ComBlu specializes in community marketing and influencer programs. Our Lumenatti blog sparks conversation about the best and brightest community ideas.

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  • 11.30.2009

    I’m tired and my head hurts……

     

    But not from the usual Vegas reasons: staying up late, losing money and drinking too much. I did none of those during the three day WOMMA 2009 Summit in sin city. My excuse is too much information and so many great conversations with little down time to process. So now, I’m in the air heading home with a little time to reflect.

    Summit 2009 content was heavily focused on case studies, social marketing techniques and measurement. In fact, WOMMA debuted it’s newly published “Measurement and Metrics Guidebook”, a collaboration of some of the best thinkers in social metrics. Check out ComBlu’s chapter by Jennifer Voisard on cost deflection. I moderated a session on “Community: An Important Driver of WOM” with panelists Dawn Lacallade , chief community strategist at Solar Winds and Bill Johnston chief community officer at Forum One.

    And, Steve Hershberger helped lead the live “Socializing Media” podcast which featured a conversation with some of the best thinkers in word-of-mouth. In between hallway chat and keeping up with crucial projects, I attended a half dozen sessions. Here’s some of my favorite take aways.

    Measurment Keynote. WOMMA’s chair of the Measurement Council, Walter Carl, PhD, presented highlights of the above cited tome of best practices in measurement. One interesting factoid was the impact of word of mouth marketing (WOM) on revenue vs. traditional marketing communications channels. Turns out the latter does a much better job of generating short term customer acquisition and revenue generation, while WOM yields higher customer lifetime value through longer, deeper customer relationships and a significantly higher referral rate for new customers. (1.7 per traditional channels vs. 3.8 for WOM).

    Anatomy of Buzz Revisted. Author Emanual Rosen gave an address on what not-for-profits can teach commercial enterprises about generating buzz. Core to his examples is the concept that human beings want to share what they create. If you give them an opportunity to co-create with you and other stakeholders, they will spread their interpretation of the activity. I think this basic tenet of self-expression as an engagement model has been forgotten in the gold rush of social media and the bright shiny object syndrome.

    The View, only with academics. Keller Fay principal, Brad Fay deftly led a panel of academics who all study various aspects of engagement, influencer identification, measurement, etc. You’re thinking this was deadly, right? They were great. Here’s the line-up.

    Socializing Customer Service. Sue Sunday, Microsoft, Ed Billmaier, The Scotts Company and Marie Shubin The Gallo Winery, talked customer support. These were from wildly different industries: software, wine and fertilizer yet offered a common thread: the use of customer service professionals to become the voice of the company in social platforms. The rationale: many companies that start listening programs or solicit comments through online forums and communities often get quickly overwhelmed by the sheer volume of conversations. The solutions: repurpose customer service representatives from call centers or email support. Not only will they be able to handle a larger volume of customer support episodes through the online platform, but they typically can offer marketing three magic things: human resources who already have deep product knowledge and are steeped in the legal, privacy and compliance imperatives of their organizations.

    Cognitive Science. Another potentially deadly topic that turned out to be the absolutely best presentation I heard. This one was lead by Steve Knox of P&G’s Tremor Group. He laid out how human’s think and a process for disrupting normal perceptions that serves to get people’s attention. Using this disruption model or combining two unrelated schemas can lead to the magic that we all seek: cutting through the clutter and getting consumers to notice, buy and tell others. This is highly over simplified, and definitely worth digging deeper. Who knew 45 minutes about schemas could mesmerize!

    I’ll provide more learning about some of these sessions in upcoming posts. ComBlu also previewed our research report, “The State of Online Branded Communities” which we’ll also dive into in the weeks ahead. Now that I’ve gotten these ideas out of my head, the seat is going back and I’m snoozing the rest of the way home.

  • 08.18.2009

    The Tower of Babble

    There is a story about the Tower of Babel in which a great tower was built in the city of Babylon thousands of years ago. 

    Babylon was a cosmopolitan city, many of the citizens were very impressed with themselves.  They were very important.  They did important things.  What they did, what they said eclipsed the value of everything and everybody else. 

    Across this city/state there were a myriad of languages spoken, roll all of this together and it was a very confusing and problematic place to be at the time. 

    All of this self impression along with the conflicting languages caused things to go badly.

    Hmmm.  Does any of this strike a cord?  Did you notice in my blog posting I deliberately mis-spelled Babel?  It’s typed as ‘Babble’.  Dictionary.com defines Babble as “to talk idly, irrationally, excessively, or foolishly; chatter or prattle.” 

    Sound vaguely familiar yet?  No?  Ok, I’ll keep going.

    How about this.  Earned Media.  Getting warmer?  Tagging? Uh-huh.  Uniques?  Yep.  Web 2.0?  Sure.  Tweets.  Of course.  What about this one:  Link Juice.  Ummmm.

    Marketers have their own language that to others sounds like well, babble.  Try an experiment.  Set a meeting request to your company’s CFO and put in the subject line ‘Briefing on Earned Media, Tagging and Link Juice. 

    See if he or she accepts or instead, declines and emails you back asking what the @#!&# it is you want to waste their time with. 

    Respond saying you made a mistake.  You want to share a few cost-deflection and lost revenue earn-back strategies you’d come across.  You’ll probably get a different result.  You see, marketers speak ‘promotion’, while CFO’s speak P&L (profit and loss).  Accountants speak GAAP (Generally Accepted Accounting Principals), VP’s of Manufacturing speak Lean or Cellular (as in Lean or Cellular Manufacturing).  A few mutants still speak Six Sigma.  Together at some level in the organization, the management committee made up of the C-level and EVP level peeps who make decisions like merge, divest, close the Scranton Office, etc. speak Revenue Center and Cost Center. 

    Revenue and Cost center is an interesting language, it has two intertwined dialects.  The first, ‘Cost’ is brutal and gutteral, sort of like Gaelic.  ‘Revenue’, on the other hand is more melodious and sweet; a joy to listen to

    Those who speak Revenue and Cost see things as, well…generating either revenue or incurring cost.  Revenue and Cost speaks only of black and whites. You as a marketer are part of that world.  Yes!  It’s true.  Unfortunately, you reside more often than not in the Cost side; not always a comfortable place.  Sales sits in the Revenue side, which can be much more fun.  The reason is metrics.  Sales can show direct contribution to revenue.  TV ads and guerilla marketing tactics usually don’t.  Sales are easy to defend.  Without hard metrics, marketing is well, squishy and couple squishy metrics with terms and definitions that others don’t get and you are on thin ice in terms of value and influence.

    While the term Earned Media sounds cool and is important to help describe all of which help define the granular inner-workings of some marketing tactic, its impact or outcome, most people outside of the marketing department don’t care or even understand.  Your marketing power points cause some in the organization to spontaneously bleed from the ears (note:  this will usually cause them to exclude you from critical meetings like budget planning).

    Not being understood is bad.  If they don’t understand, you’re value to the organization is diminished (imagine getting a new boss who doesn’t understand what you do.  How long will you last?). 

    dilbert

    If those who speak Revenue and Cost can’t understand your department or your program’s value, you don’t get the opportunity to actively shape how the marketing promise is delivered. 

    Those who control the business enterprise (the making of the widget, the pricing of the widget and the distribution of said widget make their decisions regarding the widget without you.  Your input falls on deaf ears.  Yikes!  Hell on earth!

    So what to do?  Don’t live in the chaos of Babylon waiting for the impending doom.  Be proactive!  Learn a second language and communicate.  When we as marketers are as versatile in the other operational languages our peers speak as we are in our own language, amazing things will happen.  One:  You will start measuring your activity and results in ways that are important to others (those who speak Revenue and Cost).  Two:  Your influence and work will amplify in terms of results.  Marketing initiatives will begin to be baked into operational activities and visa versa.

    What were previously siloed activities will begin to work more harmoniously (i.e. CRM and Social Marketing) and you as a marketer will cease to be viewed by the other non-marketers in the company (whom by the way out number you) as not just the creator of hokey messaging and some un-measurable brand promise but instead the gate keeper of customer loyalty, net profit generation, low-cost win-backs and heck, maybe even a cost deflection source!

    Well, we are at the end of this blog posting and the four non-marketers who were reading this have already gotten their fill and left, so I will reveal the big important ah-ha.  One that trumps even decoding Revenue and Cost.

    You as marketers will hold the power of the customer in your hands and strong customer demand trumps everything.  You will understand them better than anyone, you will know how to reach and keep them happy.  You will know how to convert more customers using targeted, efficient techniques and tools.  You will balance the promise of your marketing efforts with the delivery of those promises by the operation.  You will be the master of customer engagement efficiency!  You will drive profit, which you can measure and defend…and that is a very good place to be.

    That is, if you like that kind of stuff.

  • 06.09.2009

    Is Social Media a ‘trick play’?

    Yesterday I had the good fortune to be with a couple of former NBA greats.  My nine year old son and a handful of his friends had the good luck to spend a couple of hours at Conseco Field House’s practice gym with these guys.  There was a lot of shouting and running and working on the basics. 

    DSC_0160 (2)

    During a break, I asked my son, ‘Are you having fun?’.  He glared at me.  This wasn’t quite what he expected.  One of the former players yelled, “Being in the NBA is hard!  This ain’t no cakewalk!  What’s pain? (A: Lunch!)  Will you quit?  (A: Never!  We want more!  We want more!).  Not good enough!  Give me a suicide (sprint)!”

    One of the players has a gold medal.  A co-captain of one of the Dream Teams.  During the break, I asked him what it took to win at that level.  Here’s the answer.  “Flawless execution, consistently of the fundamentals….as a team.  Then he added, chance favors the prepared.”  That’s what it takes.

    There was something about this quote that nagged at me beyond it originating from Louis Pasteur.  It finally dawned on me last night when I read Oliver Blanchard’s blog post.  Over the past couple of months, I have been growing increasingly frustrated with marketing and a large swath of marketers.  Oliver’s blog brought it up an express elevator from my subconscious, which is where this notion has been sitting, irritating the you-know-what out of me.

    Successful teams win by having a culture of ‘we’, not ‘me’ and focusing on everybody flawlessly executing the fundamentals. And they communicate and they measure. Teams that rely on trick plays, don’t communicate or measure performance effectively may win a few games but don’t consistently get to the championship.  Period.

    So I was up in the middle of the night thinking about this.  Social media is a tactic.  Media is a venue, a distribution tool.  A tactic.  All of the shiny pennies being promoted as something you need to adopt to ‘join in the conversation’ are the equivalent of a few juiced up trick plays.  For some, it’s easy to pull them out when you have no game plan or your game plan isn’t working. 

    The problem is trick plays only work once and usually for a very short time.  You won’t win relying on them.

    By itself, social media doesn’t deserve it’s current rock star status and those who are piling onto the bandwagon are really piling onto nothing more than a little red wagon.  Again, it’s marketing tactic, not a business strategy. Note: Little red wagons also tend not to hold up well under heavy load, so beware hard hard you jump. 

    If this is true, and I believe it is, where should our attention attention lie?  It belongs in what drives the relationship between marketing, operations and the marketplace.  These relationships should be socialized.  Not just one but many.  Not in an ad-hoc way but in a pragmatic and planned order. 

    Why?   Social is an adjective.  In part it means to participate in activities designed to remedy or alleviate certain unfavorable conditions of life in a community.  Great communities (businesses and brands count) are organized and planned affairs.  Am I splitting hairs?  Not in the slightest.

    When people work well together collaboratively, they win.  NBA team, swim club, Fortune 500 business, mom and pop shops, doesn’t matter.  The key is focus, collaboration, organization and a single shared goal.  Yes, you need tools and everybody has a slightly different role but without this approach, success is expensive and short lived.

    For the purposes of this blog post not becoming horribly long, I have broken this into two steps general steps pretty much anybody should be able to get their head around. 

    1. Aligning the groups involved around an organizing construct and getting buy in.  This should generally be organized as shown:

     

    venn

        2.   Map the activities that drive your business into nodes or ‘neighborhoods’.  Define who participates in these and why.  Some will be closer to the marketplace than others but each should be interconnected to one or another node that has ties to the marketplace.  If you map your initiatives, their audiences and participants, if you are honest and performing at a high level (i.e. you are profitable), these initiatives should loosely imitate the layout of these two diagrams.

    We call this exercise ‘Urban Planning’.

    Here’s an example of neighborhood mapping.

    structure 1

     

    Naturally, users will gravitate towards areas of interest.  Product testing, service feedback and user collaboration are three examples that fit either the operational or marketing functions, however, the learning and outcomes of this collaboration belong to the entire entity, not just say marketing.

    If this makes sense but your formal or even back-of-the napkin findings don’t align with the above general structure, please consider using this tool to aid you in your career advancement.

    So why is there not more of a focus on this instead of the current fixation on social media?  Two reasons.

    1.  Tactics are easier to sell than strategy, unless you understand operational strategy.  Most marketers don’t, nor do they want to.  Business strategy isn’t sexy. 

    It also requires discipline and focus. Most marketers aren’t willing to invest in.  The basketball player I talked to said he spent hours a day for years working on rebounds.  Not sexy.  Tiger Woods spends hours a day, every day at the driving range.  Not sexy.  Critical to winning though.

    2.  Shiny penny tactics are like drugs.  Especially the tactic du jour. They can feel really good (mistaking activity with results sometimes has this effect) and are addictive but without a good reason for taking them, they can be harmful over the long haul.

    Recently, at a conference, I saw a sales guy for an agency deboned by a world class operations person.  He was hyping a simple tool as strategy (in this case, platform measurement software) and streaming buzzwords faster than I could keep count.  He was dead before he knew it and by the time he figured it out it was too late.  There was a subtle gleam in the eye of the brand ops person who had been through the wars and got social marketing and operations on a Ph.D. level.  She filleted the talking head with the precision of Freddy Kruger.

    At this same conference, I overheard (as did several others who tweeted on this very topic) two marketers talking about their conference goal was to get a how to guide on setting up a blog to further promote their product and maybe get some customers to create some viral videos for them.  You can’t get any more in the weeds than this.  Enter the trick play and the marketer who sells it.

    So in conclusion, ask yourself, how many trick plays are currently in your playbook?  Are you really playoff bound?

    610x

    The clock is ticking…

  • 02.23.2009

    M&M Post Script

    I received a comment from Deb Eastman, the CMO of Satmetrix regarding my recent blog post.  Her comment is below:

    Steve, I want to clarify a miserception in your original post, M&Ms is absolutely NOT faking customer engagement.  This site is hosted on the Satmetrix Community platform and MyM&Ms used our technology to collect input from highly engaged fans.  However, Emma is an employee of myM&Ms and was responsible for engaging consumers to provide feedback on how to improve their products and overall customer experience.  They made several changes to their packaging, allowed consumers to put their faces on M&Ms and improved their customer experience based consumer input.  Consumers got the products they wanted and M&Ms increased loyalty in the process.  Everyone wins. 

    It's unfortunate that budgets are currently impacting their level of engagement, but I expect we will continue to see myM&Ms engage with consumers and improve their products & services based on customer feedback.

    This brand listened and acted on customer feedback.  I think most would classify this as genuine customer engagement.

    Deb Eastman, CMO

    Satmetrix

    I would like to thank Deb Eastman for her point of view.  Since the M&M site was hosted by Satmetrix, they cannot, like many professional marketing service organizations, ensure that their counsel will be either listened to or acted upon.   Like the physician who counsels their patient to stop smoking, they simply can’t make it happen, even if it is the right thing.

    Satmatrix is a well respected organization and should be applauded for fine work we see from them across the marketplace.

    Deb points out that M&M’s implemented a number of key initiatives that came out of customer feedback.  This is great, but is only a start.  True engagement and subsequent performance results comes from:

    1. Actively listening to the customer
    2. Providing multiple ways for the customer to engage in this process
    3. Organizing what was heard
    4. Acting on this insight, across the business (beyond just the marketing group responsible for the initiative
    5. Reporting back on what can be acted on, what can’t and why (note: Intuit does this with great success.  Intel is starting to do this in partnership with their hardware OEM’s.  Heck, even small firms have seen a more holistic approach allow them to effectively compete against much larger competitors, as well as, remember where their core advantage lies.)
    6. Providing active, intrinsic rewards for involvement.  Note I said intrinsic rewards, not extrinsic.  That’s a slippery slope.  Intrinsic means:
      • Thank you’s
      • Spotlighting users
      • Articulate how their idea was integrated into the process, service or product
      • Tapping them as SME’s (subject matter experts)
      • Engaging them as mentors
    7. Systematizing the process of customer engagement as part of the culture of the business, rather than a narrow program.

     

    There are also some helpful tips for engaging influential customers (such as M&Mmbassadors) at WOMMA’s website.

    Now, I am NOT saying that M&M has or has not done any of this.  Who knows, there may be a lot going on behind the scenes.  I’d love to hear from them. 

    Moreover, I’d love to see this program come back…in full force…bigger and better than it ever was.  Since I am a fan of M&M’s, count me in.

    Lastly, thanks to Deb at Satmetrix for her comments as well.

  • 02.20.2009

    M&M. Faking customer engagement?

    Ok, I love M&M’s.  Who doesn’t.  My two year old daughter really loves M&M’s.  To her, it’s a food group.  Me, if I was trapped on a desert island and could only take one candy, it would be M&M’s. 

    I doubt I will ever be put in a position to make this kind of critical decision.  Although I sort of wonder what kind of creepy reality would force me to have to do this…but that’s another blog post.  Indulge me, it’s Friday.

    I saw a tweet come through from a friend of mine, Virginia Miracle (veedub to her friends) about the M&M Mbassador program.  This factoid will be important later (veedub, not the program).

    Being the good student of community, I followed the link to the Mbassador home page.  I immediately dove into the comments…before I even read the post.

    There were about a half a dozen comments which oozed affinity and brand loyalty.  All sorts of love.  Several craved more interaction.  They essentially said, '”Hey M&M, here I am.  Involve me!  Work with me!  Tap me as a resource!  I’ll do anything, just don’t shut me out.”

    I dove a little deeper.  Lots of comments and stories about the love people have for the melt in your mouth, not in your hand chocolate crack.

    When I Googled M&M Mbassador program, there it was on the top of the list.  But there is a problem (can you find Waldo?) .

    MnM_veedub

    If you look carefully, I was dropped on VeeDub’s page straight from Google.  The page his hosted by SatMetrix.  C’mon guys, this sort of thing is bad form!

    Here is how I got to it:

    Google MnM

    I finally went back to read the original post that was prompted by Virginia’s tweet.  Here’s how it reads:

    MnM

    I feel for Emma.  She sounds pretty down and out.  Reading between the lines, I’d bet that you don’t see any form of direct consumer engagement coming back anytime soon.  I hope it does.  Engaged and excited consumers who love the brand are a great way to extend understanding and product adoption and use.  Heck, just look at all of the UGC people have created on their own.

    A friend and colleague of mine, Pauline Ores has a great line…”Community is like gravity'. It is the same for everything or everyone.”  Or at least it should be.  Good community works the same for Apple as it should for M&M.  That is to some degree if management gets it or understands its value. 

    My guess is the folks at M&M are making a short term P&L decision.  Understand it.  Too bad.  If I see more commercials of un-dead, man-sized candies playing good cop/bad cop on TV, I’ll be even more disappointed.  That means the brand chose the easy generic impression rather than an integrated customer engagement path.

    What a bummer.

  • 02.16.2009

    Form over function

    Apple has done an amazing job in creating an image and what used to be a customer base of passionate brand advocates.  People who were so gung ho on the brand that they would defend everything the company did, no matter what.  Today, I think they have morphed more into a company that caters to product advocates…people who love their i-phone, their i-pod, garage band, whatever.

    Job’s rock-star style of ‘shock and awe’ product releases has created a double edged sword in the sense that everybody expects Apple to turn out fabulous, sexy and useful stuff.  I am going to go on record in saying that Apple’s ID (industrial design) team is legendary.  They could make a doormat sexy.  However, if it is not useful, or user-friendly the value starts to diminish.

    I see a couple cracks in the dam that indicate there is trouble brewing.

    1.  Apple’s twitter feed has over 24,000 followers.  It does NOT allow for @ REPLIES or RT (re-tweets).  It simply pushes out branded content with no concern or care to who is listening or why.  Marty Collins does a good job breaking this fact down.

    image

    2.  Genius bar.  If you have ever used it, unless you are a power Apple user (i.e. know exactly how to work the computer, the website and the system), in which case you mostly don’t need the genius bar in the first place, this is a horrible experience for the average Mac user.  It’s noisy, crowded, difficult to get an appointment and most people end up feeling like idiots and leave disgruntled.  Mostly because the 28 year old person on the other side of the counter (which separates you from them) has a t-shirt on that essentially says, ‘hey I am smarter than you.)  Apple wants to cultivate this image.  They believe it.

    Untitled

    image

    But not everybody feels this is a great experience.  On more than one occasion, I have been in a store and overheard some poor customer say either to a genius or to anybody in earshot that was listening, “Are you actually trying to make me miserable?”  or here was a real gem from the Michigan Avenue (Chicago) store “Do you think that you have me so completely that you can treat me like this and I won’t care?  Or that I have no choice?'” 

    3.  Apple’s tools and marketing channels are devoid of any voice of the customer.  No UGC, no interactive tools, no learn from people like me, no easy and useful communities of other passionate users that’s integrated with the product. Instead, you find product, marketing content and white space.

    Untitled2

    In fact, I have to go to France (OK, it’s Sara France) to get to some form of consumer UCG I might find helpful.  But again, this is marketing content.  Not user content.  No way to rate or rank, share, communicate, collaborate, learn or experience. 

    As marketing to consumers becomes challenging, not to mention an economy that is making virtually every shopper consider what they are buying, why and what is the value, Apple is on the verge of creating a problem for themselves.  It won’t manifest quickly I think but will come to a boil over time.

    I saw this first hand a long time back when Scully headed Apple.  They (and he) knew better.  They (and he) never listened.  They spoke.  The company teetered on the brink because of that. 

    Don’t get me wrong.  I love Apple.  I love the history, I love the overcome all odds mentality, I love the fact that they do get the product experience, every element from the packaging to the plug in.  I have many friends who are former Apple superstars.  Developers and marketers alike.

    For Apple to capitalize on their still-strong fame, they need to re-think:

    1.  Content only being 1 way.

    2.  User Feedback and aggregation of the consumer’s content being a core strategy.

    3.  Integration of the user experience into the product (think Yelp, Amazon, etc.)

    4. Re-invent the store.

    5.  Have a couple of marketing messages, not just bashing Microsoft.  Spotlight your customer!  Geico has a number of methods.  Sure, they are cheesy but it’s unsexy car insurance, not sexy devices.

    Just a few thoughts. 

  • 02.12.2009

    Social Media Podcast

    Recently, I was interviewed by Tom Searcy, the President of Hunt Big Sales.  Tom has spent nearly two decades in CRM, having run and sold a large CRM call center and software business. 

    His recent business, Hunt Big Sales

    helps sales forces from Fortune 500 to high growth entrepreneurial businesses maximize sales activities.

    Thought you might enjoy.  You can download or stream the podcast here.

  • 02.11.2009

    5 Keys to Brand Strength

     

    I decided to do an experiment.  I emailed 50 business executives that know and respect.  I carefully weighed who to include.  The list took two days to assemble. 

    The question was purposely broad and came with a little descriptive help so as to allow for some creativity but not to entirely stray off the reservation.

    Here is the email:

    Sent:         Friday, February 06, 2009  11:00 AM

    To:            Undisclosed List

    Subject:    RE: Economy is melting.  What   are the TOP FIVE most important metrics for brand health/survival?

    Status:    Red

    --------------------------------------------------------------

    Think engagement vs. awareness.  What increases loyalty generation?  What drives incremental spend?  What do I as a marketer that is ammo for the other C-suite members?

    I got a 50% response rate.  Considering who I pinged, I was happy.

    Here’s the breakdown:

    LiveWriter

    Here are the responses, rank ordered:  I tried to keep the responses as close to the original verbatims as possible.  These are points are reflective of all the responses.

    1.  Increased direct customer engagement; collaboration with each other and with the brand.  Outcome based activity (less promotion, more utility)

    2.  Brand reputation and relevance/Net Promoter Score/Increased Relevance and direct value to the consumer

    3.  Reduction of churn/increased focus on ongoing education and peer/customer collaboration/greater focus on UGC/expansion in customer centric/customer focused social media, web 2.0 and community activities

    4.  Better integrated CRM activities/integrating customer support with sales and marketing/increase in customer voice within brand

    5.  Better measurement to ROI around:  a) Marketshare  b) Margin  c) Net Sales  d) Cost deflection/operating costs  e) product usage  f) loyalty

    Interestingly, I got on average a full page response from each person.  Some were short, sure but most were well thought out and provided a fair amount of detail.

    I’d love you to weigh in and let me know what you think the top five are!

    Here’s the good news.  With the explosion of technology, there are more and more annoying ways to pester customers and prospects, as well as, collect more data on their behaviors.  The freezing of the economy has, well, freaked most executives out thoroughly. 

    The customer, who was as of Spring last year, looking like they were on the verge of being totally disenfranchised by most brands (hey, they are a nameless, faceless number that in the end can be replaced.  Shut up, we just want your money…right?) Now all of a sudden (and rightly so) has become very, very important. 

    The customer finally can speak with their voice, not just their wallet…brands are listening.  They have no choice.  They listen and respond or go out of business.

     

    Sort of like the fat guy who has to have a heart attack before he changes his life style.

    In the end, this is going to be a good thing for both brands and customers.  They will have a closer relationship.  Technology and advertising for the sake of themselves won’t be the end-all-be-all they have been. 

    The next question is how many brands will survive this.  I heard from one senior marketer the other day that in 24 months, there will be 15-20% fewer brands than we had 12 months ago.

    What do you think?

  • 02.05.2009

    Cause and effect

     

    I had dinner last night with an economist formerly who is also a friend of mine and with whom I used to race bicycles.  Years ago, we were both track racers (riding in a velodrome with a heavily banked track).  Our specialty was the 500 meter kilo, a very fast and short race.  Later, we graduated to racing criteriums and one day ‘classics’ races.  In essence, we had become specialists.  Focusing on more dangerous, faster and shorter races.  Neither of us had the gas for longer or multi-stage races.  We’d been conditioned to perform differently.

    TOUR-DE-FRANCE-STAGE-NINE--

    My friend and I discussed the stage of the economy, covering four important topics.  The stimulus package, the credit lock, the paradox of thrift and wall street’s myopic approach to economic growth.  Each of these things alone are important and will have an impact on our economy for the next 20 years.  Together, no one knows what will really happen.  We have to look to the past for answers. 

    The net is that a free market economy always rights itself, as long as it is based on a sound structure.  Unfortunately, the hunger for profit has caused Wall Street to create new financial instruments that are essentially based on nothing other than risk itself.  Derivatives of derivatives.  Not a lot different than playing Kino or Baccarat in Vegas.  Wall Street bet on black and it came up red.

    image

    Now that a big chunk of what fuels our economy (i.e. the financial sector) is no longer truly part of the free economy, what with the financial firms being nationalized and all, we are in new brand new territory.

    That said, are we are more likely to be seriously hobbled again in the future by Wall Street itself or instead by the Federal Government’s ownership interests.  Truly, these two forces are at odds.  So what will happen?  Will our growth engine of the future be a Hemi or a Hybrid?

    What I mean by this can be found in the outset of this blog post where I discuss cycling and the correlation my friend made.

    The macro-economic trends which drive our U.S. economy, as well as, the integrated components of our economy that aren’t U.S. based but global in nature.  Not being an economist (like my friend), I don’t want to debate where macro-economics converts to micro and the interdependencies between the two.  Instead, here’s the important notion. 

    As a cyclist, my friend and I focused on short, fast races and were not equipped to race longer races, say like the Tour of California.  Our economy is essentially a long race.  Wall Street has trained public companies to race short races.  Meet the quarterly guidance at all costs.  Juice the numbers, move assets, sell at a discount, just meet the numbers so our stock price doesn’t tank and keeps us from borrowing money or selling our bonds.  It’s a vicious cycle.

    Getting new products to market, capitalizing on market share opportunities.  These are sprints.  Short races.  Running say Citigroup, AIG, Boeing, Microsoft.  These are long races.  As my friend reminded me, Lance Armstrong won 7 Tours.  He didn’t win every stage, or even the majority.  He won the overall race. 

    If we want our economy to right itself, get the speculators and gamblers out of the business decision process.  They will always promote a sprint.  Let them gamble (they always will, we can’t stop that) but not at the cost of influencing the outcome of the longer race

    Can the Mongols of Wall Street co-exist with their new bed fellows, the shackled and risk-adverse CEO’s, and their new bosses, the beurocrats and politicians of the federal government?  Maybe, if each understands their place on the team.  Sprinters sprint when appropriate and climbers climb when the need to.  My guess is they won’t play nicely. 

    The fact is that the Feds never, every give up anything.  So I am not sure AIG will ever return to its previous form.  So, we shall see.  It’s gonna be a long and scary ride for sure.

  • 02.04.2009

    Signs of the times

     

    It was 4 degrees at 5:45am this morning.  It was also dark. I slid and stumbled down the still snow covered driveway to locate my Wall Street Journal, the old-school paper kind.  Finding it I made my way quickly back inside.  But as I walked, I noticed one thing.  The paper weighed almost nothing. 

    '”Hmmm, this would explain why I now have to walk all the way to the bottom of the driveway to get it.  A year ago, it made it three quarters of the way up.  Driver can’t toss it as far.”

    When I got inside, I opened it and again noticed something that I had been seeing for days, even weeks but only today saw.  In each section, the cover, Marketplace, Money & Investing, even Personal Journal there is only one type of news.  Business all over, of every type is bleeding.  Some, like GM and Chrysler have throat wounds.  Others like Motorola, UPS and Dow Chemical are bleeding and anemic. Yet others like Mattel, Nintendo and even Electronic Arts are showing rumblings of trouble.

    President Obama said something that stuck with me a while back.  “We don’t have a republican problem, we don’t have a democratic problem, we have an American problem.”  True, but we really have a people problem.  This issue is global and we are all tied together.

    That said, rather than sit here and whine about it, we should all be acting pro-actively and thinking with an innovative mind.  Clearly, cost cutting across the board is a requirement in every industry but panic and repetition of traditional marketing, sales gen and CRM efforts will fall on deaf ears.  People, consumers are not worried right now, they are scared.

    You will fight for every dollar decision.  Make it easy for them.  Listen to them.  Be innovative.  Speak plainly.  Share the knowledge.  Here are some ideas I have had over the last couple of days.

    NBA teams:  Invite loyal fans to a series of pizza parties held on the hard wood.  As THEM to re-invent the stadium experience.  Music, activities, prizes, contests, etc.  Put management in the stands in sweatshirts that say Team Management:  Talk to me.  Make them move every 15-20 minutes.  Meet after the game, rank order feedback.  Post it as a checklist on what’s being done.

    Retailers:  Recruit customers (real ones) to secret shop and provide them a deep discount on purchases when doing so.  Give them a forum to post their findings.  Act and report on those findings.  Give key customers Pure Digital (www.theflip.com) cameras to record their experiences.  Here’s an example, caught on a flip camera.  It’s called ‘Why buying a new sled at Walmart is a good idea, it’s called Meredith goes sledding.  Give them a forum to share homegrown ideas of stuff to do with their families that don’t cost an arm and a leg.

    Airlines:  Remember, you have the power to make it better or worse.  It can be simple things.  Make a joke.  Ask a question.  Smile.  Show sincerity.  Look people in the eye.  Most of the things you do make you appear to be out of touch and actively working hard to piss us all off.

    Restaurant chains:  Create mix and match fixed menu options for sharing.  Have patrons rank and rate favorites on paper menu options.  What sounds good, versus what is a good value versus what was actually tasty.  Follow up with repeat patrons to inquire how the take out service was.  Ask for 1 way to improve either the experience or the value.  Track this, learn from it, act on it, share it.  Create podcasts on ways to cook this at home.  Have a favorite dish?  We’ll show you how to make it.  If you are a chain that sells branded in store items, feature these items.  Provide in in-restaurant discount to people who have used these products and have a proof of purchase.  If you don’t make it, maybe you should.  Any contract manufacturer would welcome the chance. 

    In the end, listen to your customers.  Ask them.  What you will receive is golden.  I’d love to have some more ideas.  What is it that businesses should be doing to stay in synch with their customers?  Post a category and one or two ideas.

  • 01.09.2009

    The One Word You Need to Know to Grow is 'Are'

    Recently, I got a call from a friend of mine. He’s a pretty smart guy, but he began our call like this. “Hey, I may be an idiot because I don’t understand something that seems so mind-numbingly simple. Can you help me?” I asked him what was bothering him. He said that over the last couple of days he’s responded to a couple of surveys. One he got in the mail, another came as part of a sales receipt where he dialed into an 888 number. The third survey he had just finished and they had called him. In each instance he had been asked a question that made no sense from his point of view.

    My friend owns a successful manufacturing company and has undergraduate and graduate degrees in finance, so he sees things pretty black and white. He has been a loyal customer to each of the brands to whom he’d responded to the survey information, so he was happy to take the time to complete each survey. In each survey, they asked how likely he would be to recommend their brand to others. He responded that he’d be likely to do so.

    Seems simple enough, right?

    Wrong.

    In reality, as he said, he is very uncomfortable in imposing his point of view on others, unless they specifically ask him what he thinks; which is a rare occurrence, since he doesn’t tend to talk about such things regularly. Moreover, currently he isn’t recommending any of these brands to anyone. Not that he doesn’t love them; he said that he did. He just doesn’t go out of his way to do it, isn’t doing it and can’t remember the last time he did. This concept really bothered him.

    He said to me, “Steve, the survey is worthless because it is going to report something that isn’t happening. They should have asked me if I was recommending them. Right?”

    He continued, “It reminds me of a former salesman I had. He’d put into his sales forecasts projects he thought would close when he had no data to prove they would. He just felt good about the opportunity. In the end, he was trying to create a reality that really wasn’t there.

    When I got rid of him, I personally went out and met with all our key customers and asked them for their honest appraisal of us. What I heard wasn’t all pleasant but it was what was keeping us from winning all of their business, so we went away and acted on what they told us.

    Knowing that information was critical, it wasn’t pleasant but it was necessary. Since then, we’ve doubled our profitability and have not lost one customer. Our prices are 20% higher than our competitors. We couldn’t do this without customer advocates and we would have customer advocates without meeting their needs. We can’t meet their needs unless we know what they think.”

    He’s right again. Being likely to recommend doesn’t mean you are or will. But it sure makes it easy to say “yes” and marketers feel better about reporting the fact that 85% of their customers are likely to recommend their products and services.

    Sounds a lot better than currently 18% of our customers actively recommend us on a regular basis, doesn’t it? So his question to me on why this was is a good one, as was his point. What do you think?

    Why is the phrase ‘are you likely to recommend’ used instead of ‘are you currently recommending’?

    The answer might lie in the fact that if not enough people are recommending the brand.

    Might it be because the experience falls short and that would require real and meaningful change? Perhaps it is because the brand does little to engage them as advocates? I couldn’t give him a good answer why there wasn’t (to use his terms) more of a ‘concrete present value’ to most of marketing.

    In the past, I had given this friend Fred Reichheld’s book, ‘The Ultimate Question’ as well as, a couple of others such as ‘Wisdom of the Crowd’ and ‘Return on Customer’.

    He liked each very much but in the end, his opinion was that it easier for marketers to keep creating TV commercials with good looking actors portraying happy customers and asking if consumers might possibly be willing to do something sometime in the unspecified future than truly engaging the customer, asking tough questions and instituting real change to meet their needs and requirements. That was my friend’s point of view. I thought that this story was worth sharing.

    Here is mine: The one word you need to know to grow is ‘are’ (as in are you recommending).

    It is time to stop talking about customer engagement and do it.

    It is time to stop thinking we know what is in the minds of our customers and invite them into the process.

    It is time to treat our best customers better than our next customer.

    It is time to stop worrying about politics of making change and act.

    It’s time to stop organizing focus groups that include people who have never bought our products and probably never will.

    It is time to stop talking to our customers and start talking with them.

  • 01.08.2009

    The You Tube Methodology

    In the November 2007 issue of CRM magazine I recently read an article titled 'Have You Caught It?'  The premise of this article was that Viral Marketing is striking out...but viral isn't to blame.

    The article starts out like this.  "Disappointing numbers have convinced many marketers to decrease their viral marketing (spend) by 55% next year, but viral isn't to blame.  Viral marketing is exciting, and understandably so-it's a marketer's dream that by simply planting a video, consumers will not only find it, but also spread it far and wide."

    The reality is that what I quote above isn't happening.  According to the article and the underlying research conducted by JupiterResearch, only 15% of viral marketers succeeded in getting consumers to promote their message.  Why is this?

    Ready-Fire-Aim.  I have begun to call this phenomenon 'The You Tube Methodology'.  Now there is nothing wrong with You Tube.  On the contrary, it is a powerful and very engaging tool, when used appropriately (and there are a lot of ways to use it).  I instead refer to using the venue, which is a tactical tool as a strategy and avoiding a process altogether.  Bad idea.

    So why do certain viral videos work?  Two reasons really; they resonate with their audience because they are made expressly for their audience (and many times members of the audience have a say in it or come up with the idea for the video themselves) or they are so far off the mark they are embarrassingly bad. 

    The first example is like throwing the impossible pass to win the Super Bowl with one second left on the clock.  Your team's fans go, "Wow, did you see that?!"  They get the video snippit off You Tube and pass it around for days.  They talk about it for days and share it with people just like them.  I got a video from a friend of mine which illustrates this point.  See the video here.

    Different sport but same idea.  Actually, it is the third time I had seen it in as many weeks.  As a competitive cyclist, I belong to a community of riders just like me, as well as a sub set of that community that are fans of single speed mountain bikes.  A very passionate group who talks about and recommends everything from nutritional aids to vacations to restaurants to you name it.  This social network is spread across the country and is made up of CEO's, attorneys, doctors, airline pilots, graduate students, plumbers and even a state senator.  Last week, one member of the group made a recommendation that resulted in another choosing to fly to Europe to take possession of a new Audi sports car, along with an included trip to the factory, a short vacation and a chance to drive his car on Audi's test track.  Purchase value?  $46,000.00.  What had he had originally planned to do?  Buy a used one locally.  Big difference and talk about influence.  How this video is spread is viral and it works.  Although it is not a product focused video, it easily could be and it resonates with a specific group (are you listening Giro Helmets?).

    The second example is the train wreck that doesn't resonate with anybody but it is so bad that people feel the need to share it in order to make fun of it.  Any publicity is not always good publicity.  There are lots of examples of these 'corporate videos' that well, just plain suck.  So why do they, um, suck?  Most of all, they totally miss their demographic mark and there is no call to action for feedback, voting or to get involved.  There are other reasons but these two are enough for now.

    So what's the purpose of this post?  To compel my fellow marketers to have a reason for doing something.  Take a page from Seinfeld.  The show about nothing.  The reason it was so funny was that it resonated with people for a specific reason (we all saw part of our lives there and could relate to it), plus it was scripted!  Planned out!  There was a reason for a joke.  It was tried out in advance!

    Keep using viral tools but dump the You Tube Methodology.  You'll be a lot better of and a heck of a lot more successful (and popular with your customer base).