The Marketing Expert

Desperate Times Call For Desperate Marketing Measures

2010-10-27T10:57:00.000-07:00

I’ve been seeing two new email marketing trends. I’m not sure they are very effective. You decide.

The first is the fake apology email for a trivial event that never happened and an offer for restitution by way of a discount. Typically, it goes something like this:

Dear Thomas,

On behalf of the entire company, I would like to apologize profusely for any issues you may have encountered while browsing our site this past Thursday. I’m sure the experience was frustrating for you and I hope we haven’t let you down. Please rest assured that this occurrence isn’t typical of our company and we are working very hard to make sure it doesn’t happen again.

As a way of saying thank you for your patience, please accept this 33% discount on all purchases on our site for this week.

Sincerely,
Jack Smith
President and CEO

Seems nice enough. Except that I never visited the site in question.

Here’s one from a job board I’ve never used:

Dear Thomas,

You may have received an email from us recently with a link in it that was not working. We are very sorry for the inconvenience that it may have caused you. As a way to make up for your trouble we would like to offer you $200 off our resume writing service plus a bonus thank you note at no additional charge (a $50 value).

Sincerely,
Tom Jones
Senior Resume Consultant

There is some truth to the old marketing adage that “the better the reason, the better the response.” However, I’m not sure referencing events that never happened is effective marketing strategy. It is insulting the intelligence of a customer or prospect. I’m don't know about you, but it sure doesn’t work for me.

The second marketing trend (peeve) I’ve noticed recently has been aggressive survey reminders. There are a few reasons why companies do this. The first is that it costs virtually nothing to send another email… or a few more. The second is that the people who are responsible for conducting the survey feel it is important and that people who they send it to obviously share this feeling. Finally, inexperienced marketing people assume it is always a good policy to touch a customer or prospect. Obviously, none of this is good marketing strategy.

If I don’t take a survey, it’s because I don’t care enough about voicing my opinion on the product or service. Constant reminders to take the survey only result in annoying me and diluting whatever goodwill I had towards the brand.

I saw this in a Get to the Point email today:

When comedian Michael Ian Black ignored a guest satisfaction survey from his stay at a Doubletree hotel, he didn't expect a nagging reminder.

"We noticed that you did not have time to complete the survey," advised a second email on the topic. "We are concerned that you may not have responded because we have somehow failed to live up to your expectations."

An irked Black responded with an open letter to Rob Palleschi, Global Head of Doubletree, taking him to task for the passive-aggressive assumption that time limitations prevented him from completing the survey.

A clarification,"The reason I did not fill out the survey is not because I did not have the time, but because I did not want to. To put that into survey language, on a scale from 1-10, with one being the lowest and ten being the highest, the amount I wanted to fill out your survey was zero, which is a little bit below the lowest number I can choose."

Black goes on to explain that no one anticipates a thrilling experience at a mid-price hotel chain, and that his sole expectation was that he would be left alone. Accordingly, while he would have rated his experience as "very good" prior to the survey requests, he says he now "would downgrade my overall experience to just 'satisfactory' because I do not like receiving surveys about my experiences."

After his closing salutations, Black does, however, offer Palleschi a complimentary postscript: "Your cookies are good."

The Point: Ask, don't badger. Continuing to contact survey nonrespondents might actually lower their original opinion of you! Proceed with caution.

The 80/20 Rule: Using the Pareto Principle in Marketing

2010-08-20T13:04:00.000-07:00

Did you know that 20 percent of your marketing is responsible for 80 percent of returns… 20 percent of a project will take up 80 percent of the completion time… 80 percent of customer complaints are caused by 20 percent of employees…

In 1906, Vilfredo Pareto and Italian economist observed that 80 percent of the land in Italy was owned by 20 percent of the population. He later found that this particular ratio applied to other areas too. For example, he noticed 80 percent of the peas in his garden were produced by 20 percent of the peapods.

Since then this principle, called the Pareto Effect, has been used as a heuristic in all sorts of disciplines from operations management… to business… to marketing… and even to the natural world. Although it would be simplistic to say that everything would fit this hypothesis, this 80/20 rule is still useful for focusing at what is important.

Here are some ways the Pareto Principle can be used in marketing:

20 percent of your customers are responsible for 80 percent of your revenue. Define who these customers are and treat them well. You may want to give them some privilege or benefit that are not available to other customers. Segment this group as your target demographic and position your product or service to them.

80 percent of all defects are caused by 20 percent of operations. This means that be focusing on 20 percent of the operations we can get rid of 80 percent of the problems. It can be a substantial cost/advantage ratio and very useful for customer relationship management.

20 percent of your media mix will generate 80 percent of responses. Focus your efforts on where you are succeeding and pull back elsewhere.

80 percent of visitors will visit only 20 percent of your web site pages. Make sure that these pages are optimized to maximize conversions.

The Pareto Principle can be used as a constant reminder of where to divert attention and resources. It is a common sense tool that is effective and easy to understand.

Only 20 percent of people who started reading this post will finish it. If you’re one of them, thank you!

Content Marketing: Persuading by Informing

2010-08-13T11:14:00.000-07:00

Until the advent of the Internet and digital media, knowledge and information were closely guarded by the few who possessed it. Today, the opposite is true. Almost anyone can find out something about almost anything quite easily online. So how is this affecting marketing? It has made content marketing necessary.

Smart marketers are realizing that it is easier to persuade prospects to buy their products and services when they give them enough information to make rational choices. Content marketing is the creation and sharing of desirable information through various media for the purpose of engaging prospects and clients. Rather than have people scour the Internet and elsewhere (including misleading sources), companies have realized that it is in their best interests to simply give out the information and claim ownership of it.

Content marketing includes emails, message boards, blogs, social media, videos, white papers, reports, newsletters, etc. For it to have any impact, the content should be important and valuable.

For example, an insurance company may send an email to customers and prospects with on the implications the new health care regulations. Although it does not have any overt marketing message associated with it, the email creates credibility for the company on health insurance matters. This leads to positive brand perception and ultimately to sales and retention.

Or, a small auto repair shop can send a postcard to the residents of the town with safety tips for winter driving. Of course, it is implied this auto shop can do all the necessary repairs to make sure someone’s car safe for the winter.

The new marketing mantra is to “Tell not sell.” Buyers today tune out as soon as they feel they are being sold something. So it is important to make them feel that they are receiving information that is relevant and valuable. Once you have someone’s respect and trust, it s much easier to make a sale.

Content marketing is also used as a tool for the purpose of search engine optimization. Having more people link to your blog or site and creating a buzz for your product or service online, raises your search engine rankings.

Buyers today are immune to hard-sell advertising messages. Instead, they prefer to make up their own minds based on credible information. Marketers who provide them with that information will be the ones they turn to when they are ready to buy.

If you haven’t already, add content marketing to your marketing strategy. The benefits are too many to ignore.

Lay Off The Jargon!

2010-08-06T10:51:00.000-07:00

Guy Kawasaki links to a web page with a list of management buzz phrases and says (facetiously, I presume) that you should never hire anyone who uses all these terms. It generated a lot of angry responses from MBA types. Guy does have a point though — especially when it comes to marketing and dealing with clients.

A recent survey shows that most people do not like a lot of jargon or industry buzz words in their marketing material or sales presentations. Over 97% either did not understand what they meant or thought it detracted from the message.

So don’t be tempted to use those fancy terms you learned in business school or elsewhere when you speak to customers and prospects. You can either wind up speaking “above” their heads or be perceived as lacking in confidence and trying to appear overly bookish.

Here are some words you should never use in a casual conversation with anyone — especially a client: value-add, disambiguate, leverage, benchmark, Six Sigma, 3C’s, 4P’s, BCG Matrix, fiduciary, bandwidth, c-level, Kaizen Philosophy, buy-in, helicopter view, leapfrog, modularize, low-hanging fruit, cost-benefit ratio, mindshare, deliverables, monetize, paradigm shift, pushback, synergy, turnkey solution….

Of course, I being a bit tongue-in-cheek too… but I’m sure you get what I’m saying. Customers and prospects don’t really care about how much you know — only what you can offer them. Confusing them with jargon is not a good way showing what you can do.

Using jargon in your writing is even more disconcerting. However, if you like it, here’s a free Jargon Generator that you can use. Each time you click, it generates a new jargon sentence. Here’s one I generated: “Identification of business units synergistically with change management will increase the visibility of key business metrics.”

Have fun with it.

Marketing Regularly Is A Requirement... Not An Option!

2010-08-03T11:15:00.000-07:00

One of the big mistakes many small and mid-sized businesses make is NOT marketing adequately and often. The simple truth is that if you keep advertising you will see results.

The first thing to do is to set aside money for marketing. Calculating a marketing budget can be based on a few different methods (see my earlier post). What is important is to earmark enough money to meet all the required objectives.

The next step is to develop an integrated marketing communications strategy. Touch your prospects and customers through the various media they come in contact with — print, internet, billboards, theater slides, television, etc. You may be surprised to find out that a sensible media mix is not necessarily outrageously expensive.

One of the most important developments in media in the last decade has been the segmentation of markets. This is good news for advertisers. As more and more media focus on niche markets advertisers benefit because they can target only the segments they are interested in. And, since media rates are based on circulation, advertisers pay less for it.

Did you know that for about $450 per week you can get about seventy to eighty 30-second TV spots in your local market spread across all the cable channels at various time-slots. They’ll even produce it for you if you want. It’s the same with other media too. Find the various niche segments that will buy your product or service and find a way to reach them. If you are a small business entrepreneur, look for local media or regional advertising specials.

Direct marketing is another cost-effective way of reaching your market. Postcards and mailers can cost from 40 cents to a few dollars a piece. What’s comforting about it is that the response rates are quite predictable — from 2-4% depending on the product. Start with a test campaign and when you see the expected rates of response, you can safely send it to a larger similar group with predictable results.

There’s also a lot of marketing that can be done for free or very cheaply. Write a blog… get a Facebook and Twitter page… make an interesting video about your product or service and put it on YouTube. Keep in contact with your customers by email. Use Google Adwords or other pay-per-click advertising on the web.

So market regularly and market often in a variety of relevant media. You have to. Most products and services don’t usually sell themselves.

Your Marcom Budget: How Much To Spend On Advertising & Marketing?

2010-07-27T16:31:00.000-07:00

Now that scientists have answered the age-old question of which came first, the egg or the chicken, they can focus on another interesting conundrum, namely, how much should a company spend on its advertising and marketing.

Budgeting for marcom (marketing communications) has always been an inexact science for most companies. As Lord Leverhulme, the founder of Unilever, famously said, “I know that half of my advertising budget is wasted, but I’m not sure which half.”

It is really very hard to know how much money to spend on advertising and marketing or how to spend it. However, there are a few methods businesses can use to come up with a reasonable and logical marcom budget.

Affordability:

As the name suggests, it is based on what management thinks they can afford to spend on marketing. Many small businesses use this method. It could be an arbitrary number — or simply what is left over after all other expenses are met.

Most experts agree this it is not a very good method. It relegates marcom to a position of comparative insignificance and assumes that it will not produce positive results.

For owners and managers who are unfamiliar or unsure of the power of marketing, using an affordability approach may seem like a logical idea. However, it usually results in campaigns that are underfunded — and therefore not capable of delivering on expectations.

Percentage of Sales:

This means setting a budget based on a proportion of the previous year’s actual sales or on the coming year’s forecasted sales. Most experts recommend between 2-10 percent of gross sales. This number varies greatly by industry. Manufacturers of food, beverages and entertainment spend over 25-30 percent of sales on marketing. Publishing companies spend up to 50 percent of sales on advertising. On the other hand, B2B companies and service-oriented businesses typically spend only about 1 percent of sales.

Small businesses also need to spend more than large corporations on marketing. A very large corporation may spend 2-5 percent, a mid-sized company 5-10 percent, and a small business 20 percent or more of gross sales. Of course, since it is based on percentage of sales, the dollar amount a very large corporation spends would be much, much more than that of a small business.

The percentage of sales method is often criticized as being illogical. This is because it reverses the logical relationship between advertising and sales — after all, sales should be attributed to advertising not the other way around. Using this method, as sales increases, advertising is also increased and when sales decline the money spent on advertising is also reduced. Most sophisticated marketers do not use this as the sole method by which they determine their budget. It is, however, a useful way of coming up a rough marcom estimate quickly.

Competitive Parity:

This method looks at what the competition is spending on marketing and advertising and sets the budget at a little more than that. The logic here is that by spending the same or more than the competition a company can have a similar or better outcome in terms of marketing. For example, if a company learns that its primary competitor is spending 15 percent of its gross sales on advertising, they may decide to commit 18 percent of their sales on marcom activities.

In general, there is a direct correlation between what a company spends on marcom and it’s SOM (share of market) and SOV (share of voice). SOV is the total percentage that a company has of a particular niche, market, or audience they are targeting.

However, competitive parity is not a very practical method for most companies — especially small and mid-sized businesses. First, it quite hard to get accurate data on what a competitor is spending on marcom. Secondly, it assumes that all advertising and marketing campaigns can lead to similar outcomes if the same amount of money is spent. These days many smart marketers are using social media and viral marketing to have better results than their competition while spending much less.

Objective and Task:

This is generally accepted to be the best method for setting a marcom budget. It looks at what the company wants to achieve and sets a budget accordingly.

Typically, the objective and task method is built around specific communication goals. For example, increase market share from 20 to 30 percent… improve brand awareness by 50 percent… increase hits to website by 50,000 per week… etc.

Once the objectives are set, the next step is to define the tasks that are needed to realize the objectives. This includes all the marketing and advertising tasks that would need to be performed — create direct mail postcards… creative for campaign… landing page… posters and banners… etc.

The final step is to estimate the costs associated with performing the required tasks — media costs… ad agency fees… marketing research… etc. When you add up all the costs of the various tasks you get a pretty accurate marcom budget.

Establishing the budget is probably the most important marcom decision the management of a company can make. The consequences of spending too little or too much cannot be ignored. If too little money is set aside, sales goals may not be met and profits will be lost. On the other hand, unnecessary marcom spending can result in higher expenses and hence lower profits for the company.

So take the time and put in the effort to outline an effective marcom program — and derive your budget from it. And make sure you take an integrated approach to marcom by utilizing all the various activities associated with it — advertising, sales promotion, marketing research, customer service, and public relations.

A Social Media Marketing Primer

2010-07-20T11:39:00.000-07:00

When it comes to small and mid-sized businesses, there is still a certain amount of trepidation and skepticism about using social media. Most owners and managers want to use it, but they are unsure on how to proceed. Others are doubtful about its value to their business and are not sure if it is worth the time and effort.

It’s a fact that most large companies today are using social media in their marketing mix. According to a recent survey of business leaders and managers by SmartBrief:

75% either know or want to become knowledgeable about social media

51% are actively using and exploring social media

63% do not think it is a marketing fad

55% do not think it is a waste of time or resources

83% think it gives them a window into what their customers are saying about them

40% think they’ll fall behind their competitors if they don’t use social media

For the uninitiated, social media refers to using the Internet and mobile-based tools to share and discuss information. It can take on many forms and includes message boards, blogs, videos, and web applications.

According to the popular theory known as “Six Degrees of Separation,” anyone on the planet can be connected to any other person on the planet through a chain of acquaintances that has no more than five intermediaries. I was reading somewhere recently that if you included social networking, this link could be shortened to three intermediaries. Interaction between people has never been more than in this age of social networking. For businesses, the question is how to use this very powerful and dynamic phenomenon to connect with customers and prospects.

Here’s a look at the popular SM tools available:

Facebook: This is the most popular social networking site today. In addition to individuals, businesses can also create pages and share information.
Pros: Easy to use, huge user base, allows multimedia content.
Cons: Closed environment — you need to register to use, limited ability to customize your page.

Twitter: This is a micro-blogging site. Users send and read short messages of up to 140 characters called tweets. Business can create a page and invite people to “follow” them on Twitter.
Pros: Public feed (so it shows up in web searches), more open than Facebook, does not need a user to reciprocate with followers, easier to start a conversation with people on it, sizable user base.
Cons: Text only site (so you can’t post images), hard to say something substantive in 140 characters or less, difficult to break through clutter, may attract off-the-cuff negative posts from users.

LinkedIn: This is the most “professional” of the social networks. It is meant mainly for individual networking — although it also allows businesses to create profiles on it. Many companies also use it to recruit and check the background of potential employees.
Pros: Allows you to go beyond your immediate network, professional and business-oriented venue, straightforward connections, direct communications.
Cons: Closed system, frequented mostly by job seekers, boring environment for interaction, marketing messages are usually unwelcome by users.

Blogs: The popular public blogs include Typepad, Blogger and Wordpress. Blogs allow you to post longer content, including pictures and videos.
Pros: Increases your web presence and helps in search engine optimization, allows for longer content and detailed interaction, serve as an archive for online content, easy to manage posts.
Cons: Take more time to generate detailed content, harder to write, templates offered can limit branding, need knowledge of HTML and CSS to create custom designs.

YouTube: This is the most popular video-sharing site today. Businesses and individuals can post original content for free. It allows viewers to comment as well. YouTube is also the premier site for viral marketing (see my earlier post).
Pros: Ease of use, works well on any browser, platform and device, large user base.
Cons: Copyright infringement issues, hard to control comments and responses on video, cost of video production.

So why use social media marketing?

Because it’s free! Facebook, Twitter, Blogger, LinkedIn etc. all offer free accounts. It even costs very little to create a company’s discussion board — compared to any other way of reaching the same people.

Most people use them. Facebook alone has over 400 million users. Some of them could be your customers and prospects. You can’t afford not to connect with them if your competition is visible on it.

It is instantaneous. Anything you post reaches your users immediately. It’s a great way to let your customers know about important information, safety issues, etc. I was reading somewhere that many take-out places, and even some pushcart vendors, in New York City are using Facebook & Twitter to let their customers in the nearby office buildings know of daily specials.

It is non-threatening and permission-based. Unlike email, social media is not annoying or threatening. People decide if they want to invite you into their world and they can remove you if they feel they don’t need you. Your challenge is to make sure that you keep them engaged so they don’t.

It can extend your brand exponentially. A viral campaign can give you a reach and exposure that you could never have imagined. You may also reach a new target market through social media. Because of the low costs, many companies use SM to prospect in new territory.

The communication is two-way. Social media are great for having a conversation with your customers and prospects. It also allows you the opportunity of finding out what people are saying about your company and to respond accordingly.

Social Media Etiquette

As more individuals (of all ages) and companies (from all around the world) start interacting via social media, there is also a need for etiquette among users. Here are some suggestions:

General rules of social etiquette apply: Introduce yourself properly, be polite and don’t stir up trouble.

It’s not only about you: In social media reciprocity is essential. If someone posts on your wall or blog, return the favor if you can. Of course, some social media relationships are lopsided when it’s not personal — such as an artist or business and a fan. But even in those situations, writing a thank you post or holiday message is good etiquette.

Don’t post pictures of your employees, customers or friends without clearing it with them first: Just because you have photos does not mean you have to post them. Be careful of posting photos from parties, get-togethers and outings where people sometimes let their hair down and do embarrassing things. Also, don’t post old pictures of your friends with their ex-wives or old boyfriends without asking them first. It could cost you a friendship or a customer.

Keep your private topics off your wall post: Everyone in your friends list can see what you post on your wall. It is unprofessional to post private and sensitive topics on your company’s blog. Individuals also need to be careful not to post details about their love life or an argument they are having with someone — especially if business contacts and customers are in their friends list.

Introduce links: Don’t just post links on all sorts of topics from a variety of sources without an introduction or comment on why you think it could be important for your friends or customers.

Don’t use your social network only for blatant self-promotion: Use social media networks for customer service and real friendships — not just for ceaseless marketing and promotion. Offer something of value to your users. Don’t flood people’s walls with self-serving, commercially motivated, messages everyday. It’s annoying.

Be discrete with invitations: Don’t tag everyone in your friends list with trivial event and cause requests. It’s annoying.

Social media is here to stay — and it is a powerful marketing tool. However, to be successful with it, companies need to be able to engage their customers and prospects. The best results can be achieved by integrating social media marketing with a company’s broader marketing and business strategy.

So, if you haven’t already, sign up on Facebook, Twitter, LinkedIn and Blogger and connect with your customers, fans, friends… and the rest of the world. It can be profitable and rewarding.

New Realities in Marketing

2010-07-15T17:47:00.000-07:00

In 2004, Business Week announced that the age of mass marketing had come to an end. However, even today, most businesses and marketers still use this model in their approach to marketing. When I used to work at a progressive marketing and production company, I often encountered this mindset in clients. People found it very difficult to adapt to the new realities in marketing.

Mass marketing has been replaced by micro marketing. But this new paradigm is anything but simple because it uses technologies and methods that are quite complicated and need the active participation of all involved at every step of the process.

The primary component that is at the backbone of marketing today is information. Marketers are finding that the more information they have, the more successive their marketing efforts will be. However, even a little information can produce results that far exceed that of mass marketing.

Most companies have been collecting digital information on their customers in some form or the other since the advent of computers. This could be in the form of invoices, records, address records, customer surveys, etc. or even collected explicitly for the purposes of marketing.

Data mining is a term that refers to sifting through digital data and analyzing it to make meaningful connections for the purposes of marketing. There are several levels to data mining. Using a list or company records to find likely customers is a basic method. For example, a local children’s hairdresser can target parents in the nearby area by buying a list of subscribers to a popular parenting in the same zip code. Advanced data mining efforts involve complicated analytics using powerful software programs.

As the quality of data increases, so do the opportunities for marketers. Every new field in a database file adds to the value of a list. For example, gender, age, race, income, affiliations, interests, etc. can all be invaluable information and used to pinpoint customers.

In fact, even when it comes to the mass media — newspapers, TV and radio — segmentation based on data collected and demographics usually drives all the marketing efforts today. The “spray and pray” mass marketing of the past has been replaced by focused and targeted campaigns based on extensive marketing research and data analytics.

If you haven’t made the transition to information-driven marketing, it’s high time you did.

Think Outside The Box

2010-07-14T13:28:00.000-07:00

There’s an ancient Indian story that is sometimes used to demonstrate the importance of lateral thinking — or thinking outside the box:

Many years ago, in an Indian village, a poor farmer owed the local moneylender a lot of money. The farmer had a beautiful daughter who the moneylender fancied. So he told the farmer that he would forgive his debt if he could marry his daughter. The farmer and his daughter were horrified by this proposal. So the cunning moneylender told them that he would let providence decide the matter.

The moneylender said he would take two pebbles — a black one and a white one — and put them in an empty bag. The girl would have to pick one pebble from the bag — otherwise her father would be arrested and sent to jail. The moneylender said he was offering two reasonable outcomes:

1) If she picked a black pebble, she would become his wife and her father’s debt would be forgiven.

2) If she picked a white pebble, she did not have to marry him and her father’s debt would still be forgiven

They were standing on a pebble-strewn path in the farmer’s field. As they were talking the moneylender picked up two pebbles and put them in a bag. The sharp-eyed girl noticed that he had picked up two black pebbles and put them into the bag. The moneylender asked her to put her hand inside the bag and pick a pebble.

The girl was in a quandary. If she let on that she knew about his deceptive tactics, it would anger the moneylender — and he would send her father to jail. On the other hand, if she picked a black pebble, she would have to marry him — which she did not want to do.

Are these her only options? What would you do? Think about it before you look at what she did…

The girl put her hand into the moneybag and drew out a pebble. Without looking at it, she fumbled and let it fall onto the pebble-strewn path where it immediately became lost among all the other pebbles.    

"Oh, how clumsy of me," she said. "But never mind, if you look into the bag for the one that is left, you will be able to tell which pebble I picked."    

Since the remaining pebble is black, it must be assumed that she had picked the white one. And since the moneylender was too embarrassed to admit his dishonesty, he had to forgive the farmer’s debt.

Think outside the box — especially with your marketing.

Going Viral

2010-07-13T12:56:00.000-07:00

It seems everyone is going viral these days. It's the buzz now, but what exactly is viral marketing and how can it be used as a viable marketing strategy?

In simple terms, viral refers to creating some online content and then getting people to pass it on to their friends and acquaintances — like a virus. This can include websites, images, videos, links, applications, games, stories, emails and documents. Among the online marketing methods, nothing is more powerful and cheaper than viral content.

But all viral content cannot be considered viral marketing. Videos of a cat playing the piano or an alligator eating a deer may have hundreds of thousands of views but cannot be considered viral marketing if it does not have a vital marketing component in it.

To be viral from a business standpoint, the content needs to be much more than just a shocking video, photo or blog capable of generating users. It also needs to be relevant and ultimately create interest in a product or brand.

Here are some things to keep in mind when creating viral content for your company or brand:

Know exactly whom you are targeting: Make the content relevant to your audience
Most viral campaigns that fail do so because they can’t connect with their target audience. If the key message or implementation does not resonate among the group it is targeting, it will fail. So like any other campaign, tailor your content for your target market.

Burger King targeted its primary customer group — 18 to 34 year old men — with its Subservient Chicken campaign. It generated over 46 million visits in less than a week after its launch in 2001 and is still one of the most popular viral campaigns today. On the other hand, if you’re manufacturing a new type of plumbing fixture, you may want to create a YouTube video showing the difference between what is available now and your product or instructions on how to install it.

Be creative: Make it engaging and interesting
This is the most important aspect of a viral campaign. The content must be something that people will want to pass along to others. It doesn’t necessarily have to be funny or wacky — although ones that are get disseminated much faster. Even mundane topics, such as how to videos and blogs can go viral if they are done well and provide valuable information.

In the B2B world, a good white paper can easily resonate with key decision makers who may send it to their colleagues and associates. On the other hand, a gorilla playing drums — like this viral video from Cadbury — can be a big hit among consumers… just because!

Brand it: Make it memorable and identifiable with your brand or product
Unless you can tie-in the content to your brand or product, it does not have any marketing impact. This has to be done tastefully though. It should not look like a blatant attempt to sell something. Try to integrate the brand with the storyline — and make sure viewers don’t miss the connection.

One of the first instances of viral marketing was The Hire series of BMW videos featuring (an unknown) Clive Owen. Launched in 2002, each 10-minute video was made by a noteworthy film director and reflected their unique cinematic style. The only thing they all had in common was that they all featured Clive Owen and a BMW vehicle. It was a huge brand boost for both Clive Owen and BMW and links to it are still passed around today.

Don’t mislead users: Be honest about your intentions
Keep it real and don’t resort to deception or manipulation. Be clear about the relationship between endorser and seller.

A blog “alliwantforxmasisapsp” which claimed to be independent — and whose authors supposedly had a friend that wanted a Sony Playstation for Christmas — was exposed as really being a marketing company hired by Sony. This quickly generated negative publicity for Sony and anger among online users who felt they had been deliberately tricked. Sony had the post the truth and apologize to gamers who had visited the website.

Make it easily accessible: Create your content in the appropriate format
Try to create your content in the most accessible format. Choose your medium and file format very carefully.

If you want people on iPhones and iPads to view your content, don’t use Flash. If you are embedding into an email stay away from file formats that may be blocked or not compatible with all mail systems. If it’s video upload it to a site that everyone can access — like YouTube.

Seed it appropriately: Select the right online vehicles to move it forward
Seeding is the process of putting your viral content into the appropriate online media so it gets picked up and distributed around the social web. There are a number of ways to seed viral content including email, Facebook, YouTube, Twitter, Blogger, etc. Depending on your budget and launch schedule, try to get it in as many as many online outlets as possible. The best way to start a viral campaign rolling is to leverage existing communities. That’s why it is so important for companies to nurture social media relationships.

To promote Bob Dylan’s new album in 2007, the record company created a Facebook application that allowed users to make their own version of Dylan’s Subterranean Homesick Blues video. It premiered on Dylan’s Facebook page and went viral very soon.

Be consistent with branding… or not!
Viral marketing sometimes works best when it is a part of a larger marketing strategy. Before you embark on a viral campaign, make sure you have your other marketing elements firmly in place. Does your website reflect your viral branding — and have enough bandwidth to receive extra visitors? Are you referencing your viral campaign in the rest of your marketing?

One of my favorite viral campaigns is for Tanqueray Gin and features the fictitious Tony Sinclair and targets young adults of 21-34 years. This campaign is not limited to just the Internet but also appears on TV and in print. It’s just the right blend of goofy and funny to appeal to the brand’s target demographic.

On the other hand, established brands sometimes choose to have viral campaigns that are not consistent with the brand image. For example, IBM made an irreverent series of “mockumentaries” titled “The Art of the Sale” that were “off-brand.” The videos went viral quickly and helped soften the image of the company and possibly attracted a new audience to IBM products.

Viral campaigns are most effective when marketers have a clear goal about what they want. However, there is also an element of luck involved — it is virtually impossible to know if a Web marketing program will go viral. No one could have predicted that Susan Boyle’s video from Britain Got Talent would generate 33 million views in one week and catapult her and the show into people’s consciousness all over the world.

So go ahead and take a shot at it. If it doesn’t work, try again. The medium is more or less free, once you create the content. It does take a bit of luck and planning for something online to go viral — but the possible rewards definitely warrant adding viral content to your media mix.

Is Print Media Dead?

2010-07-09T17:44:00.000-07:00

People have been writing about the demise of print media for over 15 years. It is still around in various forms, but for both marketers and publishers, it’s getting harder and harder to make any money from print these days. A recent survey by Outsell, a marketing analytics company, showed that advertisers this year plan to spend 32.5 percent of their budget on digital and online marketing compared to 30.3 percent on print. This is the first year this has happened and could be seen as a harbinger for things to come. So, should small and mid-sized business abandon print and spend their precious marketing dollars on digital and online media? The short answer: No, print is still useful, but…

Let me begin by saying that I love print. The smell of printing ink and freshly cut paper is something I quite enjoy. I put myself through college by working at a printing company doing almost every job there — from cutting paper, operating the darkroom, doing layout and even running the small presses. Many years later, I went back into a printing environment while working for a direct marketing company. By then, print had evolved into a digital form. Ink presses had been replaced by variable data digital printing machines.

These days, I have to decide whether to buy any print at all. Most small and mid-sized businesses do not want to pay the sizeable costs associated with print media. Postage costs at least 27 cents for standard bulk mail while email is literally free. Advertising costs a lot of money. It all makes print a hard sell. Print is still going to be an important marketing medium for a while longer but I think business owners and managers need to look at their print buying more closely now to see if it makes sense anymore.

Here are some of the most common print media used by businesses and my thoughts on whether they are dead or still useful.

Yellow Pages Directory — Dead: They are not going quietly but they’re getting extinct for sure. The only practical use for the Yellow Pages Directory is to pop up broken furniture or as protection against intruders. To their credit, the publishers are trying to adapt by publishing it both in print and online, offering web video, SEO, etc. — but I still advise people not to waste their money on the print edition.

Instruction Manuals — Dead: While most consumers may think it would be helpful, its just not worth the expense and wastage of printing 500-page manuals anymore in most situations. PDFs and online instructions may require a little more effort from customers but the savings are definitely huge. When I bought a new car recently, I got a 20-page quick-guide and a cd with the rest in digital format.

Printed Stationery — Mostly Dead: Printing large quantities of letterheads, pads and continuation sheets are no longer needed. Just use your desktop printer for the few times you actually need to send something out. You still need to print envelopes and business cards though. In a related point, ask your ad agency or designer to adapt your logo so it can be used as a heading in your Word document.

Print Classified Ads — Dead: You still see they are being replaced by web sites like Craigslist, Zillow and Ebay. For the typical small business or single-item seller, it does not make sense to pay for print classifieds when you can get the same result by advertising and selling for free online.

Print Newspaper & Magazine Ads — Still Breathing: Magazines and newspapers have taken a big hit in the past few years but they’re still around. The good news is that they are serving smaller and smaller niche markets — that means advertising costs are lower and the target market is well defined. It still costs a lot of money for print advertising — but you need to have a print presence for most B2B industries and to reach certain consumers such as ethnic minorities and older people.

Direct Postal Mail — Alive: With all the government restrictions and negative perceptions that customers have about email marketing, direct mail is still one of the best and most convenient ways to reach someone with a one-to-one message. It has evolved to keep up with current technology (see my earlier post). Response rates are about 2-3 percent.

High Quality Brochures — Barely Breathing: Most companies are opting not to print big expensive print brochures anymore. They are still needed sometimes— but most companies can get by with smaller booklets and folders. The trend today is for print-on-demand. With high-quality digital presses you can make short runs on demand. This eliminates wastage and over-printing.

Printing on cloth was invented in China around 220 AD. Movable type was invented in Korea in the 13th century and introduced to the West by Johannes Gutenberg when he printed his first Bible in the middle of the 15th century. Since then, the world has never been the same. No other invention has had a bigger impact on human civilization than the printing press. It spawned industrialization, the assembly line, education and mass marketing. But now it’s time for it to make its way out.

Everything evolves to fit the environment and print needs to evolve too. It simply does not make sense to be wasting so much of our natural resources in creating a disposable product with such a short shelf life.

Over the next few years printing will slowly get obsolete as the medium moves into electronic methods of delivery. Advertisers will follow their customers. Is the death of print something to lament about? No, it’s all good.

Optimize Yourself — Yes Real-ly!

2010-07-08T12:42:00.000-07:00

Seth Godin’s blog recently titled “The non-optimized life,” where he says that it is better to create than to optimize. That, in the end, the ones who succeed are those who create things of value — not those who are constantly trying to optimize what they have. If you want people to visit your site, make it interesting and provide something of value — don’t just optimize it so the search engines rank it at the top.

We’re living in a world today where we have access to all sorts of communication and networking tools. The mantra these days appears to be one that people have to optimize their virtual presence if they want to get ahead. That’s nice, but what about the real world?

Are we optimizing our real selves where it matters too? Are we doing our jobs better? Are laid-off (and employed) workers developing new skills and meeting real people who may be of help them? Or are they just depending on social networking or online job boards? Is your business providing better products and services — or are you just depending on clever marketing and a killer website instead?

My family and I were in Washington D.C. over the weekend. We decided to take a cab to the National Mall — which was about 1.5 miles away from our hotel. The cab driver who took us there was very nice. He closed the windows and turned on the A/C, spoke politely and even pointed out the various landmarks on the way. When we got there, the meter displayed $6.25. I gave him a ten and told him to keep the change.

On our ride back we got a different kind of cab driver. He was surly and did not turn on the A/C. Even though the ride was shorter and the meter said $5.75, he demanded $10. I thought about reporting him to a policeman at the end of the street but didn’t because I had the kids with me. I paid him exactly $10.

Both ultimately got the same amount of money — the first by optimizing his service and offering better value, the second by optimizing his price. Who was smarter?

Beyond the legal and moral ramifications of deceiving people, entrepreneurs, managers and employees need to ask themselves if doing so makes any sense. In my opinion, deceiving a customer or employer is never a good policy. A flashy website, embellished resume or deceptive marketing only works for a very short time.

Want to be a rock star? Master an instrument and learn how to write good songs. Want to have a successful company? Create a valuable product or service.

Optimization is a buzz-word today. Don’t believe the hype though. People are still looking for real value.

Because everything begins with a plan!

2010-07-07T16:40:00.000-07:00

I always try to start every campaign I work on with a detailed marketing plan. Of course, this not always possible. Sometimes you have to do exactly what your client wants you to do — or is willing to pay for. But I’d rather start a project with a clear idea of what needs to be done and how to go about doing it effectively. This requires a written plan. It’s what they teach you in business school — though I suspect most graduates choose to skip it when they become managers or owners of companies because it requires a bit of time and effort.

A marketing plan does not necessarily have to be slick and created in Flash or PowerPoint with attractive charts and pictures — although I find it certainly helps in conveying the idea to others more effectively. They will also take you more seriously if you do, in my opinion. But for the purposes of getting the idea down and creating a clear plan of action, just writing it down in a notepad is good enough — especially if you own or manage a small business and are doing it for your own reference.

The marketing plan is essentially driven by the company’s business plan. It is a clear and simple summary of all the elements that contribute to the marketing activities of a particular product, service or brand. The marketing plans is also usually included as a part of a company's business plan and given to potential investors.

Smaller companies may have just one marketing plan for the entire scope of operations while larger companies may have separate marketing plans for each product or division. The intention is to plot out a clear prioritization of marketing objectives, strategies and tactics, along with financial data. It allows managers and owners to understand clearly how they intend to create superior value in relation to their competitors.

A marketing plan is thus useful and necessary in guiding marketing activities. If you feel you don’t have the time or skills needed to do it yourself, hire a professional to do it for you. You can also find templates and software online that can help you create one relatively easily.

The following is a brief outline of a typical marketing plan.

Executive Summary:

Although this goes first, it should be written last. The Executive Summary is the gist of the plan and contains key facts, assumptions and rationale used in it.

As the name suggests, it is intended for top executives who are too busy to read the entire contents of a plan. It is also your chance to grab and hold your reader’s attention and motivate them to read your plan. So spend a little time and effort writing it. Keep it under 2 pages — or on one slide if you are presenting it as a PowerPoint.

Situational Analysis:

This section should describes they way things are and the environment where you intend to sell your products or services. Start with information on the company (goals, mission statement, etc.) as well as the product and services being offered.

Follow this with an analysis of the macro-environment — legal, government, technology, political, social, culture, economy, etc. Next look at the micro-environment — market properties, size, tends, competitors.

If you want, you can use Porter’s Five Forces theory as a framework to examine the attractiveness of the market. This includes: (1) The threat of new competitors entering the market; (2) The intensity of competition; (3) The threat of substitute products or services; (4) The bargaining power of customers for your product or service; and (5) The bargaining power of suppliers.

A SWOT analysis is also useful here. It examines at the strengths and weaknesses of your company and product as well as opportunities and threats that exist in the marketing environment you are entering.

Having a well-researched situational analysis can be very useful for all your marketing activities. So do it diligently. Most of the information you need can be acquired through secondary research (existing information, databases, etc.) but you may also need to do primary research (surveys, interviews, and questionnaires) to get relevant data.

Marketing Objective:

This is a very important aspect of the plan. It is what the company or division wants to achieve through the proposed marketing activities. It should be clear, measurable, and have a stated time frame for achievement. For example, a marketing objective could be increase awareness for ABC Widgets by 40 percent in New York by the end of 2010.

Marketing Strategy:

This is basically the heart of the marketing plan. It outlines how you intend to achieve your objectives. It includes the infamous 4Ps of marketing — product (your specific product or service), price (what you will charge for your product or services), promotion (how you will create awareness in the marketplace) and place (how you will get it to your customers. This is also called the marketing mix. An optimal proportion of each of 4Ps in the marketing mix is desired and they should all complement each other for the strategy to work.

There are several tactics that can be used for each of the 4Ps to accomplish the desired strategy. For example, the features of the product, the type of pricing (penetration, skimming, competitive, etc), the specific media mix used (ads, direct mail, TV, etc.), and which stores will distribute the product.

Financial Requirements & Projections

As the heading suggests, this involves calculating how much the plan will cost over the entire period of the marketing campaign. Many small and mid-sized companies sometimes make the mistake of not allocating enough money. The result is that they run out of money before the stated goals are accomplished and require the strategy to be changed mid-way to meet a reduced budget. It is much better to have a detailed marketing budget that is approved and earmarked right at the start.

Finally, it is also important to include financial projections in a marketing plan. What will be the ROI and how will it be measured? What benchmarks will be used? This will let you know if the marketing plan is successful or not. Of course, expectations need to be reasonable and within the scope of what could be possible.

A marketing plan is an essential part of business strategy. Marketing campaigns cost a lot of money and it does not make much sense to simply spend on advertising and marketing without any clear idea of where the money is going —or what you can expect from it in terms of sales or brand recognition. A marketing plan is also an objective record of marketing activities during a given period of time. It can be used to analyze the success or failure of a company even many years later.

Not Your Father’s Direct Mail

2010-07-01T20:22:00.000-07:00

Direct mail today involves more than just slapping on mailing labels and sending mass-printed postcards to everyone in the phone directory. Marketers are finding that they can have much greater success by targeting specific groups of prospects and customizing the messages for each target group — or even individuals.

The hard part is figuring out exactly who the most likely prospects are… how to reach them… and deciding what to tell them about the company or product that will elicit a response. Marketing professionals use STP — segmenting, targeting and positioning — to achieve this.

Segmentation is the process of dividing up the possible market into smaller groups (or segments) of prospects with the same characteristics and needs. For example, an insurance company, may first segment their market into business insurance and personal insurance — and then into groups such as homeowners insurance, construction insurance, flood insurance, health insurance, restaurant insurance, etc. To be effective, this needs to be broken down again into smaller groups — based on criteria such as location, company size, income and number of employees

Once the segments that may be interested in a product or service are isolated, the next step is deciding which segments to target with direct mail. This is, appropriately, called targeting. Based on market research findings, the insurance company mentioned above, may decide that a segment they would like to target are dry cleaning stores with 5-15 employees in New York City with revenues between $250,000 and $1M.

Now that the company knows who they are looking for, they can buy a list that matches their criteria from a database company such as InfoUSA or Hoovers. Lists are priced based on the depth of information.

While buying data and communicating with prospects, companies need to remember that consumers are protected by CAN-SPAM laws (Controlling the Assault of Non-Solicited Pornography And Marketing Act of 2003). This means, that marketers cannot telephone or email consumers without their expressed consent. It does not apply to B2B communications — but B2C marketers need to be careful not to get caught violating this law.

The third step in the process is positioning — creating an identity that is favorable and fits in perfectly with what the target market wants. The insurance agency mentioned above may want to position itself as a company that are experts in insurance for dry cleaners. To do this, they will also need to make sure that their products and services are superior and can be differentiated from the competition. Positioning is always in relation to the competition.

It is up to the ad agency or creative director to communicate the positioning strategy to the recipient through the direct mail piece. Modern variable data technology allows for each individual respondent to receive a unique piece of direct mail that is specific to his or her needs and uses keywords, images and concepts that will trigger a favorable response.

Assume that the data file purchased by the insurance company reveals that there are three distinct categories of owners among the dry cleaning stores in New York — Spanish, Korean and English speaking. To make the direct mail more relevant, the company can decide to send separate and distinct postcards to each of these groups.

With variable data software, such as XMPie and high quality digital printing presses today, creating personalized and unique pieces for each recipient is not very difficult. All the individual elements of the layout such as text, graphics and images can be changed in each printed piece based on information from a data file (such as an Excel document).

For example, the insurance company may decide that in addition to different languages based on ethnicity, the cover of the postcard of the male recipients will feature an attractive woman, while that of the female recipients will feature a handsome man. Other personalization elements could include using the recipient’s name in the headline or body copy, having different colors based on gender, using themes based on hobbies or interests (sports, pets), mentioning family members or friends in the copy… the possibilities are endless!

Another tool in the direct marketers arsenal today, is using micro-sites or landing pages in conjunction with print or email to drive up response rates. These web pages are automatically generated at the same time as the printed piece or email. It can contain a special offer, specific information, or a pre-filled form that the direct mail recipient accesses after receiving a postcard or email with a call-to-action. The URL for these sites usually has the recipients name in it — like www.john.smith.drycleaner.com. This increases the likelihood that the person will visit it. After all, who doesn’t like their own name and isn’t curious about a web page dedicated to them.

According to the DMA, the average response rate for direct mail is around 2.61%. Marketers claim that with variable data and personalization this can be increased to about 5%. However, what is important to remember is that direct marketing results are not the same for every industry. The product usually dictates the degree of success.

As I’ve said before in other posts, each element of the media mix needs to be balanced against the bigger marketing and business strategy. Direct mail is only one tactic of the larger marketing and business plan. With all the pieces of the media mix working in conjunction with one another, the likelihood of marketing success becomes exponentially greater.

Buyer’s Remorse: The “Wish-I-Hadn't-Bought-It” Blues

2010-06-30T12:56:00.000-07:00

We’ve all experienced that feeling in the pit of our stomach after buying something — wishing we hadn’t bought it and being anxious about our “rash” decision. With all the choices and conflicting recommendations these days, it is very hard to purchase anything and still remain happy with the decision. This is known as buyer’s remorse. If you are the owner or manager of a business, you need to be aware of it and take steps to lower it among your customers. Otherwise, it can hurt your business.

Buyer’s remorse is strongest in the period immediately following a purchase. This is where companies need to focus on the most to relieve any anxiety among their customers. Remorse also increases when the monetary value of the purchase is high. So businesses that sell high-ticket product and services need to be especially sensitive to this issue.

The worst thing a business can do during this period is to stay silent. Buyers are looking for reassurances that they have made the right decision.

Here are some things you can do as a manager or owner to reduce buyer's remorse among you customers:

Include a “Welcome Package” with your product for all new buyers. Make them feel that they are joining a larger group of satisfied product users.

Send out an email, letter, or postcard congratulating your customer on their choice and reassuring them of quality service in the months and years ahead.

“Over deliver” on the purchase. Send customers a small gift or a voucher after the purchase — or throw in an accessory or free service. This will surprise and delight them.

Call and thank them for the purchase and introduce them to their customer service representative. Tell them how to use the product and what they can expect from you at all times.

Offer an unconditional guarantee on your product of service. This will give them the reassurance they need. Offer a two-week money-back guarantee to assure customers that they don’t need to wait for a better deal. Tell them you will match the competition’s price for up to two-weeks after the purchase.

If they want a refund, don’t hesitate to give their money back promptly and with a smile. It’s a lot worse having dissatisfied customers than losing one or two. Of course, if you have this happening all the time, you should re-examine your product or service.

If there is a delay or time lapse between when the customer pays for the product or service and when they actually take possession of it, there is more likelihood of them cancelling the order. In such cases, a “stick strategy” is helpful. It involves giving them a gift to fulfill the need for instant gratification, and to keep in touch with them until they receive the product or service they purchased. This can include updates on the progress of their order, getting them involved in the delivery such as sending them the UPS or FedEx tracking number, etc.

It is important to remember that marketing does not end once you sell the product. On the contrary, it is only the beginning of new marketing opportunities. Current customers are also the best future customers. So focus on them and keep them happy before you start looking for new customers. A business that increases customers by 10 percent and loses 25 percent of its current customers is not really coming out ahead.

Customers are your best advertising medium. If they like your product or service they will not hesitate to recommend you. Keeping them happy and satisfied with what they buy is therefore very important.

I bought a Dodge Challenger recently. Because I hadn’t bought an American car in a very long time, and given all the negative stories about the U.S. car industry, I was a bit hesitant from the start. When I went to the dealership, I was a little suspicious of the sales staff (based on preconceived ideas of crooked auto salesmen). They were actually quite nice and forthcoming. They didn’t try to trick me or get me to buy options I didn’t need. They also explained everything clearly. After I finished the paperwork, they presented me with a voucher for a free service.

In the next few days, I got a couple of congratulatory emails as well as a welcome package in the postal mail from Dodge. After a few weeks I received a survey about my experiences at the showroom and the sales process. I got a service reminder postcard in a couple of months telling me I could schedule my appointment online — which I did. It was very easy. I got a reminder email, the day before the appointment.

After the service, I received another email asking me about my experience. So far I’ve been very happy with the product, the price and the quality of customer service. I love the car so everything else is an add-on and just enhances my enjoyment. Even the commercials I see on TV are quite “cool” and different from the usual car ads. So, I haven’t had any buyer’s remorse with this purchase.

My son, on the other hand, tells me he still prefers the Nissan (which we traded in) better — and if we can please get it back. That reminds me of another marketing topic — customer loyalty — which I will talk about at some other time.

Time Magazine, iPad & Pricing as a Marketing Strategy

2010-06-29T19:43:00.000-07:00

I just bought the latest issue of Time on my iPad. It cost me $4.99. This is the same price I would have paid for the print version at a newsstand. With a yearly subscription, I can get a print issue for about 35 cents. Time does not offer subscriptions for their iPad version currently.

Is $4.99 a rip-off or is it a fair price? Is it good marketing strategy or will it only lead to anger and outrage among possible customers?

Pricing is the most often overlooked of the 4P’s in the marketing mix. The other three — product, place and promotions — seem intuitively easier to grasp in the context of marketing. But after product, price is probably the most important factor that drives sales. It is also an important variable in positioning a product.

Before I go into the pricing and its marketing implications of Time on the iPad, let me comment on the app and the content. The app is a free download. Once you have it, you can browse recent issues — starting with the April 12 (the day Apple launched the iPad) issue featuring Steve Jobs on the cover. Each issue requires a separate download.

Time was one of the first magazines to create an iPad version of its print magazine. I mean, specifically for the iPad — not iPhone or web. The other was Wired. I’m sure others are on their way, if they aren’t available already.

The iPad version of Time contains the entire content of the print edition, plus exclusive international coverage, live updates of stories, dynamic videos and slideshows, interactivity on each page, portrait and landscape modes, scroll navigation and customizable font size. So it offers a lot more than the print version. There is also a Help Guide for newcomers with diagrams and instructions on how to use it.

Visually, it is very striking with rich and engaging content. In the June 14, World Cup issue, for example, there are profiles of all the top players. If you rotate the iPad, you can play a video on that player. The layout is great. It looks and feels just like the print version — but it is also so much more. The high-resolution images and integrated video make reading it interesting and enjoyable.

I admit I was a bit shocked when I saw the price for the download. But I think it was a good marketing decision. When it comes to setting the price of a product, there are a number of pricing strategies that can be adopted, such as:

Penetration Pricing: Setting a low price so more people buy it and you gain market share — Walmart, Dell.

Competition Pricing: Looking at what the competition charges and setting your price close to it — commodities (steel, paper, fertilizer) and certain services (plumbers, electricians, construction, insurance).

Product Line Pricing: Pricing different products within the same product range at different price points — lawn mowers, cars, televisions.

Captive-Product Pricing: Selling the product cheap and once you have a captive customer selling them the replacement parts — razors, video games, desktop printers.

Bundle Pricing: Grouping products together and selling at a reduced cost — software, music, books

Premium Pricing: Setting the price high to make the product appear exclusive — perfumes, electronics, cars, vacation packages, restaurants.

Option Pricing: Selling the base product first and charging extra for options — cars, homes.

Skimming Pricing: Setting a high price initially and slowly lowering it to increase the pool of customers — computers, electronics, cutting-edge, products.

Of course, it is obvious that Time is employing a skimming strategy with the iPad app. And they do this because they know that it will result in more profits than if they launched it with penetration pricing — say for $0.99 per issue.

In terms of positioning, they are targeting a niche market of relatively affluent, first adopters who are not very concerned about spending a few extra dollars on impulse. Of course, the next step of market skimming pricing is to lower the price so it will attract another layer of buyers. This is going to happen soon as the competition increases and the early buyers discover other shinny things that make them happy.

There is also a lot of anger and resentment at the $4.99 price among some groups. Time obviously made a calculated decision to keep the price high even though they knew it would offend this group. They probably have research that shows that these consumers will not buy the magazine even if the price was lower.

In the long run, using a price skimming strategy will probably not hurt Time if they know when lower the price — which is about now if you ask me. The magazine is quite attractive and engaging. Given the right price it would appeal to almost anyone.

In a related topic, while Time opts for a market skimming pricing model, surprisingly, Apple is using a market penetration strategy for the iPad. The starting price of $499 was far below what most people had anticipated.

Of course, leave it to Mr. Jobs to know how to turn a profit. Apple also makes obscene amounts of money from the apps, advertisers, accessories, and AT&T. In fact, someone needs to come up with new name to describe the Apple pricing strategy that is a sort of hybrid of some of the others mentioned here.

Customer Service is an Essential Part of Marketing too

2010-06-28T09:29:00.000-07:00

I told my kids that I would take them for ice cream yesterday morning. My daughter, Alexandra, wanted to go to Carvel, my son, Nathaniel, wanted to go to Purple Monkey — another ice cream parlor in our neighborhood.

I told them that they both had to agree on one place or we wouldn’t be going anywhere. So, Alexandra spent 10 minutes selling Carvel to her brother — the number of flavors of ice cream they had, that it tasted better than all other ice creams, its great location and ambiance… and that their ads were cool.

Nathaniel finally agreed to go there.

We got there and found there was no one behind the counter. We had to wait a short while for a guy, who was working on some machines at the back of the store, to come to the front. He didn’t have on a uniform, nametag on or one of those little ice cream parlor caps. He wasn’t even very friendly and didn’t seem particularly happy to see us.

There were no other employees there. The sign said, “Open 10:00 AM to 10:00 PM.” It was about 1 o’clock in the afternoon.

As usual, Alexandra knew exactly what she wanted — cookie dough ice cream in a cup. Nathaniel couldn’t make up his mind. The man was getting a little impatient. So I asked him to ring up Alexandra’s ice cream and to give Nathaniel a few more minutes to decide. He appeared to be irritated as he rung up the order. He gave us our change and returned to what he was doing at the back of the store.

A few minutes later, Nathaniel decided on the flavor of ice cream he wanted. We had to call out to the guy again because he’d gone back to the rear of the store. He seemed even more annoyed to be called back. Now Nathaniel was having a problem deciding which type of cone he wanted. The man was getting impatient again. He kept glaring the whole time. Finally, Nathaniel made his choice (sugar-coated and wrapped in a U.S. flag). We paid $2.82 for his ice cream.

We sat down at a table and ate our ice cream. Because Alexandra had got her ice cream first, she finished it before her brother and then began running around the store. The guy came out from the back and yelled at her for running around and touching the ATM machine.

“I hate this place. Let’s never come here again,” said Alexandra to me as we were leaving the store.

Carvel spends over $5 million on advertising every year. Their slogan is "It's what happy tastes like.” They spend millions more in marketing, store design, selecting their ice cream flavors and generally trying to have an edge over their competition among customers.

And all it takes is one surly store clerk to make a 7-year old never want to go back there again — and for her father to write about it here. Assuming that our family never went to Carvel, it could cost the company thousands of dollars in customer lifetime value (CLV). Multiply that by the number of dissatisfied customers and at each store location and we’re talking a lot of money. For small businesses, it’s even worse — it can literally break you.

Word-of-mouth can be the most powerful marketing tool. Nothing is better than a good review, or an enthusiastic reference when it comes to prospects or new customers. Conversely, a bad experience can hurt your business. Dissatisfied customers tend to vent out their frustrations by talking to their friends or relatives and by posting at multiple sites online. So be very careful — once it’s out there, it is very hard to get rid off. Online complaints and rants will show up in searches — so avoid giving customers a reason to do it. And the more times people view it online, the higher up in ranking it goes. Whenever I have to do business with a new company, I always tend to Google them first. I’m sure many others do it too.

Marketing is not just about creating good products, targeting the right customers and clever campaigns. It also means total customer satisfaction. The big companies have understood this and are devoting a lot of of resources towards customer relationship management (CRM). They spend a great deal of effort and money training and educating their employees. It’s about time the small and local businesses realized it too.

Customers don’t need to put up with rudeness, delays or incompetence. They have a choice — they can buy from your competition instead.

Here are some basic things to keep in mind when dealing with your customers:

Know who is boss. It’s the customer of course. If they didn’t buy, you’d be out of business — so do everything you can to keep them happy.

Take time to listen to your customer’s needs. Don’t make assumptions and start ringing up the order before a customer completes ordering. This happens to me all the time at fast food restaurants or take-out places. Many times I take what they’ve rung up because I don’t want to hold up the line but it still gets me irritated — this is ultimately bad for the brand.

Be polite at all times and say thank you at the end of every order or conversation. Smile if you are dealing with them face-to-face. Let your customers know you appreciate their business.

If you are a B2B company, send at least one communication every year to your customers thanking them for their business. This can be via postal mail or email. Send them a good-customer discount coupon if you can. If you’re in retail, have promotions and frequent customer programs at least once every year.

Keep your employees happy. Chances are they’ll treat customers the way they’re treated. Set an example by being friendly to employees and customers. You’ll create a culture of friendliness that your employees will emulate.

If you’re a small business or in retail keep your eyes open for regular customers and tell your employees to do the same. Call them by name and make small talk with them. It makes them feel important and lets them know you value them as customers.

Let your customer know exactly who you and your employees are. Use nametags for all employees if you own or manage a retail store. If you are a B2B company, make sure all your company’s emails have a professional looking signature at the end with the person’s full name, title, phone, and address.

The old credo that “the customer is always right” still holds true. At least give the customer the benefit of the doubt. Remember, winning an argument with a customer usually leads to losing the customer. It’s not worth proving you’re right and they’re wrong — in any situation.

If a customer is angry, try to diffuse their anger — not escalate it. Use words like, “I’m sorry” or “I apologize.” Allow angry customers to vent. Don’t interrupt them or start speaking until they have finished what they have to say. If you’re face-to-face, stay calm and try smiling. If you’re on the phone, talk calmly and use your customer’s name a few times in the conversation.

Try to accommodate a customer if you can. They’ll always remember it. Even if it is an exception from your regular service policy, and if it isn’t illegal, try to do it.

Years ago, when I was a poor struggling student, I once bought an electric typewriter at Sears. After more than a year, it started having problems and wouldn’t work properly. I took it back to Sears. The manager in the electronics department was very understanding and nice. He tried fixing it. When he couldn’t, he exchanged it for a new typewriter. I still remember that incident. Of course, it probably cost Sears nothing. They just returned it to the manufacturer.

However, you will come often across store clerks or managers who decide that they are saving the company money if they can avoid a return. It usually never pays off.

Many large companies train their staff to never say “no” to a customer... and to go out of the way to serve them. Legend has it that once a guest at the Ritz Carlton (which is known for exemplary customer service) left his briefcase at the counter when he was checking out. The checkout clerk asked the doorman to run and give it to the customer before he left the hotel. The doorman ran outside but the customer had already left for the airport. So he took a cab and went to the airport… but the customer’s plane had already taken off. The doorman, called the reception clerk… got the customer’s business address… took the plane there… and delivered the briefcase to his secretary. That customer probably still stays only at the Ritz Carlton when he's traveling.

And even now, when my wife and I want to buy an appliance, the first store we always think of is Sears.

Search Engine Ranking: The Holy Grail of online marketing… or is it?

2010-06-26T06:09:00.000-07:00

Search Engine Optimization is the activity of enhancing Web pages or whole sites in order to make them more search engine friendly, thus getting higher positions in search results. SEO has become a buzzword today — even though few people know exactly what it involves or if their business would actually benefit from it.

The Holy Grail for most online marketers is to have their company or product make it to #1 in the search rankings… and stay there. However, the question that needs to be asked is whether ranking high in searches contributes significantly to the success of a company or brand?

Speaking strictly for myself, I have not found this to be necessarily true — particularly in the B2B world. Nor have I personally ever bought something just because it was listed at the top of a search. I have found SE rankings to be useful in some situations — such as for making a company’s presence known in a certain market, promoting a local businesses, public relations, and marketing certain types of products. But the notion that without aggressive SEO a company is doomed for obscurity or bankruptcy is hardly warranted.

The biggest problem I have with SEO is that its primary intent appears to be one of tricking the system to generate false results. Ultimately, this is a strategy that I think is bound to fail and will hurt companies that practice it. I find it very annoying as a consumer when a product or service shows up at the top of my search and clearly does not belong there. In marketing terms, this can lead to negative brand perception.

For their part, the search engine companies are trying to ensure that search results are as accurate and dependable as possible. Until a few years ago, using invisible text and meta-tags were easy ways of tricking the search engines to boost ranking. That doesn’t work anymore. So now, other devices such as cloaking, keyword stuffing, doorway pages and spam are being used instead. Search engines have responded by banning such sites or lowering their ranking if such activity is discovered.

SE companies, such as Google and Yahoo, only want the most relevant listings showing up in searches — their reputation and profitability depend on it. People who conduct searches, on the other hand, are looking for the fastest and easiest way of finding a product, service or information. Using SEO to game the outcome goes against the basic needs of both these groups. It makes little sense for marketers to employ such short-term and counter-productive strategies that are aimed at deceiving prospective customers and media providers.

What is surprising is that many managers are so sold on the hype of SEO that they do not consider that fact that they could probably make it to the top of the list without resorting to deception. All they have to do is to follow a few simple rules of website design and actually offer products and services match what people are looking for in their searches… and talk about them on their site.

Here are some more tips:

Have descriptions of products and services as well as other unique information in plain text on your site.

The more links that lead back to your site, the higher it gets in SE rankings. Manage your site frequently so there are no orphan pages or broken links. Search engines don’t like that.

Start a blog that talks about your products and services and link it to your site.

Develop a social media network that makes people visit your site frequently.

Sooner or later you’ll find that your company or product is showing up in all the relevant searches. If you don’t have the time or skill, there’s nothing wrong in hiring a SEO expert to ensure that your site is set up in a way that makes it accessible to the robots and spiders that catalog and analyze web content. However, if you expect them to get you to the top of every possible list you can think of, chances are that you will be pressuring them to use deceptive tactics.

SEO doesn’t have to be a black art — practiced with malicious intent by maniacal wizards hell bent on getting to the top of the rankings game at any cost. It is after all just one small part of Internet marketing, which is again only one aspect of a larger marketing strategy. I am a big proponent of integrated marketing where all touch points with customers need to be consistent with brand values. Internet users today are sophisticated enough to recognize when they are being tricked. Companies that resort to deception for short-term gains can hurt their brands in the long run.

Hello

2010-06-23T20:51:00.000-07:00

Thank you for visiting my blog. I'll be posting on a variety of topics related to marketing, advertising, design, media and technology here.

I welcome your input but I've turned the comments button off because I'm tired of the automated comments that are generated to facilitate improving someone's search engine ranking — more on that later. If you'd like to contact me, write to itty(dot)thomas(at)gmail(dot)com.