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Make It Stick: Design for Action and Impact

Better to return home and weave a net than stand by water and desire the fishes.

CHINESE PROVERB

Galaxy Sports is a high-tech company that manufactures and markets sports wearables and apps in the United States and beyond. The company develops action cameras, mobile apps, and video-editing software for amateur and professional athletes who love to experience and share great moments of sports. Founded about 20 years ago by a group of sports enthusiasts, Galaxy has become one of the major players in the rapidly growing industry. At the beginning, Galaxy offered cameras that captured images using 35-mm film that needed to be processed at a pharmacy or photography studio. Later on, the company replaced its film cameras with digital cameras that generate both digital photos and VGA videos. Today, the company offers a variety of products equipped with audio capabilities, wide-angle lenses, and time-lapse features. Its product lines also include smartphone apps, video-editing tools, and Wi-Fi remote controls.

Since it was founded, Galaxy Sports has been investing heavily into new product development and relying on profits from the new product sales to recover the investment, covering the costs related to new product developments and fueling future new product projects. Recently, the company launched a 360-degree video camera. This product has multiple features that are superior to many of the competing brands in the marketplace. Galaxy Sports executives are hoping that this product can succeed in the marketplace and strengthen the company’s leadership in the industry. Kelly is the product manager, and she has been working on the product from concept generation all the way to new product launch. Market research has indicated that this product has a great potential to satisfy unfulfilled needs of target customers, and Galaxy Sports has invested millions of dollars into it.

However, three months after its launch to the market, the 360-degree video camera has not been selling as expected. Kelly and her team are not satisfied with the performance of the new product, and the sales revenue has not grown fast enough. The current sales revenue is growing at a rate of only 15 percent per month, far below the expected 30 percent monthly growth rate. As an experienced product manager, Kelly knows that sales revenue is a significant measure of financial performance at Level 4, and growth rate is a critical measure for new product success, especially in the early stages of a product’s life cycle. To better understand the situation, Kelly works with a performance consulting firm to identify the causes. The data and analysis show that although some customers have positive reactions toward the new product (Level 1) and even have learned some of its features (Level 2), very few customers are taking action (Level 3). Specifically, only 5 percent of customers who learned the new product features took action by either downloading the app or responding to social media promotion. In addition, the new product website traffic has been low, indicating very few customers are visiting the website and searching new product information.

Kelly decides that the key to the success of her 360-degree video camera is to convince more customers to take action. Therefore, she designs multiple solutions to address the issues with the assistance of the performance consulting firm. Based on survey research and suggestions from the performance consultants, she develops an integrated marketing communication (IMC) strategy by focusing on the following attributes:

1.   Perceived usefulness. The research has identified that target customers are struggling to understand the benefits provided by the 360-degree video camera. To address this issue, the new promotion highlights the product features that make the product useful for customers. For example, the 360-degree action camera has a waterproof feature that is particularly useful for people who love surfing and enjoy sharing the moments on social media. Additionally, the clear lens cap that comes with the product is useful for protecting the lens when shooting intense action.

2.   Perceived ease of use. It is clear that some customers are, to a certain degree, intimidated by the perceived sophistication and complexity of the new product. The new IMC strategy demonstrates the fact that, for most customers, the 360-degree video camera is easy to use. Through content marketing and digital marketing messages to target customers, Kelly and her team demonstrate how easy it is to use the new dynamic image stabilization feature of the camera for both still photos and videos. The messages also highlight the feature that provides all images captured by the camera to be automatically backed up through cloud connectivity, with very few skills needed.

3.   Self-efficacy. According to research, self-efficacy refers to individuals’ belief in their abilities to execute actions successfully and serves as a critical predictor of their actual actions. To induce desirable actions, Kelly and her team strive to increase target customers’ self-efficacy to use the 360-degree camera. Videos created using the new product are uploaded to YouTube and Instagram, and many users are sharing their success stories. Research shows that watching similar people succeed and hearing their success stories motivates customers to believe that they can do it too.

Kelly understands the importance of attitudinal changes prior to behavioral changes, so she uses surveys and interviews to carefully monitor the attitudinal changes of customers before and after the new IMC promotion. In addition, Kelly and her team use sponsorships as a critical component of their marketing program. They maintain a roster of over 100 athletes from a wide variety of sports who serve as champions and ambassadors for the Galaxy Sports brand and new products.

After launching the marketing program, Kelly and her team utilize multiple instruments to measure and evaluate the effects of the program at different levels and pay particular attention to measures related to action at Level 3. Specifically, they monitor website traffic and smartphone app downloads, in addition to questionnaire data collection. They also analyze how people watch their YouTube and Instagram videos and how customers respond to Galaxy Sport’s Twitter and Facebook messages. All these measures are significantly improving and will, Kelly hopes, lead to increased sales revenue and growth rates.

Influence Actions to Achieve Business Impact

Most marketing programs break down at Level 3, Action. As shown in the opening story, when customers do not take action after we implement a marketing program, business impact does not materialize. When employees do not take action after attending an internal program, the knowledge and skill they have learned will have no influence on job performance. When there is a lack of action, marketing programs fail to generate benefits, and financial and human resources have been wasted. Figuring out exactly why no action has been taken can be a daunting task because there can be many barriers and enablers simultaneously influencing success, although some may be more notable and influential than others. The challenge is to identify, understand, and address these barriers and enablers before, during, and after our marketing program.

Making it stick, discussed in this chapter, is an important step in the ROI Methodology that focuses on customers’ actions and their impact on business performance. This chapter offers tips for marketers to design for success at the action and impact levels. Specifically, we review various factors identified by research in the past decades, discuss their implications for our marketing programs, and provide tools and techniques for marketers to use to design their marketing programs for results.

Factors Influencing Customer Action

For decades, marketing managers and researchers have been engaging in studies focusing on factors that influence customers’ behaviors. During this process, ideas have been borrowed from social psychology, from industrial and organizational psychology, and from the literature on management. Notable models and frameworks in this arena include the theory of reasoned action (TRA), the theory of planned behavior (TPB), and the theory of adoption model (TAM). These theories have been tested in various contexts and have gained considerable empirical support over the past decades. The following factors have emerged from the literature as the most significant and reliable predictors of customers’ actions.

Attitude

Customers’ attitude refers to their favorable or unfavorable predisposition toward a subject, which could be the product, service, promotional message, brand, or organization. Customers must find the product or service important or valuable to them. According to research, customers develop positive attitudes when they positively evaluate the most important attributes related to the subjects in question.¹ In contrast, when they negatively evaluate salient attributes related to a subject, their attitude will be negative. As predicted by the theories, positive attitude leads to strong behavioral intention and actual behavior. For example, when a customer has a positive attitude toward a product, he or she is more likely to seek more information about it, to discuss it with other people, and to try it out or even purchase it than people who have a negative attitude toward it.

In the previous chapter, we discussed three strategies to change consumers’ attitude toward a brand. Specifically, we can change the perceived strengths of an attribute, change the perceived importance of that attribute, or add new attributes to consumers’ minds. When consumers have a more positive attitude toward a brand, they are likely to take action to try and purchase (Level 3), thus improving sales revenue and profit (Level 4). These goals can be achieved by using advertising, personal selling, social media marketing, and other promotional approaches, as they can positively influence consumer reaction (Level 1) and learning (Level 2).

Attitude is also important for internal marketing programs such as training. When employees have a positive attitude toward an internal marketing program, they are more likely to engage in actions to participate, learn, and apply the contents. The attitude comes from a cognitive process as employees evaluate the most important attributes of the internal marketing program. Managers and program facilitators may use the same three strategies to change employees’ attitude toward an internal marketing program by using announcements, brochures, flyers, meetings, and intranet communications. When these communication efforts create a positive reaction (Level 1) and learning (Level 2), employees develop positive attitudes, which lead to desirable actions (Level 3) and outcomes (Level 4).

Subjective Norm

Also known as normative pressure, subjective norm is a social pressure to perform or not to perform a behavior. Subjective norm plays an important predictive role in both TPB and TRA.² Its validity has been tested and confirmed in hundreds, if not thousands, of empirical studies. In marketing, strategies using subjective norm include relying on endorsements from opinion leaders and celebrities and on referrals from family members, peers, and friends. In an internal marketing program, it is critical to get managers’ support and endorsements for the program because employees are more likely to comply with manager expectations.

Self-Efficacy

As discussed in the opening story, self-efficacy is an important predictor of one’s behavior. When customers have more confidence in their abilities to successfully use a product, they are more likely to spend time and effort searching for information and exploring and trying the samples. For internal marketing programs, employees with increased self-efficacy are more likely to transfer and apply the skills they learned to work-related applications. From academic research and managers’ experience, we know that self-efficacy can be improved in multiple ways. We may increase and improve an individual’s self-efficacy by using verbal persuasion and by creating opportunities for individuals to have successful experiences, to learn from others’ success, or to mimic their role models’ behaviors.

Perceived Usefulness

A particularly relevant attribute for new product sales is customers’ perceived usefulness of the product. As discussed in the opening story, this construct measures the extent to which customers perceive the new product to provide useful benefits to make their life easier, more enjoyable, and more productive.³ Because adopting a new product always involves changing behaviors (Level 3), it takes effort to convince the customers that the change will lead to desirable outcomes. Marketers need to consider this in the process of designing content and promotional materials. It is also a powerful influencer of employee actions in internal marketing programs. When employees find an internal marketing program, such as sales training to be useful, they are more likely to take actions based on what they learn from the program. Sometimes, organizations utilize bonus and sales contests to increase the perceived usefulness of an internal program in order to induce desirable actions.

Perceived Ease of Use

Another relevant attribute for new product adoption is perceived ease of use. TAM defines this as the extent to which an individual believes that using the new product would be free from effort with less difficulty and barriers.⁴ When customers believe a technology or a product is easy to use, they are more likely to try it. Otherwise, they may hesitate. As demonstrated in the opening story, marketers may use content marketing to convince customers. This can be accomplished through creation and distribution of content, including videos, web pages, white papers, podcasts, infographics, etc., for the specific audience of target customers. In internal marketing programs, managers may use templates, job aids, and tools to make the process of learning and the adoption of new skills and new knowledge easier, thus improving the perceived ease of use and facilitating desirable actions.

Implications for Marketers

These research findings provide meaningful insight to marketers in the process of designing, implementing, and evaluating marketing programs. This helps marketers identify appropriate strategies to influence and induce customers’ action, both directly and indirectly, in order to achieve business impact. Additionally, these implications guide marketers in designing and choosing tools and techniques for various tasks in this process. Relying on the research finding, marketers may choose to influence customers’ actions directly by changing their attitude toward and perceptions about the marketing programs. Alternatively, they may influence target customers indirectly by utilizing sponsorships, opinion leaders and significant others, or managers and executives if it is an internal marketing program.

The Alignment Model

The process of designing, implementing, and evaluating marketing programs means we have to manage many moving parts. During the process, it is important not to get lost in the details. As discussed in previous chapters, the alignment model (Figure 7.1) helps marketers achieve business alignment for their programs.⁵ We will use the opening story as a case to demonstrate the components of and process to develop alignment.

FIGURE 7.1 The alignment model of a consumer marketing program

As shown in Figure 7.1, the situation of Galaxy Sports creates a payoff need, because the benefits derived from the 360-degree action camera sales revenue are not enough to recover the investment, as noted in the upper-left corner of the model. Also, on the left-hand side, we can see a business need, as the current sales revenue is growing at a rate of 15 percent, which is far below the expected 30 percent growth rate. Further analyses show several action needs, because 95 percent of consumers lack enthusiasm toward the new product. The lack of action may be explained by the fact that only 5 percent of consumers are aware of the existence of the new product, indicating there is a learning need. The marketers at Galaxy Sports believe that to ensure the effectiveness of their marketing program, the camera needs to be seen as relevant and valuable by the consumers.

As stated in the opening story, Galaxy Sports designs a marketing program to address these needs in an effort to improve the new product sales performance. Specifically, it launches an integrated marketing communication strategy highlighting important attributes of the new product. As shown in Figure 7.1, the company sets objectives at five levels corresponding to the five levels of needs identified. After launching the marketing program, Galaxy Sports utilizes multiple instruments to measure and evaluate the effects of the program at different levels. It uses questionnaires to measure the reaction and learning of the marketing program, Levels 1 and 2 data, respectively. To measure action at Level 3, which is the focus of the marketing program, the company monitors website traffic and smartphone apps downloads, in addition to questionnaire data collection. The Level 4 data of business impact are collected through monitoring records of sales revenue and the growth rate of the new product. Calculating the ROI generates data at Level 5 and completes the alignment model of this consumer marketing program.

The alignment model can also be used in business marketing programs. Figure 7.2 shows the alignment model of a distributor that is actively developing a new market in the Midwest through company sales-people. Marketing executives feel that there is a payoff need because the rate of new customer acquisition is too low. They also identify needs at the business impact, action, and learning levels as well as the reaction level, listed on the left-hand side of the model.

FIGURE 7.2 The alignment model of a business marketing program

The marketing directors of a distributor conduct analyses and find that most of the salespeople lack the tools for negotiating and closing deals. Additionally, they find that the prospect database used by salespeople is incomplete and outdated. They design a solution to address the issues by providing tools, job aids, and updated databases. To ensure that salespeople will take action to use the tools and job aids (Level 3), the distributor develops objectives to achieve desirable reactions (Level 1) and facilitate learning (Level 2). These objectives are highlighted in the middle column of the model. The marketing directors also use a variety of methods to collect and evaluate data, as shown on the right-hand side of the alignment model.

Both cases we discussed demonstrate the benefits of using the alignment model for marketing programs. The alignment model enables marketers to understand the issues and problems clearly so that gaps and opportunities can be identified. These help marketers justify the initiation of the marketing program, secure funding, and enlist support from executives and stakeholders. Further, the alignment model helps marketers understand needs and set objectives accordingly at different levels. Understanding the needs and setting objectives will facilitate the design and development of the best solutions. It also will help marketers communicate with stakeholders from other departments in the organization. The alignment model provides an opportunity for marketers to review progress and make adjustments if necessary.

Data Collection for Action and Impact Levels

It is helpful to review data collection methods for measuring action and impact level data before discussing issues related to making it stick. Choosing appropriate data collection methods is critical throughout the program cycle.⁶ As we discussed in the last chapter, some methods are suitable for collecting and measuring reaction and learning data. In this chapter, we explore data collection methods for action and impact, which can be used to confirm the effectiveness of the marketing program. Data collection may also reveal areas where the program is not working as planned, thus enabling marketers to take corrective measures for improvement in order to make it stick. In Table 7.1, we list several of the most commonly used data collection methods and the levels of data where they are used.

TABLE 7.1 Collecting action and impact data

Questionnaires and Surveys

The questionnaire is the most common method of data collection, whereas surveys are a specific type of questionnaire that captures attitudes, beliefs, and opinions. As discussed in the previous chapter, we can use questionnaires to measure customers’ reaction and learning. We can also use questionnaires to obtain subjective information about customer actions, business results, and even ROI analysis. To control for potential bias likely to be associated with the results collected from questionnaires and surveys, it is important to ensure an adequate response rate. For more detail and many useful tips on how to increase and achieve desired response rates, please see our book Survey Basics.⁷

Observation

In addition to collecting data at the input, reaction, and learning levels as we discussed in Chapter 6, observation can be used to collect action data at Level 3. For example, marketers from Fisher-Price frequently use observation to monitor children’s interactive actions with the toys the organization designs and promotes. The company even has a Fisher-Price Play Lab to accomplish such a task. Observation is also commonly used in internal marketing programs to monitor the extent to which employees use a precise sequence of actions or apply the learned skills as expected after a program.⁸

Interviews

Interviews are another helpful data collection method, which can be used to collect Level 3 data that may be difficult to obtain through questionnaires, observations, or other methods. Interviews may also be used to uncover success stories that can communicate evaluation results. To ensure the effectiveness of this method, interviewers must be skilled in interviewing a variety of individuals and using the probing process to uncover barriers to and enablers of actions and explore success stories.

Focus Groups

Similar to interviews, focus groups are helpful when direct and in-depth feedback is needed. As discussed in Chapter 6, focus groups can be used to collect data at the input, reaction, and learning levels. Additionally, this method can be useful when collecting data at Level 3. It is especially useful when marketers are interested in the following tasks:

•   Gauging the overall effectiveness of a marketing program to drive actions

•   Identifying the barriers to and enablers of actions that would prevent a successful implementation

•   Isolating the impact of the marketing program from other influences

Monitoring Marketing Performance

One of the more important methods of Level 4 data collection is monitoring the organization’s business records. Marketing performance data are available in every organization to report impact measures, such as sales revenue and profit, new accounts, product returns, sales cycle time, customer complaints, customer satisfaction, and loyalty. As emphasized in Step 1, “Start with Why,” the key is to start with a business impact measure connected to one of the four dimensions of marketing performance. We can then compare it with the actual results of the marketing program. The business impact measures need to be converted to monetary values and isolated for the effects of our marketing programs before calculating the ROI. We will discuss these steps in the next chapters.