A Marketing Information System Versus Market Research

real-time social media analyticsIn an earlier post, I presented the 5 steps in creating a marketing information system, but today I’d like to take a step back to discuss the impact of a marketing information system on sound marketing decision-making; which, of course, is the main role for a marketing information system.

First, let’s start with the definition;  a marketing information system is:

A system that analyzes and assesses marketing information, gathered continuously from sources inside and outside an organization. Timely marketing information provides basis for decisions such as product development or improvement, pricing, packaging, distribution, media selection, and promotion.

Meanwhile, Philip Kotler, sort of the father of modern marketing management theory defines it slightly differently as:

people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.
In contrast, market research is:
The process of gathering, analyzing and interpreting information about a market, about a product or service to be offered for sale in that market, and about the past, present and potential customers for the product or service; research into the characteristics, spending habits, location and needs of your business’s target market, the industry as a whole, and the particular competitors you face.

If you’d like to learn more about market research, you’ll find some basics here.

The difference between market research and a marketing information system

Now, some combine the two in something called a market decision support system. I prefer to think about the 2 separately because they’re really very different in both character and the skill set necessary.

That said, today I’ll focus mainly on an effective marketing information system:

  • Why you need one?
  • What to include in one?
  • Who should use one?

 Why you need a marketing information system?

The days of operating a business on the seat of your pants are long over and long live the new king of business management — analytics. Today’s hyper-competitive environment quickly punishes businesses who don’t make decisions guided by market intelligence with poor market performance and, ultimately, death.

Need an example? Take a look at the epic failure of companies like GoDaddy to capitalize on their huge Super Bowl advertising campaigns year after year. Even a cursory look at their campaign analytics shows an inability to use market information to successfully plan future campaigns.

Whether you implement a real-time marketing information system like the one above (from NASCAR) or whether yours is composed of less timely metrics, a marketing information system is a key component of decisions related to marketing, product, logistics, pricing and other related marketing activities.

Ideally, a marketing information system should contain recent data that guides decision-making presented in a visual format (because humans process images much better than numbers and because visualizations highlight trends), at the appropriate level of analysis (more granular data for line managers, higher level data for C-suite users), and allow users to perform ad hoc analysis. Moreover, an effective marketing information system should include a variety of metrics encompassing major factors impacting market performance (more about this in the next section), be accurate, and timely.

What metrics to include?

There’s no good answer to this question because every business and industry is different. So, the short answer is to include all metrics that impact market performance paying close attention to metrics comprising both the top and middle of the funnel, not just conversion.

That said, too many firms construct their marketing intelligence using metrics that are easy, rather than ones having the greatest impact on market performance. Too often, their efforts mimic this Mutt and Jeff comic strip from 1942 — looking for market intelligence with data that easiest to get, not most insightful:

marketing information system

Make sure you have metrics representing all your KPIs (Key Performance Indicators) and that KPIs match your marketing and organizational goals. Similarly, make sure KPIs represent the entire conversion funnel, including post-purchase evaluations and behaviors such as recommendations, satisfaction, complaints, and loyalty.

Downloading CSVs (Excel files), APIs, and SQL queries help strip selected data from sources such as Google and social networking analytics tools, your website, other external data sources including industry reports, and internal data. Bringing all the metrics together on a Cognos or Cyfe dashboard makes it easy to see interconnections between metrics from different sources.

Who needs a marketing information system?

The short answer — everyone who wants to build a successful business or make their business more successful.


That said, a marketing information system is expensive, so you need to perform a cost/ benefit analysis to determine how much you should spend to gather market intelligence. In the case of NASCAR’s real-time analytics, the benefit of having accurate, real-time information outweighs the cost of collecting, analyzing, and disseminating this information. A smaller organization might opt for a simpler system that fits their budgetary constraints. Opting for NO marketing information system simply isn’t an option, although it’s a common response from businesses who fail to accurately measure the opportunity costs of bad decisions.

Building market research into your marketing intelligence system

Sometimes a marketing information system needs a little help from market research to fill in gaps. For instance, when a business is working on a new product, market research provides specific information on customer needs, willingness to buy, preferences, and pricing that no marketing information system can provide with accuracy, although it can certainly help by providing historical data related to other products produced by the firm or its competitors.

Need help?

We welcome the opportunity to show you how we can make your marketing SIZZLE with our data-driven, results-oriented marketing strategies.  Sign up for our FREE newsletter, get the 1st chapter of our book on digital marketing analytics – FREE, or contact us for more information on hiring us.

Hausman and Associates, the publisher of Hausman Marketing Letter, is a full service marketing agency operating at the intersection of marketing and social media.


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Marketing your Lean Startup

marketing your lean startup
Lean startup is probably the hottest concept in entrepreneurship today.
Maybe you’ve heard of it, but you’re not quite sure what all the hype is about. Well the father of lean startups, Eric Ries, sums up the lean startup concept as:

The Lean Startup provides a scientific approach to creating and managing startups and get a desired product to customers’ hands faster. The Lean Startup method teaches you how to drive a startup-how to steer, when to turn, and when to persevere-and grow a business with maximum acceleration. It is a principled approach to new product development.

The lean startup process looks like this: marketing your lean startup

Embedded within this process is the concept of failing fast — in other words, learning quickly whether there’s a market for your great idea and whether what you’ve planned solves a consumer problem faced by real people.

Lean startup versus traditional entrepreneurship

According to the Harvard Business Review, lean startup changes everything in the startup ecosystem. Traditional entrepreneurship delays market testing a new idea until months or years (and thousands or millions of dollars) have been spent developing your idea into a new product or service. Yet, despite careful planning, time, and money being poured into the venture, 75% of startups fail, according to a new study by Harvard Business School and Dr. Ghosh.

In my experience working with the SBDC (Small Business Development Center) and private clients, my guess is the 75% failure rate actually under represents the actual number of startup failures because many startups never even reach the point of starting operations, but die in the birthing process.

Lean startup methodology eschews extensive planning and hyping investors in favor of developing an MVP (not most valuable player, but a minimum viable product). In theory, at least, the concept of an MVP makes perfect sense — you test the waters with consumers before spending months or years and millions of dollars building a product no one wants. The Field of Dreams approach of traditional startup planning often only works in the movies.

Using an MVP to test the waters means startups don’t spin their wheels and waste money developing elegant solutions to problems consumers don’t want solved. As small organizations without a top-heavy bureaucracy that destroys nimbleness, startups learn from early customer experimentation and iterate through to a product that meets customer needs, something termed agile development. In the lean startup process, startups discover what works in terms of reaching customers, effective messaging, production and distribution opportunities — in essence discovering and testing rather than planning in isolation.

Pivoting is also critical for lean startups. Pivoting implies a malleability, and openness to change that’s hard to develop and harder to manage because it means a company opens itself up to quickly discarding things that don’t work and moving on to alternatives that might.

Marketing your lean startup

I see this happen almost every day.

I go to a pitch session where budding entrepreneurs demo their new, great product — often an MVP. The problem is, they’re still developing that MVP in isolation rather than in conjunction with consumers. Entrepreneurs have a great idea (they think) and start coding or tinkering until they have something to show the rest of the world. Problem is, often they’re solving a problem shared by few consumers, for which consumers aren’t willing to pay, or for which consumers are satisfied with current solutions.If I see one more dining app, I’m gonna puke. Companies like Github own that model, so don’t even try to horn in on their parade. Even if you offer it for free, I don’t have room for one more app on my smartphone, so NO, I don’t need you.

These folks miss the point about lean startup methodology — get consumers involved from the beginning, not after you have MVP. Ideas are a dime a dozen — everybody has them. There’s nothing unique about your idea.

Consumers buy solutions, not products. Find their problems. Consumers vent their frustrations every day and that’s your opportunity to become their solution.

Whether you’re a budding entrepreneur or a big company wanting to grow your product line and bottom line, start with consumers, not product.

Finding customer problems

Get out of your office. Interact with real people and seek out diverse groups. Listen to what people are saying. That’s where your great idea comes from.

As an exercise with MBA students taking my entrepreneurship class, I asked them to think about a new product to solve a problem they see everyday by adding to taking away something from an existing product. It’s a great exercise in finding your “big idea”.

When Chrysler introduced the minivan, they watched consumers using existing car and truck model to identify a set of problems. The result was the most successful new automotive product in decades.

Testing your MVP

You can test some solutions without an MVP. You can talk to folks about your idea and get feedback without all the expense and wasted time. The problem with this testing is that consumers might not give accurate feedback about something they can’t see or try yet. When working on a project for the Aquarium in Tampa, we asked hundreds of folks what they thought and got high praise for the idea. After the city spent millions building it, attendance didn’t even approach projections.

Or, you can create a down and dirty version of your idea to get feedback and be ready to change if your idea doesn’t work. That’s what happened at Facebook when Zuckerberg created his first product — users loved it, but women hated it and the school accused him of invading the privacy of students by scraping their images.


Facebook is born.

Build. Test. Pivot. Produce.

Laying the groundwork for market performance

Marketing is key to success in finding and developing your MVP — don’t leave it until you have product ready to roll out.

Just as you’re using marketing tools to uncover unmet needs (problems) and testing your MVP, you should test your positioning, messaging, and plans for distributing your product to consumers — all marketing activities. Marketing develops personas representing likely consumers and develops strategies to reach each persona. Marketing also has a valuable roll in developing the user experience (UX).

Marketing builds your initial customer base, then follows users with an eye toward iterating the product using customer feedback. Your marketing executive uses initial metrics to determine which platforms are best for reaching potential customers and develops marketing collateral. Then, when you’re ready to roll out product, you’ve already figured out the best ways to reach and convert potential buyers.

Need help?

We welcome the opportunity to show you how we can make your marketing SIZZLE with our data-driven, results-oriented marketing strategies.  Sign up for our FREE newsletter, get the 1st chapter of our book on digital marketing analytics – FREE, or contact us for more information on hiring us.

Hausman and Associates, the publisher of Hausman Marketing Letter, is a full service marketing agency operating at the intersection of marketing and social media.

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Marketing Simulation versus A/B Testing

a/b testingMarketing simulation versus A/B testing

A/B testing involves creating different versions of your marketing materials. Consumers view only 1 version using a process of random selection to determine which version any consumer sees. Marketers then monitor to see which version performs best, usually based on consumer actions, such as buying the product, or subscribing, consumer emotions, such as liking, or consumer thoughts, such as knowledge about the brand.

Because it’s a powerful method for increasing conversion, A/B testing is kind of the gold standard for metrics-driven marketers (and should be for everyone doing digital marketing). Yet, problems exist.

For instance, you can only make a single change between versions of your marketing materials — such as a headline, color or text of your CTA (Call to Action), etc — which can result in a lot of different versions, which require a large number of consumers to effectively evaluate results. Ethical concerns also exist regarding using human beings as test subjects. But, the biggest concern with A/B testing is that return visitors may get confused or produce inaccurate results when they see different versions of the marketing materials.

In contrast, web designers commonly set up a sandbox to test performance before uploading the design to the internet for others to see. That’s because you don’t want visitors coming to the site in the middle and seeing things that don’t work right or look awkward. Such incomplete or bad designs discourage visitors from returning and give the brand a poor image.

Like the sandbox used by web designers, marketing simulation creates a sandbox to test your ideas. Unlike the sandbox created for web design, however, a marketing sandbox doesn’t just test whether a feature works or not, it tests HOW people respond to your marketing materials:

Does the orange or green CTA box generate more clicks?

Would consumers respond better if materials were directed at them, ie. let us help you versus let us help?

Does a white paper generate more response than a video?

Which consumer segment will generate the most profits?

Where would consumers be most likely to buy our products?

While you might use A/B testing to discover the answers, marketing simulation is often a better option for the reasons listed above. Plus, marketing simulation can determine response more holistically rather than 1 element at a time.

Types of marketing simulations

Marketers sometimes use consumer panels for marketing simulation. For instance, we did a shopping panel for a company making holiday gift wrap. We simulated a store and gave members of our consumer panel $25 to spend on gift wrap in our store. At the register, we not only charged for the purchases, but recorded the designs chosen. At the end of the simulation, we reported the highest grossing designs to the client who used the information to determine which designs to produce.

In the case of a consumer panel, you use real people in your simulation, which is expensive and time-consuming. An alternative is constructing a simulated consumer panel using advanced databases and modeling to predict how these pretend humans respond to marketing efforts.

That’s exactly what Thinkvine is all about. They create a simulated digital marketplace peopled by databases reflecting real consumers and modeled using sophisticated algorithms to deliver customer-driven insights that guide your marketing efforts.

Learn more about how Thinkvine helps you create better marketing campaigns from my interview with CEO, Mark Battaglia.

Need help?

Whether you need a complete analytics strategy, some help with brand marketing, or some consulting to learn how to optimize post content, we can fill your digital marketing funnel. We can help you do your own social media marketing better or do it for you with our community managers, strategists, and account executives. You can request a FREE introductory meeting or sign up for my email newsletter to learn more about social media marketing.

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Customer Insights Create Competitive Advantage

Online commerce is changing — FAST! A customer insightsstrategy where tech weenies used to dominate is quickly changing as the importance of online and mobile sales increase dramatically. IS YOUR BRAND READY FOR THESE CHANGES ????

Not only are more customers shopping using their computers tablets, and smartphones, but digital influence dwarfs the voice of brands’ paid advertising. Frankly, I’m appalled that offline advertising still makes up the lion’s share of a brand’s marketing budget.

So, what’s driving this change? Well, a number of things. Let’s take a look, courtesy of IBM’s graphic.

Social Media

Word of mouth is nothing new. We’ve always known the power of social influence on consumer purchase intentions is strong. Social media just provides a platform for social influence to spread like wildfire.

But, the importance of social media for marketing doesn’t end with encouraging amplification and positive sentiment about your brand. Possibly the most important aspect of social media is the customer insights provided by all that data about customers and their lifestyles, wants and needs, problems and triumphs, how they express themselves, what they like and hate, etc. This unstructured data is a gold mine of customer insights that’s hard to collect using standard market research tools.

Yet most firms ignore this rich vein because they lack the tools and skill to effectively manage unstructured data. Others ignore customer insights from social media because they’re uncomfortable with the touchy-feely nature of these sociological customer insights. I remember teaching some folks for a consumer packaged goods (CPG) company which shall remain nameless, but their initials are P and G. These entry level engineers managing consumer brands thought it was crazy to use this type of customer insight to guide management decisions. They needed hard numbers, not some squishy “emotional” stuff.

But, social media offers much more than just customer insights in terms of “emotional” stuff. Using tools designed to handle big data, such as IBM’s Big Insights, can convert unstructured data into structured customer insights used for predicting things like demand in real time. Customer insights from social media include segmentation by classifying consumers into behavioral groups and developing strategies for optimizing marketing ROI from each group. Social media provides additional customer insights such as geographic clusters to help guide location strategies, consumer hot buttons to guide promotional strategies and many other customer insights that give you a competitive advantage with your target market.

Cross-channel customer insights

We no longer live in a world where customers choose a single channel for their purchases. As you can see in the graphic, consumers combine in-store search with online purchase almost as much as they use the internet to help guide in-store purchases. These shoppers spend 400-500% more than more traditional shoppers — making them a fantastic opportunity for retailers.


So, what do these customer insights suggest? Why not make it easy for in-store shoppers to use their smartphones and increase sales?

For instance, ShopKick enables retailers to track customers through the store, offering incentives for purchase and offering information to stimulate buying. Even without the high cost of this technology, Macy’s effectively uses QR codes to promote purchase. Shoppers can access information throughout the store using QR codes to provide more information about products, suggest options for accessorizing or complementary items, or just giving shoppers insights from clothing designers.

And, consumers are perfectly comfortable using their smartphones to make purchases. So, why not reduce frustration and shorten lines (especially problematic during the Christmas season) by letting customers use their phones to buy products in your store. I recognize retailers fear theft, but look at the opportunity cost of NOT doing it. Grocery stores are ahead of the curve on this one. My Giant store offers scanners that allow customers to scan and bag items as they shop through the store. When they get to the register, customers simply upload the scanner data and swipe their credit cards. It’s only a short step from this to replacing the scanner and register with smartphone apps. As a bonus for consumers, smartphone grocery apps already provide coupons that could automatically reduce purchase price. Everyone wins.

But, don’t forget the wave of data available when consumers use these digital devices. Analyzed effectively, these customer insights further enhance the retailers marketing strategy.

Need help?

Wanna learn more. I’ve got a lot more insights on social media analytics from my week with IBM.  So, be sure to bookmark this site so you can come back tomorrow. Or, better, sign up for my email newsletter to learn more about social media analytics and marketing strategy. If I’ve whetted your appetite to use more analytics to optimize your marketing, let me show you how Hausman and Associates can help with our unique virtual agency model that provides cutting-edge social media at a reasonable cost.

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Perceptual Mapping: Beyond the Basics

perceptual mappingI get lots of comments and questions about an old post on perceptual mapping. I think this is great. It means folks are using these predictive analytics to optimize their business. But, it makes me realize there’s a lot I left out of that original post on perceptual mapping. So, here’s the continuation of that post.

Variables for perceptual mapping

Literally, you can use any factors important for your target audience. But, don’t guess which factors have the most influence over consumer decision-making. Ask. And, it may be that different market segments within your target market have different variables that influence buying decisions.

While new perceptual mapping software allows you to build maps on more than 2 axis, you still need to pick those factors that have the most influence on buying behavior. It means doing some preliminary research before you even start collecting data for your perceptual map.

Perceptual mapping

Once you’ve identified the most influential factors, you’re ready to start collecting data regarding those variables from your target audience. Remember, you not only want their perceptions of where your brand fits in the multi-dimensional space of your perceptual map, but where your competitors fit. In some cases, you’ll also want perceptions about close substitutes for your brand.

I commonly use a Likert-type scale to collect data because it’s richer than a bi-polar scale and easier than a semantic differential scale. But, any type of data will do, as long as it represents your entire target market. Here, the biggest problem is getting biased data because of problems with your sample.

Visualizing your perceptual map

Maybe the best feature of perceptual mapping is the data visualization — being able to see the data graphically helps in making appropriate decisions. Depicted in this map is the positioning of your brand relative to its competitors.

Good software for perceptual mapping generates a figure like the one above that clearly models where your brand fits in the minds of consumers, as well as where your competitors fit. Good software also displays brands in sizes relative to their existing market share — with brands that sell more displayed larger than brands that sell less.

Making decisions based on your perceptual map

First thing, your preliminary research tells you what’s important to your target market (or target markets) — if you didn’t already know.

Next, you want to avoid head-to-head competitions, if at all possible. So, if your brand is perceived as too similar to a large competitor (for example if you’re Cadillac, you’re too much like Lincoln and Mercedes), think about re-positioning your brand to fit on the perceptual map where there’s little competition. Cadillac did a good job of this with its redesign of the CTS as both a high performance and sexy automobile, while Lincoln and Mercedes stayed in the same space.

If you’re working on a new product, try to find one where there’s a free quadrant ( or part of one) on the perceptual map. But, you also need to consider WHY there’s no one in a blank spot on the perceptual map. Maybe that area is not possible — such as a cheap luxury car. More likely, the space is empty because consumers really don’t WANT a product in that space.

Pitfalls in perceptual mapping

Two big pitfalls to perceptual mapping lie in wait of the unwary or unschooled.

First, market research is complicated and expensive. Done wrong, market research is less than worthless. Market research relies on doing a good job of sampling your entire target market, avoiding bias, and the reliability and validity of your measures.

Second, interpretation can be a little tricky, especially given the politics in some firms.

Need help?


Need help putting together a killer market research program that helps make your marketing SIZZLE? We’re here for you. You can access free content, such as our FREE 66-page ebook on making money with social media and posts to this website. Need more help? We’re here for you. Simply contact us and we’ll show you how affordable GOOD market research can be.

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