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.

Bookmark and Share

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,, 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); 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:

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,, 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,

• 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

Hope this gives you some food for thought — Brian.

Bookmark and Share

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.

Bookmark and Share

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!


Bookmark and Share

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.



Bookmark and Share

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.

Bookmark and Share