The Reality of Branding
Reality shows are all the rage. Rumor has it next year the Survivor franchise, having run out of exotic places to televise from is going to run an experimental Survivor: South Central LA hour long show: Contestants will be parachuted into that part of LA and any that survive until the end of the show wins a chance to return the following week to try again. Of course, show business execs are complaining that an hour might be too long and difficult to fill with the rate of expected attrition. Nonetheless . . . one has to view these reality shows with a cynical outlook; after all, how “alone’ can you be with twenty camera crews and fifty overhead cameras recording your every move and thought?
Of all the reality shows, the Apprentice comes closest to real world value. It teaches concepts such as leadership, teamwork, competition and customer centric that this here prophet has always thought worthy of dissemination. However, one can also watch the show and pick up such non-desirable traits as finger-pointing, sabotage, autocratic behavior, bullying, and pure stupidity. But it is fun to watch and probably more of a learning experience than all the other Survivor series combined (ad infinitum).
Nevertheless, I must comment on some aspects of the series. The format typically has two teams competing against each other on a particular assignment. They have 24 hours (or less sometimes) to complete a business assignment. Of course it is “staged” but often fun to watch. Here’s my beef: in less than 24 hours the team are challenged to create a new brand or branding position for a particular product and present their findings to corporate head honchos.
Wrong. Wrong. Wrong. This is teaching America that all it takes is 24 hours and a Power-point presentation and you have established a brand that you can sell by the millions.. This is an entirely wrong notion of how to brand and what brands are. Brands are not created overnight and come into the world fully formed and ready for consumer consumption. Brands are an emotional shortcut between the product/company and the customer and provide valuable information to customers regarding quality to customers. Brands identify, differentiates, minimizes risk to the customer, reduces search cost to the customer, and provide meaning to the customer. It is basically a promise: ”You continue to buy from me and I will continue to provide the same high quality product to you.”
1) Branding is a multi-year phenomenon. Some experts indicate it could take as many as 5-7 years to firmly establish a brand in the mindset of your customers. It takes time and multiple purchases to gain credibility and trust among customers. You cannot merely tell them once and it is a done deal.
2) Consistency in the message is a necessity. All forms of marketing media must contain the same branding message and position. Otherwise, your customers will be confused about what you stand for . . . if anything.
3) Brand message and position must be reasonable and rationale with the product or service you are marketing and the company mission/reality. A Tiffany store in Walmart may not do well. In other words, you can’t make pearls from swine. You can always get them to buy once but it takes a good product to get repeat purchases.
4) Provide a simple, realistic, relevant message. All the branding advertising in the world is not going to make up for a poor product. The product must be a quality, usable, understandable and relevant.
So next time you watch The Apprentice, enjoy the show, watch the business banter but understand reality is much more subtle (and less forgiving than The Donald).
Saturday, September 22, 2007
Wednesday, September 12, 2007
Hoorayforproblems
Problem, Problem, Who’s got a problem? We’ve got the problem.
The Retail Customer Dissatisfaction Study 2006, conducted by The Jay H. Baker Retailing Initiative at Wharton and The Verde Group, a Toronto consulting firm, surveyed approximately 1200 U.S. shoppers in the weeks before and after Christmas 2005. Those surveyed were asked to discuss their most recent shopping experience. Half said they had at least one problem. On average, survey respondents reported experiencing three problems on the shopping trip, during which they spent an average of $163.
Parking was a major source of aggravation for shoppers with 40% of those surveyed reporting dissatisfaction in the parking lot. This is not good news for retailers as parking problems set the stage for customers to "arrive angry," which can make them more likely to have a troubled shopping experience. Retailers must realize the shopping experience is total and inclusive, from the time the shopper decides to leave their front door until they return home
In addition to parking problems, shoppers surveyed complained that it took a long time for them to be waited on (24%) or to pay (33%). Shoppers who had to wait for service complained about it to 2.1 other people, on average, and those who had to wait a long time to pay told an average of 1.4 people. Customers' time has become an important part of the retail value equation, along with price, merchandising and other traditional components of the industry.. Time is a rare and precious thing. Yet because the Internet allows shoppers to buy around the clock, there is more pressure on retailers to respect their customers' time.
Meanwhile, retailers continue to focus on merchandise, jamming stores with inventory that overwhelms customers and cuts into the time they have to shop. According to the survey, shoppers are likely to tell 2.5 people, on average, about their inability to find an item because the store was cluttered with merchandise. In the end, retailers will wind up reducing the price on merchandise to make up for the negative experience, eroding their profit margins.
The survey shows some slight differences in attitudes among shoppers who were reporting their experiences at a mass merchant versus a specialty store. People who are in a specialty store are more in the pleasure-seeking experience, while people going to a mass merchant are on a mission.
Retailers historically have paid a great deal of attention to how to satisfy the customer, but have not been too interested in finding out what makes them dissatisfied. Historically it has focused more on product and experience as a way to create satisfaction.
And despite the value in learning about consumer gripes, retailers have resisted asking their customers what they do wrong for fear of stirring up negative thoughts. Retailers need to find ways to get customers to share complaints with management, not friends and family. One way is for retailers to ask customers to check a box on their credit card slip indicating they had a problem at the store. Retailers could then attempt to follow up, or give the customer a phone number or web address to make their complaints directly. If nothing else, it would give the customer a chance to blow off steam.. Retailers that are responsive and friendly are more likely to smooth over issues than those that don't try to be as friendly as possible.
And now to the moral of the story: Why don't shoppers confront the retailer directly? Respondents indicated they rarely discussed their concerns with store personnel or management. The prevailing psychology was that most people presumed it would happen repeatedly (46% of those who had a problem expect they would definitely or probably experience the same problem in the future), was unavoidable, and resigned themselves to poor service. When any service has become a pleasant surprise instead of the expected, the time is ripe for a marketer to woo customers with (if not exceptional) then solid good sincere service. How much more effort would it take to do so? And by what America is telling us, the reward would be well worth it.
The Retail Customer Dissatisfaction Study 2006, conducted by The Jay H. Baker Retailing Initiative at Wharton and The Verde Group, a Toronto consulting firm, surveyed approximately 1200 U.S. shoppers in the weeks before and after Christmas 2005. Those surveyed were asked to discuss their most recent shopping experience. Half said they had at least one problem. On average, survey respondents reported experiencing three problems on the shopping trip, during which they spent an average of $163.
Parking was a major source of aggravation for shoppers with 40% of those surveyed reporting dissatisfaction in the parking lot. This is not good news for retailers as parking problems set the stage for customers to "arrive angry," which can make them more likely to have a troubled shopping experience. Retailers must realize the shopping experience is total and inclusive, from the time the shopper decides to leave their front door until they return home
In addition to parking problems, shoppers surveyed complained that it took a long time for them to be waited on (24%) or to pay (33%). Shoppers who had to wait for service complained about it to 2.1 other people, on average, and those who had to wait a long time to pay told an average of 1.4 people. Customers' time has become an important part of the retail value equation, along with price, merchandising and other traditional components of the industry.. Time is a rare and precious thing. Yet because the Internet allows shoppers to buy around the clock, there is more pressure on retailers to respect their customers' time.
Meanwhile, retailers continue to focus on merchandise, jamming stores with inventory that overwhelms customers and cuts into the time they have to shop. According to the survey, shoppers are likely to tell 2.5 people, on average, about their inability to find an item because the store was cluttered with merchandise. In the end, retailers will wind up reducing the price on merchandise to make up for the negative experience, eroding their profit margins.
The survey shows some slight differences in attitudes among shoppers who were reporting their experiences at a mass merchant versus a specialty store. People who are in a specialty store are more in the pleasure-seeking experience, while people going to a mass merchant are on a mission.
Retailers historically have paid a great deal of attention to how to satisfy the customer, but have not been too interested in finding out what makes them dissatisfied. Historically it has focused more on product and experience as a way to create satisfaction.
And despite the value in learning about consumer gripes, retailers have resisted asking their customers what they do wrong for fear of stirring up negative thoughts. Retailers need to find ways to get customers to share complaints with management, not friends and family. One way is for retailers to ask customers to check a box on their credit card slip indicating they had a problem at the store. Retailers could then attempt to follow up, or give the customer a phone number or web address to make their complaints directly. If nothing else, it would give the customer a chance to blow off steam.. Retailers that are responsive and friendly are more likely to smooth over issues than those that don't try to be as friendly as possible.
And now to the moral of the story: Why don't shoppers confront the retailer directly? Respondents indicated they rarely discussed their concerns with store personnel or management. The prevailing psychology was that most people presumed it would happen repeatedly (46% of those who had a problem expect they would definitely or probably experience the same problem in the future), was unavoidable, and resigned themselves to poor service. When any service has become a pleasant surprise instead of the expected, the time is ripe for a marketer to woo customers with (if not exceptional) then solid good sincere service. How much more effort would it take to do so? And by what America is telling us, the reward would be well worth it.
कस्तोमेर्सोल्दंड़व
Something New, Something Old: Customers
Last week, I started counting the signs and marquees I saw in our little town alone:
“New Customers Half off first rental”
“Free XXX with first purchase”
“10% off First Year Fees”
“ First Time buyers—no payment until 2007”
At first glance, I thought, isn’t this terrific marketing. Then it hit me: I was not eligible for any of these because I was an already established customer. And then I did not feel quite so kind. What am I missing out on by being an old, reliable, non-threatening, buy and never complain type of customer? Are you taking me for granted—good old reliable Paul. Are you being complacent about me? Perhaps it is time for me to shake you up and change businesses. I (and I suspect most people as well) do not like being taken for granted and discriminated against (which is exactly what this is, discriminating for new customers/businesses at the expense of us older clients).
Is your business doing likewise? Working overtime to attract new customers and not paying attention or giving time to present, existing customers? This is a recipe for disaster. Do you think that once you bagged a new customer, s/he will be yours for ever and you can go hunting for new clients without regard for your previous catches? Think again.
Do you know what the numbers say? It takes five times as much time and money to get a new customer as it does to enhance an existing customer’s business. The typical business gains less than 5 to 10% of lifetime potential business from the initial sale to a customer. If you do not go back to your existing customers, you are missing out on up to 95% of potential revenues from that customer. You have already established a relationship with the customer, s/he knows your products, your company, your service capabilities and your employees. You have already established awareness and a reputation (hopefully a good one) with your existing customers. Think of the costs involved in gaining the levels of awareness and reputation that already exist in current customers to new customers who may have never heard of you. That is the benefit of your established base.
If you are already aware of these benefits and still chase after new customers, why? For many of us, the roots of the problem can be found in our evolutionary past: it is the thrill of the chase and the immense joy in the successful ‘kill.’. Or the pride achieved in a new ‘conquest.’ That as it may be, it is time to tame the primitive hunter and use the rational civilized mind to run a business, not a wild game chase on the Savanna.
I recently received a notice in the mail from a health plan I belong to. They indicate a rate increase is forthcoming. Then they indicated they could either raise the rate only on old customers thus “keeping our new customer rates lower to attract new business,” or raise rates on both old and new customers. They decided to do the latter. They have foregone the temptation to lure in new business while taking advantage of older customers. In the end, they will gain less new business but retain many more older customers. I cheer them on with their decision.
What can you do?
1) Many of the challenges can be traced directly to the incentive system provided to salespersons—more bang for new accounts than for managing older existing ones. Modify it so appropriate weights exist.
2) Do not actively discriminate between old and new customers. Your existing customers will play the game to get the ‘newie’ benefits: they will create new email addresses to confuse the system into thinking they are new customers. Don’t get into playing games. Stick to providing the best products and services you can offer. Everything else will follow.
3) Of course you should always be seeking new business. Remember that new business that comes because of deep initial discounts or freebies will more readily leave when the next vendor offers better deals. Seek those businesses/customers who will be long-term customers. Gain their attention with your product/service/reputation/quality not with a one-time deal.
Remember your old existing customers for it is they that will grow your business.
Last week, I started counting the signs and marquees I saw in our little town alone:
“New Customers Half off first rental”
“Free XXX with first purchase”
“10% off First Year Fees”
“ First Time buyers—no payment until 2007”
At first glance, I thought, isn’t this terrific marketing. Then it hit me: I was not eligible for any of these because I was an already established customer. And then I did not feel quite so kind. What am I missing out on by being an old, reliable, non-threatening, buy and never complain type of customer? Are you taking me for granted—good old reliable Paul. Are you being complacent about me? Perhaps it is time for me to shake you up and change businesses. I (and I suspect most people as well) do not like being taken for granted and discriminated against (which is exactly what this is, discriminating for new customers/businesses at the expense of us older clients).
Is your business doing likewise? Working overtime to attract new customers and not paying attention or giving time to present, existing customers? This is a recipe for disaster. Do you think that once you bagged a new customer, s/he will be yours for ever and you can go hunting for new clients without regard for your previous catches? Think again.
Do you know what the numbers say? It takes five times as much time and money to get a new customer as it does to enhance an existing customer’s business. The typical business gains less than 5 to 10% of lifetime potential business from the initial sale to a customer. If you do not go back to your existing customers, you are missing out on up to 95% of potential revenues from that customer. You have already established a relationship with the customer, s/he knows your products, your company, your service capabilities and your employees. You have already established awareness and a reputation (hopefully a good one) with your existing customers. Think of the costs involved in gaining the levels of awareness and reputation that already exist in current customers to new customers who may have never heard of you. That is the benefit of your established base.
If you are already aware of these benefits and still chase after new customers, why? For many of us, the roots of the problem can be found in our evolutionary past: it is the thrill of the chase and the immense joy in the successful ‘kill.’. Or the pride achieved in a new ‘conquest.’ That as it may be, it is time to tame the primitive hunter and use the rational civilized mind to run a business, not a wild game chase on the Savanna.
I recently received a notice in the mail from a health plan I belong to. They indicate a rate increase is forthcoming. Then they indicated they could either raise the rate only on old customers thus “keeping our new customer rates lower to attract new business,” or raise rates on both old and new customers. They decided to do the latter. They have foregone the temptation to lure in new business while taking advantage of older customers. In the end, they will gain less new business but retain many more older customers. I cheer them on with their decision.
What can you do?
1) Many of the challenges can be traced directly to the incentive system provided to salespersons—more bang for new accounts than for managing older existing ones. Modify it so appropriate weights exist.
2) Do not actively discriminate between old and new customers. Your existing customers will play the game to get the ‘newie’ benefits: they will create new email addresses to confuse the system into thinking they are new customers. Don’t get into playing games. Stick to providing the best products and services you can offer. Everything else will follow.
3) Of course you should always be seeking new business. Remember that new business that comes because of deep initial discounts or freebies will more readily leave when the next vendor offers better deals. Seek those businesses/customers who will be long-term customers. Gain their attention with your product/service/reputation/quality not with a one-time deal.
Remember your old existing customers for it is they that will grow your business.
Saturday, August 25, 2007
DynamicMktg
Dynamic Pricing: Here today, gone today.
By Paul Herbig
Pricing is one of nature’s hidden wonders. We all see it but few of us understand it. And perhaps it is rightly so. To paraphrase an ancient wise man, “ You do not want to see legislation, sausage or pricing being made. It is not necessarily an appetizing process and you will be a changed man forever more as a result.”
With the advent of the Internet and vast computational capabilities, a phenomenon called dynamic pricing has arisen, mighty in scope and tremendous in its capabilities to change habits of every American and business. Dynamic pricing. Like it or hate it, it is here and for the rest of time. Dynamic Pricing is the practice of charging different customers different prices for the same product or service . . . at the same time. It has been typical marketing practice to charge different prices (at different times) . . . the retail markdown, the seasonal sale, the inventory clear-out are all examples of this. What makes Dynamic Pricing different is that prices offered to different customers at the very same time could well be considerably different. Some examples include charging travelers different fares for the same flight or same hotel accommodations, setting prices for sporting events based on the quality of the opponents and charging borrowers different interest rates based on their credit history. From a company perspective it is full of promise and excitement, yet fraught with risk. Dynamic pricing gives marketers the flexibility to pursue margins and sales volumes simultaneously I(especially true in settings with high uncertainty regarding market condition), and that increases profits. Companies that experiment with dynamic pricing could lose a few customers but the gains from the many, many customers who don't care would far outweigh the losses.
It is both new and old. In some ways, Dynamic Pricing is as old as commerce. Think of the Arab bazaars where buyers haggle with merchants over the price of spices and rugs. One buyer could well get a price considerably different from another buyer of the exact same good within minutes or seconds of each other. What makes it different is with the advent of technology, Software programs using sophisticated statistical models and algorithms can crunch all the factors that go into determining something's price, including market trends, competitors' prices, the cost to produce and sell the item, and the customer's demographic information and past purchasing history. Companies can now disseminate an individual price instantly to the Web, to store, or to customers anywhere in the world at anytime of day. Overstock.com acknowledges the company watches how long you linger on the site and how much you spend which could determine whether you will see a notice of a liquidation sale or a new shipment of premium priced items
An urban myth had Coca-Cola developing the ultimate in a dynamic pricing vending machine. The machine could sense the outside temperature, the number of cans of each brand still left in the machine, the time of day and was programmed to factor in how many nearby vending or retailing outlets existed. Then it supposedly would change the price instantaneously accordingly. That is, if it were hot outside, the machine isolated and how few cokes were left, the machine would register a significantly higher price than if it were cold and stocked full.
You too can check out dynamic pricing on the web. If you already have an Amazon or other online retailer account, create a second email address, than order the same item from your regular account as you would from your new address. Preferably do it as close together as possible. Are the prices the same? If not, odds are that your new account was provided a lower price (as inducement to become a new customer ). Or even go to a site, check out the price and return moments later and you may well get a totally different price..
Yes it is here to stay. What can customers do? Compare often. Shop carefully and become more savvy with the technology race. Marketers beware. Dynamic Pricing offers higher margin but at a cost of consumer discontent. What is the value of a lost customer to you? And more to the point, how important is your reputation? Do you want to be perceived as the ever shifting (and shifty) company or one that is consistent and fair to all? The choice is yours.
One is to make customers who pay a higher price feel they're getting more for their money. For instance, travelers are willing to pay hundreds of dollars more on first-class plane tickets even though the ticket doesn't get them to their destination any faster than the folks flying economy. What it does get them are perks such as complimentary drinks and more comfortable seats. Dynamic pricing also lends itself to products that are purchased infrequently, such as cars or luxury goods, because consumers are less likely to remember how much they paid or to compare prices with friends. Finally, segment customers appropriately and don't charge higher prices to those who are price-sensitive. Otherwise, you'll definitely alienate customers.
By Paul Herbig
Pricing is one of nature’s hidden wonders. We all see it but few of us understand it. And perhaps it is rightly so. To paraphrase an ancient wise man, “ You do not want to see legislation, sausage or pricing being made. It is not necessarily an appetizing process and you will be a changed man forever more as a result.”
With the advent of the Internet and vast computational capabilities, a phenomenon called dynamic pricing has arisen, mighty in scope and tremendous in its capabilities to change habits of every American and business. Dynamic pricing. Like it or hate it, it is here and for the rest of time. Dynamic Pricing is the practice of charging different customers different prices for the same product or service . . . at the same time. It has been typical marketing practice to charge different prices (at different times) . . . the retail markdown, the seasonal sale, the inventory clear-out are all examples of this. What makes Dynamic Pricing different is that prices offered to different customers at the very same time could well be considerably different. Some examples include charging travelers different fares for the same flight or same hotel accommodations, setting prices for sporting events based on the quality of the opponents and charging borrowers different interest rates based on their credit history. From a company perspective it is full of promise and excitement, yet fraught with risk. Dynamic pricing gives marketers the flexibility to pursue margins and sales volumes simultaneously I(especially true in settings with high uncertainty regarding market condition), and that increases profits. Companies that experiment with dynamic pricing could lose a few customers but the gains from the many, many customers who don't care would far outweigh the losses.
It is both new and old. In some ways, Dynamic Pricing is as old as commerce. Think of the Arab bazaars where buyers haggle with merchants over the price of spices and rugs. One buyer could well get a price considerably different from another buyer of the exact same good within minutes or seconds of each other. What makes it different is with the advent of technology, Software programs using sophisticated statistical models and algorithms can crunch all the factors that go into determining something's price, including market trends, competitors' prices, the cost to produce and sell the item, and the customer's demographic information and past purchasing history. Companies can now disseminate an individual price instantly to the Web, to store, or to customers anywhere in the world at anytime of day. Overstock.com acknowledges the company watches how long you linger on the site and how much you spend which could determine whether you will see a notice of a liquidation sale or a new shipment of premium priced items
An urban myth had Coca-Cola developing the ultimate in a dynamic pricing vending machine. The machine could sense the outside temperature, the number of cans of each brand still left in the machine, the time of day and was programmed to factor in how many nearby vending or retailing outlets existed. Then it supposedly would change the price instantaneously accordingly. That is, if it were hot outside, the machine isolated and how few cokes were left, the machine would register a significantly higher price than if it were cold and stocked full.
You too can check out dynamic pricing on the web. If you already have an Amazon or other online retailer account, create a second email address, than order the same item from your regular account as you would from your new address. Preferably do it as close together as possible. Are the prices the same? If not, odds are that your new account was provided a lower price (as inducement to become a new customer ). Or even go to a site, check out the price and return moments later and you may well get a totally different price..
Yes it is here to stay. What can customers do? Compare often. Shop carefully and become more savvy with the technology race. Marketers beware. Dynamic Pricing offers higher margin but at a cost of consumer discontent. What is the value of a lost customer to you? And more to the point, how important is your reputation? Do you want to be perceived as the ever shifting (and shifty) company or one that is consistent and fair to all? The choice is yours.
One is to make customers who pay a higher price feel they're getting more for their money. For instance, travelers are willing to pay hundreds of dollars more on first-class plane tickets even though the ticket doesn't get them to their destination any faster than the folks flying economy. What it does get them are perks such as complimentary drinks and more comfortable seats. Dynamic pricing also lends itself to products that are purchased infrequently, such as cars or luxury goods, because consumers are less likely to remember how much they paid or to compare prices with friends. Finally, segment customers appropriately and don't charge higher prices to those who are price-sensitive. Otherwise, you'll definitely alienate customers.
Tuesday, August 21, 2007
Numbers
Numbers
Numbers is the award winning CBS science drama that shows on Friday nights. It has become quite a hit in the year plus it has been airing. Once or twice in each episode the young math progeny professor (who could multiply four digit numbers together before he could even speak complete sentences) describes how a mathematical concept (simple or otherwise) or mathematical law can be used to assist the good buys in finding or stopping the bad guys. Add some nifty graphics and visuals and it makes for good TV and some true learning about how that dismal mathematics we all learned in high school can be applied to real world problems. For nerds, it shows that you too can be cool. Of course, it is a drama show with the math angle as the device to provide hour -long drama. Nonetheless, it does provide some real-world education benefits, which is more than I can say for practically everything else on the tube.
So what does Numbers have to do with Marketing? Simply this, do you as a businessperson know your numbers? Do you even know what numbers we are talking about? Do you know what numbers are the important ones and which can be happily ignored? If so, go to the head of the class, you are dismissed from class and can go back to adding on to your net worth. IF not, come to the front of the room, pull up a chair and be prepared for some basics.
Here are the questions about numbers you should be asking yourself: How many leads do you get per day? Week? Year? More or less than last year at this time? What is your conversion rate (that is, converting leads into customers)? Is it rising or falling? How many customers do you have? Compared to last month or year? How many potential customers exist in your universe (your market area)? Is the number increasing or decreasing? What market share do you have? How many competitors do you have in your market area? How do you compare to your competitors? How many regular customers do you have versus transient one-of-a-kind customers? What is your average revenue per customer? What is your average revenue per regular customer? Do you know your profit margin for each product? For each customer or class of customer? Can you answer any of these questions?
Why is this important? How does this relate to you? Think of some products. No, not the type of products you sell but the type you get when you multiply two numbers. Your number of leads times your conversion rate provides you with the product that is the number of customers you have. Multiply this number by the revenue per customer and you have total sales. One more multiplication, this time revenues by the profit margin per customer should provide you with the total profit. Do you have these numbers? If not, what have you been using? Do you know how much better or worse you do from year to year? Do you have an idea as to why you are being better or worse? (for instance, if you improve your conversion rate slightly, this increases your revenue and profit stream if all else stays the same.) But if you do not measure it, you have no idea what happened within the black box called your business and hence cannot readily analyze what is the cause of business swings that regularly occur. But you might say I do not have time to spend to analyze my market and my numbers for I must work constantly to stay in business as it is . But I ask you, can you NOT afford to do so?
Take the time to find the numbers that matter, to analyze them, to understand the dynamics of your business, and then use them to make your business grow and become more profitable.
Numbers is the award winning CBS science drama that shows on Friday nights. It has become quite a hit in the year plus it has been airing. Once or twice in each episode the young math progeny professor (who could multiply four digit numbers together before he could even speak complete sentences) describes how a mathematical concept (simple or otherwise) or mathematical law can be used to assist the good buys in finding or stopping the bad guys. Add some nifty graphics and visuals and it makes for good TV and some true learning about how that dismal mathematics we all learned in high school can be applied to real world problems. For nerds, it shows that you too can be cool. Of course, it is a drama show with the math angle as the device to provide hour -long drama. Nonetheless, it does provide some real-world education benefits, which is more than I can say for practically everything else on the tube.
So what does Numbers have to do with Marketing? Simply this, do you as a businessperson know your numbers? Do you even know what numbers we are talking about? Do you know what numbers are the important ones and which can be happily ignored? If so, go to the head of the class, you are dismissed from class and can go back to adding on to your net worth. IF not, come to the front of the room, pull up a chair and be prepared for some basics.
Here are the questions about numbers you should be asking yourself: How many leads do you get per day? Week? Year? More or less than last year at this time? What is your conversion rate (that is, converting leads into customers)? Is it rising or falling? How many customers do you have? Compared to last month or year? How many potential customers exist in your universe (your market area)? Is the number increasing or decreasing? What market share do you have? How many competitors do you have in your market area? How do you compare to your competitors? How many regular customers do you have versus transient one-of-a-kind customers? What is your average revenue per customer? What is your average revenue per regular customer? Do you know your profit margin for each product? For each customer or class of customer? Can you answer any of these questions?
Why is this important? How does this relate to you? Think of some products. No, not the type of products you sell but the type you get when you multiply two numbers. Your number of leads times your conversion rate provides you with the product that is the number of customers you have. Multiply this number by the revenue per customer and you have total sales. One more multiplication, this time revenues by the profit margin per customer should provide you with the total profit. Do you have these numbers? If not, what have you been using? Do you know how much better or worse you do from year to year? Do you have an idea as to why you are being better or worse? (for instance, if you improve your conversion rate slightly, this increases your revenue and profit stream if all else stays the same.) But if you do not measure it, you have no idea what happened within the black box called your business and hence cannot readily analyze what is the cause of business swings that regularly occur. But you might say I do not have time to spend to analyze my market and my numbers for I must work constantly to stay in business as it is . But I ask you, can you NOT afford to do so?
Take the time to find the numbers that matter, to analyze them, to understand the dynamics of your business, and then use them to make your business grow and become more profitable.
Monday, August 13, 2007
Viral Marketing
Viruses are catchy: More on viral marketing
Viral marketing essentially takes advantage of the rapid multiplication effects of online social networks (through e-mail, chat rooms, IM, file-sharing networks, etc.) to help spread a commercial message on the cheap. Potential exists for exponential growth in message exposure that can far exceed what's achievable were similar budget spent on commercial media channels. Passed via peer to peer, "word of mouse" messages can help endorse a brand among like-minded consumers, thus spreading its influence. Because they're passed between individuals at a low distribution level they can bypass spam filters with relative ease.
Those seeking to attract and influence a young, Web-savvy, male-oriented audience should consider online viral tactics. Many of the most successful viral marketing campaigns have come from advertisers promoting consumer packaged goods and lifestyle brands to this demographic.
Here are six rules on how to succeed at v-marketing (as it is quickly becoming known as) .
Rule 1: Stealth is the essence of market entry
Most marketers know that getting into the consumer's mind is the toughest part of the challenge; the usual response is simply to turn up the volume. Viruses are smarter: They find a way into the host under the guise of another, unrelated activity.
PepsiCola is one company that has begun to experiment with v-marketing. Its Mountain Dew campaign offers kids the chance to send 10 proofs of purchase and $35 to qualify for a Motorola pager. Cool! The kids have to subscribe to the paging service themselves, and Mountain Dew reserves the right to beep their newly equipped customers with Dew-related messages on a weekly basis. So every time the pager goes off, it reminds the kids indirectly who's responsible for getting them that way-cool piece of social technology.
Rule 2 : What's up-front is free; payment comes later
Viruses are unusually patient little buggers. Many will lie dormant in their host for years before demanding payback; digital viruses often burrow into an unsuspecting hard drive and wait for their trigger date such as Michaelangelo's birthday before making their presence known. It's a corollary to stealth: no payment up-front.
Consider how Intuit's wildly popular Quickenrogram got its start. It all spread from a single campaign that contained a basic message: order the product and pay nothing. If you aren't productive within eight minutes of opening the box, tear up the invoice.
Of course, most users were not only balancing their checkbooks within eight minutes but also discovering that they couldn't live without this software. The result: 70% global market share in personal-financial-management software with minimal expenses for traditional marketing or selling. As an added bonus, Quicken gained an installed base to drive pricier sales of ancillary products such as checks and upgrades.
Rule 3: Let the behaviors of the target community carry the message
Viruses do not spread by chance. They let the high-frequency behaviors of their hosts -- social interaction, email, Websurfing -- carry them into new territories. The lesson for v-marketers: fashion your messages so that the target markets will transmit them as a part of their core interests.
This tactic works best when absolutely no one is masterminding the campaign. On America Online, for example, there are multitudes of chat rooms for investors; Motley Fool is only the most prominent. Not long ago, these communities got hold of a couple of high-tech stocks Iomega and Presstek that key members of the group "talked up" as hot investment opportunities. Both stocks enjoyed a skyrocketing hundred-fold increase, carried by the hospitable hype of the online hosts. When the mainstream press caught on, critics rushed in to pop the bubble. But compared to their starting points before AOL came along, Iomega and Presstek still trade at hugely inflated prices.
Rule 4: Look like a host, not a virus
Because they are able to masquerade as something they are not, viruses are able to avoid being rejected by human immune and computer operating systems. They enter human cells and mimic genetic material, or they enter software systems and mimic existing code. The message to v-marketers: be the host.
One consumer marketing company, albeit one with lots of money, has perfected the tactic. Consider Nike's "Just Do It" campaign. All it takes is megabucks to hire the world's most sought-after celebrity athletes, to buy television time at $40,000 a second during the Super Bowl, and to saturate the retail channel with product promotions and giveaways. But none of that worked as well as Nike's ubiquitous tag line, "Just Do It." The phrase is practically an entry in the Merriam-Webster Collegiate Dictionary under the listing: American culture. Everyone from cynical marketers in ad agencies to prison guards in B-movies is using the phrase without irony. Every time they use it, they're endorsing Nike products.
Rule 5: Exploit the strength of weak ties
Sociologists have long noted that individuals with many casual social connections have a larger influence on communities than do individuals with fewer strong connections. Viruses thrive on weak ties. The movement of viruses over the Web -- a practically infinite collection of weak ties in countless virtual communities -- is a prime example.
In business, such tactics are the instinctive practice of companies engaging in multilevel marketing: marketers such as Tupperware, Amway, and Mary Kay Cosmetics, for instance. In each of these businesses, the strategy is to find a collection of individuals who excel at developing a large number of weak ties -- and use those ties to sell products and services. Tupperware, for example, gets someone in a social community, such as a suburban neighborhood, to host a party featuring Tupperware. Everything about the party is ostensibly noncommercial: it's her house, her food, her friends. But the social interaction is funded by the sale of Tupperware products. What's social is indistinguishable from what's commercial a powerful business network built on weak social ties.
Law 6: Invest to reach the tipping point
Viruses do not become epidemics until they reach the tipping point. In other words, the virus must expand through the host population until it reaches a certain threshold of visibility and scale. Assume, for example, a virus doubles each year. In year one, it's only 1% of the host and scarcely detectable. In year two, it's still minute, only 2%. But in year five, it's 16% -- and suddenly it's an epidemic. V-marketers must understand that they're playing the same game because the impact of exploiting weak ties does not come overnight.
That's why Microsoft's true leverage with its DOS and Windows operating systems took a decade to pay off. Today Microsoft operating systems run on an estimated 85 million PCs the world over. That's why CNN was viewed as a joke by the mainstream press -- until suddenly everyone from Saddam Hussein to Bill Clinton was getting real-time news exclusively from the 24-hour network.
Though you can certainly derive a number of benefits from encouraging the viral spread of commercial content, be aware of the limitations. You cannot control the message and the channel thus making outcomes unpredictable and difficult to measure. The proportion of the online audience likely to participate is small. Jupiter Research's latest European consumer survey shows only 5 percent of the Internet population had forwarded an advertising message. Of respondents who said they had, 64 percent were under 34 years old and 56 percent were male.
If you want to use viruses, be smart and be patient.
Viral marketing essentially takes advantage of the rapid multiplication effects of online social networks (through e-mail, chat rooms, IM, file-sharing networks, etc.) to help spread a commercial message on the cheap. Potential exists for exponential growth in message exposure that can far exceed what's achievable were similar budget spent on commercial media channels. Passed via peer to peer, "word of mouse" messages can help endorse a brand among like-minded consumers, thus spreading its influence. Because they're passed between individuals at a low distribution level they can bypass spam filters with relative ease.
Those seeking to attract and influence a young, Web-savvy, male-oriented audience should consider online viral tactics. Many of the most successful viral marketing campaigns have come from advertisers promoting consumer packaged goods and lifestyle brands to this demographic.
Here are six rules on how to succeed at v-marketing (as it is quickly becoming known as) .
Rule 1: Stealth is the essence of market entry
Most marketers know that getting into the consumer's mind is the toughest part of the challenge; the usual response is simply to turn up the volume. Viruses are smarter: They find a way into the host under the guise of another, unrelated activity.
PepsiCola is one company that has begun to experiment with v-marketing. Its Mountain Dew campaign offers kids the chance to send 10 proofs of purchase and $35 to qualify for a Motorola pager. Cool! The kids have to subscribe to the paging service themselves, and Mountain Dew reserves the right to beep their newly equipped customers with Dew-related messages on a weekly basis. So every time the pager goes off, it reminds the kids indirectly who's responsible for getting them that way-cool piece of social technology.
Rule 2 : What's up-front is free; payment comes later
Viruses are unusually patient little buggers. Many will lie dormant in their host for years before demanding payback; digital viruses often burrow into an unsuspecting hard drive and wait for their trigger date such as Michaelangelo's birthday before making their presence known. It's a corollary to stealth: no payment up-front.
Consider how Intuit's wildly popular Quickenrogram got its start. It all spread from a single campaign that contained a basic message: order the product and pay nothing. If you aren't productive within eight minutes of opening the box, tear up the invoice.
Of course, most users were not only balancing their checkbooks within eight minutes but also discovering that they couldn't live without this software. The result: 70% global market share in personal-financial-management software with minimal expenses for traditional marketing or selling. As an added bonus, Quicken gained an installed base to drive pricier sales of ancillary products such as checks and upgrades.
Rule 3: Let the behaviors of the target community carry the message
Viruses do not spread by chance. They let the high-frequency behaviors of their hosts -- social interaction, email, Websurfing -- carry them into new territories. The lesson for v-marketers: fashion your messages so that the target markets will transmit them as a part of their core interests.
This tactic works best when absolutely no one is masterminding the campaign. On America Online, for example, there are multitudes of chat rooms for investors; Motley Fool is only the most prominent. Not long ago, these communities got hold of a couple of high-tech stocks Iomega and Presstek that key members of the group "talked up" as hot investment opportunities. Both stocks enjoyed a skyrocketing hundred-fold increase, carried by the hospitable hype of the online hosts. When the mainstream press caught on, critics rushed in to pop the bubble. But compared to their starting points before AOL came along, Iomega and Presstek still trade at hugely inflated prices.
Rule 4: Look like a host, not a virus
Because they are able to masquerade as something they are not, viruses are able to avoid being rejected by human immune and computer operating systems. They enter human cells and mimic genetic material, or they enter software systems and mimic existing code. The message to v-marketers: be the host.
One consumer marketing company, albeit one with lots of money, has perfected the tactic. Consider Nike's "Just Do It" campaign. All it takes is megabucks to hire the world's most sought-after celebrity athletes, to buy television time at $40,000 a second during the Super Bowl, and to saturate the retail channel with product promotions and giveaways. But none of that worked as well as Nike's ubiquitous tag line, "Just Do It." The phrase is practically an entry in the Merriam-Webster Collegiate Dictionary under the listing: American culture. Everyone from cynical marketers in ad agencies to prison guards in B-movies is using the phrase without irony. Every time they use it, they're endorsing Nike products.
Rule 5: Exploit the strength of weak ties
Sociologists have long noted that individuals with many casual social connections have a larger influence on communities than do individuals with fewer strong connections. Viruses thrive on weak ties. The movement of viruses over the Web -- a practically infinite collection of weak ties in countless virtual communities -- is a prime example.
In business, such tactics are the instinctive practice of companies engaging in multilevel marketing: marketers such as Tupperware, Amway, and Mary Kay Cosmetics, for instance. In each of these businesses, the strategy is to find a collection of individuals who excel at developing a large number of weak ties -- and use those ties to sell products and services. Tupperware, for example, gets someone in a social community, such as a suburban neighborhood, to host a party featuring Tupperware. Everything about the party is ostensibly noncommercial: it's her house, her food, her friends. But the social interaction is funded by the sale of Tupperware products. What's social is indistinguishable from what's commercial a powerful business network built on weak social ties.
Law 6: Invest to reach the tipping point
Viruses do not become epidemics until they reach the tipping point. In other words, the virus must expand through the host population until it reaches a certain threshold of visibility and scale. Assume, for example, a virus doubles each year. In year one, it's only 1% of the host and scarcely detectable. In year two, it's still minute, only 2%. But in year five, it's 16% -- and suddenly it's an epidemic. V-marketers must understand that they're playing the same game because the impact of exploiting weak ties does not come overnight.
That's why Microsoft's true leverage with its DOS and Windows operating systems took a decade to pay off. Today Microsoft operating systems run on an estimated 85 million PCs the world over. That's why CNN was viewed as a joke by the mainstream press -- until suddenly everyone from Saddam Hussein to Bill Clinton was getting real-time news exclusively from the 24-hour network.
Though you can certainly derive a number of benefits from encouraging the viral spread of commercial content, be aware of the limitations. You cannot control the message and the channel thus making outcomes unpredictable and difficult to measure. The proportion of the online audience likely to participate is small. Jupiter Research's latest European consumer survey shows only 5 percent of the Internet population had forwarded an advertising message. Of respondents who said they had, 64 percent were under 34 years old and 56 percent were male.
If you want to use viruses, be smart and be patient.
Thursday, August 9, 2007
इन्तेग्रतेद Marketing
As Benjamin Franklin said during the Revolutionary War, “Gentleman, we must hang together or we will hang separately.” Neither marketing nor sales can succeed on their own; but together, working in unison, they create a powerful, almost irresistible force. Marketing needs the feedback from sales to determine what is working and what isn’t. They must know what promotions work and those that don’t. Sales cannot be competitive without the tools that an enlightened marketing can provide.
Integrated Marketing or Collaborative Selling is where all aspects of the organization, marketing, sales, support, customer service, are found within one umbrella organization and all facets, data bases, personnel, etc are integrated to optimize previously discrete business departments. The objective is to link all the business processes among all these common elements into a smooth flowing cooperative endeavor. If successful, the end result will be the creation of a Customer-centric organizations.
We want to be one company, providing a single face, to the customer. Therefore, you must integrate all interactions to the customer to create the customer expectations and customer experience that is relevant and useful to that customer. Companies that integrate internally across those sales and marketing process see benefits exceeding 20 to 30 percent over those that do not integrate. The ultimate is thinking of sales and marketing as one and not two organizations linked together. Consistency is the key: to be viewed at all times through all angles by all customers the same way, providing the same message.
Integration continues to gain ground slowly and painfully. Necessity, not corporate vision, will continue to drive the process of improved marketing and sales integration. Silo-based management of sales and marketing resources promotes waste and thwarts results measurement. It also creates a procedural barrier to ensuring that organizational actions align with organizational goals related to sales and customer retention
Major barriers to integration remain. Don't bet on integrated marketing becoming a corporate fad. Unlike past fads, the process of integrating business development and retention faces some unique obstacles that actually might benefit the process in the long run. Perhaps the biggest obstacle is the lack of a clear champion, short of the chief executive. Integrated strategies span sales, marketing, human resources, and operations, and few people, aside from very senior executives, have responsibilities spanning this range.
Large companies such as IBM have created integrated marketing groups, but even these don't necessarily tie into the customer service and operational issues that go along with the need to fulfill marketing promises at the operational level. Large ad agencies for years have claimed to offer this service, but, with few exceptions, integration really means the offering of additional direct marketing, promotional, or other tactical services, and not high-level organizational consulting potentially needed to align organizational silos with organizational goals. (Coke recently announced that its next ad agency will have to come up with inventive new ways to promote the brand beyond creating new types of television ads.)
Companies with a results-oriented, integrated approach to business development and retention almost always run their businesses this way, because the bosses insist on it. In the meantime, more and more of the nation's business schools are turning out students with exposure in one way or another to the emerging area of integrated management,
which could eventually create a new group of leaders less wedded to a specific
tactic.
Integrated marketing is the wave of the future and the separator for companies that will succeed and those that will fail. Which will you be?
Integrated Marketing or Collaborative Selling is where all aspects of the organization, marketing, sales, support, customer service, are found within one umbrella organization and all facets, data bases, personnel, etc are integrated to optimize previously discrete business departments. The objective is to link all the business processes among all these common elements into a smooth flowing cooperative endeavor. If successful, the end result will be the creation of a Customer-centric organizations.
We want to be one company, providing a single face, to the customer. Therefore, you must integrate all interactions to the customer to create the customer expectations and customer experience that is relevant and useful to that customer. Companies that integrate internally across those sales and marketing process see benefits exceeding 20 to 30 percent over those that do not integrate. The ultimate is thinking of sales and marketing as one and not two organizations linked together. Consistency is the key: to be viewed at all times through all angles by all customers the same way, providing the same message.
Integration continues to gain ground slowly and painfully. Necessity, not corporate vision, will continue to drive the process of improved marketing and sales integration. Silo-based management of sales and marketing resources promotes waste and thwarts results measurement. It also creates a procedural barrier to ensuring that organizational actions align with organizational goals related to sales and customer retention
Major barriers to integration remain. Don't bet on integrated marketing becoming a corporate fad. Unlike past fads, the process of integrating business development and retention faces some unique obstacles that actually might benefit the process in the long run. Perhaps the biggest obstacle is the lack of a clear champion, short of the chief executive. Integrated strategies span sales, marketing, human resources, and operations, and few people, aside from very senior executives, have responsibilities spanning this range.
Large companies such as IBM have created integrated marketing groups, but even these don't necessarily tie into the customer service and operational issues that go along with the need to fulfill marketing promises at the operational level. Large ad agencies for years have claimed to offer this service, but, with few exceptions, integration really means the offering of additional direct marketing, promotional, or other tactical services, and not high-level organizational consulting potentially needed to align organizational silos with organizational goals. (Coke recently announced that its next ad agency will have to come up with inventive new ways to promote the brand beyond creating new types of television ads.)
Companies with a results-oriented, integrated approach to business development and retention almost always run their businesses this way, because the bosses insist on it. In the meantime, more and more of the nation's business schools are turning out students with exposure in one way or another to the emerging area of integrated management,
which could eventually create a new group of leaders less wedded to a specific
tactic.
Integrated marketing is the wave of the future and the separator for companies that will succeed and those that will fail. Which will you be?
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