We Are a Collection of Our Habits + other articles from Duct Tape Marketing

They can propel us forward in very positive ways and hobble us equally destructive ways. Habits allow us to do many of the little things we do, often without thought. They are extremely difficult to change and can be a major factor in the success of failure of a business.

My guest for this week’s episode of the Duct Tape Marketing Podcast is Charles Duhigg, a staff writer at the New York Times and author of the recently published book The Power of Habit about the science of habit formation and its applications among individuals, companies and societies.

For the Power of Habit, Duhigg researched in great deal how habits are formed, how they are disrupted and changed and how some companies are using this understanding to turn your habits into sales.

At its core, The Power of Habit contains an interesting argument: The key to exercising regularly, losing weight, raising exceptional children, becoming more productive, building revolutionary companies and social movements, and achieving success is understanding how habits work.

Duhigg breaks the psychology behind how habits control are actions into three parts: Cure, Routine, and Reward. It’s this pattern that makes our behavior so predictable and makes breaking habits so hard.

However, when we understand why we act as we do habitually, it starts to make the process of creating healthier rewards for healthier habits more possible. In fact, habits are so hard to break that we often only succeed doing so when we replace one habit with another.

I’ve stated for many years that marketing is a habit. The fact that so many business owners struggle to practice it successfully stems from the fact that they haven’t sufficiently tied a reward to “doing” marketing every day.

The Power of Habit is a must read for any business owner trying to understand how to form habits that serve and a very enlightening read for any marketer trying to understand why their clients do what they do.

How to Discover Your Perfect Target Customer in 5 Steps  This content from: Duct Tape Marketing

One of the most important elements of a marketing strategy is the development of an ideal target customer profile. Effectively understand who makes an ideal customer allows you to build your entire business, message, product, services, sales and support around attracting and serving this narrowly defined customer group.

When working with businesses that have an established customer base I can generally identify their ideal customer by finding the common characteristics found in their most profitable clients that also refer them to others. I’ve written about this kind of ideal client discovery here.

Today, however, I want to address the needs of the start-up or business with very little customer experience. Finding and serving an ideal customer is equally important for a business just getting started and establishing a focus on discovering a narrowly defined ideal client from the very beginning will save months of wandering in the dark trying to be all things to all people.

The 5 steps below can put you the path to discovering your ideal target customer.

1) Start with the Smallest Market Possible – This may feel counterintuitive to many just starting a business, but you have to find a group of customers that think what you have to offer is special. When you’re just getting started you may have very little to offer and in many cases very few resources with which to make sufficient noise in a market for generic solutions.

Your key is to find a very narrow group, with very specific demographics or a very specific problem or need and create raving fans out of this group. You can always expand your reach after you gain traction, but you can also become a big player in this smaller market as you grow.

2) Create an Initial Value Hypothesis – In the step above I mentioned the idea of finding a narrow group that finds what you have to offer special. Of course, this implies that you do indeed have something to offer that is special.

You must create a “why us” value proposition and use that as you hypothesis for why us. If this is starting to sound a little like science that’s because it is. You must always stay in test and refine mode in order to move forward.

Many people get caught up in trying to execute their business plan when the fact of the matter is the market doesn’t care about your business plan. The only thing that matters is what you discover and apply out there in the lab beyond your office.

3) Get reality in Discovery Test Sessions – Established, thriving businesses have the ability to learn a great deal every day from customer interaction. Since start-ups don’t have any customer interaction they have to create ways to test their theories initially and on the fly.

The key to both making and affirming your initial assumptions is to set-up what I call Discovery Test Sessions with prospects that might easily fit into your initial smallest market group. These are essentially staged one on one meetings.

This can be a little tricky since you have no relationship with said prospect. I often find that there are industry or trade groups that may contain your initial target market and by joining these you may have an easier time gaining access to this group.

Another possible option is to offer free sample products or beta test relationships to those willing to provide you with agreed upon feedback.

The main thing is that you start talking to prospects about what they need, what they think, what works, what doesn’t and what don’t have now. This is how you evolve your business, your features and your assumptions based on serving a narrowly defined target.

4) Draw an Ideal Customer Sketch – Once you’ve trotted out your hypothesis and tested it with your narrow group, you’ve got to go to work on discovering and defining everything you can about your ideal target group.

Some of this information will be commonly understood, such as demographics, but much of it will be discovered in your test sessions and though some additional research in more behavioral oriented places such as social media.

This is a great time to start your CRM thinking by building custom profiles that include much richer information than most people capture. I wrote about the new breed of CRM that is making this easier to do than ever.

5) Add Strategy Model Components – the final step is to apply this new ideal customer approach to other elements of your strategy.

The thing is, when you discover your initial ideal client it should impact the thinking about your basic business model and overall business strategy. All great business models are customer focused and now that you have a picture of this customer it’s time to consider how this alters the other aspects of your business.

Consider now how this discovery might impact your offerings, your revenue streams, distribution channels and even pricing.

Consider how you can reach this market, who you can partner with and what resources you either have or need to have in order to make an impact in this market.

I can tell you that my experience suggests that you’re never really done with this exercise. As your business evolves, as you learn and grow, this model will evolve as well, but perhaps the continual process of discovery is just as important as what you discover.

Digital Coupons as Real Time Conversion Content This content from: Duct Tape Marketing

Coupons have been with us for a very long time. In fact, they remain one of the last vestiges of the offline print conversion realm. While many offline lead conversion tactics have been rendered obsolete by inbound methods, print coupons have held up for traditional coupon shoppers.

But, that’s about to change as coupon behavior, stimulated by millions upon millions of Groupon type coupon users. Digital coupon use is closing in on print coupon use at an astoundingly rapid pace.

Digital coupons are fast becoming a medium that every type of business must explore. Consumers are growing to expect them, admit they help seal the deal and remain loyal to brands that offer them.

While coupons were once looked at as a low rung consumer product come on, they’ve matured in the digital world and through efforts by Google and other online advertising mechanisms, coupons have matured into a sustainable and profitable staple.

Add mobile use and location based intelligence and digital coupons are quickly moving to the top of the list of loyalty building tools favored by brands in every industry.

The popularity of sites like Coupon Sherpa point to the growing popularity and acceptance of digital, clickable coupons across every imaginable demographic.

Recent advancements in web conversion technology have turned coupons into real-time conversion content. As the use of content has evolved to include every type of interaction, smart marketers have discovered ways to deliver coupon content that involves behavior.

Spring Metrics (a client) has developed a technology called Smart Offers that turns the humble coupon into a conversion tool loaded with knowledge about your site’s visitors.

To me, this is the future of all content. The key to building trust, educating, nurturing and eventually closing with content is to find a way to tune the content so that it’s delivered to the right person at precisely the right time.

In the very near future we’ll see content management systems that use customer and visitor data to deliver all manner of content based on the specifics of each visitor.

The infographic below, developed in conjunction with Spring Metrics, goes deep into the current and future world of digital coupons as an evolving online consumer behavior.

5 Ways for Small Business to Jump on the Big Data Train  This content from: Duct Tape Marketing

The idea of something that’s being called “Big Data” has definitely reached the trend tipping point. Tech firms like are all about it. PR firms are forming teams to promote it and consulting firms have their business technology teams all over it.

So, what is it and what does it mean for small business.

The “what is it” part is pretty easy to explain in textbook terms, but the hype that’s currently surrounding the idea makes it much harder to bring down to practical application.

Initially the idea of Big Data applied to organizations that had such large data sets they could no longer work with them internally to analyze things like customer buying patterns.

The broader sense of this term and the one that is gaining steam of late is the ability to mine and analyze public data as a business opportunity. Google for example has been able to analyze the rise in the number of searches for flu related phrases to help the CDC pinpoint where to supply flu vaccine in near real time.

Companies are creating new tools such as Affectiva to help measure customer emotion and identify trends and opportunities based on social signals.

In many ways we’ve become a society of data producers – every email, tweet, blog post, status update, link, purchase, listen, download and review is generating data about what we think, how we act and maybe even what we want for breakfast.

The rush to make sense and profit from this information is driving a lot of the buzz surrounding Big Data.

But, here’s what I think this means for small business. While a great deal of the talk is centered on enterprise solutions there’s a great opportunity for small business to benefit from the coming set of tools and appliances aimed at helping us tap into the minds and data of the market.

1) More cloud integration – The adoption of cloud based tools for things like CRM, project management, file storage, backup, email, customer service and accounting means that integration of all of these various data set, even for the smallest of businesses, will become much easier.

The idea that everyone in the organization can have access to files that may live on a coworkers laptop or see customer history from inside an inbox is stuff that used to cost hundreds of thousands of dollars in hardware, software and consulting time. Now this kind of access is becoming a cloud based solution that people tackling big data will make available to small organizations for very little investment.

2) Culture of measurement – Before access to more data will serve any purpose there needs to be a culture of measurement and analysis. Most small businesses don’t measure or lead based on objectives, goals and metrics.

Until a business of any size gets serious about listening to their customers, talking to their customers, and measuring every possible data and touch point, the promise of more data will only serve to distract.

Unless you get hooked on small data – things like routinely asking your customers what they think – big data is just more noise. In fact, what I call small data, actually talking to your customers, is a real advantage that small business have. I think some of the appeal of Big Data for large organization is that it shields them from actually having to interact with their customers.

The real value for the small business that builds a culture based on data will come when services like those from ClearStory that aim to help organizations integrate their own data with existing large public databases, become commonplace.

3) Know what you need answers to – Actually, we’ve always had access to reams of data, the real trick, and this will prove so for enterprise as well, is knowing what to make of the data. Proper analysis is more important than more data.

The trick for the small business is knowing what it is your trying to find out or knowing what answers you’re trying to find. One of the best ways to analyze data for a small business is to go into it looking for something.

Spend time up front asking your customers and your sales team about things they don’t have, things that don’t make sense, things that always bug the customer, and things that they are seeing and hearing more and more. This is how you make sense of trends that might come from research in public data sets like Google Insights and Google Public Data.

4) Walk before run – The first place you need to start is internally. Until you get a handle on your own data, you shouldn’t concern yourself with the cool new tools that might help you make sense of more data.

So, for most small businesses this is going to mean creating a dashboard of key metrics and installing tools that give you real time access to the data that would allow you to measure simple things like, leads generation, ad conversion, and cost to acquire a new customer.

Starting with some of the more robust web site analytics tools such SpringMetrics (a client) and KissMetrics is how you gain insight into this craft. Learning how to test and measure your ads, headlines and offers is an essential data collection starting point.

Like so many things about business, until you build a strong foundation based on real customer interaction, you can’t build on top of it with the latest and greatest.

5) Hire a numbers nerd – data mining and analysis is essentially math and, well, some people excel at math and some at art.

Every business needs a numbers person – the one that can look at what seems like a pile of unintelligible digits, charts and graphs and sees music. Look for a proliferation of data marketplaces like Infochimps to crop up and offer access to data integration in a candy store kind of way for your numbers person.

From a practical sense this person probably needs to also know how to install and write a little code, read a P/L and create processes that allow you to build, track and measure a sales pipeline, but find the right one and your business will change forever.