Over the past few years marketing and IT teams have been flying high with cloud-based innovations. These servers and software “in the sky” are aimed at improving flexibility, scalability, and efficiency of handling and accessing the data that empowers marketers to make the informed decisions they need to reach their target audiences and provide great consumer experiences. From collecting and storing paid media analytics to scheduling automated campaigns, the cloud seems to be the key fueling your brand’s digital ascent.
But as you soar amidst the data-driven clouds, a question whispers in the wind: is your data safe?
Enter cloud security management, the vigilant guardian in this digital sky. It’s the framework, the set of tools, the sleepless protector ensuring your prized marketing data navigates the cloud with confidence and integrity.
The cloud security landscape: From seedling to towering tree
Cloud security’s journey began decades ago, as a tiny sapling sprouting from concerns about online data vulnerability. Today, it stands tall as a mighty oak, offering robust solutions across industries. But for marketers and IT teams who rely on high-quality data to drive actionable insight, understanding where you are in this forest is crucial. Are you just planting the seeds of cloud adoption, or do you have sprawling data ecosystems nestled within its branches? Identifying your stage sets the foundation for your cloud security management journey.
Understanding data protection: The roots of secure marketing
The heart of cloud security management is data protection. For many marketing teams, this translates to safeguarding customer information, campaign creatives, and brand-sensitive data. For others, like those who rely on healthcare web analytics data, the roots are even deeper.
However, cloud security management isn’t without a few thorns. Today’s marketing landscape throws myriad security challenges our way:
Evolving threats: Hackers, malware, and data breaches constantly evolve, demanding dynamic, adaptable security measures.
Fragmented ecosystems: Multi-cloud environments and third-party integrations multiply data touchpoints, creating a complex security puzzle.
Human error: Accidental data leaks or inadequate employee training can unintentionally expose vulnerabilities.
To combat these growing threats, marketing and IT teams might consider an approach with two branches:
1. Data classification and encryption
Prioritize your data, classifying it based on sensitivity and implementing robust encryption measures for high-value information. Secure cloud storage solutions further solidify your digital fortress.
2. Cloud security standards
Adopt industry-standard practices like strong password policies, access controls, and regular security audits. Remember, prevention now is always better than breakfixes later.
So, having acknowledged the critical role of data protection, the question that begs to be asked is: how can we actively implement best practices and tools to build a data sanctuary within the cloud that protects and enables our marketing initiatives?
Best practices for cloud security management: Building your data a secure shelter
Let’s delve deeper and explore the practical tools and best practices marketers and IT teams can leverage to ensure data stays safe in the cloud.
Cloud security monitoring and threat detection
Invest in tools that continuously monitor your cloud environment for suspicious activity and potential threats. Early detection is key to swift and effective containment. Tools can vary by cloud provider. Those using AWS might look to GuardDuty or Amazon Inspector, while those on Azure might consider Microsoft Defender for Cloud or Log Analytics.
Future-proof your environment
Stay ahead of the curve by constantly evaluating and updating your cloud security measures. Remember, the digital landscape is ever-shifting, and so must your defense mechanisms.
Secure cloud storage
Choose reliable cloud storage solutions that offer robust security features, data redundancy, and disaster recovery options. Your marketing data deserves a digital vault, not a cardboard box.
Cloud security policy
Craft a comprehensive cloud security policy that outlines data handling procedures, employee training protocols, and incident response plans. Clear guidelines are your best friend in crisis mode.
Regulations like GDPR and HIPAA add another layer of complexity to the cloud security puzzle. Risk management in cloud security is key, by regularly assessing compliance and actively managing potential risks, you can chart a secure course through the regulatory waters. Other guidelines, like SOC 2 and ISO 27001, provide a roadmap for achieving and maintaining compliance, earning you precious trust and peace of mind.
Embarking on your secure cloud journey
Cloud security management may seem daunting and like a maze of risks and regulations. But remember, you don’t have to navigate it alone. Cloud security solutions abound, offering tools, expertise, and managed services to guide you every step of the way.
At Tallwave, we understand the intricacies of cloud security, especially in the dynamic world of digital marketing. Our team of marketing data strategy experts is ready to equip you with the knowledge, tools, and confidence to conquer the cloud’s highest peaks. Tallwave is just a cloud hop away; we’re here to help when you need us.
In today’s complex and ever-evolving digital landscape, understanding the nuances and differences between omnichannel and multichannel marketing is essential to providing your customer with a great experience. It’s more than just a battle of the buzzwords; marketers need to understand that omnichannel marketing is the natural evolution of its predecessor, multichannel marketing.
This isn’t about picking one over the other; it’s about embracing the journey toward a more sophisticated, integrated approach that better meets consumer expectations. We’re talking about a strategy that resonates deeply with today’s customers who crave not just interactions but meaningful, connected, personalized experiences across multiple touchpoints in the channels of their choice. It’s about painting a bigger picture, where every channel tells a part of your brand’s story, cohesively and compellingly.
You might think of multichannel marketing like a single-round sparring session. You make the best use you can of marketing strategies and techniques within a single round (or channel), learning and iterating on the fly without the benefit of insight into how a given sparring partner (consumer) has behaved in other rounds (channels). Omnichannel marketing is more like a multi-round professional prize fight where marketing heavyweights consider their opponents’ moves in each round so that, round to round (or channel to channel), their marketing strikes are strategically choreographed around their expanding knowledge of consumers’ preferences and prior actions.
By the book: Omnichannel vs multichannel marketing
“Omnichannel” and “multichannel” are often mentioned when discussing digital marketing strategies. But there’s not always a clear distinction between the two approaches. Let’s cut through the confusion and clarify what omnichannel marketing and multichannel marketing actually are.
Multichannel marketing refers to using various channels — paid and organic search, social media, email, or even in-store experiences — to engage with customers. It’s about being present and visible in multiple places, but often, these channels operate in silos with strategies that consider the best practices for each individual channel, but don’t connect to touchpoints consumers have with the same brand in different channels at different stages of their journeys.
Omnichannel marketing takes a more holistic and customer-centric view. It’s not just about being present on multiple channels; it’s about creating a seamless, integrated experience across all touchpoints that reflects customer preferences and behaviors across channels. Omnichannel commerce ensures that whether a customer interacts with your brand online, through an app, or in a physical store, their experience is consistent and interconnected. An omnichannel marketing strategy ensures that customers receive an experience that’s brand-consistent no matter the channel but personalized to them based on real-time interaction across channels as their behavior evolves, aiding in their decision-making process, and encouraging high-value actions.
With these definitions and differences in mind, you can put your marketing strategy on the path to omnichannel prizefighter status.
Four ways omnichannel marketing can give your strategy a fighting edge
Exploring the differences and nuances between omnichannel and multichannel marketing isn’t just academic or informative; it serves as a practical guide to aligning your marketing strategy with the evolving expectations of today’s consumers and taking an integrated approach.
There are several ways omnichannel methods can level up your marketing strategy, from focus to flexibility:
1. Focus: Product vs. Consumer
In multichannel marketing, the focus often leans toward the product, service, or brand. Each channel works independently to highlight the offering, sometimes leading to a disjointed customer experience.
The hallmark of an effective omnichannel strategy is its integrated nature. Unlike multichannel strategies where each channel might operate in a vacuum, omnichannel marketing strives for connection. This integration means data and insights are shared across channels, ensuring that the customer journey is not just multichannel but truly interconnected.
Consider this example: a customer visits an e-commerce apparel website and visits the product page for a particular top. They even add the top to their cart, but ultimately abandon it before completing the purchase. The abandoned cart and purchase history data is used to trigger retargeting and the consumer sees an ad for that same top later on Facebook. It also triggers an email reminding them of the item in their cart. A few days later, they receive an exclusive promo text with a discount that applies to the time in their cart. In this example, we have a consumer interacting with a brand on three different channels, website, social media, and text. With an omnichannel strategy, every one of these touchpoints reflects the consumer’s preferences (they’re interested in tops), behaviors (they showed interest in a particular top), and journey stage (adding the top to the cart suggests an intent to purchase). Data makes it possible.
3. Personalization: Tailored vs. generalized
Personalization is the heartbeat of omnichannel marketing. While multichannel marketing can sometimes result in generic messaging across various platforms, omnichannel marketing leverages data from all touchpoints to create a tailored, personalized experience. It’s about understanding the customer’s journey and reflecting that in every interaction at every stage of the funnel.
To understand what that looks like in practice, consider the previous example, but this time imagine that the reason the consumer visited the e-commerce apparel website in the first place was that they received a text message announcing the the arrival of a new spring collection triggered by the fact that multiple months had passed since the consumer’s last purchase. And imagine that when they landed on the home page, they were greeted by featured products personalized for them based on past site and purchase behavior. That’s omnichannel marketing at work to create a highly personalized experience powered by an integrated data strategy.
4. Flexibility: Controlled vs. Agile
Omnichannel marketing is inherently more flexible and agile compared to its multichannel counterpart. With the latter, strategies are often rigid, with each channel functioning within its predefined scope and data being collected and housed in channel-specific silos. Omnichannel marketing, however, thrives on adaptability, responding in real-time to changes in customer behavior.
Consider this last example: a customer visits a software company’s website and reviews two related products on the website. Not finding quite enough information to decide between them, the customer clicks into the website’s chatbot to ask some questions about the two products. Because there’s some complexity to the answers, the chatbot escalates to a live sales rep. Rather than greeting the customer with a “How can I assist you today?” the rep greets the customer by saying they understand the customer has questions about two products, mentioning them by name. And in addition to answering the customer’s questions, the rep highlights the new integrations on one of the product offers with another that the customer purchased several months ago. That’s the power of omnichannel marketing to an exceptionally personalized, integrated, and customer-centric experience in real time.
Embracing the right approach in your marketing strategy
Embracing omnichannel marketing means you’re not just using multiple channels; you’re masterfully blending them to create a narrative that speaks directly to your customers. It also means you’re reaping the benefits of an omnichannel approach to data and analytics that creates a 360-degree view of the customer, making omnichannel customer experience possible. It’s a savvy move for any marketer aiming to make a real impact in this digital age. This holistic, customer-centric approach is not just the way forward; it’s the key to unlocking deeper connections and lasting loyalty with your audience.
Giving your digital strategy a bright future
As we look ahead to the future of digital marketing, the trend is clearly skewing toward more integrated, personalized experiences. Brands that understand and implement omnichannel strategies are poised to build stronger connections with their customers, leading an optimized conversion journey and enhanced brand loyalty.
Whether you choose omnichannel marketing, or want to innovate further with a convergent commerce approach, you should always focus on delivering value to your customers. By understanding the nuances of each approach and aligning them with your business goals and customer expectations, you can create a marketing strategy that not only meets the demands of today’s digital landscape but also sets the foundation for future growth and success. And with a mature data strategy that prioritizes a single source of truth for customer data, you can bring that strategy to life.
And you don’t have to go at it alone. From increasing visibility with future-proof SGE-informed search strategies to embracing data centricity, Tallwave is eager to implement digital marketing strategies that align with your consumers and meet them where they are when they need you most. Let’s talk.
As we draw near the close of 2023, our sights are set on the year ahead and in true Tallwave fashion, we’re turning our focus to the challenges and possibilities of a new year. But before we run headlong into 2024, we’re taking a moment to reflect on all we accomplished this year.
Our incredibly talented teams executed high-value work that made a real impact on our clients’ businesses. The brilliant thought leaders among our ranks contributed knowledge to the benefit of prospective clients, partners, and business leaders of all stripes. And Tallwavers at every level of the organization seized opportunities to learn, develop, and grow, demonstrating that our value of relentless pursuit isn’t just a series of words, but words we live by. In the spirit of honoring auld lang syne (times long past), here are the highlights the Tallwave team will be toasting as we ring in the new year.
Creating value for our clients
Looking back over our work in 2023, data enablement and modernizing the technology and strategies for delivering on customer needs stand out as themes in some of the most ambitious challenges we helped our clients tackle.
Powering up a customer portal strategy
In 2022, we were engaged by a private, independent energy company with over 35 years of experience in the industry. They’d always been technology-forward thinkers, and their customer connect portal was already a differentiator that set them apart from competitors and contributed to their number one ranking in the industry for customer service. As a tech-forward company, they were planning for ongoing evolution of their portal into a best-in-class solution that continued to meet the needs of their customers.
After evaluating their portal and making strategic recommendations in late 2022, the stage was set to translate strategy into action in 2023. Over the course of the year, we’ve worked with our client to design, test, and validate a new customer connect portal 3.0 solution, implement a measurement strategy to evaluate the performance of the new portal solution, and provide ongoing analytics maintenance, reporting, and strategic insights for a portal that’s always evolving, improving, and creating value for our client’s customers.
Enabling growth through an upleveled internal asset management strategy
One of our largest, most complex clients, a multinational financial services corporation, enlisted our help to establish the proper team and organizational structure, improve data quality to unlock insights that empower decision making, standardize global policies and procedures, and strengthen relationships that align into the broader enterprise with the right engagement models. These desired outcomes coincided with an increase in demand for internal technology assets, intensifying hardware budget management demands, and the increasingly complex logistics for supporting a global workforce’s technology needs.
They initially engaged us to help them create a playbook of standard operating procedures to drive predictability, agility, and efficiency in servicing employee tech needs. But as we helped them imagine the art of the possible, we set our sights higher, ultimately building a strategy for service automation and digital experiences that work in concert with SOPs and designing an MVP solution and a framework to continually build upon their internal product ecosystem to drive efficiency, scale, accuracy, and predictability. This, in turn, will help our client optimize their internal technology asset investments, reduce risk, and improve the quality of service to colleagues.
Enabling data-driven business processes by translating between business needs and infrastructure parameters
CP Skin Health Group, Inc., a division of Colgate-Palmolive focused on product and service innovation for dermatologists, estheticians, and other skin health professionals, found themselves in a position common among our clients. Rapid growth, including the merging and acquisition of well-established and high-performing brands, led to a fractured data ecosystem. They were leveraging multiple disparate data sources and systems across their business units and many of the processes required for their business relied on manual data entry, which negatively impacted their sales and marketing teams’ ability to operate effectively at scale and created a poor customer experience. They needed a partner to work alongside their Global IT team to create a more unified technology and data infrastructure to serve the needs of the business.
We brought business stakeholders together with their Global IT team to map their data environment, identify and document technical limitations and risks in their data inventory, and define problem statements. As a result of our work, the skin health division and the Global IT team were able to align on a shared data strategy and vision that would pave the way for better support for the skin health division’s business needs and lay the foundation for future data analytics capabilities. This allowed the skin health division’s marketing team to operate more effectively and efficiently and optimized sales processes to deliver better customer experiences and business outcomes.
Bringing a new mobile app to life at the speed of light
Working with one of our development partners, we embarked on a journey to redesign and develop a new mobile application for a national broadband communications provider. The new application required some complex features—like account registration and management, bill pay, service appointment scheduling, and more—that also played high-stakes roles for the customers who would ultimately use them. And the timeline for getting it done was tight. But that’s just the kind of ambitious challenge the Tallwave team thrives on.
We mobilized our wildly talented product design team to quickly develop a digital brand UI kit, UX/UI designs for 3 new complex user flows, front-end code acceleration training, and consultation on UX/UI execution, usability, and accessibility in the span of just a few weeks. The team’s work was a shining example of our ability to deliver great mobile app design at the speed of light without sacrificing our commitment to deliver a great CX for consumers.
A power-packed, end-of-year kickoff for a 2024 product strategy
We partnered with a new client, an energy management services, procurement, and energy infrastructure development firm, in December to help them define and package their intellectual capital and expertise into an ongoing and scalable data-as-a-service (DaaS) product. Starting our engagement this late in the year, it would have been easy to assume we’d kick off in January. But with a client who shares our bias toward rapid action, we decided there’s no time like the present to get the ball rolling.
This month, we mobilized our team to head out to the client’s offices in Texas to lead them through a full-day workshop with their senior leadership team to understand the energy ecosystem and value chain and begin to formulate ways to package their unique value to customers. Seizing the moment to begin our work now puts us in a strong position to advance our plans to design, develop, and test the product concept with prospective customers and develop a go-to-market plan that drives immediate adoption upon launch in the new year.
Contributing thought leadership to the industry
The work we did for our clients wasn’t the only way we created value in 2023. Tallwavers showed up as thought leaders, contributing their knowledge and perspectives on hot industry topics like data unification and enablement, conversion rate optimization, and more at industry events and a few of our own. Some standout moments include:
On the physical stage at Brand Innovators
At the Brand Innovators Sports Marketing Upfronts in Scottsdale, Arizona in February, Tallwave Partner, Robert Wallace, had the privilege of moderating a panel session with members of the marketing team from Riddell Sports Group, a leader in high-performance football gear.
On the virtual stage at the GDS CX Innovation Summit
Our SVP of Marketing, Jessica Pumo, hit the big screen at the GDS CX Innovation Summit in May, presenting a Masterclass Keynote on bridging the data divide. The topic of overcoming fractured data ecosystems to harness the business power of data resonated so much, she gave a special live encore presentation at our invite-only dinner for current and prospective clients focused on data unification and enablement in August.
Spreading the word on the value of CRO
Conversion rate optimization can be an extremely effective strategy for improving conversion rates and maximizing return on investment in traffic-driving marketing. But it requires a highly integrated approach to execute, making it difficult for clients and many other digital agencies to capitalize on. Our Integrated Marketing team brought their knowledge, experience, and expertise to conversion-conscious brands of all kinds in a CRO webinar in May.
Pursuing personal and professional growth
Our ability to do great work for clients and contribute thought leadership to our industry is fueled by our relentless pursuit of growth. In 2023, Tallwavers fed their brains, expanded their knowledge, and refined their perspectives on a wide range of topics through conferences, events, and other personal and professional development opportunities. Here are two that really blew us away:
Making quality connections at KPMG /Michigan Ross QuantumShift
Tallwave CEO, Jeff Pruitt, had the rare opportunity to attend QuantumShift, an exclusive four-day peer-to-peer learning experience for the top decision-makers of fast-growing private companies. This experience took Jeff out of his day-to-day business environment to share with, learn from, and collaborate with leading CEOs from around the country as well as top professors from the University of Michigan’s world-renowned Stephen M. Ross School of Business. It was a highly impactful experience that allowed him to live our value of thoughtful rigor in a whole new way while embracing the power of human connection.
Having flurries of fun at the Snowflake Data Cloud World Tour
Senior Data Strategist, Brooke Weidenbaker, and Engagement Manager, Rikki Ebenal attended the Snowflake Data Cloud World Tour event in Austin, Texas where they plowed through presentations, demos, and customer breakout sessions celebrating data centricity and came away with new ideas and examples to share with clients as we help them navigate the data maturity curve.
Raising a glass to the past and focusing on the future
Reflecting on all we’ve done, everywhere we’ve been, and everything we’ve accomplished, we’re proud of the year we’ve had. And we’ll be raising a glass in gratitude for the opportunities it’s brought us to learn, grow, and evolve and to help others do the same. It’s been a year worthy of celebration. But when the clock strikes midnight on December 31, our gaze will be squarely focused on the future and all the opportunities that lie ahead to help our clients dream bigger about the growth possible for their brands, discover a path to achieve it, and not just do what it takes to get there, but to constantly strive to do better together.
About this series: Great products are not just about great functionality, pretty graphics, or even revenue. Great products are about solving problems for the people who use them so well that they return again and again. It’s easy to miss the needs those humans have when focusing on the individual components from a specific (and inherently limited) perspective. Each department in your business sees a different part of the story and a different way that customers engage with products. As we continue to explore the business value of great design, remember that only the BEST problem statements deliver the best designs. And when it comes to delivering the best problem statements, cross-functional teams have the advantage. Let’s unlock the potential of great design as the ultimate path to great business and how cross functionality advances it.
Design excellence requires more than individual brilliance; it demands diverse talents and perspectives. Digital products today are so easy to build that great digital products must shine brighter than most, which means solutions must be sourced from across the business landscape and not just from one person or team. Collaboration is pivotal for exceptional design and each player has a vital role toward innovation in product development and customer experience.
There is power that arises when different disciplines converge, contributing their unique insights to sculpt a solution and then align on building that experience together. Let’s look at the magic that happens when teams align for collaborative product development.
Introduction to cross-functional teamwork
The concept of cross-functional teamwork is easy to grasp; when more perspectives are available, there should be fewer gaps during design and build. Executing well on a cross-functional team, however, can be incredibly challenging and depends on many factors, including leadership, organizational structure, time and talent available, and individual personalities. Much of the challenge of effective teamwork in general is alignment. It can be difficult for a company to work toward a single strategic goal if one team is doing something radically different. Cross-functional teams have a distinct advantage in this situation as they can draw on team members’ experiences from various disciplines to move toward a singular goal. Collaborative product development enhances efficiency and becomes a cornerstone for cultivating a culture of creativity and adaptability within an organization.
When companies organize by customer experience or mission rather than by feature or technology stack, there is a lot of opportunity to build cross-functional teams with shared goals. This strategic approach allows a customer outcome to be analyzed and improved from various perspectives, unlocking gaps or opportunities that might have otherwise been missed. Think about a customer that is signing up for a new software product. In that single customer experience, they will likely encounter the general marketing of the company and the product itself, as well as welcome emails, onboarding tutorials, and probably a community of users, not to mention new targeted social media ads. In a cross-functional team, there are a lot fewer gaps than if different team members handle each of those customer touch points.
Building cross-functional teams
At the heart of building effective cross-functional teams lies the intentional structure of diverse skill sets to propel creative problem-solving. That doesn’t mean that all skill sets are required all the time. Building a cross-functional team is as much about communication and timing around when and how skill sets are brought together. Understanding how and when to bring team members in and out of the conversation (with the right amount of context and background) is a skill that each organization must build and refine.
As we shared in the first part of this series, great design starts with a strong problem statement. But problem statement development can also be the starting point for effective cross-functional collaboration. Sharing qualitative and quantitative UX research results across a diverse team to build a great problem statement will ensure that the right team members are being consulted for the cross-functional team to create the best customer experience to solve that problem. It’s useful to bring various stakeholders together during a solutioning conversation, essentially beginning with the ‘entire’ team to get perspectives on the customer experience and potential solutions. It might seem like a design or marketing team is all that’s needed in this ideation stage, but it’s incredibly valuable to bring varying perspectives in at this point. After that, it’s more useful to think of all of those participants as stakeholders who need to be ‘informed,’ but the responsibility will shift from department to department as the development progresses.
As in the example above, there are various customer touchpoints that different teams might own, but all of the stakeholders involved need to be informed each step of the way in order to ensure a cohesive customer experience. For example, when the marketing website for a new product is being launched, the product design team needs to ensure that the expectations set on the marketing website reflect the realities of the final product. Similarly, the customer success team needs to ensure they aren’t asking customers for information they’ve already provided via the marketing website or other pre-sales activity. By keeping these cross-functional team members informed, they can hold each other accountable for gaps, missed opportunities or missed expectations throughout the customer experience.
Cross-functional teamwork is vital to the success of a good product but that doesn’t mean that each stakeholder must be present for each conversation. Being efficient when sharing critical information can really elevate the communication across team members. Documentation and communication needs to go beyond live, collaborative communication to consider how to effectively institutionalize critical information in a way that contextualizes it for different stakeholders while driving alignment to an overarching vision and topline business goals. These versatile communications become more than just documents or “updates;” they evolve into powerful tools that communicate a unified vision, fostering cohesion and alignment among teams and organizations. A well-built roadmap is an excellent example of a flexible communication strategy that can share the most critical information to a variety of stakeholders. When presenting to leadership, the roadmap can be collapsed to only show the highest level strategy and initiatives. As conversation is required and/or different stakeholders are included, the roadmap can be expanded to show various tasks and strategies that will come together to deliver the initiatives. Leveraging communication tools that can adapt to the intended audience is a valuable way to keep communication up to date across team members.
Summing it up: Embrace a collaborative process
Creating and fostering a strong cross-functional and collaborative culture may not be the most obvious enabler to exceptional product design. But the impact of driving diverse perspectives into the product design process is key to unlocking its full business value. It can be difficult to create a highly collaborative environment, particularly when time is tight, the strategic importance of collaboration isn’t clear, and organizational silos get in the way. Enlisting the help of a neutral third party can be an effective way to broker buy-in on the value of strong cross-functional collaboration, align priorities across different teams and departments, and challenge historical organizational silos. Beyond the product design strategy and execution support we provide to our clients, we often find that the role we play in uniting cross-functional teams behind a common goal and achieving a shared point of view is equally valuable.
About this series: In the fast-paced business world, it’s all too common to hear about companies striving to become “product-led” and chasing after metrics like velocity and conversion rates. While these numbers undoubtedly hold significance, they often overshadow the underlying force that drives the success of great products: design. Design is not just about aesthetics; it’s about understanding your customers, empathizing with their needs, and crafting solutions that meet and exceed their expectations. In this exciting three-part blog series, we will dive deep into the realm of design and design strategy and its pivotal role in achieving business goals. Let’s unlock the potential of great design as the ultimate path to great business.
Understanding the cornerstones of great product design
In the ever-evolving landscape of product design, success hinges on the ability to navigate a maze of user needs and expectations. Understanding the need at hand and then defining the actual problem is a crucial first step that can make or break the entire journey. You might have a fantastic idea for a product but if you aren’t drilling down to the true problem that this product is solving, then you aren’t going to be able to truly satisfy customers. This design stage uncovers true pain points for customers to ensure your product is solving the right problem and a real problem. Understanding user needs and defining the problem are cornerstones of successful products, ultimately paving the way for continually high business value.
Empathy: The heart of a user’s needs
User needs are the foundation of good design, placing the customer at the very heart of the product development process. It’s imperative to empathize with users’ unique experiences, desires, and pain points when creating designs that resonate. User needs specific to a problem serve as a constant reminder that humans (specifically users) are at the core of the design process. By placing the human at the center of design, user needs act as constant reminders that the end goal is not just a product but a solution that addresses real-life challenges.
Moving from good to great design requires more than just a surface-level understanding of desired functionality. It requires a combination of both qualitative and quantitative UX research techniques that delve deep into user needs. First, quantitative UX research methods provide a structured and data-driven approach to learning about user behavior and preferences. Understanding the numerical data and statistical analysis can help you quantify user interactions, preferences, and performance. Surveys, questionnaires, A/B testing, and analytics tools are common examples of quantitative research techniques. Teams don’t need to use all of them every time, but carefully selecting a combination of methods will bring some helpful data to the surface as you assess user needs. These methods allow for the identification of patterns and trends, enabling UX researchers to create informed hypotheses about user needs. Quantitative research complements qualitative research by offering a more objective and measurable perspective, providing the necessary data to think through problems and have support for business decisions.
Qualitative user experience research methods provide valuable insights into the intricacies of user behavior, emotions, and perceptions. These methods delve deep into the more nuanced and harder to quantify psychological aspects of user interactions, aiming to understand what users do and why they do it. Qualitative research techniques, such as in-depth interviews, usability testing, and ethnographic studies, offer a way to channel the individual perspectives and experiences of users. Open-ended questions and real-time observations can help researchers uncover users’ needs, pain points, and desires, shedding light on the nuances that quantitative data often cannot capture. Qualitative research is an indispensable tool for human-centered design, enabling designers and businesses to truly understand user needs on a deeper level.
User needs are the baseline of effective design and encapsulate the essence of what the user truly desires and values. Before jumping to solutions or pixels, design teams must first empathize with their target audience, truly understanding their hopes, aspirations, and pain points. Taking the time to crystallize the human-focused needs and desires of the users ensures that every design decision is rooted in empathy and a genuine desire to enhance the user experience. Businesses that research, prioritize, and build products for these needs are not only better equipped to stay competitive in an ever-changing market but also to forge lasting, meaningful connections with their customers.
Crafting the perfect product design problem statement
With a solid understanding of user needs in hand, next up is crafting a clear problem statement to fuel product creation. A well-defined problem statement encapsulates the precise challenge that needs to be addressed, serving as instructions for design teams. Outlining the problem’s scope and context ensures that the design effort remains aligned with the customers’ real pain points and needs, allowing for a solution that truly resonates with them. This clarity and alignment fosters creativity and innovation in finding the optimal solution. It ensures that the entire team is headed in one direction, toward solving one problem. A well-crafted problem statement that is based on solid UX research guides the design process toward an excellent customer experience.
When thinking about the parts of a perfect problem statement, you must consider the person as well as the problem. This might be a problem that only a certain type of person has or a problem that lots of people have but only at specific moments in their lives. The person in the middle of the problem is just as important as the problem itself and cannot be separated from the problem statement. In addition to the who, problem statements must also consider the why but without the how. When the right amount of research has been done, there should be no trouble succinctly explaining for whom the problem exists and why. As the team sets out to create a solution for this problem, user needs and problem statements come into play. The goal is to reach an actionable problem statement that defines for whom you’re building the product or feature and why.
The positive impact of a clear problem statement reverberates through the entire business ecosystem. First and foremost, it reduces the risk of costly missteps in product creation. By defining the problem clearly, teams can avoid the pitfall of investing time and resources into solutions that do not address the root issues. It ensures that design efforts are aligned with the actual needs and pain points of the target audience and that the team is setting out to solve for the user and their why. As a result, products are more likely to resonate with and create value for users, leading to enhanced customer satisfaction, loyalty, and advocacy. A great problem statement empowers businesses to differentiate themselves in the market, gain a competitive edge, and drive sustainable growth. In sum, a clear problem statement acts as the catalyst for great design, and when design excels, so does business.
Wrapping Up: Great design, greater user experience
In the realm of product design and business success, two critical elements stand out as paramount: crafting well-defined user needs statements and clear problem statements. These statements act as the guiding light that illuminates the path to exceptional design and, in turn, outstanding business performance. User needs statements distill the essence of what customers truly value, enabling design teams to create products that resonate, cultivate customer loyalty, and fuel lasting trust. Clear problem statements also serve as a map for design, defining the challenge, scope, and objectives. They streamline decision-making, stimulate innovation, and ensure that design efforts align with real customer needs, ultimately reducing the risk of costly errors. The result is a positive ripple effect that enhances customer satisfaction, differentiation in the market, and sustainable business growth. In sum, these foundational statements are the key to unlocking the synergy between great design and great business.
Are you ready to embrace great design and improve customer experiences? We’re all ears. Let’s talk about your next project. And there’s more on the way; stay tuned for the second installment of this series! We’ll delve into how collaboration leads to the best design outcomes.
We recently had the privilege of attending the Snowflake Data Cloud World Tour event in Austin, Texas. It was a full day of presentations, demos, and customer breakout sessions dedicated to discussing the technical and cultural challenges that organizations face as they strive to become more data-driven. Industry leaders who have harnessed the power of Snowflake’s data processing technologies and platform experts convened to shed light on the evolving landscape of data utilization and the critical need for businesses to adapt.
In today’s business environment, where access to data has reached unprecedented levels, success hinges not on the sheer volume of data you have access to but on how effectively you can leverage it to make informed decisions on an ongoing basis. In fact, research by Mckinsey & Company found that insight-driven companies report above-market growth and EBITDA (earnings before interest, taxes, depreciation, and amortization) increases of up to 25%.
Our most significant takeaway from the event was the pervasive sense of urgency, coupled with encouragement, that resonated throughout the sessions we attended. In the fast-paced world of business, staying ahead of the curve is imperative. The lifeblood of modern organizations is data, and if your company hasn’t already placed your first-party data at the forefront of your decision-making process, you risk falling behind. While it’s one thing for decision-makers to prioritize data, it’s another to instill a data-centric culture throughout your entire organization.
During the event, heard from business leaders who recounted their early efforts to get their data houses in order. Some of these efforts date back to 2017 and 2018 when these visionaries recognized the transformative power of data and embarked on a strategic journey. Fast forward, as 2024 approaches, data isn’t merely a choice—it’s a necessity. If your organization hasn’t embraced a data-centric approach yet, the time to dive in is now.
Right after returning from the event, we received a timely report from Experian Research, focusing on the “Data Quality Revolution.” The message was crystal clear: if your business isn’t placing a strong emphasis on access to high-quality data, you should be, and the time to act is now. Continue reading as we explore the key takeaways from both the Snowflake event and the complementary Experian report.
The shift towards data-centricity: Where we stand
In the realm of data-driven decision-making, businesses are no longer tentatively testing the waters; they’re taking a deep dive. As highlighted in the Experian research report, “Over a third of business leaders say that better and faster decisions using data is a top priority to respond to market pressures. A continuous influx of accurate data enables team members—technical or not—to act with confidence. This is a claim that we see year after year and is vital in a market that is moving faster than ever.”
This sentiment echoes the progressive strides made by forward-thinking companies showcased at the Snowflake event. For instance, the Senior Director of Data Architecture, Engineering, and Platforms at a Fortune 500 athletic retailer shared insights into their innovative use of real-time data. By monitoring inventory levels and analyzing optimal pricing strategies in real-time, they’ve effectively maximized space utilization and ensured optimal profitability without compromising margins. This sophisticated approach underscores how organizations at advanced stages of data maturity leverage their data reservoirs to tackle genuine business challenges. Experian defines data maturity as “the extent to which your business can collect valuable data, derive meaning from it, and leverage this information in the decision-making process.”
Successful companies are often able to point to a mature data strategy that is disseminated throughout the organization that lends them a competitive edge. Consider Netflix or Amazon, for example. Both companies utilize their data to personalize content and provide product recommendations that increase customer satisfaction and ultimately drive greater customer engagement, retention, and overall revenue.
However, this level of sophistication isn’t universal. For numerous organizations, the journey along the data maturity curve is just beginning. Bridging the gap between recognizing the potential of data-centricity and effectively implementing it remains a common challenge encountered across various industries.
The challenges: Technical and cultural hurdles
One of the key challenges emphasized at the event was the demand for tools that can expedite the transition to data-centricity without subjecting organizations to extended development timelines. In today’s fast-paced business landscape, waiting months for development to design and implement complex systems is simply not feasible and leads to frustration throughout the organization.
What businesses need are solutions that are agile, efficient, and user-friendly. Experian “[s]urveyed businesses are looking at their technology to plan for scaling, expanding, and innovating data quality initiatives including easy-to-use tools for business users (50%).” The emphasis on user-friendly tools highlights a critical aspect of overcoming technical hurdles—providing accessible platforms that empower business users, regardless of their technical backgrounds, to harness the full potential of data, ensuring that the journey towards data-centricity is smooth and collaborative.
Many organizations now find themselves at a crossroads—they’re acutely aware of the immense potential that a data-centric approach offers, but they are equally familiar with the growing pains that accompany this transformative journey. The heightened awareness of the benefits is juxtaposed with the acknowledgment of the challenges. This duality can be both motivating and overwhelming. The Experian research report echoes this sentiment, revealing a profound truth: “Year after year, we find that data investment equates to business growth. Our study shows that 95% of super performers—these high-achieving and data-mature leaders—believe that data quality is fundamental to business operations going forward.”
This statistic underscores the critical importance of data quality in the contemporary business landscape. It’s not merely a matter of investing in data; it’s about investing in high-quality, accurate data that can fuel informed decision-making and drive business growth. The realization that data quality is intrinsically linked to future success is a powerful motivator for organizations navigating the complexities of the data-centric journey. It signifies a shift in mindset from viewing data as a mere asset to recognizing it as a cornerstone upon which robust business operations are built.
While the challenges are palpable, so are the rewards. Embracing the potential of a data-driven approach means not only understanding the significance of data quality, but also taking proactive steps to address it. As organizations grapple with the intricacies of data utilization, this awareness becomes a guiding light, illuminating the path toward transformative change. By investing in data quality, businesses not only mitigate risks but also position themselves for sustained growth and innovation.
In this landscape of shifting paradigms, Tallwave stands as a strategic partner, ready to navigate the complexities of the data revolution alongside your organization. We offer tailored solutions designed to guide you and your teams to think through what data matters to your organization and build a culture that ensures your business is not just prepared for the future but actively shaping it. Let’s embark on this transformative journey together—where challenges become opportunities and data becomes the cornerstone of your success.
Tallwave: Your partner in the data journey
If your organization is ready to embark on the journey of embracing data-centricity but you’re uncertain about where to start, Tallwave is here to provide expert guidance. We know the intricacies of this transformation, offering expertise in both technical solutions and cultural adaptations across various teams in your organization. Our approach is tailored to your specific needs, ensuring a seamless integration of data-centric practices into your existing framework.
Ready to make the shift?
Don’t wait until you’re left further behind—take action now. Discover the business benefits, navigate the challenges, and transform your data potential into tangible results. Your journey toward a data-centric future starts today. We’re ready to lead the way.
The holiday season is just around the corner, and that means Black Friday, Cyber Monday, and the annual avalanche of gifts, deals, and shopping sprees is practically upon us. It’s that time of year when consumers embark on an epic quest to find the perfect presents and snag the best bargains. But for frenzied holiday shoppers, a poor shopping experience goes over about as well as coal in the stocking.
While overall holiday spending is expected to stay relatively flat with last year, shoppers are expected to purchase fewer gifts to balance the effects of inflation. That means retailers are likely competing for fewer total purchases. At a time when cost consciousness is high and consumer loyalty is low, brands that can offer consumers a friction-free, customer-centric experience all tied up with a bow will be the winners this holiday shopping season.
Let’s delve into the latest shopping trends, highlight some common shopping experience pitfalls, and provide valuable recommendations to ensure a seamless and enjoyable holiday shopping experience for your customers that puts your brand on the nice list.
Macro Trend: What is convergent commerce?
Shopping has become an increasingly multi-channel experience, blurring the lines between digital and physical shopping experiences. While data suggested that preference for online retail was waning heading into 2023, e-commerce is expected to be a major channel for holiday spending with over 60% of consumers planning to do at least 40% of their shopping in that channel. But with channels evolving and new channels emerging, channel preferences get increasingly difficult to predict. It also makes the notion of omni-channel retail where a seamless shopping experience across several channels a less desirable goal.
Consumers are less interested in retailers creating curated multi-channel experiences and more interested in climbing into the driver’s seat themselves. Consumers want an anytime, anywhere commerce experience where they call the shots and execute their shopping activities—from browsing products on live streams to comparing prices across brand apps and AI-powered search, checking items in person for quality, ordering online to ship directly to gift recipients and everything between—wherever they want, whenever they want based on their changing preferences. That’s convergent commerce. It’s a shift from an experience that offers optionality (online vs. in-store) with parity, to frictionless fluidity.
If that sounds like a tall order, that’s because it is. Shifting from either/or considerations for the retail channels you engage in to activating across multiple channels at once in an integrated and seamless way requires considerable thoughtfulness. Convergent commerce relies on a data-informed (and frequently validated) understanding of what your customers value and their shopping preferences, strong data quality management, and a commitment to breaking down silos across teams, technology stacks, decision-making processes, virtually every facet of your business.
But it’s also a tremendous opportunity to create a consumer experience that’s truly differentiated. Consumers aren’t looking for more of the same; they want experiences that are uniquely tailored to them. And for brands that embrace the concept of convergent commerce, a powerfully divergent experience that sets them apart from competitors can be the reward.
Micro Trends: Delivering a better customer experience now
According to the National Retail Federation, this holiday shopping season is already underway with over 40% of consumers reporting they planned to begin their holiday shopping in October or earlier. That means today’s consumers can’t wait for your brand’s future convergent commerce strategies to take shape. And brands can’t let perfect be the enemy of progress when it comes to making this year’s shopping experience the best it can be. So what can brands do to better meet the needs of holiday shoppers right now? Reflecting on my own shopping experience, there may be more opportunities for quick wins than many retailers realize.
As both a holiday gift giver and receiver, my shopping considerations are the same as a lot of other holiday shoppers this season. Even though I regularly start my shopping before November, I’m always short on time. So convenience is key for me and online shopping is a great fit. I want to give gifts that feel personal and thoughtful, but with family all over the country, I’m concerned about the costs and potential delays of shipping. So like 55% of Americans who will buy at least one gift card this holiday season, experiential gifts in the form of gift cards, passes, tickets, etc. are high on my list. In what will be the dominant shopping channel (online) focusing on items that are subject to fewer inventory, stocking, and supply chain disruptions than a lot of other gift categories (gift cards), my shopping experiences have included a surprising amount of friction. So my gift to you is three ways you can ensure the holiday shopping experiences you’re serving up don’t leave consumers with a “bah humbug” feeling:
Consider the End-to-End Experience Gifting Experience
The actual purchase is only half the journey, but the gifting experience begins and ends outside the shopping cart. From the ability to effectively manage an influx of traffic from holiday browsers to ensuring gifts can easily be returned or exchanged, brands must consider the end-to-end experience to eliminate friction for both gift buyers and recipients.
There have definitely been times in my own shopping experiences where a slow, laggy, friction-filled experience has driven me to abandon ship. In fact, this year I’ve begun using the app released by one of my favorite body care retailers. I’m a bargain hunter, but I’m not great about remembering to use my coupons before they expire. I was drawn into the app by the wallet and loyalty points features that keep track of both and give me anytime, anywhere access to them right from my phone. I could shop from the app, but I like to be able to “smell before I buy” when it comes to body products and using the “pick up in store” feature allows me to browse only the inventory I can actually test in the store. Unfortunately, the popup for selecting a store by zip code or my current location just spins. This has been the case up to the time of writing this post despite multiple app updates. So I’ve got two choices when faced with this friction: I can abandon the app and move to the website in hopes of a better experience or I can say “Scrooge it” and move onto something else.
If you want to avoid turning gift givers and recipients into Grinches here are some tips for ensuring your delivering a gifting experience that sleighs from the first mile to the last:
Get your website traffic-ready: There’s nothing more frustrating than a website that takes forever to load. Consumers have zero patience during the holiday rush. A slow website will send them searching for alternatives so your website should be a well-oiled machine. Test its loading speed, ensure mobile-friendliness, and fix any broken links or errors. A smooth online journey will make customers stay and shop.
Take deals directly to customers: Utilize customer data to provide personalized recommendations and offers. Making your customers feel special by proactively showing them that you understand their needs and preferences will help bring them to you.
Offer clear and flexible pickup and returns: With consumers moving between physical and digital channels across the customer journey, offering clarity around return policies and flexible pickup and return options will better allow you to meet customers in their channels of choice. Offer the option for customers to order online and pick up items in-store or return online purchases at your physical location for maximum convenience.
Have strong support standing by: The holiday season means long hours for your customer support team. Failing to respond promptly to inquiries or complaints can lead to disgruntled customers who won’t hesitate to share their grievances on social media. Implement chatbots, and set up a system for addressing inquiries and complaints promptly. Social media monitoring can help you spot and address issues early.
Make conversion dead simple
Optimizing high-value actions like purchases to the fullest extent means thinking beyond the point-of-purchase mechanics of your e-commerce platform to other experiential elements. Using language within the purchase experience that makes sense to consumers, providing the information consumers need to solidify buying decisions, making relevant payment options easy to use, and ensuring parity of experience across device types can make or break the buying experience.
I was recently on the website for my favorite purveyor of chocolates with the goal of building a custom box of chocolates and I found myself getting tripped up at key points in the experience. After selecting the size and type of box I wanted to fill, it was time to select my candies. I specifically wanted dark chocolate and was surprised that there didn’t appear to be any search filters on the page; there was just a typical-looking search bar with “Search for flavors” as the hint text and a magnifying glass at the right edge of the box. I scrolled around the site to make sure the filters weren’t just oddly placed and after finding none, I begrudgingly opted to use the search. As I clicked into the box to search the word, “dark,” I discovered that what was designed to look like a typical search bar was actually a drop-down set of filters, which included a filter for dark chocolate. I proceeded to fill my box and initiated the checkout process and got all the way to the payment screen—the final conversion point—before realizing there was no option to select a store for pickup. At no point in the process did I have an option to choose a fulfillment option other than shipping (which also had a cost). Ultimately, I abandoned my cart after the experience left me with a bad taste in my mouth.
Here are a few tips for ensuring your conversion experience is as sweet as a box of chocolates:
Simplify checkout processes: Your customers are looking for a seamless shopping experience, not a labyrinth of forms and confusing steps during checkout. So your checkout process should be as easy. Offer guest checkout options that prioritize speed and simplicity, enable auto-fill features, and provide multiple payment options. Simplify the process, and you’ll see a boost in completed purchases.
Avoid hidden fees and charges: Shoppers hate surprises, especially when it involves extra costs at checkout. Display all costs clearly and be upfront about shipping fees, taxes, and any other charges. A transparent pricing strategy builds trust and encourages purchases.
Reduce the painof out-of-stock items: Nothing’s worse than finding the perfect gift only to discover it’s out of stock, so it’s critical to stay on top of your inventory. Ensure your inventory management software is equipped to prevent overselling, notify customers promptly if a product is out of stock, and suggest similar items to keep them engaged.
Consider people and process
Successful convergent commerce experiences require a seamless transition from one channel to the next. That means that the people and processes underpinning the in-store experience need to be equipped with the tools, training, policies, etc. needed to support customers who began their shopping journey in a digital channel (and vice versa).
I was gifted a digital gift card to one of my favorite restaurants. Because I have three kids, I tend to opt for take-out and delivery more than in-restaurant dining, and I was looking forward to redeeming my gift card for dinner after a particularly hectic day. However, I discovered I wasn’t able to redeem the gift card on my favorite food delivery app or the restaurant’s website. I had to call in and have them run the gift card over the phone. And because the restaurant offers delivery through its app partners only, I was forced to place an order for pickup rather than delivery. The restaurant is in a very busy area, and having to drive, park, and go into the restaurant completely undercut the reason why I decided to order instead of cook. To make matters worse, the staff working seemed to be confused and inexperienced with the restaurant’s pick-up processes. As a result, I spent 20 minutes sitting at the bar waiting for them to sort it out before I could pick up the dinner I’d originally intended to have delivered. I really love their food, so the experience won’t keep me away entirely. But I can tell you their gift cards won’t appear on my wish list until they offer the ability to redeem them for delivery.
Here are a couple of tips for keeping customers from going from joyed to annoyed as they transition between digital and physical experiences:
Drive brand consistency across touchpoints: Your online and in-store experiences should feel like two sides of the same joyful holiday coin. That means these experiences should feel connected in every way. Avoid creating functional silos between in-store and online experiences when it comes to ease of purchase; redemption of gift cards, coupons, and promotions; and returns and ensure where differences do exist—like offering a broader range of product options online or running online and in-store exclusive promotions—they feel purposed and beneficial to your customers.
Prepare your in-store team: Train your in-store staff to be knowledgeable about your online offerings and promotions. They should be ready to assist customers in placing online orders, redeeming digital gift cards, and answering product-related queries.
In the world of holiday gifting, experience is everything. Shoppers are looking for convenience, transparency, and joy during their quest for the perfect gifts. And gift recipients are looking for ease and flexibility when it comes to redeeming, exchanging, returning, and using gifts. By staying ahead of the latest trends, addressing common pitfalls, and implementing our recommendations, your business can ensure a memorable holiday shopping experience for your customers. Even if achieving truly convergent commerce is still a future destination on your roadmap, implementing these strategies will help you deliver a cohesive shopping experience that supports customers as they transition between online and in-store shopping. This flexibility not only meets the evolving demands of today’s consumers, but also positions your brand as one that truly values creating a differentiated experience that puts customers at the center. No matter where your brand is in your convergent commerce journey, we can help you ensure each step along the way creates value for your customers and your business.
As a digital agency CEO with a strong financial bent and a finance leader with deep experience in the agency space, we’ve seen the financial dance between marketing and finance teams more times than we can count. And we’ve heard some pretty creative approaches for classifying marketing expenses in different ways. While there’s no hard and fast rule that’s 100% right 100% of the time, more often than not the most compelling case is for treating marketing as an operating expense. This decision isn’t just a matter of semantics; it can have a significant impact on your business’s financial health and agility.
Operating vs. Capital expenses
Before we dive into why you should treat marketing as an operating expense, let’s clarify the difference between operating and capital expenses.
What Is an operating expense?
Operating expenses, often referred to as OpEx, are day-to-day costs incurred to keep your business running. Think salaries, rent, utilities, and yes, marketing expenses. OpEx is immediately deductible against your revenue, reducing your taxable income.
What is a capital expense?
Capital expenses, often referred to as CapEx, are investments in long-term assets, like buying a new factory or upgrading your IT infrastructure. CapEx is typically depreciated over time, which means it’s deducted gradually over several years.
Now that we’ve defined these two expense types, let’s talk about why we recommend putting marketing investment on the OpEx side of the ledger.
The temptation of a capital expense classification
While we believe the strongest argument is for classifying marketing as an operating expense, we understand why some companies may be tempted to categorize it as a capital expense. It can inflate the company’s assets on the balance sheet, potentially presenting a more favorable financial picture to investors and stakeholders. Additionally, tax implications can sometimes favor capitalizing marketing expenses, especially when a company is looking to spread out deductions over several years to minimize immediate tax liability. However, it’s essential to weigh these potential benefits against the flexibility and transparency that come with treating marketing as an operating expense to make an informed decision that aligns with the company’s overall strategy.
In cases where marketing initiatives have long-lasting effects, such as brand-building campaigns, there might be an argument for considering them as capital investments. One area where this argument tends to be the strongest is in investment in digital properties like websites.
Websites can serve as long-term assets, contributing to a company’s brand image, customer acquisition, and revenue generation over an extended period. This aligns with the capital expense criteria of enduring benefits and a useful life spanning several years, so classifying website investment as a capital expense has its merits. By capitalizing website development costs, companies can gradually expense them over time, smoothing out the financial impact.
However, there’s a counterargument to consider. Capitalizing certain marketing costs so they don’t hit your expense line and EBITDA can be enticing, but in the future, these become dead expenses because they’re being depreciated. Doing this over multiple years will lead to carrying depreciated expenses that you’re not realizing tangible return on, which hinders your marketing team from driving a full return on each year’s expenses.
Additionally, the digital landscape evolves rapidly, and website technology becomes outdated quicker than many other capital assets. Treating website development as an operating expense recognizes the need for continuous updates, improvements, and adaptations to keep pace with changing user expectations and technological advancements. Moreover, categorizing website investment as OpEx offers immediate tax benefits, as these expenses are fully deductible in the year they occur, potentially reducing tax liability in the short term.
Ultimately, the classification of website investment as a capital or operating expense depends on the specific circumstances and strategic goals of the company. CFOs and finance teams must carefully assess whether the long-term benefits and gradual expense recognition of capitalizing website costs outweigh the agility and tax advantages offered by treating them as an operating expense. It’s a balancing act that requires a nuanced understanding of the company’s digital strategy and financial priorities.
The argument for marketing as an operating expense
Potential exceptions like website investment aside, marketing investments represent ongoing, essential costs incurred to sustain day-to-day business operations, promote revenue generation, and adapt to dynamic market conditions. Treating marketing as an operating expense aligns with the constantly evolving nature of the marketing landscape and offers a host of advantages:
It gives you the flexibility needed to adapt to rapid change
One of the primary reasons to treat marketing as an operating expense is that it reflects the reality of the marketing landscape today. Marketing isn’t a one-time investment; it’s an ongoing effort to connect with your audience, build brand awareness, and drive sales. In today’s fast-paced digital world, consumer preferences can change on a whim and marketing campaigns must be able to adapt rapidly. When it comes to marketing, you can’t simply “set it and forget it” like you would with a capital asset.
When it comes to marketing, you can’t simply “set it and forget it” like you would with a capital asset.
Treating marketing as OpEx provides greater financial flexibility, allowing you to adjust your marketing budget more easily in response to changing market conditions or business needs. When marketing is a capital expense, you’re stuck with the initial investment, whether it’s performing as expected or not, which can limit your ability to evolve and adapt. As companies take greater control over their data and leverage technologies like AI and ML to execute data-driven decision making at scale, the capacity for ongoing, real-time optimization of marketing activity to drive performance improvement will only increase. With OpEx, you can scale your marketing spend up or down as needed, allocate resources to new marketing channels, and pivot your strategy without making the same level of long-term commitment from a finance and accounting standpoint and without the burden of depreciating assets.
It enables better ROI tracking and more accurate financial reporting
Accurate financial reporting is essential for making informed business decisions. When it comes to marketing investment, treating marketing as an operating expense ensures your income statement accurately reflects the real cost of doing business. This transparency helps you understand the true profitability of your operations and facilitates more accurate forecasting.
For its part, marketing efforts have high expectations for delivering quantifiable returns, whether it’s in the context of return on ad spend, reduced cost of acquisition, improved lifetime value, or any number of other metrics used to evaluate return on marketing investment. When marketing is categorized as OpEx, it’s easier to track and measure its ROI in real-time. You can see how your marketing efforts impact revenue and adjust your strategy accordingly. With CapEx, ROI calculations become more complex and less immediate.
It makes your CFO’s job easier
Given our roles and backgrounds in financial stewardship, we know the importance of prudent financial management. And we know that’s the love language of most CFOs. Treating marketing as OpEx actually makes your CFO’s job easier. Here’s how:
Clearer financial statements: Treating marketing as OpEx leads to cleaner, more straightforward financial statements, simplifying your job in preparing financial reports and ensuring transparency for all stakeholders.
Easier budget management: With marketing as OpEx, you have greater control over the budget. You can allocate resources more dynamically, responding to changes in the market or business priorities. It’s easier to manage and forecast expenses when they align with the business’s actual needs.
Reduced risk: Capital expenses carry inherent risks. What if the asset becomes obsolete or doesn’t perform as expected? Treating marketing as OpEx eliminates the risk associated with depreciating assets, offering a more predictable financial landscape.
Take it from us, it’s a great way to endear yourself to your head of finance, which can grease the wheels when you’re looking for approval on decisions that need to be made quickly.
It can send the right signal to strategic marketing hires
This last advantage of classifying marketing as OpEx is an easy one to overlook, but it can be really impactful. Top marketing talent often prefers companies that treat marketing as an operating expense. You might be surprised if this question comes up in an interview for a strategic marketing hire. But when a candidate poses this question, it can be a great indicator of strategic thinking about the level of ongoing business value your company ascribes to marketing. Because they know it demonstrates a commitment to staying current and competitive, being able to tell candidates that you classify marketing as OpEx shows that your company views marketing as a dynamic and mission-critical function and is willing to invest in it continually for long-term success.
Betting on marketing as a dynamic driver of growth
Things are rarely cut and dry when it comes to strategic budgeting, and marketing is no exception. There will always be a need to balance near-term and long-term financial constraints, business goals, and the marketing strategies and assets that support them. And there may be sound business reasons to capitalize on certain marketing investments under particular circumstances. But in general, treating marketing costs as operational versus capital expenses provides the greatest benefit when it comes to optimizing marketing performance, maximizing ROI, simplifying marketing budget management, and positioning marketing as the dynamic level for driving business growth that it is.
Regardless of how you classify marketing expenses on your budget sheet, fostering collaboration between marketing and financial leadership is key. Driving ongoing conversations between marketing and finance will help ensure that your finance team has a clear understanding of the business context for marketing investment, including the roles that various marketing investments play in achieving business goals, how return on those investments is defined, and what short- and long-term management and stewardship of those investments looks like and requires. It will also help your marketing team understand the broader financial parameter and requirements within which the business operates and the considerations that go into expense classification.
Sometimes the best way to foster understanding between your marketing and finance teams is with a partner who understands both sides of the coin and can translate between their unique points of view. If you’re looking for guidance or support bringing these critical business functions closer together, let’s talk.
Many companies have shifted their focus to bottom-of-funnel tactics, like paid search and retargeting ads, as economic uncertainty drives budget constraints and increases the pressure to make sales. However, this imbalanced approach will almost certainly have a lagging negative impact on revenue and ROI.
Implementing a full-funnel marketing strategy can fix the imbalance and ensure long-term growth and sustainability. Let’s look at the full marketing funnel, why stage-specific engagement matters, and how to bring them to life.
What are the stages of full-funnel marketing?
Marketing strategy is often compared to a funnel because of the shape it takes as consumers move through the purchase journey.
Stage 1: Top-of-funnel
Awareness tactics (at the top of the funnel) are broad and cast a wide net to reach consumers. This might include things like radio ads, billboard ads, blogs, or public relations campaigns.
The purpose of top-of-funnel tactics is to get your brand in front of your audience and generate brand awareness. As such, success for these individual tactics should be measured by publisher metrics like impressions, reach, frequency, and video completion rates or through survey metrics like lift in brand awareness and ad recall. A common misstep we see marketers make is trying to measure the success of a top-of-funnel tactic by the number of conversions it drives. Billboards aren’t going to result in a click-through conversion, but they do influence consumers who may not even know they want to buy your product or service yet. Similarly, an attribution model that ignores the role top-of-funnel tactics play as part of the confluence of factors that ultimately drive conversion can work against you.
Stage 2: Mid-funnel
Consideration tactics (in the middle of the funnel) focus on consumers who are familiar with and evaluating the brand. Tactics deployed at this might include product-specific emails, FAQ pages, and organic search strategy.
This is the stage where we start to see consumers interacting with the brand so success metrics look different than those in the top of the funnel. Here, we are interested in engagement metrics like click-through rates, social media interactions, rich media interactions, average time on site, pages visited per website engagement, scroll depth, and non-conversion website events (e.g., PDF downloads, webinar registrations, video completions, etc.).
Stage 3: Bottom of the funnel
Conversion tactics (at the bottom of the funnel) get in front of consumers who are ready to make a purchase. Paid search is a major tactic at this stage of the funnel, but tactics might also include website content like comparison charts or savings calculators.
This is the stage at which we measure tactical success in terms of conversions. Consumers, influenced by the awareness and consideration driven higher up in the funnel from other tactics, are now ready to make a purchase or submit a lead form.
But it doesn’t end there! After consumers convert, they move into the loyalty part of the funnel. The tactics in this part of the funnel keep consumers coming back. It might include things like personalized content, rewards and loyalty programs, or incentive campaigns.
The success of your loyalty program can be measured by customer retention rate, customer lifetime value, and repeat purchases.
The lowest part of the funnel is advocacy, which is all about getting consumers to tell their friends about your brand. This often takes the form of customer reviews and referral programs and can be measured by metrics like customer satisfaction scores, online reviews and sentiment analysis, and social listening insights.
Why does a full-funnel marketing strategy matter?
Although marketers like to position their strategy into a nice, neat little funnel, the reality is that the consumer journey is not so nice and neat. It’s also not linear. On average, it takes 8-12 touchpoints with a brand to convert a customer!
The beauty of a full-funnel marketing strategy is that it helps you meet consumers where they are in their journeys. It is a holistic, integrated approach that drives repeat exposure and facilitates multiple touch points with customers at different stages of their journey, which is critical for ensuring your brand is top of mind when the moment of truth comes and a buying decision is made.
The negative impact of a bottom-of-funnel approach
Conversion-focused tactics often get the most attention because they produce the most conversions. But consumers can’t convert if they aren’t aware of your brand. Consumers won’t convert if they know about your brand, but haven’t taken the time to consider what it means to them. By neglecting the upper parts of the funnel, you choke the funnel and restrict your ability to drive conversions in the long term.
Unfortunately, many companies get overly focused on the bottom-of-funnel tactics due to the very real and understandable pressure that marketers get from leaders focused only on transactional KPIs. This is especially true in times of economic uncertainty (check out our white paper on how to optimize your customer experience for recession resilience) when driving revenue takes on a heightened priority.
A broken funnel can manifest in many ways:
Poor engagement rates
If you skipped over the awareness part of the funnel, consumers may not be familiar with your brand. Trust and credibility have yet to be established and so they are not prepared to engage with your content.
High engagement, but low conversion
Similarly, if consumers are clicking, but not converting, may not be meeting them at the right point in their journey.
Conversion stagnation
Often a symptom of low-funnel strategies, you may have tapped out your available audience by ignoring critical awareness tactics.
Unintentionally over-indexing on first-time customers
It is 5-7 times more expensive to acquire new customers than to retain existing ones. If your customer base is over-indexed on new customers, you may need to double down on your retention efforts.
Decrease in branded searches
Customers can’t search for you if they don’t know about your brand. Investing in top-of-funnel tactics is crucial to driving brand awareness.
Increase in costs to convert
Persistent increases in cost per lead (CPL) or cost per acquisition (CPA) signal that you are competing for a finite, over-indexed audience and would benefit from upper-funnel tactics.
Bringing a full-funnel marketing strategy to life
If any of the scenarios above sound familiar, it’s probably time to evolve your marketing strategy to adopt a full-funnel approach.
Here are some key considerations when establishing a full-funnel marketing strategy:
Teamwork makes the dream work
A full-funnel marketing strategy requires collaboration across multiple teams (think strategy, brand, paid media, creative, content, design, PR, email, loyalty… the list goes on!) to ensure thoughtful, cohesive customer experiences. Make sure you are pulling in representatives from all the appropriate teams to drive alignment and ensure consistency.
Measurement matters
An appropriate measurement strategy is key to keeping a full-funnel strategy on the rails. As we described when defining the stages of the funnel, KPIs must reflect where tactics sit within the funnel to properly measure success and make informed marketing decisions.
Similarly, an attribution model can make or break your strategy. Last-click attribution models in particular can influence over-indexing on bottom-of-funnel tactics by assigning credit to the last touch before a conversion. This model puts a thumb on the scale for bottom-of-funnel tactics, limiting the ability to optimize for the distinct goals of tactics that play other roles in the funnel. Linear or data-driven models are generally more effective at assigning appropriate value to tactics throughout the funnel.
Be patient
The impact of a full-funnel strategy won’t be felt immediately. Upper-funnel efforts build future demand. Building loyalty and driving advocacy takes time. But this strategy sustains growth marketing investment in the long term by allowing you to reach more potential customers, extending the lifetime value of those customers, and generating more profit for less investment by driving efficiencies across the program.
The bottom line: full-funnel marketing strategies work
A recent Nielsen study of CPG brands showed that those with a full-funnel strategy had 45% higher ROI and a 7% increase in offline sales compared to marketing campaigns running in a single purchase stage.
We recently published a case study about how we helped a nonprofit client of ours drive efficiencies in their paid media program by enhancing their bottom-of-funnel paid media program to a full-funnel one. In the first year of running this full-funnel program, our client spent 9% more on paid media year over year, but produced 61% more donations.
Designing holistic customer experiences that drive growth is our strength. Because full-funnel marketing strategy is a team sport that requires participation from multiple teams, internal silos are the enemy of creating a holistic, integrated strategy. At Tallwave, we pride ourselves on two things: 1) relentlessly keeping the customer at the center of what we do at every stage of the journey and 2) driving integration and collaboration in the strategies that drive the customer experience so we can deliver successfully against your customers’ needs and your business goals.
Ready to learn more about how Tallwave can help enhance your marketing program? Give us a shout!
Target audience research and persona profiles have become a standard part of the marketing toolkit. Despite the changes I’ve experienced in my 20 years as a marketer as new technologies have emerged, channels have evolved, and customer expectations have become more demanding, the importance of persona profiles has been one of the few constants. A rich persona can be hugely beneficial in driving and informing how we engage with prospective customers, certainly through marketing efforts, but more broadly as well.
Despite the rapid rate of change that has shaped the marketing landscape, how we approach persona profiles hasn’t changed all that much. I’ve seen personas with different levels of depth and layouts, but they’re generally pretty similar at their core. Most of the time, they include a combination of what your audience looks like, with details like their age, income, job title, and marital status. The more creative ones even include fictitious names and pictures. And the rest is some combination of consumer behaviors, statements, pain points, and information gathered from a fairly small number of representatives of your audience, often through interviews.
But there’s one big problem with the traditional approach to personas. Nearly all the information they include has very little to do with what you care about most: WHY your customers buy and HOW to get prospective customers to do the same. The good news is we believe we have a better approach. In this post, I’ll share a method for audience research and persona development that taps into a huge repository of existing data to deliver insights on the values that drive your customers’ decisions.
Why Values Matter for Driving Consumer Behavior
Roy E. Disney, nephew of Walt Disney and longtime senior executive for the Walt Disney Company, put the power of values into the most succinct statement I’ve seen yet: “When your values are clear to you, making decisions becomes easier.” He understood that, just like our customers, we make decisions every day, not based on our demographics or our past behaviors, but on our values. And brands can tap into that power. If you know which values your best customers share, the values that motivate the buying behaviors you’re trying to inspire in prospective customers, you have the power to know what to do and say to get existing customers to say yes more often and to drive new customers to purchase.
The Disconnect between Values and Demographics
As it turns out, our values have little to do with our demographics. Our demographics might be part of the reason we don’t take a particular action. For example, odds are if I don’t have children, I’m not searching for pediatricians or childcare options. Being childless, which is part of my demographics, is the reason for my inaction. But for people who share the demographic condition of parents, that common characteristic only determines that searching for and selecting a pediatrician or a childcare option is a choice they’re likely to make. The demographic condition of being a parent has nothing to do with which choice they make and why. If it did, all parents would make the same choices. But of course, they don’t. They make different choices based on what they value. That’s why using demographics alone to connect with and influence your audience doesn’t really work.
I think the values gap that exists within a traditional demographic and psychographic approach to audience research and persona profile development is something that most marketers recognize intuitively. But there haven’t been a lot of better options for uncovering the nuances of what an audience values in a scalable way. That is, until I listened to episode 331 of the Digital Marketing Podcast, The Death of Demographics, An Interview With David Allison. In it, David Allison talked about his book, The Death of Demographics, and the research data behind it that spawned the first big data tool that makes a scalable, data-driven approach to values-centric audience research and persona creation possible.
The book is the product of a massive global research study known as the Valuegraphics Project (more on that in a minute) that finds that when it comes to values, humans agree about 8% of the time as a baseline. When you group by any demographic cohort—age, gender, income, marital status, you name it—that agreement only increases by 2.5%. So building a marketing campaign around what you think “Gen Z” or “working moms” or “retirees” care about is going to be only slightly more effective than throwing the spaghetti at the wall and deploying your campaign to anyone and everyone. Because while the year you were born, whether you have kids, and your employment status may influence decisions you will or won’t make, they don’t have anything to do with the “why” behind them.
So what will be more effective? The answer is valuegraphics.
The Valuegraphics Project
The Valuegraphics Project is a global mapping of core human values, the drivers behind all our decision making. Through nearly a million surveys deployed in 152 languages in 180 countries across the world evaluating 436 values-related metrics, 56 core human values emerged. And 15 statistical clusters of agreement around subsets of those values, which the architects of this project call “archetypes,” emerged from that research data. Those 15 archetypes can be used as the basis for valuegraphic personas, each representing an audience that is demographically diverse, but highly aligned on values.
So building a marketing campaign around what you think “Gen Z” or “working moms” or “retirees” care about is going to be only slightly more effective than throwing the spaghetti at the wall and deploying your campaign to anyone and everyone.
This focus on values doesn’t mean demographics and psychographics don’t have a place—they do. They can be practical and effective ways to limit your audience based on functional barriers to making the decisions you want them to make. But demographics and psychographics won’t help you understand what actually drives those decisions. You need valuegraphics for that. That audience data triad of demographics, psychographics, and valuegraphics all come together with your audience engagement strategy in the Value Thinking process.
Values Thinking is a process for identifying the underlying values that motivate your target audience so you can build an engagement strategy around those values.
Valuegraphics in Action
Value Graphics in Action: The U.S. vs the world.
So how do you go about putting valuegraphics to work to better understand and engage your audience? It starts with understanding the valuegraphics profile for your target regions and then surveying your target audience to illuminate their dominant and least dominant valuegraphic archetypes.
Regional Valuegraphic Profiles
One of the outputs of the Valuegraphics Project is a set of region-specific profiles that tell you the top values for each region. Looking at the regional valuegraphics profile for the US, we know that belonging, family, relationships, personal growth, and health and wellbeing make up the top 5 values for the region. Looking at the top 5 values for the US compared to the rest of the world, we see that family and relationships are valued similarly. But there’s significant divergence between the US and the rest of the world when it comes to belonging and health and wellbeing.
If you’re targeting a US-based audience, that’s already much more useful than any demographic or psychographic data when it comes to not just getting in front of, but influencing your audience to take a particular action. No matter what else you say, if you can connect your product or service to the values of belonging and health and wellbeing, your efforts will be much more effective at striking a chord than they would be with demographic and psychographic data alone.
Valuegraphic Archetypes
Value Graphics in Action: Adventurer Archetype.
With the valuegraphic profile for your target region, you’re ready to uncover the most and least dominant valuegraphic archetypes of your audience. Let’s say you’ve surveyed members of your audience and determined that the dominant valuegraphic archetype among them is the Adventurer. This is the 7th most common archetype globally representing 10% of the population. So you’re already getting much more narrow than the regional profile. When you get down to archetypes and the values they contain, you’re tapping into a currency that not only drives human behavior, but drives it in remarkably similar ways for those who share these values.
Comparing the regional valuegraphic profile of the US with this specific archetype, two points of meaningful distinction in the top 5 values are immediately apparent. Experiences aren’t in the top values for the region at all, so focusing on this value will be uniquely resonant to this group. Personal growth is in the top 5 values for the region, but it’s ranked much higher for this particular archetype. Tapping into these values will create an engagement strategy that’s uniquely relevant for this specific audience. So in this example, we’ve deployed a valuegraphic survey to the kinds of customers we want to find more of. And in analyzing that data, we uncovered the Adventurer as the dominant archetype. How do we get from here to a values-driven persona that marketing and other teams within our business can sink their teeth into?
Building a Better Customer Profile: Valuegraphic Personas
We’ve taken this process one step further to create personas based on the valuegraphic profiles we’ve built around specific audiences. One of the first things that makes these personas stand out from the traditional fare is what they don’t include. What you won’t see in this kind of persona are the demographic elements you typically see (a picture, fake name, age, and bio). That’s by design because they generally have nothing to do with the action we want to compel. And including them can imply that they do. Best case scenario, it’s not helpful. Worst case scenario, it can cause us to arbitrarily limit our audience and cut us off from engaging with values-aligned prospective customers.
Here’s what you will find in one of our valuegraphic personas:
The valuegraphic archetype(s) represented and a brief description of it, including contextual statements from people who share the archetype(s)
Statistics on how common this persona is in your region and their degree of values alignment
Highlights of the most and least dominant values, which serve as driver and detractor values respectively
A list of qualities and characteristics that are virtually certain (in that they’re true for 90%+) and highly likely (75-89%) to be shared by people who represent the persona and implications for your brand
The information in the first three bullets helps us start to get inside the minds of this persona. But the last bullet contains the gold nuggets that have actionable impact on marketing and beyond. The certainties and likelihoods for valuegraphic personas cover broad and sometimes unexpected ground, from unique perspectives on values to common behaviors and preferences related to travel, mobility, money management, leisure, the list goes on. And they can inspire insights that can influence everything from product and service innovation to content and creative, targeting, affinity and partnership marketing, and more. And these insights aren’t the product of a handful of qualitative interviews; they’re the product of a massive global research study that included analyses on massive quantities of research data at a level of statistical rigor that would exceed the requirements of most major universities.
Beyond B2C: The Value of Valuegraphics for B2B Brands
It’s easy to see how a valuegraphics-based approach to target audience research and persona profile development applies to B2C companies. But the applicability to B2B companies might not seem as obvious because in these scenarios, we tend to adopt an institutional view of our buyers. In reality, purchase decisions for businesses are still made by human beings (and in most cases, multiple human beings). That means that not only is the concept of connecting with the values of your buyers still very much in play, one could argue that the impact is compounded given that purchase decisions are made by multiple decision makers. So if you’re engaging in a way that’s not aligned to your target audience’s values, you’re going to hit the same snags over and over again with multiple decision makers.
In the context of the traditional approach to target audience research for B2B companies, it would be typical to develop buyer persona profiles for the different stakeholders who play a role in making purchase decisions and develop distinct persona-specific value propositions for those different decision makers. In the context of valuegraphics, the same logic holds. Illuminating the values that drive decision making for your cadre of B2B buyers will make you more successful in aligning to those values and compelling the desired action.
Evolving Your Approach to Understanding and Driving Consumer Behavior
With the execution of the Valuegraphics Project, we now have a way to leverage a much bigger body of data in the art and science of developing persona profiles. As marketers and growth drivers for our businesses, that gives us the ability to develop a deeper understanding of our audience at scale and parlay that understanding into action both within and beyond our marketing strategies to align better, resonate more, and compel action more effectively. As the world around us grows increasingly privacy-sensitive and the data at our disposal to drive reach with our audiences becomes more limited and nuanced, the brands who know their audiences best will have the greatest advantage.
If you’re ready to evolve your approach to target audience research and harness the power of valuegraphics data to drive your market engagement strategies, I highly recommend checking out David Allison’s book, The Death of Demographics. Or better yet, give us a call for the CliffsNotes and our playbook for putting it into action.
