In his book, “Thinking, Fast and Slow,” Nobel Prize winner, Danny Kahneman, describes the way we humans think as something of a battle between two discrete “systems.” System One is our instinctive, intuitive, gut-level, rapid-fire decision-making system. It was critical to our survival. System One asks: Is this stranger friendly? Or is he about to hit me over the head and steal my food?
But System One is not always reliable – and all too often, it leads us down a dubious path.
System Two is a slower, more deliberate system. It takes into account—and weighs—all the information at hand before moving forward. System Two says: He looks like he could be an enemy. But if I share my food with him, maybe I can make him an ally.
The challenge: System Two requires a lot of energy. And so, because our bodies and brains are programmed for efficiency (conserving energy however we can) System One is our go-to way of thinking. We literally can’t help it. And it works—for the most part. But not always.
Data used to be a System Two solution to most marketing problems. For one thing, we didn’t have nearly as much data as we do today. And we had few of the analytic tools available to manage.
But more importantly, marketing was about product features and benefits. It was about a brand’s positioning, or Unique Selling Proposition. Most of you know the well-known axiom: “If you build a better mousetrap, the world will beat a path to your door.”
The data—information about the folks you hoped would buy your mousetrap—was something of an afterthought. But times changed.
We came to realize that building a better mousetrap was no guarantee of success—that someone was sure to come along and build a competitive one faster, cheaper, with more features, free shipping and a money back guarantee. Hello, Amazon!
We learned that truly knowing who you are targeting, that speaking to them in a language they understand, about the things they care about, via the channels they prefer, at the moment they are ready to take action – well that’s the key to success.
Fast forward to 2017, and data (capturing it, manipulating it, studying it) has become the System One, de facto, solution to almost every marketing problem. We are literally awash in data.
Marketers have more data analytics tools available to them than they can possibly manage.
Marketing automation (totally dependent on a free flow of data, of course) promises to take the heavy lifting (System One!) out of marketing decision-making. And yet…
- Few marketers report a significant improvement in the metrics against which they measure their marketing performance.
- Few are seeing a real reduction in their new customer acquisition costs.
- And even fewer are seeing an increase in the customer lifetime value.
Why is that? How can that be?
Increased competition plays a part, of course. But it’s also because successful new customer acquisition—no matter how much data you have at your disposal—will always be a System Two endeavor. There are no quick fixes. There are no easy answers.
There must be a collaboration between smart marketers, merchants, and media managers, all working together with the data to identify critical patterns, glean actionable insights and to deploy it intelligently to overcome specific challenges.
That collaboration is the only way your organization can make data smart again.
Here’s an example of what I’m talking about: Multichannel retargeting is a hot new category garnering a great deal of attention across the marketing world. The System One approach to retargeting is that abandoned shopping carts are the Holy Grail. Yet a deep System Two analysis provides some interesting counterpoints. Namely that:
- An individual who views a product two or more times, in the same session, will outperform an abandoned shopping cart, where the product was viewed only once, by a factor of at least two times;
- An individual who views a product two or more times, in successive sessions, will outperform an abandoned shopping cart, where the product was viewed only once, by a factor of four or more; and
- A multivariate model that incorporates a number of web browsing behavioral data attributes (i.e. time on site, level of engagement, return visits, etc.) will outperform any single attribute (including shopping cart abandonment) by up to 12 times!
The CMO of a major client of ours recently told our team, “Don’t bring me another data play. And I don’t want to hear about a new technology. I just want to know how you’re going to help me generate more sales.”
Well that’s the point, isn’t it? To sell something to someone. System Two to the rescue.