The price ($0.00) is right

In the new economy, how can companies give away so much and still make money?

Today’s  savvy consumer knows they can surf the web and find just about anything they need to know for FREE.  Hit the search engines, and you’re off to finding your answers.   With traditional media (direct mail, telemarketing, TV) it used to be, give away a watch, backpack, or DVD FREE with a paid offer.   Now more and more dollars are being diverted to “getting mindshare”–getting prospects/customers to your online presence… engaging them with free content and a community experience, and then presenting them with your premium offer.  

 Here’s a perfect example:

Comedy’s legendary Monty Python members–you know, “I’m a lumberjack and I’m OK,” the Killer Rabbit, the Dead Parrot —were tired of seeing their legendary sketches pirated and posted on YouTube, free to whoever wanted a quick laugh.  So they posted their own, higher-quality versions on YouTube–also free–but let fans know that complete DVD versions were available for purchase.  As a result, sales rose 23,000 percent!

There are many examples of how companies are monetizing “free” in Chris Anderson’s new book, Free:  The Future of a Radical Price (Hyperion, $26.99).  According to Anderson, “people are making lots of money charging nothing. Not nothing for everything, but nothing for enough that we essentially created a country-sized economy around the price of $0.00.

 Bottom-line:  Allure your prospects/customers with the right price ($0.00); get them to embrace your brand with helpful tips, customer forums, etc. and soon their mindshare will turn into walletshare.

Surviving the Downturn: Building and Maintaining your Brands’ Reputation

Today’s consumer now struggles with weighing “value” in a product or service and “values” in what they want and expect from companies –according to a recent Harris Interactive poll.

 That should come as no surprise considering the bailouts, bonuses and bad business behavior that all combined to erode the overall reputation of corporate America to its worst standing in ten years. Technology remains the highest rated industry, but its reputation declined along with six other industries, with the Automotive industry reporting the greatest decrease ever.

Despite this free-fall in Corporate America’s image among consumers, Johnson & Johnson, Google, Sony, Coca-Cola, Kraft, and returning to the list of Most Visible Companies, amazon.com, all received RQ scores that categorize their reputations as “Excellent”. An RQ score of 80 and above is considered “Excellent”.

“While the overall reputation of Corporate America has never been worse in the eyes of the general public, greater understanding of and credit for working diligently to build and maintain a good reputation has never been stronger,” says Robert Fronk, Senior Vice President, Senior Consultant, Reputation Strategy at Harris Interactive. “The RQ study also validates that both corporate behavior and corporate communication play a major role in how a company is perceived.”  And, this theory is also reinforced by the following definition of a brand by Scott Bedbury in “A New Brand World” –

    ” A brand is the sum of the good, the bad, the ugly and the off-strategy. It is defined by your best product as well as your worst product.. It is defined by the accomplishments of your best employee…the mishaps of the worst hire you ever made…the music your customers hear when put on hold…the finely worded statement by the CEO..but also consumer comments overheard in the hallway or in an online community.  Brands are sponges for content, for images, for fleeting feelings.  They become psychological concepts held in the minds of the public, where they may stay forever.”

“The companies that achieved RQ scores that characterize their reputations as either good or excellent have a decidedly value or comfort basis in their businesses”, says Fronk of Harris Interactive. “While the reputations of many of these companies have been relatively stable over time, there is no doubt that in the current economic environment, these two characteristics only serve to reinforce a positive reputation.

The RQ surveys more than 25,000 American consumers in a two-step process, through online and telephone interviews, to first identify the 60 most visible companies and then to rank these companies based on their reputation in six different categories: Emotional Appeal, Products & Services, Social Responsibility, Vision & Leadership, Workplace Environment, and Financial Performance.

The top 10 companies on this year’s list in order of ranking include: 1) Johnson & Johnson; 2) Google; 3) Sony Corporation; 4) The Coca-Cola Company; 5) Kraft Foods; 6) amazon.com.; 7) Microsoft Corporation; 8) General Mills; 9) 3M Company; 10) Toyota Motor Corporation. For a full list of the top 60 companies and other findings visit: www.harrisinteractive.com/RQ.

The six areas that the RQ survey focuses on that influence reputation and consumer behavior include the following, along with the companies that scored highest in these categories:

• Social Responsibility – Whole Foods, Johnson & Johnson, Coca-Cola, Walt Disney, Microsoft

• Emotional Appeal – Johnson & Johnson, Kraft, amazon.com, Sony, General Mills

• Financial Performance – Johnson & Johnson, Berkshire Hathaway, Coca-Cola, Microsoft, Google

• Products & Services – Sony, Johnson & Johnson, 3M Company Google, Kraft

• Vision & Leadership – Berkshire Hathaway, Google, Microsoft, Coca-Cola, amazon.com

• Workplace Environment – Google, Johnson & Johnson, Sony, Microsoft, Kraft

In addition to Wal-Mart and Sony, other big gainers in 2008 included AT&T, Unilever, Royal Dutch Shell, and Nike. Each of these companies has confronted reputation issues in recent years and it would appear that their efforts to mitigate these issues and rebuild a positive reputation are beginning to bear results.

To review selected research from the Harris Interactive RQ survey, please visit www.harrisinteractive.com/RQ.

Hope this gives you some food for thought — Brian.

Surviving the Downturn: Strategies Part 2

In my last post, we looked at re-tooling the “price” - P  in the marketing mix.   This week I’d like to hone in a bit on the “promotion” -P.

We all know that marketing expenditures are shifting from traditional branding efforts and media to more direct ROI methods and “customer nurturing” or social media.  With budgets shrinking marketers are faced with having to do MORE with LESS.  So, what are some of the savvy marketers doing?   

Well that depends on what industry you are in, and whether you are a B-to-B or B-to-C marketer.  But, one strategy that many marketers have embraced is to focus more on RETAINING customers rather than acquiring new customers.  I’m not saying they are abandoning their new biz efforts, but SHIFTING more of the marketing budget towards retention.

If you think about the old 80/20 rule (in the B-to-B world), where 80 percent of your business comes from 20% of your customers, then it really makes sense regardless of the economic climate to keep those customers loyal to your brand.  Many companies are stepping up their efforts to identify and nurture the decision makers and influencers in their top 20%.  It’s not enough to just focus on one or two individuals in an account, but rather anyone who has an experience with your product or service.

Another main reason is the obvious –it simply costs much less to maintain a customer than to acquire a new one.  So, in a downturn when budgets are scarce, it makes sense to change your main focus to maintaining your market share vs. growing it.  Some of the tactics being deployed are:

               Loyalty programs:  Companies that have them are enhancing and promoting them more.   Companies that don’t have a loyalty program are creating them.  One strategy that is also growing is  the “brand ambassador” program.  The brand ambassador program can be implemented with various media —direct mail, email, inserts, collateral material, social media, and by word-of-mouth.  It’s simplest form is the “referral program” where your friend gets xx and you get xx for referring them.  A few more expensive to implement, but bring in a positive ROI are the following social media tactics:

           Tap into customers’ enthusiasm with online ratings and reviews.  Many marketers have seen an explosion of new sales just because they implemented this feature in their website.  One company, eBags expects to yield over $400,000 in profit from a $200,000 investment in one year!

          Create a community to energize your customers.  This works best if your customers have a passion for your product/service and have an affinity for each other –especially in a B-to-B environment.   Constant Contact- an email service provider for small business owners is experiencing an incredible snowball effect from this effort —13000 participants -10% from it’s customer base, with 30% of the community providing referrals. That equates to an 82% growth rate for the company! 

More to come..have a great day!    Brian.

Surviving the Downturn: Strategies Part 1

We all know that today’s economy poses a tough challenge for companies of all sizes and industries.  But through it all, many organizations will survive and even thrive.  How?  Simply by changing a few fundamental ways they do business– putting emphasis on creating strong loyalty to their brand and preferably, to the company’s premium brands.  And to do this, they are  dissecting  the 4 “P”s and retooling…quickly.  For today, let’s focus on one of the 4 P’s – PRICE.

How you price your product or service in normal times can be a challenge in itself.  It’s all about PERCEIVED VALUE.  Price too high, well you lose most of the time.  Price too low, and your profit margin is compromised, plus you may lose out to higher priced competitors because your product/service is perceived as inferior.  (I learned this lesson the hard way when my agency came in at 50% lower than a competitor and we lost the bid.  The next time we raised our bid up 45% and won.  Did we cut corners?  No. We just were able to do the job at a lower cost because of our lower overhead, but our client didn’t care — it was the perception that they would get more VALUE at the higher price)!

In these tough times the game has changed.  The key is to find the ultimate price point on what your customers are willing to pay, and to get them to be loyal to your premium brand.  You could just simply lower your prices to gain or keep market share–but a healthier approach would be to “repackage” your offer so that profitability is acceptable and the consumer is willing to TRADE UP for your more profitable, premium brand by paying the same for the premium brand as they would for the standard version.

  Here’s an example:

Say you have three kinds of  hand lotions – regular, advanced and premium.  They sell for $4, $5, and $7.  They are all packaged in 16 oz containers. The price/oz. is $0.25, $0.3125,  and $0.437 respectively.  Quite a big jump from standard to premium.  But, if you price them all at $4 each and repackage the advanced in a 15oz. bottle and the premium in a 14oz. bottle, the price per oz. is now $0.25, $0.26, and $0.28 –not a big difference in the eyes of the consumer. Now the consumer can buy the premium for the same $4 as the standard–and probably will even though they get 2 oz. less.  You will take a smaller profit margin then usual, but you are achieving your objective of maintaining your market share and developing loyalty to your premium brand.

We all have our own pricing models whether they are subscription-based or per project or per piece.  I’m sure that you can find creative ways to find the ultimate “P” to help you win in this economy and in good times ahead.

Part 2 of this series will examine another strategy that is a MUST for any organization.

I welcome any comments, views, concerns, topics you’d like to hear about…   Have a great day!   Brian.

Explosive revenue growth at little or no cost –is it possible?

In today’s tough economy there are still ways for creative marketers to achieve remarkable results without having to make a major investment —here are two examples:                               

1)  Social media – YouTube:  Blendtec, a manufacturer of high-end blending machines is one of several great examples of how this medium can yield incredible results –in fact it achieved over a 20% growth in revenue from a $ 300 investment!!!  The skinny is this– the new marketing director was amazed at how the blender could grind up wood in the testing center and thought it would be great to show the world a demo of it’s power.  With that, he thought of putting “extreme blending” videos on the web.  Initially they put the videos up on their website and linked with Digg.  Then on to YouTube.  Then the explosion took place– 6 million views in the first week!  Soon fans on YouTube were suggesting things to grind up –such as the iPhone …and Blendtec obliged.  The result: over 60 million views plus appearances on The Tonight Show and The Late Show with Jay Leno.

2) Partnerships.  Here’s where you really need to think out of-the-box.  Customers, suppliers, other organizations in your industry, etc. all have their own market reach that could be tapped with little or no cost.  Here’s an example…

The marketing director of a large magazine approached one of their retail advertisers with this promotional concept:  promote a sweepstakes contest that would drive the consumer to the magazines’ website to register for a free e-newsletter and to enter into the sweeps contest.  The advertiser agreed and paid for the floor banners that were place in the isles of their retail stores.  The publisher gave the advertiser exclusive sponsorship and appropriate online exposure.  The results:  Several thousand folks signed up for the free e-newsletter that has become a revenue generator for the publisher.  The retail advertiser increased it’s brand awareness.  The revenue generated from this campaign was not divulged, but regardless the cost to the publisher was ZERO since the web work was produced in-house.

Do you have any such stories?  Have a great day!

Brian

A few primers before your business dives into the Web 2.0 World

If you’re like me, when you first started hearing about social media (web 2.0) you probably thought it was just a passing fad or something that you didn’t need to deal with.   Well, the fact is that it is by far the fastest growing media right now — (I know, most of you bloggers out there already know this, but hey –give me a little slack here–I’m catching on very quickly). 

I want to give a little plug for an amazing book I’m reading called “The Groundswell” by Charlene Li and Josh Bernoff.  For anyone who is serious about understanding the business implications and the correct way to approach the Web 2.0 opportunity, this book is a MUST READ.

For those of you who rather not read it, but just want the topline, here goes:

1.  Know your objectives before you DO ANTHING.  That’s right. Don’t just set up a website, Twitter, Blog, etc. without clear objectives of what you want to accomplish.  Why?  Because you can waste big bucks and time executing the wrong tactics.

2. Research your customers/prospects and their “social media behavior”.  According to Messgrs Li and Bernoff, you need to identify and dissect the different groups of people and adjust your strategies accordingly.  For example, there are 6 categories that make up their Social Technographic profile: Creators- who publish content, Critics -who react to online content, Collectors –who tag and organize content, Joiners –who maintain Facebook pages, Spectators- who consume what the rest produce, and Inactives -they go online but they are not into social media.

3. Find an agency partner who has a proven track record in producing successful and measurable campaigns and that can grow with you as your communities take off.  Also make sure they begin with your objectives in mind and a clear understanding of what constitutes a successful campaign.

4.  Make sure upper management is involved.  Whatever progams you implement will be a  major change on how your organization communicates with your customers.  Implemented correctly, it can reap big rewards.  A wrong turn, can be devastating.

Cheers!

Brian

The “customer experience” —is it tops on your priority list?

Now more than ever, companies/organizations must place a high priority on gauging their customers’ experience with them.  And I mean the TOTAL experience —all touch points from sales, customer service, usage of product or service to post-sales and tech support.  It must begin with upper management’s commitment and it needs to be filtered throughout the organization. 

How many instances can you think of where you might have had a problem with a product such as a PC and you had to deal with a tech rep to solve the problem?  Did you have a good experience or was it a nightmare? And after the incident, did you tell a bunch of your friends?  Or, did you post your experience online?

 In today’s world, companies cannot afford to leave a bad taste in any customer’s mouth.  Take for instance the true story of an aggravated customer of a cable (TV service) provider….

This person was getting the runaround trying to get a tech out to his home for service.  He was so enraged with the lack of service, that he started a blog called ” (Cable Co. name) must die!”   The very next day, he received a call from the cable company (who obviously is monitoring the web for  publicity) and they immediatley sent out a repair tech.  This cable company knew damn well that they could not afford to have the power of viral marketing damage their reputation —in fact, no one can especially in these tough economic times. 

The lesson to be learned is simply, to be one of the leading companies in your industry and perhaps even survive this economic crisis, you must analyze and monitor all the possible touch points your firm has with your customers.  Make sure everyone in your organization knows how crucial any communication is, and that they must do everything possible to ensure a pleasant and positive customer experience. …make your customers rave about you and your business will thrive!

Back to Basics: The Marketing Concept still Rules

Today more than ever, successful marketers will follow the principals found in Theodore Levitt’s “Marketing Concept”.  I was introduced to Mr. Levitt’s concept while a marketing major at Northeastern University back in the early 1980′s. 

For those who are unfamiliar with Mr. Levitt’s work, “The Marketing Concept” is simply put as “your product/service offering should be geared towards what the customer WANTS, not what YOU THINK they want.  Back in those days, and even today, some companies are engineering driven —meaning …if we build it…they will come.  NO MORE. 

Now, new product development needs to be customer-focused on fullfilling a need or in the iPod/iPhone case creating a gotta-have-it….they really don’t need it, THEY WANT IT!  So, how do you know what your customers/prospects need or want?  ASK THEM..they’ll be glad you did.  

With the rapid explosion of social media (Facebook, Twitter, Linkedin, etc.) and adding your own microsites and Wiki’s, you can hone your R & D and marketing research efforts with these low-cost and powerful communication tools.

Although today’s marketing and communication channels are undergoing rapid change, one thing will always remain constant and that is successful businesses/organizations listen to their target market and give them what they desire…and they strive to make the TOTAL customer experience better than their competition.

Tips for Improving marketing ROI

Greetings!  Here are a few tips to improve your marketing ROI.

 

Tip 1:  Keep testing your landing pages – make them relevant to your

             offer or search terms!

 

In addition to testing the creative elements (copy/design) and offer on your landing

pages, making the pages more relevant to your audience can have a big impact

on conversion rates.

 

According to a recent Marketing Sherpa survey of marketers, 68.2% of those

who tested “altering landing pages dynamically depending on offers or search terms”

reported that their conversions were “definitely better” after implementation.  According

to the survey, linking to a landing page with a search term was the single most effective

tactic for improving conversions.  Out of the 3,451 marketers surveyed, only 3% are

already automatically generating landing pages when specific items are searched for.

 

 

 

Tip 2:  Create Direct mail – to Web applications

           

Direct mail lists are still the “king” when you are looking to pinpoint your

direct response marketing.  “Cold” email solicitations just do not measure up –the lists

are not as targeted, and most messages are deleted and treated as “spam”.  If you are

looking for a way to reduce mail costs, then one solution is a “web driver” approach.

 

Creating simple direct mail packages that drive responses directly to the web

have several advantages.  First of all, they cost less.  The direct mail piece is primarily

creating excitement and giving the recipient a reason to check out the offer —the landing

page does the selling.  And, that leads to the second benefit— the low cost variable landing page.  It’s low cost to produce (generally $1000-$3000 if outsourced) and there are no printing/production costs.  Today’s technology allows you to produce 1:to:1 communications based on your database.  For example, in a B-to-B application, the landing page can be personalized by industry segment or by purchase history.  In a B-to-C application, the landing page can be personalized by demographics. 

  

Tip 3: Lift Conversion with Personalized URL’s

            Personalized URL’s in a direct mail piece is a powerful device in reaching your consumer. Advertisers can expect to see a 20% lift, in fact, on conversion by implementing personalized URL’s (or PURL’s) according to a MarketingSherpa study.

            When a consumer receives a piece of direct mail, postcard or an email, they are driven to their own customized landing page via their PURL. So how does this work? When the PURL is entered into a browser the database is triggered and will then serve a landing page for this specific consumer based on that unique URL. The consumer is given a direct, and personalized, communication that requires little or no effort on their part. The customization evokes a sense of comfort with the consumer prompting them to respond. Furthermore, the more simplified the consumer process, the higher the response. Utilizing this method increases the advertiser’s conversion performance dramatically.

            PURL’s are also powerful in aggregating valuable data. The respondent’s behavior will be in invaluable, as you have captured information that can be helpful in understanding how your services are viewed to a consumer as well as individual consumer data.  

Always tailor your PURL’s based on these learning’s in order to continue increasing your conversion and response rate.

 

Tip 4: Harness the Power of Social Media

 

            According to MarketingSherpa’s recent February statistics 46% of firms have not accepted and adapted to social media, citing a lack of understanding as their main reason for their leisurely approach to involvement. Social Media has been paving the way for itself over the course of the past few years. As the channel evolves in leaps and bounds and economic downturn is just the sort of spark to ignite the blaze. More and more companies are cutting back on their budgets in response to more and more consumer’s uncertainty in the current economic climate. Both are consequentially spending less. Consumers are more cynical than ever. So how does a company maintain, and even expand, its consumer base and ultimately sales during a recession?

Social Media and Guerilla Marketing tactics allow companies and brands to effectively communicate with their audience. They also, when effectively harnessed, allow for an increase in their consumer base in the most efficient way the web has seen. Having and honest and public conversation with your consumers will fuel brand ambassadorship, igniting trust and furthermore loyalty. Allowing consumers to voice their concerns, issues and generally engage with the brand creates a direct line of trust. In years past this sort of dialogue could not be obtained or purchased. The savvy marketer understands that these conversations are currently happening all around them and they can authentically join in or continue to struggle with budget cuts and consumer’s ability to publicly rant or rave about their company or brand.

 

 

Tip 5: Fine tune your Pay Per Click Campaigns

            As you know, Pay Per Click advertising is one of the most cost effective ways to target sales via the internet. Countless advertisers seek this tactic due to the highly appealing nature off allowing an advertiser to only pay when their ad is clicked. For this reason, many advertisers manage their own PPC campaigns. However, creating and maintaining an efficient and effective PPC campaign requires a breadth of research and skill.

            Keyword selection requires more than just selecting words that relate to your industry and services. Avoid doing so, as it can easily return irrelevant clicks that may increase site traffic but ultimately do not return valid inquiries. This translates to a wasted budget. Be cautious when selecting the number of keywords you are bidding on. Quantity is not quality in matters of PPC. Select only well researched and relevant keywords.

            Ensure that you have written engaging copy. What is normally considered as engaging copy in the marketing world does not necessarily translate to the confining limitations of a PPC ad. A professional or firm can guide you as to what is enticing and will generate action in this specific marketplace.

            Pay close attention to your Click Through Rate! Monitor your campaign, as a slight variation can greatly impact its performance. One of the biggest mistakes an advertiser will make is launching a PPC campaign and letting it sit, without consistently analyzing and optimizing based on performance. Allow the campaign to ramp up after changes are made and closely monitor the impact of the changes. Give the modifications you’ve made enough time to settle and confirm their actual impact, then analyze.

Many factors contribute to your overall PPC campaign performance: the relevance of the keyword, how well your copy is tailored to this audience and the consistent analysis of your campaign. Be sure to consider all of these factors when engaging in and fine-tuning a PPC campaign. As always, practice makes perfect.

           

 

PURLS:

Frank Hudetz of Solar Communications reports a 33 percent lift in pURL campaigns.

Marketing Sherpa. May 7^th, PURL’s can increase conversion 20%