Customer Expectations
By Paul Herbig
Customer expectations have been rising over the past few decades. Graduates expect to find that perfect job and be managers and owners within a few years out of school; everyone is searching to find the ‘perfect’ spouse, often discarding those with one or two frailties; and our children should be perfect, beautiful, smart, athletic (picking those characteristics genetically is not as far off as one might think). As the number of choices increase in our life, many consumers believe they should never have to settle for that which is just “good enough” and instead shoot for perfection—given the plethora of options available, They know it is out there and theirs to be found. Those that do aim for only the best have been repeatedly found to be less happy, less optimistic, and more depressed . . . the making of a dissatisfied customer who cannot make up his/her mind (sounds familiar?).
Recently a "Husband Shopping Center" opened in Houston, where women could go to choose a husband from among many men. It was laid out in five floors, with the men increasing in positive attributes as you ascended up the floors The only rule was, once you opened the door to any floor, you must choose a man from that floor, and if you went up a floor, you couldn't go back down except to leave the place never to return.
A couple of friends went to the place to find their perfect mate. First floor, the door had a sign saying "These men have jobs and love kids." The women read the sign and said, "Well, that's better than not having jobs, or not loving kids, but I deserve better so I wonder what's further up?" So up they go. Second floor says "These men have high paying jobs, love kids, and are extremely good looking." Hmmm, say the girls, “Better but not the best. I deserve better. I wonder what's further up?” To the Third floor they go: "These men have high paying jobs, are extremely good looking, love kids and help with the housework." Wow! Say the women. Very tempting, BUT, Not quite good enough. There's more further up! And up they go. Fourth floor: "These men have high paying jobs, love kids, are extremely good looking, help with the housework, and have a strong romantic streak." Oh, mercy me. Sounds heavenly but not quite perfect. I only deserve the absolute best. Just think what must be awaiting us further on! So up to the fifth floor they go. The sign on that door said, "This floor is empty and exists only to prove that women are impossible to please."
This is funny. Take away the sexist implication (substitute men for women, substitute looking for perfect) and you have an excellent example of seeking perfection and never be satisfied with anything less. The result: constant dissatisfaction.
Customer expectations are often misaligned with company objectives. This could be due to the customer having unrealistically high expectations or the company having created levels of expectations it either cannot or will not fulfill.
Setting expectations. You must set the level of expectations you are able to meet and then sell to that point or just below it. Tell customers what you want them to want. Messages must be crafted to give the appropriate level of expectations. Hype might bring customers to your door but if your product and delivery cannot match the hype, you will not close the sale or keep the customer. What are you promising to the customer? Are you willing and able to meet the promises?
A study by the University of Illinois found customers willing to hang around even with lower actual satisfaction if their expectations were of higher actual future use. And conversely, those customers whose future value of products were minimal (not very useful to them in the future) tended not to hang around even with high ratings of customer satisfaction. In other words, if you provide a product valuable to them in the past, present and future, they will tend to stick with you regardless of the level of satisfaction (up to a point that is). You must 1) Effectively set expectations for customers; 2) Understand all the expectations of your customers. Not just those overtly expressed but just as well trying to understand those hidden; and 3) Deliver on their expectations or exceeding them Remember, Dissatisfaction is often derived from failed customer expectations
If your major benefit or sustainable competitive advantage is service and customer support, do not send messages of aggressive pricing. You will attract the wrong type of customer who will not be happy with the actual product offered. The expectation you create for your customers must match the message they hear.
Thursday, November 1, 2007
Wheredidtheygo
Where did they go?
By Paul Herbig
When Nielsen Media Research's fall sweeps ratings came out this past November, they clearly showed that men between the ages of 18 and 34 were watching less television, particularly fewer prime-time shows. For the time period during the autumn weeks, when many vaunted network shows hit the airwaves for the first time, Nielsen's data concluded that men 18-34 watched a hotly debated 7.7% less, or 270 fewer seconds, of prime-time TV programming a day than they did a year earlier. That may seem an insignificant drop, but Nielsen's research shows that younger men have been watching less television for the past 12 years and are no longer glued to the boob tube
This is not a trivial audience. For ad-supported network and cable TV channels, with more than $37 billion in annual revenue, 18- to 34-year-old men account for about $4.3 billion. So every minute that young males don't watch prime-time programming could carry a potential price tag of about $77 million across network, cable, national syndication, and national Hispanic TV channels
Where did the boys go? The Online Publishers Association (OPA) conducted a study
that addresses the where-the-boys-are problem TV networks are struggling with
(they appear to have found the girls, too). The coveted 18-34-year-old demographic
composes 24 percent of the U.S. population. Yet it accounts for a disproportionate
34.1 percent of the online population. This group takes access for granted, wherever,
whenever, and under their control. It is the first generation that grew up with the Internet. These young people are ditching their PCs in favor of laptops -- with wireless
broadband access.. It is not as if these people don't watch TV. They do. But "chaotic" schedules make concepts such as primetime all but meaningless. And when they do watch, it's often with laptop and cell phone at hand (they own lots of gadgets). When this demographic sees something in a brick-and-mortar store that catches their fancy, they'll often go home and buy it on the Web. "No lines,"
As TV loses its appeal among younger men, advertisers are using divining rods to follow the money. The PGA Tour, which tries to attract younger fans, sponsored EA Sports' golf video game, "Tiger Woods PGA Tour 2004." It even includes a section where the player can outfit his virtual persona with accessories from Nike, Tag Heuer, and Adidas. Says Kris Magel, senior vice president/group director of national broadcast at Optimedia, a New York advertising firm, "Partnerships with the developers of these games is a really interesting way to try to get in front of these guys." And while Volkswagen spent over $125 million on television advertising in 2003, the car company also paid Sony Computer Entertainment to have one of its vehicles featured in "Gran Turismo 3: A Spec." In the car racing game, the player can buy different car models from the Dodge Viper to Volkswagen's new Beetle
Research consistently shows men ages 18-34 watch less TV and go online
more. But research also says people who own DVRs watch more hours of TV.
Maybe people don't just watch more TV (since they can skip commercials),
but they watch it differently (because they control the schedule), at different
times (customized and managed to their availability and leisure), and only
the programs they want to watch. It resembles opt-in permission to exchange
personal information for tailored, relevant content.
TV media executives and advertisers should be glad they are not in the news print industry due to plummeting readership among younger consumers. I asked my son in college if he would like a subscription to The Wall Street Journal. His response: “If I want to read any articles I will check its web site.” This generation demands instant content on what matters to them and the newspapers must adapt their methods to customer’s behavior or die.
Behavioral targeting and DVR are ultimately about the consumer. Allowing
people to consume what they individually deem relevant will only increase
product affinity It is a war out there: the media and advertising versus the consumer. As you can’t win by fighting the customer, perhaps it is time to cooperate with him.
By Paul Herbig
When Nielsen Media Research's fall sweeps ratings came out this past November, they clearly showed that men between the ages of 18 and 34 were watching less television, particularly fewer prime-time shows. For the time period during the autumn weeks, when many vaunted network shows hit the airwaves for the first time, Nielsen's data concluded that men 18-34 watched a hotly debated 7.7% less, or 270 fewer seconds, of prime-time TV programming a day than they did a year earlier. That may seem an insignificant drop, but Nielsen's research shows that younger men have been watching less television for the past 12 years and are no longer glued to the boob tube
This is not a trivial audience. For ad-supported network and cable TV channels, with more than $37 billion in annual revenue, 18- to 34-year-old men account for about $4.3 billion. So every minute that young males don't watch prime-time programming could carry a potential price tag of about $77 million across network, cable, national syndication, and national Hispanic TV channels
Where did the boys go? The Online Publishers Association (OPA) conducted a study
that addresses the where-the-boys-are problem TV networks are struggling with
(they appear to have found the girls, too). The coveted 18-34-year-old demographic
composes 24 percent of the U.S. population. Yet it accounts for a disproportionate
34.1 percent of the online population. This group takes access for granted, wherever,
whenever, and under their control. It is the first generation that grew up with the Internet. These young people are ditching their PCs in favor of laptops -- with wireless
broadband access.. It is not as if these people don't watch TV. They do. But "chaotic" schedules make concepts such as primetime all but meaningless. And when they do watch, it's often with laptop and cell phone at hand (they own lots of gadgets). When this demographic sees something in a brick-and-mortar store that catches their fancy, they'll often go home and buy it on the Web. "No lines,"
As TV loses its appeal among younger men, advertisers are using divining rods to follow the money. The PGA Tour, which tries to attract younger fans, sponsored EA Sports' golf video game, "Tiger Woods PGA Tour 2004." It even includes a section where the player can outfit his virtual persona with accessories from Nike, Tag Heuer, and Adidas. Says Kris Magel, senior vice president/group director of national broadcast at Optimedia, a New York advertising firm, "Partnerships with the developers of these games is a really interesting way to try to get in front of these guys." And while Volkswagen spent over $125 million on television advertising in 2003, the car company also paid Sony Computer Entertainment to have one of its vehicles featured in "Gran Turismo 3: A Spec." In the car racing game, the player can buy different car models from the Dodge Viper to Volkswagen's new Beetle
Research consistently shows men ages 18-34 watch less TV and go online
more. But research also says people who own DVRs watch more hours of TV.
Maybe people don't just watch more TV (since they can skip commercials),
but they watch it differently (because they control the schedule), at different
times (customized and managed to their availability and leisure), and only
the programs they want to watch. It resembles opt-in permission to exchange
personal information for tailored, relevant content.
TV media executives and advertisers should be glad they are not in the news print industry due to plummeting readership among younger consumers. I asked my son in college if he would like a subscription to The Wall Street Journal. His response: “If I want to read any articles I will check its web site.” This generation demands instant content on what matters to them and the newspapers must adapt their methods to customer’s behavior or die.
Behavioral targeting and DVR are ultimately about the consumer. Allowing
people to consume what they individually deem relevant will only increase
product affinity It is a war out there: the media and advertising versus the consumer. As you can’t win by fighting the customer, perhaps it is time to cooperate with him.
XADS
X-Advertising
By Paul Herbig
Extreme Sports (X-games) are now the rage. It is the ultimate in obtaining the more-fickle-than-ever-before consumer’s attention. Just as X-games are getting the attention of the coveted younger crowd, a new set of X-advertising (Extreme Advertising) is being broadcasted to get the younger consumer’s attention.
TRAVEL advertising is “predictable, bland and boring”—unless you’re advertising UK youth package tour company Club 18-30, that is. Unsurprisingly, this is the view of Club 18-30 managing director Andy Tidy, whose controversial advertising created by Saatchi & Saatchi London won a Grand Prix at Cannes last year.
The entry featured a group of gorgeous young things in recreational situations, much in the manner of a Breughel painting, and incorporated a number of visual gags in each poster
Tidy was a speaker at the Cannes International Advertising Festival last week on the topic of ‘extreme advertising’—in which Club 18-30 indulges. The brand has been created around the consumer insight that for the majority of its customers, a Club 18-30 trip means sun, fun and, most of all, getting laid. Most of its marketing, including a variety of ambient and stunt campaigns, focuses on the latter point. For example, the brand ran a pseudo-demonstration outside the U.S. embassy in London recently, with people carrying placards and chanting “We want Bush”. On the back of the signs was a Club 18-30 logo.
“Within the travel industry, very few ‘brands’ exist,” Tidy told B&T. “The Club 18-30 logo adds meaning and completes the ad.”
Interestingly, however, a brand that is so strongly and controversially positioned contributes to a limited lifespan with its consumers. Tidy said there is a three-year window where Club 18-30 is the right travel brand for a person.He says the brand—which is owned by mainstream travel company Thomas Cook, but run by a separate management company at which Tidy is the only person aged older than 27—needs to expand its market to include slightly older travelers (who prefer ‘unpackaged tours’), and further generate word-of-mouth and loyalty .“Traditional loyalty programs are useless,” he said. “The real loyalty is when our customers tell other people what a great time they had and it gets passed on.”
As part of its efforts to generate word of mouth, the company spends time and effort on getting close to its market—and oddly, even their parents. For example, it runs local model competitions in local newspapers—something that is popular with its potential target market—and their parents—who might otherwise be expected to be rather anxious about sending their offspring on a Club 18-30 holiday.
“We have one rep to every 25 guests. A lot of the other companies only have one rep to every 200 guests,” Tidy says. “We’ve very successfully used this tactic for years..We also have an annual reunion—9000 people—it’s the biggest indoor event in Britain.” This is also where the ‘extreme’ advertising approach comes in. Club 18-30’s advertising must be “talked about”.
“It’s very, very important for the advertising to be award-winning,” Tidy says. “There’s no way I want to be a ‘me-too’ brand. It’s got to lead, not follow.We are so close to the target audience that we know if something is working. We know if we’re losing it. It’s anecdotal evidence—if we’re not being talked about.”
Tidy says for the longer-term, there’s little alternative but to launch new brands that target older travelers. For example, Cultura is set to launch at the end of August this year offering partly-packaged tours to Spanish and Italian cities and Prague.“It’s not a package holiday,” he says of the new brand. “You’re opting out, not in.
“We have a new reservation system. We’ll be able to work with partners like EasyJet. It will be very different from Club 18-30. But budgets will never be huge [so we need to] define another strong brand.”
Extreme Advertising—the future?
By Paul Herbig
Extreme Sports (X-games) are now the rage. It is the ultimate in obtaining the more-fickle-than-ever-before consumer’s attention. Just as X-games are getting the attention of the coveted younger crowd, a new set of X-advertising (Extreme Advertising) is being broadcasted to get the younger consumer’s attention.
TRAVEL advertising is “predictable, bland and boring”—unless you’re advertising UK youth package tour company Club 18-30, that is. Unsurprisingly, this is the view of Club 18-30 managing director Andy Tidy, whose controversial advertising created by Saatchi & Saatchi London won a Grand Prix at Cannes last year.
The entry featured a group of gorgeous young things in recreational situations, much in the manner of a Breughel painting, and incorporated a number of visual gags in each poster
Tidy was a speaker at the Cannes International Advertising Festival last week on the topic of ‘extreme advertising’—in which Club 18-30 indulges. The brand has been created around the consumer insight that for the majority of its customers, a Club 18-30 trip means sun, fun and, most of all, getting laid. Most of its marketing, including a variety of ambient and stunt campaigns, focuses on the latter point. For example, the brand ran a pseudo-demonstration outside the U.S. embassy in London recently, with people carrying placards and chanting “We want Bush”. On the back of the signs was a Club 18-30 logo.
“Within the travel industry, very few ‘brands’ exist,” Tidy told B&T. “The Club 18-30 logo adds meaning and completes the ad.”
Interestingly, however, a brand that is so strongly and controversially positioned contributes to a limited lifespan with its consumers. Tidy said there is a three-year window where Club 18-30 is the right travel brand for a person.He says the brand—which is owned by mainstream travel company Thomas Cook, but run by a separate management company at which Tidy is the only person aged older than 27—needs to expand its market to include slightly older travelers (who prefer ‘unpackaged tours’), and further generate word-of-mouth and loyalty .“Traditional loyalty programs are useless,” he said. “The real loyalty is when our customers tell other people what a great time they had and it gets passed on.”
As part of its efforts to generate word of mouth, the company spends time and effort on getting close to its market—and oddly, even their parents. For example, it runs local model competitions in local newspapers—something that is popular with its potential target market—and their parents—who might otherwise be expected to be rather anxious about sending their offspring on a Club 18-30 holiday.
“We have one rep to every 25 guests. A lot of the other companies only have one rep to every 200 guests,” Tidy says. “We’ve very successfully used this tactic for years..We also have an annual reunion—9000 people—it’s the biggest indoor event in Britain.” This is also where the ‘extreme’ advertising approach comes in. Club 18-30’s advertising must be “talked about”.
“It’s very, very important for the advertising to be award-winning,” Tidy says. “There’s no way I want to be a ‘me-too’ brand. It’s got to lead, not follow.We are so close to the target audience that we know if something is working. We know if we’re losing it. It’s anecdotal evidence—if we’re not being talked about.”
Tidy says for the longer-term, there’s little alternative but to launch new brands that target older travelers. For example, Cultura is set to launch at the end of August this year offering partly-packaged tours to Spanish and Italian cities and Prague.“It’s not a package holiday,” he says of the new brand. “You’re opting out, not in.
“We have a new reservation system. We’ll be able to work with partners like EasyJet. It will be very different from Club 18-30. But budgets will never be huge [so we need to] define another strong brand.”
Extreme Advertising—the future?
OlDGUYS
Don’t trust anyone over 30
By Paul Herbig
Advertisers want to be where the youth are. Advertisers are willing to pay a steep premium (sometimes two to three times as much) to have their products seen by young men and women in the ‘coveted’ 18 to 34 age group. Examine any primetime network show and you can almost see the intended audience mirrored by the show’s stars and culture. The networks cringe in horror if any show is targeted to “older” viewers (The dropping of Joan of Arcadia was because the viewership had turned old with many of the youth tuning out.). They fight one another over the average age of their viewers, dreading the ultimate insult of having the “oldest” average viewer, knowing the toll it will take on its advertising income.
Which brings us to the major question at hand: Why does Madison Avenue fight tooth and nail, court fiercely, and live and die for those youthful viewers? It can’t be for the money. Those “old folks” age 45 and over are the ones making the big bucks, have the largest disposable income, and who are buying most of the expensive products available today. The kids are either in school or just out of college, beset by huge amounts of college loans they must pay back, in an uncertain economy where any job is a good job, and living in modest digs if they haven’t already moved back with mom and dad. If the Advertisers wish to go where the money is, they have their priorities upside down.
Why then pursue the young and restless? Several reasons exist to rationalize the Advertiser’s odd behavior. The number one reason is the belief that marketers need to instill brand loyalty when the consumer is young and it will be maintained for the rest of their lives (Analogous to “Give me the child until he is 5 and he will be mine forever” School of thought). The only problem with this theory is that is it blatantly wrong. Young girls play with Barbies, that does not make them loyal to Mattel for life; as tweens (8-13) they loved the Backstreet Boys ; as teens they listened to Hip-Hop, in College young women have different tastes, and so on. Just because at one stage of their lives, they enjoy a product does not guarantee their loyalty for life; in fact, just the opposite is true, because they enjoyed a product as a high school student will almost guarantee they won’t like it as college student (because they associate it with their less mature high school life and they are now college students who must act and live like college students). This fallacy can be seen through the results of a recent survey:: males 18 to 21 are nearly four times as likely to favor apparel specialty shops than those 8 to 12 (38% to 10%) But guys lose interest in shopping at discount department stores as they get older (78% 8to 12 enjoy, compared to 57% of males 18 to 21). Perhaps as their spending patterns grows, their desire changes to more status brands.
The second reason is the “my customers are dying” syndrome whereas you fear the older average age of your product users could spell major problems in the future. Some truth may exist to this fear: the average age of Cadillac buyers have been edging up; however, Cadillac as a brand is under siege. In real life, some products are preferred by different age groups: Cruises tend to attract more seniors because they have the time and the money. To attempt to market to the young as a means of complementing your older users tends to alienate both groups: Remember “This is not your father’s Oldsmobile” commercials. They failed to attract the young and drove away their loyalty older customer. Oldsmobile has been retired from GM’s stable primarily due to this debacle.
The third and more probable reason is that the creative team at the Advertisers tend to be young and project what they like to see and what they think their peers would appreciate. It must be new, hip, faddish. Very few fifty-ish creative types exist at agencies anymore. It is a game for the young (who likewise tend to be selling to their youthful marketing peers at your company). If you do not want to lose your older users, you “senior” marketers must monitor and rein-in those runaway youth, less your product finds the black hole as did Oldsmobile.
Don’t forget the older or they will forget you.
By Paul Herbig
Advertisers want to be where the youth are. Advertisers are willing to pay a steep premium (sometimes two to three times as much) to have their products seen by young men and women in the ‘coveted’ 18 to 34 age group. Examine any primetime network show and you can almost see the intended audience mirrored by the show’s stars and culture. The networks cringe in horror if any show is targeted to “older” viewers (The dropping of Joan of Arcadia was because the viewership had turned old with many of the youth tuning out.). They fight one another over the average age of their viewers, dreading the ultimate insult of having the “oldest” average viewer, knowing the toll it will take on its advertising income.
Which brings us to the major question at hand: Why does Madison Avenue fight tooth and nail, court fiercely, and live and die for those youthful viewers? It can’t be for the money. Those “old folks” age 45 and over are the ones making the big bucks, have the largest disposable income, and who are buying most of the expensive products available today. The kids are either in school or just out of college, beset by huge amounts of college loans they must pay back, in an uncertain economy where any job is a good job, and living in modest digs if they haven’t already moved back with mom and dad. If the Advertisers wish to go where the money is, they have their priorities upside down.
Why then pursue the young and restless? Several reasons exist to rationalize the Advertiser’s odd behavior. The number one reason is the belief that marketers need to instill brand loyalty when the consumer is young and it will be maintained for the rest of their lives (Analogous to “Give me the child until he is 5 and he will be mine forever” School of thought). The only problem with this theory is that is it blatantly wrong. Young girls play with Barbies, that does not make them loyal to Mattel for life; as tweens (8-13) they loved the Backstreet Boys ; as teens they listened to Hip-Hop, in College young women have different tastes, and so on. Just because at one stage of their lives, they enjoy a product does not guarantee their loyalty for life; in fact, just the opposite is true, because they enjoyed a product as a high school student will almost guarantee they won’t like it as college student (because they associate it with their less mature high school life and they are now college students who must act and live like college students). This fallacy can be seen through the results of a recent survey:: males 18 to 21 are nearly four times as likely to favor apparel specialty shops than those 8 to 12 (38% to 10%) But guys lose interest in shopping at discount department stores as they get older (78% 8to 12 enjoy, compared to 57% of males 18 to 21). Perhaps as their spending patterns grows, their desire changes to more status brands.
The second reason is the “my customers are dying” syndrome whereas you fear the older average age of your product users could spell major problems in the future. Some truth may exist to this fear: the average age of Cadillac buyers have been edging up; however, Cadillac as a brand is under siege. In real life, some products are preferred by different age groups: Cruises tend to attract more seniors because they have the time and the money. To attempt to market to the young as a means of complementing your older users tends to alienate both groups: Remember “This is not your father’s Oldsmobile” commercials. They failed to attract the young and drove away their loyalty older customer. Oldsmobile has been retired from GM’s stable primarily due to this debacle.
The third and more probable reason is that the creative team at the Advertisers tend to be young and project what they like to see and what they think their peers would appreciate. It must be new, hip, faddish. Very few fifty-ish creative types exist at agencies anymore. It is a game for the young (who likewise tend to be selling to their youthful marketing peers at your company). If you do not want to lose your older users, you “senior” marketers must monitor and rein-in those runaway youth, less your product finds the black hole as did Oldsmobile.
Don’t forget the older or they will forget you.
ओनेतूने
You to me marketing
By Paul Herbig
One-to-one marketing it is called, a radical rethinking of the way marketers treat their customers. Companies can increase their profits by selling more things to fewer customers. It is wiser to focus more on increasing sales to a smaller percentage of your existing customers than it is to find new ones (estimates are it costs 5 to 10 times as much to get a new customer as it is to retain current ones).
Getting a new customer is expensive. It takes money to get his attention and it takes continuing effort to educate him (interruption marketing is expensive, and so is the
process of winning a customer's trust). It's also expensive for the customer, who has to spend time evaluating and learning about the features and benefits of a product. Instead of focusing on how to maximize the number of new customers, the focus should
be on keeping customers longer and getting far more money from each of them over time.
It's back to the old days, when merchants had a limited supply of customers and worked to get the maximum revenue from each one. Except now, with technology, companies can combine this old world thinking with the ability to dramatically grow their customer base at the same time.
If MCI spends hundreds of dollars to get a new long distance customer, and that customer pays just $20 per month for MCI’s services, then they have to be figuring out other ways to generate revenue through their interaction with that customer, not spending all their energy getting yet another new customer. By selling cellular phone services, home security services and an increasing array of other items, MCI can recoup the expense of obtaining these customers.
Levi's has built the single largest brand of women's jeans in the country. And they've done so without having any jeans in the store. Instead, women have their measurements taken by a trained specialist, who sends them to a computerized factory. There, a semi-custom pair of jeans is made to order. The shopper gets custom fit for a fraction of the cost. Levi's has a huge savings in inventory risk and advertising costs. And best of all, once a customer has given her measurements to Levi's, once she's endured the hassle of all that measurement-taking, once she's worn a pair of custom jeans that fit her to a ‘T” and makes her look like she always wanted, why would she even consider switching brands to save a few dollars?
A company should focus on four things when selling to customers:
1. Increase your "share of wallet." Figure out which needs you can satisfy, then use the knowledge you have, and the trust you've built, to make that additional sale.
2. Increase the durability of customer relationships. Invest money in customer retention, because it's a small fraction of the cost of customer acquisition.
3. Increase your product offerings to customers. By being customer-focused instead of retail-focused, or factory-focused, a manufacturer or merchant can widely increase its offerings, thus increasing its share of wallet.
4. Create an interactive relationship that leads to meeting more customer needs. It's a never-ending cycle. By constantly inducing the consumer to give more information, the marketer can offer more products.
This series of techniques isn't easy, nor is it free. If it were, everyone would do it. It requires a huge investment in scaleable technology, along with the focus and the commitment to do it right. It puts a lot more pressure on your organization, as well, because as each customer becomes worth more, the cost of losing one increases. But with the risks come the rewards.
By Paul Herbig
One-to-one marketing it is called, a radical rethinking of the way marketers treat their customers. Companies can increase their profits by selling more things to fewer customers. It is wiser to focus more on increasing sales to a smaller percentage of your existing customers than it is to find new ones (estimates are it costs 5 to 10 times as much to get a new customer as it is to retain current ones).
Getting a new customer is expensive. It takes money to get his attention and it takes continuing effort to educate him (interruption marketing is expensive, and so is the
process of winning a customer's trust). It's also expensive for the customer, who has to spend time evaluating and learning about the features and benefits of a product. Instead of focusing on how to maximize the number of new customers, the focus should
be on keeping customers longer and getting far more money from each of them over time.
It's back to the old days, when merchants had a limited supply of customers and worked to get the maximum revenue from each one. Except now, with technology, companies can combine this old world thinking with the ability to dramatically grow their customer base at the same time.
If MCI spends hundreds of dollars to get a new long distance customer, and that customer pays just $20 per month for MCI’s services, then they have to be figuring out other ways to generate revenue through their interaction with that customer, not spending all their energy getting yet another new customer. By selling cellular phone services, home security services and an increasing array of other items, MCI can recoup the expense of obtaining these customers.
Levi's has built the single largest brand of women's jeans in the country. And they've done so without having any jeans in the store. Instead, women have their measurements taken by a trained specialist, who sends them to a computerized factory. There, a semi-custom pair of jeans is made to order. The shopper gets custom fit for a fraction of the cost. Levi's has a huge savings in inventory risk and advertising costs. And best of all, once a customer has given her measurements to Levi's, once she's endured the hassle of all that measurement-taking, once she's worn a pair of custom jeans that fit her to a ‘T” and makes her look like she always wanted, why would she even consider switching brands to save a few dollars?
A company should focus on four things when selling to customers:
1. Increase your "share of wallet." Figure out which needs you can satisfy, then use the knowledge you have, and the trust you've built, to make that additional sale.
2. Increase the durability of customer relationships. Invest money in customer retention, because it's a small fraction of the cost of customer acquisition.
3. Increase your product offerings to customers. By being customer-focused instead of retail-focused, or factory-focused, a manufacturer or merchant can widely increase its offerings, thus increasing its share of wallet.
4. Create an interactive relationship that leads to meeting more customer needs. It's a never-ending cycle. By constantly inducing the consumer to give more information, the marketer can offer more products.
This series of techniques isn't easy, nor is it free. If it were, everyone would do it. It requires a huge investment in scaleable technology, along with the focus and the commitment to do it right. It puts a lot more pressure on your organization, as well, because as each customer becomes worth more, the cost of losing one increases. But with the risks come the rewards.
Celebrities
Celebrity Non-sweethearts
By Paul Herbig
Celebrities have gained deity perspective in many minds. More than ever before, Americans are celebrity smitten, if not obsessed. Some psychologists claim Americans need celebrities as much as food, water and shelter. “We need them to feel connected.” Some estimates are that one in three people are moderate to advanced celebrity worshippers. Whether the paparazzi follow celebrities because the public demands news of the stars or the celebrities and their pr machines broadcast news because they believe the public should be interested, the situation is not healthy.
It is the epitome of the infamous “Fifteen Minutes of Fame.” Celebrities are made every day. A man in California suspected of killing his wife; Smart after her kidnapping. A female American soldier captured in Iraq. (What happened to the hundreds of Americans killed in Iraq—why aren’t they celebrities; they gave the ultimate sacrifice, their life. Why was she chosen?) If they aren’t appearing, they are being invented (American Idol? Bachelor/Bachelorette, Survivor). Michael Jackson’s arrest lit the headlines for weeks, even to the point of downplaying Iran’s massive earthquake that killed tens of thousands or the Asian Tsunami. Kobe Bryant occupied the news for weeks during Summer 03 for a rape accusation (how many real rapes occur daily, what made him so special?) News networks placed this situation on par with the Iraqi war.
Oprah Winfrey tells America what books to read. Celebrities sponsor every product imaginable. What makes them an expert? Why should we buy a certain pair of shoes or apparel just because a celebrity says we should? Hugh Hefner eating a Carl’s Jr. hamburger is meant to bring throngs to the fast-food chain because Hugh supposedly eats there and says they should? Hollywood Celebrities make headlines by their political actions and comments: what makes them political experts? Why should Americans care what Jane Fonda has to say? The ultimate in hubris was when Ben Affleck made his “if Bush gets elected I am out of here.” Comment during the 2000 election. Did he really expect Americans to vote against Bush because they did not want to see him leave? He might be an excellent actor but as a knowledgeable political figure he is not credible. And finally there are those inane television shows whose very essence consists of celebrities and their status: Celebrity Poker, Donald Trump interviews, Made for TV movies about celebrities, Celebrity-Magazines fill the grocery next to check-out; Does Hollywood really believe the “little person” is so concerned about their stars they want to know every bit of gossip (affairs or rumored affairs, inside scoop on marriage difficulties, operations, etc) no matter how trivial? What is this society coming to?
Some experts say technology is to blame. Celebrities used to be larger than life and inaccessible—viewable only on the big screen or the little screen in the living room. No longer. Fans can now learn and view intimate details of celebrities practically on a minute-to-minute basis through 24 hour news channels, Entertainment cable channels, a host of available print vehicles, or online at any of the many celebrity or fan web sites. The end result is the feeling that the fan knows the celebrity, establish a relationship with them, and shares the celeb’s life. Or perhaps it is, as another expert indicates, because we, as a nation of consumers, are information hungry, about anything, including stars.
Another reason is due to economic uncertainty and recessions: during economic downturns, there is a tendency for people to want to know about the rich and famous more than other times. Others say the advanced economic status of the developed countries is to blame. As all the basic needs are taken care of, more leisure time is available. When this happens, Joyce Brothers says, “We have time to fritter away on less important things.”
Stars who believe their own press . . . Jack Quigman played Quncy, MD and then for years afterwards relied on his expert presence to rally troops around medical issues.
Parade magazine sells out constantly with only stories about stars and starlets. The same goes for People,..Sports , Media, Music and Hollywood. Celebs: America’s royalty? It certainly appears so.
The demagogy of the word hero is an excellent example. In past days, the term hero was reserved for one who sacrificed his/her life or whose actions put his/her life in jeopardy. Heroes were also those who put their career, reputation, honor on the line for that they believed in. It was not a term to be bandied around lightly. Today, the term is practically synonymous with celebrity. Michael Jordan is a hero to the youth; really? When did he ever put his life on the line?
From a marketing perspective, if celebrities sell, who are we to pass judgment on the situation. Nonetheless, use of celebrities as sponsors of products must be a cautious undertaking. O.J. Simpson was the star of Hertz commercials, jumping over airport lounge chairs, and running through airports, for decades. The public indelibly linked the two. It was a huge success for years--until the summer of 1994 with the murder of his wife and her male friend. Even though eventually acquitted, the negative press and the resulting doubts have made him persona non-grata for any sponsorship role; the impact upon Hertz has had to be negative. Another prime example is the Drink Milk campaigns with celebrity after celebrity with milk moustaches. Another great success. Except with Dennis Rodman, the NBA bad boy, went too far, kicked an courtside cameraman during a game; The Agency fired Dennis and withheld those ads with his appearances.
Celebrities sell but not celebrities are created equal and stay that way. Be careful whom you choose. .
By Paul Herbig
Celebrities have gained deity perspective in many minds. More than ever before, Americans are celebrity smitten, if not obsessed. Some psychologists claim Americans need celebrities as much as food, water and shelter. “We need them to feel connected.” Some estimates are that one in three people are moderate to advanced celebrity worshippers. Whether the paparazzi follow celebrities because the public demands news of the stars or the celebrities and their pr machines broadcast news because they believe the public should be interested, the situation is not healthy.
It is the epitome of the infamous “Fifteen Minutes of Fame.” Celebrities are made every day. A man in California suspected of killing his wife; Smart after her kidnapping. A female American soldier captured in Iraq. (What happened to the hundreds of Americans killed in Iraq—why aren’t they celebrities; they gave the ultimate sacrifice, their life. Why was she chosen?) If they aren’t appearing, they are being invented (American Idol? Bachelor/Bachelorette, Survivor). Michael Jackson’s arrest lit the headlines for weeks, even to the point of downplaying Iran’s massive earthquake that killed tens of thousands or the Asian Tsunami. Kobe Bryant occupied the news for weeks during Summer 03 for a rape accusation (how many real rapes occur daily, what made him so special?) News networks placed this situation on par with the Iraqi war.
Oprah Winfrey tells America what books to read. Celebrities sponsor every product imaginable. What makes them an expert? Why should we buy a certain pair of shoes or apparel just because a celebrity says we should? Hugh Hefner eating a Carl’s Jr. hamburger is meant to bring throngs to the fast-food chain because Hugh supposedly eats there and says they should? Hollywood Celebrities make headlines by their political actions and comments: what makes them political experts? Why should Americans care what Jane Fonda has to say? The ultimate in hubris was when Ben Affleck made his “if Bush gets elected I am out of here.” Comment during the 2000 election. Did he really expect Americans to vote against Bush because they did not want to see him leave? He might be an excellent actor but as a knowledgeable political figure he is not credible. And finally there are those inane television shows whose very essence consists of celebrities and their status: Celebrity Poker, Donald Trump interviews, Made for TV movies about celebrities, Celebrity-Magazines fill the grocery next to check-out; Does Hollywood really believe the “little person” is so concerned about their stars they want to know every bit of gossip (affairs or rumored affairs, inside scoop on marriage difficulties, operations, etc) no matter how trivial? What is this society coming to?
Some experts say technology is to blame. Celebrities used to be larger than life and inaccessible—viewable only on the big screen or the little screen in the living room. No longer. Fans can now learn and view intimate details of celebrities practically on a minute-to-minute basis through 24 hour news channels, Entertainment cable channels, a host of available print vehicles, or online at any of the many celebrity or fan web sites. The end result is the feeling that the fan knows the celebrity, establish a relationship with them, and shares the celeb’s life. Or perhaps it is, as another expert indicates, because we, as a nation of consumers, are information hungry, about anything, including stars.
Another reason is due to economic uncertainty and recessions: during economic downturns, there is a tendency for people to want to know about the rich and famous more than other times. Others say the advanced economic status of the developed countries is to blame. As all the basic needs are taken care of, more leisure time is available. When this happens, Joyce Brothers says, “We have time to fritter away on less important things.”
Stars who believe their own press . . . Jack Quigman played Quncy, MD and then for years afterwards relied on his expert presence to rally troops around medical issues.
Parade magazine sells out constantly with only stories about stars and starlets. The same goes for People,..Sports , Media, Music and Hollywood. Celebs: America’s royalty? It certainly appears so.
The demagogy of the word hero is an excellent example. In past days, the term hero was reserved for one who sacrificed his/her life or whose actions put his/her life in jeopardy. Heroes were also those who put their career, reputation, honor on the line for that they believed in. It was not a term to be bandied around lightly. Today, the term is practically synonymous with celebrity. Michael Jordan is a hero to the youth; really? When did he ever put his life on the line?
From a marketing perspective, if celebrities sell, who are we to pass judgment on the situation. Nonetheless, use of celebrities as sponsors of products must be a cautious undertaking. O.J. Simpson was the star of Hertz commercials, jumping over airport lounge chairs, and running through airports, for decades. The public indelibly linked the two. It was a huge success for years--until the summer of 1994 with the murder of his wife and her male friend. Even though eventually acquitted, the negative press and the resulting doubts have made him persona non-grata for any sponsorship role; the impact upon Hertz has had to be negative. Another prime example is the Drink Milk campaigns with celebrity after celebrity with milk moustaches. Another great success. Except with Dennis Rodman, the NBA bad boy, went too far, kicked an courtside cameraman during a game; The Agency fired Dennis and withheld those ads with his appearances.
Celebrities sell but not celebrities are created equal and stay that way. Be careful whom you choose. .
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