keep things as simple and as lightweight as possible for now. Small teams. Swift action. Some of the most successful marketers I know spend no more than a couple hours setting up a database in the cloud and work from there; it'll be sloppy, and it might not scale well, but it's enough to get moving. Start with a workshop, not a factory. We don't need a huge CRM when a spreadsheet will do. We'll add more data as we go, but we'll do it with purpose. Every week I meet another company that's spent a year obsessing about how to store its data. The best marketers aren't doing that; they're obsessing over how they can use their data, keeping it simple, showing they can make money, and building from there.

START WITH PEOPLE

The finest source of truth is straightforward. It's money. If we made money from a customer, we know where that money came from, and we know who that customer is. That's the spreadsheet we're building. That's also the spreadsheet CFOs respect. They tend to care less about your leads or app downloads than about what's in the bank. Data organized on the basis of channels, campaigns, or products is the wrong way to look at this. Start with the people.

KNOW EVERYONE'S NAME

The third principle: we need to know as many names as possible, because that will help us tie everything together. Actual names. Email addresses. Loyalty program numbers. Something that allows us, when we look across systems, to know that the person over here is the same person there. The importance of this principle cannot be overstated. One entertainment company knows everyone by up to twenty-seven different IDs-one for each system, with no common connection. The company can't hold a decent conversation because they keep losing their place.

You need to be able to identify your customers. Offer incentives to encourage them to register for an account-exclusive content, promotional offers, coupon codes. (Just don't go overboard and give away your margin.) Use a single-sign-on provider like their Google or Facebook ID to ease the burden. Some companies get more creative with tools like email-campaign tagging to help identify customers across multiple devices.

The point is this: regardless of the approach you use, focus on identifying as many people as possible. Don't simply accept that only a few will give you their names before making a purchase. Work at it. Find the right balance, the approach that yields the most names at the lowest cost. It's that important.

Take What You Can Get

Don't wait to make use of the names you learn. Personalizing your marketing offers immediate benefits. Research found that adding the name of a recipient to the subject line of email marketing campaigns increased open rates by 20 percent and conversion rates by 31 percent while reducing unsubscribe rates by 17 percent. But bear this in mind: you've got to know just enough about your customers to get it right.

You don't need ten thousand columns of data to have better conversations with your customers. It's not about recording everything. Start simple. Begin with data you're confident is accurate instead of trying to clean up everything that you've collected. Use names to keep things as consistent as you can. From there, you need to pay attention to what truly matters in your conversations. This is a skill that I'll teach you in the upcoming chapters.

There are companies that will sell you fully automated systems to conduct these conversations on your behalf. Some are better than others. But be careful. It's like asking your friend to talk to your crush at school. When your friend comes back and says, "They like you!" that's fantastic-but what do you really know about the exchange? Does your crush like you as a friend? As something more? Were they just being polite? It may lead to more questions than answers-and you'll still need to talk to your sweetheart eventually.

Be selective, don't overcomplicate . . . and then learn to listen.

Chapter 3: Ask Questions

Travel is part of my gig. Even with the steroidal data and bandwidth on Google's campus, nothing can replace getting hands messy in the field, witnessing firsthand how store clerks and call center reps capture the interactions with customers, the silos that emerge when companies behave as two separate businesses-online and offline-united in brand name only, and all of the other idiosyncrasies that numbers still fail to represent. John le CarrŽ had it right: "A desk is a dangerous place from which to watch the world."

Working in dozens of countries, you get attuned to the rituals of travel. The most fascinating come from the hospitality industry itself-a space where marketers are trying to capture data and understand and anticipate the needs of their guests, while still respecting their desire to book rooms with as little friction as possible. The proliferation of third-party agents like Expedia means that for most hotels, the conversation with customers doesn't begin until they arrive. You don't want a questionnaire when you check in after a long-haul flight. But what choices are hotels left with?

At the Ritz-Carlton, employees carry small notebooks they call preference pads in their uniform coat pockets. A decidedly low-tech method for capturing more customer data, but well named and highly functional. If the employee overhears a guest mention a personal preference-a type of music or beverage-it goes on the pad and from there to a single online profile, all in anticipation of future conversations.

Table of Contents

Introduction xi

Part 1 Conversations

1 Let's Talk 3

2 Starting Simple 9

3 Ask Questions 19

4 Embrace Human Nature 35

5 Take a Hint 49

6 Guide the Conversation 69

Part 2 Relationships

7 Let's Talk About Your Friends 79

8 Knowing Where Things Stand 83

9 Meet Better People 95

10 Accept People for Who They Are 111

11 Make It Work or Say Goodbye 121

12 Listen to the Right Voices 133

13 Get Out There 141

Part 3 Self-Improvement

14 Let's Talk About You 145

15 Take Small Steps Forward 147

16 Try a Career in Politics 155

17 Unleash the Testers 165

18 Be Faithful but Not Blind 181

19 Field a Winning Team 191

Conclusion 201

Acknowledgments 207

Index 211