Marketing DR

It’s the End of the Sale as We Know It

2012-01-27T09:10:00.003-06:00

When attempting to navigate the rocky road that is department store retailing, maintaining status quo is not a viable strategy. The department store sector has been challenged for years by greater merchandise assortments of specialty stores and lower prices of mass merchandise discounters. One company caught in the fight for relevance has been JC Penney. Sales in 2010 were $17.8 billion, down from $19.9 billion in 2006. In addition to declining sales, the company faced a brand image problem as it was perceived as old and stale.

The response to the challenges faced by JC Penney was laid out this week by new CEO Ron Johnson, an Apple disciple. The boldest strategy change is a radical shift in pricing and promotion. The company is ditching the traditional high-low pricing model. Instead of frequent sales and discounts, a three-tier pricing strategy will be used. Products will be at an everyday low price, monthly values, and best price Fridays on first and third Fridays each month. Analysis of transactions revealed that only one in 500 items was sold at regular price, so the move to streamline the dizzying number of promotions (nearly 600 a year) to a more straightforward pricing approach is logical.

Let’s jump to the most important question: Will this strategy work for JC Penney? The key to its success will be convincing shoppers that the value-based pricing approach is better for them than sales featuring hot prices and coupon offers for additional discounts. A rational analysis of the pricing approaches would point to value pricing as a better deal for buyers. However, we do not always make rational buying decisions. The psychology of a sale suggests to shoppers that a bargain may be realized when a product’s price is temporarily reduced. Add an incentive like a coupon on top of the sale price, and buyers have been trained to expect value delivered in this way from retailers.

JC Penney desperately seeks to carve out a distinctive brand position. If it cannot position through products, service, or brand image, perhaps price is the final frontier. If this strategy succeeds, JC Penney can re-establish its relevance. JCP (as it is branded via its new logo) must deliver a great shopping experience to go along with its simplified pricing. If it succeeds, JCP shoppers may just be singing “It’s the end of the sale as we know it, and I feel fine.”

AdAge - "JC Penney Reinvents Department-Store Retailing"

Textbook Industry: Game Over or Game On?

2012-01-20T08:41:00.001-06:00

Apple made its expected announcement that it is venturing into the textbook market. A combination of factors makes the situation ripe for Apple. First, Apple has demonstrated capability in simplifying the user experience to consume music and entertainment via iPods, iPhones, and iPads. Customer expectations would be that Apple will deliver a similar experience through the planned iBooks 2 platform. Second, customer dissatisfaction abounds in the textbook industry. While iBooks 2 will target K through 12 textbooks it seems inevitable that solutions for the higher education market will follow.

Should the textbook industry be hiding under a rock? Some cynics would say that publishers are already there, and that is why Apple is rising with a challenge. Years of maintaining status quo by publishers along with advances in technology have attracted Apple and other firms to explore how to innovate in the textbook industry. It would be unfair to suggest that traditional publishers have not attempted to innovate in response to changes in technology and students’ book consumption preferences, for they have made strides in responding to students’ needs. But, there is a great deal of work that remains if publishers want to be competitive in an environment in which new entrants are intent on changing how students buy and read textbooks.

Firms have two response options when disruptive innovations make their way into an industry: 1) Game Over or 2) Game On. The Game Over response may not be an immediate surrender. Rather, it can be a gradual decline in a prolonged battle to maintain relevance (see Kodak). In this case, textbook publishers are too heavily invested to cede control to Apple or anyone else. The response has to be Game On.

As a college professor and textbook author, I have great concerns about the costs students must bear to gain access to important learning resources, costs that are in addition to constantly increasing tuition. We cannot price students out of the opportunity to prepare to compete in the job marketplace. The innovation gauntlet has been thrown down for textbook publishers- Game On!

Caring as a Brand Differentiator

2012-01-13T08:50:00.002-06:00

Positioning a brand is one of the most important strategies a marketer must devise. Communicating a brand’s real, relevant difference compared to competition can be the difference between being a “me too” brand and a category leader. This point is touched on in the book Brand Against The Machine by John Morgan. One particular differentiation strategy is recommended that is so simple yet often not practiced: Demonstrate that you care.

Can caring really be utilized as a positioning strategy? Of course businesses care about their customers, or they will not be in business for long! But, as you and I know there are often breakdowns in execution of customer-focused marketing plans and strategies. Great customer service programs are little more than empty promises to customers who experience poor service quality.

A few months ago, we replaced a heater/air conditioner in our home. The company we called, Hiller Plumbing, has a great reputation for customer service. In fact, it won recognition from the Nashville Business Journal as a Best in Business firm in 2011. My wife talked with the manager about the company winning the award. His response was that for a company in that industry to be recognized for its performance is significant because the reputation of the category as a whole is not very positive. Winning recognition in a competition with businesses from a wide range of product and service categories was an even greater testament to Hiller’s differentiation as customer oriented. The key to Hiller’s success is that employees from top management to front-line service personnel show genuine concern for customers.

Many aspects of marketing are hard, but caring should not be one of them! One of the most frequent comments I hear from students who have been in my classes is that they appreciate that I show concern for them. It is surprising to me that they do not experience caring from all faculty members, but like customer service in general, knowing to do the right thing does not translate into actually doing things right.

Be different- care. Reflect on what you can do to demonstrate more concern for customers; then empower employees to deliver. They will be heroes, and your brand will stand out.

Add Value, Not Fees

2012-01-06T09:02:00.000-06:00

One of the greatest benefits of paying attention to the world around us is that we can learn from the mistakes made by others. When we see someone make a decision or take an action that leads to an undesirable outcome, our response might be “Note to self: Never do that!” While observing the mistakes of others does not serve as insurance that we will not fall into similar traps, we can have our eyes opened to missteps and consequences that we may not see otherwise.

Businesses have the same luxury of learning from the mistakes of others. After all, business decisions are made by people who have the capability to exercise bad judgment. But, even savvy businesspeople sometimes fail to take advantage of the opportunity to avoid mistakes made by other businesses.

Case in point: Verizon Wireless and its short lived plan to charge a $2 “convenience fee” for certain payments. The fee would have been levied on certain payment methods that were already available to customers… for free. No additional service or benefit being added; just a fee tacked on to the bill total. Customer backlash was swift and vicious in social media, and Verizon quickly backpedaled and announced it would not implement the fee based on “customer feedback.”

From the outside looking in, it seems Verizon Wireless could have saved goodwill and not created customer angst if it had only paid attention what happened in the banking industry just a few months ago. Banks that announced a $5 monthly fee for debit card usage were besieged with customer protest, and the plans were scrapped. But, damage was done as banks that did not plan to implement fees used that point in their marketing in contrast to the “greedy” banks.

What can we learn from the banking industry and Verizon Wireless and their ill conceived plans to implement fees? Price increases are inevitable, but it is better to increase price via new value. Adding fees without new value being offered is bad business. Consumers are too savvy and these days too connected to passively accept higher costs without more benefits delivered. And, for most products we buy there are enough alternatives that enable us to not have to do business with companies that seek to extract extra dollars without giving anything new in return.

10 Ideas for Small Biz Marketing in the New Year

2011-12-29T09:30:00.002-06:00

I spend a lot of time at hockey rinks serving as taxi driver, equipment manager, and cheerleader for my 11-year-old goalie, Ethan. Recently, hockey took us to a goalie camp in the Atlanta area. Besides Ethan having a good experience at the camp, I ran across an interesting article in the Gwinnett Business Journal. It was a list of 10 small business trends for 2012. Marketing advice is plentiful, even if not always useful. However, I thought the 10 items on the list was excellent food for thought. The ideas may not be a perfect fit for every small business, but they can be taken as a challenge to refresh approaches taken to marketing in the coming year.

Below are 3 highlights from the list. The complete list can be viewed here.

• Listen to customers differently. Take advantage of social media for listening, but face-to-face communication remains vital.

• Offer bigger value propositions. Be able to clearly articulate your point of difference and why someone should buy from you.

• Identify and pursue new growth opportunities. Whether it is new products or new customer segments, how can you expand your footprint?

Here is hoping that 2012 is your best yet, professionally and personally.

Prediction as the Future of Customer Engagement

2011-12-22T05:30:00.004-06:00

Engagement with customers is the Holy Grail pursued by marketers today. Awareness is not enough- quality interactions have gained favor over exposure and repetition as goals of marketing communications. Understanding this trend is easy; how to make customer engagement happen is much more elusive. How can people be persuaded to invest time and interest in your brand?

One solution to the engagement challenge is prediction. No, not marketers predicting buyer behavior using sophisticated modeling techniques. I mean consumers predicting future outcomes, doing it in the form of games. An example of the harnessing the power of prediction as an engagement tool can be found in a game being tested by The Tennessean, a Gannett newspaper. Nashville-based Consensus Point developed Football Futures, a stock market-style game in which players predict outcomes of future events and buy units (with points, not money) based on their level of confidence that the event will occur as predicted.

The goal of Football Futures is to amass points to maximize net worth with the potential to win prizes. Whether it is whether LSU or Alabama will win the BCS Championship Game, Norv Turner will be fired as head coach of the San Diego Chargers, or Tim Tebow will win more games as a starting QB than Cam Newton, Football Futures enables players to express their views and potentially parlay their opinions into prizes.

If there is one thing for which there is no shortage where sports are concerned, it is opinions about what should or will happen. Football Futures gives players an outlet to have a voice in the discussions that surround sporting events and stories. More importantly for The Tennessean, it draws people to its website and encourages them to spend time engaged with the site. The possibilities for using prediction-style games to engage consumers seem limitless. Politics, popular culture, and other sports are obvious prospects for themes for other games like Football Futures down the road.

Engagement does not occur because a marketer wishes it; people must be willing to commit to interaction. What better way to invite engagement than to ask the simple question “What do you think?” As we move toward the fresh start of a new year, it is a timely reminder that marketing relationships must be customer-centered. The voice of the customer must be heard, and it is up to marketers to provide platforms for making it possible.

Tim Tebow on Branding

2011-12-14T09:01:00.000-06:00

I am at the same time amused and confused by the polarization created by Tim Tebow. The Denver Broncos quarterback was a college football superstar at the University of Florida, but many experts felt his style of play was not suited to the pro game. Then, there is the issue of Tebow’s faith and the prominent role it has in his words and actions. It is too much for some people to bear who want sports to be devoid of any aspects of faith. His story continues to evolve as he has gone from third-string to the starting QB, leading the Broncos to seven wins in the last eight games. While many people are ecstatic about Tebow’s emergence as an NFL QB, it seems that many others cannot wait for him to fail.

This blog is not about sports; I will not be breaking down Tebow’s strengths and weaknesses on the field. However, I cannot help but see a teaching moment that relates to how businesses should view branding. Like him or hate him, Tim Tebow is grounded in values that define his purpose and meaning. To this point, he does not seem to have been affected by the trappings of the celebrity lifestyle lived by star pro athletes. His personal brand has remained consistent as his professional career has taken off.

Marketers can learn from Tim Tebow what branding is… and is not. Branding is a never ending pursuit- there really is no such thing as a “branding campaign” as that implies a beginning and end. Branding entails identifying and articulating meaning- the purpose, values, and core beliefs that drive day-to-day and long-term business decisions. A great brand remains true to purpose, values, and core beliefs even though economic conditions, technology trends, and customer tastes are evolving.

Marketing is important- research, design, advertising, and selling are vital to a firm’s success. But, branding transcends all of those activities. Without a great brand, marketing is little more than a functional area in an organization. The brand brings life and energy. Time will tell if Tim Tebow is a great “product” in terms of a successful NFL quarterback. But, it is clear that brand Tebow is on solid ground, which will serve him well far beyond his playing days.

Can You Teach an Old Brand New Tricks?

2011-12-09T11:31:00.002-06:00

I am a rather nostalgic guy- like many people I am drawn to the past. Things like retro architecture of baseball stadiums, classic ad campaigns, and branding from days gone by remind us of the past. To this day, I laugh when I think of the Calgon laundry detergent commercial in which a Chinese dry cleaners owner claims his cleaning formula is an “ancient Chinese secret” but his wife exposes him as a fraud… Calgon is his secret!

Another brand from the past that is at a crossroads in its history is Duck Head. The apparel brand has a heritage that dates back to 1865. However, the brand actually disappeared from the market when its owner, Goody’s Family Clothing, went out of business in 2009. The brand has been licensed by Eagle Dry Goods of Nashville (where the company originated) and returned to market. The obvious question now is whether Duck Head will succeed in connecting with men like me who wore the brand as a teen and young adult as well as capture the attention of that same market today.

For a brand with a heritage story like Duck Head, there are two key criteria that it will have to meet in order to gain traction in the market: 1) Be relevant to its target market and 2) differentiate the brand from the myriad of apparel options that men have. Relevance will be easier to establish with “alumni” who are familiar with Duck Head and wore its products in the past.

For the young male market, achieving relevance will be more challenging. It will take more than having a Facebook page and Twitter feed to be “cool.” Duck Head must figure out how to integrate the brand with young males’ lifestyles. For example, linking the brand with a Southern tradition like college football is a strategy that could raise consciousness of Duck Head among young males. Differentiation will be even more challenging- Duck Head must create a niche related to its relevance. Perhaps it is tapping the Southern traditions theme, or it can be done through linking the brand with a greater aim, as it has done with Soles 4 Souls, a charity that donates gently used shoes to people in need.

The bottom line question for a consumer in Duck Head’s target market is “Why should I buy your brand?” Right now, Duck Head is just another brand vying for attention. It must succeed in working its way into the lifestyles of the audience it seeks to reach. The nostalgia buff in me hopes Duck Head succeeds- I am ready to buy. The marketer in me is more skeptical, but if the brand can leverage its heritage to be a lifestyle brand it will prove that you can teach an old brand new tricks.

The Tennessean - "Can Duck Head Rise Again?"

The Potential of #YourMessage

2011-11-28T10:11:00.002-06:00

One of my favorite parts of Thanksgiving is the buffet of college football rivalry games. Among the must see games for me is the Egg Bowl, pitting Mississippi State (my undergrad alma mater) against Ole Miss. This year’s game was a treat to watch as State thumped Ole Miss 31-3, but as a self-proclaimed marketing geek I was even happier about the recognition State received for its social media innovation.

The acclaim Mississippi State received before and during the game was its integration of Twitter into the game, painting #Hail State in one of the end zones. The nod to Twitter, along with replacing players’ names on the backs of jerseys with “Hail State” (the name of the school’s fight song), garnered media attention and created a buzz among fans and viewers watching the game on ESPNU. One estimate put the number of tweets including the #HailState hashtag at more than 1,000 during the game alone. While that figure pales in comparison to the buzz generated by breaking news or celebrity gossip, the idea to weave social media into the game production was a genius move by Mississippi State’s marketing staff.

While #HailState was an innovative tactic for college football, the bigger question it raises for marketers is what is the true potential of engaging people via Twitter? As I watched the game and unfolding conversation on Twitter, I considered the possibilities for hashtag marketing. A few examples of how Twitter can be incorporated into existing marketing efforts:

• Addition of Twitter search terms in print and digital ads- Just as including a website address is common copy, inserting a Twitter search term would be a way to drive people to brand conversations.
• Twitter search terms that are based on ad slogans or product traits- Do not limit creation of search terms to company or brand name.
• Connecting to other IMC tactics – Twitter search terms can link an audience to a brand’s sports sponsorship or support of a nonprofit organization. Connecting social media with sponsorship enables telling of the brand story by reaching audiences may be difficult to access with sponsorship alone.

The three examples merely scratch the surface of how Twitter can be integrated into current marketing campaigns. Social media does not replace existing communication channels; it enhances them by encouraging the audience’s involvement in the communication process. Of course, this idea loses its effectiveness if the landscape becomes a sea of hashtags. Be strategic in communication of #YourMessage. If you encourage people to embed your term in their messages, there must be significance or meaning to the conversation you seek to create. Otherwise, your Twitter efforts may be described with a common hashtag: #Fail.

The Commercial Appeal - "MSU Athletic Director Hopes to Score with End Zone Hashtag"

The Spirit of Radio

2011-11-17T07:01:00.001-06:00

Invisible airwaves – Crackle with life – Bright antennae bristle – With the energy – Emotional feedback – On timeless wavelength – Bearing a gift beyond price – Almost free…

Lyrics from “The Spirit of Radio” – Rush (1980)

I am pretty sure that my favorite band was not singing about the virtues of radio as an advertising medium, but the song may just be an ode to radio’s effectiveness for connecting with audiences. A recent study found that exposure to a radio ad campaign resulted in higher levels of consumer response across all stages of the purchase funnel. The magnitude of impact varied from brand awareness being 10 % higher to a whopping 38% lift in brand recommendation and 39% lift in brand affinity. In other words, radio works!

Results of research on the impact of radio advertising suggest an ability of radio to engage listeners on an emotional level. The greatest difference between the exposure and non-exposure groups was in “feeling” responses of liking and advocacy. It is challenging enough to break through advertising clutter to get your audience’s attention, let alone eliciting positive feelings about your brand. Radio seems to have the potential to meet a vital need of tapping into the emotions of an audience.

One huge question is left unanswered: Why? What characteristics of the audience and the medium make radio effective for connecting emotionally with listeners? One possible explanation is that the favorable mood created by a radio station’s programming may influence the audience’s receptivity to ads. Also, radio spots can create powerful mental imagery as we supply the “video” in our minds to the audio of a radio commercial. This level of engagement with a message can have a positive impact on its “stickiness.”

The lesson learned is to not give up on radio just because there are newer, trendier communication tools like Facebook and Twitter. As long as people are listening, marketers should tap the spirit of radio to strengthen emotional bonds between their brands and customers.

Media Post Research Brief – “The Power of Radio”

A Brand is Meaningless without Integrity

2011-11-09T20:04:00.000-06:00

What is a brand? Of course it is a name, logo, and colors that form its identity. The identity represents the tangible aspects of a brand. But, that is not why you and I are attracted to certain brands and become loyal customers. We are drawn to brands because of the promises they make and deliver against. Some promises are explicit, such as product warranties and service guarantees. Other promises are implied benefits that one can expect from a brand. Consistency, fairness, and integrity are three implied brand promises that can either strengthen or destroy customer relationships depending on how well a brand is managed.

A brand that finds itself at a decision point to manage an implied promise of demonstrating a high level of integrity is Penn State University. The institution is engulfed in a child sex abuse case against a former assistant football coach that has swept up the iconic head football coach, Joe Paterno. The purpose of this post is not to opine on Paterno’s culpability or whether he did the right thing when made aware of improprieties. In fact, the effect of this scandal on Joe Paterno should be of secondary concern to those persons entrusted to manage the Penn State brand, its trustees.

The overarching concern, besides the well being of the victims, is protecting the integrity of the Penn State University brand. Any crimes committed cannot be undone, but the institutional values of Penn State University can be affirmed, which could mean that Joe Paterno and other leaders who could have done more to prevent some of the alleged assaults must step down immediately.

A truly great brand is larger than any one leader or star employee. Remember, a brand is really owned by the stakeholders to whom the brand matters. Their interests must be served, and that can be best accomplished by making decisions that send signals that Penn State University is committed to being a high integrity brand.

“Put Bacon on It” as Product Strategy?

2011-11-03T07:05:00.002-05:00

I saw a commercial for KFC’s “new” menu item, the Cheesy Bacon Bowl. The message in the commercial provided a paradox for the role of product strategy in a business. KFC has offered bowl menu items for some time; the innovation that makes Cheesy Bacon Bowl new to market is the addition of bacon. KFC’s brand extension could be interpreted as either marketing genius or an example of what is wrong with product management today.

The genius behind the Cheesy Bacon Bowl is enhancing customer value by adding a proven feature to a product. In this case, it is as simple as adding bacon. The tagline of the commercial – “everything tastes better with bacon” – contains a reminder for marketers that the best products are those that people value for what they do, or in this case for how they taste. Adding bacon does not require investments in R&D and test marketing; there is very little risk involved.

So, what is wrong with “put bacon on it” as a product development strategy? It is symptomatic of the lack of risk taking that is needed to bring truly great innovations to market. It is a safe, but unimaginative approach to developing new offerings for customers. And, depending on how such a minor innovation is marketed, it may not be taken seriously by buyers. Does a Cheesy Bacon Bowl meet a need that has gone unmet or underserved in the market? Probably not. Yet, KFC will spend heavily to market a product that essentially exists already in the market but has one new ingredient added.

Is “put bacon on it” a viable product strategy to drive business growth? It is possible that a product can be transformed by the change or addition of a component or feature if it delivers new value to customers. But, most great products are not the result of adding bacon; they are new solutions for customers that require greater and risk to develop.

Want to Market Experience? Create One

2011-10-27T07:23:00.002-05:00

“Experience” is a word that is top-of-mind with marketers today. Offering experiences is seen as a solution to how we can attract and engage people to pay attention to brands and stay connected with them. Clutter and intense competition plague most industries, and developing experiences around brands is a strategy for achieving brand differentiation. Sounds great, but it is easier said than done.

Some categories lend themselves to being marketed as experiences- services, sports, and entertainment are three that come to mind. But, how is experiential marketing utilized when a natural link to creating experiences does not exist? The answer is simple: Create an experience to attract people to your brand. Cars.com has developed a customer experience that relates its brand to something highly intertwined with driving cars- music. The connection of music and cars is done through three branded custom channels on music streaming service Pandora. The three stations tie in to significant musical experiences people have related to cars: 1) Road Trip, 2) Car Songs, and 3) Tailgate.

The Cars.com program on Pandora illustrates the difference between exposure and engagement when marketing to an audience. It would have been simple for Cars.com to buy ads on Pandora, plastering its brand name across the site. Of course, we would have largely ignored Cars.com, just as we do most of the ads that are directed toward us online. While we focus on delivering great experiences at the point of consumption such as when people are visiting Cars.com, it is important that we explore other experiential points to interact with our audiences. Cars.com has succeeded in establishing additional experiential contacts that will “drive” development of brand relationships.

Marketing Daily - "Cars.com Sets Up Custom Channels on Pandora"

Be Constructively Discontent

2011-10-21T15:16:00.002-05:00

I am a fan of quotes- they can be inspiring, disconcerting, and challenging… all at once. Quotes are like a snack for the mind, giving a mental boost or sparking thought that can lead to personal growth. One such quote caught my eye this week, and it came from an unlikely source. In a press release discussing financial performance in the most recent quarter, a company’s CEO said that despite a strong quarter and year-to-date performance that his company is “constructively discontent and resolutely focused on our future…”

What a challenging way to manage a business! The thought of being constructively discontent has gripped me ever since. The quote struck a nerve with me as I have always approached teaching with a similar mindset. The prospect of becoming outdated and stale is disturbing enough that I challenge myself regularly to become a better teacher and scholar. Complacency is the enemy; if you are not growing you are dying.

Who said his company was constructively discontent? It was Muhtar Kent, Chairman and CEO of Coca-Cola. What makes his remarks interesting is the company had a good quarter by all accounts - international sales volume up 5%, net revenue up 45%, and operating income up 17%. These figures coupled with the brand stature of Coca-Cola would make it a prime candidate for complacency, but that is not the case. The company has a long-range plan called 2020 Vision that outlines goals to pursue between now and 2020, a strategy that falls in line with being constructively discontent.

It is easy to be discontent; it can also be destructive. But, when constructive discontent is encouraged, discontent with status quo and exploring avenues for growth keeps an organization and its employees hungry to accomplish more. However, adopting a mindset of being constructively discontent must be a conscious choice- you have to work at it. Don’t settle – I refuse to accept self-imposed limitations – and I hope you will join me in being constructively discontent.

Crisis as a Catalyst for Change

2011-10-19T13:33:00.000-05:00

Even the strongest brands eventually face low moments or dark days. It is inevitable- if you operate in the outside world you are exposed to potential crisis. The key to coping with crisis is not trying to avoid it but how you respond to it.

We were reminded on Sunday of the lows that can be faced by a business. IndyCar lost one of its most vibrant personalities when driver Dan Wheldon was killed in a wreck during a race in Las Vegas. The sorrow of Wheldon's death was great, and the unspoken question arising from the tragedy was "Now what, IndyCar?" What can you learn from this painful event to make racing safer?

History provides many examples of brands in crisis- think Tylenol, NASCAR, Mattel, Coca-Cola, and Toyota, to name a few. These brands experienced crisis related to product safety. In the end, process improvements were made to create quality safeguards that restored brand confidence.

Whether your brand is hurt by product recall, loss of key customers, negative publicity, or some other crisis, you will not be the first to go down that road. For IndyCar, here is hoping that the weight of heavy hearts inspires change that serves as a catalyst for transforming IndyCar into a stronger organization.

The Legacy

2011-10-06T08:26:00.000-05:00

Merriam-Webster defines legacy as “something transmitted by or received from an ancestor or predecessor or from the past.” The passing of Apple co-founder and chairman Steve Jobs raises the inevitable question “What is Steve Jobs’ legacy?” Could it be the numerous products introduced over the years that enhanced productivity and provided entertainment value? The list includes McIntosh, iMac, iBook, iPod, iPhone, and iPad. The ways that we work, play, and communicate have been significantly impacted by the genius of Steve Jobs.

I prefer to view Jobs’ legacy differently. It can be distilled to one word: innovation. Steve Jobs dared to be different, not for the sake of being different but to stretch the limits of what could be accomplished. He once said that it did no good to ask customers what they want because they don’t know what they want. And, they don’t know what they want because they do not realize what is possible- the products that could be developed to add value to their lives. Steve Jobs was a visionary in this area- he had a feel for what was possible, more so than the rest of us.

If we want to honor Steve Jobs’ legacy of innovation, it is not by buying Apple products or stock. Instead, we must keep alive his passion for stretching the limits of the possible. Personally, I have been more focused on innovation in my professional work over the past 5 years than at any point in my career. I attribute this focus to the influence of forward thinkers like Steve Jobs. It is imperative that we encourage innovation in business, education, government, and in our communities. Too often, we are mired in the status quo and fearful of doing something different because it has not been tried before. We need to get past our self-imposed limitations and keep the passion for innovation alive.

Beware the Incentive Escalator

2011-09-30T11:11:00.003-05:00

Price-based incentives are effective for attracting buyers and generating trial or enticing customers to buy again. But, using price breaks to stimulate sales comes at a cost greater than the amount of discount offered to lure buyers. All efforts to craft a desired meaning for your brand can be negated by a promotion-intensive strategy. An unintended consequence can be that consumers believe your product is not really worth full price if discounts are offered frequently. Although incremental revenue generated from price-based promotions may be realized, the distinction of “work hard vs. work smart” comes to mind. We have to work harder (i.e., sell more) to cover the expense of discounting, yet the potential damage to brand equity can still occur.

Evidence of what I call the “incentive escalator” is found in a report by Experian Marketing Services on search terms related to retailers. Percent-off deals are among the most popular searches, and consumers’ expectations of retailers’ deals seem to be increasing. In 2009, 20% was the most common discount search term; that figure shifted to 30% in 2010. Deals sought by many consumers in 2009 were not sweet enough just one year later. Where does it end? Will 35% be the top discount-related search in 2011? How high will consumers’ expectations soar about the discounts they believe retailers can offer? Similarly, an increase in searches related to free shipping indicates that online shoppers expect to continue to have access to incentives from sellers once they have been exposed to them.

Choose whatever saying you want: the cat is out of the bag; the horse is out of the barn; the toothpaste is out of the tube. Once price-based incentives become a norm associated with your brand there is no turning back. Strive to build customer relationships that are not dependent on price to reduce the chances of finding your brand riding the incentive escalator. Look to brands that you admire- chances are they have succeeded in ways other than discounting.

Marketing Daily - The New Consumer: '30% Off Is The New 20%'

The Question Netflix Got Wrong

2011-09-22T09:21:00.001-05:00

An interesting email appeared in my inbox Monday morning. It was from Reed Hastings, founder and CEO of Netflix. The subject line, “An Explanation and Some Reflections” got my attention. Was he writing to say that Netflix made a mistake when it implemented separate pricing for its DVD by mail and online streaming services? When I read the first three words of his message I was convinced- “I messed up” suggested Hastings was about to tell us Netflix had a change of heart about its new pricing structure.

Not so fast- he goes on to say “I owe you an explanation.” Hastings proceeds to provide justification for the decision to change the pricing structure. On top of that, he broke the news of Netflix splitting into two businesses, Netflix for online streaming and Qwikster for DVD by mail. Hastings’ message was genuine and the tone was that of someone who realized he had erred in handling the implementation of Netflix’s new business model. But, in the end the message was more of an attempt to save face… and stem the tide of customer defections. Netflix has lost an estimated 1 million subscribers since the change. With more than 20 million customers remaining, we will not shed a tear for Netflix, but the extent of customer defections is significant.

The mistake that Netflix made was that it incorrectly answered a huge question: What would customers do? What would they do after learning that their associations with Netflix of “entertainment delivered as you want it” no longer applied? The changes benefited Netflix only, or at least that was the perception of many subscribers. And, when it comes to brands, perception is reality. I remind my students often that the true owners of a brand are its customers. While a business owns the physical and intellectual property of a brand, its meaning comes from the relationships people form with it. For many subscribers, their relationship with Netflix was shattered when their ability to get entertainment however they wished changed.

I do not fault Netflix for arriving at a decision that changes were needed in its business model to preserve the long-term profitability of the business. But, most everyone (including Netflix management) realizes they damaged brand relationships in the process. So, any change in strategy should be evaluated fully in terms of how customers will react to change? Human nature is to resist change. Marketers must be prepared for the resistance by being able to make a strong case for how change is good for the brand’s real owners.

Brand Essence: Say it in 7

2011-09-15T09:09:00.003-05:00

One of the best reads I have experienced this year has been The Accidental Creative by Todd Henry. Anyone who works in a creative field or wants to strengthen his or her creativity should read this book. Unlike many business books, The Accidental Creative goes beyond telling you what you should do and provides guidance on how to become “prolific, brilliant, and healthy.” I have been a fan of Henry’s Accidental Creative podcast for some time; it is a treasure trove of useful ideas for creatives.

An example of actionable ideas in The Accidental Creative is the concept of a 7-word bio. The idea is simple: distill what you do and who you are into a 7-word description. I see it as a cross between mission and position. While Henry discusses a 7-word bio as a tool for individuals (ideal for developing one’s personal brand), it has applicability for organizations, too. Drilling down to 7 words forces an organization to strip away grandiose proclamations and get away from wordy mission statements. In other words, cut to the chase and define what we are as an organization. What is the payoff of having a 7-word bio? It provides grounding and focus that guides decisions on what projects you take on and how you manage relationships.

This week, I have challenged students in my marketing communications class to develop a 7-word bio for their personal brand. It is a challenge I am taking on, too. What are your 7 words?

The Meaning Behind Price

2011-09-07T15:56:00.004-05:00

A product’s price is more than the dollar amount required for purchase. Price contains meanings that influence our perceptions of a brand. For instance, high price typically sends a signal of high quality, while a low price may elicit connotations of value, basic, or even low quality. So, it would seem that if a marketer is going to err on setting an optimal price it would be better to be too high than too low. If you subscribe to that belief, you may want to check out how HTC has destroyed that myth.

HTC is aiming at the high end of the tablet market with the Jetstream, perhaps named because its price is sky high! Jetstream is priced at $700 for a 32GB model, plus it requires a two-year contract with AT&T. The price is comparable to the Apple iPad 2; its Wi-Fi +3G 32GB model retails for $729 on the Apple website. The key for taking market share from the leader is to differentiate- in this case, offer something that the iPad does not have. HTC does not succeed in differentiating on benefits or price. It is a high-end offering in a category that has an entrenched high-end brand.

Unfortunately, the HTC Jetstream fails to position itself for success using price. Its “me too” price at the upper end of the market gives no compelling reason for tablet shoppers to pick it over iPad 2. If HTC intended for its price to position Jetstream as a premium competitor to iPad, it appears to have not worked. Is it just a matter of time before the price drops?

What meanings will customers uncover when they encounter the prices of your products or services? You should never have to apologize for the price you set, but be certain that it represents fair value and is consistent with your brand’s identity.

Fast Company - "Forget That iPad, What's It Gonna Take To Put You In This $700 HTC Jetstream Tablet?

Fighting Customer Fatigue

2011-09-02T11:42:00.002-05:00

If you ever were a student of marketing, you learned about the product life cycle. The PLC includes stages of introduction, growth, maturity, and decline- yes, that product life cycle. And, you probably learned about the characteristics associated with each stage. For example, the growth stage is characterized by increased competition as new entrants enter the market and a need to achieve brand differentiation. Hey, that sounds just like what is going on in the daily deals category. Groupon established itself as the dominant brand, and its rapid success attracted a slew of websites with a similar deal-of-the-day concept.

Evidence is appearing that should alarm daily deals marketers like Groupon: traffic on their websites is decreasing. Groupon’s site traffic last week was down 25% compared to early June, and it had its first ever month-over-month traffic decline in July. The drop in Groupon website traffic can be attributed to the large number of options consumers have for daily deals. At some point, “in-box fatigue” sets in and the daily email offers become part of the message clutter that is our lives as consumers.

Marketers can learn many lessons from the daily deals category and Groupon in particular. First, early entry into a market can be advantageous but does not guarantee success. Being first is not as important as being unique. Second, if a business idea is easy to imitate as the daily deals concept has been, it is critical to differentiate in a way that rises above the clutter. Whether it is choice, convenience, service, or some other benefit, creating relevance to customers is essential. Ask Facebook, it has ended Facebook Deals less than a year after it launched. It was nothing more than another feature on Facebook. Farmville is unique; another daily deal offer is not!

Fight fatigue by striving to maintain energy in your brand. Let fatigue claim competitors as its victims. Continuously ask the question “how can we better, different, or unique?”

USA Today - "Websites Selling Daily Deals Lose Luster"

If You Do It, Measure It

2011-08-30T10:29:00.003-05:00

Occasionally I run across one of my favorite quotes about advertising from John Wannamaker, a marketing pioneer. He said “half the money I spend on advertising is wasted; the trouble is I don’t know which half.” That reasoning extends beyond advertising; it can encompass all marketing spending as well as expenditures throughout a business. It is unnecessary to take “half” literally - it may be more or less than 50% that is being wasted. The point is that waste is likely occurring, but it is possible that it could be reduced if more emphasis was placed on measurement.

Measuring performance is a weakness for many marketing organizations. They may be exceptional at planning and executing strategies and tactics, but assessing results may lack the same emphasis. Or, the wrong things may be measured if activity is confused with results.

This issue surfaced for me this morning as I listened to the radio. The Chief Operating Officer of the Nashville Predators, Sean Henry, was on a sports talk show discussing the importance of a professional sports franchise being visible and active in the community. Henry stressed that the visibility is not limited to players and coaches, but rather employees throughout the organization should be engaged with the community. To that end, the organization recently launched an initiative called Project 6K. The program’s goal is to reach a cumulative number of 6,000 hours spent by team employees working in the community, or about 40 hours per employee. One comment Henry made that stood out was that employees are already active in the community; those efforts will now be quantified through Project 6K.

I applaud the Nashville Predators for an organization-wide approach to corporate social responsibility. Moreover, it is important that employees’ contributions are being measured to measure productivity in community relations. Also, it will help present a more compelling story to the Nashville community about the level of involvement the Predators organization has in the area.

It would be interesting to assess the impact of activity like the hours invested in Project 6K on marketing results. Did the program contribute to more brand awareness? Did it enhance the image local residents hold for the Nashville Predators? How many leads for ticket customers came from the organization’s involvement in the community? While it is unrealistic to expect every investment to deliver a return in the form of sales or new customers, it is realistic for initiatives like Project 6K to have marketing benefits. So, if you do it, measure it.

The Facebook Flaw

2011-08-26T07:56:00.004-05:00

A year ago, the future of the location-based social network Foursquare was uncertain. It was not due to any missteps on its part. Rather, it was the announcement that Facebook was launching a location-based feature known as Facebook Places. The dominant player in social networking was moving into the check-in space? With a miniscule number of users compared to Facebook, the question that loomed was how could Foursquare possibly compete?

Fast forward one year- Foursquare appears to have survived the Facebook threat. Facebook announced this week that Places will no longer be a stand-alone feature on mobile devices. Places never got traction among users. My personal experience was that it rarely worked on my smartphone. Technical glitches notwithstanding, my inclination to check-in is to use Foursquare instead of Facebook. Although my network is significantly larger on Facebook, in my mind Foursquare is the brand for location-based social networking.

Why did Facebook Places not crush Foursquare? And, why is Facebook Deals, a social coupon service, not causing executives at Groupon to lose sleep? The answer to both questions is that while Facebook is ubiquitous and a valuable tool for keeping us connected with other people it cannot be all things to all people. It is another example of a classic branding mistake that experts like Al Ries often lament. As a brand grows, it is natural to seek growth opportunities. But, as brand extensions inch further away from the core offering consumers are not as accepting of the brand’s capabilities. Google has experienced a similar fate as many of its brand extensions have met with less than resounding success.

The Facebook Flaw is not unique; it is same song, another verse of the perils of brand extension. Define what is great about your brand and be the absolute best- differentiate and dominate. But, avoid the temptation to think that your greatness will transfer to products that may be beyond the core of what attracts customers to you in the first place.

Have a great weekend! I’m off to a full day of meetings, but first I am going to check-in… on Foursquare, of course.

MoBlog - "Facebook Kills Places - Is Deals Next?"

To Be a Marketer, Think like a Customer

2011-08-23T17:49:00.000-05:00

I had a refresher in the importance of thinking like a customer yesterday courtesy of my 22-year-old son, Chris. The inspiration for his lesson came from an unlikely location: the motor vehicle inspection station. We took his car for emission testing that is required before license plate renewal. Our arrival found that about 20 other people had the same idea. The wait itself was not unbearable, but it did give Chris time to pose a very valid question: Why is the emission testing location and tag renewal office not located together?

I had never given this any thought- the tag renewal office is downtown with other county services, while the emission testing center is a few miles away in an industrial area. Completing the two-step process is inconvenient, but I suppose that I have always tolerated it because it is a government agency, not a for-profit business. My son’s question came back to the forefront later in the day when I arrived at the County Clerk’s office at 4:01, or 1 minute after it closed. A return trip today would not have been necessary if tag renewal was a one-stop experience.

It goes without saying, or so it seems, that to be a good marketer means to be able to put yourself in your customer’s shoes. But, as the process of license plate renewal reminds us, a well-designed customer experience is often lacking. What are your customers’ needs? What are their problems? What challenges do they face? If you can answer these questions, could you not have the capability to better serve them?

It is tempting sometimes to think we know what is best for customers- after all, we are the “experts” at what we do. The true expert is your customer; learn from the experts and you will have an advantage over competitors that do not have the same mindset.

Marketing Lessons from the Class of 2015

2011-08-19T09:32:00.003-05:00

A major life event is taking place now and in the coming weeks for thousands of families across the country as the college Class of 2015 begins their freshmen year. College is more than higher education in an academic sense; it is a phase in one’s life when they are molded intellectually, emotionally, and socially. From a marketing standpoint it is important to understand the characteristics of this segment of the population. After all, they are future customers, employees, and leaders of business.

One firm that has made its work about gaining insight into Millennials is Mr Youth, a New York agency that describes what it does as “decoding the mystery of the new consumer.” Its recent report “5 Ways to Friend the Class of 2015” identifies influences on this group’s lives and how brands should approach marketing to them. They have seen the bad - terrorism has been a constant in their lives since 9/11 and saw (and in many cases felt) the economic meltdown of 2008 first-hand, and the good- tech toys like iPods and tools like Facebook that give unprecedented connectivity. This group is a paradox in that while many suggest that technology can contribute to laziness, they also believe that they can get ahead through hard work.

An important takeaway from the study is how the Class of 2015 differs from their 2010 counterparts. Instead of an interest on brands that convey status, this year’s freshman class is more concerned with brand authenticity and relevance. Brands whose values resonate with Millennials’ personal values are more important today. The challenge that marketers face is two-fold: 1) understanding where Millennials are in terms of their values and beliefs, and 2) connecting with them in a way that brand values can be communicated in a way that builds relationships. Social media is an enabler for reaching this audience, and Millennials expect to have access to your brand. But, the tone of conversation should have less to do with marketing products than it does acting like a trusted friend.

Good luck to the Class of 2015! I look forward to having some of you in my classes one day.

Use Your Head- Engage in Philanthropy Strategically

2011-08-17T10:10:00.004-05:00

Businesses of all sizes are hit up daily with requests to support causes, nonprofits, and charities. Many of these requests are from legitimate organizations with laudable aims. However, it is simply impossible for a business to say “yes” to every request. Besides, engaging in corporate philanthropy based on solicitations is a reactive way to practice corporate social responsibility. Instead, a proactive strategy of aligning your brand with causes, issues, or organizations that are relevant to your customers will enhance the likelihood of a favorable return on investment... yes that ROI.

Philanthropic decisions should be made with consideration of how the impact on your brand and business. What is the expected outcome of philanthropic involvement- image enhancement? Brand preference? Customer loyalty? But, before that question can be answered, a more pertinent question to ask is “What matters to our customers?” Aligning support with an issue that is a priority with customers is a key to transforming philanthropy from donations to brand investments.

An example of strategically driven philanthropy is an initiative announced recently by Dick’s Sporting Goods. The retail chain has identified an issue that is very important to many of its customers: concussions. Dick’s program, called Protecting Athletes through Concussion Education (PACE), will provide neurological testing for more than 1 million high school athletes. If tested athletes suffer a concussion, they will receive additional testing to assess the impact of their injury on brain function. The initiative is supported by a website, and NFL Hall of Famer Jerome Bettis will appear in a commercial promoting a cause marketing promotion that links athletic shoe purchase to donations to PACE.

Does Dick’s Sporting Goods want to sell more shoes, apparel, and equipment because of its association with a cause that matters to its customers? Of course it does, but it would have been easier for Dick’s to write a check to an organization than create the PACE program. And, it certainly would have cost less to not go to the lengths of paying for a million neurological tests. But convenience and cost are not the issues- connection with a target audience is the overarching objective.

For your brand to matter to customers, it is essential to first understand what matters to them. That understanding goes beyond what they want from a product to what is relevant in their lives. Strategic philanthropy is a strategy for connecting your brand to their values.

The New York Times – “Sporting Goods Chain Supports Concussion Testing in Schools”

Leash and Muzzle: Social Media Program Tools?

2011-08-11T22:39:00.002-05:00

One of the great characteristics of social media is that it gives a voice to brands. Interaction with customers and other people enables brands to shed their impersonal, aloof nature. Rather than talk at people using mass media channels, social media lets brands and people talk with each other. The unbridled communication exchanges bring transparency to business relationships. But, are there limits to how personal and frank brand representatives should be in social media?

This question has arisen again after a vice president with the New York Giants engaged in candid exchanges with fans upset with the team’s offseason personnel moves. Pat Hanlon did not pull punches in his replies to fans’ criticism of the Giants. Some of his tweets this week (@giantspathanlon) include:

“We don't play on paper. You know what you can do w/ that paper?” His reply to a fan’s tweet: “on paper they ARE worse. no matter who signs your checks”

“This is great. We usually get to play two regular season games before people tell us we aren't worth a shit.”

“Can you say we're worse, knucklehead?” His reply to a fan’s tweet: ”can you say definitively the Giants are better than last year?”

Entertaining banter between Hanlon and Giants fans (and probably some Giants haters), but is this the best use of social media to engage people and build a brand? Can you imagine what would happen if this were the vice president of communications for Walmart getting into it with customers or special interest advocates criticizing the company? The executive would likely be reprimanded or even fired. No signs of either happening to Pat Hanlon.

Would it be better if Pat Hanlon bit his lip (or put his hands in his pockets) and refrain from responding to criticisms of his employer? Let the team’s performance on the field do the talking, with the ideal being Hanlon having the opportunity to gloat when the Giants have a great season. Social media provides a forum for listening to what people have to say about your brand- good, bad, and otherwise. But, listening can be difficult if social media is used as a platform for challenging people who are critical or oppose you.

When it comes to social media communication strategy, a figurative leash and muzzle can be valuable tools for resisting the urge to “discuss” issues in public. Listen and learn, but avoid the urge to lash out.

The Past is Never Dead

2011-08-08T09:01:00.002-05:00

I was not very productive last week. Fortunately, I know the source of the problem and can address it. But, it really was not my fault that I was distracted from my work. I was attracted to a trend that seems to be sweeping Facebook recently- group pages related to one’s hometown. For me, the page “You might be from West Point, MS if u remember…” was the lure. I noticed the page for a couple of days but did not bother to visit, but when I did I found myself watching a virtual highlight reel of my childhood.

Memories flooded my mind of people, places, and events that made up life in our small town. I eagerly anticipated reading others’ thoughts about their experiences. One of the first thoughts I had as I read posts from others in the group was wondering how long this would last. After all, West Point is a small town- will the group complete its collective historical compilation in a few days or weeks and the group page slowly die? Upon further reflection, I realized this page will not die anytime soon. I thought of the William Faulkner quote from Requiem for a Nun: “The past is never dead. It’s not even past.”

We hold onto the past- the good and sometimes even the bad, but we hold on. There are a variety of reasons for our affinity with the past: simpler times, youthfulness, relationships, and certainty, to name a few. Given the turmoil of the day, looking back for something positive as an anchor is an understandable tendency.

This longing for the past extends to the relationships we have with brands. Many comments on my hometown’s Facebook group page relayed people’s fond memories of a restaurant, store, or other business in town. Many of the businesses we reminisced about are gone today, but the impact they had on our lives remains.

The power possessed by nostalgia should not be overlooked by marketers. While so much emphasis is placed on innovation, “new and improved,” and technological advances, appealing to consumers’ feelings of nostalgia can be a powerful connector. Proven ideas, products, and campaigns often run their course or evolve, but that does not mean they have to be mothballed never to be seen again.

What do you know, do, or sell that would resonate with your customers’ associations with the past? It is a question worth exploring from time to time because “the past never is never dead- it’s not even past.”

Don't be Seduced by the Data

2011-08-04T10:11:00.002-05:00

As a college professor who has watched textbook prices increase at rates greater than inflation for several years, I am very interested in alternatives to delivering vital content without costing a small fortune. Digital textbooks in particular seem to hold great potential as technology improves to deliver content to tablets and smartphones and prices of e-readers decrease. The combination of high prices for print books and development of digital formats would appear to set the stage for a textbook revolution. In fact, there are data to suggest that is the case.

A recent survey of college students sponsored by Kno Inc., an educational software firm, provided an eye-popping statistic about their willingness to adopt digital textbooks: 25% said they would give up sex for a year in exchange for never having to carry bulky textbooks around campus. Whoa! Time to usher in the era of digital textbooks; a significant segment of the textbook buying market has indicated a high level of interest in being able to shift to digital books. Not so fast- all we know at this point is that some students would rather exert less effort on carrying textbooks than having sex.

The findings on college students’ views on print and digital textbooks do not quite match with reality. Despite being available for several years, digital textbooks have yet to be adopted on a wide scale. Digital books’ share of the textbook market is below 10%. Furthermore, only about 2 in 10 college students currently own an e-reader, which is a limitation on mass adoption of digital books. It is possible that digital textbook sales will take off. Personally, I am hopeful that the quality of the digital product will continue to improve and be able to offer students an enhanced learning experience at a good value.

Don’t be seduced by the data; examine research findings critically to evaluate the extent to which consumers’ intentions mirror reality. A gap often exists between what people say they will do and their actions. In the case of the textbook study, I can understand why students would express a desire to not have to tote clunky textbooks on their backs if alternatives were available. But, realities such as inferior digital offerings and lack of owning needed hardware like a tablet or e-reader means that most students will maintain status quo. When data give great hope, cautiously embrace the opportunity. However, seeing is believing; so watch out for data that portrays a mismatch between stated intentions and actual behavior.

eCampus News: "'Sex vs. Textbooks' Survey Doesn’t Jibe with Student Preferences"

Managing the Inevitable: Price Increases

2011-07-28T11:39:00.001-05:00

We all know about the two things that are inevitable in life: death and taxes. If you operate a business, there is a third inevitability: price increases. Whether it is due to rising costs for transportation, materials, or other expenses thttp://www.blogger.com/img/blank.gified creation of a product or service, passing along price increases to customers is a reality. The decision to raise prices may be rather easy; communicating price increases to customers may not go so smoothly. Just ask Netflix.

Earlier this month, Netflix created a firestorm among its subscribers when it announced that it was unbundling the DVD by mail and online streaming options for receiving movies. Customers who pay $7.99 for mail delivery plus an additional $2 for online streaming will have to pay $7.99 for each plan beginning in September. The 60% price increase for affected customers did not sit well with many of them. The result is not surprising- many customers say they will drop Netflix service rather than be forced to decide if they want to spend $6 a month more for both services. With 25 million subscribers, it will be interesting to see: 1) how many customers follow through and cancel their subscription,and 2) if their departure will have a noticeable impact on Netflix’s profitability.

The problem Netflix created was not that it raised prices, but it did a very poor job of communicating why prices were raised. Do customers deserve an explanation when prices go up? Absolutely! If we are going to talk about being in relationship with customers, part of being in a relationship includes working through rough times such as when prices must rise. In this case, Netflix is dealing with rising costs of home delivery as well as licensing fees paid to movie studios and must stem the tide by changing its pricing models.

When prices must increase, it is imperative that the marketer communicate how the product remains a good value. Otherwise, why should a customer pay more just to help cover costs? Netflix could defuse some of the sting of its price increase by comparing its value proposition (e.g., selection, convenience, and cost) to Blockbuster, Redbox, and other options for movies and entertainment. Never feel that you have to apologize for your price, but make certain that the value offered is never in doubt.

Sell Solutions, not Products

2011-07-21T13:53:00.002-05:00

Marketers are constantly on the lookout for the “next big thing,” aspiring to hit a home run with a new product that contributes to profitability and strengthens the brand in the marketplace. Unfortunately, most new product development does very little to meet these aims. Why? Think about most new products you encounter - they are not very new at all. Instead, they are minor modifications of existing offerings- new colors, flavors, or sizes- not new in the sense that one would expect.

Another reason why most new products struggle to overcome the odds of failing in the market (80 to 90% of new products do not stick on the market long term) is because of an incorrect marketing focus. People want solutions to their problems, not new products. Yet, a tendency exists to focus on a product’s features and benefits. Oh sure, most products tout their point of difference, how they are better or different than competition. But, that still misses the mark of relating a product to how it adds value for users.

One example of a product that understands that marketing is an enterprise of offering solutions instead of products is Keurig. The coffee machine and single-serve beverage unit of Green Mountain Coffee Roasters got it right with its K-cup concept. The K-cup brewers and single cup varieties of coffees, teas, and other beverages make it easy and cost effective for consumers to brew drinks. And, while customers can order products directly from Keurig, they are not held captive and forced to buy from a single source. K-cups are also available at supermarkets, specialty stores, and department stores.

The impact of Keurig’s K-cup brewers is evident in that it has quickly captured a 6% market share of the home-brew market, a market that has grown during the economic downturn. An alliance with Starbucks will bring K-cup offerings of Starbucks coffees to stores this fall, further entrenching Keurig as a force in the single-cup coffee market. Its ease of use and ability to sample a wide variety of coffee products through product assortments has definitely increased this blogger’s coffee consumption. While I wanted the product (the brewing machine), what I came to experience was the solution of making beverages quickly and at a lower cost than visiting a coffeehouse.

As I sip the final few drops a cup of Green Mountain Coffee Dark Magic, the takeaway is this: strive to offer customers solutions to problems or situations. They will reward you with greater purchase frequency and brand loyalty. Products are interchangeable; solutions eliminate the need to seek out products.

Be Careful What You Ask For…

2011-07-15T22:18:00.000-05:00

Last Saturday, my family made a trek from Nashville to Cincinnati. While planning for the trip, I realized that there would be a NASCAR Sprint Cup Series race at Kentucky Speedway that day. The track is located just off I-71 about 40 miles south of Cincinnati. With a 7:30 pm start, I knew that there would likely be traffic near the exits for the track that would delay us for a while. Well, “a while” took on a whole new meaning as it took us more than 4 hours to move approximately 18 miles past the track.

As the length of time increased sitting in what became a parking lot on I-71, my thoughts turned from our travel schedule to the plight of thousands of racing fans. It became evident that many people stranded on the interstate would be late for the race. For many people, the delay turned into completely missing the race. Investments of time and money had gone down the drain. For those who did manage to get to the track for the race, many of them had to endure another traffic nightmare after the race. On top of the major traffic problems, fans voiced complaints with many aspects of the customer experience such as inadequate parking, insufficient toilet facilities, rude employees, and a chaotic situation overall.

What made the epic service failure at Kentucky Speedway surprising were the struggles the track went through to get a NASCAR Sprint Cup Series race in the first place. For more than 10 years, Kentucky Speedway lobbied, begged, and even sued NASCAR in an effort to get a race on the schedule. Finally, persistence was rewarded with the inaugural Quaker State 400. Time for Kentucky Speedway to shine and put on a show that would show NASCAR that it should have been awarded a race a long time ago… didn’t happen! Poor planning and execution left Kentucky Speedway unable to deliver the promised experience of a NASCAR Sprint Cup Series race.

The lesson for marketers from this unpleasant experience is: Be careful what you ask for because if you get it, you may not be able to handle it. If you are looking to stimulate demand, boost sales, or draw an audience, are you prepared for a scenario of tremendous customer response? Kentucky Speedway is not the first business to fall on its face when trying to make a good impression. Some businesses that have made offers via Groupon have struggled to meet surges in customer demand. Thus, quality suffers and the aim of initiating relationships with new customers by drawing them in with a coupon incentive is negated. If you are planning a unique event or promotion, are you prepared to handle the spike in business it may bring? Is there a recovery plan in place in case service failure occurs?

The customer chaos that transpired at Kentucky Speedway was more than service failure- it was a service disaster. It was inexcusable and should have never happened. Protect the most valuable asset you have: customer trust in your brand.

A Toaster’s Perspective on Customer Experience

2011-07-06T07:33:00.000-05:00

I returned recently from another memorable family vacation in Canada. We visited Niagara Falls and Toronto as well as made our first trip to Ottawa. All three cities offered fun and entertainment, but those stops were merely warm-ups for the highlight of the trip: a visit with my 87-year-old aunt in Granby, Quebec, located 50 miles southeast of Montreal. Aunt Marcelle truly is inspirational- she possesses a combination of beauty, grace, charm, and intellect that makes her one of a kind.

Aunt Marcelle has something else that is unique: A toaster that gives a refresher course in designing customer experience. It is not just any toaster; it is a shiny, silver 50-year-old Sunbeam model that I am pretty sure could be used as an anchor for a small boat when its toasting days are over. Yes, I said a 50-year-old toaster. Marcelle said it has needed only one repair during that time which cost $20. Each morning, I found myself marveling at the toaster as it performed its sole function. What made the toaster even more remarkable was its simplicity- there were no buttons, levers, or switches. Plug it in, drop in bread, and let the magic begin! The finished product was nearly perfect toast- browned but not burned.

The toaster did more than make breakfast; it was a reminder about the importance of simplicity when designing customer experience. Inclusion of features in a product or service often occurs because the capability exists to develop them along with a belief that customers would value the features. The result sometimes is over-engineered products that may be less convenient to use and more prone to failure compared to a product with a more simplistic design. Also, a trend toward developing products that multi-task leads to the possibility of negatively impacting customer experience if customers perceive that tradeoffs in quality or ease of use exist.

The familiar KISS method (Keep It Simple, Stupid!) comes to mind as I reflect on Aunt Marcelle’s classic toaster. Customers do not want to be dazzled with the capability of a product or service as much as they want to enjoy the benefits of how it adds value to their lives. For some people, simplicity has a connotation with being unsophisticated. If that is the case, I am content to have unsophisticated interactions with companies and brands that can simplify the experience of using their products or services.

Disassociation as a Strategy for Targeting Upscale Markets

2011-06-24T07:46:00.002-05:00

If you were like most teenagers, the mere thought of being seen in public with your parents or siblings was a source of great angst. What if your friends saw you with these totally un-cool people- your image and reputation would be ruined! If your situation was like mine, it turns out in the end that parents and siblings were not so bad after all. But, image is everything, so we would go out of our way to disassociate our “brand” from someone or something with which we did not want to be connected.

This avoidance strategy practiced in our teen years can be brought out of retirement by marketers wishing to extend their business footprint to upscale markets. These customers expect higher product quality, personalized service, and an overall superior experience to mass market brands. Companies marketing a portfolio of brands face challenges in serving upscale marketers, including decisions about branding. Even a well known brand name is not necessarily an asset because if the aim is to reach a high-end market, those customers may reject a brand perceived as incongruent with being upscale. Auto companies recognize this dilemma, which is why Toyota created Lexus, Honda developed Acura, and Nissan sells Infiniti.

Another auto brand striving to connect with upscale customers is Ford’s Lincoln nameplate. Lincoln has gone from the top selling luxury brand in America to an also ran. Why? Product design had devolved into dressed up versions of Ford models. Ford’s solution to the problem is to commit $1 billion to an overhaul of Lincoln. In the next few years, Ford will roll out seven new or significantly redesigned Lincolns. Sales projections look for annual volume to more than double by 2015.

Ford’s strategy of a product design makeover is an important first step in energizing the Lincoln brand. But, greater transformation will be needed. A top class dealership experience is needed, both in terms of buyer-seller interaction and service after the sale. Brand communications that consistently position Lincoln as a unique luxury brand are needed. The further it can distance itself from its “average” relative Ford, the better.

Will Ford’s attempt to grow Lincoln pay off? It has the potential for success, if Lincoln can break away from perceptions that it is a Ford with more bells and whistles. Act like a teenager, Lincoln, and keep your distance from your parent… but do not forget that you need them!

Foxnews.com - "Ford's $1 Billion Plan to Save Lincoln"

How to Connect with Justin Bieber (and Anyone Else)

2011-06-15T07:50:00.003-05:00

Most of my blog posts relate to current events and practices in marketing. However, as someone who has spent the past 25 years involved with marketing in some capacity, I cannot help but see parallels between everyday situations and marketing practice. Today’s post is one such observation.

My friend, Mark, is a TSA agent at Nashville International Airport. In his position, Mark encounters many different kinds of people, including celebrities. One day last week, he realized a celebrity was passing through airport security- one Justin Bieber. The teen heartthrob quickly drew attention among travelers in the security lanes, as one would expect. Mark found himself near Bieber, and he did something that no one else was able to do: he made a connection with Justin Bieber.

What was Mark’s secret? Was it the fact that Mark’s teenage daughter is a huge fan, and he used that fact to get Bieber’s attention? No, in fact, Mark said others were trying to get Justin's attention with the expected “I’m a big fan” type comments without much success. Apparently, they did not know something that Mark did. He engaged Justin by asking him if he still played hockey. What? This guy is an international singing sensation, and Mark wants to know if he is playing hockey! Justin took a moment to answer his question and have Mark tell him about his hockey playing son before going on his way. Mark had succeeded in doing something that most young girls at the airport would have loved to have done that morning- get Justin Bieber’s attention.

Mark’s ability to connect with Justin Bieber is similar to what effective salespeople practice: develop knowledge about customers and prospects as people. A buyer is more than a party to a business transaction; he or she is a person with family, hobbies, and interests, most of which are more interesting to think about and discuss than the business at hand. One of my favorite examples of "know thy customer" comes from author and business expert Harvey Mackay. He developed the Mackay 66, a comprehensive questionnaire that salespeople complete on a buyer that captures information personal interests and their business. A foundation of understanding buyers and their needs is instrumental in building trust to advance a business relationship.

Want to connect with your customers and prospects? Make it a point to know about them and their organizations- who they are and what they do. As John Maxwell says “People don’t care how much you know until they know how much you care.” Salespeople can demonstrate caring by taking time to learn about the person across the table. If it works with Justin Bieber, it will probably work with the clients and prospects you interact with on a daily basis.

Evaluating Service Performance is no Mystery

2011-06-09T16:18:00.004-05:00

As someone who spent time in retail management and even more time as a marketing researcher, I am a proponent of mystery shopping. Enlisting persons to assume the role of a customer or shopper to evaluate a service provider’s performance gives an unfiltered view of employee performance. In a retail setting, mystery shoppers can assess touchpoints of the service encounter such as how quickly they are greeted (if greeted at all), salesperson’s product knowledge, selling skills demonstrated, closing attempts, and transaction execution. Findings can be used to give positive feedback to employees who are observed demonstrating desired behaviors or to give coaching to employees who do not meet expectations.

Recently, Sports Business Journal ran a story about a study by IntelliShop of ticket sales employees for Major League Baseball teams. Mystery shoppers were used to evaluate salespersons’ attempts to build a relationship with someone calling to inquire about tickets as well as whether the customer was invited to visit the ballpark to learn more about season-ticket options. The study was not sponsored by MLB, but one would think it would be very interested to know how its teams fared in terms of serving potential ticket buyers. Apparently not! A MLB spokesperson quoted in the article said “While I haven’t seen all of the data, I think anyone would question the results of a survey where the research company aggressively solicited more than two-thirds of the league to forge a business relationship. They are incentivized to demonstrate a need to teams, one that they can fill. It is a clear conflict of interest.”

I assume that the MLB spokesperson has neither worked in marketing nor has a grasp on the concept of a mystery shopper. Question the results? Clear conflict of interest? The spokesperson’s dim view of the survey’s findings may be attributed to some teams scoring very low in terms of: 1) percentage of mystery shoppers invited to visit the ballpark and 2) salespeople’s efforts to build rapport with mystery shoppers when they called. Instead of taking a defensive posture, MLB teams should embrace the data… especially since they did not have to pay for it!

Mystery shopping is a valuable market research tool for uncovering strengths and weaknesses, individually and organizationally, in delivering outstanding customer service. Rather than feeling compelled to engage in PR-speak when results are less than ideal, MLB and its clubs should be thrilled because they now have insights into how their ticket sales personnel’s interactions with buyers are perceived. In effect, mystery shopping removes the mystery of identifying areas of improvement in enhancing the customer experience.

Another Tale of ‘Differentiate or Die’

2011-06-02T13:31:00.001-05:00

My favorite marketing mantra is the title of the Jack Trout book Differentiate or Die. It is at the same time straightforward, provocative, and applicable in many situations. In a world in which we have a great deal of choice for most of the products and services we buy, standing out from competition is a must. To be clear, it is not about standing out in a dye-your-hair-pink way; it is defining what you or your business does better or uniquely that distinguishes your brand from similar offerings. Without differentiation, it is very difficult to make a persuasive case that your brand offers sufficient value to justify product purchase. In the extreme case, failure to differentiate can result in business death.

Today’s installment of Differentiate or Die is brought to you by the Atlanta Thrashers. The NHL franchise is being sold to an ownership group that will relocate the team to Winnipeg. The Thrashers were the second coming of the NHL in Atlanta, which lost its first team in 1980 to Calgary. The second life of the NHL in Atlanta lasted 12 seasons but met the same fate as the Atlanta Flames 21 years earlier. Why?

There are many reasons, too many to discuss here. Perhaps the greatest challenge is the stiff competition for the sports entertainment dollar in the market. The Braves, Falcons, Hawks, Georgia Tech, and University of Georgia are formidable obstacles. And, that is only sports entertainment competitors. When other entertainment, leisure, and cultural opportunities are considered, the Thrashers faced immense competition in a nontraditional hockey market.

Competition was a significant issue for the Atlanta Thrashers, but in the end it would be too easy to blame the team’s troubles on the other sports properties in the area. The demise of the Atlanta Thrashers is due in part to what it did not do: differentiate itself from other sports entertainment brands in Atlanta. It was part of the sports landscape, but being a big league team is not a sufficiently compelling reason to become a fan, sponsor, or ticket buyer. It does not matter if you sell hockey or hot dogs, or whether you are a major league sports property or a local mom and pop business, differentiation is essential. Can you answer the question “How am I better, unique, or different?” I hope so.

An Email Marketing 'Dear John' Letter

2011-05-24T10:59:00.001-05:00

I just ended a relationship. No, the break-up was not painful at all- it took only a couple of clicks and it was done. Now, I will no longer receive the almost daily emails you have showered me with recently. I like you, but your barrage of messages turned my impressions of you from a trusted source to seeing what you could extract from my wallet.

Why did I break up with you? Was it because you closed 2 out 3 stores in my area, making it harder for me to come visit? No, that did not factor into the break-up at all. I understood your need to leave. You had become too pushy, always wanting me to buy. Oh, you were nice and usually offered me a coupon. In the end, I felt sorry for you because you had to try to bribe me to be your friend. I know you are hurting right now, and that you need as many customers… I mean friends, as possible.

We have grown apart. It’s not you- it’s me. No wait, it is you. Perhaps you know it is you because when I left you asked me if it was because you sent me too many emails. Apparently, I am not the first to leave you under these circumstances. I wish you well, Borders- no hard feelings.

Permission-based email marketing is a valuable tool for connecting with customers and strengthening relationships. But, it is imperative that customers’ “space” be respected and not overwhelm them with email messages. Research shows that one of the main reasons consumers end permission email relationships is that the frequency of messages received is too high. Use email to deliver information and facilitate sales, but do not annoy customers to the point that they break up with you.

Word-of-Mouth Marketing: What’s in it for me?

2011-05-13T16:17:00.004-05:00

The credibility and authenticity of word-of-mouth communications (WOM) is undeniable. When people tell friends and others about their experiences with a company, product, or service, recipients of the messages know that it is not a sales tactic; it is a first-hand account of one’s interaction with a business. Best of all, WOM is viewed as “free advertising.” The messages are not only coming from credible sources, but they are delivered at no charge! Channels for WOM are plentiful today. Email, Facebook, and Twitter are like office water cooler talk on steroids. Messages can spread quickly and extensively.

Note in the previous sentence the use of “can be” as fewer people are engaging in WOM today compared to just two years ago. A study by Colloquy found that 58% of people surveyed have conversations often with others about products and services they have used, a drop from 73% in 2008. An even more troubling statistic for marketers is that the percentage of people who have recommended a product or service to others has declined from 75% in 2008 to 57% today. It seems that consumers are more reluctant today to share their consumption experiences with other people at a time when engaging in WOM is easier than ever before.

Have consumers suddenly become bashful about sharing information with other people on products and services they use? While there has been some evidence of less conspicuous consumption (which includes talking about brands purchased) following the onset of the economic recession in 2008, that trend was not so widespread that it would create a downward shift in WOM communications. The ease of engaging in WOM online may also be contributing to the caution people are exercising in making recommendations to others. In some cases, people may not want others to know every brand that is in their cabinets and cupboard and thus are reluctant to engage in WOM.

In other situations, WOM may not occur because of a lack of developing brand advocates. People may need to be encouraged to tell others about brands. Merely having a link to a Facebook fan page or Twitter feed is not powerful enough to enlist people to spread the word. Encourage customers to engage in online WOM and reward them for their advocacy. Channels for WOM have evolved, but human nature has not. The age-old question “what’s in it for me?” is being asked still. Coupons, discounts, prizes, or other incentives can be used to promote WOM among a brand’s customer base.

Marketing Daily – “People Close-Lipped on Companies, Products”

Confession as Ad Execution Strategy

2011-05-09T09:33:00.003-05:00

Confession is good for the soul; it lifts a burden from us when we acknowledge shortcomings or mistakes. Acknowledging a problem is the first step toward fixing it. This process of introspection and improvement applies to businesses, too. However, a major difference between businesses and individuals when it comes to acknowledging mistakes is we do not usually feel compelled to share our admissions of guilt with the whole world. Increasingly, businesses are making the choice to go beyond admitting mistakes and featuring them in advertising campaigns.

Domino’s Pizza brought attention to the tactic of confession as an advertising execution strategy in 2010. The company acknowledged that many pizza eaters did not like the taste of Domino’s, and it responded by taking steps to reformulate the product. To drive home the point that it recognized customers had come to dislike the product, commercials featured the “new and improved” pizza being delivered to homes of people who had complained about Domino’s product quality. The camphttp://www.blogger.com/img/blank.gifaign was an innovative way to say “http://www.blogger.com/img/blank.gifwe know we messed up.” Moreover, Domino’s demonstrated responsiveness to consumers as the complaints served as a catalyst for change.

Fast forward a year and a half and we find another restaurant brand employing the same strategy as it seeks to return to glory. Shoney's had more than 1,600 locations in its heyday, but it is a shadow of its former self with only 230 locations today. The architect of the plan to turnaround Shoney’s is CEO David Davoudpour, who bought the company in 2009. Shoney’s has launched a "Starting Fresh" ad campaign that includes a commercial in which Davoudpour is driving a bulldozer directly toward one of his restaurants. Another commercial shows a “kidnapping” of the executive chef hired by Shoney’s to improve the menu. The admission is not as strong as that made by Domino’s, but the takeaway from the Shoney’s ad campaign is “it is broken, but we plan to fix it.”

So, is confession not only good for the soul but effective for persuading customers about the quality reputation of your brand, too? Admitting failure is admirable, as is going to the lengths of communicating it in an expensive ad campaign. But saying “we were wrong” must be followed with tangible evidence of what has been done to right the wrong. If the aim of “confession advertising” is to change people’s beliefs about a brand, then there must be evidence of verifiable change. A slogan of “we’re trying harder” will not do!

WPLN.org - "New Shoney's Ad Campaign Concedes Failures"

What Do You Want to be Known for?

2011-04-29T13:20:00.002-05:00

The headline poses a deep question, one that we are asked from time to time. What do you want to be known for? People can’t remember everything about you, so what is the one salient characteristic that should resonate with them? Businesses try to articulate this reason for being in their mission statements. Unfortunately, many mission statements devolve into a literary exercise. Their value often resides in contributing to the décor of an office. The mission looks splendid in a frame, but its contribution may end there.

The problem with many mission statements is that they are too wordy and ambiguous for front-line employees to recall, much less execute. The remedy for this problem is to express your purpose in a simple, straightforward way. I saw a sign on the outside of a convenience store today that drove home this point. The sign said:

“To be known for… Making the lives of our customers easier.”

This no-nonsense statement is one that every employee can grasp- this is why we are in business! The store is Kangaroo Express, the primary brand of The Pantry, Inc. The company’s mission statement is a bit more elaborate:

“To become an indispensable part of our customers’ daily lives by always satisfying their on-the-go needs in a fast, friendly and clean environment.”

Mission statements are important pronouncements that define the existence and priorities of an organization. I am a fan of the idea to simplify the mission, as Kangaroo Express has done. The guideline for crafting a mission statement should be to make an impression, not to impress.

Bigger not Always Better when Selecting Marketing Partners

2011-04-22T09:16:00.002-05:00

Remember times from your youth when a group was divided into teams to compete? Often, the bigger kids got picked first because, well, they were bigger. Another example of a “big bias” is shared by Zig Ziglar who points out that if a car stops at a group of kids to ask directions, the driver is likely to direct her question to the biggest child in the group… even though he may be the dumbest one in the bunch! The tendency to favor the tallest, largest, oldest or those perceived as strongest is normal, but sometimes flawed.

When it comes to selecting marketing partners, we would be well served to think back to our childhood experiences and remember bigger is not always better. This analogy came to mind this week when the National Hockey League announced a new 10-year TV broadcast deal with NBC Sports. Fan interest has grown since the NHL returned from a year-long lockout in 2005, and the Winter Classic has quickly become a New Year’s Day sporting tradition in the U.S. The NHL’s current American TV broadcast partner is Versus, a Comcast property which is now part of NBC by virtue of the NBC-Comcast merger. When the NHL debuted on Versus in 2005, it was the up and coming sports channel’s best known professional sport property.

Fast forward to 2011, and the NHL attracted the attention of other networks interested in acquiring broadcast rights, including ESPN. NHL games were broadcast on ESPN prior to the lockout of 2004-2005, but unimpressive ratings and an abundance of other sports content left ESPN with little interest in bringing the NHL after the lockout. But, ESPN was in the mix for acquiring TV broadcast rights, primarily interested in broadcasting the Stanley Cup Playoffs. In the end, the NHL saw NBC as a more committed partner, one that will put resources toward promoting hockey. In contrast, NHL would be competing for attention and air time on ESPN networks that already serve up heavy portions of NBA, college basketball, college football, NFL, and MLB.

Some observers have criticized the NHL for not partnering with ESPN. Yes, ESPN is the dominant sports media brand today… with the key word being “today.” ESPN made its mark by securing leadership of televised sports in the 1980s. The media landscape has changed, and we have many options for consuming sports content- streaming games online, blogs, podcasts, mobile applications, and social media networks, to name a few. There are no guarantees that the behemoth of sports television will be the dominant sports brand of the digital age. In fact, history suggests that companies with a dominant position struggle to adapt as technologies and consumer preferences change. Look no further than General Motors and Microsoft as examples.

Bigger is not better when it comes to selecting marketing partners. Commitment to your success matters- who is willing to invest in growing your business?

NHL.com - "NHL, NBC Sign Record-Setting 10-Year Deal"

Consumers Want to be Green, But…

2011-04-15T10:42:00.003-05:00

Several studies I have read in the last two years point to a greater emphasis in environmental concern among consumers. More people are expressing that they are concerned about how their consumption affects the environment and that they have expectations that companies will engage in sustainable practices to minimize their environmental impact. The latest study, conducted by NBCUniversal as part of its Green is Universal initiative, indicates a majority of American adults have strong inclinations toward being green consumers.

Among the study’s findings:
• 68% of persons surveyed said they would be willing to pay more for green products from trusted brands (up 8 percentage points from 2009)
• 90% agreed that companies have a responsibility to protect the environment
• 77% have a more favorable impression of companies that promote environmental causes
• 62% said they are making an effort to buy goods from environmentally responsible companies

These statistics and findings from other studies point to a new age of consumption, one that is influenced heavily by the values people hold about being stewards of the environment. However, the findings shared here must be tempered with the understanding that none of these measures reflect actual buying behavior. Yes, many consumers want to go green, but there are two limitations holding them back:

1. Marketers need to get serious about being green producers – Many claims made about companies and brands being green today are motivated more by an attempt to project an image of social responsibility than sustainability being integral to the business model. It is challenging for most companies to develop policies, practices, and processes that promote environmental stewardship. The evolution may take time, but if consumers put their money where their opinions are, being positioned as a green brand could pay off.

2. Consumers need to have green choices at fair value – One of the obstacles to greater consumption of green products is price. Prices for many items touted as green are higher than alternatives. As we wrestle with higher prices for gas, food, and other necessities, it will continue to be a dilemma of whether to do the right thing for the environment or for our wallet.

Consumer sentiment toward environmentalism is encouraging, particularly among young adults. Marketers should ratchet up their commitment to promoting environmental stewardship, not merely promoting their greenness. Only then will companies realize the benefits of sustainable business practices.

Marketing Daily - "68%: Green Products Worth Paying More For"

Disruption: Be the Protagonist, not the Victim

2011-04-08T08:28:00.001-05:00

Managing a business is challenging enough- balancing customers’ needs with organizational priorities in the pursuit of profitability. The day-to-day tasks tend to put the focus on the short-term. All the while, winds of change are swirling outside the walls of the organization. Change is inevitable, and many firms that are successful today will encounter turbulent times ahead because they were not prepared for disruptions to their business models.

Marketing expert Martin Lindstrom raises this issue in a recent Fast Company article. He points to two companies as examples of how disruptions can blindside an unprepared company: Polaroid and Blockbuster. Polaroid was riding high in the 1970s and 1980s with its instant camera. Of course, digital imaging technology has rendered Polaroid irrelevant in meeting that particular customer need. More recently, Blockbuster went from the dominant movie rental retailer to a bankrupt entity that was acquired this week by Dish Network for slightly more than $300 million. That figure is more than 90% off of Blockbuster’s market value in 2002.

Polaroid and Blockbuster were taken down by disruptions- changes from outside the organization for which they were unprepared to adapt. Like death and taxes, change is a certainty. Whether it is new competitors, emerging technologies, or shifts in customer desires, change will happen. Having foresight to sense potential disruptions to the business model is a trait that sets apart successful firms from struggling ones.

Sometimes disruptions blindside a company; in other cases the disruption is observed but resistance in the form of maintaining status quo prevents adapting to the disruption. I have observed the latter in higher education. Greater interest in online education and intense competition from for-profit institutions has propelled many traditional colleges and universities to debate the need to adapt to the disruptions. As the debate continues, the disruptions further threaten the competitiveness of traditional institutions.

While managing the here and now, keep an eye toward the future to spot the next disruption that will impact your business. Be out front and turn the disruption into an opportunity. The alternative is to follow in the footsteps of Polaroid and Blockbuster, companies that did not adapt to disruptions and became victims of change.

Fast Company - "The Anti-Blockbuster Way: Disrupt Your Business Rituals Before Someone Else Does"

The Upset is a Winner in Social Media Marketing

2011-03-30T17:28:00.002-05:00

March Madness is winding down, with the Final Four set for this weekend in Houston. The drama that unfolds during NCAA tournament games can be breathtaking, and storylines develop that make household names out of relatively obscure teams and players. This year is no different as VCU had to play its way into the tournament and made a remarkable run to the Final Four. Along the way, VCU beat higher seeded teams in the Southwest Region including Georgetown, Purdue, and Kansas.

VCU’s string of upsets in the NCAA basketball tournament has created buzz and excitement, two traits that any brand would desire. So, why not tap into the frenzy of interest generated by upsets during March Madness? According to Networked Insights, a social media marketing firm, that is exactly what some marketers are doing as an alternative to expensive TV advertising buys. A Networked Insights client made unpaid and paid content placements in social media and search engines related to upsets that generated almost 200 million paid impressions at an average CPM of just over $11. When the unpaid exposure received was factored in, CPM dropped to just over $2.

A strategy of brand message placement in the context of upsets in the NCAA basketball tournament is brilliant! It is a great example of marketing in the moment, deftly associating a brand with a popular cultural event. And, upsets tend to be feel good stories (unless your team is the one that was upset), creating desirable emotions to link to a brand. Marketing around upsets is effective because they are unexpected, newsworthy events. When upsets happen, basketball fans might seek out information about the game, and in the case of VCU, search to learn more about the coach, players, and institution.

The fact that there are no 1 or 2 seeds in the Final Four and two teams came in to the tournament as 8th (Butler) and 11th (VCU) seeds are evidence that this year’s NCAA basketball tournament has proven to be a bonanza for marketers looking for upsets to provide marketing opportunities. With the Butler-VCU winner playing either Connecticut or Kentucky in the championship game, is there one more upset in the cards for marketers? One can only hope!

Marketing Charts - "March Madness Upsets Ideal for Online Ad Content"

Being Better More Important than Being First

2011-03-24T08:01:00.001-05:00

In my last post, the challenges of being late to market were discussed, with the demise of Microsoft’s Zune music player being the latest example of how failure to differentiate can doom a product. Now, another situation in which a well heeled brand is coming to market with a new product is examined; this time it is from the perspective of an entrenched competitor. Groupon is a social media success story, going from start-up to an estimated $3 billion in revenues in less than three years. In that time, Groupon has established itself as the dominant social couponing brand. Nothing will be able to derail Groupon given its position as the early-to-market king… right?

Should Groupon executives be losing sleep over Facebook’s push into the social couponing category? The social network giant is launching Facebook Deals, which resembles Groupon’s offering of discounts on local dining, services, and entertainment. Facebook Deals has been available in some foreign markets for several months, and it will debut in five U.S. cities soon (Atlanta, Austin, Dallas, San Diego, and San Francisco). With more than 500,000,000 users worldwide, Facebook is a ubiquitous distribution channel that holds appeal for businesses in markets large and small.

Facebook may be bigger than Groupon, but is it better? Market presence and success give a brand like Facebook an upper hand when introducing extensions but do not guarantee success. Other brands have struggled with breaking into new categories. For example, Google’s enormous market share in search and search engine advertising were not enough to make Google Buzz a viable product, nor has it exactly translated to success for its Chrome browser.

Facebook Deals may be a smash hit, but it will not be because Facebook has a large number of users. In order to be adopted, it will have to offer points of difference relative to Groupon. Are the deals more attractive? Are coupons easier to redeem? Is the interaction with retailers or service providers different in some way? Groupon can win the battle by being better; being first will be helpful but not as much as a providing a better experience for customers.

In the long run, being better will be more profitable than being first. To borrow an ad tag line from Nike, Groupon will have to show “My better is better than your better” when it comes to competing with Facebook or anyone else. If the customer experience is positive and enjoyable, almost any brand can compete.

Another Tale of "Differentiate or Die"

2011-03-16T11:00:00.001-05:00

News that Microsoft may discontinue its Zune music player may be denied by the company, but it seems to be only a matter of time before it will happen. Launched in 2006 as a competitor to Apple’s iPod, Zune has done little to derail the iPod’s dominance. Microsoft faced an uphill battle given that iPod was established as the dominant music player in the market, but it is too easy to chalk the failure of Zune to being a late market entrant.

Portable music player is not the first category that Microsoft entered late; the company was far behind Nintendo and Sony entering the video game console category. It would seem that Microsoft faced a more daunting challenge taking on two entrenched brands, both with loyal customers. And, there were times when it looked like the Xbox could ultimately face a fate similar to the one Zune is staring at today.

However, Xbox has solidified itself as a force in video games. According to data from NPD Group for the period March 2010 to February 2011, Microsoft’s Xbox 360 had 38.3% share of the 18 million video game consoles sold. Microsoft’s share was just behind Nintendo Wii (38.6%) and Sony PlayStation 3 (23.1%). Microsoft’s market share jumped 12 percentage points in the past year, taking most of its gain from Nintendo (down 11.6 percentage points).

What is the difference between Zune and Xbox 360? Borrowing my favorite marketing book title, it is another case of “differentiate or die.” Zune has never successfully differentiated itself as being unique or superior to iPod. Granted, Microsoft faced an uphill battle given iPod’s icon status as a lifestyle brand. But, Apple successfully used marketing to get to that point. In contrast, marketing for Zune did not resonate with consumers.

Microsoft faced a similar uphill battle competing against Wii and PS3 yet has proven to be a formidable competitor in the video game category. The difference- Xbox has been able to differentiate itself from Wii and PS3. Its Kinect sensor, inspired by the motion-activated gaming experience of the Wii, has been popular with existing Xbox players and attracted new users. And, Xbox Live enhances the gaming experience by letting players connect with friends and fellow gaming enthusiasts online.

Being late to market is not a liability, it is an excuse. Failure to deliver a differentiated experience compared to the status quo is the real issue that dooms most failed products. “Differentiate or die” is not just a clever book title; it is a mantra by which marketers should live when it comes to developing product strategy.

Product Strategy: Keep it Simple, Be Great

2011-03-08T07:06:00.001-06:00

Two of my favorite hobbies are eating and running, with the latter a pursuit that allows me to practice the former! So, I had an interest in checking out a new reality show on NBC, America’s Next Great Restaurant. The show will feature 10 aspiring restaurateurs who will compete to be selected for funding to open locations in New York, Minneapolis, and Los Angeles. The series debut narrowed an initial field of 21 hopefuls to the 10 contestants that will compete to secure investment capital. The judges/investors include celebrity chefs Bobby Flay and Curtis Stone, Chipotle founder Steve Ells, and Miami restaurateur Lorena Garcia.

A major marketing lesson, coming under the category of “What Not to Do” was delivered by the first person to present to the judges. Her idea was for a restaurant she called What’s Good, with a focus on organic and healthy dishes. The concept was interesting, but her description of the product offering doomed any chance of being considered for investment. A sample menu showed page after page of different items- it screamed of a nightmare to manage! Judges gave the contestant feedback about their concerns about the menu complexity, then gave her the bad news that they would not be investing in What’s Good.

Many of the great brands today succeed because of their simplicity in their product offerings. It is not unusual for a business to have an extensive product portfolio, but usually it evolves over a long period of time. Start on a small scale, gain acceptance and traction in the market, and expand what you can do for customers as they buy into your value proposition. Perhaps one reason Chipotle’s Steve Ells was critical of the elaborate menu ideas for What’s Good is that his restaurant thrives with a menu that features essentially two types of products: burritos and tacos. Are there other dishes and items Chipotle could offer within the category of Mexican food? Sure, but it has chosen to focus on being great at serving burritos and tacos.

The lesson is not new, but it is as relevant as ever- follow the edict of Jim Collins and be great at one thing, better than any competitor could ever hope to be.

Who's Out Front for You?

2011-03-01T16:59:00.000-06:00

Every interaction a person has with your brand has an impact on associations that make up brand image and ultimately, liking (or disliking). Face-to-face experiences customers have with your employees are a critical channel for shaping brand perceptions. An enjoyable experience reinforces one’s decision to be a customer; a bad encounter can call into question why to do business with a company whose service leaves something to be desired.

The above comments state the obvious- the importance of good customer service is understood. This issue comes to mind because I have noticed a stark contrast in the interactions that occur at the front desk at the recreation center on the campus where I work. I have been going to the rec center several days a week for almost 10 years now, and it does not take long to realize that its approach to service would put a for-profit fitness center out of business quickly. Most of the customer contact staff is made up of students, and whether it is inexperience, lack of training, or apathy, a service orientation is sorely lacking.

One exception to the unremarkable customer service is Ashley. I look forward to going to the rec center on Tuesdays and Thursdays because Ashley is at the front desk. She greets each person entering and leaving the facility and usually strikes up a conversation. I complimented Ashley on her performance, and she attributed her approach to the influence of her parents and a decision to have fun doing the job. Ashley represents the type of person a business needs to have on the front lines. Her smile and demeanor create a positive initial impression for rec center visitors. Unfortunately, there are not more Ashleys on staff, making her performance stand out even more.

Who’s out front for you? Do you have an Ashley that can warm up customers and even disarm them when they are unhappy? If not, it is time to make a change to improve the initial impression people form about your brand.

The Follow-Up: A Lost Art?

2011-02-21T05:46:00.001-06:00

For the past six years, I have had the privilege of serving as a judge for an awards competition sponsored by a local business publication. In that time I have met many successful entrepreneurs who have inspired me to stretch my limits of professional and personal growth. It is a service commitment that takes time and has no extrinsic rewards, but the people I have met and lessons learned are payment enough.

A fellow judge and I observed a trend over the years we have judged the competition: the act of follow-up from contestants does not occur as frequently today. We visited with top executives at 12 companies this year, and only two of them followed up with a “thank you” message. Follow-up from a company is not a judging criterion nor are companies excluded from consideration because they did not follow up our meeting with an email, call, or postcard.

Our surprise is that more managers do not pursue the small task of following up with judges, just as a salesperson would follow up on a meeting with a prospective client or a key account. The acclaim that comes being named a winner in this competition can enhance a firm’s visibility in the community, not to mention potentially attract new clients that recognize the firm’s accomplishments. The two managers that took the step of following up our visit (one with a handwritten note, one with a phone call) stand out from the others simply by taking a few minutes to say “thank you.”

The intent of sharing this experience is not to indict the other 10 companies. The saying “when you point a finger at someone, you point three fingers at yourself” rings true for me. As I reflected on the trend we observed, I realized my follow-up communications do not always meet my personal expectations. So, rather than criticize anyone I am using this experience to become more consistent in my own practice of the art of the follow-up.

Investing a few minutes to thank a customer, prospect, mentor or someone else who has invested time with you is often perceived as an indicator of someone paying attention to details. A salesperson that regularly practices follow-up with clients can create confidence that he or she is on top of things. And, follow-up is good, old school customer relationship management.

L.O.V.E. Your Customers

2011-02-14T06:49:00.001-06:00

Valentine’s Day is upon us; it’s one day that we tell that special someone how much we care for them. We show our affection with flowers, candy, gifts, and food. We give priority to making loved ones feel special that day. The love that we show on Valentine’s Day leads me to wonder why we do not shower those people with same attention the other 364 days of the year. And, it begs the question “Should businesses take a similar approach to our relationships with customers?”

The answer is an unequivocal “Yes.” A business should show LOVE for its customers just as we invest in important personal relationships. What is LOVE? I’m not referring to the 1983 song by Ho"font-style:italic;ward Jones, who asked that very question. LOVE is an acronym that can guide how a business manages its customer relationships. To LOVE is to:

Listen – Create a culture among customer contact employees to pay attention to customers’ wants and desires. How can your products make their lives better or easier? The answers to this question change frequently, but we have to be attuned to our customers to gain needed insights.

Observe – Be on the lookout for changes in customer behavior that could signal a shift in the relationship. Decreased order volume, placing orders less frequently, or delays in responding to communications can be tip-offs that your standing with a customer may not be as solid as you believe. Too often, these signals are not detected until after a relationship diminishes or ends altogether.

Give a Voice – Give your customers platforms to communicate with your company and other customers. Allowing user reviews of your products, building a community around your brand, and making email and phone contact a painless process are steps you can take to make customers feel valued.

Show Empathy – Encourage employees to put themselves in your customers’ shoes. More importantly, the concern they feel must be communicated and felt by customers, not just a script or canned responses delivered by employees.

As you can see, LOVE is not a special promotion, program of the month, or slick internal marketing campaign. LOVE represents customer-centered behaviors that transform marketing from promises to results for your customers. So, while we go all out to show love on Valentine’s Day, why not commit to showing LOVE everyday for the next year?

What's Behind our Super Bowl Obsession?

2011-02-04T10:46:00.003-06:00

Most Americans know that this Sunday brings the biggest football game of the year. Super Bowl XLV will feature two of the most storied franchises in NFL history, the Pittsburgh Steelers and the Green Bay Packers. The Super Bowl has become more than a game; it is a cultural event that has become an unofficial national holiday. A study done for the Retail Advertising and Marketing Association projects consumers will spend $10.1 on purchases related to the big game this year.

Among notable statistics from the NAMA survey:
• 171 million people are expected to watch the game (the largest audience ever)
• 61 million people plan to attend a party
• 35 million people plan to host a party (for the 61.2 million to attend!)
• 4.5 million people plan to purchase a new television
• 75% of persons surveyed said the commercials serve as entertainment
• 18% said commercials help to increase their awareness of the brands advertised

Wow! The Super Bowl’s attraction to a large majority of the population is undeniable. It is amazing in part because fans of 30 out of the NFL’s 32 teams will feel a sense of emptiness Sunday. Their teams will not be playing, yet many of them will be watching. And, many people who watch little or no football during the season will be tuned in Sunday (including 2 people in my home). How did we get to this point? The NFL helped build the Super Bowl brand, obviously, with a great on-field product, broadcasting partners that bring the drama into our living rooms, and transforming the game into a major entertainment event.

Before we give the NFL all of the credit for the popularity of the Super Bowl, we should acknowledge it is the beneficiary of human nature. We like to be part of communities of people, whether it is fellow football fans, friends, or family. The Super Bowl is an opportunity (if not an excuse) for us to come together with others with whom we share common interests.

Marketers seeking to build a great brand can learn from this characteristic of the Super Bowl and sports in general. For all of the talk about how the Internet isolates people, most of us want to belong to a community, be it face-to-face or virtual. What can you do to promote development of a brand community, a group of customers and friends that share an affinity for your brand and products?

As for Sunday’s game, we know that among the expected 171 million viewers will be fans of the Steelers and Packers. I am sure my friends Mark, Faye, and Mike will be decked out in black and gold; my former students Joshua and Katie will no doubt be cheering on the Packers. Regardless of which team you support, enjoy as you spend time engaged with your community whether it is at home with your family, at a party with friends, in a pub with strangers, or with your hashtag-wielding pals on Twitter.

Make Product Design a Fantasy

2011-01-27T09:56:00.003-06:00

An often repeated saying in marketing is that “customers do not buy products; they buy benefits.” In other words, we are interested in a product not for what it does, but rather we are interested for what it can do for us. Yet, marketers often get bogged down in the design and production of products, and the desires of the customer often are overlooked. In their book Creating Breakthrough Products, Jonathan Cagan and Craig Vogel call for a different approach to product development when they say “form and function should follow fantasy.” This view requires a customer-centered approach to designing products.

Fantasy is an emotional state that can be felt through more satisfying experiences with a product. The question a marketer should ask is how well do products under his or her watch help customers fulfill their fantasies? Also, what tweaks can be made to make a product more capable of delivering a meaningful customer experience? These questions came to mind as the National Hockey League prepares for its All-Star Game weekend in Raleigh, North Carolina beginning tomorrow.

All-Star games in professional sports are exhibitions that feature top players but generally uninspiring play. And, there is little innovation in the design of the product as it is usually a game that pits all-star teams made up of players from a league’s two conferences (e.g., Eastern vs. Western Conference, American League vs. National League). The NHL sought to spark interest in this year’s All-Star Game by foregoing the East vs. West format in favor of selecting teams like a fan might draft a fantasy hockey team. A captain and two alternate captains for each team will draft from a pool of players selected to play in the game. Friday night’s player draft will perhaps be the highlight of the weekend, adding intrigue to the game itself on Sunday.

We must remember that doing things a certain way because that is how they have been done always is not a recipe for marketing success. Customers may prefer another way, one that adds more value to the products or service you offer. Invite your customers to share their fantasies, and then develop form and function to help them realize their fantasies.

The Red Velvet Cake Rule of Brand Extensions

2011-01-21T07:12:00.000-06:00

One of my favorite desserts is red velvet cake. I cannot give a particular reason, but along with cheesecake and pecan pie it is one dessert that if it is available I am likely to partake. However, two recent experiences with red velvet cake have left an unexpected impression, one that reminded me of a danger with brand extensions.

First, during a visit to a Sonic restaurant I saw a sign for a Red Velvet Cake Sonic Blast. The combination of red velvet cake with ice cream was a thought I could not shake without trying one. Unfortunately, between the product’s look, texture, and taste, my excitement was wiped out quickly. Second, on a visit to a local doughnut shop, the server suggested a red velvet cake doughnut. I was delighted! Why hadn’t I thought to look for this before? Well, after eating the doughnut I realized why it had not been brought to my attention before now: a red velvet cake doughnut does not compare very favorably to the core product. In both instances, the conclusion I reached was that I have the urge to try these products out of my system and can move on.

What do my experiences with red velvet cake have to do with brand extensions? They are reminders that a product has limits on how far it can be extended from the core product. A brand develops associations and reputation for how it delivers value. Introducing new products under the same brand creates expectations among consumers that the new brands will deliver value in a similar manner. An article by marketing expert Al Ries shares an example of the perils of brand extension. He uses unsuccessful brand extensions of Little Caesars in the 1990s of delivery and expanded menus to make a point that extensions can take a brand’s focus away from what it does best. In the case of Little Caesars, its core strength was offering carry-out pizza at a low price.

The fallout from overextending a brand is that consumers may become less confident in the brand’s capability to deliver value. Business experts have cautioned against overextending for years. Whether it is called “stick to your knitting” or Jim Collins’ call for a company to focus on the one thing at which it can be great, managing brand extensions is crucial to keeping the core brand’s meaning and value proposition intact.

As for my disappointing experiences with red velvet cake extensions, I realized that they had a surprising effect on me: I feel less enthused about having red velvet cake when an opportunity presents itself. I am likely to opt for one of my other favorite desserts. A brand that dilutes its equity by extending to products that are not as strong as the core product risks a similar fate. It can create a double whammy of negative perceptions of the extension as well as unfavorable associations with the core brand. So much for growing a brand!

Is The Green Consumer Fading?

2011-01-15T08:57:00.000-06:00

Green consumerism and sustainability are practices that many observers believe are not the latest fad. The U.S. recession, a more truly global economy, and a highly connected world have been contributors to the spread of Green. However, results of a recent Harris Poll provide evidence that attitudes toward environmentally responsible consumption appear to have lost momentum in becoming a priority for Americans. Among the findings that point to a fade in Green attitudes:

• 36% of those surveyed said they were concerned about the planet we are leaving behind for future generations compared with 43% in 2009.
• 36% said they personally care about the current and future state of the environment, down from 34% last year.
• 29% said they are environmentally conscious, down 1% from 2099.

Fewer adults holding Green attitudes contradicts the notion that the “me” generation of the indulgent consumer is evolving into a “we” generation that weighs the impact of consumption decisions on future generations. At the same time, it would be premature to signal an end of the Green consumer. Several economic indicators point to the effects of the recession easing. It is possible that some consumers are reverting back to previous attitudes and behaviors as their personal situations improve. We can look at reactions to gasoline prices and observe similar patterns. When gas prices have risen to their highest levels, more consumers cut back on driving, more interest exists for fuel efficient vehicles, and electric and hybrid vehicles are in vogue. As prices recede, attitudes and behavior return for the most part.

Momentum for the Green movement has slowed, but not disappeared. In the same survey, more adults labeled themselves as “a conservationist” (20%, up 3 points) “green” (18%, up 5 points), and “environmentalist” (16%, up 3 points). Results of the survey suggest that a segment exists of adults committed to promoting environmentally friendly consumption. The challenge is to spread the adoption of this mindset. Evidence exists that younger consumers are more likely to hold green attitudes. The question is whether we can bide our time and allow Green consumerism to gradually take root, or should green education initiatives become a higher priority for businesses, advocacy groups, and governments?

Marketing Charts - "Fewer Americans Go Green"

Do You Need Marketing Partners?

2011-01-06T13:08:00.002-06:00

As the new year begins, one of the most common resolutions people make is to lose weight. And, it s might be a good time for businesses to consider whether they need to shed weight, too. That is, weight in the form of marketing partners. The parallel to weight loss came to mind as recent events unfolded involving American Airlines. First, American ended its partnership with online travel service Orbitz, no longer allowing Orbitz to list American’s flight schedules or sell tickets. In response, Expedia, one of Orbitz’s competitors, pulled the plug on its partnership with American for what Expedia viewed as a “anti-consumer” and “anti-choice” decision by American.

The end of the American-Orbitz and American-Expedia partnerships invite evaluation of how marketing partners add value to a business. Three considerations come to mind:

1. Do partners enhance or detract from the brand experience? American Airlines appears to be interested in having consumers engage in a direct relationship with American, not travel websites. But, if consumers value the convenience of shopping and buying from partners, denying them the option may do more harm than good.

2. Can your company deliver the value your partners bring to the relationship? Shedding marketing partners has financial implications in terms of reducing marketing expense via no revenue sharing, but can your business take on additional customers that were served by partners? Customers may have come to your brand because of the partner, and if you are no longer associated with the partner, will customers still be attracted to you… or was your partner the attraction all along?

3. Will lost revenue from a partnership be offset by cost savings or acquisition of new customers? Despite statements by American Airlines executives about strengthening brand relationships with customers, the move away from Orbitz is driven by financial considerations. The concept of building more direct connections between customer and brand is great, but if visions of dollar signs overshadow creating brand relevance, then the decision to divorce a partner may be a misguided one.

Business relationships are like personal relationships – even the strongest partnerships hit rough times and experience conflict. And, it is not uncommon for a business relationship to end for many of the same reasons that mark the demise of personal friendships: changing priorities, unmet needs, or a different way of looking at things. A marketing partner is not a permanent appendage but rather a strategic partner that should add value not only to your customers, but to your business.

As for American Airlines, this blogger has flown the airline occasionally… thanks to Orbitz. I wonder how many customers like me will no longer fly American because it has ended its relationship with Orbitz.

Keeping It Real in Advertising Creative

2010-12-15T11:43:00.001-06:00

When it comes to selecting a message source to deliver an advertising message, there are compelling reasons to consider using animated characters instead of real people. An animated spokesperson will not be difficult to deal with in contract negotiations, will not get arrested or do anything to embarrass a brand, and it will not turn off audiences with annoying behaviors or mannerisms. These traits of animated spokespersons, coupled with their increased presence in ads, seem to make the decision to use animation instead of live action an easy one to make.

But, before you replace people with characters, check out a recent Nielsen study of the impact of animation on consumer response to ads. A comparison of animated versus live action executions found that brand recall was 22% higher for ads using live action. Further comparisons across demographic groups found that the difference in brand recall for live action ads was higher for women (+27%) than for men (+17%) and that consumers aged 35-49 had higher recall of live action ads (+24%) than 13-35 year-olds (+11%). While overall results suggest the impact of live action ads is greater, one exception was that animation execution had 28% higher brand recall for ads for food ingredients and seasoning.

Results of the Nielsen study beg the question “why?” The answer may not be all that complicated. Consumers connect with brands with which they perceive similarity and thus can be influenced by evidence that a brand is “like me.” Which creative execution can get that point across more effectively? Using real people, of course. Granted, we are not always going to identify with characters in ads (there are many characters that we do not want to identify with!). However, for ads using a problem-solution scenario or that attempt to resonate with consumers on an emotional level, having real people as the message source seems to get through to consumers more effectively than animated characters.

Center for Media Research - "Animation or Actors"

Brand Passion: Quality over Quantity

2010-12-08T19:59:00.002-06:00

Social media not only gives consumers a voice, but it also gives marketers a channel to listen to what customers and others have to say about their brands. And, methodologies have been developed to analyze social media conversations that can give insight into consumer sentiment toward brands. One example of monitoring online buzz is Netbase’s Brand Passion Index, which measures the volume of conversations and the favorability of consumers’ sentiment.

The most recent installment of the Brand Passion Index examined social media conversations about e-readers. The results are interesting given that the category is in its infancy, but in some ways the findings are hardly new. Apple iPad dominated the chatter about e-readers, coming up in more than 90% of conversations examined. Despite heavy volume of mentions, the iPad drew mixed feelings about its functionality and performance as an e-reader. In contrast, Amazon Kindle was mentioned in far fewer conversations but the affinity expressed for the brand reflected passion for the brand. Of all conversations about Kindle, 87% had positive comments about the brand. Among the favorable sentiments for Kindle were its singular functionality, performance, and ease of use.

Results of the Brand Passion Index provides a lay of the land as to consumers’ beliefs and attitudes toward e-reader brands, but a more fundamental tenet of branding surfaces, too. Why do Kindle users like the brand? It is not because of hype or glitz; they love the simplicity of the product. It has one function: an e-reader. The single focus on an exceptional reading experience is not a weakness compared to the multi-function iPad but an advantage. Kindle represents a simple brand promise and delivers in the eyes of a vast majority of Kindle users.

Simplicity is not a liability for a brand. When a strong and relevant point of difference is possessed, consumers are likely to see the value and, as in the case of Kindle, sing the praises of the brand’s value to others. In the case of e-readers, quality of brand capability trumps quantity of capabilities. Focus on the quality of brand benefits delivered; that is what customers want and that is what they enthusiastically share with others.

Marketing Daily - "Index: IPads Generate Chatter, Kindles Love"

It’s OK to Say “I’m Sorry” but …

2010-12-01T13:38:00.003-06:00

Customer service failures are inevitable. Even the best service providers will not come through for their customers sometimes, whether it is the fault of an employee, a product defect, or some external source. While minimizing errors and failures is a high priority, it is equally important to have clearly defined plans about how to recover. The question of how, when, or even if to say “I’m sorry” is raised by Neil Berman, CEO of email marketing company Delivra. Berman asks if companies are sometimes too apologetic, sending out apology emails for minor transgressions or even sending emails to all customers when an error affected only a few of them.

If an apology is warranted, Berman suggests the following guidelines:
• Be brief and to the point
• Take responsibility; do not make excuses or attribute the error to someone else
• Appearance of an apology email should be similar in appearance to other communications (e.g., use of logo, color scheme, and layout of email)

Berman’s suggestion that some marketers may be over-apologetic served as a pause for reflection on this issue. How important is a proactive apology in service recovery? Is it possible for an apology to fan the flames of customer discontent rather than correct a mistake? My take on this issue is that an apology, particularly if it is a sincere expression and not a scripted response, is a necessary first step in service recovery. However, the words of an apology are secondary to the actions taken to soothe an unhappy customer. An apology with no corrective action or worse yet, another service failure, serves no purpose.

The best rule to follow is AAA service recovery: Acknowledge, Apologize, Act. Begin by acknowledging an error or mistake occurred in a matter of fact way. Then, take responsibility and apologize for any inconvenience or harm experienced by the customer. Finally and most importantly, explain to the customer actions that can be taken (or have been taken already) to correct the problem.

Service failure can set the stage for a heroic recovery that instills customer confidence in your firm. Embrace that possibility by having a plan when it is time to say “I’m sorry.”

Email Insider - "Always Having to Say You're Sorry: Our Love Affair with Apology Emails"

Making a Case for Brand Positioning in Higher Education

2010-11-24T14:21:00.002-06:00

Brand positioning is the strategy that stokes my fire for marketing more than any other. It is a powerful means of differentiating a brand from competitors and articulates brand meaning to consumers. My intensity on positioning is also fueled by dismay at the numerous brands that do not seem to appreciate the impact of positioning or simply have no clue how to develop a positioning strategy.

My industry, higher education, is not exempt from this dim view of the practice of brand positioning. Many branding campaigns either revolve around the institution itself (e.g., programs, buildings, history) or feature a “diverse” group of students engaged in mock interactions, presumably doing some learning. In other words, most higher education branding efforts are lousy! There are exceptions, with one of those being a current campaign at Purdue University.

Purdue’s current branding campaign, dubbed “Makers All,” sets out to differentiate Purdue’s programs in areas such as math, science, and technology, experiential learning, and international culture. The aim of the campaign is to communicate how students are impacted through their studies at Purdue. It is all about the customer and what the product does for them. “Makers All” is a refreshing change from the seemingly predictable tone of many Higher Ed marketing campaigns.

A brand’s position is based on a point of difference that is: 1) real and 2) relevant. Purdue’s “Makers All” campaign meets those criteria. What is most compelling about Purdue’s brand positioning is its connection to stakeholders. Students, prospective students, alumni, and employers all can appreciate the value the brand delivers.

Marketing Daily - "Purdue Differentiates Self in New Effort"

Holding on to the Past: The Good and the Bad

2010-11-17T12:17:00.001-06:00

My 10-year-old son recently discovered the joy of watching “The Andy Griffith Show.” As I watched an episode with my son, I received far more pleasure watching his reactions than I did from the show. One of the reasons for my response is the good feeling I got that my son was being entertained by a show that had done the same for me when I was his age. As a marketer, it reinforced the power that nostalgia can have as a connection point with consumers. Nostalgia can remind us of younger days, simpler times, or a place that we never experienced but longed to understand. I think of the retro-architectural designs of many new professional baseball stadiums today that give a nod to the physical appearance of baseball parks a century ago. Building a bridge to the past with a product or experience today can be a persuasive emotional hook to attract customers.

Beware, though, as the past can be a dangerous place to look for marketing ideas. At about the same time I was reflecting on my son’s attraction to classic TV, I read an article by Pat LaPointe titled “SOV is DOA.” He cautions against use of a measure of marketing effectiveness known as Share of Voice (SOV). This measure compares a brand’s measured advertising spending to the entire category’s ad spend. The assumption has been that a brand’s SOV should mirror its market share. For example, if a brand has an 8% market share, it should have at least an 8% share of voice. The logic of the SOV/market share relationship is understandable, but does that mean we should be concerned with our SOV? How does it translate to building and nurturing customer relationships?

The title of Pat LaPointe’s article says it all: SOV is DOA. While LaPointe addresses a specific measure of marketing effectiveness, the takeaway from his piece is a challenge to question the applicability and relevance of the measures we use to assess performance. Just because SOV has been used for years and is widely recognized and understood, that does not mean it is a key indicator of marketing impact today. Customers change, the external environment changes, strategic priorities change, so should we not anticipate the need to change how we measure marketing productivity?

How to Lose Friends and Alienate People

2010-11-10T12:03:00.006-06:00

In case you do not fully appreciate the concept of transparency and its impact on businesses today, look no further than Cooks Source magazine. Until recently, Cooks Source was a relatively obscure regional publication in western New England. That is until its editor, Judith Griggs, was caught in a massive firestorm of controversy surrounding her response to a writer whose work had been plagiarized by the magazine. Cooks Source lifted an article posted by Monica Gaudio on a website about apple pies. It appeared in the magazine’s October 2010 issue. Plagiarism is one issue; insensitivity and arrogance as a response to plagiarism apparently is not a good idea.

Gaudio’s inquiry to Cooks Source met with a response from Judith Griggs that has been widely disseminated across the Web (if you have not read the response, click here). In a nutshell, Griggs blew off Gaudio and suggested she should be grateful Cooks Source had published her work. She went so far as to criticize Gaudio’s work, saying it was much better after Cooks Source had edited it. It seems that Judith Griggs did not think about the possibility her reply sent to the inbox of Monica Gaudio was actually being sent to the inbox of the entire Internet. Critics have been merciless in assailing Cooks Source and Judith Griggs in blogs and on Facebook. After several days of bashing and a failed, lame attempt at an apology, the Cooks Source website now consists of a single page with a bit more heartfelt apology.

The lesson taught by Judith Griggs is a reminder that transparency rules today. If a business appropriates intellectual property from another source, it cannot go undetected forever. And, when a business is caught red-handed, whether it is stealing others’ work, mistreating employees, or misleading customers, the sooner it comes clean and vows to make changes the more effective damage control will likely be.

Perhaps the most galling aspect of Judith Griggs’ mea culpa is that Cooks Source and its stakeholders are victims, damaged by the groundswell of criticism arising from this incident. It is as if accepting responsibility is secondary to the “inconveniences” felt by Cooks Source as a result of its poor decision. Social media is powerful, no match for a manager that allows sarcasm to flow through his or her fingers and onto the Internet.

Winning with Social Coupons

2010-11-03T14:19:00.001-05:00

Consumers flocked to coupon offers in the past two years as the recession put a dent in our buying power. But, coupons really are not for us; they are ultimately for the gain of marketers that offer them. This small but significant point has been lost on many businesses that have experimented with social couponing services like Groupon. Many businesses have gotten burned because the revenue hit taken and expenses incurred to offer deep discounts to attract customers is not always recouped.

A recent study from Rice University found that nearly one-third of businesses running an offer through Groupon say that lost money on their promotion. More than 40% of businesses surveyed said they would not run an offer on Groupon again. These figures are alarming for the future of social couponing. The medium holds great promise because information about coupon offers can be transmitted through permission marketing and word-of-mouth, channels that are much more cost efficient than traditional channels used to deliver coupons.

Rather than shy away from social coupons because of a bad experience or because of hearing about bad experiences other businesses have had, marketers should take the following steps to manage a social coupon campaign:
1. Do the Math – The expenses associated with a coupon offer can be calculated on a per unit basis when evaluating an opportunity. Revenue sharing with a service like Groupon, cost of goods sold or given away, and any additional labor costs to handle increased demand must be considered when making a decision to participate in social couponing. Realistically, Return on Investment should be based on incremental profit, not revenues. What is the additional profit a promotion brings in once all expenses are deducted? Social coupon offers can be capped; set a maximum number of offers to sell to manage profitability of the promotion.

2. Prepare Employees – One of the problems businesses have had with demand generated by a Groupon offer is that employees can become overmatched in meeting the influx of customers. And, in the case of service businesses, many employees have found that Groupon customers are not always the best tippers, basing tips on the deeply discounted price rather than regular price. Companies should take steps to increase service coverage, train employees on handling service encounters with new customers attracted by a coupon , and monitoring employee satisfaction during peak business periods.

3.Think Long-Term – A coupon can get customers in the door, but other factors will determine if they return. A great customer experience, which is highly related to #2, can demonstrate the value offered and persuade customers to return without the incentive of a coupon. If employees can be persuaded to view these customers more like a new friend than a nuisance, the initial service encounter can set the stage for repeat customer visits. Also, businesses should seize the opportunity of a visit by first-time customers to invite them to expand the relationship by opting in for permission-based marketing in the form of email or by friending a brand in social media.

Social coupons may fall under the category of “spend money to make money,” but when properly executed and managed they should not lose money and hopefully set the stage for developing repeat customers.

Promo - "Groupon Social Coupons Unprofitable for One-Third of Marketers: Study"

Fan Frenzy: Balancing Access and Security

2010-10-27T08:22:00.002-05:00

The new NBA season began last night. All eyes were on Boston as the Celtics hosted the Miami Heat and its much ballyhooed trio of LeBron James, Dwayne Wade, and Chris Bosh. The league is riding a huge wave of fan interest following an exciting 7-game finals series between the Celtics and Los Angeles Lakers as well as a free agency period that was dominated by the question of where James would play this season. The excitement surrounding the NBA today reminds me of a period in the 1980s when Michael Jordan, Larry Bird, and Magic Johnson were the faces of the league. Great basketball was the brand story, not boorish behavior on the court or illegal behavior off the court.

Amid all of the hype of the new NBA season, I read a quote from Heat coach Erik Spoelstra in USA Today that caught my attention. Talking about extra security in place at the team’s hotel, Spoelstra said “I liked it. There was more security and more barricades so fans couldn’t get close to us, rather than in years past where they could walk right up to you.” These comments should not necessarily be taken at face value. It is understandable that security and player safety is important. After all, these athletes have a job to do and the stakes are high.

A cynical view of Spoelstra’s comments, though, would suggest that fans can be an irritant or unwanted distraction for NBA players. Did he mean he wants to keep NBA fans away? Sure, there are people whose desire to hang around the pro sports scene borders an unhealthy obsession, and then there are memorabilia dealers who show up with armloads of cards, balls, and other items looking for autographs that they can then sell for a quick buck. But, most fans simply want a glimpse of their favorite team or players, maybe a quick photo, and a chance to express their admiration.

The Miami Heat’s situation is unique in that the team features three superstars and has built a media frenzy around them. The Heat does need extra consideration when it comes to protecting players from a crush of fans that could pop up anywhere the team is playing. The risk is becoming too isolated from customers who care about you most. Social media is one solution to this dilemma as it gives fans access to players’ thoughts and daily lives… but at arm’s length.

Leave No Brand Story Untold

2010-10-22T12:23:00.003-05:00

What makes a brand resonate with consumers? A cool logo? No. A catchy slogan or jingle? Nope. The best creative efforts of an ad agency can take a brand only so far. People connect with brands in the same way they connect with other people: they are attracted by their personal stories. We value brands that we perceive as having something in common with us- our values, interests, attitudes, and mindsets. The connector that attracts us to a brand is its story. What does the brand represent, offer, and do that I can relate to and matters to me? To know a brand’s story is to add a dimension to one’s relationship with that brand.
The importance of telling stories comes to light this week with the Broadway debut of Lombardi, a play that tells the story of legendary Green Bay Packers coach Vince Lombardi, both on-field accomplishments and off-the-field relationship with his wife, Marie. Despite being the namesake of the NFL’s Super Bowl trophy and generally regarded as an NFL coaching legend, many of today’s NFL fans know little about the man behind the Lombardi persona. To that end, the NFL should be praised for its marketing involvement with Lombardi as a way to preserve the Vince Lombardi story for fans today and in years to come.
If you own a business or are responsible for marketing a brand (which includes all of us since we are managers of our personal brand), is telling your brand’s story part of your branding platform? Maybe your brand story is told through fiercely loyal customers, or maybe it is shared by employees that are on the front lines of serving customers and carrying out the brand promise. Perhaps there is heritage to share, stories from the past like the Vince Lombardi story. The stories are there, why not share them? People are more likely to connect with your brand through the emotions wrapped in a story than they are the features built into a product. Leave no brand story untold.

Advertising Age - "NFL Backs Broadway Play About Legendary Coach"

Advertisers, Welcome to the World of Purposeful Marketing

2010-10-19T07:53:00.000-05:00

I read with great interest a recap of last week’s Association of National Advertisers conference. A theme at this year’s ANA meeting was purpose-driven marketing. Marketing executives from several companies echoed the importance of conducting business in a way that has a positive impact on communities and society while at the same time meeting business objectives. Representative of marketers’ sentiments is a quote by Jim Tripodi, Chief Marketing and Commercial Officer at Coca-Cola, who said "We have to move from impressions to expressions.”

Welcome to 2010, ANA members! I am at a loss to understand why this group of global companies is seemingly just now coming around to the importance of social responsibility in their marketing strategy. The stance taken by speakers at the ANA conference is commendable; my question is why have they been so slow to come around to that position?

Social responsibility can b e a strategy to differentiate a brand from competition, but a higher purpose is served by engaging in socially responsible practices. A business may exist in order to generate profits, but at the same time a business has a charge to conduct business in a way that not only minimizes impact in terms of resources used and ideally, positively impact the communities in which it operates and serves customers.

Purposeful Marketing is not a fad, it is here to stay. Kudos to ANA member companies that are leading a call to focus on how to better engage customers and create an organization culture that places an emphasis on giving back.

Advertising Age - "Purpose-Driven Marketing All the Rage at ANA"

Who Owns Your Brand?

2010-10-14T07:21:00.002-05:00

Who does own your brand? A strange question, you may be thinking. Or, perhaps you suspect I am lobbing a trick question your way. My response on both counts is “no.” It is neither a strange question nor a trick question. I would say it is a question with a very straightforward answer. Who owns your brand? Not you!

Brands are perceptions, associations, and images held by customers and others. Thus, they are the true owners of a brand. As a marketer, you are merely a caretaker, a steward charged with protecting the value it holds with stakeholders.

Do you need proof? Take the story of Gap. The clothing retailer unveiled a new logo last week only to announce four days later that it would keep its iconic blue logo. The change of heart followed immense public backlash against the new logo.

I read with amusement different opinions from designers and other experts about why the Gap’s new logo was an epic fail. Some experts said the Helvetica font was horribly outdated and unworthy of a trendy apparel retailer. Others said the blue square that protruded above the “p” had no relevance or meaning.

These critiques of the Gap’s new logo miss the most obvious point: the Gap’s logo does not belong to Gap. OK, the tangible qualities of the logo belong to Gap. Ownership is protected by a trademark. But in reality, Gap’s customers own the logo and the brand. Those brand elements connect the company with persons who care about it. Making swift, drastic changes to this piece of the relationship with customers is a prime reason why the uproar was so ferocious.

Manage your brand; build your brand; do what you can to control your brand. In the end, it is not yours, so commit to engaging your stakeholders so that you are partners in its development. Don’t go it alone, or you may experience the same “gap” in stakeholder relationships as Gap is experiencing now.

Creativity - "What the Gap Did Wrong"

A Regimen for Brand Positioning Training

2010-10-07T08:18:00.001-05:00

A distinct, consistent brand position is instrumental in achieving differentiation from competitors and scoring with customers. Articulating brand position is vital to the success of a positioning strategy. The audience for which the brand should be relevant must recognize and value the point of difference. To that end, the more ways brand position can be communicated, the greater chance that it sticks with the target market.

One of the most effective brand positioning strategies implemented in recent years has been done by Subway. Its “good for you” positioning in the quick service restaurant category has resulted in market share gains and more importantly, ownership of that brand association in consumers’ minds. The linchpin in Subway’s positioning strategy has been Jared Fogle, a Subway customer whose story of how regularly eating at Subway was part of his dramatic weight loss shone a light on the advantages of eating at Subway compared to burger and pizza fast-food restaurants. Jared’s story as an everyday guy who has benefited greatly from Subway’s products resonates with consumers.

Subway is not content to stand on the basic claim of “better for you,” even though it has been successful. In recent years, Subway has used top-tier athletes as endorsers including swimmer Michael Phelps and NASCAR driver Carl Edwards. Now, Subway and Jared have embarked on a marathon effort to promote the nutritional benefits of Subway, as in an association with the ING New York City Marathon. Jared is training to run in the race on November 7, and Subway has partnered with the event as the “Official Training Restaurant.”

The impact of Subway’s sponsorship of the ING New York City Marathon should be positive, but a greater long-term benefit to the brand stands to be realized. The sponsorship status of “official training restaurant” is one that Subway has bought the New England Patriots and exploring opportunities with other sports properties. The greatest opportunity to promote the status of “official training restaurant” seems to lie with the one audience that does not charge sponsorship rights fees: the consumer. A campaign that touts Subway as the official training restaurant of the everyday athlete (like Jared Fogle) would be a natural extension of high profile sponsorships.

Subway’s association with the NYC Marathon and staking the claim of “official training restaurant” demonstrates that work is never complete when it comes to brand positioning. Even when a brand’s position is solid as is the case with Subway, explore opportunities to drive home your brand’s distinctiveness in new ways.

Marketing Daily - "Subway Positions Itself as Athletes' Training Choice"

Look Beyond the Norm for Customers

2010-09-30T09:36:00.005-05:00

A study conducted recently by Scarborough Research yielded interesting insights about a segment of sports fans often taken for granted: females. A tendency exists to automatically think of 18-34 year-old men as a lucrative market, but women are often lumped into the family segment rather than viewed as a distinct customer group. The Scarborough study examined the demographic and consumption characteristics of female college football fans. The Southeastern Conference garnered the most interest among females who are avid college football fans; 19% of this group has attended an SEC game.

Scarborough’s indexing methodology compares a customer segment to the population. Among the findings that compared avid female SEC fans to the general population, they are more likely to be African-American, hold white collar positions, own their own home, have HDTV, and installed a home security system. Companies in many different product categories that use sports as a marketing vehicle may be surprised by the opportunities to reach women through college football.

While the findings of the Scarborough study may not give definitive direction to marketers in terms of keys to success for reaching avid female college football fans, the results should serve as a reminder to look beyond preconceived notions about who your customer is. In the case of college football, the number of women who are avid fans may be smaller than men, but their passion for the sport and buying power should not be overlooked. It is not always a men-women or young-old issue; the point is there may be a group of customers for which you do not fully recognize or appreciate their potential. Look beyond the usual ways customer segments are defined; what you may find could surprise you!

Center for Media Research - "Avid Female College Football Fans"

Toyota’s Tiny Sports Marketing Play

2010-09-24T11:08:00.002-05:00

Toyota is a brand that is heavily involved in sports marketing. It is a force in NASCAR, is naming rights holder of the Houston Rockets home court (Toyota Center), and is a sponsor of NBC’s “Sunday Night Football” telecasts. But, Toyota’s tiniest association with sports may be its most innovative. Toyota rolled out a concept called the Tiny Football League (TFL) that is integrated into its sponsorship of the halftime show on “Sunday Night Football” and supported with a web and social media presence.

The TFL is a lighthearted take on the world of youth football. The TFL website invites youth teams to add photos, stories, and videos. Toyota is running a contest in conjunction with the TFL initiative in which 8 youth teams will receive $5,000 each, and a team selected by fan voting will receive a $10,000 donation. Criteria used to judge teams include evidence of teamwork, determination, and constant improvement.

At a time when it has become very expensive to be associated with top tier sports properties, Toyota’s foray into football via the TFL is brilliant. Toyota enjoys the best of both worlds. On one hand, its tie-in with the NFL via NBC’s Sunday night broadcasts give it the exposure a national brand like Toyota seeks. For Toyota, linking its presence in football to grassroots programs allows the company to show concern for local communities. The potential payoff in terms of how consumers perceive Toyota because of the Tiny Football League may be far greater than a more costly investment as an official sponsor of a major league sports property.

Football is the number one sport in the U.S., but there are ways to be associated with America’s favorite game other than an expensive sponsorship rights deal. Toyota’s TFL is a great example of how to link a brand with consumers’ interests in a creative way, one that taps into the benefits of sponsorship without the typical level of financial commitment.

Marketing Daily - "Toyota Talks Tiny Football in Corporate NFL Push"

Movin’ on Up? Hyundai’s Luxury Brand Aspriations

2010-09-21T08:22:00.001-05:00

One of the most impressive brands during the recession was Hyundai. The auto brand would have had every reason to wallow in the misery of American consumers and blame poor sales on a bad economy. Instead, the company saw its market share rise in 2009 on the heels of a bold program called Hyundai Assurance, which gave buyers the option to return a new car to Hyundai during the first year if they could not make payments. Hyundai was recognized by Advertising Age as Marketer of the Year for 2009 because of its proactive response to the recession.

I have been admirer of Hyundai for some time. In addition to the innovative Hyundai Assurance program, the company’s “Think about It” campaign was a creative way to attempt to reshape consumers’ image of Hyundai as an entry level economy car. The message that Hyundai is a quality brand was an attempt to bring Hyundai on par with Toyota, Honda, and other imports that enjoy quality associations with consumers. Hyundai’s boldest move yet is to take the brand upscale- the question is will consumers accept it? Hyundai introduced the Genesis sedan at a price point in the area of $40,000 in 2008, and it is about to debut Equus that will sell for $55,000 range.

Will consumers buy into the idea that the Hyundai name should be equated with upscale automobiles? Will Genesis and Equus be high selling models for Hyundai? Does Hyundai even care how many of these cars it sells? What was that? Of course Hyundai would care how many units of Genesis and Equus it sells… unless there is another motive behind the move toward the upscale segment of the auto industry. The motive seems to be to persuade buyers of cars at moderate price points to rethink their perceptions about the quality of the Hyundai brand. If Hyundai is marketing high priced cars, then a high level of quality must be present, too. This reasoning could change consumers’ perceptions about Hyundai’s quality across all of its models.

Hyundai faces a huge challenge if it intends to convince buyers of upscale cars to include Hyundai among the brands they consider worthy of purchase. It is very difficult to extend a brand into upscale segments when it is known as a moderately priced brand. Other auto companies went upscale by creating brands separate from their core offering (Toyota > Lexus, Nissan > Infiniti, Honda > Acura). Hyundai’s decision to forgo this approach to branding suggests it seeks to impact quality perceptions of its core brand by offering high end products. It seems to be another form of “Think about It”; surprising consumers by showing how Hyundai is capable of creating a luxury car experience.

The Wall Street Journal - "Can Hyundai Sell Pragmatic Prestige?"

Marketing that Matters

2010-09-17T07:43:00.003-05:00

Cause marketing is a strategy for resonating with customers through a company or brand’s support of a charity or nonprofit organization. Nonprofits benefit from the exposure a sponsor’s marketing platform provides, and it has become a valuable source of funding as government funding and individual donations have been squeezed during the recession. Cause marketing is beneficial to the companies involved because it creates goodwill for their brands and often creates incremental sales when donations to a cause are contingent on product sales (e.g., 10% of sales during a time period are donated to the sponsored cause).

The payoffs of cause marketing mentioned here have been recognized for some time. Another payoff is becoming clear: consumers expect companies that they do business with to be involved in supporting causes and they want to buy products from companies that are active in cause marketing. Cone, Inc. has conducted research into consumers’ attitudes toward cause marketing for nearly 20 years. In its most recent study, Cone found that 83% of consumers want more of the companies that they do business with to be involved in supporting causes; 41% said they have purchased a product within the past year because of the seller’s involvement in supporting a cause. That percentage is noteworthy because it is double what it was when Cone first started tracking consumer response to cause marketing. Moms and millennials are two consumer segments particularly interested in companies’ cause support. The percentages of consumers that have favorable views of cause marketing, desire to buy brands associated with causes, and actual purchase behavior of brands sponsoring causes are higher than the general population.

The takeaways from the recent Cone study are clear: consumers expect companies to support causes, and they want to buy products and services from companies engaged in cause support. Other studies have found that one impact of the recession is that many people have re-examined priorities and seek more meaning in their lives. Marketers should re-examine their priorities, too, and ask how they can use cause marketing to bring greater significance to their business impact. The potential exists for cause marketing to touch the nonprofit organizations supported, consumers who buy products linked to cause support, employees, and most importantly, the constituents served by the nonprofits.

Media Buyer Planner - "Consumers Support Companies that Support a Cause, Finds Study"

A Case for Moving from Product to Experience

2010-09-14T08:00:00.001-05:00

As the new NFL season debuted, several media outlets ran stories about the challenges some NFL teams are encountering selling tickets. A surprising 22 games were blacked out in 2009, thanks in large part to a dreadful economy. And, the prognosis for 2010 is no better; attendance league-wide is expected to decrease for the third straight year. But it is too convenient to blame attendance woes solely on the economy. Many NFL fans have found that watching games in the comfort of their homes in high definition with access to replays and multiple games is a suitable substitute for attending the game in person. Throw in money saved on tickets, parking, and concessions as well as not missing dealing with traffic and drunken fans, and watching games on TV at home becomes a more attractive alternative.

Some sports industry observers wonder if the fact that football is a great sport for television will ultimately lead to a decline in game attendance. It will happen... if the NFL treats live games as a product. The reason is that products can be duplicated, at least the benefit products provide are relatively easy to copy. In this case, technology enhancements have made watching NFL games on TV an acceptable substitute for watching a game in person. Compelling arguments can be made that the TV product has some advantages such as different camera angles and replay capability, not to mention the convenience and cost savings mentioned previously.

Before the NFL is declared in a state of emergency, let us not forget that the brand is still very strong. It commands premium prices for tickets, sponsors, and media coverage. The key for the NFL to sustain its position as the premier sports property in the U.S. is to focus more on the experience offered by the live event. Steps have been taken already by addressing the problem of unruly fan behavior with a fan code of conduct. Further enhancements can be made by introducing more technology in stadiums to give fans options for consuming content beyond what is transpiring before their eyes. Sponsors can play a role, too, in adding value to the game experience. Interactive exhibits, games, and spaces give sponsors opportunities to have “quality time” with attendees.

Products can be mimicked to offer similar benefits at lower costs. Experiences can be unique encounters between brand and consumer that substitute products simply cannot match. This contrast does not apply just to the NFL. Whatever you sell, there are likely substitutes available. What can you do to move from selling a product to offering an experience? Remember the old adage: people don’t buy products, they buy benefits. Today, that adage can be modified to read “people don’t buy experiences, they seek meaning from the experiences they have.” Add meaning, and you add value.

Put Down Your Product to Attract Customers

2010-09-10T16:18:00.004-05:00

No, the headline does not have a typo. Putting down your product can be a way to position your brand to attract new users. It is possible that customers think your product is too good for them, so changing its frame of reference to something bad, decadent, or unhealthy may resonate with some people.

Is this an unusual recommendation? I think so, and I am holding back laughter and skepticism as I gather these thoughts. Here is an example of what I mean, coming from a group called “A Bunch of Carrot Farmers.” In a campaign that launches Monday, baby carrots are positioned as an alternative to junk food, even bearing the tag line “eat ‘em like junk food.” An integrated campaign will use advertising, social media, and a website (www.babycarrots.com) to spread the word. Even product packaging gets into the campaign as baby carrot packages resembling potato chip bags will appear in stores.

This campaign is a great illustration of using marketing communications to influence consumers’ thoughts, feelings, and behaviors. Associating baby carrots with the indulgence of eating junk food challenges consumers to rethink how they perceive carrots as a snack. The messaging that has been developed for the campaign to this point is humorous and light hearted. Rather than a focus on “eat carrots because they are good for you,” the implied message is “eat carrots because they are fun!”

Will consumers be attracted to baby carrots because they are fun (not to mention better for you than junk food)? It is certainly an unexpected positioning, but one that might work on a product that is viewed as a commodity by many consumers. Shifting focus from a more virtuous “good for you” product to a more playful treat is a put down that could result in higher sales of baby carrots.

DM News - "Baby Carrot Growers Target Snackers with Integrated Effort"

What Marketers Can Learn from College Football

2010-09-07T08:09:00.000-05:00

I love college football! It does not matter what teams are playing, the pageantry and competition of college football are irresistible. I do not watch much TV these days, but I could easily give 12 hours on a Saturday to watching games. And, as the 2010 season kicked off recently, I noticed that I was not alone. The anticipation that college football fans had for the season to begin was infectious.

As I took in all of the excitement about the new college football season, I inevitably did what I have been trained to do: ask what marketers can learn from this phenomenon. Wouldn’t it be amazing if the passion that people have for their favorite team was held for other brands? Get fired up for Tide! Paint yourself UPS brown. Unlikely to happen, I agree, but what does college football teach us about stoking the emotions of consumers? Three lessons are worth noting:

1. Experience – College football is far more than games. It entails pep rallies, tailgating, homecoming, meeting old friends, and making new memories. It is not a transaction, it is an experience. What can you do to create experiences that engage customers with your brand? To build and sustain relationships with customers, look beyond the transaction and consumption of the product or service and extend it with experiences. Birthday cards for customers, customer appreciation events, and employee recognition programs are examples of ways to create experiential contacts with stakeholders.

2. Tradition – The most successful college football programs in terms of attendance, licensed merchandise sales, and overall fan interest have a history of greatness when it comes to appealing to fans. Alabama, Texas, Ohio State, and Notre Dame are examples of programs with winning traditions and legendary players and coaches that span generations. The lore of these programs adds to their appeal today. How can tradition be cultivated in your organization, externally with customers and internally with employees? Do you have a legendary product? Ad campaign? Logo? Other marketing asset that can be leveraged to build a bridge to the past?

3. Stories – The on-field product in college football is supplemented with intrigue and drama in the form of stories involving personalities on the field. Whether it be the walk-on player who goes on to earn a scholarship and be a star, or the coach who returns to his alma mater to lead the program back to glory, college football is replete with stories that create warm, fuzzy feelings. The feel good story at the beginning of the 2010 season is Boston College linebacker Mark Herzlich, who missed more than a year battling cancer to return to the starting lineup. In the same vein, what stories can be told to draw customers closer to your brand? Testimonials from customers who have been positively impacted by your product or service are one way to make this happen. Similarly, employee testimonials about their commitment to customers and the organization can have an impact on the internal market as well as resonate with customers.

Let’s face it, not many products match the glamour and intensity of college football. But, we can glean inspiration from the best of what the sport offers and energize our brands and employees. May you (and your favorite team) score many touchdowns on whatever field you play.

Look at Customers Carefully… They Aren’t Necessarily You!

2010-09-03T16:15:00.007-05:00

Despite the benefits market research provides in aiding marketers in making more informed decisions, the reality is that customer data is a luxury for many small and medium sized businesses. Customer insight usually comes from face-to-face interactions, but the opportunity to drill down deeper to learn from customers through focus groups, interviews, or surveys can be beyond a firm’s resource capabilities. Thus, we are often left to make judgments about customers based on experience gained from serving customers and competing in the marketplace. The danger of this approach to customer analysis is that it is easy to view customers through the lens of our own generalizations, and even stereotypes of our customers. The gap between consumer behavior and a marketer’s view of the customer can be exacerbated when there is disparity in characteristics between customer and marketer.

An example of how this difference in characteristics might play out can be found in a recent study by the Pew Research Center’s Social & Demographic Trends Project. In a survey about the necessity of different electronic and entertainment tools, only 46% of consumers 18-29 years-old said a landline phone was a necessity while 59% a cell phone was a must have. In contrast, 30-49 year-olds favor landlines, with 62% saying a landline phone is a necessity compared to 51% for cell phone. An even more pronounced difference between the two age groups was in their views of television as a necessity. Twice as many 30-49 year-olds said TV was a necessity than their younger 18-29 counterparts (58% and 29%, respectively).

The concern raised here is that if marketers make decisions based on what they think customers want or prefer, it is possible that personal biases will cloud effective decision making. Age-related differences in particular are a potential source of making incorrect assumptions. If marketing management ranks are staffed largely with 30-somethings and 40-somethings (or older), is their intuition about younger customers on target? I am not suggesting they are incapable of having a good understanding of younger consumers; I am merely pointing out the possibility of age differences leading to misguided analysis. After all, managers who come from a generation raised on TV may have trouble fathoming that people would not view TV as a necessity. However, the reality is many Millennials feel adequately connected to the world with computers and smartphones.

Pew Research Center - "The Fading Glory of the Television and Telephone"

The Digital Billboard Divide

2010-08-31T09:04:00.002-05:00

Digital billboards have gained quite a bit of attention, literally and otherwise. The sharp images that change every 5-10 seconds allow outdoor advertisers to keep fresh messages in front of travelers. The novelty of digital billboards and the frequently changing images attract the eyes of drivers. The attention grabbing capability of billboards may be a plus for marketers, but it is a cause of concern for some local governments and advocacy groups. Digital billboard placement has been banned or limited in several markets across the country.

The debate about digital billboards is two-fold. One issue is rooted in aesthetics; some groups simply do not want the landscape dotted with flashy signs. The other issue is a more serious matter concerning the safety impact- are drivers more likely to be distracted if exposed to digital billboards compared to static billboards and all of the other stimuli that can get take our attention away from the road? The answer to this question is “it depends.” It depends on who you ask. Multiple studies conducted on behalf of the outdoor advertising industry have found no correlation between the presence of digital billboards and an increase in traffic accidents. Government sponsored research has been less conclusive, and others simply fan the debate with positions without objective evidence such as a St. Louis alderman who said “digital billboards are a distraction” as he pushed for the city to halt digital billboard placements.

It is possible that the real concern about digital billboards is that they will lead to further encroachment of commercialization into our lives. The safety argument is a convenient cloak to make a rational case for why they should be prohibited. Compelling arguments are made on both sides of the issue. The quality of digital billboards exceeds previous generations of signs, and certain situations may arise in which digital billboards can serve the public good such as posting information about a missing child. The debate will continue, but the question that must be answered to resolve this issue is whether the benefits of digital billboards outweigh any risks or problems they might create… if there are any risks or problems at all.

USA Today - "More Cities Ban Digital Billboards"
OAAA - "Engineer: Digital Billboards not Linked to Accidents"

Brand Positioning with Pop

2010-08-27T08:16:00.003-05:00

A clearly defined and articulated brand position is a must, no way around it! Most industries are characterized by intense competition, maturing markets, and cautious consumers. Given these challenges, it is imperative to develop an identity that conveys a brand’s distinctive point of difference. Successful positioning can drive growth and build brand momentum; failure to send a consistent positioning message can make a brand stagnant and negatively impact brand image.

A great example of a brand that has used positioning to grow its business in a weak economy is Popeye’s, the quick service chicken restaurant. Popeye’s has outperformed the chicken QSR category overall for nine consecutive quarters. One of the keys to Popeye’s success has been a positioning strategy that connects the brand with its Louisiana roots. The culinary heritage of Louisiana is a meaningful connection for a restaurant brand, and Popeye’s menu and advertising campaigns have delivered consistently on the Louisiana theme. In contrast, category king KFC moved into grilled chicken and is unclear about what its point of difference is. Now, Popeye’s is going after KFC by touting its chicken beat KFC in taste tests.

Popeye’s has “outmarketed” KFC on multiple fronts. Its advertising is more likable, its social media efforts are more effective, and front line customer service is more consistent. All of these marketing tactics tie in with brand positioning. It is unrealistic for consumers to remember everything about your brand, but what is the one thing you want them to associate with you? For Popeye’s, that one thing is “Louisiana” and the positive food associations that go along with the state. When a position is real and relevant, as is the case for Popeye’s, brand positioning can be a powerful marketing asset.

Advertising Age - "Power of Louisiana, Social Media Help Popeye's Stand Out in Chicken Fight"

A Customer Engagement Fantasy

2010-08-24T08:17:00.003-05:00

Fantasy football has moved past being a football geek’s passion. Estimates of the number of fantasy football players run as high as 15 million. The interest in fantasy football is not lost on marketers looking to link their brands with fantasy games. A simple but unimaginative way to market through fantasy football is sponsoring a game by buying ad space on a game provider’s website. The exposure received on popular game portals at Yahoo and ESPN can be beneficial to a brand, but what if fantasy football players think about your product while they play? Better yet, what if they use your product while they play? Moving from exposure to engagement is desirable, but it is often a matter of easier said than done.

An example of how one brand is seeking to leverage fantasy football as a marketing platform is Papa John’s Pizza. The pizza restaurant is now the “Official Pizza Sponsor of the NFL.” Buying sponsorship rights is the starting point for engaging fans; it gives sponsors the privilege to develop marketing programs that can be used to access the sport property’s audience. Papa John’s plans to reach passionate fantasy football players through at least two tactics. First, a beginning of season promotion invites consumers to register for a fantasy football draft party that includes Papa John’s food delivered by former NFL star and current ESPN analyst Cris Carter. Second, Papa John’s will run a contest in which fantasy football league commissioners will register their leagues to be judged on criteria still to be determined, with the winner receiving a trip to the real 2011 NFL Draft.

Marketing opportunities can be relatively easy to spot in a sense; after all, it is not a stretch to see the connection between eating pizza and watching football. The challenge is developing creative tactics that allows a brand to take advantage of the connection. In this case, if Papa John’s only bought advertising on a fantasy football game site it would be missing an opportunity to make more meaningful connections with fantasy football players.

The planned promotions that Papa John’s will use to target fantasy football players may not be lead to the outcomes envisioned. Communication of the promotions will be key to their success. Papa John’s is moving in the right direction by trying to tap into the interests of fantasy football players. And, the choice of Facebook as the platform for promoting the promotions is ideal because fantasy sports are a form of social networking themselves, so why not use a social network to connect with the target audience?

Should Customer Acquisition be Painful?

2010-08-20T14:50:00.002-05:00

Retailers and service providers use coupons to attract new customers to their businesses. The all important trial that an incentive like a coupon can provide is crucial for creating relationships. A new genre of couponing that has emerged is known as “social couponing,” driven by social media’s capability to spread information quickly from person to person. The leader in social couponing today is Groupon, the Chicago-based company that has become a $350 million dollar company in annual revenue in less than two years. The basic premise of Groupon is that a retailer or service provider offers a coupon at a deep discount (e.g., $10 worth of food at a restaurant for $5) as a carrot to create traffic. Groupon’s cut is up to 50% of the coupon sales. Most Groupon offers are local in scope, but it executed its first nationwide offer this week for Gap.

Deep discounting like that required by Groupon can succeed in adding new customers and revenues. My family found a great restaurant in Nashville, The Local Taco, which we would have never visited had it not been for a Groupon offer. We have been back once at regular price since using our Groupon, and we will go back again in the future. But, for all of the stories like mine, there are many other stories of failure to establish customer connection that will bring them back for future visits without the deep discount.

Businesses considering a Groupon program should be prepared to hold their noses while giving away about 75% in the transaction. Groupon may bring customers in to visit, but the experience they have once they arrive and marketers’ efforts to engage them (e.g., encourage sign up to receive emails to continue the relationship) will ultimately determine if the short term pain actually leads to long term gain.

Redefining Customer Delight

2010-08-17T09:08:00.005-05:00

The concept of delighting customers has many advocates among marketing experts. Going above and beyond what customers expect is viewed as a way to make customers happy and build loyalty. After all, who would not occasionally want a free product upgrade? Free shipping? A refund when a unsatisfactory experience is delivered? Delighting customers seems like a breath of fresh air and a basis for differentiating a brand.

Customer delight comes at a cost to the firm (see free product upgrades, free shipping, and refunds). The question that must be asked rather than assuming an answer is do efforts to delight customers lead to greater brand loyalty? The answer is “maybe,” but there may be an easier, more cost effective way to develop loyalty. According to findings from research by the Executive Board, the emphasis on delivering a “wow” customer service experience may miss the mark in building long-term relationships.

An immediate reaction to this assertion is “how can this be?” We have been led to believe that giving customers the unexpected is good; our challenge is to figure out how to move customers from satisfaction to delight. The shift called for in the Executive Board report is that the focus of customer service should be how to reduce the effort required by customers to solve the problem they have. If you desired to quench thirst with a glass of water and were given a gallon of water instead, you would no longer be thirsty but you received something that will not deliver utility.

The Executive Board has developed the Customer Effort Score (CES) to measure customer service performance. It consists of a single question; “How much effort did you personally have to put forth to handle your request?” It is scored on a five-point scale with anchors of “very low effort” and “very high effort.” The CES was a better predictor of customer satisfaction and even the highly touted Net Promoter Score. In short, it appears that the easier marketers make it for customers to do business with them, the more loyalty customers will show.

This research was conducted in the context of call centers and self-service contact channels on websites. Does delight via reducing effort apply in all situations? Or, is there still room for creating customer delight by going the extra mile? According to the Executive Board’s research, going the extra mile will only make you tired! The thought of simplifying interactions with companies with which we do business does conjure images of delight.

Harvard Business Review - "Stop Trying to Delight Your Customers"

Free Wi-Fi (and Brand Relevance) at Starbucks

2010-08-13T09:40:00.003-05:00

Starbucks made news earlier this summer when it began offering free Wi-Fi access to customers. At first glance this decision would seem to create an unintended outcome of some customers hanging out for extended periods of time, preventing turnover in seats that could actually result in potential customers walking away. But, further examination of Starbucks’ plans show this move goes beyond giving away Wi-Fi access to lure customers into its stores.

A new offering to be launched this fall, the Starbucks Digital Network (SDN), will feature premium content aggregated for Starbucks’ customers that can be accessed for free. Paid versions of sites like The Wall Street Journal and The New York Times are two SDN partners. Among other content providers are Apple and magazine publisher Rodale. Content will be organized into five channels: News, Entertainment, Wellness, Business & Careers, and My Neighborhood. Starbucks and the content providers will look to create up-selling opportunities on SDN that will be a revenue sharing venture between Starbucks and its partners.

The brand that set new standards for creating a great customer experience continues to innovate. Starbucks will always have as its main focus delivering great coffee, but it is not the coffee alone that brings customers to Starbucks. Drinking coffee while relaxing, working, or surfing the Internet is an escape for many people. Enhancing time spent at Starbucks by building a custom network of information valued by customers can lead to greater brand loyalty to Starbucks… and its content partners. This loyalty translates into more visits to Starbucks. Ideally, customers will purchase more items and do it more frequently, to the point that Starbucks is not a choice (“Should I go to Starbucks, Dunkin Donuts, or McDonald’s?”) but part of customers’ lifestyles.

Weaving brands into customers’ lives in this way is a powerful strategy for building customer loyalty. To reach this destination, a price for loyalty must be paid. It is not bought with frequent promotions or low prices, but with relevance to the consumer.

Yahoo News - "How Starbucks Plans to Capitalize on Free Wi-Fi"

New Competitor? Chill Out

2010-08-10T09:22:00.002-05:00

Competition can be the proverbial thorn in the side. After all, they stand between you and customers. Being concerned about competitors is an appropriate managerial stance, and so is being appreciative of your competitors. Yes, appreciate them because they can make you and your business better. An example of a company that gets it is Jamba Juice, the better-for-you beverage maker of smoothies with more than 700 locations across the U.S. Jamba Juice made headlines recently when it launched a new product, a Cheeseburger Chill. Well, it sort of launched a cheeseburger smoothie. A YouTube video was a tongue-in-cheek nod to McDonald’s expansion into the smoothie category. Jamba Juice’s point is that it is not capable of doing burgers… so should one expect McDonald’s to extend from burgers to smoothies with a good product?

Jamba Juice has every right to be concerned about McDonald’s foray into smoothies. It has a massive distribution network in place, and McDonald’s has experience moving onto new turf from its launch of premium coffee. Instead, Jamba Juice executives view this new competitor as a spark for interest in the smoothie category. McDonald’s’ promotion of smoothies could result in more consumers considering the product category as a beverage option. And, if Jamba Juice can capitalize on that interest by appealing to consumers who would enjoy a premium product, then the outcome could be new customers and increased sales. That scenario is a far cry from the concern and even panic that can occur when a strong competitor emerges.

Competition can be a catalyst for innovation and spur product category growth. You still have to fight for your share of the pie, but there may be a larger pie to enjoy. Competitors can make your organization stronger; you have to determine how to benefit from their efforts and embrace their presence.

Why We Won’t Be Riding the Wave

2010-08-06T13:27:00.002-05:00

Google receives accolades regularly as one of the world’s most innovative companies. But even a strong brand and a knack for developing new services does not make a company immune from product failures. Google signaled defeat this week when it announced it would no longer develop Google Wave as a stand-alone application. The real-time communication and collaboration service had a loyal following, but one that was too small for Google to continue supporting it as part of its product portfolio.

As I learned of Google’s decision, my immediate reaction was “I’m not surprised.” I am leading students in a Product Management course through the book Made to Stick by Chip Heath and Dan Heath. This bestselling book examines why some ideas “stick” or are adopted and others are not. The difference is not necessarily in the quality of the idea, but it is in the messaging that communicates an idea to the audience for which it is intended.

Two of the six traits of a sticky idea are noticeably absent in Google Wave: simple and concrete. A simple idea is one that can be expressed succinctly yet contains a meaning that is consistent. I am unsure whether “real time collaboration” is a core message that got through to the masses. And, the invitation program used by Google to introduce the Wave may have appealed to some people, but it left the uninvited in the dark about the service. A concrete idea removes abstraction and presents it in an easy to understand format. Until reading Wave’s obituary yesterday in Fast Company, I was unable to tell anyone what it was because I did not know myself!

Wave is not the first failure Google has had, and it likely will not be the last. Sure, having a powerful brand gives a company a leg up when introducing new products. Consumers are more likely to acknowledge a new product’s existence and perhaps even consider trying it when it is the sibling of brands that they trust and know. That benefit was not enough in Google Wave’s case, nor was the innovative nature of the service.

The story of Google Wave should serve as a reminder that regardless of a brand’s strength and product uniqueness, if the benefit to consumers is not articulated in simple and concrete terms it is vulnerable. The question “what’s in it for me?” has to be answered clearly if consumers are expected to change their behavior and adopt a new product.

Bad News as a Catalyst for Change

2010-08-02T09:43:00.000-05:00

Bad news is usually not good for business. The saying "there's no such thing as bad publicity" may apply to entertainers and other personalities who benefit from keeping their names in front of the public... even if it is because of an arrest or embarrassing actions. But, most brands do not benefit from their names being associated with negative events or news.

A recent example of bad publicity that impacted an entire group of businesses was an ESPN "Outside the Lines" story about the food safety concerns at major league sports venues. The bottom line was that the vast majority of foodservice locations at sports venues have been cited for violations when inspected. After watching the story, one wonders if people singing "Take Me Out to the Ballgame" should omit any lines about buying peanuts, Cracker Jacks, or any other items from a stadium foodservice operator. When it comes to food, there is most certainly such a thing as bad publicity!

Is there marketing opportunity in bad news? Yes, and marketers must seize the chance to turn lemons into lemonade. The news does not have to be publicized as it was in the case of the sports foodservice industry to be actionable. Internal information that shows an increase in customer complaints, a rise in the number of lost customers, or lower profits are examples of events that could be a catalyst for change.

In the case of sports foodservice, the ESPN exposé should serve as a call for companies to review all aspects of their operations including hiring, training, food preparation processes, and the quality of products offered by their suppliers. Instead of a defensive, withdrawn response to questions about product safety like the responses given by foodservice companies Aramark and Centerplate in the "Outside the Lines" story, the more appropriate response is "what can we do to deliver a better experience to our customers?" Sports venues have expanded their foodservice options to more upscale (and higher profit margin) fare, but their efforts may be more fruitful with a focus on a quality, consistent, and healthy experience for their patrons.

When bad news visits, embrace it as an invitation for change. It will not leave until the conditions that brought into your life in the first place are addressed.

The Meaning of the Music Industry’s Sales Song

2010-07-26T11:25:00.002-05:00

Many young people become enamored with music during their teenage years. They listen to songs intently and seek to decipher meanings or messages they believe are contained in the lyrics. That description fits many of my friends and me in the early 1980s. We were eager to take away something substantive from the songs we heard. Sometimes we could, and sometimes, well it was harder!

Fast forward to 2010, the adolescent experience of learning from music can be extended to businesses learning from the music industry. A recent article appearing on FastCompany.com painted an interesting contrast about the state of music in the United States. On one hand, data shown in the article reflects a woeful state for music sales. Annual sales volume is less than half of dollar sales 10 years ago when adjusted for inflation. Such a dramatic slide in sales would usually trigger red flags that product interest is waning, but we know better. The article leads with a quote from Tom Silverman, a music industry executive, who says "More people are engaged with music than ever before." His view is based on the our options for consuming music today without paying for it (Pandora, iTunes, and Internet radio, to name a few legal options).

What was broken in the music industry for some time is not the consumer’s interest in music, but the long-time product kingpin: the album. Artists and music companies packaged a collection of songs in a single product, but in many cases music lovers may have had an interest in only one or two songs. Now, rather than paying $14.99 for a CD to get a few coveted songs, consumers can buy single tracks for $1.29 and get only the songs they want to pay for. So, instead of music sales being driven by what the labels want to sell (but consumers do not want to buy), the product that appeals to most buyers is the individual song.

As I read the article and thought about the transformation of product sales in the music industry, I could not help but wonder “are there other industries that suffer from an out-of-touch sales model”? Did a similar situation lead to a decline in the American automobile industry? Are lack of offering new approaches to products and distribution responsible for stagnation in the soft drink industry? It seems that opportunities exist for businesses that are willing to depart from the status quo if selling products differently will positively influence consumer acceptance. It requires listening to the music (as performed by customers) to interpret the meaning.

Let Customers Know You Care by Letting Them Know You Hear

2010-07-20T10:47:00.001-05:00

Social media has opened new communication channels between marketers and customers. Unfortunately, too many times the traditional media mindset of “talk, talk, talk” is being applied to social media, which negates the power of social media tools to engage consumers in conversation. Mastering social media resembles the challenges marketers faced a decade ago building websites that delivered value to their target markets.

A big problem, according to eMarketer founder Geoff Ramsey, is that most marketers are uncertain how to integrate social media into their existing digital media mix of display and search advertising. In Ramsey’s view, the value of social media resides in the ability to listen to what customers and others are saying about your brand. So, a different approach to social media should be taken than the messaging used in digital advertising that is geared toward persuasion and action.

A great example of a listening opportunity using social media that has been missed (at least so far) is on the Facebook page of Baja Fresh, a quick service restaurant chain. A post by the company yesterday (July 19) is a teaser for a new Facebook coupon for Baja Fresh fans. As of this morning, 20 comments were made about the post, many of which express frustrations with Baja Fresh locations in their local area not accepting the coupons. The silence from Baja Fresh is rather noticeable; no one from the company has responded to the concerns about not being able to use coupons.

The ability to listen to customers’ praises, questions, complaints, and ideas (and respond to them) makes social media a powerful communication medium. Giving customers a voice is great, but are you prepared, as Jim Collins says, to “confront the brutal facts?” Creating social media content without evidence of listening is a return to one-way communication. I am unsure what is worse: A company’s Facebook page that is updated with new content once every few weeks, or a rather active presence with little emphasis on listening and responding to customers. The decision to use social media implies you want to hear from people who care about your brand. Let them be heard… and let them know that you hear them!

Understanding the New Consumer

2010-07-14T12:25:00.003-05:00

The recession has had a profound impact on consumer behavior. Many studies conducted in recent months have found consumers have become more frugal, price conscious, and less brand loyal. These shifts spell trouble for marketers that are accustomed to buyer behavior following the peaks and valleys of the economy. This recession may be different; it appears that many consumers have decided to change their spending ways.

The most recent study on this issue from Deloitte titled “The New American Pantry” suggests that many consumers enjoy the challenge of saving money by using coupons, shopping for bargains, and participating in retailers’ loyalty programs. In fact, 81% of the respondents said these shopping techniques were fun! Consumers feel that they are more savvy as a result of the modified buying behavior induced by the recession, with 79% of respondents indicating they feel smarter about the way they shop.

Perhaps the most sobering finding arising from this study for brand marketers is that many consumers have regrets about their old shopping habits. The Deloitte report describes consumers’ sentiments about their pre-recession spending using words such as “remorse,” “embarrassment,” and “wasteful.” These feelings should serve as a call to brand marketers for a renewed focus on how they add value for consumers. It may not be enough to be a prestigious brand, and the perceived quality advantage national brands have enjoyed over private labels has been erased to an extent. Experience and relationship may overshadow awareness and image as marketing priorities. The key for brand marketers is to remain competitive in an environment in which brand relevance will matter more than brand image.

Marketing Daily - "Deloitte Study: Consumers Love Spending Less"

To Xfinity and Beyond: Comcast's Branding Mistake

2010-07-07T17:22:00.003-05:00

Brands are among the most important assets a business owns. They project an identity; they communicate meaning; they serve as the connection point in the relationship between buyers and sellers. Thus, brand name strategy is more than an important marketing decision; it has repercussions throughout a company and into the marketplace. Why do I begin with a reminder about the importance of brand names? I am at a loss to understand the rationale behind Comcast’s decision to re-brand its communication and entertainment services Xfinity.

Author and marketing consultant Al Ries recently wrote a column in which he questions the wisdom of Comcast’s strategy. I do not always agree with Ries because his views often seem too simplistic and based on not much more than a “that won’t work” justification. In this case, I could not agree more with Ries’ assessment that Comcast not only adopted a bad brand name, it is following an unnecessary path. The main flaw in Comcast’s strategy is that it is marketing a brand, not a category. In Ries’ view, a firm’s priority should be to market with an objective of product category dominance. Ries uses McDonald’s, Chick-fil-A, and DirectTV as examples of brands that have honed their message so that they are known for a specific product category. The Xfinity brand offers little in the way of communicating such category strength.

Critics of Al Ries criticize him for being anti-line extension, and he has certainly opined against brand extensions over the years. However, in this case, Ries has correctly called out Comcast for a branding decision that does not seem to have legs underneath it. It will be an expensive process to re-brand, and Comcast is putting a great deal of faith in consumers that they will recognize, understand, and care about the Xfinity brand.

Ad Age - "Comcast Needs a New Strategy, Not a New Brand"

Online Coupons Can Reward Sellers, Too

2010-06-30T07:01:00.001-05:00

Consumers have increased their use of coupons as a way to stretch buying power. The use of coupons has been aided in part by the ease of distributing coupon offers through digital channels. Yes, coupons benefit buyers by enabling them to save money, but payoffs from coupons extend to the sellers that offer them according to the Online Shopper Intelligence study. Findings from the recent study revealed that 57% of online shoppers that made a purchase online would not have made the purchase had they not had a coupon they received online.

It is not surprising that coupons might influence consumers’ decision to buy. A rather unexpected outcome from online coupons is that consumers apparently are willing to spend more money when they use a coupon. In the same study, the average amount spent by consumers with a coupon was $216 compared to $122 for shoppers that did not have a coupon. The upside of the expense a marketer incurs to offer an incentive to buyers may be rewards that come in the form of a higher dollar transaction.

The potential payoffs of online coupons suggest three situations to leverage through digital coupon distribution:

1. Attract new customers – Buyers conducting searches using general product category keywords may be unaware of individual brands. Reaching first-time buyers with online offers is a way to introduce them to your brand with reduced risk to them.

2. Gain competitive advantage – Placing coupons online is a wise strategy given their importance to many buyers. Make access to coupons easier for buyers and more rewarding for you by PPC and SEO strategies that bring attention to online coupon offers. Connecting couponing with search marketing strategies is a way to set a brand apart from competitors that have a less integrated approach to their digital marketing campaigns.

3. Influence product sales – Whether the aim is to introduce new products, sell complementary products, or achieve a higher average transaction, results from the recent Online Shopper Intelligence study suggest coupons empower consumers to spend. A strategic approach to couponing should be adopted. Rather than simply giving consumers a price break in the hopes they will buy, structure coupon offers to achieve broader marketing objectives. Some examples: a) offering a discount for buying multiple items can influence unit sales, b) offering a discount on an item when a complementary item is bought at regular price stimulates sales of both items, and c) mining your customer database to appeal to customers who have not bought in a specified time period can be done efficiently in an attempt to bring them back into the fold.

Adoption of online coupons has a long way to go to match the impact of coupons delivered through traditional media. But, many online shoppers seek coupons when making purchases; why not meet their need and possibly be rewarded by higher spending and brand loyalty?

Compete.com - "Coupons Are Good for the Bottom Line"

Borrowing Brain Power for Innovation

2010-06-23T07:02:00.002-05:00

It has been said that innovation is the lifeblood of a business. A company can leverage new products, services, or ideas in order to reach new customers, increase market reach, and grow profits. Appreciating the impact innovation can have on an organization is easy; establishing a culture that values and encourages innovation is often the challenge. Even significant investments in R&D and market research cannot guarantee that innovations will succeed… or if they will even come to fruition. Given the formidable obstacles to innovation, businesses are increasingly willing to use non-traditional methods to develop new ideas.

One approach to innovation that has gained notoriety is crowdsourcing, enlisting a community of customers or other interested persons to hatch ideas that could result in new products. Crowdsourcing has even been used to develop advertising campaigns such as the Doritos commercials that appeared during this year’s Super Bowl. The use of crowdsourcing reminds me of a quote by Woodrow Wilson who said, “I not only use all the brains that I have, but all that I can borrow.” Why not tap into the insight, inspiration, and expertise of other people to develop new ideas?

A recent crowdsourcing project intended to identify innovation opportunities was conducted by Starbucks. Its Betacup Challenge sought ideas to reduce the environmental impact of Starbucks’ iconic to-go cups. Entries vied for a piece of the $20,000 prize money Starbucks offered. The result was 430 ideas submitted online that generated more than 5,000 ratings and 13,000 comments from website visitors. While many ideas dealt with design changes for disposable cups, the grand prize winner had an idea that did not involve disposable cups at all. The winning idea focused on a rewards-based program for customers with reusable cups.

Crowdsourcing product innovation may not be a replacement for product managers, R&D departments, and market research, but it certainly brings a fresh perspective to the ideation process. Growth in any organization can be stymied by myopic thinking that comes from personnel being too close to issues and too familiar with “what can’t be done.” Starbucks did the right thing by pitching this innovation question to a broad community. Will the ideas generated in the Betacup Challenge ever be implemented? That answer is yet to be determined. More importantly, the quantity (and probably quality) of ideas from which Starbucks can pursue innovations are greater because it acknowledged it does not have all of the answers when it comes to reducing the company’s environmental impact.

Fast Company - "Winner of Starbucks' Coffee Cup Challenge Isn't a Coffee Cup"

Use Celebrity Endorsers to Engage, not Impress

2010-06-16T08:57:00.005-05:00

Celebrity endorsers have been used for decades by advertisers seeking to benefit from the familiarity and likeability of athletes, entertainers, or other famous people. Often, marketers do not fully leverage their association with celebrities. For example, ads in which the endorser is merely pictured or otherwise does not engage the audience with the story behind his or her association with the brand misses an opportunity to connect with the audience. A memorable example I once saw was an ad in a marketing trade magazine several years for a mailing list service that featured NFL Hall of Famer Joe Montana. His picture was in the ad, and while he flashed a nice smile it never was clear what his connection was to the product. I never knew Joe Montana was a mailing list expert (but he is a marketing expert if he could get a company to pay him to endorse the product!).

In contrast, I like the approach used by Unilever to integrate celebrity endorsers into its campaign for Dove Men+Care skin care line. The company has enlisted Major League Baseball personalities such as St. Louis Cardinals slugger Albert Pujols, New York Yankees pitcher Andy Pettitte, and Yankees manager Joe Girardi in a video series. The “Journey to Comfort” campaign will feature 90-second videos as well as longer clips featuring the baseball stars (see a Pujols video here). A sweepstakes is part of the campaign, too, with the grand prize being a meeting with Pujols and watching him take batting practice.

Dove’s “Journey to Comfort” campaign is not guaranteed to move the sales needle, but then again no campaign has that capability. What the campaign does guarantee is a glimpse into the lives of three baseball heroes. The endorsers share personal experiences and stories in the videos that will allow fans to see a different side than the baseball accomplishments for which Pujols, Pettitte, and Girardi are known. A video campaign like the one Dove is conducting has the potential to effectively target men through their interest in baseball, getting their attention with the access to three well-known MLB personalities. The campaign sells Dove Men+Care in a subtle manner, connecting the brand to the lives of men via the MLB endorsers. And, it is a stronger customer relationship to the brand that will ultimately positively impact sales.

Marketing Daily - "Dove Links with MLB Figures for Videos, Sweeps"

Don’t Be Afraid to Go Downscale

2010-06-11T08:37:00.002-05:00

One of the most significant effects of the recession has been consumers scaling back purchases in many ways, including trading down to purchase lower priced brands. It is an alternative to eliminating purchase of a certain product altogether. Serving customers in downscale segments has always been a delicate situation for marketers. On one hand, the potential to generate revenue from customers that may not be able to afford a company’s core brands can be reached through value priced offerings. On the other hand, a foray into value segments could have a negative impact on image perceptions of the core brand. A common strategy for managing this dilemma is to create a separate brand identity to distance the lower priced brand from the core brand. But, this approach diminishes the ability to leverage the strength of the core brand.

Coach is a brand that has enjoyed a brand positioning as a luxury lifestyle brand, the very type of brand that was vulnerable to consumers forgoing it for a lower priced alternative. What made Coach particularly vulnerable was that its core product, handbags, is more of a discretionary purchase, meaning that consumers might postpone buying a Coach handbag or trade down to another brand. Its response to the recession: tackle the shift in consumer behavior head-on with a line of lower priced handbags. Coach’s Poppy Collection carries an average price of about $200 compared to more upscale products priced at $400 and higher.

Is there a risk to a brand like Coach to entering lower priced markets? Yes, although some people would argue that a $200 handbag is not exactly a value priced offering! A branding strategy that isolates lower priced products to a certain line or group like the Poppy Collection is a way to protect core brand associations while enjoying the benefits of tapping into Coach’s brand equity. It is a matter of practicality versus pride; strong sentiment to “protect” a brand may steer strategy away from entering lower priced markets, but practicality recognizes that consumer behavior has undergone a distinct change. Product development should be guided by meeting customers’ needs, and at a time when the psyche of the consumer is still fragile that means exploring options in downscale markets that meet consumers where they are.

Marketing Daily - "Coach Makes Big Gains on Small Prices"

Usage Rate Pricing: An Acceptable Strategy Unless You Are AT&T?

2010-06-07T16:30:00.002-05:00

AT&T created a stir among its wireless customers and technology bloggers last week when it announced a two-tier pricing system for its data plans. One plan provides 200 megabytes for $15 a month, while the other plan provides 2 gigabytes of data use for $25 a month. The move to end unlimited data consumption appears to be aimed at easing congestion on ATT’s network. The idea of charging more for a service the more it is used is very reasonable, but if the aim of the new pricing system is to deter heavy data usage it would seem to run counter to what a business wants customers to do: consume.

Usage rate pricing is an effective segmentation strategy. Not all wireless customers have the same needs in terms of phone minutes or data download consumption. However, AT&T seems to be walking a fine line that makes its new pricing system punitive for its heaviest users. Rather than trying to discourage their use of the network, AT&T should engage these customers to determine how it can serve them more effectively. At the same time, it should determine the financial value of these customers to the company and possibly seek other ways to generate revenue from these customers that do not discourage their use of AT&T’s services.

One reaction to the new pricing system has been proclamations by some AT&T customers that they will exit their relationship with the brand as soon as their contracts expire, if not sooner. In AT&T’s judgment, the possibility of this outcome is a risk it is willing to accept. But, is customer alienation and creating negative associations about the brand worth the risk? That is the situation AT&T faces as it waits to see if any of its competitors follow suit with similar pricing strategies.

Bloomberg - "AT&T Sparks User Backlash with End to Unlimited Plans"

A Marketing Lesson from Roy Halladay's Perfect Game

2010-06-04T09:21:00.002-05:00

Today’s teachable moment in marketing comes from the Major League Baseball. Specifically, the lesson can be found in ticket sales. The Florida Marlins, whose average attendance ranks 28th out of 30 MLB teams this season, made news when it sold more than 3,000 tickets in a few hours earlier this week for a game against the Philadelphia Phillies. Why is this accomplishment noteworthy? The game was played last week, the Saturday before the tickets were sold on Tuesday. The Phillies beat the Marlins 1-0 that day, and Phillies pitcher Roy Halladay became the 20th pitcher in MLB history to throw a perfect game. The Marlins offered unsold tickets at face value and will continue sales until the end of the season. Ticket prices range from $12-$300, with most tickets selling for less than $25, according to an Associated Press story.

Some people have questioned the ethics of profiting from an opposing team’s accomplishments and that this move does nothing to help the Marlins’ image in south Florida. I will leave that for others to decide. What I find interesting in this story is that it reminds us that consumers’ value judgments may not always seem rational. After all, would we pay for a haircut we never got or for legal consultation but never visited a lawyer? The difference in the case of the perfect game baseball tickets is that there is a great deal of emotion and passion connected with consuming sports. The tickets were bought not for any functional value- there is none because the game has been played already. It is the intangible value of holding a ticket for an event that has occurred only 20 times in more than 100 years of professional baseball. It is a piece of history that one can hold onto and say “I remember this happening” (they can’t honestly say “I was there,” now can they?).

The takeaway from the Florida Marlins post-game marketing of Roy Halladay’s perfect game is this: you must understand what customers value from their relationship with your brand. For them, what they receive from you is not a product or service- it is what your product or service does to make them feel better about themselves or improve their quality of life in some way. It is an often-stated slogan: People buy benefits, not products. True, but extend the means-end chain further to ask “what is the significance of the benefits to our customers’ lives?” Exploring that question can have an impact on what you sell, how you position it, and who you target.

How Do You Inspire Customers? Let Us Count the Ways

2010-06-01T07:14:00.000-05:00

Inspired customers- it almost sounds too good to be true. When this status is achieved with customers, they not only buy your products, but they will tell anyone who is willing to listen about their experiences with your brand. And, they often are willing to pay higher prices for your brand because they are sold on the value delivered. How can we possibly determine how an inspiring company looks, and exactly which companies do consumers feel are inspiring to them?

One way to answer these questions is to look to Inspiration Blvd, a brand consultancy that conducted a survey of more than 1,200 adults to find America’s most inspiring companies. The survey touched on key indicators such as product innovation, growth, reliability, and charitable efforts. Below are the 10 most inspiring companies and a brief description of why they scored high.

1. Microsoft – Maybe a surprise at #1; received high marks for its charity work through the Bill and Melinda Gates Foundation

2. Google – Treats employees well; perceived as innovative as well as a purveyor of free information

3. Apple – An innovative company with a knack for rolling out successful new products

4. Ford – An inspiration for what it did not do… accept a government bailout

5. Walmart – Helps consumers by selling products at low prices; viewed as an important employer in many communities

6. McDonald’s – Charitable efforts of Ronald McDonald House cited; another company that has delivered value through low prices during the recession

7. General Electric – Receives high marks for innovation; perceived to have high level of concern for environment and health issues

8. Johnson & Johnson – Although a big company, it is perceived as caring about health and well-being of people all over the world

9. Chick-Fil-A – Practices that include closing stores on Sundays and giving back to local communities are admired

10. Target – Well known for giving 5% of pre-tax profits to local charities and causes

What does this top 10 list tell us about being an inspiring company? First, a company in virtually an industry or category can be viewed as inspiring by customers. Second, there is no single formula or recipe for being inspiring. The companies in this list were admired for different reasons, even if certain themes did emerge such as charity support and innovation. How a company can develop a reputation of being inspiring will depend on the resources it has available to commit and the point of difference it wishes to create.

Competitive activity does not matter much when it comes to the relationship between consumer and brand. A review of the top 10 list finds at least three sets of head-to-head competitors (Microsoft-Apple, Walmart-Target, and McDonald’s-Chick-Fil-A). This evidence suggests that being perceived as an inspiring company is not like a brand positioning strategy that we assume cannot be mimicked by competitors. Inspiration is in the eye of the beholder; it is up to a business to follow through on its mission so convincingly that customers feel inspired by their performance. Go forth and inspire!

Consumer Response to Celebrity Endorser Scandals: Yawn

2010-05-28T13:42:00.001-05:00

Celebrity endorsers can be an effective promotion strategy to gain awareness and shape image. Pairing a brand with a well known or likable celebrity can elevate a brand, but what happens if the endorser runs into personal troubles (did anyone say Tiger Woods)? Marketers fear that the positive effects an endorser provides can be negated and harm done to the brand if the endorser receives publicity for problems or scandal. As a result, a standard part of endorser marketing agreements is some type of morals clause, which gives the company that hired the endorser an exit from the relationship. This response was seen in the Tiger Woods case as partners like Accenture and Gatorade made moves to distance themselves from Tiger.

Is it possible that marketers overreact when quickly disassociating themselves with a troubled endorser? The answer may be “yes” according to a study by Harris Interactive (for more info click here). A survey of more than 2,000 adults found that 74% felt no differently about a brand that employed a celebrity enmeshed in scandal. Approximately 22% said they feel worse about brands associated with a celebrity involved in scandal, and 5% said they actually feel better about brands that had endorsers associated with scandal. Persons aged 45-54 were more likely to feel negatively toward brands (28% of that group shared that sentiment), and 18-34 year-olds were more likely to feel better about brands (11%).

Do these results mean that marketers should simply let their endorsers “live and let live?” Not necessarily; a partnership with a celebrity endorser is usually an expensive one. A celebrity’s problems have the potential to create negative brand associations, and that is a risk many marketers simply are not willing (and should not) take. The surprisingly large percentage of people who are indifferent toward celebrity scandal suggests a couple of themes, though. One, we love our heroes, whether they be movie stars, athletes, musicians, or from some other source of fame. Americans are able to forgive and forget relatively fast when it comes to the transgressions of their heroes. Two, I wonder if we have become desensitized to events such as celebrities getting in trouble for drug use, infidelity, or some other form of unacceptable or illegal behavior. If we rationalize the behavior as just being part of the world we live in today, coupled with affinity for our heroes, we may be inclined to shrug our shoulders and move on.

Reclaiming Customer Loyalty

2010-05-24T08:28:00.002-05:00

One of the most significant effects of the recession (which may be over according to economists but many households are not convinced) has been consumers’ propensity to trade down to lower priced brands. In good economic times, many marketers strived to deliver value through enhanced product features or symbolic benefits of their brands. The strategy was to deliver value that customers would be willing to pay price premiums to attain. When the economy worsened, consumers tended to become more conservative in their buying behavior, cutting back where they could and buying lower priced alternatives to meet their needs.

The behaviors described above are more than gut feelings about what consumers have been doing. A recent study by comScore found that consumers indeed traded down to lower priced brands during the recession. The study tracked consumer behavior in terms of buying the brand they wanted most for a variety of consumer packaged goods categories and housewares. All categories saw a decline in the percentage of consumers who had bought the brands they wanted most. For lower priced products that may have few perceived differences between brands, the effects of the recession on trading down were not as great. For example, 36% of consumers reported they bought the brand of paper towels they wanted most in 2010, only 1 point lower than 2008. But, for other products that have greater perceived differences between alternatives, more consumers decided to forgo the brand they wanted most for lower priced brands. For toothpaste, purchase of preferred brand dropped 10 points from 2008-2010 (67% to 57%), shampoo dropped 13 points (65% to 52%), and jeans dropped 15 points (54% to 39%). More information on the comScore study can be obtained by clicking here.

A great deal of uncertainty exists about whether the shift in consumer behavior during the recession is temporary or reflects a permanent shift toward value being defined more by low price than product benefits. Many experts believe the trading down behavior may be a realignment of consumers’ priorities. If that is the case, marketers must redefine their unique selling proposition. Is price the only point of difference that will matter to consumers? Probably not, but what brand traits will attract customers and more importantly, drive brand loyalty?

A return to branding basics seems to be in order. Trust is the foundation of relationships between buyers and sellers; it is no different than a personal relationship. Conducting business in a way that shows concern for customers, care for the community, and commitment to the well being of stakeholder groups are ways to develop and solidify trust. For example, social responsibility appears to be more than a fad; it is a shift in mindset among many people that businesses should be good stewards of the resources it uses and encourage consumers to do the same. Going forward, brand loyalty is more likely to be secured by demonstrating genuine concern for customers than dazzling them with product features or an aspirational image.

Chick-fil-A Creating Buzz, not Pandemonium with Product Launch

2010-05-21T09:18:00.001-05:00

A disclaimer about the following piece on Chick-fil-A: I am biased because I admire the company and its values, I am a fan of its marketing, and I love Chick-fil-A sandwiches! My affinity for Chick-fil-A hopefully has not influenced the following opinion, but in the spirit of full disclosure I share where I stand with the company.

New product development is a key growth strategy for a business. Expanding offerings that reach new customers or appeal to unmet needs can lead to revenue and profit growth. Surprisingly, Atlanta-based Chick-fil-A has experienced tremendous success and growth with a menu that changes very infrequently compared to other quick service restaurants. One of the most noteworthy new product launches in the company’s history is about to occur as Chick-fil-A is adding a spicy chicken sandwich to the menu on June 7. In some ways, the spicy chicken sandwich is like a lot of new products that hit the market; they are slight variations of a core product rather than radical innovations. What is different in this case is the approach used to create buzz about the product launch.

Chick-fil-A is using a “reservation” system in which consumers can go to www.getspicychicken.com between May 21 and June 5, select a Chick-fil-A location, and request a coupon for a free spicy chicken sandwich. Where do reservations come into play? A limited quantity of coupons (approximately 100) will be distributed per location each day during the promotion. Apparently, marketing managers at Chick-fil-A watched and learned from KFC’s grilled chicken giveaway debacle last spring. Too many coupons were distributed, and customers swamped restaurants but in many cases were unable to redeem their coupons as many locations were unprepared for the response the promotion generated. Chick-fil-A is managing time and place interactions with customers.

The reservations approach to launching a new product would not work for all brands, but it is a good fit for Chick-fil-A. The reservations system fits Chick-fil-A’s brand personality trait of being slightly quirky. Many consumers, like me, will likely appreciate the more orderly approach being used to offering free product in its stores than what KFC did last year (I’ll have to remind myself of this if I am shut out of getting a coupon). And, using a promotion that relies heavily on word-of-mouth via social media and online marketing enlists Chick-fil-A’s loyal customers to help spread the word about the spicy chicken sandwich.

Good luck securing a coupon for a free spicy chicken sandwich… save a coupon for me!

Marketing is Everyone's Job

2010-05-18T09:02:00.002-05:00

The idea that everyone in a business is a marketer, regardless of whether it is in a job title or description, is hardly new. But, I believe it is a mindset that we should remind ourselves to have and look for ways to go from lip service to practice. I was reminded of this adage when I heard a story on NPR about Texas Health Harris Methodist Hospital Hurst-Euless-Bedford holding a “speed dating” event. The purpose was to allow people searching for a physician to meet informally with a prospective health care provider. This type of event puts doctors in the position of selling themselves. Correction, they are always in a position of selling themselves. Any service provider is engaged in marketing when they come in contact with customers. The difference with the speed dating event is that physicians are expected to sell themselves before having the opportunity to dispense their professional services with patients.

Another great feature of this event was its use of an innovative promotion channel to reach prospective customers. Hospitals and physicians benefit from branding and should have a strategy for marketing, but the approach often taken is using mass media advertising. This face-to-face event was promoted via Facebook, Twitter, and e-mail, and the total cost was about $600. The opportunity for customers and prospects to experience your brand face-to-face is one of the most powerful branding tools a business can use. Well done Texas Health… although your brand name is a mouthful!

Remember, marketing is everyone’s job. Are you doing your job today?

NPR - Hospital Attracts Patients with Doctor 'Speed Dating'