Your CMO marketing thoughts

Strategy first. Warehouse second.

2011-11-28T16:01:00.000-08:00

You know I’m a big proponent of (centralized) data warehousing and what it can do for a business. But the key is the “what it can do” part of that sentence. Too often, companies want to start with centralizing the data, when they should be starting with how they’re going to use it.

Consumers (rarely) react to a single contact. Their relationship to your company will normally depend on the sum of all their experiences with it. You need to understand that sum, and what goes into it. The way to do that is to:
1) identify and map out all the ways a customer can interact with your company throughout the customer lifecycle,
2) create a strategy to link and optimize these touch points, and
3) then create the infrastructure to implement your strategy

These interactions will involve tools like your website, email, snail mail, telephone, social media, and face-to-face. They will take place during proactive and reactive interactions with people in your sales, marketing, accounting, operations, distribution, legal, and other departments.

Prospects and customers are not all the same. Which of them are “influentials?” Which are “advocates?” Who is profitable? Who is costing you money? How do you want to interact with each of these groups during every potential contact with you?

Sound complicated? It is. But would you rather have your prospect and customer relationships developing randomly (as they do for most companies), or under your direction?

The more you understand, guide, and control the contacts that create a customer’s relationship with your company, the more successful you are going to be. That idea is simple, it’s the execution that’s hard. But the more you embrace that execution, the greater the competitive advantage you will generate.

Your CMO can help you map your interactions and better control their outcomes to create more profitable relationships with prospects and customers. Give me a call and we’ll talk about it!

Two key elements of Innovation

2011-10-15T10:35:00.002-07:00

It’s a fast-paced world out there these days, and standing still is a good way to get run over. That makes innovation more important than ever. Whether you’re trying to identify new products or services, save money, or improve efficiency, innovation is the best way to increase your competitive advantage.

But most companies lack even the most basic structure to generate innovation. Here are two things that basic structure requires:

1) Ideas! And not just from the managers. Ideas should come from all levels--just offer a reward and see how many you get (it doesn’t even have to be a big reward). [Interesting anecdote: The military once offered its members 1% of the first year’s annual savings for innovative ideas which were implemented. They stopped the program because too many of their key non-coms were retiring on the millions of dollars awarded.]

One free way to foster innovation is to make it one of the job objectives evaluated for each person’s annual review. You can even challenge your vendors to submit ideas. Think about asking for different types of ideas in different years. “What would make us more efficient?” or “How can we save money?” or “What would make our job easier?” for example.

Publish the ideas in an (internal) forum available to your employees. You’ll reduce duplication and encourage synergy (“Instead of this, what if we did that…”)
2) An evaluation system: You won’t be able to implement every idea you get. Nor should you. So you need a system to evaluate and prioritize ideas. Two very basic measures are relevance to your corporate goal(s) and projected return on invested resources. Ideas should not necessarily be ranked on how well they make use of current organizational resources or expertise--that may be too limiting.

Make sure employees know the evaluation criteria. Over time, they will begin pre-filtering their own ideas, improving the quality of the suggestions you receive.

Final thought: Wouldn’t it be neat if some of our government agencies did this?

Your CMO has been involved in innovation for over 30 years. If you want to jumpstart your innovativeness, get in touch!

Stranger In A Strange (generational) Land

2011-10-15T10:35:00.001-07:00

If you visit Japan, or Germany, or Brazil, you expect cultural differences. Same with people of different races or religions. But the cultural gap between generations can still surprise us. I think we unconsciously tend to expect people “like us” to have similar attitudes and wants, no matter what their age. Not so.

Why should a marketer care? Here’s just a sampling of industries and functions where generational differences radically impact the form and usage of products and services:

Retirement communities
Cell phones
Publishing
Restaurants
Automotive
Human Resources
Fund-raising
Volunteer recruitment

If you have been giving thought all along to how generational differences affect your business, that’s great. But it’s my experience that very few people do.

If they give it any thought at all, older marketers tend to lump everyone else into YOUNGER. Younger marketers tend to lump everyone else into OLDER. And middle aged marketers just figure everyone is exactly like them.

Generations are defined by unique core values created by what happened to certain groups of people during their formative years. Most “experts” (there’s no certification or credentials for generation gurus) tend to lump living Americans into the following groups:

G.I. generation Born 1901-1926
Silent generation born 1927-1945
Baby Boomer generation born 1946-1964
Generation X born 1965-1981
Millennial generation born 1982-present

If you’re thinking you’d like to know more, you don’t need to reinvent the wheel. There is a ton of research on the attitudes and behaviors that define the different generations, at least here in the U.S. (generational data for other countries is much harder to find). A good starting place is The Generational Imperative by Chuck Underwood, one of the pioneers in the field. He has specific chapters on his book on how to market to each generation, which can be a convenient short cut.

Want to discuss how your business plan might better reflect generational differences? Give me a call--I’ve already read the book!

Identify bad products by how they’re described.

2011-10-15T10:34:00.001-07:00

Good products (or services) don’t have to be “sold.” Their benefits and value are easily recognizable. Just communicate them to people, and they’ll buy.

Bad products don’t have easily recognizable benefits, and their value is far from clear. The solution is, of course, to improve the product. But all too often, the company tries to plaster over product deficiencies with a thick layer of glowing adjectives and disclaimers. No one is fooled, but it enables the company to shift the blame (for poor sales) to the advertising agency.

Pick any undistinguished product you like, and check out the language they are using to describe it. The description will be loaded with glowing, generic adjectives like ‘exceptional,’ ‘stylish,’ ‘sexy,’ and ‘supercharged.” And/or the bottom of the page will be covered in mouse type telling you why/how the product isn’t really what it appears to be, or has some unpleasant side effect (‘some assembly required,’ ‘do not attempt at home,’ or my personal favorite, ‘may cause anal leakage’).

Whether consciously or subliminally, consumers do pick up on these cues. That’s why so much advertising is ineffective. Consumers sense the desperation and deceit, and tune it out. Even if there’s nothing wrong with the product, overheated advertising copy can make the product appear second rate.

Want to know what message your advertising is sending? Give Your CMO a call, and I’ll help you figure it out!

Yes you can. And your customers expect it!

2011-10-15T10:31:00.000-07:00

Back in the day of the corner store, proprietors used to know their customers. They didn’t have to ask the customer’s name or address, and probably had a pretty good idea of the customer’s likes and dislikes. If an order had to be delivered, the store probably even knew what time the customer was likely to be home. And customers appreciated that knowledge, and the personal service it made possible.

Flash forward 50 years, and everything had changed. The corner stores were gone; relationships had become impersonal. The store didn’t care who you were, and if you wanted something delivered, you had to supply your name and address (every time, even if you’d just bought something there the day before). Despite a greater selection and lower prices, store loyalty and customer satisfaction declined.

Flash forward to today. Thanks to computers, there is no longer an excuse for uncollected or inaccessible information. And customers know it. So customers have every right to expect the same kind of recognition and personal service their grandparents used to get from the corner store. It doesn’t matter whether they are buying face-to-face or online. They want the fast, easy, personalized service that a well-networked database makes possible.

Sure there are exceptions. Some of us have information we don’t want companies to store, like birthdays, social security numbers, and financial access data. But apart from those, customers have the right to expect you to know them, and treat them like the individuals they are.

So think about your transactional systems (and this goes way beyond purchases to systems which handle functions like customer service, billing, and shipping). When someone gives you information, do you store it? Do you pre-populate forms with known information? Do you keep track of customer preferences, and make suggestions based on them? Do your all of your (appropriate) people have access to the customer’s history? In other words, do you treat customers as the valued individuals/corporations they are, or as anonymous, unappreciated “buying units.”

It takes a lot to turn a prospect into a customer, and to keep that customer. A well designed, well networked, well used database can make that effort a lot easier.

Your CMO has extensive experience in using data to create a more user-friendly customer experience, and can provide some great examples from places “doing it right.” Let’s sit down sometime and talk about how that experience can help improve your customer acquisition and retention!

Time for a Reality Check

2011-05-01T11:43:00.000-07:00

The following exchange is from the classic movie E.T.

Elliot: "He's a man from outer space and we're taking him to his spaceship." Greg: "Well, can't he just beam up?" Elliot: "This is REALITY, Greg."

We all need to deal with reality. And reality is that marketing is not about what we want to sell. It is about what they want to buy. It's easy to ignore reality in the short term. You can simply tell your marketers and sales force "Go make people buy this." But eventually reality will have to be faced. And if you're trying to force your product or service on uncaring prospects, the bill will come due sooner rather than later.

It's economic Darwinism. The companies that listen to their prospects; the companies that take the time to understand what is needed, are ultimately successful. The ones that try to shortcut the process ("I know what the public needs--why should I waste money asking them?") are usually the ultimate losers. I'm not saying that these "I know what they want" companies don't occasionally get lucky, but do you really want your business success to depend on luck?

NOTE: I am not paid by, nor am I a member of, a marketing research firm. But whether you use one, or just do casual interviews yourself, you need to check in with your prospects and customers once in a while. No, make that "all the time." Because keeping in touch with reality is not a one-time or occasional chore--it's something you need to write on your To Do list every day.

We live in a world that is changing and evolving more rapidly than in any time in human history. Technology, events, attitudes, even weather--the landscape is constantly shifting around us. Even if you have been successful at meeting a need for a targeted group, that need is not a constant. It will change--and you'd better be ready to change with it.

So stay in touch. Yes, it is time-consuming. Yes, it is expensive. Yes, it is confusing. But "This is reality, Greg." It is also the simplest way to get and keep a competitive edge. And isn't that what we're all looking for?

Four elements of a good advertisement

2011-05-01T11:30:00.000-07:00

An advertisement can be anything, from a one-page flyer to a radio spot to an announcement in your church bulletin to a television commercial. No matter what form your advertisement takes, it will be more successful if it contains these four elements:

1) INTEREST VALUE: A good advertisement can attract attention in an environment in which anywhere from hundreds to thousands of advertisements per day (depending on who’s doing the measuring) are competing for your attention. This is job one, because if people don’t pay attention to your ad, it doesn’t matter what you’re trying to say. Note: the more often your ad will be seen, the more you want to avoid “shock” or surprise tactics that lose their punch after the first viewing. For an ad that will be around a while, it is a good idea to include a number of emotionally satisfying or interesting bits that will continue to draw attention during repeated viewings/hearings. Example: The Progressive Insurance ads with “Flo.”

2) RELEVANCE: A good advertisement offers a meaningful reason to consider and remember the brand. This sounds easier than it is. How many times have you been able to remember an ad, but not what it is advertising? It can be a struggle to reconcile this element with Interest Value, but unless you do, you’re wasting your advertising money.

3) SIMPLICITY OF EXECUTION: Don’t get too cute! Remember, you intimately understand your product and its benefits. The people who will see/hear your ad are starting from scratch, and will be paying limited attention to your message. Don’t expect too much from them! They will remember (at most) one or two simple points. So make those points, then shut up! If you have a lot to tell people, you’re going to have to do it over a series of ads, in person, or via your website. The job of advertising is to tease the prospect into seeking more information (or to sway the informed consumer to select your product over another). If you have to spend too much time explaining your product or its benefits, maybe its not as good as you think it is!

4) BRANDING PROPERTIES: Worst case—the consumer sees your ad, then goes out and buys your competitor’s product. Make sure your commercial clearly associates the product in your ad with your brand and your brand only. Make sure your name is clearly and repeatedly mentioned in your ad. If you have a brand logo, feature it prominently (that’s why logos were invented!). This is not only important for the current product, it also creates synergy in advertising for future products.

If you’re looking for help making your advertising more effective, YOUR CMO can help. Give me a call and we’ll talk about how to make it happen!

Business-to-Business Segmentation in four easy steps…

2011-02-23T11:25:00.000-08:00

Why worry about segmentation? You already know who your best customers are (kind of), and you’re too busy for some kind of facacta academic exercise. But that’s the very reason why segmentation (try calling it prioritization if that seems more comfortable) is a good idea. First, you are likely to be surprised by some of the clients who float to the top, and second, prioritizing your customers will save you time (and help you make more money) in the long run.

I’m suggesting four factors that can jumpstart your segmentation/prioritization project.

1) Current profitability: What are you netting from the account? Revenue is good to know, but a customer may be costing you more than you’re taking in, due to excessive customer service demands and late payments. [If you’re not already measuring net income by account, this is the place to start!]

2) Future potential: What are the opportunities for cross-selling or up-selling the customer? Are there different products or services you can sell to the department you’re dealing with? Are there other departments in the company you can sell your current product or service to?

3) How much attention they require: Sales and service calls, requests for (free) extra work like accounting reconciliations, socializing, freebies like Bengals and Reds tickets, etc.

4) Strength of relationship: Measured by consumer satisfaction scores, willingness to refer other companies to you, the longevity of the relationship, and the degree of interactivity (frequency of reviews, how often they open your e-newsletter etc.)

Data for all four factors should be available within your organization--all you have to do is
a) collect them into a single database (an Excel spreadsheet can work fine)
b) assign a value to each factor (nothing fancy--maybe two points for good, one point for
average, and zero for bad), and
c) rank your customers by their composite score.

Congratulations! You’re segmenting!

If you would like help with this process from someone who’s done it many times before (examples), or want to talk about how to create a great ROI from segmentation once its done, give me a call. You’ll like the results!

WHAT'S YOUR COMPANY'S GUIDING STAR?

2011-02-23T11:23:00.000-08:00

In days of old, mariners steered their course by the stars, often picking out one particular star to follow.

Today's companies often have a mission statement which should (but seldom does) serve the same purpose. A mission statement is like a compass, which can keep your company from veering back and forth as the makeup of your management team changes.

Republicans recently read the US Constitution out loud to start the new congressional session. They obviously felt that the country was off course, and were trying to focus attention back on what they considered to be the "national mission statement." If there is this kind of disagreement over our country's direction, how much easier is it for a company to drift off course?

Unfortunately, for many companies, the mission statement doesn't get much attention once it's created. It's dusted off once a year for the annual report, and may appear in a customer presentation or two, but no one really pays much attention to it.

An impressive exception is Johnson & Johnson's CREDO. It's worth a look. This 300 word mission statement addresses the company's relationship with its four most important constituencies: customers, employees, the community, and stockholders. It does this in plain language, and explains why it says what it says. For example, when it states that costs should be kept low, it specifies that this is not to bolster profits, but to hold prices down.

Here at the beginning of a new year, and in the midst of challenging economic times, it might make sense to exhume your mission statement and think about breathing some new life into it. Right now it may be a toothless lion. But if you develop a meaningful mission statement and give it the ongoing attention it deserves, it can be a compass that will help your company sail through troublesome times without expensive and unproductive zigs and zags.

Unconscious Consumption

2011-02-23T11:22:00.000-08:00

Just like a computer, our brains have a limited amount of processing capability. If we had to consciously think about things like tying our shoes or buying our daily pack of chewing gum, that processing capability would be used up very quickly, and we’d end up standing around literally “lost in thought.”

To prevent this, most of us tend to hardwire frequent, less important decisions and processes. We turn them into ‘habits’ or ‘routines.’ Which has major implications for us as marketers. We tend to think of purchasing and usage as conscious decisions, when the truth is they often are not. In many cases, logic may have nothing to do with it.

So what needs to change? We need to recognize the unconscious nature of those consumer purchasing choices, and work on understanding the cues that consumers employ to enable these unconscious decisions.

Consumers won’t be able to articulate why they make these choices. To understand the unconscious behavior and gain a competitive advantage, you have to identify the cues that lead the consumer to (unconsciously) behave the way they do. Insights can be found by observing reactions to varying stimuli such as the packaging size, color or weight, or product cost, or shelf position. For example, coffee is perceived as more robust if packaged in dark colored containers. And the higher cereal is placed on the grocery store shelves, the healthier it is assumed to be.

Ferreting out subliminal cues is going to be expensive and time consuming. But less so than wasting your money on advertising that is trying to appeal to logic where it doesn’t apply. Forget the “voice of the consumer.” The consumer can’t tell you why they’re doing what they’re doing, because they aren’t doing it consciously. They’re going to have to show you, through observation and controlled testing. Good luck!

If you’d like some help in figuring out how to interpret and influence your consumers’ unconscious buying decisions, give Your CMO a call!

Four critical stress points in planning

2010-11-14T08:33:00.000-08:00

I was reading an article by Elder and Paul (With Implications for Instruction) recently. It was a little involved, but in a list at the end of the article I saw four things that, in my experience, are prime reasons why plans fail. These may be something to keep in mind as you’re preparing for 2011.

1) Clearly state your goal(s): It’s not so much that you don’t know what you want. But plans usually require the cooperation of other people, and words are slippery things. If you don’t nail them down, you may find that they are interpreted differently by your co-workers. And that makes it difficult-to-impossible to define and execute implementation steps.

2) Clearly differentiate between facts and assumptions: Erase the words “Everyone knows…” from your lexicon. Hard as it is to believe, not everyone shares the same understanding of the world that you do. If you and they realize this, it can be relatively easy to come to agreement. But if you proceed thinking the light is green while they think it’s red, you’re facing confusion at best, and failure at worst. Your plan is, of necessity, based on information. Make sure that information is accurate (ie. provable and unarguable) before you place your bet.

3) Consider alternate points of view: Don’t get me wrong, I think confidence is a good thing. But the smartest people I know keep in mind the possibility, however upsetting it may be, that they might occasionally be wrong. Before they irretrievably commit themselves, they pilot test, reconsider, double-check, think twice, or otherwise consider the consequences of being incorrect. Anyone who thinks they are the sole repository of “right”…isn’t.
4) Distinguish between the significant and the insignificant: When you’re making plans, try to keep it all at the same strategic and/or tactical level. This helps you decide where you should be dedicating your (finite) time and money. A plan for realigning the company’s product portfolio should not also be dealing with redesigning the logo on the letterhead. It’s kind of like political earmarks--don’t let someone tack a grant for the local public television station onto your military appropriation bill!

Three steps to STAYING ON MESSAGE!

2010-11-14T08:32:00.000-08:00

No, although the current election brought the thought to mind, I’m not talking about politics. I’m talking about how every year it gets harder to make sure that your company’s (or brand’s, or product’s) message is being consistently communicated.

Even before advertising and mass communication, companies worked hard to keep their individual salespeople singing out of the same hymnal. Then we added in print and broadcast media. And today we’ve piled on the internet and social media. And it’s not just the different mediums. You also have to consider the type of communication--promotional versus brand-building versus public relations.

In today’s attention-challenged world, it makes sense that you want your company’s message confined to a handful of easily understood and remembered points (hopefully focused on competitive advantages). Frankly, you’re doing well if you can communicate that much!

So here are three steps you should ensure are being taken by your marketing team:

1) Know what your message is.
Keep it simple-- no more than two to three points.
Focus on competitive advantages--if your points are generic, they’re just as likely to be associated with the competition in consumers’ minds.
Make sure you’ve got internal buy-in for your messaging (you don’t need co-workers sabotaging you by delivering by communicating conflicting information)

2) Make sure everyone in your company knows what your message is. EVERYONE! The service department, manufacturing, billing, the company lawyers, the distribution department, and your mother. Because if they don’t know what the official message is, they will make up their own. And you won’t necessarily be happy with what they choose.

3) Make it someone’s responsibility to continually monitor what’s being said about your company to ensure it is consistent with your message. Not just online (although that’s an important venue), but in any communication and on any materials your company disseminates. Advertisements, news releases, promotional items, trade show literature, letterheads-- everything! If you’re not vigilant, you’ll be surprised how fast and how far you can drift off message.

In any competitive situation, it matters what you say. Make sure you’re saying what you want to about your company, brand or product. It will pay off!

If you’d like assistance in staying on message, YOUR CMO is here, and happy to help

Are you evolving?

2010-09-29T13:39:00.000-07:00

If you haven’t noticed, we’re living in a time of accelerated evolution.

You remember evolution. Darwin goes sailing and ends up rocking the establishment by proposing “only the strong survive” (made into a popular song by Jerry Butler in 1968).

EVOLVING TECHNOLOGY
Physical evolutionary changes still take millennia. But technological evolution has gone from taking centuries to decades to years to months. Mobile phones are replacing laptops which replaced desktops which replaced mainframes. 3D movies are succeeding 2D movies, digital recording has made film extinct, email has almost replaced snail mail, and so on. New technology can be outmoded before it is even introduced.

Since the pace of technology is unlikely to slow at our request, it behooves us to learn how to surf the technology wave. Those who succeed will “evolve” and prosper. Those who do not will join the Neanderthals.

EVOLVING MARKETERS
Evolving marketers don’t need to master every new tool or technique. They just need to know enough about it to fit it into their marketing toolkits. Is Twitter appropriate for every business? No. But marketers need to know enough about Twitter, or Search Engine Advertising, or Foursquare, or whatever, to understand when it is appropriate.

The evolving marketer is the proverbial “jack of all trades, master of none.” Instead of mastering specific tools or techniques, this marketer concentrates on building a network of experts who can be called on to execute programs. This marketer taps opportunities to stay abreast of change, and learn the pros and cons of the options it provides. And this marketer develop the ability to analyze problems so that he or she can select the right options to provide a profitable solution.

If you feel like your marketing is living in the past, remember Your CMO has the analytic ability, up-to-date knowledge, and expert network to provide evolutionary marketing for any of your needs.

“80% of Success is Showing Up…”

2010-09-09T06:13:00.000-07:00

…is a famous Woody Allen quote. You can apply it in several ways.

During a recent sales brainstorming session, two of these applications jumped out at me.

1. You need a presence. Like the lottery commercials say, if you don’t play, you can’t win.

2. You can’t just “phone it in.” You have to give it your best effort.

Staying in touch with prospects is hard, and requires a disciplined partnership between sales and marketing. Once the seller has identified the right person for the right product, MARKETING can provide the automated touches to maintain awareness and build credibility until the right time occurs and the prospect (hopefully) raises their hand. Meanwhile, through periodic face-to-face meetings, SALES refines the seller’s understanding of the prospect’s needs and wants, and closes the sale when the time is right.

Back to Woody’s quote, and the two applications identified above. You have to stay in touch with the prospect. You need an ongoing presence--mailings, calls, and occasional face-to-face meetings.

And your presence has to be meaningful. I’m talking about tailoring my communications to the prospect’s needs and stressing your product’s benefits at every opportunity. Sending someone a generic ‘newsletter’ once a quarter doesn’t cut it. Neither does a phone call or lunch to “see how things are going.”

We’re all pressed for time and we’re all being pushed for results. But developing a customer relationship is something you cannot rush. You have to “show up” regularly in a meaningful way. Remember, that’s 80% of success!

Start with the easiest or hardest problems first?

2010-09-09T06:12:00.000-07:00

You’ve probably heard the saying: “When you’ve got a hammer, everything looks like a nail.”

Each of us has developed a toolkit of tools and processes which have worked for us in the past. And those are what we use to solve new problems as we encounter them. In fact, we tend to prioritize problems based on how easily we think they can be solved using this toolkit. Problems that don’t “fit” our toolkit tend to get pushed to the bottom of the list. And why not? Subconsciously, we’re prioritizing from “most likely to solve” to “least likely to solve.”

I’d like to suggest that if you want to be successful--both personally and corporately--you need to reverse those priorities. Anyone can use common tools to solve common problems. What you want to specialize in is finding new tools to solve uncommon problems.

Apple faced the seemingly insoluble challenge of trying to survive as a very weak #2 in a PC world. Instead of going head-to-head using conventional tools, they began redefining computers by use--creating the I-POD, the I-PHONE, and the I-PAD. Wouldn’t you like those successes on your resume?

Dealing with the little, common problems can be very satisfying. We all like to ACCOMPLISH. But solving little problems isn’t going help you build a competitive advantage. And solving little problems isn’t going to give your career that quantum leap you dream about.

So when you’re prioritizing, move the “insoluble” problems up the list. You won’t solve all of them; but then, it only takes one to turn you into a hero. Warning: These problems probably won’t respond to a “hammer.” So you’ll need to discover or design new tools. But then you’ll have a bigger toolkit than the rest of the pack, and isn’t that a good thing?

Looking for some help with your “insoluble” problems? Give me a call. I may have something in my toolkit that can help. And if not, we’ll invent something!

Stop others from undermining your marketing

2010-07-10T17:13:00.000-07:00

As marketers, we spend untold dollars and hours to carefully craft our advertising to make a great impression. And as often as not, that impression is then undermined or destroyed by subsequent interactions and communications from other departments in the company.

Examples:
● I work like crazy to attract applicants for a new credit card. They go online to apply, and are faced with an application form drafted by lawyers and bureaucrats that is confusing to complete and difficult to understand.
● I buy an insurance policy (and you know what a tough sell that is!) and in return for my premium get a 60 page contract couched in words I’ve never seen before.
● My favorite retailer wants me to sign up for their loyalty club, and gives me an application form asking for so much information that it makes me feel like I’m applying for a job with the CIA.

NOT MY FAULT
“That’s not my fault,” I hear marketers say. “That form/application/communication isn’t my responsibility. That’s another department.” And strictly speaking, they’re probably right. But as a marketer you are (or should be) responsible for your company’s relationship with the prospect/customer.

There is absolutely no reason, other than laziness, that your company’s communications cannot be understandable and (dare I say it?) fun to deal with. Everyone pays lip service to the idea that we should treat people the way that we would like to be treated (Golden Rule) or the way they want to be treated (Platinum Rule). Then we turn around and treat them the way that is most convenient for us, and to hell with what they want.

So the next time you’re trying to figure out how to improve your prospect conversion rate or your customer retention, try looking at the hoops that you make people jump through to do business with you. The bar is set so low that it takes almost no effort to look better than the competition. Just take the time to work with your lawyers and service departments to create easy to understand communications, preferably with a consistently fun tonality. Like this opening to a system alert from MailChimp: “First and foremost, we haven’t changed the fact that we never rent, sell, or give away your list to anybody. That would be evil…”

People like to understand what they’re reading. And they like to laugh and smile. So to increase how many people like your company, and how much they like it, take the lead in getting your company to create communications that are easy to understand and fun to read. And enjoy the goodwill it creates.

Be a Promise Keeper

2010-07-10T17:11:00.000-07:00

Walmart, General Electric, and Duke Energy came up with a slam-bang promotion. They mailed a coupon, good for a package of compact fluorescent lightbulbs (CFLs) to thousands of households. It could be redeemed at any WalMart store.

It was a tremendous opportunity for
● GE to generate sampling and build brand loyalty for their CFLs
● Duke Energy to build a “green,” consumer friendly reputation
● Walmart to attract consumers who would probably buy other stuff while they were in the store.

Only one problem--the offer was so good that the stores sold out overnight, and many people seeking to redeem their coupons were disappointed. I was one of those people. I don’t shop at Walmart often. But this offer was so good that I made a special effort to include Walmart on my next shopping trip. No bulbs.

I was persistent however. I kept the coupon in the car and when driving by a different Walmart a couple of weeks later I stopped and found--they were sold out too. End of effort. Now instead of the positive feelings (and sales) the promotion participants had hoped to create, they created a consumer with decidedly more negative feelings toward their companies and products.

Those negative feelings intensified when I received a follow-up post card recently apologizing for the “overwhelming response” and telling me the coupon expiration had been extended until July. The only problem is, I threw away the coupon months ago. Who saves a coupon that apparently can’t be cashed?

Wait, though. It says on the second postcard that I can visit a website for more information. Maybe I can download a new coupon there… Nope. There’s a number I can call in case I never got a coupon, but it’s too much trouble for a pack of light bulbs. I’ll just nurse my resentment, thank you very much.

This point was reinforced the other day when someone at an organization I belong to promised event participants that the person would post some recipes (for food served at the event) on the organization’s website. I’m the webmaster for the site, so I sent this person a message a couple days later asking for the recipes. The person replied that they were too busy to send them then, it would be a few days until they could get around to it.

I told them not to bother. By that time it was too late--the promise was broken. Just as I would not return to Walmart every week looking for lightbulbs, the members of this organization will not return to its website over and over looking for these recipes. My point is, fulfillment delayed is fulfillment denied. And fulfillment denied generates disappointment and negative feelings.
You go to a lot of trouble to make people like your organization and buy its products. Don’t disappoint them. It is easy to blow a lot of good will in a very short period of time. Be very careful to keep your promises, or don’t make them in the first place.

Does Anybody Care?

2010-04-26T12:44:00.000-07:00

These lines are from the musical 1776, but they echo the concern of many advertisers. It doesn’t matter what vehicle you’re using. You want to know how many people see your message, and are they paying attention to it. Because until they do, they’re not going to take any action, like asking for more information or even (hopefully) spending some money with you.

The answer to the first question is, yes, your target market is there. And thanks to the vast array of advertising and social media vehicles available today, they’re easier than ever to reach. The tougher question is “Does anybody care?”

And the answer to that is, yes they do--but here’s the rub. They care about what they want to hear, not about what you want to say. So unless you provide content that’s relevant to their needs, they won’t care.

To be relevant, you need to listen to your target market. You have to understand what they need, and customize your products and services to meet that need better than the competition does. NOW they will listen. NOW they will care. NOW they will buy.

Basic? Yes. But you’d be amazed at how many companies take it for granted that it’s the vehicle that is broken, and not the product or messaging. Here’s the deal--all the communication vehicles work. Every one of them. Sure, some are more efficient than others. But they all work. If your advertising isn’t getting the results you want, it’s because you’re not saying what your prospects want to hear. Period.

It’s like the old computer rule: if your program doesn’t run, go back and check your input. If it still doesn’t run, go back and check your input. Repeat until it works.

Well if your advertising isn’t working, check your offering and messaging. If your advertising still isn’t working, recheck your offering and messaging. Repeat until it works.

Your CMO can help confirm the relevancy of your offering and messaging to achieve better results. Steve has developed and introduced 21 different products and product lines-- let him help you!

Great (and not so great) Expectations

2010-03-21T16:34:00.000-07:00

Here is an excellent exercise for your sales and marketing team. Sit down together and list every positive and negative payoff you can imagine that might occur for someone purchasing your product or service.

For example: If someone buys your toaster, one positive is they might not burn their toast as often (because of the built-in heat sensor). Another is that people may admire how good it looks (because of its sleek European styling). A negative payoff might be that their spouse may yell at them (because of the high cost). Or that it might not fit on their counter (because of its bulky European styling) Get the idea?

This exercise is based on the EXPECTANCY THEORY of Victor Vroom (don’t you love that name?), which suggests that purchasing decisions are made based on the net of what we expect the positive and negative payoffs to be from purchasing that product or service. In other words, for each possible decision, we have an expectation of the pros and cons, which we then consciously and subconsciously weigh against each other in arriving at a decision.

At the end of your exercise, you’ll have a list of possible payoffs. Rank them by the likelihood that your target consumers will expect them to occur.

Then figure out how to minimize the likelihood and perception of the negative payoffs. For example if you have a high cost, you might want to stress how that cost is amortized over an extended period. This is a great way to identify and deal with problems you may not have been considering.

Finally, you’ll want to consistently include the top-ranked positive payoffs (which you’ve identified) in your advertising and collateral so that your prospects can visualize these outcomes. The idea is to allow viewers to “see” each outcome in a context that will ensure it is remembered at the appropriate moment in the purchasing process.

That’s why commercials often feature new car drivers being admired by beautiful women or handsome men, and why beer ads show people having a good time out with their friends instead of drinking alone in front of the television. It wouldn’t be surprising to find this exercise has identified a couple of payoffs that you’ve been slighting in your advertising or sales presentations.

Walking the advertising tightrope

2010-02-22T06:23:00.001-08:00

How often should you update your advertising?

Advertising is expensive and time consuming to produce, and so there’s a natural reluctance to change it too often. But there is a risk to leaving the same creative out there for an extended period.

Our brains are hardwired to ignore the familiar. This allows us to pay more attention to the new and different, which in the early days of evolution might help you (“What if it’s something good to eat?”) or hurt you (“What if it’s something interested in eating me?”).

The old advertising model was “say it over and over again until it takes root in your audience’s minds.” But if your audience is ignoring the familiar, then every repetition is marginally less effective, and it won’t be long until you’re just wasting your money.

If you want to keep your audience’s attention, you need to constantly update your advertising. But watch out! Changing management and advertising creative teams tend to introduce variability. “Our advertising will be even better if we just [fill in the blank].” Every update runs the risk of straying from your brand’s core message (how many ways can you say the same thing?). And when consumers get two different messages about a brand, it creates cognitive dissonance that erodes the effectiveness of your advertising.

What’s the answer? You need to take a three-fold approach.

1) Come up with a rock-solid brand USP (see What's Your Unique Buying Proposition, September 2009 in this blog) and make sure all your advertising reflects it.

2) Changes in your advertising need to be evolutionary, not revolutionary. This is hard to enforce. Everyone wants to make their creative mark on the brand, for the sake of their personal portfolios. So they tend to develop creative that is as different as possible from “the old stuff.” The problem is, you have brand awareness equity bound up in “the old stuff.” There is real value in having your audience connect your old advertising with the new, so that you’re building on that equity and not starting a new “silo” of awareness.

3) Plan to change your advertising as frequently as your budget allows. Don’t sink every cent into advertising that you are then forced to run over and over because you cannot afford anything new. Make new creative an integral part of your schedule. New advertising can be inexpensive if you shoot or record additional material during the initial production session, and then edit and release new versions over time. This also helps you stay true to your USP.

Your CMO can show you how to keep your advertising focused and effective. Call me if you’d like to talk about helping your advertising “evolve.”

The devil is in the details

2010-01-21T07:31:00.002-08:00

It doesn’t take much to change an average experience into an exceptional experience that generates a competitive advantage. But employees, who have taken on increasing responsibilities in the past few years, are hard put to find the time to maintain even an average experience. They are happy to utilize technology to provide customer touches like “personalized” thank-you emails and newsletters.

The problem is, customers know just how much effort these technology-enabled touches cost, and they value them accordingly [low].

Increasing reliance on technology has conditioned us to avoid anything that requires customized effort. That opens up a huge opportunity for those who are able to think outside the “automated” box.

Here’s an example that impressed me over the past two years. I joined the American Marketing Association’s Cincinnati Chapter, and quickly discovered why it is one of the highest rated chapters in the country (with over 600 members). Rather than letting a new member “drift” into the organization, they invited me to an orientation where the chapter’s opportunities were described in detail and I was invited to sign up for activities I was interested in. They also worked to engage me through a variety of media--snail mail, email, Twitter, and Facebook. I was even offered the opportunity to schedule a one-on-one with the Chapter President.

I became a volunteer, and have enjoyed public recognition for my contributions through a special nametag (everyone wears nametags at events to facilitate networking) and invitations to volunteer thank-you events that include both special educational seminars and “fun” events like minor league baseball games. I’ve also been impressed with the yearly brainstorming sessions aimed at improving these already effective procedures.

The AMA doesn’t have to do all this-- the officers and volunteers are unpaid, and all have regular jobs. But because they make a special effort, they have a very successful organization.

If you said none of these things are particularly innovative, you’re right. But they’re doing them, and that’s the competitive difference versus organizations that do not do them. When the time came to write the check for another year’s membership, I didn’t think twice.
If you’d like some help in customizing your customer and prospect touches, give me a call. I’d be happy to help!

The Lone Ranger has left the building

2010-01-21T07:31:00.001-08:00

The premise behind the Lone Ranger was that he’d ride into town uninvited, clean up your problem, and ride away, leaving a silver bullet behind. Alternatively, silver bullets are reputedly the only effective weapon for dealing with werewolves, witches, monsters, and other troublesome entities.

Thus “silver bullet" refers to any simple, one-step solution. The expectation is that some new technology or practice will quickly and easily cure a problem. Want prospects? Companies that will provide you with lists of “guaranteed” names for pennies each. Want to lose weight? Plan “X” will let you do it without exercise while eating whatever you want. Want to increase customer loyalty? All you need to do is Tweet. And so on, ad infinitum.

There is no shortage of people and organizations promising silver bullets, and management teams beset by poor economic conditions and short on time and money are more than willing to listen. But they shouldn’t. Because while “Yes Virginia, there is a Santa Claus,” there is no silver bullet.

If there was, the silver bullet salespeople would be rich and retired. Instead they’re spending large amounts of money running infomercials and big display ads to attract the suckers seeking that shiny ordinance.

“If it sounds too good to be true, it probably is…”

Silver bullets are a triumph of hope over logic. People want to believe silver bullet solutions are real, because they would make our lives so much easier. The alternative is to research the problem, test possible solutions, and diligently and vigorously execute the best one. This is a lot of hard work with an uncertain outcome. Who wouldn’t rather hire the Lone Ranger?

Here’s the unpalatable fact: Cheap, easy, high-quality, instant solutions are rare to non-existent. If you want a solution, particularly one that creates a competitive advantage, it’s going to take some blood, sweat, and tears. Plus adequate funding and a reasonable amount of time.

Chasing silver bullets will cost you time and money that can be better spent on doing what you realize (deep in your heart) needs to be done. Committing the necessary resources to do the job right.

If you want a business-building marketing solution, Your CMO would be happy to provide it. Hi Ho Silver…away!

Averting the Twin Towers disaster

2010-01-21T07:30:00.001-08:00

No, I’m not talking about the World Trade Center, but rather about two mainstays of your organization--marketing and sales.

Marketers and salespeople have different mindsets. (see Sales or Marketing, who cares?) So it isn’t surprising that, even though they share the goal of acquiring and retaining customers, the two functions often exist in separate silos which interact poorly, if at all.

2008 research led by the CMO Council concluded that the strategic versus tactical approaches taken by the two disciplines tended to create divergent time frames, metrics, and vocabularies. “Salespeople consider up to 90% of the collateral materials created by marketing useless, and marketers deem nearly as much of the sales-created content as brand dilutive or downright inaccurate.”

In a 2008 survey of 506 sales and marketing professionals (“Closing the Gap: The Sales and Marketing Alignment Imperative”) 56% of respondents said their companies don’t have formal programs in place to unify sales and marketing functions. 30% said that their “marketing organization operates in a vacuum, crafting programs that do little to affect sales.”

Misalignment between these key parts of the organization often results in
· Misspent marketing funds
· Poorly exploited or wasted sales opportunities
· Inefficient lead generation and nurturing
· Poor customer profitability

Five ways to start creating alignment
1. Start by ensuring you have management buy-in for the effort; do not proceed without agreement from the Sales VP, Marketing VP, and CEO.
2. Obtain interdepartmental consensus on terms like ‘qualified lead,’ ‘profitable’ and ‘sale.’
3. Define each department’s responsibilities to the other. This should include Marketing’s role in lead generation, providing competitive analytics and defining points of differentiation and Sales’ commitment to identifying prospect wants and needs, accumulating prospect information, and reporting results. Some firms go as far as creating actual “contracts” to be signed by both functions.
4. Collaborate on setting goals and identifying metrics which allow you to measure success.
5. Create a system that allows sales and marketing to share prospect/customer data.

Your CMO has extensive experience with creating effective sales/marketing partnerships. If you’d like to fine-tune that relationship, give me a call!

Three questions define your PROMISE’s effectiveness

2010-01-21T07:29:00.000-08:00

It goes by many different names. USP, Unique Selling Proposition, Competitive Advantage, Brand Promise, Value Proposition, and Point of Difference.

It’s the PROMISE that is made to prospective customers to influence them to choose your product over your competitor’s. Every business needs one. Lots of companies have one. Frankly, most of them aren’t very good.

Here’s three ways to measure the effectiveness of your PROMISE:

1) Is it unique? Does it set you apart from your competition?

2) Is it relevant? Do potential customers care that you’re offering it?

3) Can you deliver? Are you willing and able to fulfill your promise?

If you meet all three of these criteria, you have a successful PROMISE, and, based on the three examples below, a successful business as well:

● Melt in your mouth, not in your hand.

● Fresh hot pizza at your door in 30 minutes or it’s free.

● When your package absolutely, positively has to be there overnight.

If you think about it, a successful PROMISE is an all or nothing proposition:

UNIQUE + RELEVANT but not DELIVERABLE = one-time customers and bad word-of-mouth.

UNIQUE + DELIVERABLE but not RELEVANT = Nobody cares!

RELEVANT + DELIVERABLE but not UNIQUE = Parity or commodity position

Your PROMISE should really be called a Unique Buying Proposition, because if it is done right, you won’t have to sell your product--people will be asking if they can buy it.

Want to talk about developing or refining your PROMISE? Your CMO can help!

Ten ways to make your competition work for you

2010-01-21T07:28:00.000-08:00

How much effort do you put into tracking your competition? For most of us, the answer is--not enough. You wouldn’t try to run your business with no regard for the law, or economic conditions, or your customers. But it is surprising how many people feel they can run their businesses with little or no regard for their competition.

There are exceptions. Pizza parlors carefully monitor competitive menus and promotions. I’m sure General Motors spends a lot of time keeping an eye on Toyota. And airlines pay close attention to competitive pricing and initiatives. But many other businesses pay only occasional and cursory attention to their competitors. That’s a mistake.

Here’s ten suggestions for gathering and (more importantly) making use of competitive information:

1) Reach corporate consensus on who your competitors currently are (this may be harder than you expect). Review this list regularly (semi-annually?)

2) Make someone responsible for tracking competition. It isn’t hard--your receptionist can do it if you tell them how.

3) Prove you think this information is important. Review competitive information regularly, and share your findings with the appropriate people.

4) Set up a grid comparing the details of your offering(s) to those of the competition. This can include anything meaningful-- prices, sizes, flavors, channels of distribution, store hours, shipping costs, return policies, etc. Look for differences and decide if they are advantages or disadvantages for you; then leverage the advantages and chip away at the disadvantages.

5) Benchmark competition by printing out all the screens on their website, then have someone look for changes on a regular (quarterly?) basis. Pay particular attention to pricing, product portfolio changes, service offerings, news releases, etc.

6) If your competitors are public companies, buy a share of stock in each so that you will receive their mailings.

7) Have your employees collect and forward sales collateral and advertising from the competition to the person you’ve made responsible for competitive tracking (another good reason to have such a person). Find a way to reward them for their efforts!

8) Don’t just watch established competitors. While start-ups may not be an immediate threat, they obviously feel they’ve found a significant chink in your armor, or they wouldn’t be entering the industry. Analyze them carefully to find out why they think you’re vulnerable.

9) Periodically (annually?) do a threat assessment that considers competition from outside the industry. It wasn’t a hard-copy carrier that crippled FedX’s overnight letter business, it was FAX machines.

10) Set up an exercise where you create combined teams of internal and external people with the assignment of putting you out of business. Then take a long look at the plans they develop. If they can think of it, so can your competition!

Having trouble finding time to watch the competition? Your CMO can set up a system for you. I’ll even monitor the competition for you, so you don’t have to. Let me know if I can help!

Get your hands dirty!

2010-01-21T07:27:00.000-08:00

When was the last time you personally did any did any prospect/customer research? Not commissioned research, not read a summary of research, but actually did the research yourself? I know you have a ton of other things to do, but if you haven’t participated in any research in the past twelve months (and I’ll bet you haven’t), then you’re really missing an opportunity. To quote John Frank, editor of the American Marketing Association’s marketingnews: “It’s much too easy in marketing to just be looking from the inside out to what you think customers want and/or need.”

Authorities and pundits are pretty well agreed that significant advances in new product development or substantive competitive advantages won’t come from just asking prospects/customers what they want. Great new products and real competitive advantages come from insights into the attitudes and motivations of your target market, as observed from their behavior. And if it is hard for people to come up with those insights from direct observation, imagine how much more difficult it is to come up with them by simply reading research data and summaries!

I don’t know about you, but there have been times in my career when I’ve commissioned important research, then because of the pressure of other responsibilities, never looked at the actual data gathered, but simply read the executive summary. (How many of you have interview CDs or DVDs of prospect/consumer interviews sitting in a drawer that you’ve never listened to or watched?)

It’s a rare report that can communicate all the non-verbal cues that direct observation reveals—the emotion in someone’s voice, or the passion implicit in their body language. How often do you actually use your product: cook and eat the food item you make, or apply for your insurance policy online, or ride the bicycle you manufacture? How often do you watch someone else do it? There is no substitute for first hand experience and observation! Lots of things can be safely delegated. This one can’t. Or at least this one shouldn’t be.

No one says you have to design your own research or schedule your own interviews. Let your marketing research department or supplier create the questionnaire and handle the administrative details. But you should be there—at least once in a while. Because if you aren’t, you’re missing a golden opportunity to come up with the insights that you are uniquely qualified to find.

The more satisfied you are the more danger you are in

2010-01-21T07:26:00.000-08:00

Because for most people, satisfaction means “things are going good, and I don’t have to change them.” And the longer you leave things unchanged, the more time you are giving the competition to catch up with or leapfrog past you.

The best friend a marketer has is the attitude that things can “always be better” and the discipline to act on that attitude. We’ve all got a lot of demands on our time. The marketing environment is more challenging than ever, and there is always a new crisis on the horizon.

In addition to these distractions, we’ve all heard “if it ain’t broke, don’t fix it.” And certainly New Coke fiasco and the Ford Edsel are stark reminders of how “improving” a product line can go wrong. [Not to mention how I’ve never forgiven Frito-Lay for making their previously excellent restaurant-style salsa so much “better” so that I had to switch to Hernandez!)

On the other hand, there are numerous examples of how complacency has led to decline. From the movie studios ignoring television to IBM’s lack of interest in home computers to Kodak and Polaroid’s reliance on film, we can all name instances where “satisfied” companies have had their lunch eaten by competitors.

So is it a case of “damned if I do and damned if I don’t”? If that was true, it would make sense to take the path of least resistance and do nothing.

But it isn’t true. If you don’t, then you can count on the competition to work like crazy to come up with a better value proposition for your customers. Some will fail, but most of us have so many competitors that the odds are in favor of one of them succeeding.

However if you do, rigorous marketing research and pilot testing can significantly lessen the chance of failure. And at least if you’re taking action, your fate is in your hands rather than the hands of your competitors.

Successful marketers (and companies) find ways to institutionalize continual improvement. They regularly schedule the time and manpower to pay careful attention to consumer wants and needs, stay up-to-date with improvements in technology, and carefully monitor competition. Finally, they make improvement a regular part of their goal-setting.
So stay dissatisfied. And when you retire, you’ll be able to look back on your career with satisfaction!

It’s all about…THEM

2009-05-20T12:50:00.000-07:00

You’ve all heard people (somewhat) jokingly say “It’s all about me.” And truth be told, even the best of us can sometimes feel and act that way, if only unconsciously.

The business version of this would be “It’s all about us.” And unfortunately, many companies tend to behave that way most of the time, despite mission statements that describe how customer-centric they want to be.

This is both understandable and regrettable.

Understandable because the most important thing to a company is naturally its own survival.

Regrettable because the company’s best chance of survival is to focus on what the customer wants, not what the company wants.

Let’s focus on sales messages. During a recent American Marketing Association meeting Bob Gilbreath (CMO of Bridge Worldwide) talked about three levels of customer needs.

--The most basic is solutions: communicating valuable information, incentives, and answers.
--Next is connections: providing useful or entertaining experiences that can be shared with others.
--And at the top of the needs pyramid is achievement: things that someone can use to improve themselves, their family and friends, or the world.

Note that nowhere in this list of needs is

“know about company XXX”
or
“know about company XXX’s product(s)”

Yet that information usually makes up the bulk of the communications we send to our customers and prospects. So why should we be surprised and disappointed that 15% is considered a typical “open” rate for emails, people fast forward through our TV commercials, and 1% a great response rate for direct mail?

Here's the point: people will only pay attention to messages they think THEY will get value from.

Before you can get prospective customers to listen to you, you have to get inside their heads! You have to break free of the 20th century mindset of talking about yourself (ie. your company) under the mistaken impression that people care. Instead, you need to identify your target market(s), zero in on what THEY care about, and customize your messages to their interests and needs.

Your message content is the key! The only way to get your message read or listened to is to tailor it to one of Bob's three levels of needs. Do it often enough, and well enough, and those open and response rates will start going up.

I don’t have the room here to give you examples of how to do that-- but I’d be happy to provide as many as you like over a cup of coffee some time. I’ll even buy. Give me a call!

Now is a great time to improve your products!

2009-05-20T12:49:00.000-07:00

Today’s economy gives five added incentives to tune up your product portfolio.

1) With business down, many firms aren’t working at capacity. So it is easier to free up people to examine your products for competitiveness and profitability and take steps to improve them.

2) Compared with other marketing expenses, product improvements can be relatively inexpensive to implement.

3) Many firms are reacting to the downturn by discounting their price, which hurts short-term profitability and degrades long-term value perceptions. Product improvements allow you to maintain or improve profitability and increase the perceived value of your offerings.

4) Product improvements create news, attracting attention without the need for expensive advertising. They also boost the effectiveness of any advertising you do.

5) Product improvements help keep current customers from bargain shopping among your competitors.

Five product improvement steps:

1) Talk to your customers! Find out what’s important to them.
-------------------------------------------------------------------------------------------------
Brand Keys conducted an analysis of 1,847 products and services, in 75 categories, via their Customer Loyalty Engagement Index. On average, the study found that only 21 percent of all the products and services examined had any points of differentiation that were meaningful to the consumers. This is nearly 10 percent less than a benchmark study that was conducted in 2003!
-------------------------------------------------------------------------------------------------
Two good questions are “What one thing about our product should we never change?” (Then probe for others) and “If you could change one thing about our product, what would it be?” (Then probe for others).

2) Chart your position versus competition, comparing target segments, features & benefits, cost, profit margin, distribution, marketing, service, and other relevant factors.

3) Clearly identify what you want your products to stand for. Then be sure you live up to your positioning. Lip service won’t cut it with customers. For example, don’t claim high quality unless you can provide it!

Once you stake out a position, review your marketing mix to be sure there’s no dissonance (for example, don’t position your product as high quality and then discount the price…)

4) Don’t keep improvements a secret. Tell people about it! Make sure they are trumpeted on your website, in your sales collateral, and in relevant industry and general publications. Remember, competitive advantages are short-lived, so you want to maximize the initial impact of product changes.

5) If the competitive advantage created by product improvements is short-lived, an ongoing differentiation process is necessary. Don’t wait for the next recession to follow this advice again. After completing step #4, schedule a return to step #1 and repeat!

I have developed and introduced 21 different products and product lines, and tested over 4,000 new products. If you feel you might benefit from outside help in tuning up your product portfolio, give me a call.

Business Blogging—a marketplace differentiator

2009-05-20T12:47:00.000-07:00

Yeah, I know, when you think about competitive advantages, your mind instantly turns to price, packaging, promotion, and all that other MARKETING 101 jazz. But what if you’re already doing all of that and (because everyone else is doing it too) you still need more of an edge? Well, how about blogging?

Remember:
· People do business with people they like.
· People do business with people like themselves.

Blogging is a great way to convince current and potential customers that you fit into one of these two categories. And it offers the chance to reinforce that conviction repeatedly over time.

In an earlier “marketing thought” I described the persuasive power of stories. Blogging is an efficient way of telling stories that will present your people and product(s) in a positive light. Business contacts tend to be impersonal. Blogging puts a personal face on your company and product or service, building an emotional connection that increases your chances of acquiring and retaining customers.

Potential blogging topics
1. Think anecdotes and personalities—“personal face”—remember?
2. Talk about how your company was founded—what are its “roots.”
3. Provide personal details about your employees (include pictures!) tied to what they do at work.
4. Talk about the procurement or manufacture or quality inspection of your products.
5. Discuss your employees’ qualifications for providing whatever service(s) you provide.
6. Provide pictures (literal or through words) of your facilities.
7. Talk about what went into developing or introducing a new product or service.
8. Provide a case study or testimonial.
9. Provide a tip or suggestion, and describe where it came from (who and why).
10. Describe your experiences at (or reactions to) an industry event like a trade show; provide information about upcoming events.

You can provide a link to information about products or promotions, but make it an “afterthought.” Lead up to it indirectly, keep the reference brief, and provide a link to the detailed information.

Who should blog
Unless you have someone who is unusually prolific and verbose, you’re going to need either an outside writer or a team of several contributors. Not everyone will be a good blogger—do an internal “talent search.” Look for passion, and hire professionals to “polish” your postings if necessary.

How often to blog
At least once a month for B2B, and probably not more than once a week.
At least twice a month for B2C, and probably not more than twice a week.
The more “pithy” and relevant your blogs are, the more people will want to read them.
Create a publishing calendar or schedule. Don’t leave your timing to chance.

Treat this like any other marketing initiative; set objectives and track readership and results.

If you think blogging sounds too “artsy-fartsy” to provide concrete business results, then you’re going against the corporate marketing wisdom of companies as big as Boeing, Dell, Kodak, and General Motors, and as small as... me!

Intrigued, but don’t know how to get started? I can help with everything from technology to identifying potential contributors to creating postings. Give me a call!

How can social media networks increase sales?

2009-03-03T11:14:00.000-08:00

Everyone is talking about social media these days, but many people have told me they just don’t understand how things like Twitter, Facebook, Linked-In, or blogging can build their business. Here is how I answer them:

Let's assume your goal is to generate either direct sales or leads for your sales force, and you want the internet to help you. So you create a website where prospects can find the detailed information needed to convince them your offering is the one they need.

But there are literally millions of websites out there—how do you increase the chance of prospects finding yours? Social media networks can act as advertising to help guide people to your website.

Twitter—gives you the ability to email VERY brief “tweets” (maximum 140 character email messages) to a group of people who have agreed to “follow” (receive messages from) you. Use tweets as “headlines” that make people want to come to your blog or website to read more.

Facebook—once you’ve created a personal profile, you are allowed to create a separate company profile. Just as people link to each other by becoming Facebook “friends,” people can become “friends” of your company; in effect creating a network of interested people to which you can email information! Linking your Facebook company profile to your website provides another way for internet searchers to “find” you.

Linked-In—increases the number of times your company name appears during internet searches. Each of your employees can be listed, and each employee’s listing can contain links to your company’s blog, Facebook page, and website.

Blogging—your website provides one way for internet searchers to find you, and you can use search engine optimization to increase the chances of that happening. But blogging provides many additional chances of a searcher being led to your website. By writing about topical subjects, bloggers (writing individually or as part of a corporate “team” of bloggers) can greatly increase the amount of internet content tied to your company, and hence increase the chances that an internet search will lead to your company.

For the business person, social media networks can be thought of as additional forms of advertising. But to be effective, social media require the same thing that good advertising does—content that is relevant and valuable.

Think about it. If you were at a party, would you waste time talking to someone who was boring, or who just repeated the same story over and over again? No. You would want to spend your time with someone who was interesting.

Well, the people who use social media networks are looking for interesting connections. And if you want to get people to “follow” you on Twitter, become your friend on Facebook, look you up on Linked-In, read your blog, and come to your website, then you have to provide content they find relevant and valuable, and do it in a witty, easily understood manner.

Are your employees a rusty asset?

2009-03-03T11:09:00.000-08:00

Companies spend a ton of money communicating their marketing message to prospects and customers, but most do absolutely nothing to formally communicate that message to their own employees, the people who have the most contact with (and often the most influence on) those key groups.

Nor do most companies spend any time teaching employees how they can reinforce and leverage the company’s marketing during their interactions with prospects and customers. At best this is a lost opportunity. At worst, companies are actively sabotaging their own marketing efforts.

You expect sales and marketing to know “the company line.” But what about the people in billing, shipping and distribution, operations, and legal? What about the receptionist?
How well do they know your branding messages and the features and benefits of your products or services?

Why does it matter? Because during their public interactions these employees can not only extend the reach of brand messaging; their product knowledge and brand-reinforcing attitudes can generate positive word-of-mouth and increased customer loyalty for the company. And because when employees feel more like part of the corporate “family,” you will probably see improvements in internal morale and retention.

Here are some easy-to-implement ways to educate employees:

· Provide a brand presentation as part of new employee orientation
· Provide a simple one-page handout listing your brands’ reason for being and primary messaging (you’ll find preparation of this piece will also help management focus).
· Expose employees to all company advertising and sales collateral.
· Provide examples of how you would like/expect employees in different departments to interact with the public.
· Give employees a list of public FAQs, and contacts for less frequent questions.
· Post reinforcing signage in employee areas, and include reinforcing messaging in employee communications.
· Praise, reward, and publicize employees who receive “attaboys” from the public.

Behavior change is major factor in new product success

2008-12-03T16:24:00.000-08:00

When people have used a product (I include services under this label as well) repeatedly, they have positive attitudes toward it, and beliefs about it, that have been reinforced over time.

These make it difficult to convince them to switch. If we want people to change their behavior to adopt a new product of service, we have to either create new attitudes and beliefs, or change how important problematic attitudes and beliefs are to the behavior.

Effecting this change is tough. A Harvard Business Review article by John Gourville documents how consumers irrationally overvalue the benefits offered by products they use repeatedly. This often leads them to reject products that are objectively superior to the “incumbents” they're already using.

Compounding this problem, the study says that companies tend to irrationally overvalue the benefits offered by the innovation they are introducing (to about the same degree that consumers overvalue the incumbent product), resulting in a huge perception gap.

The size of this gap has a significant effect on how you introduce a new product. A useful way of evaluating new products is to plot the behavior change required against the perceived benefits the new product offers.

Your CMO can help you evaluate the degree of behavioral or attitudinal change your new product require for a target market, and can help you identify cost-effective ways to effect that change. Steve has developed and introduced 21 different products and product lines, and can help figure out what it will take to make your product successful.

A moment of silence for the "Age of Advertising"

2008-10-22T06:59:00.000-07:00

First a little history: Traditionally, people bought goods produced locally; often by their neighbors. So they could predict which products would be good and which would not based on personal knowledge of who was producing them.

As transportation and packaging improved throughout the 19th and 20th centuries, it became feasible to buy products made far away. In this expanded environment, people rarely knew who had produced what they were buying. Soon manufacturers began “branding” their products in order to create a trusting relationship similar to what people used to have on a local level.

For example, if you were just buying generic laundry powder by the scoop out of an unmarked barrel, there was no telling how well it would clean. But if you knew that Tide detergent was good, and your laundry powder came in a box with the now famous target logo on it…well, you get the idea.

So far, so good. But the rise of regional and national communication channels led to abuse of branding. Manufacturers quickly began advertising to communicate their products’ benefits, and it didn’t take them long to discover that with enough advertising they could create demand that owed relatively little to their products’ intrinsic quality.

Since consumers had no comparably loud “voice” to refute inaccurate or misleading advertising claims, manufacturers could pump up profits by substituting marketing dollars for product quality.

Then came the internet, which made it easy to search out the exact product that would best meet their need. Freed from the necessity for big advertising budgets, choices proliferated. And consumers quickly forged a collective voice that first matched, and then overwhelmed advertising. At this point, anyone can access an enormous body of consumer experiences that generally allows them to form a much more accurate and objective opinion regarding product quality than they get from manufacturer advertising.

My point (finally): With advertising “neutralized,” manufacturers need to return to branding basics. Honing product features and improving quality are once again the primary way to increase sales, and branding is important primarily to make sure that consumers associate those features and that quality with the correct product.

As it always has been, advertising is important to create awareness, but its unprecedented ability to drive demand has been transferred to the internationally available word-of-mouth network created by the internet. [note: this very word-of-mouth network is now your very best resource for product development…]

If you want to discuss prospering without advertising, I can help. Let’s talk!

Are McCain and Obama good marketers?

2008-09-10T07:11:00.000-07:00

This year's presidential campaign advertising has been exceptionally negative. News analysts reported that McCain has recently introduced 15 new negative ads, versus 14 new negative ads by Obama. I have not seen a "positive" advertisement in weeks.

Conventional marketing wisdom says that you need a "unique competitive advantage" to attract customers. Historically, marketers have interpreted this as meaning they should improve their product to rise above category commoditization. However McCain and Obama have gone in a different direction. Since they only have one "competitor," they've decided to "improve their product" by making the competition less appealing.

There are three huge "negatives" to this approach:

First, you aren't developing a positive image for your "brand." And if you don't tell customers what your benefits are (or in marketing terms, create a positive "brand image"), who will? Granted, negative ads presumably degrade the opponent's brand image. And theoretically that leaves the negative advertiser one-up. But with the opponent doing the same thing, both sides lose.

Second, this policy of unintentional mutual destruction guarantees that politicians’ “customers” will have an increasingly negative opinion of politics in general. This weakens both the Republican and Democrat parties (“the category”) and leaves them vulnerable to other alternatives (“competitive categories”).

Of those queried in a recent bipartisan survey by the Project on Campaign Conduct:
--39% believe all or most candidates lie to voters
--67% say they can trust the government in Washington only some of the time or never.

Third, defending your brand against attacks eliminates risk taking. You attempt to reduce your vulnerability by avoiding innovation, with the result that your “product” never improves. This strategy virtually guarantees that things remain the same. And as the customers of our politicians, how happy does that make you?

“Who is in charge of your website?”

2008-08-18T17:25:00.000-07:00

Actually this is a misleading question. The answer to the question above is probably “[place name here] in the Information Technology department.” That’s the person who makes requested changes and who fixes the website when it crashes.

My question should actually have been phrased “Who is in charge of your website strategy/content?” And I’m guessing that your answer at this particular point is probably “I’m not sure.”

Most websites have tended to grow somewhat organically, with Sales putting some brochure ware on line, Human Resources adding a few job postings, Customer Service reluctantly agreeing to a place for customers to submit emails, and … you get the idea. Information tends to be added once, and then forgotten, with no one given the responsibility for keeping content up-to-date and little (if any) thought given to maximizing the website’s potential or measuring how well the website is supporting the company’s goals.

Assigning the responsibility to one department isn’t a good idea. Whoever you give the website responsibility to, everyone else in the company can say “Oh, that’s XXXX’s responsibility” and forget about it. Dividing the ownership is not much better—your website is likely to become a co-located group of single-function “silos.”

The solution developed by more effective companies is a Web Steering Committee—generally 6-8 fairly senior managers under the leadership of an executive officer, meeting at least quarterly to ensure that the company gets the maximum possible utility out of this extremely important client-facing communication channel.

Typical Web Steering Committees have a mid-level Website Leader to centralize administration, plus representatives from:
Executive Level (strategy)
Sales (prospecting & direct sales)
Marketing (branding & public relations)
Customer Service (customer interfacing)
Information Technology (technical issues)
Finance (budgeting & performance analysis)

Two key ways the Web Steering Committee can help maximize the utility of the website are by prioritizing website improvement projects (by the monetized benefits they’ll produce?) and designating and monitoring performance metrics. (This is in addition to the natural benefits of raising the website’s profile and keeping its content current.)

If you’d like some outside help making your website a more useful tool, I’ll be happy to talk with you!

Are you listening to your customers?

2008-08-18T17:24:00.001-07:00

Got your ears on good buddy?

Many years ago, during the CB (CITIZEN BAND RADIO) craze, this was a slang way of saying “Are you listening?” As marketers, it is easy to fall into the habit of communicating to consumers rather than communicating with consumers. And that is dangerous—because without consumer feedback, your products and marketing are likely to become increasingly irrelevant, uncompetitive, and unsuccessful.

In today’s environment of rapid change, successful products and marketing need to accurately follow the shifts in this environment.

A marketer’s view of her or his products is based both on their own perceptions and on the perceptions of others. But who are those “others?” In too many cases they tend to be fellow employees, retailers, and management—NOT consumers. Unless a marketer makes a systemic effort, we may seldom come into direct contact with prospects or customers.

When was the last time you took the time to seek out direct customer feedback? Can’t remember? It’s easy to understand—there is almost always some crucial meeting, or project, or conference that takes precedence. And even if you can find the time, there is rarely enough budget to have researchers set up interviews or focus groups.

So how do we get the consumer feedback we need to stay on course? Remember, the goal is to get honest feedback from consumers (not to confirm our own personal biases). While we might not agree with what they say (it may not even be correct), their perception is your reality.

First let’s talk about some opportunities to systematically collect feedback:

--Soliciting input on your web page: Make it easy for people to leave you messages. Not just a CONTACT US tab in the menu bar, but a prominent “we want to hear from you” box on the home page. Note: If you ask for communication, you’re going to get it. Be prepared to keep the dialogue going. That means responding to consumers in a timely fashion.

--Monitoring customer service: Schedule time to monitor your customer service people’s interactions with consumers. It is usually possible to obtain tapes of telephone interactions, and copies of customer correspondence (with the corporate replies).

--Monitoring outside web conversations/postings: Search engines make it easy to find out where people are discussing your company, products, and promotions. If internet “buzz” is really important to you, there are services like Nielsen Online which will locate comments and summarize the content.

Finally, let’s talk about a couple of useful questions to ask:

--What one thing would you change about this product? Any other things you’d change?

--What one thing would you tell the company to never change?
Any other things you’d never change?

--What is the silliest thing that this company does? Anything else?

--What is the best thing that this company does? Anything else?

Once upon a time...

2008-08-18T17:23:00.001-07:00

Everyone loves a story. Marketers should love stories more than most people. They don't necessarily. But they should. A famous 1910 baseball poem, BASEBALL'S SAD LEXICON, talks about a famous 1902 double play by three Chicago Cubs players named Tinkers, Evers, and Chance. Knowing this, would you find it easy to remember their names tomorrow? Probably not. But suppose I asked you the question "Do you think three gypsy TINKERS could EVER(S) have a CHANCE to make a double play?" Easier to remember, right? You've probably used similar mnemonics yourself.

[A mnemonic device (pronounced /nəˈmɒnɪk/) is a memory aid. Mnemonics rely on associations between easy-to-remember constructs and lists of data, based on the principle that the human mind much more easily remembers data attached to personal or otherwise meaningful information than that occurring in meaningless sequences.] A story is just another kind of mnemonic. Stories are an easy way to communicate your message to an audience, and to get them to remember it. It's hard to recall a simple list of benefits, or a quick series of video clips, and associate them with a particular product or service. [Automobile advertising is particularly prone to this mistake.]

But we are culturally hard-wired to pay attention to stories, and are more likely to remember them. So when I see a commercial that shows a little boy stealing a base in a little league game , and getting his uniform filthy from the slide, and them mom washing that uniform sparkling clean with Tide, I remember that Tide is good at getting out tough stains. BINGO! A classic example of the value of a good story is the J. Peterman phenomenon. If you've never experienced it, go here now: http://jpeterman.com/product~cat~110206~sku~WSL%201019.asp. See if the story doesn't seduce you into paying much more attention to an ordinary nightshirt than you ever would if it were prosaically listed in a less imaginative catalog. Stories can ignite the imagination, tap hidden emotions, drive home a message, and create lasting memories. Sounds like just what you want your advertising to do, right? So....tell me a story!

Getting it all together

2008-08-18T17:22:00.001-07:00

HOW’S YOUR GESTALT?

ge·stalt or Ge·stalt (gə-shtält', -shtôlt', -stält', -stôlt') n. plA physical, biological, psychological, or symbolic configuration or pattern of elements so unified as a whole that its properties cannot be derived from a simple summation of its parts.

Your business represents a “gestalt” to your customers. Customers don’t judge you solely based on the rosy descriptions in your advertising (although you probably wish they would). Naturally, they judge you on the value of your product or service. But they also judge you on your billing, your customer service, your distribution, and every other interaction that you have with them. All of these impressions add up to their overall evaluation of your company—it’s “gestalt.”

Your gestalt didn’t used to matter so much. Given the relatively few choices that were generally available, people were more likely to settle for a gestalt that was “OK.” But then along came the internet, and things haven’t been the same since. Now there are dozens (if not thousands) of choices just a click away.

Today every customer interaction matters—because if they’re not happy, they’ll look for “greener pastures” somewhere else. And as they leave, they may “poison the water” by posting an internet comment or evaluation for other potential customers to find.

To quote an old cartoon song, what your customers want is “Happy Happy Joy Joy.” And if you don’t give it to them with every interaction, you’ve probably lost them. There are just too many other choices available [if you don’t believe me, type in a description of your product or service in Google, and see how many links it offers; there are 2,720,000 links for “artificial flowers” for heaven’s sake!].

There’s a tendency for all of us to concentrate on our immediate area of responsibility—outside of that is “someone else’s problem.” But if all of your customer interactions aren’t first rate, then the outcome will be unhappiness for everyone at your company. Because your customers will go away, and not come back. And that means pretty soon your paychecks will do the same thing!

Someone at your company needs to be keeping an eye on how happy your customers are with every aspect of your operation. And you need to take prompt action to fix any aspect that isn’t earning rave reviews.

What price whimsy?

2008-08-18T17:20:00.000-07:00

The Encarta English Dictionary defines ‘whimsy’ as “the quality of being slightly odd or playfully humorous, especially in an endearing way.”

You don’t see a lot of whimsy these days. And that’s a pity—because whimsy may be directly translatable to increased ROI. I’ve recently been reading a marketing classic—INFLUENCE, THE PSYCHOLOGY OF PERSUASION—in which author Dr. Robert Cialdini exhaustively documents the point that “We most prefer to say yes to the requests of someone we know and like.”
“Well I knew that!” I hear you thinking. Sure. But while I’m sure your customers know you, what are you doing to make them like you? (Note: The annual holiday card is not enough.) Think about your company’s or brand’s personality. Does it ever give your prospects and customers a reason to smile? When we’re wearing our corporate hats, most of us are dead serious. And how likeable is that?

I tried to come up with some examples of likeable brands and came up pretty dry. Which just supports my point. Sure there are companies with funny advertising—but it rarely seems to carry over to their other materials. What is there on your website (or mine—I’m guilty too!) to make you smile? How about on your billing? Your sales collateral? The recorded announcements on your automated phone system? Forget likeable—most times, these things aren’t even user-friendly!

Ben & Jerry’s probably qualify as “likeable.” Who doesn’t smile when they see a pint of “Cherry Garcia” ice cream? And Snapple was likeable before Quaker Oats “corporatized” it (Wendy is still one of my favorite spokespeople of all time). But such examples are very few and far between.

None of us want to look or sound frivolous. And “likeability” costs money—it’s easy to be serious and factual, but adding (a likeable) personality takes extra effort. And that effort cannot come at the expense of the value you offer customers—it is the whipped cream on top of the dessert, not the dessert itself.

Still, look at the benefits. Properly executed (in today’s cheerless environment), the creation of a likeable brand personality can generate buzz, attract additional prospects, increase conversion rates, and improve retention. Put like that, it sounds like it might be worth a try, doesn’t it?

What people REALLY want...

2008-08-18T17:19:00.000-07:00

...probably isn’t what your advertising or your salespeople talk about.

I like to do wood-working. And one of the tools I use is a router that puts fancy edges on wood. Most people, if they were designing an advertisement for a router, would talk about how much horsepower it has, how inexpensive it is, how it has a built-in light, or how easy it is to clean. But those things aren’t why I bought the router. I bought the router because:

1) I want people (especially my wife) to “ooh and aah” over my projects.
2) I want to feel the glow of competency and pride from building useful, attractive pieces.
3) I want to avoid making mistakes that will cost me wood and time.

So to the extent the advertising, or the sales pitch for any woodworking tool “promises” to help me fulfill one (or better yet, all) of these desires, I will be much more likely to buy that product. I don’t really care about the horsepower, or the light, or (if the desire is strong enough) even the price, as long as the product gets me what I REALLY want.

Think about your commercials, advertisements, brochures, website, and salespeople’s scripts. Do they address the fundamental reasons people buy products or services like yours? Or have you slipped into the trap of just describing features, and assuming that people will be able to figure out how those features will help them get what they really want? How much have you even thought about your customers’ real “wants” recently?

To the extent that your persuasive communications address fundamental motivations, you will be able to command a higher price and build greater brand equity than competitors who sell on features. Let’s get together sometime and talk about how “fundamental” your advertising is!

How many people are there in your marketing department?

2008-08-18T17:18:00.002-07:00

Many more than you think!

You would probably agree that marketing has the primary responsibility for your company’s relationship with its customers; developing and delivering official customer communications.

But there are a whole bunch of other people in your company that also interact with your customers. Of course (I hear you saying) our sales people interact with our customers all the time. But no, although that’s true, they are not who I was thinking of.

There are three customer interfaces that most people overlook. You won’t find them assigned to the marketing department, but they can strongly reinforce (or damage) your company’s relationship with its customers.

Your receptionist (or whoever customers reach first when they are calling your company). Do customers get a knowledgeable, friendly human when they call, or an impersonal, hard-to-navigate voicemail system? Which would you prefer? Which is more likely to set the stage for a successful customer interaction?

Your service department. How good is your service? It recently took me seven calls to reach someone in customer service at Sears. Think I’ll be buying anything from them again soon? On the other hand, the service people who delivered and set up my new Sleep Number bed last month really reinforced my purchase decision—they were on time, efficient, and did an excellent job of explaining how to use this expensive new piece of furniture. Treating your customer service as an extension of your marketing rather than as a necessary evil can make a huge difference to your repeat sales and retention.

Your billing department. How understandable are your invoices? [I hope they’re not like my telephone bill] Do they reinforce the wisdom of the customer’s purchase? [Insurance companies always miss this opportunity—how much would it reinforce the policy’s value if every bill included a story about how their insurance had helped a policyholder?] If customers have a question about their billing, is it easily and cheerfully answered? Or is it like unraveling a puzzle [hospital bills are a good example of this].

Expanding how you define your “marketing department” can unlock the route to improved customer relations. Want to talk about how to redefine your “marketing staff?” Give me a call!

Make Sure You’re Findable!

2008-08-18T17:18:00.001-07:00

I had a frustrating experience the other day. I’ve been developing a new direct response TV commercial to replace one that has been airing for the past few months. The original commercial has done well, so I want to use it as a benchmark. This original commercial was pre-tested by a research company, and I wanted to get in touch with them to get a quote for running a similar test for the new creative I’m developing. This proved to be so difficult that I almost gave up and used a competitor. I’m sure this isn’t what the researcher would have desired, and the communication problem was easily preventable. See if any of their failures might apply to your company…

The only evidence of the original test was a copy of the finished report. That commercial had been created and tested before I joined our company, and the people who had commissioned the pre-testing were no longer with the company.

I checked through the report, and while the research company name was on it, there was absolutely no contact information provided. [LOST OPPORTUNITY #1: put your company’s contact information as a footnote on every page you publish!] “No problem” I thought. “I’ll just google them.” Google provided their website, but it wouldn’t open because I didn’t have the latest copy of FLASH software on my computer. The website provided a link to this (free) software, but when I tried to download the software, my computer wouldn’t let me do it.

Turns out that at my company, I require an IT administrator to download software. That wasn’t the research company’s fault, but it cost me another day before I could get in touch. [LOST OPPORTUNITY #2: if you’re going to require special software to access your site, at least put some company contact information on an easily accessible initial landing page.]

Once we’d installed the software, I opened up the researcher’s website, and the contact information tab on the site wasn’t working! Worse, there was no other place on the entire website with any contact information [LOST OPPORTUNITY #3: make sure everything on your website is working, and in case it isn’t, footnote basic contact information on your home page.]

Meanwhile, I looked for other Google citations for the research company. There were hardly any, even though this was a large, international firm. [LOST OPPORTUNITY #4: firm didn’t generate any separate mentions. Publishing some white papers or participating in trade organizations would produce alternate pathways to the company’s website and build credibility.]

I am very persistent. Finally on the third Google search page I found a mention of the company in a press release published by one of their clients. I called the client contact listed on the press release and asked if they could help me get in touch with the researcher. They didn’t have a business card [LOST OPPORTUNITY #5—not staying in touch with a current customer], but dug up an old email from someone in the researcher’s Los Angeles branch.

From there things improved rapidly. The Los Angeles researcher called me immediately, and provided contact information for the company’s Cincinnati Branch—which was located less than a quarter mile from my office! [LOST OPPORTUNITY #6: There is no B-2-B yellow pages listing—it’s under the corporate parent’s name.]

Make sure you don’t put prospects through a similar search for your company’s contact information.

The (recently necessary) evolution of Branding

2008-08-18T17:16:00.000-07:00

Branding was developed to allow consumers to differentiate among products in a category so that they could more easily choose the ones that were likely to deliver the benefits they were looking for.

Manufacturers used branding to tell consumers how the manufacturer’s product differed from similar products. Procter & Gamble wasn’t the first, but they’re a good example. Soap was soap, until they started telling people that IVORY and its sudsy brothers and sisters provided particular features at specific and consistent levels of quality.

But how to know that manufacturers were telling the truth?

It would be expensive and time consuming for a consumer to test all the different products available for a particular use, and so for many years consumers were willing to take manufacturers’ promises at face value, and make their selection based on those promises. If a product failed to live up to its branding, then maybe that was just a fluke. There was no way to tell.

After all, what was the alternative? Personally and repeatedly test every brand to see how well the promises were being kept? That wasn’t (and still isn’t) very practical. And there wasn’t any way for consumers to band together to share their experiences with given products.

During much of the recently concluded 20th century, manufacturers (of services as well as products) came to rely on pounding their brand messages into consumers via newspapers, magazines, radio and television. In the face of relentless advertising, if a product didn’t live up to its branding, consumers were as likely to mistrust their personal experience as they were to mistrust the manufacturers’ promises. And again, what was the alternative?

Then came the internet, and in the 21st century we’ve entered a new world for branding. Consumers “get it,” but I’m not sure that the change has sunk in yet for many manufacturers. You see, CONSUMERS NO LONGER HAVE TO TAKE A MANUFACTURER’S WORD FOR HOW GOOD THAT MANUFACTURER’S PRODUCT IS. Anyone with access to the internet (and that is rapidly approaching “everyone”) can now look up any major product (and most minor products!) to see what experiences people have had with that product.

This is a profound change. Almost overnight, promises (which had become vastly overinflated and greatly undersubstantiated in many cases) have become the starting point instead of the final word for consumers. Consumers may use a manufacturer’s promise to pre-sort candidates, but it is no longer the final word. The final word comes from the reported experiences of other consumers, reported across millions of websites, and instantly accessible via incredibly efficient search engines.

As a result, it is time for branding to evolve. Manufacturer promises are as important as ever, but the product MUST live up to those promises. First time. Every time. Exactly as consumers should have been able to count on (but couldn’t) for the past few decades. Because if the product doesn’t perform for someone in Iowa, consumers in California, Florida, and Maine will know about it.

Advertising can no longer compensate for products deficiencies. Manufacturers who survive and thrive in the future will be those who develop meaningful differentiation that can be consistently delivered. Does that describe your products? If you feel like your branding needs to be working harder in this brave new world, feel free to give me a call, and we can talk about it.

Riding the WOM Whirlwind

2008-08-18T17:15:00.000-07:00

TV, Radio, Newspaper, Magazines, Online Ads—there’s one advertising medium that beats them all. It’s WOM (Word-of –Mouth). Thanks to the internet, WOM is exponentially stronger these days (because it’s so easy to find). In pre-internet days, you had to either hope someone would mention an experience with a product or service you were curious about, or else you had to come right out and ask people if they had any such experience. Today, you just type in the name of the product or service you are interested in, and you can instantly find dozens (or thousands) of opinions. The internet put WOM on steroids. For example, type “hamburger opinions, Cincinnati” into Google and you will get 288,000 citations, headed by my wife’s favorite, The Burger Guys, at http://cvgburgerguys.blogspot.com.

Internet WOM can grow like a snowball rolling downhill. It may start with one opinion, then people comment on that opinion, and the next thing you know you have a website like www.amexsux.com containing hundreds of experiences and exerting a significant effect on a major corporation.

So your customer’s experience with your product becomes paramount. Bad experiences become bad WOM, and bad WOM becomes particularly damaging when it is so easy to access. Especially since people are much more likely to go public with a bad experience than with a good one.

What can help you ride the WOM whirlwind?

1) Know what is being said about your product or service. Regularly search the internet for mentions. You can do it yourself if your operation is small. If you are a TIDE or FIDELITY, you’ll want to create a robust internal capability or hire a company like Nielsen’s Buzzmetrics to keep a finger on the pulse of WOM.

2) Respond to negative WOM. If it is pointing out something that is wrong about your product or your service, don’t go into denial—get it fixed! If someone has misunderstood or misused something, try to correct the misconception by replying (using the same channel where they published their opinion) in a polite and measured way.

3) Nurture positive WOM. Identify satisfied customers and obtain testimonials from them. Publish those testimonials on your website, and tell all your other customers about them. Help your proponents talk to each other for reinforcement. Think about Harley-Davidson “hog” owners. With considerable help from the company, they have reinforced each others’ positive opinions to the point where if someone says something negative about a Harley, the complainer is likely to get tossed through a window!

Want to talk about your WOM? Give me a call, and maybe we can think of some ways to tilt the buzz in your favor!

Give to Get

2008-08-18T17:14:00.000-07:00

To succeed in business today, you have to give to get. A recent column I read contained some of the best advice I’ve seen in months. The author said:

Customers tell me that they gravitate to suppliers who “look after things for me.” These suppliers regularly act in the best interest of their customers, suggesting new ways to do things, helping to train their staff. One of the most favorable reactions that they elicit is: “That’s one less thing I have to worry about.

I suspect that it is a universal business truth that people and companies prefer to give their business to suppliers who demonstrate that they understand that the customer must succeed in order for the supplier to succeed. Businesses that care only about what their customers can do for them (ie. “how much can you buy?” and “how much will you pay?”) are not going to earn any customer loyalty, no matter how good their products and/or services are.

It is common today for businesses to say they want to “partner” with their customers. But relatively few of them walk the talk. Want an interesting exercise? Take ten minutes and list all the things your company does for its customers that aren’t directly concerned with selling and servicing your products. Include how you educate them on ways to improve their business, train their employees, aid them with government regulations, help connect them with prospects, provide technology and industry information, brainstorm solutions to problems unrelated to your products, create networking opportunities, and anything else that is directly designed to make the customer more successful.

The more things you can list, the more of a “partner” you are, and the stronger your customer relationships probably are. If there isn’t much on your list, then you aren’t much of a partner, and your customers are probably looking around for your replacement right this moment. You don’t trust people who are just out for themselves—why would you trust a company that is?

By the way—this advice applies to internal as well as external customers. The more you enable your co-workers to succeed, the more they will support and protect you. And the practice works as well within families as it does between businesses. The more you give, the more you get.

Understanding your target market

2008-08-18T17:13:00.000-07:00

How lazy are you when it comes to understanding your target market?

On the whole, many of us prefer to obtain information about the people we are selling to…secondhand. We buy industry reviews. We pay marketing researchers to do surveys. We read summaries of focus groups. We compile purchase transaction statistics. We listen to the sales force’s anecdotes. We build data warehouses and fill them with every possible fact we can collect or buy.

It seems like we chase down virtually every path to insight except actually listening to our prospects and customers. There are reasons for this—we tend to be busy people, and real interaction isn’t an efficient process. So in the time that you can talk with one person, or listen to some calls into the call center, you can study abstract information about of hundreds of people. And there’s the danger that people won’t be truthful with you face-to-face; they’ll be too polite, or too calculating to tell you the truth. Or worse yet, they’ll complain to you! Personal contact is unpredictable, and it takes a lot of work to “mine” it for real insights. So its often easier to take a more lazy way out.

It’s all very understandable—and very dangerous to your company’s health. Maybe it is MBA programs that bred the personal contact out of so many of us, or maybe we’ve just abrogated too much responsibility for personal contact to our salespeople, or call center reps, or (worst case) our internet software!

Printed words and conversion ratios are unlikely to convey the insights that will provide the competitive edge you’re seeking. Often it is the excitement or disgust in someone’s voice that signals an opportunity. Or body language—a lifted eyebrow or shrug—that tells you how engaged someone is with your proposition. Or just a look in their eye that says that’s the sweet spot.

So try to make some space in your schedule once in a while to actually go see some people face-to-face. Travel with your salespeople. Listen to the call center representatives talk with prospects and customers over the phone. I guarantee you, you’ll get more out of it than you will from any piece of paper in your office.

Industry Group Membership Benefits

2008-08-18T17:12:00.000-07:00

Your participation in industry groups should go beyond sponsoring a hole at the local golf outing!
There’s a trade group or professional organization for virtually every business and job. You know which ones are most important in your industry or career field. But are you making full use of the opportunity they offer?

Most people skimp on participation in these groups. They may take a foursome to a golf outing, or buy a ticket or a table for the annual awards dinner. They may even sponsor a luncheon or buy an advertisement in a program booklet. But that level of engagement doesn’t begin to tap into the benefits that are available to someone who is willing to become actively involved.

Every group represents a power structure. You can ignore that power structure, or you can take advantage of it. Participation in a group can generate three advantages:

1. It is an opportunity to collect favors. When you volunteer to work for a group, people in that group appreciate it. However unspoken that gratitude may be, it is a “deposit in your account” if and when you choose to take advantage of it. [Think about it: who are you more likely to help-- someone who comes to you out of the blue, or someone who has done you a service in the past?]

2. It provides access to powerful people you might otherwise have trouble meeting. And it typically provides that access under very favorable conditions.

3. It is a chance to showcase how intelligent and hard working you are, and how easy you are to work with (assuming all these things describe you, which I’m sure they do!). Demonstrating these virtues can lead to direct business, referrals, and even the occasional job offer.

4. The right kinds of participation (such as being a speaker or panel member at a convention) can enhance your credibility. People think “If he/she was considered smart/knowledgeable enough to be invited to speak, they must be pretty good. Maybe I should be talking with them!”

Newcomers have to work their way up in organizations—it is unlikely you’ll be immediately asked to run for president of a group. But just letting people know you are interested and willing to volunteer for “whatever needs to be done” will open the door. I’ve found that such participation pays significant rewards for surprisingly little work, and that advancement (and commensurate rewards and opportunities) can come quickly if you’re sincere and enthusiastic!

Customer Satisfaction = Marketing Success

2008-08-18T17:11:00.000-07:00

Your marketing success (at prospecting, cross-selling, and retention) is inextricably tied to customer satisfaction. Measuring customer satisfaction has traditionally required elaborate questionnaires. However in 2004, Fred Reichheld authored a Harvard Business Review article that offers a simple and effective substitute.

He suggested that a single question—“On a scale of zero to ten, how likely is it that you would recommend [company name] to your friends or colleagues?” —could effectively measure customer satisfaction. And he demonstrated that “net promoter scores” which measure the difference between the percentage of customers who give high responses (promoters) and those who give low responses (detractors) correlate closely with a company’s revenue growth. [Promoters are defined as customers responding with a ‘9’ or ’10,’ while detractors respond with a ‘0’ through ‘6.’ Customers who respond with a ‘7’ or ‘8’ are considered “passively satisfied,” and aren’t counted in the ratio.]

Since the article’s publication, this satisfaction measurement system has been embraced by a list of companies that includes General Electric, American Express, and Intuit.

Why it works is simple enough. Detractors are more likely to defect, and less likely to buy additional products or services from a company. Further, they are less likely to provide referrals to your salespeople, and more likely to write uncomplimentary things about your company online (which is just a reflection of what they are saying to people face-to-face). Promoters are your cheerleaders, providing the referrals and testimonials that should be two of your primary prospecting resources.

[Note: approximately 10% of the population are defined as “Influentials,” a term coined by research company RoperASW to describe those whom others turn to for opinions and advice. Customers in this segment act as “magnifiers,” and have a disproportionate effect on your company’s reputation. It behooves you to give Influentials special attention.]

Having your customers answer the satisfaction question isn’t the end of the process—it is just the beginning. To take advantage of customer responses, you need to leverage your promoters to produce referrals and testimonials, and warm up the passively satisfied to turn them into promoters. Finally, you need to talk to your detractors, record and quantify their complaints, and then do something about them!

If you would like to talk about establishing a customer feedback program, or giving your current program a jump-start, please give me a call. Your CMO will be happy to discuss steps you can take to create and exploit customer satisfaction data!

Great Expectations isn’t just a Dickens novel

2008-08-18T17:10:00.000-07:00

How picky are you? What do you expect from the companies that serve you? If you are like me, you have pretty high expectations. You are disappointed when those expectations aren’t met. And if that disappointment doesn’t set you searching for a better alternative, it at least makes you more receptive to competing goods or services.

I am more than averagely tall, and require extra-long ties on those occasions when I have to wear one. Recently I walked into Macy's and asked where their extra-long ties were. “We don’t sell any big or tall products” the clerk said without apology. He then proceeded to tell me that Dillard’s (a different department store) sells them. What a missed opportunity! I understand how “turn” affects inventory costs. But a big company like Macy’s could at least offer XL ties over the internet (saving the sale). Instead this clerk directed me to the competition!

Wait, it gets worse! Before I went to Dillards, this experience prompted me to look on the internet, where I subsequently bought just what I wanted at SaveOnTies for half the price and $.99 shipping (less than the cost of the gas I burned getting to Macy’s). So now it’s not just Macy’s that’s lost me—it’s the whole department store distribution channel.

Every business is probably doing some things that disappoint their customers. (Yes, even yours!) If customers complain, I’m sure you try to make them happy. But most don’t complain—they simply leave. And it is difficult (and expensive) to get them back again.

It just hasn’t soaked in for most businesses just how much choice their prospects and customers have today, and just how easy it is to find someone else who wants their business. Many businesses still behave as though customers continue to have the same limited choice as before the Internet radically enlarged the competitive environment.

Executives talk about how they want to provide a great customer experience, but most still don’t put any real effort into developing or delivering that experience.

The bad news? Given the amount of choice available today, you need to provide an acceptable experience just to be a commodity, and an exceptional experience to be a preferred vendor.
The good news? Most experiences are so lousy, it doesn’t take that much (yet) to be considered exceptional.

So what’s my point? Make sure that interacting with your company is an acceptable or (preferably) exceptional experience. Unless you have a monopoly on a “must-have” product (like Ma Bell did in the old days), the customer experience is a make-or-break factor. Until you’re providing a good experience, you will be wasting any money you spend on marketing.

Prospecting? Why would I want to buy from you if you’re difficult to do business with?

Cross-selling? Why would I buy something else from you if I was unhappy with my first experience?

Retention? Why would I come back or stay if I don’t like doing business with you?

If you’d like some help in evaluating and upgrading your customer experiences, give Your CMO a call. I will try to make that experience a pleasant one!

A Spoonful of Sugar

2008-08-18T17:07:00.000-07:00

“A spoonful of sugar helps the medicine go down…” Mary Poppins

In today’s communication-cluttered environment, this is advice worth remembering.

There are a lot of relatively inexpensive communication choices available to today’s marketers, which has led to consumers being barraged with sales messages. But consumers have more “filtering” tools available than ever before—DVRs, Do-Not-Call registries, anti-spam software, email opt-outs, and satellite radio, just to name a few. They don’t have to listen to those messages.

Many marketers have responded by making their messages as intrusive as possible. They want to make people listen, and they’ll employ celebrities, humor, nostalgic song clips, dancing elephants, and anything else they can think of to get the consumer’s attention.

The problem with this approach is that these marketing messages are still full of what the marketer wants to say rather than what the consumer necessarily wants to hear. This is where the spoon full of sugar comes in.

If you are targeting a well-identified pool of prospects or customers, you should have some idea what their needs and interests are. So you can wrap your sales message (which people are likely to be only marginally interested in) with “value added” content (ie. “sugar”).

This can take the form of education, testimonials, anecdotes, links to other material, tools like calculators, and anything else that your target market finds useful or interesting.

As your prospects and customers find value in your communications, they will become more likely to read them and less likely to filter them out. And while absorbing the content they are interested in, they will be more receptive to the sales messages accompanying that content.

The alternative is to force your marketing message down people’s throats, with the likelihood that they won’t find it useful or interesting, and will therefore be indifferent or hostile toward your company (and more likely to filter out future messages they identify with it).

The last thing you should do is advertise…

2008-08-18T17:06:00.000-07:00

The purpose of advertising is to inform prospective customers of your existence, and to communicate the value of your product or service. So how can you argue with doing it? (Actually, I’m not saying don’t advertise; I’m just saying there are a few other things you should think about first.)

1) Who is your prospective customer? No. Really. Who is it? Most companies define their target much too loosely. They use something like “boys 13-18” or “urban women.” Your target customer can be profiled much more exactly. This shouldn’t be guesswork. Unless you are a start-up business, you already have customers. To find out who your target is, you can simply profile the group that has already bought your product or service. Don’t have a lot of information about these people? Not a problem. If you can get a name and address or telephone number, data aggregators can usually sell you extensive information about them (often for pennies per person).

And you don’t need to get data on all your customers—just a representative sample. That’s usually less than a thousand people. Analysis of the data can be done on either an internal or outsourced basis. I guarantee you’re going to find some surprises when you do this. And when you are ready to advertise, I also guarantee this more precise targeting is going to make your advertising much more effective.

By the way, if you’re working on a start-up business and don’t have any customers yet, give me a call, and I’ll tell you how to develop a profile of the people who will become your best customers.

2) Why should someone buy your product? Who is your competition, and what are you providing that they are not? Unless you are just trying to out-shout your competition—which is an awfully expensive proposition—you should have a clearly understandable competitive advantage. If you don’t, you should be spending your money on developing an advantage instead of on advertising. Advertising creates leads, but it is superior products that turn leads into sales.

3) How do you treat your prospects and customers? Do people enjoy doing business with you? Are your sales associates knowledgeable and professional? Do you have an informative, comprehensive website? Are telephones quickly, politely, and competently answered? Do you reply promptly to e-mails and letters? Until you can answer yes to these questions, you should be spending your money on customer service rather than advertising. It is very expensive to create a warm lead using advertising, and that expense is often wasted if your organization is poor at converting that lead into a satisfied customer.

4) Have you explored less expensive alternatives to traditional advertising? Should you be blogging on the internet? Are there events you should be sponsoring? Press releases you should be distributing? Contests you should be holding? Cross-promotions you should be doing? In-store merchandising you should put up? It’s easy to substitute advertising for creativity. But it is also very expensive.

You need to figure out who and what influences your target customer. A recent survey ranked media advertising dead last in influencing purchasing decisions, behind personal anecdotes on the internet, news stories, professional assessments, and (strongest of all) word-of-mouth from someone you know personally (ie: referrals). Some big companies today are working on identifying what specific sources influence target segments, so that they can efficiently “influence the influencers” rather than trying to reach each individual prospect.Advertising is a wonderful tool. But like any tool, it is most effective when used in the right way at the right time. It is not a substitute for careful targeting, a competitive advantage, good customer service, or favorable word-of-mouth. So advertise, by all means-- after you have these other elements in place.

Sales or Marketing—Who cares?

2008-08-18T17:04:00.000-07:00

A couple of years ago, I was serving as chairman of the marketing committee of the Life Insurance Marketing Research Association. To start one meeting, I asked the 12 committee members (each heading up the marketing function at a major Life Insurer) to agree on a one-paragraph definition of marketing for use in the brochure for the next annual convention. Two hours later, we still hadn’t reached consensus. I suspect the same thing could happen with a group of sales executives.

Who cares? You should. Because Sales and Marketing are different functions, with different responsibilities requiring different skills. And if you try to put both functions under one person without understanding those differences, you won’t get optimal results in either area.

After a lot of thought, I’ve “assigned” the functional responsibilities like this:

Marketing is responsible for
Identifying the target customer
Matching the company’s products and/or services to the needs of the target customer
Telling sales where target prospects can be found

Sales is responsible for
The sales process (fact-finding, needs-analysis, recommendation, close, delivery)
The service process (providing information, relationship-building, conducting transactions)

Marketing and Sales should share the responsibility for
Developing better ways of approaching the target prospects
Maintaining a relationship with customers once the sale is made
Warming up prospects for the future in “not now” situations.

[To see how these responsibilities fit together into a clearly understandable process, check out the Sales Success Cycle Diagram on my website at www.yourcmo.com]

Marketers usually don’t enjoy selling one-by-one. They prefer persuading people in bunches. They really enjoy poring over data, attending focus groups, designing advertising, and creating automatic systems that are more dependable than salespeople. Marketers are motivated more by deadlines than by results. Put them in charge of sales organizations and they’ll tend to shy away from customer interaction and concentrate on production ratios, sales processes, and management systems.

Salespeople like to get face-to-face. They really enjoy personal interaction, and can be uncomfortable dealing with statistics, processes, and systems. As a result, they prefer ad hoc, customized sales materials over mass-marketing collateral like advertising and printed brochures. Because they’ve probably lived off commissions (where if you don’t make a sale, you don’t get paid) they can be overly focused on short-term results. This frame of mind, coupled with a salesperson’s natural optimism, tends to oppose the idea of targeting—most salespeople consider everyone a viable target!

This difference in mindset is why it is important to carefully assign sales and marketing responsibilities. People can develop an understanding of, and skill at, both responsibilities. But they rarely have the mindset and passion for both. And without them, something is going to get short-changed if you try to combine these functions.

Anecdotes Trump Advertising

2008-08-18T16:58:00.000-07:00

Companies spend millions on advertising every year, but when it comes to influencing consumers, advertising doesn’t hold a candle to the opinion of the person next door according to Intelliseek’s 2005-2006 Consumer Generated Media Engagement Monitor.

When people were asked to rate how strongly fourteen factors influence purchase decisions, advertising came in dead last, behind personal word-of-mouth, expert testimonials, stories in the media, and even postings from strangers on the internet!

To what degree would your decision to purchase something be influenced by:
[ from 0 = not influenced at all to 10 = influenced greatly ]

A positive word-of-mouth report from someone you knew personally 7.72

A negative word-of-mouth report from someone you knew personally 6.95

A positive first-hand report from a credible professional source or expert 6.46

A positive news story on TV or radio or in a newspaper or magazine 6.16

A negative first-hand report from a credible professional source or expert 6.05

A negative comment about a product or company by an employee of that company 5.74

A negative news story on TV or radio or in a newspaper or magazine 5.68

A positive first-hand report from an individual on the Internet with comment

postings from others agreeing with him or her 5.68

A negative first-hand report from an individual on the Internet with comment postings

from others agreeing with him or her 5.41

A positive first-hand report from an individual on the Internet 5.16

A positive comment about a product or company by an employee of that company 5.14

A negative first-hand report from an individual on the Internet 4.97

A television or radio commercial 4.74

An advertisement in a newspaper or magazine 4.63

This study reinforces the need for companies to be aware of the word-of-mouth they are generating. Each interaction and transaction with consumers is the potential source of either a positive or a negative anecdote more persuasively powerful than the your commercials This suggests three important considerations:

1) You need to understand that each consumer interaction creates either an enhancement to, or a detraction from, your advertising. [This effect is magnified if you are dealing with an “influential”—someone who makes an extra effort to communicate their experiences and opinions.] So it makes sense to put a strong effort into making sure every consumer interaction is a positive one.

2) Publicity is more powerful than advertising. Resources should be devoted to obtaining testimonials from experts, placing news stories, and stimulating positive “buzz.”

3) Your company can be badly hurt by negative anecdotes. With millions of people blogging on the internet, you may be getting lambasted and not even know it. It makes sense to have someone regularly search the internet for any negative stories; defusing them if possible, and taking steps to prevent recurrence of the kind of situation that caused the negative story.

Wisdom as a competitive advantage

2008-08-18T16:56:00.000-07:00

Marketing is all about gaining a competitive advantage, and the use of data is a major tool in that effort. With that said, let me get theoretical for a minute (hang in there—I’ll get back to the competitive advantage part soon).

I lunched the other day with a friend who used to be a reporter on the Cincinnati Enquirer newspaper. Our discussion eventually turned to the shallowness of modern reporting. We agreed that it is increasingly rare for reporters to provide any perspective on the news. They seem content to communicate what happened, without mention of the how or why. Meanwhile, newspaper readership (and television viewership and radio listenership) are in sharp decline. Coincidence? We thought not!

Data, or raw facts, is the commonest thing in the world. We are awash in it. So much so, that we are willing to pay to have it organized. Just as flour is worth more than wheat, and cookies are worth more than flour, so data gains in value as it is processed.

When data is organized, it becomes information. We pay authors to organize data into books, and teachers to organize data into lessons. When information is put to use, it becomes knowledge. Anyone can buy an engineering textbook, but we pay an engineer because their knowledge helps them put that information to use more efficiently than we can. And while many people gain knowledge, we will pay a premium to the person that can use that knowledge better than most people.

DATA—raw facts

INFORMATION—organized data

KNOWLEDGE—information put to use

WISDOM—knowledge applied to gain an advantage.

For example, the entire body of data about law and medicine is available on the internet for free. Organized in law books or medical texts, this data becomes information. There are many knowledgeable lawyers and doctors who put this information to everyday use. And when knowledge is manipulated by a particularly creative trial lawyer or diagnostician, it can become wisdom.

OK, back to marketing. Prospects and customers are looking for wisdom. They don’t have time to process all the available data affecting all the areas of their lives themselves, so they look for products and companies that can help them. It is easy to organize data into information, so lots of companies do that (but cannot charge much of a premium for the service). It’s harder to turn information into knowledge, so there are less companies (some of them are called colleges and universities) doing that, and they can charge more for the service. It is hardest to turn knowledge into wisdom, and so wisdom commands the highest price.

So the question you should be asking yourself is, “How do I build more wisdom into my products or services?” Because that is the way you will gain more customers and sell them more at a higher price. And isn’t that what a competitive advantage does?

Avoiding Checkmate By Thinking Ahead

2008-08-18T16:55:00.001-07:00

It has been said that chess is great training for war. It is also great training for business. You learn to balance offense and defense, to make the best use of limited resources, and, most importantly, to think several moves ahead. Given today’s business environment, I suggest we should all be playing a lot more chess!

The minute you think you’ve created a successful business model, it is already out of date. So if you aren’t planning several moves ahead, your business is already in decline.

Over the past three decades written communication has progressed from snail mail to faxes and overnight delivery to e-mail and text messaging. Carbon paper was replaced by mimeographs, then copiers, then computer printers. Music has gone from vinyl to reel-to-reel to eight-track to cassettes to compact discs to MP-3 players to cell phones. The story is similar in every industry. And the interval between changes is becoming increasingly brief.

To be successful in business today, you need to be schizophrenic. Half of you must be thinking about how to optimize your current business model, while the other half must be thinking about how to replace it. Not an easy thing for most people to do!

The way to link these two tasks is to continually focus on providing a unique value for your customers—something that your company is perceived as doing better than anyone else. You can accomplish this by rigorously following these four steps:

Define the group you want to do business with (your target market)
Understand what your target market wants
Find the best way to provide what they want
Repeat this process on a regular basis

It is the last step that is the hardest (and most often ignored). None of us have unlimited resources, and once you have identified a need and become good at filling it, there is a tendency to coast. The more successful you are with your first pass through steps one through three, the less likely you are to repeat the process on a timely basis (if ever).

But the expectations and wants of your target market are constantly changing, fueled by technology and an increasingly efficient marketplace in which a simple internet search can match buyers and sellers with a couple of clicks. As a result, a business that fails to think at least a couple moves ahead is likely to find itself checkmated.

Steps one through three are marketing territory—feel free to give me a call if you would like to get some outside perspective on how to your polish your product portfolio or sharpen your competitive edge. Or if you’d like a game of chess!

Ranking your Customers Maximizes Profits

2008-08-18T16:53:00.000-07:00

Are all your customers equally valuable to you? How about prospective customers?
If you answered “no” (and I hope you did), do you have a system in place for rating the value of your customers?

No matter how big your company is, your sales and marketing resources (be they salespeople or advertising spending) are limited. So it makes sense to apply these resources to the customers who are most likely to buy your product at a profitable price. Are you with me so far?

Whether you call them A-B-C customers or level 1-2-3 customers, or gold-silver-bronze customers, customers should be ranked in importance. Pareto’s Rule suggests that 80% of your profit will come from 20% of your customers. The remaining 80% of your customers are either relatively profit neutral, or are actually costing you money (in another application of Pareto’s Rule, the worst 20% of your customers are probably responsible for 80% of your costs).

Ranking your current customers also creates a valuable spinoff—the ability to rank prospective customers. If you create a profile of your most profitable customers, you can then look for prospects that match that profile. The factors in the profile will differ by business. But by prioritizing prospects using their similarity to the different profiles in your customer ranking system, you can greatly increase the effectiveness of your customer acquisition efforts. Your business development people can concentrate on the prospects matching the profile of your most profitable clients, and consciously avoid wasting time on the prospects matching the profile of your least profitable clients.

It is relatively easy to rank customers based on either relative or absolute profitability—your accounting department can supply you with the necessary information. But a good ranking system goes further, and requires art as well as science. I’ll illustrate with just two of the many factors you may want to consider:

First, let me suggest the importance of potential. If two retail customers generate an equal amount of profit, but one is a 55 year old factory worker, and the other is a 28 year old neurosurgery intern, which of them is the better customer? If you have 10 products in your industrial portfolio, and two companies are spending the same amount with you, is your better customer the company currently buying two of your products, or the company buying 9 of your products? [Answers: the neurosurgery intern, because of their future buying power, and the company currently buying two products, because of the additional cross-selling potential]

Second, let me suggest the importance of understanding relationships between your customers. A bank was culling its “unprofitable” customers, and cancelled the checking account of a college student who overdrew his account. This action enraged the student’s father, who had a highly profitable multi-million dollar business loan with the bank. He subsequently withdrew his business, costing the bank a considerable amount of money.

If you think customer ranking sounds too difficult, you’re wrong. One simple way to create a ranking system is to assemble a cross-departmental team of salespeople, accountants, operation folks, and marketers. Then have them create a list of variables that you want included in your system—revenue, profit percentage, potential, number of products purchased, volume of products purchased, length of time they’ve been a customer, etc.

Finally, have them assign a number of points to for each factor—for example: 3 points if they’ve been a customer over five years, two if they’ve been a customer over two years, and 1 if they’ve been a customer for more than one year.

Remember—a simple ranking system is better than no system at all. You can always refine your system in the future.

A list of reasons to make lists

2008-08-18T16:52:00.000-07:00

My wife makes fun of me, but I do it anyhow. Make lists, that is. I have a home list and a list for my business. The grocery list is on the refrigerator, and there are lists of future vacation sites, presents we’ll buy for next Christmas, and… well, you get the idea.

My memory is fine. But if your goal is to get it right every time, then it’s hard to beat a list. Because even if you only miss one thing out of a hundred, that’s one dinner ingredient that isn’t around when you need it …one errand you have to drive back for again…one broken promise... Sometimes the consequence can be even greater. One of my most important lists is the checklist I use to make sure my SCUBA equipment is hooked up and working properly before I dive.

Do I sometimes feel a little anal? Yes….. but that doesn’t bother me as much as disappointing a customer, friend, or family member. And I get a charge out of how lists help me pump up my productivity.

People who keep lists tend to be organized people. And organized people tend to be efficient and effective people. And efficient and effective people tend to be a pleasure to do business with. Their prices are lower, their delivery times are quicker, their service is better, and they make fewer mistakes. Think about the professionals you count on the most—airline pilots, doctors & nurses, accountants, soldiers, architects, teachers—they all depend on checklists.

Many businesses say that they want to differentiate themselves on “service” or “performance.” I am hard-put to imagine how a company can create a competitive advantage in these areas unless it is trying to dot every i and cross every t. And if you want every person in your organization maximizing every customer contact—that means you’re going to need checklists of your own.

Making a list is a commitment to quality. It says you don’t want to miss something important—from a callback to a potential customer to ordering flowers for Mother’s Day. [It’s no coincidence that one of the definitions of ‘listless’ is “indifferent.”]

So you list-makers, stand up proud. And if anyone laughs at your list, make a note to look superior the next time they forget something!

When it comes to communicating, less is more.

2008-08-18T16:51:00.000-07:00

In Lewis Carol’s THROUGH THE LOOKING GLASS, the White Queen advises Alice “Start at the beginning, go on to the end, and then stop.” To this royal advice, I would add “using the fewest possible words in the process…”

People don’t have a lot of time to waste these days, but that doesn’t keep businesses from wasting it. It might be because it is so hard to get a prospect’s attention, or it might be because businesses don’t do enough targeting to know what their prospects really want. But once businesses “connect,” they tend to throw everything but the kitchen sink into their communications, in the hopes that something will catch the prospect’s interest and lead to a sale.

Sarcastic M.I.T. mathematics professor and cult singer Tom Leher once said “I think that if people have nothing to say, the least they can do is shut up.”

But the problem is not that businesses have nothing to say. The problem is, the important part of the communication gets buried in so many different messages, details, and repetitions that it tends to get lost.

Treat your prospects’ time with the same respect you want your vendors to give to you. Boil your communications down to essentials. What is most unique and important about your service or product? What do prospects have to know? Communicate clearly and concisely!

You should be able to make your pitch in a 30-second commercial. That’s about 100 words. If it takes you more than that, then maybe you need help in better defining your product, service, or offer (or in targeting who it should appeal to).

Here’s an example:
“Your CMO can help guide you to the optimal target prospect for your product. Your CMO will then help you develop effective ways of approaching that prospect, establishing a relationship with them, and turning that relationship into persistent, profitable sales.” 40 words. Enough said?

Better Strategic Reviews

2008-08-18T16:41:00.000-07:00

“It’s hard to remember your original objective was to drain the swamp when you’re up to your [bleep] in alligators...”

How do you keep your eye on the strategic “ball?” Everyone tells you to watch the forest as well as the trees, but its a hard thing to do. There are so many tactical issues to deal with, we tend to put strategic reviews off. After all, if a strategic issue is really important, it will bring itself to our attention. Won’t it?

Yes, it will. Unfortunately though, strategic issues tend to bring themselves to our attention in the form of crises. Like key customer defections, competitive break-throughs, and precipitous sales declines. The whole purpose of regular strategic reviews is to identify strategic issues so they can be dealt with before they become crises.

In many companies, strategic reviews tend to be internal affairs. But there are two problems with these.
(1) Most business unit leaders are reluctant to expose themselves to a potentially image-damaging review by peers with whom they may be in competition with for the next promotion. Subordinates are safer participants, but may be less productive due to a reluctance to voice what may be seen as criticisms by their superiors.
(2) Insiders can find it hard to be truly objective—they tend to over-value strengths and under-estimate weaknesses.

Adding outsiders can increase the value of a review. Some smaller companies use all outsiders, in the form of an informal “board of directors.” This can be a good solution—you are probably more ready to listen to people you’ve personally selected and who you are not competing with. Of course, you have to be ready to reciprocate and help them do the same for their businesses.

But just inviting a few professionals (from vendors or non-competing businesses) to participate along with your people can improve your review. If its too much trouble to form your own group, several vendors will be happy to provide one for you. Here in Cincinnati, I know Tim Shepelak (T.Shepelak@TheGrowthCoach.com) facilitates inexpensive sessions to help professionals and business owners do regular, periodic strategic assessments.

At the far end of the spectrum are strategic reviews conducted entirely by outside consultants. For this kind of review, internal people contribute mainly by answering questions and providing information. The results of outsider reviews can be very objective and enlightening, but expensive.

Some other thoughts:
You can reduce the frequency of strategic reviews if you are staying alert to your environment. Attend industry meetings. Continually ask your customers and vendors (1) what you are doing well, (2) what you could do better, (3) what the competition is doing (when was the last time you had someone check out your competitors’ websites?) and (4) what’s changing in your industry.

You can reduce the scope of strategic reviews by concentrating on one functional area per review; even separating operations from sales/marketing can significantly reduce the effort.
Strategic reviews can be painful. But every time I do force myself through the exercise, I always end up with business-building, money-making insights that totally justify the effort. If you’ve got a suggestion for easier or more effective strategic reviews, please share it with me, and I’ll pass it on in a future e-mailing.