November 15, 2007

Measuring ROI on social media investments

need%20help%20sm.jpgA lot of people and companies are struggling to come up with good ways to define an ROI for social media investments - Patrick Schaber's recent post on the topic is just one of the many thoughtful pieces on the topic.

The key to measuring your investments in social media is to first define what it is you are trying to do - are you trying to increase sales, improve the SEO of your site, get more new product ideas into your new product development funnel, trying to improve customer service, or enhance your PR by getting a bigger share of voice in the social media space? And yes, you can do all that with various social media strategies - we have case studies in each and every one of them.

So once you have defined what it is you want to do - measure it the same way you would measure any other program deployed for that same purpose. If you already track idea sources and various percentages to gauge the success of your new product development pipeline, just add a category for the new social media-based community and measure everything else the same way. If you want to increase sales, just measure the efficacy of the social media based campaign the same way you would measure any other lead generation program. And if PR/awareness in the social media space is your goal, then there are many more tools at your disposal in the social media space to measure progress than there are in traditional media. One bonus of social media-based programs is that they will impact multiple marketing functions much more so than traditional marketing programs. So in effect you might develop an ROI in one area and see the cost of doing business in other areas go down at the same time.

Now, the real problem is that we measure traditional marketing programs the wrong way. Almost everything in traditional measurement programs is customer transaction-based - how much will it cost to get a customer to buy...ONCE. What we really want to measure is how programs affect a customer's life-cycle value - including his/her ability to influence others in making buying decisions. The other problem with most traditional measurement yardsticks - and ROI is perhaps the most famous of them - is that they are trailing indicators, not leading indicators. Not enough companies measure things in ways that give them indications of where their business is going, or how sucessful add-on programs will be.

We are currently working with Deloitte on a research project to uncover how companies are measuring the progress and success of various social media-based external communities. If you would like to help with that or if you have opinions on the subject, feel free to email me at francois [at] emergencemarketing [dot] com.

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November 14, 2007

Fun Viagra ads

While on the topic of ads - here are a couple of clever Viagra ads :)
(via Ads of the World)

Viagrabridge_preview.jpgViagranouturn_preview.jpg

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November 13, 2007

The end of advertising as we know it

A new study by the IBM Institute for Business Value predicts that the next 5 years will hold more change for the advertising industry than the previous 50 did (here for executive summary, and here for full pdf report of the study).

Based on a survey of 2,400 consumers and feedback from 80 advertising execs, they see four change drivers that will shift control within the Industry:

Attention - consumers are increasingly in control of where they direct their attention. And not just by using Tivo-like products which enable them to skip ads and watch what they want when they want it, but because of a fundamental shift from TV usage to PC usage. 71% of the survey respondents use the Internet more than 2 hours a day, with only 48% spending equivalent time watching TV. 19% spend six hours or more on a PC with just 9% watching that much TV.

Creativity - consumers now have the tools to create their own user-generated and peer-delivered content. User generated content sites are already the top destinations for viewing online video, attracting 39% of the survey respondents.

Measurement - advertising executives predict that 20% of all advertising dollars will shift from impression-based models to impact-based models within 3 years.

Advertising inventories - ad space is increasingly available through open exchanges instead of proprietary channels that were controlled by broadcasters.

Based on these drivers, and considering that two of them have a high degree of uncertainty - the attention driver and the open inventory driver - the study envisions 4 possible scenarios for 2012:

Continued Evolution: One to many still dominates but thanks to DVR's, increased penetration of CGC and better measurement techniques, a greater portion of direct marketing dollars gets allocated to channels typically used for brand oriented advertising.

Open Exchange: Not much changes in this scenario other than most inventory gets bought through open exchanges.

Consumer Choice: In this scenario the user takes full control of the way ads get viewed and filtered.

Ad Marketplace: In this one the consumer choose preferred ad types as part of self-programming their media choices and are more involved with the creation and distribution of the ads.

Here is how the study predicts advertising spend allocation will evolve over the next 3 years:

ad%20spend%20IBM.png


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Anti-Hummer campaign

This one is quite funny...

hummerbig.jpg

(via Coolz0r)

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November 7, 2007

History repeats itself - ad skipping in 1934

This article in the April 4th edition of Modern Mechanix reminds us that many new ideas are...well not so new after all - "Radio listeners who dislike advertising announcements and long speeches will welcome a new invention that automatically shuts off voice programs."


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(via MIT's Advertising Lab)

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November 1, 2007

Amazing to see how many marketers spam...

Almost 10 years after the ClueTrain you would expect marketing professionals to no longer spam - especially not in social media based marketing networking groups. Yet that is exactly what happens all the time. I must be spending an hour a week cleaning up spam in the Marketing 2.0 group on Facebook which I created a couple of months ago.

Sometimes I just yank the spam, sometimes I write a note to the author, especially when it is somewhat borderline, sometimes I get pissy, especially when there is a lot. Spam ranges from get rich quick schemes and incredible-sounding offers to people just adding a link to their company or blog without engaging in the conversation. Sometime people I write notes to take it well, sometimes I never hear from them and sometimes they get mad. One guy, who kept plastering the group with a link to his blog, sent me emails adding up to almost 1,200 words now - telling me that I did not understand the meaning of the word spam, that he would "interpret (my) note as a stupid act by a guy who's intelligent in at least some respects," and eventually graduating to telling me that "The so-called Web 2.0 world doesn't need another pompous ass." ...he also told me that I should apologize.

Maybe I should follow Chris Anderson's lead and just have a note in the group that lists those people who do not get it.

...but wait, it was the threat of doing exactly that which sent the poor chap over the edge...so this could actually be a dangerous course of action :)

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October 10, 2007

Is the customer really in charge?

So in the past couple of years there has been a lot of talk about the democratization of media, citizen marketing, the amateur hour, and other themes & memes pointing to the fact that the customer is now in charge. He owns the message; she decides what happens to the brand, etc.

Fact is – the vendors are no longer is charge. Nobody would argue against that point anymore.

But does that automatically equate with saying that the customer is now in charge?

Academic research about democratic sites like DIGG shows that a majority of what makes it to the front page comes from a very small number of people – in fact, researchers talk about the “tyranny of the minority.” Other research, such as the one done by Jackie Huba and Ben McConnell and reported in their Citizen Marketers book, finds that the percentage of people who actually create and broadcast content is 1%.

So is the customer really in charge? Or is it a small group of non-democratically elected loudmouths who now controls the message?

This is just one of the topics that we will talk about this afternoon during the interview with Jackie Huba.

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October 5, 2007

Are the 4 P's still relevant in today's world?

marketing%202.jpgAs I was responding to some discussions in the Marketing 2.0 group on Facebook, I started talking about the relevance of the 4 P's in marketing, which of course is one of the cornerstones in marketing education worldwide.

But are they really relevant anymore?

Let's look at them one by one:

  • Product - I guess this one stays :) - although are you sure that people are always buying your "product"? Or are they buying an experience associated with your product? Or perhaps a "personal identity" that comes with the use of your product?
  • Place - is amazon.com a place? Is a search engine placement a place?
  • Promotion - people are not taking your corporate BS anymore...And according to the Strategy and Business article I posted in the Facebook "posted items," 80% of all insurance policies will be bought based on information not provided by the insurance companies! So does promotion in the insurance industry still matter? Maybe - if you think that the company can participate in the creation of the user generated content that people will base their decisions on without hiring corporate "shills."
  • Price - many new business models have funny pricing schemes - as in "free"

In the late 80's some academics (I cannot remember who they were) came up with a replacement for the 4P's - the 4C's. While not perfect, the 4 C's may sound a little more modern/appropriate for the times:

  • Customer instead of product
  • Communication instead of promotion
  • Cost instead of price
  • Convenience instead of place...

Using the 4P's as a roadmap for success for new products may not be the best roadmap to use anymore... It is a bit like using north, south, east and west as guides to find your way in deep space.

Thoughts?

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October 1, 2007

Comparing Wal-Mart and Target on Facebook

Both Target and Wal-Mart have sponsored groups on Facebook - both of which are targeted at college kids.

Target has over 7,000 members and mostly positive comments in a vibrant set of discussions. The Wal-Mart group on the other hand has a little over 1,200 members, no discussions are allowed, and the wall postings are mostly negative.

What is the difference do you think, except for the fact that a large portion of the population believes that one of the two companies is truly evil?

The Wal-Mart home page looks like another interactive ad.. The Target home page is more inviting and enlists the help of users to co-create the experience. Any other differences that you can think of that would result in such a difference in membership and tone of conversation?

We can take the discussion to Facebook - in fact I started a thread on the subject in the Marketing 2.0 group, where we now have more members than the Wal-Mart Facebook group.

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September 28, 2007

Do we really need a new and more verbose definition of Marketing?

marketing%20brain%20sm.jpgThe Chartered Institute of Marketing (CIM) decided that its 30-year old definition of marketing was no longer good and that they needed to come up with a new one (via The Economic Times). The results are depressing.

Here's the old definition:

The management process responsible for identifying, anticipating and satisfying customer requirements profitably

The new one:

The strategic business function that creates value by stimulating, facilitating and fulfilling customer demand. It does this by building brands, nurturing innovation, developing relationships, creating good customer service and communicating benefits. By operating customer-centrically, marketing brings positive return on investment, satisfies shareholders and stake-holders from business and the community, and contributes to positive behavioural change and a sustainable business future.

Yikes...the inmates are running the asylum at CIM!

How about something real simple, like Peter Drucker's view on marketing:

The aim of marketing is to make selling superfluous. The aim is to know and understand the customer so well the product or service fits him and sells itself.

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September 27, 2007

So you think that message saturation is a new phenomenon?

In prepping for the interview with brand guru Tom Asacker tomorrow I ran across this fabulous quote in one of his thought pieces - this one his visual illumination on how to connect your brand to THEIR lives.

“Psychologists tell us that the mind is under a continual bombardment of ideas, all of which are trying to make an impression on it. The prospect, therefore, does not sit around with his mind a blank, calmly waiting for someone or something to capture his attention without a struggle. The salesman enters a field already well occupied and must fight for the undivided attention that is a successful sale.”

This was written in Modern Man in 1918!

That right 89 years ago...and who said that message overload is a new phenomenon?

Make sure to join us tomorrow - it should be fun.

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September 26, 2007

Do the dumbest marketers work for cell phone companies, or is it just T-Mobile?

10/03/07 Update: Somebody from T-Mobile got in touch with me and offered me a Blackberry Curve for less money than what new users buy it for. I took the offer. Thankfully someone at T-Mobile is watching out and taking action - but I still think they would benefit from making this a proactive program instead of a reactive one.

I am a T-Mobile user and yesterday I tried to upgrade to the Blackberry Curve. Even though I am long-time loyal T-Mobile customer, spending $180+/mo on their services, I would have to pay $400 for the new handset instead of the $250 that new customers have to pay. I was furious but the guy in the store could not do anything and recommended that I call customer service - which I did. Half an hour into that call I got the same response.

Obviously I am about to become an iPhone user until those guys screw up - no matter how much it will cost me to break my contract (earth to T-Mobile marketing - it isn't about the money, it's about principles on how you treat your customers).

It is of course not the first time that this has happened to me, as I am sure it has happened to you. This time around, however, I figured I would do some back of the envelope calculations to demonstrate the stupidity of this particular marketing technique/abuse campaign.

I am a very loyal customer and if they would have switched me and not screw up too badly in the future I could have easily been with them for another 4 years. At $180/mo, that is a loss of $8,640. I am also a big recommender when I like a product or service, and can point to many people who switched to T-Mobile because of my recommendations. Let's say that 4 people become subscribers every year based on my recommendations (might be more with a cool toy like the Curve), and let's further assume that 50% of those would have joined through some other marketing outreach program from T-Mobile. For the sake of this exercise let's say that those people who do sign up based on my recommendations would spend half of what I spent. That means that by losing those recommendations they would lose $8,640 in referral business the 1st year, $6,480 the 2nd year, $4,320 the 3rd and $2,160 the 4th year. And supposing that the customer acquisition cost, not including handset subsidies, is around $200/customer, the other 8 referrals who might have joined based on other outreach programs might have saved them another $1,600 in acquisition cost.

So the lost opportunity so far for not giving me the discount is $31,840. I know, it should be converted into its net present value to get the real number - but for a $150 rebate??

Now that is not all. I am sufficiently turned off with this idiotic marketing behavior that I am willing to write about it on my blog. With 18,000 unique visitors/month according to Google Analytics and close to 1,200 RSS subscribers according to Feedburner, I can only assume that a few people will not switch to T-Mobile because of my bad experience. Add to that the number of social networks that I belong to and where this recommendation will get syndicated, and the amount of lost business because of my negative recommendation could actually be far worse than the lost business caused by me no longer being a customer and referrer.

How stupid can this be? And when will the government step up and let us own phones that are no longer locked to a particular service provider?


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September 25, 2007

The value of word-of-mouth

The latest issue of the Harvard Business Review has an article on how to calculate the value of customer referrals (article not online yet).

They conducted two studies - one in telecom and one in financial services. Some interesting findings from those calculations include:

  • People refer way less than they say they do

  • The customer referral value is higher than the customer life-cycle value

  • The people with the highest customer life-cycle value are not the ones with the highest referral value

The importance of these findings are twofold. First you need to segment your customers along the customer life-cycle value axis, but also along the customer referral value axis. That will enable you to target your incentives to groups to either increase their usage or increase their referrals, or both. Second, this research shows that customers will low customer life-cycle value can in fact have a higher value to your company through referral value than those with high customer life-cycle value.

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September 24, 2007

Two great telephone interviews coming up

On Friday 9/28 at 1pm I will be interviewing branding expert Tom Asacker, the author of the great book "A Clear Eye for Branding," as well as the blog by the same name. You can find out more information about the event and also sign up through the Facebook event page that was created as part of the Marketing 2.0 Group.

On 10/10 @1pm I will be interviewing word-of-mouth expert Jackie Huba, the author of "Creating Customer Evangelists: How Loyal Customers Become a Volunteer Sales Force," and co-author of "Citizen Marketers: When People are the Message." You can find more information about that session and sign up through the Facebook event page created for this interview.

Soon we will be announcing additional interviews, debates and discussions with other marketing thought-leaders - so stay tuned.

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September 20, 2007

What is the marketing potential of LinkedIn, Facebook and MySpace

Reveries.com conducted a survey on the potential of social networking sites like Facebook, LinkedIn and Myspace as media for marketing activities (pdf download of survey summary results and analysis are here). The main finding seems to be that marketers are in the very early stages of truly understanding the potential of these new networks - with only 18% of the respondents calling the potential of online social networks as a medium for marketing "huge".

Other interesting tidbits from the survey include the fact that marketers see "word of mouth" as the most promising aspect of social networking sites, and that many pointed out that marketers should participate in the conversations that take place on those sites without interrupting them.

Unfortunately, the reality is that many spammers have already invaded Facebook, Myspace and other similar sites. Go check the walls of the most popular interest groups in Facebook to see for yourself - many are littered with posts that are total sales pitches or with information that is totally irrelevant to the group's conversation.

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September 19, 2007

Marketing Voodoo and Fufu Juice Descend on Conversational Marketing...

voodoo%20prayer.jpgFollowing the phone conversation with David Weinberger last week, during which he expressed doubts about whether marketing can be conversational, I ran across this piece on conversational marketing by Joe Marchese on MediaPost's Online Spin blog.

Talking about best practices in conversational marketing he says:

"The best practice is to imagine your brand’s message as a circle and a community’s conversation as another circle; what you are looking for is the area where the circles overlap. Once you find this overlap, you can begin to look for ways to participate in the conversation and achieve your marketing goals at the same time. Three things to remember: First, speak frankly and understand that each individual you are communicating with is a peer, not a demo. Second, as my friend Rishad Tobaccowala pointed out so succinctly, if your product sucks, don’t bother trying to create conversations. Third, remember, conversation without permission is just interrogation."

Further in the article, he suggests that:

"as a marketer, (you) should be prepared to finish the conversations you start."

I think David was right...marketers will screw it up. For those marketers who even get what Joe is trying to say, I can just see them expanding their "brand message circle" to where it totally overlaps with the "community circle". I bet you some brand message "areas" will be turned into ellipses, squares and other fancy shapes just to make the overlap happen.

The very clever ones will claim that the shape of the "community circle" is not really what it appears to be. Surely some marketers will agree that the "community circle" of the "Empower Patients" group on Facebook overlaps with the "brand message circle" of heart burn medicine; or that the 104,633 people who belong to the "Foundation for the protection of Swedish underwear models" cause on Facebook might be interested in engaging in conversations with cruise organizers.

As for the other recommendations - I am not sure that I agree with any of them. For starters, not everyone you are communicating with is a peer. I know they are not a demo, as they are hopefully human. But what if the community consists of a bunch of doctors, and you engage with them because you have the expertise to help them in an area where they don't - say accounting. They are not your peers. Now this is more than bickering about terminology - being peers implies certain acceptable behaviors in conversations which are not appropriate if you are not peers.

And saying that if your product sucks you should not start a conversation is a potentially a misleading recommendation. For the longest time Google docs may have looked like a product that sucks for high end professional services companies that spend a lot of effort in creating sophisticated proposals, and who would not blink a eye at the money required to get a really high-end collaborative environment. For many of us freelancers on the other hand, it was a product sent from heaven - even if the app would crash periodically. The whole "innovator's dilemma" landscape is littered with products that suck but displaced very successful incumbents.

And can we really not end a conversation? Sigh...

OK - so let's try to summarize this:

  • Markets = conversations
  • You either have a legitimate reason to engage in the conversation - or not
  • In some communities it is ok to talk about "crappy" products - in others it isn't
  • Sometimes you have to have permission to speak, and sometimes you don't
  • Communities are not always made up of peers
  • => Marketing can be conversational if you can handle it; but most often it can't - either because of you or in spite of you...

See - easy to understand and no Venn diagram required!

I cannot wait until the conversation marketing experts talk to us like humans and not like demos :)

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September 18, 2007

The new complete marketer

The latest issue of Strategy+Business has a good article on the new complete marketer (requires registration, but free here)

The article is making very similar points to the McKinsey article that got published earlier. They too talk about the need for broadening the marketing function, saying that : "Once a fairly discrete department within the organization, marketing is more and more often being asked to fulfill a far more significant, strategic role with implications for the entire enterprise."

The article also refers to a research project that they conducted in conjunction with the Association of National Advertisers, in which they distilled six themes that the best CMO's adhere to:

  • Put the consumer at the heart of marketing

  • Make marketing accountable

  • Embrace the challenges of new media

  • Recognize the new organizational imperative

  • Live a new agency paradigm

  • Remain adaptable

Some of these themes may seem simple and mundane, but is in how CMO's execute against them that determines the winners from the losers.


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September 17, 2007

Markets are conversations, but should marketing be conversational?

That is the question that David Weinberger tried to answer during a public phone interview I conducted with him last week for the Marketing 2.0 group in Facebook.

His view? Perhaps not - marketing may be not be able to engage in the conversation without corrupting it.

One alternative, which we have implemented for a variety of clients - including the FASTforward conversation on Enterprise 2.0 for FAST Search, and the Mobile Messaging 2.0 conversation sponsored by Airwide - is to host a conversation that is sponsored by that company, but which is editorially independent from the company. We let our clients engage in those conversations, but their engagement is subject to editorial approval. For some of those communities we also started to set up editorial boards who help us make decisions on what is appropriate and what is not.

Of course there are other marketing functions that cannot not be conversational, but more on that later...

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September 12, 2007

Do not miss the interview with David Weinberger this afternoon

This afternoon I will be interviewing David Weinberger on the future of marketing. The interview will happen over phone and is open to the public. You can register for the event on Facebook, or you can simply dial in 1-605-475-8590, the conference room # is 5785861.

We hope to see you there!

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September 4, 2007

Funny Toyota ad in Brazil

(link for RSS subscribers)

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August 23, 2007

Advertisers vs. online identity

On NPR last night they were discussing the impact of of the known presence of registered sex offenders on social networking sites like MySpace or FaceBook on how advertisers will make their advertising decisions...concluding at one point with an expert opining "well if I were P&G I would worry"...

Should they really worry? Do they worry now whether sexual predators subscribe to the Wall Street Journal and The New York Times online? Is the importance of identity in marketing really different online then offline?

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August 21, 2007

Marketing 2.0 - a discussion group on FaceBook

I have created a new discussion group called Marketing 2.0 on FaceBook. 89 people joined the group since I made it public yesterday afternoon - so it has the potential to become a great conversation on the future of marketing.

Join the Marketing 2.0 conversation - and if you want to help organize stuff, drop me a note!

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August 16, 2007

The CMO role is broadening...

McKinsey Quarterly has an interesting article on the evolving role of the CMO (requires subscription). In it they argue that while most CMO's have their hands full, their role should be further expanded - to represent "the voice of the customer" throughout the organization.

(Yes! finally some common sense on the role of the CMO from an authoritative voice ...)

In the face of a rapidly changing customer - ignoring "push" marketing and making buying decisions based on their own research rather than sales recommendations - and with bloggers and other consumer-generated content now determining corporate reputations, companies need to change the way they meet customer needs, the way they innovate, and the way they behave in the marketplace. That will require change efforts across the entire corporation, and who is better positioned to lead those charge than the CMO?

You don't buy the fact that "push" marketing is dead? Then consider this: in consumer electronics more than half of the buyers buy products based on their own research rather than advice from sales staff. More than 60% of baby boomers use the Internet to supplement their doctor's advice (so pharma marketers have to rethink the pitch to doctors). And by 2010, it is expected that 80% of all insurance purchases will be based on consumer research rather than information supplied by insurance agents.

You are not worried about consumer generated content? McKinsey Quarterly says" "User-generated media account for almost one-third of all the time individuals spend on the 100 most visited US Web sites, up from roughly 3 percent just two years ago."

The change in consumer buying habits is broader than some may expect. It is not just that the number of customer touch points with a company has increased dramatically, there is also a more rapid growth of the low and high ends of the the market at the expense of the middle.

So a marketer does not just need to understand the changing customer need as it relates to their product or service, they also need to understand the changing buying needs of those same customers and adapt the whole company to deal with those changes.

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August 13, 2007

Leveraging social media to deal with a corporate public affair's nightmare

Johnson & Johnson is suing the Red Cross and other parties over the use of the Red Cross. Talk about one heck of a juicy story. The reality is that J&J is suing the Red Cross because it is licensing the use of the Red Cross symbol to for-profit organizations, while J&J holds trademarks to the Red Cross symbol since before the Red Cross actually existed.

So what is a VP of corporate communications at J&J to do in response to such a corporate public affair's nightmare? Send out press releases, hold press conferences, use all the traditional tools available to corporate communicators in crisis management mode? Not so for the J&J corporate com VP, Ray Jordan, who took his story to the J&J corporate blog, where he wrote up J&J's point of view in an everyday and personal voice.

The result? A large number of comments and stories generally providing broad support for J&J's point of view. While there are negative comments, the blog achieved what no other crisis communication's vehicle would have delivered.


(via Johnnie Moore)

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July 27, 2007

Interesting research on online video usage

The Pew Internet & American Life Project released some interesting research about online video usage. It was especially interesting to see those results in light of a project that we are working on (work in progress at www.crappybills.com - feedback welcome!).

57% of online adults have used the Internet to watch or download videos, and 19% do so on a daily basis. More than half (57%) of online video viewers share links with others, and 75% say they receive links to online videos from others!

For young adults (18-29) comedy is the biggest draw, with 56% watching humorous videos.

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July 25, 2007

64% of emails get read on mobile devices...

...and chances are that your email campaigns look like crap on those devices.

New research from MarketingSherpa indeed shows that 64% of all emails get read on mobile devices (available for free for a period of time here). The article has some recommendations on what to do if you are a heavy email marketer, and also contains some interesting stats on mobile email usage.

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July 24, 2007

In New Product Introduction - more is less

The Executive Corporate Board has a great white paper entitled "Boosting the Impact of Innovation and New Product Launch Processes." In it they have some mini case studies of how companies who try to achieve top line growth by introducing an increasing number of product/service extensions often times end up with reduced revenues instead.

They also recommend that companies focus on "market segment" innovation rather than pure product innovation - which has traditionally been used to help differentiate products. With the advent of fast followers becoming increasingly faster, product innovation no longer helps with product differentiation. They describe the case studies of P&G and Best Buy as good examples of "market segment" innovation - where you look at product innovation based on the insights gained from well defined market segments.

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July 23, 2007

What do you do when the old foundations are no longer there - attention, differentiation, and loyalty...

Many of today’s companies are realizing that traditional marketing no longer works – they are finding it increasingly difficult to reach their target audience and to differentiate their offering in ever more overcrowded markets, as well as finding that with commoditization becoming the norm rather than the exception, customer loyalty is becoming a thing of the past.

And while many of today’s agencies are catching up to the new market realities, most of them have yet to make the shift and help their customers in ways that deliver quantifiable ROI’s – which is why many companies are turning for help to alternative sources.

The key to success these days is a company's ability to tap into communities - existing or created ones. Communities can help with everything - from getting the word out, to gaining insight from the market on product requirements to market research and innovation.

As a few of us are embarking on a project to quantify how companies are leveraging communities within their business practices and how they measure success, we would love to hear from anyone involved with business communities. If you have a story to tell, please contact me at francois [at] emergencemarketing [dot] com

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July 19, 2007

When large companies buy innovative startups - a case study: HP buying LogoWorks

[warning: rant coming] I have used LogoWorks for 4 projects now. The first two experiences were so delightful that I could not stop talking about them - resulting in more than one referral customer. The third experience had a little problem, but they addressed it by giving me a change, which I would have had to pay for, for free - so I was still a champion.

Then came my last experience. I ordered a logo last Wednesday, which was supposed to be ready this past Monday at 4:37pm Mountain time. When that time came and went and nothing happened I emailed support - getting a machine generated response. The next day came and went and nothing happened again, so I emailed support and got that same machine generated response. On Wednesday I took a closer look at that email only to find out that it listed the email for my project manager and that I should contact that person (for some obscure reason the system could not do that I guess...). So I did - sent an irate email to my project manager.

She simply responded: "Sir, you must complete your billing informatin for us to continue." After a quick check, I found that not only had I received a receipt, my credit card had been charged. So I sent back all the supporting information with a closing saying: "Now what? This is RIDICULOUS..."

Now at some point in time I did create another account by accident, but that one had no projects in it - all four of my projects were in the same account that kept showing me:

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My project manager sent me another saying: "Ok Sir I am so sorry about this I was looking up your project under your gmail address...I can see that the problem with your logo is that we do not have enough information about the company to get started." Now, just like any other time I created a project with them, I followed the instructions and filled out the whole creative brief. But I never received an email asking me for more info...not at my main account nor at the other account, which had an email that I also use. In addition, I could not even access the brief to add more info...it was closed and telling me that designers were working on my project. I complained to my project manager about the fact that no one ever contacted me and that there was no way for me to add info to the profile.

My project manager responded by explaining that they never contacted me because they were looking at the other account - the one that has no active projects in it! And that I could email her the additional information about my company.

What are they thinking? That their customers are stupid or something?

So I responded: "That makes no sense (and note that in my experience as a marketer it is never a good idea to BS a customer – especially not an irate one)...But even if your system would have gotten confused, as you are, then I should have received a email there and that did not happen either...I am still not sure what info you require to continue….when you say you can email, what do you need? Address, telephone number, number of employees, color of my eyes? I am pretty sure that I said that this was a marketing services company – providing marketing consulting services. What else do you need???? When you are the one that is screwing up and aggravating the customer beyond belief, don’t you think you should be a little more helpful in trying to get the customer somewhat satisfied again?"

That was yesterday afternoon....I have not heard from them since - and my dashboard still says "Designers are working on design concepts....Check back Jul 16, 2007 4:37 PM Mountain Standard Time to view design concepts."

Is this a case of a large company screwing up a gem by integrating it with their customer prevention processes? Or is this just a case of a team that made money on the acquisition and lost their passion around the business? Obviously I cannot tell, but having done 4 projects now, I could clearly see the downhill trend in this case.

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What do you do when a customer insists on a standalone ROI?

So you have developed a project which enhances PR, improves the amount of feedback you gain into the new product development process, helps with lead generation and which perhaps impacts a few other business areas. Yet your customer or your manager insists that you measure ROI on the project as a standalone project - not including how it positively impacts other business areas for which you are not responsible for.

What do you do?

  • Quit?

  • Modify your project so that it can be measured as a standalone project - perhaps at the expense of positively impacting other business areas

  • Wait until they shut down your project

Obviously, none of those options are beneficial to the company as a whole, yet considering that it is unlikely that you can change the manager or the customer, those seem like the only options. One way or the other your project will end up being crippled at the ROI altar...


Measuring ROI can hurt companies if not done properly - badly!

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July 2, 2007

Cool PSP ad

Sony came out with a fake book - including fake hands - to let you play with your PSP while looking seriously busy with your book. Too bad it's in Italy or I would definitely try to get one of those :)

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[via engadget]

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May 17, 2007

Companies need to add "Customer UI" expertise to their talent pool

And I am not talking about product UI (User Interface) - I am talking about the "company" UI from the customer's point of view. After all my poor buying experiences with companies that have very bright and dedicated people working for them, it became clear to me that most companies should hire or staff a group of independent customer advocates with UI experiences to ensure that all the touch-points through which a customer can interact with the company are all compatible with one another and are all delivering against the same promise that is being made during the pre-sale cycle. That includes packaging, in-store support/returns/etc, phone support/billing/etc., web support/shops/registration/etc, and any other way through which a customer could interact with the company after they first buy a product.

The fact that HP as a company has multiple logins for different shops, and that a "customer" case manager for one division can not handle problems the customer has with another division would go away if you would have a customer-centric company UI group who would police this stuff. The fact that my insurance company sends me statements with a different look and feel, different information in the same places, and different content for the various policies I have would go away as well. The fact that most corporate web sites are organized around the companies' divisions instead of being customer-centric would also go away...you get the point.

A good example of a company doing this right is Apple. I recently bought a new iMac for my son, as well as a new Airport Extreme to upgrade my home office network. I registered those products online, and required some support for setting up disk and printer sharing with the new Airport. I have also been using iTunes to buy my music for years. At Apple, all the touch-points reinforce the same message - we are easy and fun to work with. From the store interactions to the packaging, to the online support and registration systems, all the touch-points are perfectly tuned to one another and they all have "me" at the center.

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May 14, 2007

Being in "HP Hell" - the PC Manufacturer's Hell Sequel!


[UPDATE 05/16/07] After spending between 15-20 hours on the new computer in the last week, HP fixed their telephone lines and I got in touch with my case manager - who was very efficient. They are going to replace the whole computer. Fedex is picking up the old one today and I should have the new one next week.

[UPDATE 05/17/07] Someone from the small & medium business division emailed me to apologize for sending me two monitors - apparently this error occurred due to a system issue. She wanted to know if I "would like to keep the monitor or return it; this would be at no charge of course." I assume the return would be at no charge and not the "keep" option...sigh


angrysm.jpgDepending on how you look at it, this could be the funniest or saddest buying experience - I will let you be the judge of that. This is my story of trying to buy an HP media center PC - a fairly high end machine by desktop standards. Unfortunately there are so many "Colbert-esque" twists and turns to this story that it became really long - so I apologize for the length of this marketing horror story...but I am sure you will relate to some parts of it.

First was the actual buying experience - I decided to buy an HP Media Center from the Home Office division but did not like the monitor choices from that online store. In looking around I found what I wanted in their small and medium business division's store. Trying to buy that monitor did not exactly go as smooth as expected. Not only did I need a different account with different rules to be able to buy this product, which all by itself caused some problems as I described last week, but they shipped me two monitors - even though all my records and confirmations show that I only purchased one. You might think that was a good thing - getting a spare monitor for free. Not so, they also charged me twice (not right away, mind you, but a few days after I received the order)!

Hmmm...come to think of it, I may have stumbled across the secret HP formula for success...just send duplicate orders to your customers, charge them for it only a few days after someone accepted the order, and hope that nobody will notice :)

The real story started when I got my brand new machine on Tuesday of last week. Somehow I could not get the sound to work. I tinkered with it for a few nights thinking that it must be a classic case of "stupid user errors," but no, I could not get it to work. On Friday I finally got in touch with their support department and spend a long time online with the first technician, who took me through all her possible help screens to debug my problem. She finally told me that the system was somehow not recognizing the Soundblaster card, which her system showed as having shipped with my new computer, and that I should shut off the computer, open up the tower and re-seat the Soundblaster card. And if that did not work I should reload the drivers. ..easy, that should solve my problem.

So I did that, but never found the Soundblaster card. Thinking that perhaps Soundblaster had stopped branding their product, I decided to re-seat all the boards I could find. When that did not work I reloaded some audio drivers but not the Soundblaster drivers, as I could not find them. So I got back in touch with the award winning HP support department.

The second tech took me through many of the same steps and also some new ones. After what seemed like an eternity she finally gave up, sending me a link to all the help screens she was going through to troubleshoot my system and saying: "Francois, Please try the steps from the article if that does not resolve the issue we will take the PC for physical evaluation. This will get your issue resolved" (in quotes taken from the actual chat transcript) I thought she had not noticed that besides buying a PC with all the bells and whistles, I had also bought an in-house support plan - the type that promises to send a technician to your house or office if something does not work. So I mentioned that to her and also said that her proposed resolution was unacceptable. I also asked her how I could return the PC and inquired about further escalation possibilities. By now, the only thing she was concerned about was: "Are you ready to send the PC to our factory, so that we would physically evaluate the PC and get the issue resolved." When I asked what was included as part of the in-house service plan she answered "The in-home service would cover replacement of hardware component if any.." How she decided that this was not a hardware issue is a mystery to me - after all the first tech rep told me that it sounded like the system was not recognizing a piece of hardware....was it even there? When I asked for a manager she told me that a "quality manager" would call me back within 48 hours - which BTW still has not happened.

I can assure you that it was a lovely way to spend 3 hours on a Friday night - thank you HP!

On Saturday I took a closer look at the in-house plan that I bought, only to realize that you have to register that thing within 10 days or else it becomes null and void. I opted for the online registration. The system prompted me for some personal information and then for my products' serial numbers and product numbers. At first it would not accept the product numbers which were listed on both the computer itself and on the invoice. It presented me instead with a series of numbers that did not resemble anything that I had received from HP. I picked one anyway but then the system told me that it could not register my computer's serial number as it did not exist. Thankfully there was a human-based backup system reachable by fax which figured it out based on the numbers that the online process had rejected.

...another hour well spent on a beautiful Saturday - thank you again HP.

As you can imagine, by now I was livid...

I got a sliver of hope when I discovered the HP Marketing Excellence Blog authored by an HP VP of Marketing Strategy & Excellence who had just received some award by Brandweek for being a marketing exec who "gets it." Hooray, someone at HP was engaging in the market conversation. I left a comment on his blog saying that I wished I could congratulate him for his new award, but that while he might "get it," he had obviously not been able to instill that "getting it" into his company's culture. Since marketing is all about making sure that all the customer touch points reinforce the same marketing promise you make at the point of sale, I told him that I could not consider HP's marketing successful and worthy of an award. He approved the comment really fast and sent me an email explaining that he would see what he could do to help me. I thanked him with some additional details of my ordeal so he would have all the ammunition to get this resolved. I also lefr a message on their customer experience blog - pointing out some the problems with site incompatibilities which I had encountered and the form that did not work, but that comment has yet to be approved.

Unfortunately things did not improve after that...

When by 3pm yesterday I did not get a call from anyone, I sent the VP a quick note letting him know that I had not heard from anyone. Shortly afterwards I got a call from a senior case manager who introduced herself and gave me a phone number with two extensions, one for my case and one her personal extension - unfortunately I was on the phone when she called and so that information came to me via my voice mail box. When I called back and dialed her extension, I got a message that this extension was an invalid extension. When I dialed the extension for my case the system would hang up on me. Thinking that perhaps it had to do with my VoIP service I tried repeatedly from my cell (T-Mobile) as well as from my home phone (Verizon) - but in each case the system would keep hanging up on me. I recorded this experience, so you can listen to what it sounds like to call HP support if interested.

Not believing that this award-winning support department would do this sort of thing I kept trying, finally entering a random set of numbers which got me to by-pass the IVR and put me into the general queue for their case management service. When I finally got a live person I asked to be connected with the extension of my case manager - only to be told that he could not connect me to that extension. He asked me for all sorts of information to identify myself and subsequently transferred me to someone else who asked me for all the same information - and also unwilling to connect me to my case manager. 45 minutes later I got transferred to a third person who first asked me "how" he could help me, but then quickly sensed the mood and tried to connect me with my case manager. When that failed he asked for my number and proceeded to give me the "right" number for me to call back - which was the same number I had tried all along. I asked him to use his cell phone or some other phone to call that number himself and verify that it kept hanging up on me. He said he would, put me on hold and NEVER came back. I did receive an email from my case manager saying that she was unsuccessful in reaching me via phone (1 try!), but that I could call her back at her personal extension - that same defunct number. I tried to reply to the message but it was one of the mailboxes you cannot reply to...

...another 2 hours well spent - thank you HP!

If anyone at HP is listening, here are a couple of recommendations:

  • Stop your marketing - if your post-sale processes are set up to destroy your brand promise as it did for me, then all your marketing dollars are wasted resources. They will not buy customer loyalty, which is where your long term profitability will come from

  • Stop focusing on optimizing mind-less processes. Empower some humans to by-pass the processes and get the customer the help they deserve. Build escalation steps within your support infrastructure that includes real techies - not telephone operators who are following a set of screenshots to debug a system

  • Fix my problem or send someone to pack up and pick up this machine - as a small business owner I cannot afford to spend any more time on your problems, and I certainly do not want to inherit them

Buying and supporting PCs is getting worse than dealing with airlines. Even my $4-7 (for full fault tolerance) a month ISP is offering me better service.

Hopefully someone at Lenovo is paying attention - if this is how their competition deals with customers it cannot be that hard to capture all those lost souls and turn them into life-long loyal customers.

Click to hear the sound of HP support hanging up on you...


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Beyond Buzz - the next generation of word-of-mouth marketing

beyond buzz.jpgI have been remiss at writing about a few good books I read in the past few months. My reading list is also desperately out of date...

One book which definitely should interest any marketing practitioner is a book by my good friend Lois Kelly, who also blogs on the Foghound blog.

The book - called Beyond Buzz, The Next Generation of Word-of-Mouth Marketing - is a great "how to" book with a ton of actionable ideas. The author does a great job clarifying the distinction between making meaning and making buzz. She also teaches you how to uncover interesting things about your company or product and turn them into "point of views" that people will want to talk to you about, she tells you how to organize customer listening tours, and much more. The book also provides some great frameworks and questionnaires to help you turn word-of-mouth strategies into actionable plans that will work, and not fizzle out or backfire, as many of them do.

Definitely a great book to have on your office bookshelf.

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May 11, 2007

Sony delivers the worst ROI yet!

customer service hell sm.jpg[rant coming] OK, so I am in a complaining mood this week, but as a passionate marketing person it is so depressing to see how large companies deal with their customers. My last mind-bending experience is with Sony.

I bought a Viao laptop from their online store last week and picked a model/color that was in stock and that was going to ship this past Tuesday - May 8th. I even paid for the 2 day shipping upgrade as I wanted it for the weekend. On May 8 I went online to check on my order and their system now showed that my order was now not scheduled to ship until May 9th. So on May 9th I went and checked and the system showed that my brand new toy would ship that day. When I checked on May 10th I was shocked to find the system now yelling at me: "CURRENTLY OUT OF STOCK, ship date unknown". Never did I receive a notice from Sony explaining what was happening. The only thing I got from them was a useless dock that I had ordered with the PC. So I emailed them to complain about my 2 day shipping surcharge which was now meaningless and also to ask them for clarification on what was going to happen and how I could potentially cancel my order and return the dock.

36 hours later, the system is still yelling: "CURRENTLY OUT OF STOCK, Ship date unknown" and I still have to receive my first email or phone call from Sony. What did I do wrong?

Companies operating in the consumer electronics space have to know that as long as they do not screw up, people will continue to buy their brands when it's time for an upgrade. That is true for PC's, printers, cameras, you name it - heck - I bought 7 Dells before they screwed up. So how can a company, who is currently not doing that well to begin with, first screw up on their supply chain management so than a product that showed in stock suddenly goes out of stock with an unknown ship date, and secondly screw up even more by not communicating with a customer who not only paid extra for expedited shipping, but who also took the time to alert them about the fact that he was becoming irate? And did I mention that I usually buy top of the line, or should I say with tons of options that you don't really need - so over a lifetime this could mean tens of thousands of dollars to Sony just from this one customer - me.

These are the basics...this is not sophisticated management theory:
a) make sure you have a reliable supply chain
b) have an impeccable customer service process - especially when a) fails

My Return on Information with Sony is close to zero...

sigh...

[end of rant]

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May 2, 2007

Are you ready for "bigseed" marketing?

virussm.jpgEven though most viral marketing campaigns fail - many companies are jumping on the bandwagon based on the few well-documented case studies that keep being recycled. The same Harvard Business Review quoted yesterday has another interesting forethought on the mechanics of viral marketing campaigns and how to increase their success ratios - this one by Columbia University Prof. Duncan Watts and Jonah Peretti, co-founder of the Huffington Post.

Standard viral marketing is based on an analogy with the spread of infectious diseases. If you start with a seed of individuals who spread the message by "infecting" their friends, the expected number of new infectious people generated by each one is called the "reproduction rate," or R. If R is larger than 1 then you have a successful viral marketing campaign, if it is smaller than 1 then your campaign will fizzle out.

The point that the authors are making is that unlike infectious diseases marketers have a few more controls than diseases. First they can start with a much bigger seed. And with some of the new social networking/sharing tools that enable people to more easily forward messages to friends, they can also improve their message reproduction rate. And both those factors add up. Say that you have a reproduction rate of 0.5 in your campaign and that you send it to 10,000 people, then those people would pass it on to 5,000 and those would pass it on to 2,500 and so on - eventually reaching 20,000 people, twice your original seed. By having the ability to tweak both the size of the seed and the reproduction rate, you can optimize your campaigns - even when they are not totally "viral."

One interesting piece of software that they mention is ForewardTrack, an open source applications originally designed to promote online activism. The system tracks and maps the diffusion of email forwards, political calls-to-action, and online petitions. It can trace email forwards, map the impact of blogs, and facilitate web-based sign-ups and social networking. Many commercial entities, including P&G, are now using ForwardTrack as part of their email campaigns.

Fascinating...

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April 12, 2007

Artificially creating barriers to adoption...

I have been looking for a group "to-do" list for a long time, and never really found what I was looking for. Most to-do lists are for individual usage - which is not what I am looking for. And unless you are Google, I do not even get why people bother developing those apps as there are a ton of applications on people's desktop that already have that service integrated - for free.

But as far as a simple group task list for truly distributed teams....there isn't much available. I finally found a solution that looked promising....integrating/synchronizing with Google calendar, etc. - all for $15. So I bought it thinking that would solve my problem. Except that when I tried to invite one of my closest associates, it required that he too buy that same application. That was almost a week ago, and of course that has not happened yet.

How can people do that? Group applications already have plenty of barriers to adoption to overcome - so why a company would artificially add one extra barrier in the mix is a mystery to me. I bet you that most "potential" users of this app would use it with teams of 2-3 people. So if that is the case, charge the buyer of the app $30-50 instead of trying to get $15 from all the users. That way you may end up with some real users instead of frustrated buyers.

Elementary...my dear Watson...

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April 11, 2007

Leveraging envy to generate demand

This past Sunday, the Boston Globe reported on new research that shows that giving preferential treatment to a few can generate demand from everyone. The research was part of doctoral dissertation by Allison K.C. Lo.

As part of the research she did some amazing experiments. Some which were somewhat predictable - like the fact that by giving away swimsuits to the Olympic swimmers Speedo increased its sales of swimwear, or that by hosting free tastings exclusively for bartenders, Belvedere Vodka became one of the most successful Vodka launches. It is a known fact in marketing that people want to be associated with the "experts."

Other experiments were less evident, such as the one that showed that you do not even need an expert endorsement to convey that expert comparison. In one of those experiments, people were offered a camcorder with a $30 gift certificate to either Wal-Mart of for a for a Seagate external hard drive, which a tech-savvy buyer might use to store digital photos or video. What they found is that people preferred the Wal-Mart gift certificate over the Seagate because it gave them more flexibility. When they repeated the experiment with comparable camcorders that each came with just one offer, the researchers found that whichever camcorder came with the Seagate coupon won. The reason was because the hard drive promotion was perceived as something that high end camcorder buyers would buy. And people wanted to be associated with the high end guys.

So leveraging envy as part of your marketing works...probably just like leveraging people's ego, avarice and ambition...

What's next?

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April 9, 2007

Doing market research differently

The Enterprise 2.0 RAVE that I described last Friday is not just another event. It came about as a market research project to increase the understanding around everything Enterprise 2.0 - product requirements, maturity of the market, success of pilot programs, etc. But instead of spending hours on the phone or in person doing interviews with willing candidates we decided to do something fun and get them all together at once for a giant brainstorming session.

The benefits of doing it this way are quite clear. Instead of having a one way delivery of value we created an environment in which there is a two way exchange of value - as every practitioner who is involved with Enterprise 2.0 projects is dying to meet other people who are going through the same pains. And the value to the market researcher is much higher as well - if we get 80 people to attend that means a minimum of 30 focused conversations with 8 people each on specific issues surrounding Enterprise 2.0 deployments.


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March 29, 2007

Perceived quality loss lags actual quality loss by years

New research published in the latest issue of the Harvard Business Review (available for free here) shows that changes in product quality do not immediately get perceived as such by customers - in fact it can take years for perceptions to catch up with actual changes.

The study, which covered 241 products in 46 categories over a period of 12 years, and which involved over 30,000 consumers, found that most of the perception catch-up happens after the second year following the quality change. Full adjustment to the changes takes 5 to 7 years. Those numbers vary depending on the brand, frequency and purchase and other factors, but even with products where consumers were quick to gauge the change, like toothpaste, it took 3.9 years.

This has some far reaching implications. Not only does it explain other research that shows that it takes 5 to 10 years for product quality improvements to result in higher profits, it also means that companies have a long time to course-correct when something bad happens with their product (assuming they do not get hammered in the blogosphere that is).

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March 27, 2007

Think beyond the product itself when identifying customer needs

gorillastudyinghumanbrainsm.jpgMany products in the marketplace have reached or surpassed their functionality saturation point - that point where new features largely go unused and are no longer used as a competitive differentiator. Phones, many software applications, copiers, watches, cars, baby products and many other product categories have reached that point.

When trying to uncover customer needs for those product categories, product managers need to think beyond the product itself because it isn't the product itself that customers are buying anymore.

Take cell phones - some people are buying and using them as ultra-lightweight computing devices, comparing them to small notebooks when making a buying decision. Others are buying them as a fashion statement. In both cases it's not the phone needs that will lead to successful new products, it's all about understanding the current fashion trends and a user's mobile computing needs .

Or take the copier market - most copiers will have the same feature set as most other copiers in that price range and most will have a similar lifespan and lifetime maintenance cost. A small business owner may make her buying decision based on the financing options and upgrade plans that are available - in essence turning the copier selection and buying process into a financial product selection and buying process.

And how many people do you think buy baby products for their "product" features? Most are basing their decisions on safety factors - essentially buying safety products with a twist of fashion.

When looking around at product offerings in these categories, there is evidence that some companies are getting it. But there is also a ton of evidence that many product managers are still operating in the dark ages of "feature-itis."

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March 26, 2007

A world without the 30 second spot or the glossy spread?

Bob Garfield's Chaos Scenario 2.0 is a great read in the online section of AdAge today.

Interrupt marketing is dead! Traditional media and traditional advertisers are locked into a death spiral...word of mouth and social networking are in...agencies are out...

Good stuff.

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March 19, 2007

Marketing shift: from 'one->to->many' to 'many<->to<->one'

1to1.jpgAt last week's Community 2.0 conference, an interesting discussion developed after John Hagel's keynote address, in which he said that customers do not want 1:1 marketing, but that they instead want to be put in touch with many connections and resources.

In a way, that is like describing marketing evolution from the one->to->many, to the 1<->to<->1 to the many<->to<->one, with the vendor having the opportunity to facilitate the connections between customers and other people and resources - also called community building. Despite a wave of excitement about the potential of 1to1 marketing in the 90's, popularized by the success of the One to One books by Rogers and Peppers, one attendee argued that we were never able to successfully achieve 1to1 and that therefore many-to-one may be an elusive goal as well.

But is this true? Is this truly an evolutionary process in which we cannot skip a step until the previous one is complete? Or did we missread the need for many-to-one as the need for one-to-one and launched on another marketing fad that never materialized? Could community-based marketing be like that as well?

It could be argued that this time we are dealing with the genuine article - and that some companies have known that for a very long time - skipping the 1to1 marketing wave all together in favor of many<->to<->one, and in the process reaping tremendous competitive advantages (note the bi-directionality of the arrows - a key ingredient to make it work!).

What do you think? Community-based marketing: another fad or a real competitive differentiator?

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February 16, 2007

Time shifting and skipping ads on DVR's is not as prevalent as previously believed

While data from Tivo showed that 70% of what TiVo owners watch is time shifted and that TiVo owners tend to fast forward about 70% of the ads when viewing pre-recorded content (see also Thomas Hawk for written report on the iMedia podcast where a Tivo representative discloses that data), new data released by Nielsen now shows that people who own DVR's still watch 2/3 of the ads and that 50% of them watch their shows in real time.

That is quite a shift in less than one year...or could it just be that Tivo owners are more geeky than other DVR owners so that their data is skewed compared to the market averages?

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February 15, 2007

You can no longer hold on to your brands...

street_illusion_18.jpgLast week I moderated a webinar panel on the role of communities in B2B marketing with Rob Leavitt from ITSMA and also with Mike Smith from BMC Software (recording can be found here - requires registration). It was a great conversation with good lessons learned from BMC Software.

As part of my opening comments I harped on one of my favorite topics again - that the field of marketing is undergoing tectonic shifts and that the old rules no longer apply. The old techniques of interrupt marketing that involved interrupting people to show them product or company messages or as Alan Moore, one of the co-authors of Communities Dominate Brands, calls it - the just in case marketing techniques - do not work anymore!

You can no longer broadcast messages to individuals and hope that they will get it and retell your story. Funding traditional communication programs like that is like pouring water into a sinking ship. Not only are people fed up with it, you are also competing with an exponentially growing number of companies who are trying to reach the same people. Plus you now compete across multiple media - many of them always-on and where prime time is between 9-5.

As a marketer you really need to solve the ambient findability problem - be there when people need you and where they need you. Madison Avenue calls it "engagement" - although most agencies are very confused about what engagement means. No it does not mean engagement with the ad...

One way of solving this riddle is to engage with communities who are already communicating amongst themselves about topics that you want to talk about. If your message resonates with them then it will automatically get amplified within the community before being "retold" outside the community. In some cases they may not like your message, but still like what you do and simply replace your message with something else before retelling the story. And then there will always be the case where they really don't like what your doing, will reject your message and talk back and in the process expose flaws with your company or product in public.

This is of course the end of control. This will happen whether you like it or not. You have to give up your brand to your communities to succeed. And if you do it right you will once again reach your customers and do it with budgets that are dramatically lower than what you are spending today.

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February 14, 2007

New Real Beauty Campaign by Dove

This one from the UK...(via 50 plus marketing)

Link here for RSS subscribers.

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February 12, 2007

Alaska Airlines Sucks! (WARNING: DO NOT FLY!)

Alaska%20Air.jpgLast Friday afternoon I was supposed to fly from San Diego to San Francisco on Alaska Airlines. We all know that the airline industry as a whole has gone down the tubes lately, but the 7 hour ordeal I went through was just a little over the top - talk about a business that could not care less about their customers.

It first started with weather and air traffic control delays - a problem which seemed unique to them as 3 United Airlines flights for San Francisco left with no problems. They then boarded us and announced that we had one additional delay. When our time to leave came up they told us that one of the air-conditioning packs was on the fritz - even though I could swear that we were still getting fresh air through the vents. When that was fixed, a circuit breaker tripped, and we all had to deplane. We each got a $6 meal voucher which got you a small pizza with no toppings and no drink - pepperoni or anything else had to be paid for by the customer.

We were then told/lied to that we would leave on an airplane that was parked at the gate next door with the same crew except for a new pilot. In the meantime I noticed that they had changed the flight number at the gate with the supposedly broken plane to a later San Fran flight.

When we finally boarded our flight one guy from the later flight tried to get on ours and was told that his flight would board momentarily at the gate next door. Knowing that the plane was broken, and having been lied to all night, I felt bad for him - thinking he would not see San Fran that night.

Our new plane had no power, since power could only be turned on by the pilot who had not yet arrived - a new twist in the story as I was led to believe that we had a new pilot who was already in the San Diego airport. No power means that it really gets hot, and it also means that the toilets do not flush, so it really gets stinky too. After being in there for awhile we saw the other airplane - the one we were on originally - take off for San Francisco! Once that flight was gone we were told that our pilot had arrived but that he was so ill that he had to be taken away by paramedics...so they cancelled the flight.

Couldn't they come up with a better story?

Obviously they decided that since we were so delayed already they were better off canceling our flight and having the next flight be an on-time departure. Instead of telling us that, they kept us at the airport for another few unnecessary hours and then made us board an empty plane so that we would not rebel when the later flight took off...

...of course, there was no budget for overnight accommodations...you were on your own - they would not even make suggestions on where to stay. There was an Alaska Airlines manager at the airport but he was not available to speak with customers - I bet he was fearing for his safety at that point.

When I tried to leave for San Francisco the next day, the only thing they could do for me was to get me there by 10:30pm through Portland. When I asked if they could put me on another airline they rudely told me that they could not do that and that I had to buy another ticket from another airline directly if I wanted to see San Francisco before 10:30 that night...

Note to self - never even think of flying Alaska Air again. They are rude and they don't even try to pretend that they are not lying to their customers.

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February 2, 2007

A day in the life of a product manager

The Pragmatic Marketer recently released their 2006 Annual Product Management and Marketing Survey (hmmm...maybe they should have called it the 2007 survey...)

Some interesting findings include:

  • on average companies have 5 developers for each product manager

  • about 10% of PM spend more than one day a week blogging

  • more than 80% of PM spend less than 1 hour a week measuring marketing programs

  • 19% work in product management, 21% in marketing, and 10% in development


I wish I could get my hands on the names of the 7% companies where product management works in sales. That would make for some good stocks to short!

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January 30, 2007

More research on viral marketing - and supporting the limited role of "influentials"

Right on the heels of learning that the influentials may in fact not be all that influential in causing trends and other social "epidemics", here comes more research (pdf) confirming the limited role of the influentials and heeding marketers that some viral marketing techniques could easily backfire on them.

Jure Leskoved from Carnegie Mellon, Lada Adamic from the University of Michigan and Bernardo Huberman from HP Labs collaborated on this research project where they looked at the dynamics of viral marketing.

Here are some of their findings:

  • We find that most recommendation chains do not grow very large, often terminating with the initial purchase of a product.

  • Marketers should take heed that providing excessive incentives for customers to recommend
  • product purchases are not far from usual 80-20 rule (the top twenty percent of the products account for 20 percent of the sales), with the top 20% of the products contributing to about half the sales

  • individuals' likelihood of purchasing a product initially increases as they receive additional recommendations for it, but a saturation point is quickly reached. Interestingly, as more recommendations are sent between the same two individuals, the likelihood that they will be heeded decreases

  • Marketers should take heed that providing excessive incentives for customers to recommend products could backfire by weakening the credibility of the very same links they are trying to take advantage of.

  • ...we find that the probability of purchasing a product increases with the number of recommendations received, but quickly saturates to a constant and relatively low probability. This means individuals are often impervious to the recommendations of their friends, and resist buying items that they do not want.

  • we find that there are limits to how influential high degree nodes are in the recommendation network. As a person sends out more and more recommendations past a certain number for a product, the success per recommendation declines. This would seem to indicate that individuals have influence over a few of their friends, but not everybody they know.

  • Finally, we presented a model which shows that smaller and more tightly knit groups tend to be more conducive to viral marketing.

This paper also exposes the potential long term negative effects of commercializing relationships on the value of personal recommendations and word of mouth in general - a practice used aggressively by some well known marketers.

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January 27, 2007

Size does not matter

This is a great ad for the new Golf GTI with its tiny engine that still produces plenty of horsepower...(via the thinking blog)

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January 24, 2007

Online word of mouth is much more powerful (or dangerous) than offline word of mouth

customer service hell sm.jpgThe latest issue of Revenue magazine has an article on the impact of online research on off-line purchases. Quoting from comScore Networks research they found that in the "toy and hobby" category, 42% of people who did online research bought a product directly related to that research - except that 88% of those people made their purchase off-line and only 12% made their purchase online. In the Consumer electronics space, 18% bought based on online research - but 93% of those bought off-line.

Quoting from Opinion Research, they found that "77% of people who do online research before buying a product purchase something when they went to the store the last time they did online research," with "over half (52%) purchased just the item they did research on, while another 18% purchased that item and additional items."

Another Research paper, this one from Perfomics is quoted as saying that "the majority of consumers conduct research online during his year's holiday season and 43% plan to make both online and offline purchases based on that research." It goes further to say that "the majority of consumers become more brand- sensitive after conducting online research."

That pretty much confirms that unlike what some analyst firms pretend, online word of mouth has the potential of being much more effective or dangerous than off-line word of mouth.

Take the personal example of Mercedes Benz which was well documented on this site (Mercedes - a case study on how to squander a great brand, Mercedes says that cars fail in the first 50K miles - after that it's the fault driver, Mercedes Benz does not care about its customers, and Mercedes Benz - poor customer service ROI). For a long while, those rants came out on the top of a variety of Google searches. So if half of the potential buyers do online research before buying, a disproportionate number of them will run into my online rants and at least pause, if not decide against buying this product. The online negative word of mouth reaches a much larger audience than any off-line word of mouth recommendation would have, plus it spans over a much longer period of time, and it also attracts additional negative word of mouth, which only makes the case stronger!

As an example, witness some of the comment excerpts that are still being made on those stories on a regular basis:

  • "Just read your blog, Just decided not to purchase a 60K Mercedes I was looking to buy." (01/04/07)

  • "I drive a C180 classic kompressor 52 plate with 35K on the clock. Since day of purchase in Feb 06 the colland warning light comes on every few days. The feeder hose has been replaced, the cap and the head gaskett and still the coolant light comes on every few days. My local MB dealership are at a loss what else to do." (11/21/06)

  • "I for one will never buy a Mercedes Car again and will continue to discourage others from doing so" (11/07/06)

  • "I PURCHASED MERCEDES ML 350, 2006 IN APRIL 2006. FROM DRIVER'S SEAT, THE LEFT SIDE VIEW MIRROR IS ONLY PARTIALLY VISIBLE! I SHOWED THIS TO HBL DEALERSHIP IN TYSONS CORNER VIRGINIA, AND THEY AGREED TO THIS DESIGN ISSUE, WHIC CANNOT BE FIXED, EVEN IF IT IS A SAFETY HAZARD...THE BEST REMEDY IS TO SHUT OFF THE AC DUCTS ON BOTH DRIVER AND PASSGENGER SIDE! THIS IS THE RESPONSE I GOT, FOR PAYING HIGH PRICE FOR THIS EXPENSIVE CAR " (11/03/06)

  • "I like most people who feel badly let down by MB will never buy another car from them, I thought I was buying quality and reliabilty." (07/27/06)

  • "Like some other people, I decided I shall never buy or even hire a Mercedes car again." (06/22/06)

  • "Funny that I stumbled on your site googling MZB's home office customer service...I should have learned my lesson the first time. I will never lease/own a Mercedes again. They do not stand behind their quality, or service. I hope people read this and take notes." (05/26/06)

  • "I've run an independent MB repair shop for over 20 years & believed in the quality of their cars...until now. I'm loosing customers left & right. I can't, in good concious, recommend a new merecedes to my loyal customers, some have been with me since I started & wish to keep me as their mechanic.I am seriously thinking of switching to Lexus,since Mercedes stated this is the car it will try to get as good as by 2009." (04/22/06)

There is no way that these stories could have affected that many people over such a long period of time in the off-line world.

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January 22, 2007

The community-driven marketing department - a romantic notion or a possible reality?

In a couple of different discussions (on this blog as well as on the Future of Communities blog) I was taken to task over the suggestion that a company could eliminate their marketing department and replace it with customer communities much like what happened at Ducati.

Over at the Future of Communities blog I looked at what it would take to replace a traditional marketing department with a more lightweight community-based group - concluding that while you may not want to get rid of your marketing department, you should definitely look into making it much more community-driven.

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January 20, 2007

Interesting Oticon ad

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January 16, 2007

Escaping the middle-market trap

The latest McKinsey Quarterly (requires subscription) has an interview with Electolux CEO Hans Straberg in which he describes how Electrolux escaped the middle-market trap.

The middle-market trap happens when a market gets polarized with low cost Asian brands taking the low end of the market and premium brands growing at the high end of the market at the expense of the middle-of-the-road brands. This is a common occurrence in markets, a threat to which most companies respond by cutting costs. History is littered with companies - some well known icons - that have cut themselves into oblivion.

One of the main changes implemented in marketing was the way they segmented customers. Instead of using the traditional industry segmentation based on price and a "good-better-best" hierarchy they started segmenting customers by lifestyle - ending up with more than 20 different product positions. Amazing how companies are only now discovering the power of actual customer scenarios as a basis to segment markets - a technique described by Tom Peters in his very early books.

Another change they implemented - which allowed them to play at both ends of the market - was to set up two different business models, with separate sales forces, to serve the value end of the market differently than the premium end of the market.

Mass-segmentation does not work anymore, except perhaps for some commodity products - like gas, or corn. Most mass markets, however, behave like collections of micro-niches and benefit from being served the same way you would serve customers in the long tail.

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January 11, 2007

"Thin-slicing" marketing plans

bulbs & gridsm.jpgThere is a new 5 "things" meme going around and I have just been tagged for it by Mary Schmidt. This time the idea is "thin-slice" a particular topic - a term coined by Malcolm Gladwell in his latest book Blink, and described as follows:

"Thin-slicing is a neat cognitive trick that involves taking a narrow slice of data, just what you can capture in the blink of an eye, and letting your intuition do the work for you."

My task was to thin-slice a marketing plan - so here we go:

1) Do you really need a marketing "plan"?
Very often people just need to get out and engage with customers, prospects, influencers and connectors. There is no need for a marketing plan to do that. Often times marketing plans are just produced by marketing luddites as a CYA document. Granted, for some very large projects that involve large teams of people a plan can be useful - but more as a check-list than as a marketing roadmap.

2) Does the marketing plan show the addressable market being in the billions of dollars?
Any VC will scoff at these numbers - yet they won't invest if it is not true. Don't talk about the total addressable market, tell me how you will get your next 10 or 100 customers. Who are they, what do they do, where do they live, how will you reach them? Give me real life scenarios of potential customers and how you will help them solve their problem. Don't give aggregate figures that have zero meaning.

3) Are you pretending or intending on being a leader in a category that nobody ever heard of?
Most companies I have worked with consider themselves the category leader in a category with one player - themselves. A category is recognized by others as a category and has other players in it. You can "create" a category, but you need help to create a new one - including help from competitors. Show me how you will create a new category, and who you will enlist to help with the creation? Show me how you will change the rules of the game in that category, how you will change the players or change their respective value as you enter the category - now that's interesting!

4) Does your competitive review result in your company or product being in the upper right hand corner of some diagram?
Do I need to elaborate? You and everybody else lives there...it must be pretty tough to compete there. Show me where you are on the BS curve compared to others - that would be much more interesting...

5) What part of the plan deals with how you will deal with change?
The biggest danger with plans is that they become "bibles" - and once they are approved nobody can deviate from the chosen path. Yet most successful marketing programs are emergent in nature, they are like a jamming sessions...and so back to point 1) do you really need a marketing plan?

And now my turn to tag:

  • Tara - how about engaging communities as part of your marketing plan?

  • Pito - what about product plans?

  • Jackie - how about word of mouth marketing plans?

  • Chris - what about customer service strategies?

  • Tom - what about brand strategies?

  • [updated] I decided to add a 6th one as I care about PR and Europeans :) - Neville, what do you think?

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January 10, 2007

The "Inter" Personal Enterprise

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As part of a client project I ran across a set speeches that former Oracle COO Ray Lane has been making on the "inter" Personal Enterprise (you can find a slide deck used at a Sandhill conference here).

In his recorded keynote presentation, which can be found at IT conversations, Lane reminds us that eighty percent of the enterprise software industry profits currently go to just three companies, while seven thousand companies fight over the remainder. In order to succeed in this environment, he recommends that enterprise software vendors focus on ease of adoption, instantaneous value and a minimum IT footprint. He also says that "...vendors need to make it easy for users to get started and provide real value to the customer before she is required to pay. The user experience should be personalized and contextualized and the product should spread through the enterprise organically, via user recommendation, rather than by management edict."

That is in fact how we built eRoom Technology to become a profitable $40M company in the early 2000's. We provided easy ways for individuals and small teams to get started after which the solution would spread organically throughout the enterprise through user recommendations. By the time the CIO at KPMG decided to standardize on eRoom as their collaboration platform, there were already over 2,000 happy eRoom users in the company. We then tried to scale the ease of adoption process by releasing an ASP version of the product. While I still believe that was a good idea, that strategy was not widely successful as the ASP offering never fully got embraced by our "enterprise" sales force. The shift from big upfront payments and fat commission checks to a more predictable pay-as-you go scheme was just too much of a culture shock.

In a lot of ways, that is also what is happening with Enterprise 2.0 tools - the adoption of Web 2.0 technologies within the enterprise. But as Harvard Business Professor Andrew McAfee, who coined the Enterprise 2.0 term, predicts, most Enterprise 2.0 tools will remain confined to geek-heavy groups, companies or industries, or at best they may find spotty mainstream penetration.

Part of the reason here is that while the tools do spread organically, they still have a long way to go in terms of user friendliness, depth of features, and seamless integration. Without those aspects, non-geeky users and innovators will have a hard time finding value in the tools.

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January 3, 2007

You are your context

worldviewsm.jpgTry tapping a song for someone else – chances that the person you are tapping it for gets it right is 2.5%. What makes a lot of sense to you, because you have the song playing in your head – sounds like total gibberish to others. The same is true when you meet someone online for the first time – their chosen handle may symbolize some imagery for you that was totally unintended by that person.

The difference here is that we all interpret signals based on the context we have. And when our context is different, we interpret things differently. A different context is also the main cause for friction and conflict between people.

In the past, there was a higher likelihood that people’s context in a particular geographic region was somewhat similar – there were only a limited amount of TV programs and radio shows, people had a much more limited supply of books and newspapers, music preferences were more uniform, there were fewer options for schooling and there were less churches to choose from. Now on the other hand, much of the popular culture is consumed through 100’s of cable channels or through the internet, you can read books that are self-published and reach audiences in the 100’s of people, you can read any newspaper in the world online or get your news from specialized blogs, you can pick from music bands that self-publish their music on social networking sites and have fan clubs in the tens or hundreds of people, and you can come up with educational programs that are totally unique to you. Add to that the increased mobility of people and the ongoing trend towards more extreme and fractioned faith-based groups – and you have a world when there is almost no shared context anymore. It’s what Wired Editor Chris Anderson calls the long tail…except that perhaps there are more people moving into the long tail now that it can be served.

Marketers, advertisers, communicators and politicians have been struggling with this phenomenon for a few years now – mostly because the old ways of “framing” issues does not work in a world where people’s context or “world-view” is so vastly different from one another.

A world populated with people that have very different contexts should also be a world where innovation explodes – or is Kathy Sierra right when she says that the “wisdom of crowds” mostly results in safe, well-balanced and non-offensive solutions?

What do you think?

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December 8, 2006

A Brand Loyalty Hierarchy

cool dudessm.jpgWhen you think about the affinity that you have for different brands, you quickly realize that they fall into different categories - you may not have the as much brand affinity and loyalty to your soap vendor as you do to your favorite shirt manufacturer, or your car manufacturer.

Could there be such a thing as a universal brand loyalty hierarchy - akin to Maslow's needs hierarchy? And if so, would it help marketers in determining what marketing program might work better to promote and position their products?

Let's try this out and see where it leads...

At the highest level of the brand loyalty hierarchy are products that help define who you are and what you stand for. They are the products that define your personal brands - let's call them Image Defining Brands. Brands that fall in this category in the consumer space include your clothes- you might want to wear only Nautica shirts because you are a sailor, or a sailor wanna be. Another product that probably falls in this category is the car you drive - with some people driving all wheel drive vehicles to indicate their love for the rugged outdoors and adventure travel, and others swearing by the Toyota Prius to indicate their dedication to a cleaner planet. In the corporate world, products that fall into this category are products that can affect a person's image or career. Early adopters of Lotus Notes collaboration software or Linux servers come to mind. Being early in buying VoIP solutions would probably fall into this category as well. The key is that those brands define who I am or who I want others to think I am.

Next ring down are products that do not necessarily define your image, but they make you feel good - let's call them Feel Good Brands. You may not really have much brand loyalty to a soap vendor who's product you use, but you buy the same soap over and over again because it smells good and makes you feel good when you step out of the shower. Another example in this category could be Fair Trade Coffee - it really does not make a difference to your image whether you drink Fair Trade Coffee or not - after all it is not written on your cup. But it makes you feel good that the laborers that brought you this coffee were treated fairly. In the business world, products that fall in this category are products in well established and mature product categories. If you are in charge of deciding which CRM system to bring into your company, it is no longer a career defining decision, or even an image defining decision - it is very much a "feel good" decision. You will choose a solution that will make you feel good about your decision.

One ring further down are the products for which you have little brand affinity. They don't define you, nor do they make you feel much different than if you were using another brand - let's call them Commodity Brands. Low end pens and pencils come to mind. You may buy a pen from Bic because you know that they have a reputation to last long and not leak on planes, but in reality you might be just as satisfied and feel just as good with a Papermate pen. The same is true for the gas you put in your car, you may have a slight preference for Mobil because it has a reputation of being a cleaner gas, but you really would not feel much different after filling up your tank with with cheap LuKoil gas. In the business world, brands that fall into this category would be office supplies, or snack/vending machine service providers. The key buying decisions for these brands are reputation and trust.

Of course, product vendors can create products in certain product categories that allows them to move up (or down) the hierarchy. Luxury pens are perceived by some buyers as image defining products. And while Fair Trade Coffee in your own cup may not help define your image, being a Starbucks vs. a Dunkin' Donuts kind of coffee buyer may do just that.

More on this later...what are your thoughts?

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December 5, 2006

Corante is sponsoring the WOMMA Summit this coming week

If you have anything to do with Word of Mouth Marketing, you should attend the WOMMA Summit next week!

As they say about the conference:

Have you heard of word of mouth? If you haven't yet, you will. It's the new way to market, and more and more companies are getting on board every day. Just ask the Inc. 500 (82% of their CEOs use word of mouth) and their customers (2/3 of consumer purchases are influenced by word of mouth).

Word of mouth is already happening TO you. Do you know how to make it work FOR you? Learn at the Word of Mouth Marketing Association's Word of Mouth Marketing Summit, Dec. 12-13 in Washington, D.C. It's the only conference that will give you a hands-on, advanced understanding of how to build truly deep, two-way relationships with your customers.

The Summit features:
- Lessons from 70+ experts
- Big questions, important issues, and straight answers
- Practical "how-to" instructions
- Everyone you need to know

Register today at www.womma.org/summit2.


They have a great line-up of speakers as well as many interesting people in attendance - making for great networking with!

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November 29, 2006

People don't get your marketing speak, nor do they get your strategic executive gibberish...

confusionsm.jpgChip Heath and Dan Heath wrote an interesting article in the Harvard Business review this month about the "curse of knowledge" (requires subscription).

The curse of knowledge happens when your language, which is based on your level of knowledge, cannot be understood by others. So an executive who uses language like "achieving customer delight!", or "unlocking shareholder value", phrases that have real meaning to him based on his years of immersion in the logic and conventions of business, will sound like a person who has a love affair with vague strategy statements to frontline employees who may not be privy to the underlying meanings.

An interesting experiment done at Stanford University in the early 90's proves that point rather nicely. In the experiment they assigned people one of two roles - "tapper" and "listener." The tapper would pick a well known song, such as "Happy Birthday" and tap it out on the table. The listener had to guess what the song was. Before tapping the song the tapper was asked to predict the probability that the listener would get it right - and they predicted 50%. When they actually tapped the songs, the success ratio was a whopping 2.5% - out of 120 songs, only three songs were guessed correctly. So what sounded like the perfect tune for the tapper actually sounded like some kind of weird tapping code for the listener.

One way to avoid this is by "translating" your message in very simple language, and one company that does this right according to the article is Trader's Joe. They actually develop their messages for the imaginary unemployed college professor who drives a very, very used Volvo.

This is a great reminder of the power of using real and actual scenarios in doing business. Not only can real detailed scenarios with real people help you with messaging, they will also help you with the design of better products and and the development of better customer interaction processes.

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November 28, 2006

Bruegger's is listening! I am a fan now...

leonardo_sandwich.gifAs many of you will have noticed, I have had my fair share of mishaps with my local Bruegger's. The last time I wrote about my experiences, Scott Hughes, the VP of marketing posted a comment on my blog asking for more information so that they could address the problem.

We went back and forth on email a few times and then two weeks ago I noticed that they put a new general manager in charge of the store. Not only has the service improved considerably, the whole mood of the store has brightened somehow. And then yesterday I get an email from Scott to inform me that they had made some management changes at the store and asking for my business, saying: "I hope you give us another opportunity."

WOW - Scott thank you for listening! You just turned me into a big Bruegger's fan!

And btw - your new Ciabatta's are great too!


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November 14, 2006

Advertising to spur demand

Slate has an interesting take on the HeadOn ads - they give you headaches and create demand! (via MIT Advertising Lab)

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Using an executive blog to "control" the message...

Nick Car over at Rough Type has an interesting post on how AOL Ted Leonsis used his blog to control his message. He calls it defensive blogging - a blogger who's main goal is not to engage in a conversation but to gain more control over the results that show up when people Google you.


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November 13, 2006

Increasing customer loyalty by creating deep-soul connections

harley.pngReveries.com released a survey and white paper on increasing loyalty by creating deep-soul connections, Harley style (pdf here).

Dori Molitor, the author of the report starts off by talking about the incredible levels of brand loyalty that Harley-Davidson bikers have - attributing it to a deep-soul connection between Harley-Davidson and those who love their motorcycle, and claiming that this is the highest level relationship a brand can have with its consumers.

Companies like Apple, BMW, or Nike can easily be used as other examples of companies that have achieved deep-soul connections with their customers, but can other companies in less "sexy" industries develop deep-soul connections with their customers? The white paper takes us through the stories of less obvious candidates that have achieved that same level of customer connection - including General Mills, Serta, the mattress company and Trader Joe's.

One of the things to remember, says Dori Molitor, is: "A deep-soul connection is not the exclusive purview of ostensibly “sexy” brands like Harley and Nike, nor does it require spending enormous sums of money. It is about transcending those kinds of considerations and connecting with consumers based on a higher purpose than a sterile, financial transaction." And a higher purpose does not mean a "good cause" or a charity - something many marketers will try to use and fail miserably. Finding a higher purpose is all "about the connections that brands can provide to other people (their relationships) or the ways in which they help consumers lead happier, more purposeful lives."

Well said! At the end of the day branding is all about how people feel about themselves...

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November 10, 2006

Email marketing delivers best ROI - but do you buy that?

burningwebsm.jpgAccording to a new study by the Direct Marketing Association, and as reported in DIRECT, email marketing delivers the highest ROI of all media available to marketers. Having just finished reading a pre-release version of WOMMA president Andy Sernovitz' new book - Word of Mouth Marketing: How Smart Companies Get People Talking - he would probably argue that word of mouth marketing would have the highest ROI as you can get that going with no investments.

The DMA research shows that the return on email marketing in 2005 was $57.25 for every dollar spent, compared to $7.09 for catalog marketing and $22.52 for non-email Internet marketing. The study also projects that all the ROI's for the different media marketing options are headed down-ward.

The same research also estimates that the commercial email market in the US was $16.5B in 2005, while the direct marketing-driven sales hit $1.806 trillion in 2005 - projected to hit $2.627 trillion in 2011!

Ouch...that sounds like a lot of wasted dollars...there should be better ways to reach people. And no matter what Set Godin says about messaging frequency vs. "being full ," there ought to be better solutions out there to resolve the ambient findability problem in marketing!

The DIRECT article did not mention anything about the methodology used by DMA - but it is assumed that the study looked at investments vs. "new" customers and "new" revenues - which is a really bad transaction-based metric in marketing.

A more interesting metric would have been to understand how email direct marketing impacts long term customer-relationship-based revenue streams for companies. Isn't that where the real profitability lies?

MARKETING - it's not the transaction anymore, it's the relationship, dummy!

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November 9, 2006

Peer pressure in Social Media

Giovanni Rodriguez found that the business benefits of social media are becoming quite apparent, but the pressure to stand out -- and do something different -- is mounting (disclosure - I am on the advisory board of Hubbub PR). He starts his excellent post by saying that: “There’s no question – the early success of peer-driven, social-media programs will put pressure on businesses to both adapt and adopt. But, for some leaders, there’s another question: in a world where everyone participates, what does it mean to lead?”

In their rush to stand out, companies and people will screw it up - let's just hope that they don't break it for the rest of us.

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November 3, 2006

The winners will be determined because of marketing

fract sm.jpgIn a recent roundtable discussion at Wharton, C. Robert Henrikson, the CEO of Metlife said "In our industry, the winners will be determined because of marketing. By that I mean true marketing, not sales support, which is what the insurance industry is about in the United States" (here via a pre reading documents from the Innovation & Corporate Entrepreneurship Research Center at Babson for their upcoming Idea-to-profit event which will cover the intersections of marketing and innovation).

Henrickson went on to say that most insurance firms have no marketing plan other than to be a fast follower of innovations developed by competing firms.

Now isn't that true for most industries. Marketers mimic their competitors, they go after the same customers with the same offerings, and they end up killing the market with price-wars...

The panel which also included an executive from a major drug manufacturer, a major real estate developer, a major bank CEO, a retired partner from a major investment bank, and a few Wharton Professors, were then asked if they saw major innovations coming from India and China.

Almost all said no, which is rather surprising even though there were no high tech players on the panel. After all, Muhammed Yunus just won the Nobel Price for Peace for Grameen Bank - which is not just a do-good organization, but a very profitable one at that. Does this not count as a major innovation in the financial services sector?

The health care experts saw little innovation coming from India because of their weak patent system, which they claim is holding innovation back. They also see the biggest opportunity in India being with clinical trials, saying that "there are massive patient populations there that have not been tapped in any major way."

Ouch! Is this perhaps a case of real-time marketing myopia? Perhaps those experts should take a look at open source business models - especially the ones that have been applied to non-technology products - and their potential for traditional business model destruction (or is it disruption?). And instead of looking at India as a massive source of (probably largely unprotected) people available for early clinical trials or cheap labor, they should look at it as a test bed for new business models. After all, it is because of Indian generic drug manufacturers that the price of Aids treatment came down from $15,000 a patient to less than $200 in 10 years time - and that Indian generics are now being used to treat half of the aids patients in the developing world. Does this not count as innovation in health care?

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October 31, 2006

Customer communities do pay off!

collaboration.jpgThe most recent Harvard Business Review reports on a study (requires subscription) that was done on the impact of customer communities on customer behavior at eBay in Germany (disclosure - I have an active interest in this topic as I have agreed to chair a conference on the business of communities - Community 2.0 - but more on that later).

The numbers are quite interesting. The experiment involved 140,120 eBay customers who had bought or sold on eBay but who had not participated in the eBay customer communities before. 79.242 were invited to join the online customer community, while the remaining 60,878 were used as a control group. Of the people who were asked to join the community, 3,299 became active participants and 11,242 became lurkers. Over the course of a year they compared the behavior of the active participants and lurkers to that of the control group and found that:

  • Lurkers and active participants won up to 25% more auctions

  • Lurkers and participants paid prices that were as much as 24% higher

  • Lurkers and participants spent up to 54% more money in total

  • Active participants listed up to 4 times as many items

  • Active participants earned up up 6 times as much monthly sales revenue

  • For first time sellers who were lurkers and participants, 10 times as many of them started selling on eBay after joining the community

All in all the activities of the lurkers and participants resulted in 56% more sales during the year of the study - bringing in millions of additional dollars into eBay's bottom line.

So can the results of this experiment be replicated in more traditional businesses?

Some people clearly think so, while others who used to be very enthusiastic about the business of communities are starting to become very skeptical.

Communities require a certain critical mass to get going - and not all companies have a large enough customer base to get to that point. They also require a lot more work and resources than most companies are willing to invest - to set up the infrastructure, to nurture the communities, to acquire content, etc.

Active communities of employees, customers and partners are clearly powerful management instruments that can dramatically improve core business processes like innovation, product development and marketing & sales. They can also backfire and have very negative impact if they are not managed properly, or set up wrongly. Before embarking on this path, companies have to truly understand the dynamics as well as the pros and cons of communities. They also need to find out if they have the resources and wherewithal to create their own communities or whether they should play in someone else's sandbox.

Unfortunately, many will start the process by throwing technology at the problem - let's just hope that those ignorants won't destroy the market for the rest of us like email spammers destroyed email marketing and (un)ethical zealots are slowly destroying word of mouth marketing.

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October 23, 2006

A new agency in town...

I got a message this weekend from Shel Holtz that he and Neville Hobson are joining Joe Jaffe to found a new type of marketing agency, called crayon. Their stated goal is to "integrate the best of the consulting, agency, advisory, thought leadership and education worlds."

The new gig will launch Thursday - with a press release and a party in their new offices - in 2nd Life!

Best of luck to you!

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October 19, 2006

Is this what brands are all about?

helpsm.jpgAdvertising Age just came out with their top 200 brands report - in which they measure brands by their ad spending on "measured' media. As can be expected when you measure brands by their ad spending, the top 25 list is littered with losers - including Verizon, in the top spot, Ford (#3), AT&T, Dell, etc.

Verizon spent almost $1B in "measured" media in the first half of 2006, while Ford, Chevrolet, and Dodge combined spent over $1.2B on "measured" media in the first six months. Ford spent 3X as much as General Motors Corp. on "measured" media. And when looking at the top 200 brand spending by media, they allocated a whopping 6.7% of their "measured" media spending on the Internet - with the rest spent on TV, Radio, Newspapers and Magazines.

What the heck are they thinking? And what are they "measuring"? Do you think that if Ford were to stop spending on traditional advertising for six month or even a year and instead invest $1 B in a clean energy research they would lose a ton of marketshare? And what if they were to spend their marketing dollars more wisely - like use the information that they already have about their existing customers to market more effectively to their existing base. If you have a Ford, how many times did you hear directly from the company since you purchased your car? Or what would happen if Verizon were to spent 1/2 as much as they did in the first six months - and by doing so still spend as much as their nearest competitors - and instead spend the other $1/2 B on customer service and customer retention programs?

Economist Steven Levitt - from Freakonomics fame - found that money spent by candidates in political races hardly mattered at all. In fact he found that a candidate could cut his spending in half and lose only 1% of the vote. The same research found that a losing candidate could double his spending and expect to shift the vote in his favor by only that same 1%.

Verizon - are you listening?

There is no question that advertising plays a role in marketing - but those numbers prove that a majority of ad dollars are being wasted and miss-prioritized!

First you need a product that will WOW your customers. And while Geoffrey Moore will tell you and Apple prove to you that you should not care about customer service while your product is in the Tornado, when you have mature products like Verizon and Ford, customer service and retention are key to your success. In fact, they can lead to a ton of free advertising - generated by your very own consumers and delivered with much higher precision than TV advertising!

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October 12, 2006

[rant] Why are companies thinking that it's OK to trick their customers?

My PC has been sluggish lately. Since I do not have an IT department I looked for some online solutions to help me figure out what might be wrong with my system (I know that it is partly my fault as I keep downloading beta software that is really pre-alpha software)...

After (very little) research I decided to download the Uniblue Wintask Pro - which seemed to have received good reviews from sites that I trust (i.e., CNET). On top of that it came with free software that promised to speed up my PC - exactly what I was looking for. When I tried the Wintask Pro it did not seem to offer me much more than the Windows Task Manager - so I went for the free software that promised to solve my problem. The minute I launched the application it told me that there was an upgrade available, which I eagerly downloaded (yeah, yeah, in my multitasking way of doing things I am sure I missed some legal "fine print" in the process somewhere). After running the application's diagnostic it came back with a whole bunch of issues related to my computer that needed to be "optimized" - which of course resulted in much optimism on my part that I would finally be able to solve my problem...

...except...the new version can only do diagnostics. If I want a version that actually fixes the problem I need to buy that one too...

How is that for misleading a newly minted customer who just dropped $50 on your solution?

I may spend another nanosecond or so to see how I can get my money back - since they have a big sign on their site claiming a money back guarantee - but do you think that I would ever recommend this company or buy from them again?

Marketing and customer service is not so complicated - it starts with common sense!

  • Do not trick your customers

  • Do not lie to you customers

  • Do not mislead your customers

  • Do not blame your customers - even if it is their fault

  • Do not treat your customers as if they were stupid - even if they are

  • Don't assume that customers do not talk about their experiences with others

  • And please, do not assume that customers have no memory

Oh, one more thing - Everett Rogers laid out a scientific approach to the principles of adoption of innovations (same as new products) back 40 years ago - this is not rocket science - it's almost antique!

[/rant]

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October 7, 2006

Bruegger's Wins Award for Worst Customer Service

[update 11/28/06] See also related article on how Bruegger's gets it and fixed the problem.

nobagels.pngFor awhile I was refraining myself from writing negative things about Bruegger's as my previous rants (here is one) got a pretty high ranking on Google. But the absurdness of their practices is so flagrant that is has become too hard not to write about it.

A few weeks back I went to Bruegger's only to find out that they had no bagels - you heard that right - on a Sunday at 8:30 am they had NO bagels. Apparently the baker had overslept. If you are a bagel shop and for some reason you have no bagels, why even bother to open up shop???

Then a week later I got a bagel with hair in it. We tried to convince ourselves that it was hair from a cleaning brush so that we could at least continue eating the others - but even that is unacceptable!

When I walked into the store last week, there was a huge line...and one very sloooow server. When a guy ordered 36 assorted bagels I thought I was going to die - the misunderstandings and the recounts that took place as part of that transaction were like a caricature on how to really piss off your customers. The thing is, even that server probably should not have been there. She most likely missed the memo that said that there was a team meeting on the back porch of the store. Indeed, after waiting in line for 15 minutes, a team of 4 Bruegger employees - including the top store manager (a very grumpy man), and the assistant manager (who clearly lacks respect for the top dog) - all came in chatting from the back porch - oblivious to the collective negative energy that was about to turn violent in their store.

And then there was this morning. I was early and there was only one server again, who evidently had forgotten (or never was given) the log-ins for the cash registers. She was using a little hand calculator to figure out how much customers should pay. I had three bagels and even though there is a special price for a three-pack, that little calculator did not have an option to enter a three-pack - the only option on that calculator was 3X the price of a single bagel. For awhile it thought it might be an operator error, but after a few minutes of arguments I realized that it must have been a calculator limitation (arrggghhhh!).

If you are in management at Bruegger's and happen to read this post (although I bet you nobody is listening) - the next time you are in my town, go take a look across the hall to Starbucks. The place is humming, employees add to the vibrancy of the atmosphere, I have never seen them run out of coffee, and I have never had hair in my coffee or in their pastries!

And if you are wondering why I continue to put up with this nonsense - you have just encountered a case where the buyer and the actual customer/consumer are two different people. I don't usually eat bagels - my son does. And yes, I have thought about taking him with me a few times so that he would get fed up with this whole thing and allow me to buy bagels elsewhere...

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September 27, 2006

97% of IP addresses should be blocked!

According to ReturnPath, fewer than 1% of sending IP addresses are not sending SPAM (full research brief here via revenue)

Could any self-governance guidelines from an industry association or government regulations have prevented this total distruction of email marketing? Are other popular marketing techniques going to end in the same boat?

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September 21, 2006

Commercial buddies and friends on MySpace

helga.jpgClickZ Experts has an interesting article on Social Network Marketing by Sean Carton. In it he lists some of the profiles of advertisers on MySpace.


It all looks pretty cheesy - surely there must be better ways to promote products to the youth market.


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The difference between perception and reality in shopping

ic185-foot-easybutton.jpgCool News has an interesting article today - Costco Confusion. In it, Tim Manners explains how what looks like a good deal at your local Costco or Sam's Club, may in fact be cheaper elsewhere.

Even though we now have the ability to compare prices across channels - something economists call "perfect information" - we still make stupid buying decisions and overpay for products. Quoting from an article on the same topic in the NYT, he says it is because "we can only focus on one thing, and that one thing tends to be a distraction. At Costco, “the very size of the product is the distraction.” If it’s that big at that price it must be a bargain, right?"

While it is easy to agree with that, another possible factor is that we tend to buy things that we did not research or even intended to buy when going on our weekly or monthly trip to Costco or Sam's. And once we're there, it is really hard to start comparative shopping from your cell phone - even if you have an Internet enabled phone with a larger screen. And besides the bulk size of the items - which indeed implies a bargain - some retailers like Staples will have signs promoting their price match policy - giving you another false sense of "security" when you buy an item.

Buying at a higher price than what might be available elsewhere happens probably more often when a buyer is making multiple purchases at once - as is the case with groceries or office supplies. When a buyer is buying a single item, say a car or a camera, they are probably more likely to go where the best bargain is.

Well, as pointed out in the article, and based on interesting research done by Hahn Lee from Stanford and Ulrike Malmemndier from UC Berkeley, this may not be the case. They studied auctions at eBay and found that "in a majority of auctions, the final price is higher than a fixed price at which the same good is available for immediate purchase on the same web page." The longer the listing period, the more overbidding occurs, and the most experience bidders are most likely to bid sub-optimally (download pdf here)! It is like gambling. The funny thing is that overbidding has been a known side-effect of auctions for a long time.

So all in all it seems like there are still many ways left in which to get an premium price for an item which is widely promoted with a lower price elsewhere...

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September 18, 2006

Integrating "status skills" into your offering

pgvirtualcampus.jpgTrendwatching.com has an interesting article on the importance of integrating "status skills" into your offerings.

No matter what you market, people will consume your offering based on how the product or service makes them feel about themselves in the presence of that product or service. The authors of the article refer to this as "providing your customers and clients with status" - perhaps a little too consumer-focused, but true for all industry segments nonetheless. As the authors rightfully point out: "there is little that consumers do that isn't consciously or subconsciously influenced by a desire for recognition from family, friends, and any fellow consumers they come into contact with."

In consumer goods, providing status may be conveyed through luxury, smart-buying, or eco-friendly symbols - symbols that will often be based on "too expensive," "too scarce," "too inaccessible," or other physical and experience based status symbols that will impress others. In the B2B space, status symbols could be conveyed through smart-buying, well negotiated, achieving results - symbols that are often based on the characteristics that make for a model employee in a particular business culture, and which would likely result in career advancement or increased reputation amongst peers.

According to the authors, consumers increasingly value creativity over passive consumption - a trend that originated in the online world - where your fighting skills may not be what is most valued anymore, but perhaps the originality of your avatar, the number of friends in your tribe, or the uniqueness of your home page. They call it "status skills," and define it as follows: "In economies that increasingly depend on (and thus value) creative thinking and acting, well-known status symbols tied to owning and consuming goods and services will find worthy competition from 'STATUS SKILLS': those skills that consumers are mastering to make the most of those same goods and services, bringing them status by being good at something, and the story telling that comes with it."

Several brands are already incorporating "status skills" into their customer interactions - including
Craft, Switch, BMW, Volkswagen, Nikon, Home Depot, Lego, and many other companies which are described in the article. Another example recently covered is the open source beer, which combines a new business model with the belief that many people will want to brew their own beer and improve their reputation as beer connoisseurs through the widespread adoption of their recipe enhancements.

With sites like Flickr and YouTube, where consumers can easily show off their creativity, it shouldn't be that hard for brands to embed at least some basic "status skills" into their offerings.

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September 13, 2006

You cannot always control the context of your brand

(via perspective)

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September 7, 2006

What happens when consumers really do not like you?

This is apparently what is happening to Hummer H2 - with a few people setting up the web site FUH2.com and hundreds of others sending in their own FUH2 pictures - which led to the creation of a poster as well as the video below (via John Winsor).

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Social marketing vs. social marketing

save the earth sm.jpgAs you probably will have noticed, the "social marketing" terminology has been popping up left and right lately.

Nedra Weinreich from Spare Change and others, who had been using "social marketing" for decades to refer to the use of marketing to address health and social issues, took issue with the new usage of the terminology - especially when Forrester launched a "Social Marketing Bootcamp" and Jupiter launched a "Social Marketing" practice. Forrester backed down and renamed their bootcamp "Social Computing Boot Camp," while Jupiter refused to rename it's practice - fueling the ongoing feud over the use of the terminology.

While it is unclear to me how good a term "social marketing" is to refer to the marketing of social issues - I disliked the new usage of the terminology from the get go.

Using "social marketing" as a catch-all category for the (not-so-new) marketing techniques which include viral marketing, word-of-mouth marketing, community marketing, consumer-generated-content-based marketing, and other social media-based marketing "techniques," not only "hypes up" the value of those methods unnecessarily - it also engenders the danger for misuse, abuse and the ultimate destruction of those marketing techniques for everyone.

Many clueless and panicky marketers, who have witnessed the decline of marketing programs like email marketing and other interrupt-based marketing methods - which incidentally they destroyed in the first place - will now jump on this latest craze and screw it all up! As usual, they will throw dollars and especially technology at the issue without understanding the underlying fundamentals and ethical considerations that allow those methods work in the first place.

You don't believe it? By now, the value of word-of-mouth marketing is being threatened by the lack of disclosure by very large and respected marketers like P&G and others. And with so much "fake" consumer-generated content going around, some people are already asking for some sort of "organic labeling" before it is too late. When it comes to "community marketing," the jury is still out as it is one of the younger hot new marketing memes - but history shows that it will only take time for some clueless marketers to latch on to that one as well and potentially spoil it for the rest of us.

I really hope that Jupiter and other industry analysts and industry associations will show leadership in this space and try to create some sort of self-governance amongst their clients and members - but somehow, and based on the descriptions of those new services, I am not so sure that is part of the agenda.

Hopefully I am wrong!

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September 6, 2006

Some cool shopping bags

Here are some interesting shopping bags...

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September 5, 2006

If we cannot predict hurricanes - how are we to predict buying behavior?

David Wolfe over at Ageless Marketing has a great post on the difficulties associated with predicting consumer behavior. Comparing the process to our inability to predict hurricane paths with the help of supercomputers he says: "I have to believe that human behavior reflects more variables and is significantly more complex than weather behavior."

The good news according to David is that customers will tell you what they want - but in order to get that information, you need to get it in "real life context" - as opposed to research environments where customers tend to behave differently than in real life.

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August 30, 2006

Adoption is always slower than you think...

combo subscribe.pngAccording to a recent report from emarketer reported in Dead 2.0, only 2% of US employees subscribe to RSS feeds. 88% do not even know what it means! Other stats show that only 13% have a good idea of what podcasting is. You can actually see the bell curve of adoption at work, with 12% of people still not knowing what spam is (via Business 2.0).

The RSS numbers also jibe with the numbers mentioned by Martin Nisenholtz from the New York Times in another Business 2.0 article (not online yet). RSS feeds at the NYT only generate 12.2 million pageviews out of a US total of 295 million.



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August 29, 2006

What happens when you "manipulate" buzz

Pete Blackshaw over at CGM picks up on a post by the Freakonomics guys in which they argue that the fact that there was such a discrepancy between the pre-release Internet buzz for the movie "Snakes on a Plane," and the actual success of the movie at the box office, may be attributed to "manufactured buzz."

One conclusion which Steven Levitt at Freakonomics comes to when answering the question "what does or does not make Internet buzz translate into commercial success" is "One reasonable answer to that question may be that when the buzz is faked/manufactured, commercial success will not follow."

Whether intentional or not, "manufactured buzz," along with other viral "gaming-the-system" marketing strategies are just another threat to the future credibility of word of mouth marketing - another one being the lack of disclosure policy which some companies refuse to endorse.

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August 28, 2006

CMO tenure keeps going down...

According to Spencer Stuart (via Brand Republic), the average CMO tenure keeps going down. A painful side effect is that marketing agencies have to defend their business sooner as well.

The changes are not that dramatic - with the new average tenure for CMO's being 23.2 months in 2006, down from 23.5 months in 2005 and 23.6 months in 2004.

The whole shortening in tenure is likely due to a combination of things: the fundamentals of marketing going through a dramatic shift - leaving many CMO's who are not permanent students of the industry in the dust - and the accountability of the CMO on the executive team being miss-aligned with what their real role should be.

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August 23, 2006

T-Mobile is the next worst practice

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When I saw the efforts of this T-Mobile user on the Church of the Customer blog I could so relate to it... I am a big T-Mobile user and when I thought about upgrading my BlackBerry the last time around they told me that it came with a $150 mail-in rebate - which swayed me into signing up with them again for a year and get the latest gadget.

Well months later (I still cannot figure out why they cannot speed up the rebate process) I get a notice saying that my phone did not qualify for that rebate...and that I am welcome to call them to discuss that issue.

Seriously now, who has the time to do this...and while spending $175/mo with them for a few years, wouldn't you think that they should call me to discuss this miss-understanding?

Oh well, only a few months left and then....goodbye T-Mobile!

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August 18, 2006

Is there no arbitrage in online retail?

30dpress.jpgWhen Ritz Camera told me it would cost a flat $250 to fix my Canon 10D digital camera without even looking at it, it caused me to pause and look at what my options might be.

Since I bought the camera a few years back Canon came out with new models that seem to deal with the issues I was having with my early digital SLR - especially those related to focus and sharpness. Switching brands isn't really an option, as I have generally been happy with my EOS cameras and assembled 4 different lenses for it so far.

Instead of fixing my existing camera (which one day started to develop a dark band on the bottom of my pictures - indicating some sort of miss-alignment of the mirror system as far as I can tell) - I decided to look at the alternative of buying the new 30D.

My surprise came when I started looking for the best price for the 30D. If you look around you can see prices as low as $639 for the body without shipping charges. When you look at 3rd party sellers on Amazon.com or if you check eBay, prices do not seem to go below $1,000 for a new Canon 30D body.

Is there no arbitrage in online retail? Or am I missing something? Could someone actually make $500 per camera by buying and reselling online?

It is not a business I want to get in, but unless I am missing something (which I often do), then the theory that online retail, with all of its online-transaction "data exhaust," would "even out" the power balance between buyers and sellers does not hold true...

What is it that I am overlooking??

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August 17, 2006

Another bad interrupt marketing example...

belt081606.jpgAdAge reports that some marketing dinosaur has found another 100 square feet of "wasted" ad space in supermarkets - the conveyor belts at the check-out lines! Worse - he is holding a patent on the damn interrupt marketing technique and besides selling ad space, he is also offering advertisers a "chance" to shut out competitors for the modest price of $182,800 for 55 stores!

Hey - why stop there? Why not advertise on the check-out clerk's forehead? Or at the very least on their clothes.

Like Adrants says - soon we'll have grocery baggers and check-out clerks flooding our hospitals for dizziness and our mental institutions for insanity! And what about the consumers?

Isn't interrupt marketing dead? Maybe it's time to start a wiki with the worst interrupt marketers around.


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77% of online shoppers read consumer reviews...

According to a new studies released by Jupiter Research, "77 percent of online shoppers use consumer generated product reviews/ratings and those who find them useful are more loyal to stores with reviews/ratings featured." Other research reveals that "consumers who post feedback on forums, positive or negative, spend 22 percent more online than do consumers who have not posted on forums." And somewhat surprisingly, "90 percent of large companies believe that consumer recommendations are important in influencing other consumers' purchase decisions."

The issue for many companies is how to consistently track consumer generated reviews and incorporate that voice of the customer component into their product innovation processes. There are literally hundreds of sites where people leave their feedback. Amazon provides product-specific searchable consumer generated reviews, but many other popular online stores, like NewEgg do not enable that level of searchability.

(Via Customer Listening Blog)

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August 16, 2006

Advertisers on social networking sites

Nellie Lide over at New Persuasion has the following to say about advertisers on social networking sites (via social customer manifesto):

I think brands will have to go beyond a conversation - though that's a good start - they have to be willing to develop and maintain a relationship/friendship with their customers over the long-term. And I think companies are looking at these sites all wrong. Advertisers, marketers, product-makers are trying to figure out how to exploit and use all the people on these sites - when they should be studying what these folks are doing and try to figure out how they can help these social sites be better for their users. Not more cluttered with their ads. If your product and brand don't really fit in - stay out. Know your customer and respect your customer - that's it.

Amen

At the risk of being repetitive - marketing is not about interrupting or intercepting people, it's about assisting them!

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August 15, 2006

The role of customer feedback in innovation

chicken or egg sm.jpgOver at the Fast Company blogjam, Dave Pollard looks at whether great product innovation really starts with the customer - and describes the whole issue as a chicken or egg question.

Involving the customer in product innovation is not an either or proposition - it is something that should always be done - but done in the right context. And when listening to customers companies need to realize that their mileage will vary depending on the type of product or the phase within the product life cycle.

In some product categories, people could care less about the products or the companies that manufacture them - making customer feedback useless at the least, or potentially dangerous if given too much weight.

Newer products that are still primarily appealing to innovators and early adopters have a different problem with potentially similar consequences. Assuming the product is successful, customers probably care about the product in this case. But their ability to innovate ahead of what is available will likely be several steps behind the ability of the team that came up with the innovation - and giving too much weight to customer feedback may limit the future product potential and give the competition an opportunity to catch up and out-innovate the incumbent.

Then you have more mature product categories where people care - probably the area that yields the most valuable customer feedback. Except that here too you have to be careful about how much weight you are giving to that customer feedback. If your goal is to grow your product revenue by 80% in the future, then you have to realize that "all" current customers only make up a fraction of your future customer base. Attaching too much weight to their feedback may eliminate a large number of future customers that do not share their profile. And according to Harvard Prof. Clayton Christensen's disruptive innovation theory, your trajectory of product improvement will eventually cross the mainstream trajectory of customer need - limiting your potential future customer base, and opening yourself up for a disruptive innovation.

All that being said, and according to MIT Professor Eric Von Hippel, in some fields there are a small number of "lead users" who invent new products out of necessity and who can be an important source of new product concepts. The kind of customer listening that is required in this case is very different from what most people think of when talking about customer involvement in product innovation!

Related posts:
- You cannot outsource innovation to your users!
- Where will your killer competition come from?
- Whatever marketing becomes...

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August 9, 2006

The revenge of the longtail...

This is a great video from YouTube explaining what happened to popular media and marketing...(via Chris Baggot)


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August 7, 2006

Are You in Marketing Death Valley?

marketing death valley small.jpgHave you been in marketing for awhile? Were you trained in marketing? If so, chances are that you’ve been wondering what happened to the “traditional” marketing rules (if there ever was such a thing) - and what replaced them.

There is no question that tectonic shifts have redefined the fundamentals of marketing as we knew it – leaving many marketers feeling like they are in the midst of crossing the equivalent of “Marketing Death Valley.”

At the very least – take a look at one of the fundamental concepts of marketing - the 4P’s of the marketing mix (Product, Price, Place, and Promotion). In the early 90's Prof Robert F. Lauterborn suggested that the 4 P’s should be replaced with the 4C’s (Consumer needs, consumer Cost, Convenience to buy, and Communications). Either way, do you believe that those are still useful as fundamental concepts for defining the marketing mix? How much can you tweak "price" in your marketing mix if some of your competitors came out with free products? What can you do about "place," now that it has become mostly ubiquitous and almost free? And how much should you spend on "promotion," when the new marketing scarcity is "customer attention" instead of shelf space, and where "findability" is the new name of the game? Sure, in some spaces you can still gain some differentiation by changing some aspects of the "product" mix - but most of those are very short-lived differentiations.

In a series of posts during the next couple of months we will be looking at what happened to the traditional rules of marketing – and try to understand what the new fundamentals are. Feel free to join this conversation and help us to make this series of posts worthwhile.

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August 3, 2006

You cannot outsource innovation to your users!

smartmob sm.jpgKathy Sierra over at Creating Passionate Users has a great post on why you cannot count on customers/users to innovate for you.

Quoting from her post, she says:

In this Web 2.0-ish world we're supposed to be all about the users being in control. Where the "community" drives the product. But the user community can't create art. (And I use "art" with a lowercase "a" as in software, books, just about anything we might design and craft.) That's up to us...

Our users will tell us where the pain is. Our users will drive incremental improvements. But the user community can't do the revolutionary innovation for us. That's up to us.

Bingo!

Of course you need to listen to your customers, and of course the customer is in control of many things that used to be controlled by the companies marketing their products and services - i.e., information about the product or service that levels/changes the balance of power in buying situations.

But that does not mean that your customers are in control of designing your next breakthrough innovation! It will never happen...and those companies that try to "outsource" their product innovation to their customers will inevitably condemn themselves to a slow dead by innovation monotony and product insipidness.

In an interview with Peter Drucker many years ago in Context Magazine - Drucker adds a few reasons why you cannot or should not outsource your product innovation to your customers:

  • 99.9% of your customers couldn’t care less about your product or service.
  • 70% of the people or organizations that should be your customers are not yet (and therefore by letting the existing customers dictate what your next generation product should be - you might very well never be able to meet the needs of those 70% who will make up your needed growth)
  • customers never buy what we sell

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Where will your killer competition come from?

explosive sm.jpg
It is a fairly well documented fact that some breakthrough innovations come from spaces that are not originally considered to be competitive. Nevertheless, it is still fun to witness one of those shifts firsthand.

If you have done any traveling in densely populated areas lately you may have witnessed a few of them. Have you noticed how fewer people seem to be wearing wristwatches - especially young people? Where did the competition come from? Cell phones...A quick online check indeed validates that the worldwide market for wristwatches is down by 10-18%.

So what else is happening? Are there fewer people carrying laptops in favor of web-enabled cell phones with email capability? Are more people using their phone to take snapshots instead of compact cameras? A quick online check does not offer any validation of these trends yet - if indeed they are real trends. But could the cell phone disrupt the wristwatch industry, the laptop market and the digital camera space?

Do you know if your industry may be under siege by stealth competition like this? Are you even looking outside your space?

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August 1, 2006

Mastering the new marketing practices

awesome_urinal.jpgOne of the great sessions at last month's CMO summit, which was organized by Corante and the Center on Global Brand Leadership, was moderated by Johh Hagel. While the session has been summarized in a variety of places, John now summarized his points on his own blog. At the risk of being somewhat repetitive I will summarize/paraphrase the post here as it has a ton of great insight...

So where does John think marketing is going?

For starters, he thinks that the current shift in the economics of business will force major changes in marketing. With attention being the new scarcity and customer acquisition and retention costs being on the rise - business will have to start focusing on economies of scope instead of economies of scale. In customer relationships it will come down to getting the largest share of wallet of any single customer rather than a fix share of wallet across a large number of customers. This whole trend is reinforced by the fact that the cost of interaction and the ability for customers to find information about vendors and products is steadily declining as well.

According to John, this all leads to the need for fundamental changes in the areas of marketing strategy, branding and performance metrics.

In the area of marketing strategy, we need to move from the 3I's (intercept, Inhibit, isolate) to the 3A's (attract, assist, and affiliate). Another way of looking at it is that we have to move from a "one to one" marketing to a "many to one" marketing mindset.

From a brand promise point of view - we need to move from a "buy this product because I am great" mindset to one closer to "buy this product because I know you and you can trust that I will configure it properly for you."

As for the new metrics, try these on for a change: average life time value of the customer (customer service execs - are you listening!), 80/20 segmentation of customers based on profitability, ROA (return on attention), ROI (return on information).

And so what are vendors doing?

As John says, they are...well...acting like vendors!

In response to attention being the new scarcity - they are bombarding us with intrusive ads on animals, in urinals, in the sky, and with other desperate moves to "grab" our attention. John has it right when he says "Rather than just focusing on how to get attention, vendors might also want to consider how they can help their customers receive attention that is important to them and not just from the vendor, but from others that matter to the customers."

And as is typical with any new wave of tools, they are also jumping on the new social media technology bandwagon - deploying blogs, communities, wikis and other network-enabled marketing tools without really asking themselves how this will help the customer, or how "it will increase return of information for customers."

John finishes his article with some recommended actions for CMO's to take: affiliate with partners to create more useful solutions for your best customers, change organizational roles so execs are in charge of the total customer experience, and adopt performance metrics that measure and reward the increase of the lifetime value of the customer.

As usual - a post chock-full of great insights for marketers.

Related Posts:
Whatever Marketing Becomes...
Markets +/vs. Marketing (Doc Searls' blog)

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July 31, 2006

Old brand logos "web2.0-ified"

Here is another great example of what CGM can do to your brand. This thread is one where they are adding a web.20 twist to old brand logos (Via JupiterResearch)

Here are some good ones:

chevy2_0.jpg

national geophlickr.jpg

pfizr20.jpg

Pfizer beta - Yikes

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July 27, 2006

Whatever marketing becomes...

marketing brain sm.jpgDoc replied to those who disagreed with him on Hugh's blog - concluding that whatever marketing becomes will start as a technology trend.

I do agree with many of the assertions in his reply regarding the poor state of marketing and especially product management in the Linux World and the Tech world in general. I would not, as he does, differentiate between marketing technology products versus marketing consumer electronics or consumer packaged goods. The role of marketing and the skill set requirement are very much the same across all industries. Having deep industry experience is an additional requirement layered on top of that.

Across all industries, marketers must play the role of "cultural anthropologist" to distinguish the real needs from the short term annoyances that people will find workarounds for by the time you can address them with either a new product or a new feature. They must also be able to interact, negotiate, and mediate with R&D, engineering, suppliers, competitors, partners, and other groups, to finalize "feasible" product plans that will meet the customer needs and include all the "relevant" innovations coming from those groups. And they need to be able to do that without being a gatekeeper or information traffic cop. In an age of rapid development and co-creation, they need to be comfortable in an environment where everyone can and should talk to everyone - regardless of organizational boundaries. Because, and within the constrains of not aggravating the customer, all of those groups need to have direct access to the customer to test and validate certain assumptions. Again, there is no difference in those fundamentals across industries.

Next they need to find ways to communicate with customers about the new products and services in the face of "attention" being the new scarcity. And while the solutions will differ from market to market, the range of options that need to be evaluated are the same across all industries. As part of that they also need to make sure that they set up the proper infrastructure to "listen" to market feedback on an ongoing basis instead of in episodic waves as they currently do.

Whatever marketing becomes will be enabled by technology. Wiki's, blogs, social bookmarking, technology enabled CGM, and many other new technologies are very powerful tools for companies to execute all the marketing functions - including all the customer touch-points - in different and better ways. Hopefully marketing will not become "defined" by technology, as that would make things much worse. Just take a look at what CRM did to sales and marketing...

Lastly, it is important to keep all things in perspective. What marketing becomes is not all that different from what it should have been all along...just take a look at what Peter Drucker said during the last three quarter century:

  • "Because the purpose of business is to create a customer, the business enterprise has two--and only two--basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business."

  • "The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself. "

  • "The most important thing in communication is hearing what isn't said."

  • "Quality in a service or product is not what you put into it. It is what the client or customer gets out of it."

And hopefully, what marketing becomes will also be heavily influenced by other disciplines besides technology - including sociology, anthropology, politics, economics, science, and others. Some of the best "field-specific" innovations have come from seemingly unrelated fields. Again, Drucker has a good example of that: "The new approaches to the study of history have, for instance, come out of economics, psychology and archeology all disciplines that historians never considered relevant to their field and to which they had rarely before been exposed....... By itself, specialized knowledge yields no performance."

Related post:

Marketing: The View from Silicon Valley vs. Madisson Avenue

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July 25, 2006

Markets without marketing?

hung to dry sm.jpg
Doc Searls has an interesting, albeit provocative, article in the Linux Journal, tiled "Markets without Marketing" (via Horse:Pig:Cow, which has a great follow-up post on it, as does Hugh, who also disagrees).

The article has a number of sweeping market observations, predictions and recommendations - many of which are fairly controversial :

  • One of the biggest problems with marketing is that it all too often focuses on "capturing and holding customers, rather than "finding and satisfying customer needs".

  • As markets are becoming truly free, we do not have much, if any, need for marketing. Marketing should get out of the way and let engineers talk directly with the customers who will be using the product.

  • Advertising is going to die and PR is already dead

  • Markets have evolved from conversations to relationships - which will require new skills and will get supported by the new tools

  • Marketing needs to get out of the website construction business - it should all get replaced with wikis, blogs, and other direct linkage between information about the products and the customer

  • Trade shows can be useful, but please do not send marketing folks
  • Nothing is worse that vaporware and yet that is what marketing pushes
  • Marketing does not know how you make money with technology or products - but engineering does. And besides, the real question is to understand how you will make money "because" of the technology... not "with" it.

Wow - Doc must have been seriously hit over the head by an old-school marketing spin-meister :)


It is true that many marketers are clueless and deserve the bad rap that they are getting. But more often than not, that behavior comes from the very top - with CEO's, CFO's and other VP's expecting marketing folks to do unnatural acts, and getting rid of them if they do not deliver the same old stuff.


Of course, marketing needs to get out of the way. It cannot be a bureaucratic wall between the customer and the company. But there is a huge gap between hearing what the customer says, and building successful products. Engineering has to have first line of communications with the customer. But while that may bring many advantages - ranging from a better understanding of customer needs by the people who are actually building the product, to better morale in the engineering team - this by itself will not lead to great product plans! You need very special skills and training to be able to turn market opportunities into successful product strategies.


And of course, we need to get rid of no-value web sites and replace them with linkages to the information sources that matter and enhance them with tools to enable various people inside and outside the company to talk and communicate with one another. But shouldn't you have someone in charge of that? Or do you believe that a free-for-all environment will result in an infrastructure where the customer will find what they need in a timely fashion?


And yes - marketing is too often focused on "capturing and holding customers, rather than "finding and satisfying customer needs"." As John Hagel says, they need to move from the 3I's (intercept, insulate, and inhibit) to the 3 A's (attract, assist, and affiliate) - no question about it! But shouldn't you have someone take the lead in that?

Look, you can argue that you do not really need a marketing department - and for practical reasons, I think you do. But you cannot argue that a company should have no marketing. Marketing is what a company should do. Everyone within the company should wear a marketing hat!

And yes, neo was right - "the problem is choice!"


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2 and 3 word key-phrases make up more than 50% of search-engine queries

According to Onestat, only 11.4% of all search queries are one-word phrases. 3 and 4 word phrases make up more than 50% of all queries (via Blog SEO). Surprisingly, even 4 word phrases surpass 1 word phrases by almost 50%.

It is also interesting to notice the cultural differences in the research - Canadians top search queries are 4 word phrases (24.02% of all queries) followed by 3 word phrases, while Germans clearly prefer 2 word phrases (making up 40.05% of all queries) followed by one word phrases.

All in all pretty strong proof that search engine marketers should invest primarily into multi-keyword phrases instead of standalone keywords.

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July 24, 2006

More good cgm examples

From the latest Worth 1000 contest (via coolz0r)

253905CHkg_w.jpg

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July 18, 2006

Successful formulas do not always work for others - especially when you miss the key ingredients

Hub.pngWhenever a company finds a new and successful way to reach a goal, or to reach a hard-to-get-to audience - many others follow quickly - copycatting the original company, often times with dismal results. In some cases, as is the case with word-of-mouth marketing, new entrants screw up the whole playing field for everyone.

There are three main reasons why copycatting does not always work. First off, many companies who copy others do so without really understanding what the real ingredients for success are. The second reason, which took down email marketing and potentially could take down word of mouth marketing for all of us is related to ethics and industry self-regulation in the absence of government guidelines. And the third one is that best practices are not always portable from one company to another.

The entry of Wal-Mart with a Myspace-like offering clearly falls into the first category (via adage - may require subscription). In an attempt to appeal to teens with something else than pencils and backpacks, Wal-Mart launched a social networking site called The Hub. The site is designed to allow teens (hubsters) to "express their individuality." They can create their own page to show it to the world, and they can post hot-lists of songs and movies. They can even shoot and submit Wal-Mart related video clips and have a chance that it will be picked up as part of their TV advertising.

So far so good.

Except that they screen all content, email all parents requiring their consent for teens to put up a page, and forbid users to email with one another. Oh, and they reserve the right to modify the commercial created with the winning video...

And they call that a "GENIUS WEB DESTINATION?"

It is web alright, but where are the genius and the destination parts? If all goes well, they may win the top price for the "most uncool" social networking site!

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July 17, 2006

Would you buy eggs with advertising on them?

egg-advert.bmp
The New York Times has an article on how CBS is planning to advertise their fall line-up right in your refrigerator (via Freakonomics blog)...

That is almost as bad as advertising on sheep along the highway...

Isn't interrupt marketing dead?

Or perhaps this is how people interpret Ambient Findability... if I can see what is on TV when cooking breakfast, then maybe I will program my VCR or Tivo to record it...

nah...


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July 12, 2006

Comcast - a tale of poor customer service and screwed up management decisions

So a guy has problems with his cable modem and spends time in Comcast's online customer service hell (he also happens to be the biggest champion for the movie snakes on a plane, even though the movie makers newer acknowledged that). Then Comcasts decides to send a technician out to have the modem swapped out. When the technician calls Comcast to activate the modem, he ends up in the same customer service hell hole as most customers end up in and spends an hour on hold - and falls asleep on the customer's couch. The customer videotapes the incident and puts it on YouTube. Next thing you know it gets picked up by mainstream media outfits like the NYT, Forbes, and even airs on MSNBC's "Countdown" program, just to name a few. More than 300,000 people view the video on YouTube.

Another good customer service story - right? This must have been a great wake-up call for Comcast management to start fixing their problems...

What do you think happened next?

Comcast FIRED the technician!

...now talk about a wrong-headed management decision.

What do you think?

(For more info - check out Mary Schmidt's blog)

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Can you actually get marketing and sales to stop fighting?

Funnel.gifAccording to a recent article in the Harvard Business Review (requires subscription or can be purchased), you could and you should strive towards integrated sales and marketing departments as the benefits of having both groups work in harmony are plentiful.

Stop marketing departments who spend on advertising without tying the results to sales, stop sales departments that only fulfill demand instead of (co)creating it, and stop managers for whom marketing is nothing more than selling and sales support... p.l.e.a.s.e!

The authors see two main sources of friction between sales and marketing - one economic and one cultural. The economic one has to do with the power distribution between sales and marketing in three of the four P's - promotion, pricing, and product. The cultural one, which may be even more entrenched, has to do with the fact that the two departments attract vastly different types of people - with different educational backgrounds, skill sets, etc.

The article offers a few suggestions to better align the marketing and sales departments:

  • Encourage disciplined communication - and that does not mean more communication, which is expensive.
  • Create joint assignments and rotate jobs
  • Improve sales force feedback

Once you have your sales and marketing departments aligned you can go a step further and work towards achieving an integrated relationship. The authors suggest the following actions to achieve integrated departments:

  • Appoint a chief revenue or chief customer officer - a CRO or a CCO
  • Define the steps in the marketing and sales funnels
  • Split marketing into two groups - strategic and tactical groups
  • Set shared revenue targets and reward systems
  • Integrate sales and marketing metrics

While some of the advise and terminology may seem a little staid or even passé (after all, is marketing still about the 4 P's? and is the buying process still a funnel?), the advise is solid and practical and should benefit any company with dysfunctional marketing and sales departments.

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July 11, 2006

Marketing software tools just don't cut it yet...

A new study released by the Business Performance Management Forum (via ClickZ Stats) found that despite continued investments in CRM and other market/company tracking data software solutions, most product marketing and product management executives use spreadsheets and gut instinct to make key business-changing decisions.

While the study implies that this is a refection of the current state of the marketing software solutions, one should not discount the possibility that it could also be an indication that marketing execs do not believe that you can extract business-changing decisions from existing company data.

There is no doubt that the current state of marketing software solutions are woefully inadequate (siloed, too hard to use, etc.). That being said, it could be that the solutions that will find the widest adoption are not those that increase complexity while enhancing usability, but rather simpler tools.

Look what wikis are doing to the collaboration space...

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Fear of social networking sites like MySpace may be overblown...

According to a new study conducted by California University Psychology Professor Dr. Larry Rosen (download press release here), the MySpace sexual predator reports in the media are widely overblown/unfounded (via apophenia)

Rosen's study included interviews with 1,500 MySpacers and 250 parents and found that (partial list of findings - for full findings download pdf here):

  • Only 7% of those teens interviewed were ever approached by anyone with a sexual intent and nearly all of them simply ignored the person and blocked him from their page.
  • Two-thirds of the parents were sure that there were many sexual predators on MySpace, while only one-third of the teenagers shared this concern.
  • Teenagers spend an average of 15 hours per week on MySpace.
  • One in three admits their MySpace activity has negatively affected their schoolwork, family life, or both.
  • Only one-third of the parents have seen their child’s MySpace page and only 16% check it on a regular basis.
  • However, 70% of the adolescents said they would feel comfortable with their parents looking at their MySpace page.

Rosen makes an interesting point when he says "MySpace is the 13th largest country in the world. Teens live in this virtual world and parents need to pay attention. It is not a fad. It is not going away. And it is not a scary place. Teenagers can live and grow there with help from their parents.”

Meanwhile, the social networking space continues to heat up, with Bebo (a MySpace competitor especially popular in the UK) rejecting a $550M acquisition offer from British Telecom (apparently they are looking for offers north of $1b).

While there is no doubt that sites with that many users should be able to monetize their traffic, it is will be interesting to follow the emerging new marketing models that will make these sites truly scalable and predictable from a revenue point of view.

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July 6, 2006

Eager sellers and stony buyers - why sellers always overvalue their products

The June issue of the Harvard Business Review has an interesting article describing some of the latest findings in the psychology of new-product adoption (here - can be purchased or requires subscription).

According to the author, Prof. John Gourville, there are a few psychological biases in decision making that need to be considered when using Everett Rogers' "relative advantage" as a measure for successful product adoption.

Gains and losses:
First off, people evaluate attractiveness of new products and services not on an objective scale, but on a subjective/perceived scale which is based on products they already own. Every benefit of the new product compared to the new one is considered a gain, and every shortcoming is considered a loss. The kicker is that potential buyers give losses a much bigger weight than gains in their decision making process. In fact, multiple studies have shown that gains have to outweigh losses 3:1 before customers will adopt the new product or service.

The endowment effect:
Because of this loss aversion, people value what they have more than what they don't have. In fact, multiple studies have shown that people demand 2-4 times more compensation to give up products that they already possess than they are willing to pay for those same items in the first place!

Status quo bias:
The status quo bias explains why people tend to stick with what they already have, even when a better alternative exists. Studies have shown that the extend of loss aversion grows over time from a factor 2 to 4 - meaning that people's pain perception of giving up something increases over time and reduces their willingness to trade up.

But that is not all! Not only are consumers overvaluing losses and existing benefits of entrenched products by a factor 3, sellers are also overvaluing the benefits of their innovations by a factor 3. That makes the mismatch between what innovators think consumers desire and what consumers really want 9 to one!

So what is one to do? The author has a few suggestions. Come up with products that contain few product changes and require little behavioral changes and you will end up with an "easy sell." If your new product has considerable product changes compared to the incumbents - make sure that they require little behavioral changes. By doing so you may end up with a "smash hit." A high degree of product change combined with a high degree of behavioral change is much like the TIVO and those innovations are "long hauls." Doomed out of the gate are those new products with little product changes that require a high degree of behavioral change.

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July 1, 2006

Affiliate marketing run amok...

This site just got spammed by affiliate marketing sites promoting some new Nokia phone...which led to the ban of Nokia as a keyword on comments. Somehow it is hard to believe that Nokia would benefit from such tactics...and even harder to believe that their marketers would have condoned this...

But is there really nothing they can do to stop this behavior?

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June 29, 2006

Customer entropy partially to blame for poor customer service

chaos2.jpgCome to think about it, customer entropy (or customer apathy) is partly to blame for the state of customer service. The reason most companies deliver bad customer service is because they can - not enough customers complain or abandon brands after a bad customer service experience.

If more people were to talk back to companies or report customer service abuse to their local local consumer affairs departments, the overall state of customer service would improve.

What do you think? Is there a way to foster consumer activism so that we can finally get the service that we deserve, the right return on providing our personal information as part of buying transactions, and intelligent humans to interact with when facing post sale issues? Or is it like voting - enough people are generally happy enough so that the only thing we can expect is status-quo?

You would expect that a new entrant who delivers outstanding customer service would change the playing field in that sector - but is that really happening?



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June 25, 2006

The bar to deliver customer service "delight" is ridiculously low

airline sm.jpgIn the last week I joined an army of people who recently had bad experiences with airlines. It is fascinating to see how low the bar to "delight" customers through customer service has gone in the airline industry (and many other industries) in North America.

My story started with a trip to the West Coast on American Airlines. Since I had ordered my ticket late and had no seat assignment, I went to the airport extra early to get a good seat. When I checked in they gave me a center seat and said that the gate agent would be able to switch me (customer service tip #1: pass the buck). Next I sat in an airport security line for 45 minutes. They had one security line servicing at least 30 gates. First class passengers had their own, and much shorter security line, which ticked off many passengers as TSA (Transportation Security Agency) employees who manage airport security are not American Airlines employees but government employees paid with our tax money. When I finally got to the gate, the agent did not even faint trying to help me - she rudely told me to take a seat as the flight was full (customer service tip #2: screw the customer).

What happened next is the best part. I boarded and realized that my seat was broken. I promptly informed the flight attendant of my problem - after all, who would want to be on a six hour full flight in a broken seat that cannot be locked in its upward position? The aggressive and non-friendly response from the agent was: "I am not sure that they can fix it, and because YOU now reported this problem they may have to take you off the plane and not fly you to California today!" So she was implying that it was my problem, since I had reported one of their defective seats (customer service tip #3: blame the customer). If only I would have sat up-straight and pretended that nothing was wrong with the damn seat, that would have been a much better solution for HER! I put up a stink and they reluctantly gave me another center seat so that I could make it to California.

Then came the weekend, when I had to fly United Airlines to Vancouver. 3 hours prior to my flight I get a call from one of their automated machines informing me that my flight segment from Chicago to Vancouver was cancelled and that perhaps other arrangements had been made for us. When selecting the option to speak with a representative I got a fast busy tone, so I called the main United 800#. After being in a queue for 35 minutes, during which I discovered that my flight was the last one out of Chicago to Vancouver that day and that there was another alternative flight route through Toronto, I finally got a "somewhat" live person on the phone:

United: may I help you?
Me: your automated service just called me to inform me that my flight segment from Chicago to Vancouver has been cancelled and that other arrangements may have been made
United: they did call you and told you that?
Me: yes
United: well, they tell you stuff before they tell us, I see no such thing in my record...
Me: well, can you at least see that the Chicago to Vancouver was canceled?
United: hold on...oh yes, you are right, the flight was canceled
Me: so what should I do?
United: fly to Chicago and see what they say
Me: but it is the last flight out of Chicago today, it makes no sense for me to go there...
United: hold on...oh, yes, it is the last flight out of Chicago
Me: so
United: you should go to Chicago and they will help you there...
Me: there is an alternative through Toronto on Air Canada - your partner
United: oh I see...let me check
United: there is no flight out of Chicago to Toronto that will get you to Vancouver...
Me: no, but there is one out of Boston that will get me there
United: oh, I see...let me check...this was the last flight out of Chicago..
Me: yeah...but this is Boston...
United: oh I see...I can "protect' that flight for you
Me: great! So you are confirming that I know will fly from Boston to Toronto and then on to Vancouver
United: yes.
Me: do I just check in at United or do I go to Air Canada?
United: that I do not know...try both...
Me: thank you very much

This was not an exchange on Saturday Night Live or some other comedy channel...this was real (customer service tip #4: hire real cheap labor and try cutting cost on training and IT!

No wonder JetBlue has such high praises from customers. In a market where the bar is so low, it does not require much to delight customers!

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June 22, 2006

Marketing: The View from Silicon Valley vs. Madisson Avenue

death valley sm.jpgAfter participating on a panel on customer conversations at SuperNova yesterday I was asked to prepare a thought for the open mic attendee round table - which, while not new and totally original, I thought would make sense to put up here as well...

Following the organization of our marketing innovation conference a few weeks ago, and after seeing sessions at WOMMA and SuperNova related to marketing, advertising and customer relationships, it dawned on me (probably late - I know that others, like Max Kalehoff, have already made that observation), that there is a huge chasm between the way Silicon Valley/Web 2.0 type people look at marketing and the way Madison Avenue looks at it.

There is more than one difference, but one that deserves particular focus is how Web 2.0-centric people look at "attention" vs. Madison Avenue advertising types focus on "engagement" - and the difference is deeper than just one of perspective - i.e., customer-centric view vs. a marketer-centric view of marketing.

We look at attention as the new scarcity in the marketing value chain - and we analyze how that impacts marketing, brands, and metrics. John Hagel talks about how attention scarcity forces us to shift from the current way of doing marketing, which he summarizes by the 3I's (intercept, insulate and inhibit), to a new way of doing marketing, which he captures in the 3A's (attract, assist, and affiliate). With attention scarcity, many people agree that we need to move from product/company-centric brands to customer-centric brands. And with all that comes a call for new metrics based on attention and customer information. Some, like the AttentionTrust, even call for better protection and customer control of their own attention data. All cool and cutting edge stuff when it comes to marketing...

Madison Avenue types on the other hand have finally realized that the eyeballs have gone, that their current metrics are worthless (impressions, CTR, reach, frequency, etc.), and that the new prime time is 9-5. In an effort to create new relevancy they have come up with a new, if somewhat vague, metric - "engagement" (defined by ARF as: "turning on a prospect to a brand idea enhanced by the surrounding context.")

Of course, there is no way to discount Madison Avenue just yet! While Larry Weber may be right when he says that spending money on traditional media is like pouring water into a sinking boat, instead of out of the boat, the reality is that many marketers are lazy and clueless and continue to operate in their comfort zone - increasing TV advertising in the face of declining viewership, just to name one example.

Remember - change hurts!

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June 20, 2006

Conferences this week...

Today I am at WOMMA's 2nd WOMBAT (word of mouth marketing association). So far, and with few exceptions, the sessions have been pretty useful and interesting, and if you are interested in seeing live blogging from the sessions, check out Olivier Blanchard's blog, who is one of the few official bloggers for the conference.

Troubling was the fact that many people speak of WOM as if it were yet another department or function (some even look at it as a new medium ?) in the marketing department. Unless marketing becomes totally integrated and tied together with other company functions like sales and customer service, just to name a few, most marketing people will fail. The same is true for WOM if it is to succeed.

The metrics sessions left many people asking for more. Sure 92% of people consider wom as their best information source, and positive wom outperforms negative wom 6 to 1. And a great majority of wom happens offline instead of online. But we were not able to get an answer on how they actually measure online word of mouth. So for example, if Jeff Jarvis complains about his Dell, do they count that as one negative story, or do they count it as 100's of thousands of negative stories - which is probably the right number considering that this many people actually read the story (and continue to read it because it gets a high ranking in Google searches).

More later...

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June 19, 2006

Hello Verizon, is anyone there?

This from the company whose motto is : We never stop working for you. Last week I, along with what must be thousands of other Verizon customers, got a direct mail piece offering to cut my phone bill by $17 a month with a new calling plan called Freedom Essentials. All I had to do was call 1-888-671-2466 today to switch. So foolish me, I call the number and instead of reaching an operator, or even being placed in a waiting queue, I get the following message: " Due to the overwhelming demand we are unable to take your call so please hang up and try again later." This is clearly not my idea of a company that never stops working for me. This is a company that simply stopped working. Since my first unsuccessful attempt at reaching Verizon I have tried nine more times. The last few attempts didn't even get me as far as the call-back-later message. I got a busy signal instead. So I wonder what, if any coordination, took place between the marketing geniuses who thought up this promotion, and the call center that was to handle the calls. This makes me think of Lilly Tomlin's Ernestine the phone operator, reminding me that when dealing with the phone company, they're the phone company, and I'm not. Hang up and call back later.

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June 16, 2006

Do you believe in CGM research?

Laurent over at the customer listening blog takes exception with the views of an old-guard marketing tweak on the importance of cgm research...and is hosting an interesting discussion on the subject.

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Best practices are meaningless - but worst practices are to be avoided

Target practice sm.jpgBased on some comments made during last week's Innovative Marketing Conference, Rebecca Lieb from ClickZ ponders whether best practices even exist.

Bryan Eisenberg said that best practices are often times achieved under very specific conditions and can therefore not always be generalized. Len Ellis said, give me emerging practices, best practices are so yesterday!

All this rings so true. If a practice becomes a best practice that is replicable across other companies or industries, you have to assume that most of your competitors will have adopted that practice - thus giving your company no competitive advantage from embracing it.

What companies really should do is to avoid replicating "worst practices" - a practice which if you were from another planet observing what earth companies do you might conclude they do on purpose:

  • Screw customers after they purchase products by treating call centers as a cost centers instead of customer relationship based economical centers

  • Continuously interrupt prospects with rude and mostly out-of-context messages

  • Treat employees as disposable cost centers instead of valuable customer interfaces

  • Insult customers' intelligence with stupid messaging or by blaming them for product failures.

  • Grab a ton of information about prospects and customers and give them nothing in return - or worse - asking them for the same info over and over again

  • ...and so much more

Let's ban the worst practices first, then let's worry about best and emerging practices!

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June 15, 2006

$50M ad campaign for newspaper advertising...

Check out this new $50M advertising campaign by the Newspaper Association of America. Maybe I am missing something...but what does "in an opt-out world, consumers opt in to newspaper advertising" really mean? Would it get you to buy more newspaper ads?

l-r-full.jpg


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Pitching cars to tweens - buy a virtual Toyota Scion online

adco[1].600

The New York Times yesterday reported how Toyota is selling virtual Scions in an online game frequented by tweens and teens. Players can buy the car, modify it, pick up friends that don't have the cool car yet, and join a club - which was visited over 33K times so far!

Talk about influencing brand image early!

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June 14, 2006

Is the need for higher customer transparency really new?

hype cycle.jpgMany people talk about the increased need for customer and employee transparency, or about the fact that people do not trust what companies have to say "anymore." But are those really new? Or are they being hyped up by consultants who are trying to create the next hype-wave to ride on?

if you look at the most recent brain research, it would show that this trait has been with us forever. If the brain is hardwired to detect "errors," and when it finds them it turns our brain into a 2 year old child's brain who will resist anything coming from that source - then we should have been rejecting and mistrusting all "marketing hype" ever since it existed. People have always expected "error-free" (=true) messages! There is nothing new here, we are hardwired for it.

Maybe what happens is that with the exponential increase of phony sounding marketing messages, more people have started focusing on associating them with BS and have developed new subconscious neural pathways or mental maps to discard them all. Or maybe the messages have just become more phony and exaggerated in companies' quests to differentiate themselves within an increasingly cluttered marketplace.

And maybe the fact that some studies show that an increasing number of people distrust companies can be explained by the fact that it has become more socially acceptable and definitely more doable for consumers to fight back and publicly expose the "marketing untruths," - thus changing the collective (un)consciousness which associates corporate messages with mistrust or untruth. Or maybe it is just a cyclical anomaly, and two years from now we will be back up.

Another important consequence of all this is in the area of word of mouth recommendations and consumer generated content. As more and more companies start to "manage" that channel, often times without full disclosure, more and more "errors" will seep into the word of mouth recommendations - over time causing the effectiveness and trustworthiness of word of mouth to erode as well.

One thing is for sure - the customer has more ways to retaliate against a company than ever before - making the "customer is increasingly in charge" statement a true statement.

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June 13, 2006

Execs only read 9 blogs?

I just got an email from MarketingSherpa saying that: "According to 2006 study data, a typical business exec reads nine (9) blogs regularly."

Unfortunately, the source of the study is not revealed. But then again, the email was not announcing the results of some new study study - it was a call for nominations for your favorite marketing blog and podcast.

The deadline for nominations is Friday the 16th, and voting will start on the 20th.

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June 12, 2006

Why is customer service at Starbucks consistently great - while the service at most other take-out joints sucks?

Customers - care.pngYou go to Starbucks and the energy is positive, the service friendly, and experience somewhat consistent from store to store. You go to Bruegger's and there is no energy to speak of, the service is chaotic at best, and the consistency - let's say non-existent.

Now if you think that that is bad, and happen to live in a town like mine - try placing an order with Papa Gino's or Domino's - it will not only be the chaotic service and low energy or the "I don't care" attitude you will have to deal with - it's pure stupidity! Never do I know whether I will fall within their delivery zone or whether some new driver will decide that I am just outside of it, and usually I do not find out until well after I placed my order and have a house full of hungry/angry kids.

So what do you think makes up the difference between those outfits?

One theory, put forth by management consulting guru John Hagel says that too many companies focus on the transactional view of economics instead of the relationship view of economics. Makes sense! The fact that Starbucks employees get more benefits, stock options, and promotional opportunities not only makes them happier employees - it results in an energy that can be "experienced" by most customers who visit their stores.

Another reason is that the marketing execs at those companies who cut corners in customer service are probably not grokking marketing the way Burger King's CMO Russ Klein does - where every "out of home food dollar" is considered to have a "social component" to it!

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Coverage from the 2006 Innovative marketing Conference

imc20062.jpgWhile wearing the many different hats of MC, coordinator, wifi guy, podcast traffic cop, and many others at the 2006 Innovative Marketing Conference, I was not able to take good notes of the great discussions that took place at the conference. Thankfully, many others did, and I will try to capture most of them here. I will also elaborate on specific sessions/discussions in future posts.

Overall I believe that we delivered against the promises that were made ahead of the Innovative Marketing Conference. We promised that it would be a conversation about the new marketing foundations that need to be built in the face of the ongoing breakdown of the old rules, and we delivered just that - few slides and one way presentations and many deeply insightful discussions. We also promised that this conference would be a conference about marketing as a whole – as one of the main premises for the event was that unless all aspects of marketing are tied together, marketers will fail! Here too, I believe we delivered against that promise - with many sessions focused on tying all the conversations together.

But enough bragging - here goes the summary and associated links to interesting posts from across the blogosphere.

Day 1 - CMO Summit

We started both days with a CMO telling us what it is like to be in the trenches. The first day's keynote, delivered by Russ Klein, CMO at Burger King, was insightful and surprising for its degree of innovation. He spoke of how they started looking at Burger King as a "social brand" in order to revive it, introduced their social currency strategy and much more. You can listen to a podcast interview with Russ here, and you can find some good summaries of the speech at:

Next up was a discussion about the creation process of products and services, and the role of innovation, co-creation and many other new factors on that process. The discussion was led by David Sutherland and you can find some good summaries at:

  • The Fast Company Blogjam, which has a number of entries on this session including this entry on co-creation, this one on the challenges of co-creation within and outside organizations, and this one reflecting one of the live discussion groups led by John Winsor
  • Johnnie Moore's blog, where he has a great entry on the co-creation discussion
  • David Weinberger's blog, Joho, where he has a good write-up on this session

John Hagel's fabulous session on attention scarcity and what that means to brands, marketing and metrics is summarized at:

  • The Fast Company marketing BlogJam, which has a number of entries on this session, including the following summary posts this one, this one and this one, this one on choosing what business you are in, this one on what it is we can learn from evangelists, and this one on how companies have to change their marketing from the 3I's to the 3A's
  • David Weinberger's blog, Joho, where he has an excellent write-up on the session
  • Johnnie Moore's blog, where he has a great entry on moving from the 3I's to the 3 A's
  • Mario Sundar's Marketing Nirvana, where he also has a good summary of John's session.
  • Chris Carfi's Social Customer Manifesto, where he has a good summary of the session as well
  • Jason Chen's Blog

Next came David Weinberger, who led a discussion on the future marketing department. Good summaries for that session can be found at:

  • The Fast Company marketing BlogJam, which has a number of entries on it, including this summary, this post on whether the CEO should be the CMO, this one on the repair tools to fix the marketing department, and this one on whether a marketing department should manufacture demand
  • Johnnie Moore's blog, where he summarizes one important point of David's session, how blogs are complexifying messages

Prof Bernd Schmitt wrapped up the day by summarizing what we discussed that day and by attempting to tie it all back together. We have recorded this session and will post the audio transcript online shortly. For now you can listen to a podcast interview with Bernd Schmitt here..

Day 2 - Marketer's Forum

The CMO who kicked off the second day was Deepak Advani, CMO at Lenovo. He spoke of the challenges to build a new brand across national and cultural barriers and also touched on what it means when your brand comes under attack by xenophobes. You can listen to a podcast interview with Deepak here, and you can find summaries of his speech at:

  • The Fast Company Marketing BlogJam, which has a number of posts on it Including this summary of the session, this entry on innovation, and this post on where design should reside in a company

  • Heath Row's Squidoo lens on a new marketing foundation

  • Judy Breck's Golden Swam, where she has a good summary of that part of the speech where he talked about sponsoring a non-profit to help students with used computers

  • Bill Tancer's blog at Hitwise, where he reports on the session and ads some Hitwise stats in the process

Next up was a panel discussion on models for innovation, where David Sutherland from the Launch Institute, Gwen Ishmael from Decision Analysts, Tony Ullwyck from Strategyn and Paul Zarookian from AIG debated all the different angles of innovation. You can find summaries of this discussion at:

  • Joseph Jaffe's Jaffejuice, where he talks about the importance of the 1 percenters...
  • Heath Row's Squidoo lens on models for innovation
  • The Fast Company Marketing Blogjam, which has a post on this session here on innovation = creating things your customers will value

After that we had a great session on the new marketing tools that are available to marketers, which was ably moderated by Johnnie Moore, and included Kevin Lee from Did-it.com, Heidi Lehman from Third Screen Media, Max Lenderman from GMR Marketing, Bill Tancer from Hitwise and Diane Hessson from Communispace. You can find some summaries at:

A particularly hot topic - the pros and cons of online marketing in the context of consumer generated content - was debated in the next session. The session was moderated by David Rogers from the Center on Global Brand Leadership, and included John Hiler from Xanga, Craig Newmark from Craigslist.org, and Chris Tolles from Topix.net. Good summaries of that session can be found at:

You can also listen to a Skypecast we did on the subject ahead of the conference

I was told that you could not have a marketing conference without a session on metrics and measurement, and so we put a great session together with Max Kalehoff from BuzzMetrics, Bryan Eisenberg of Future Now, and Ruth Stevens from eMarketing Strategy. Summaries of the session can be found here:

Kicking off the afternoon sessions were Larry Weber from the W2 Group and Lois Kelly from Foghound, talking about the future marketing department - a lively and provocative session to say the least - and which is summarized at:

  • The Fast Company Marketing Blogjam, where there are a few articles on this session (here on compensation for spreading wom, here on contributing to communities, here and here from some great quotes from the conversationhere for the answers to the 10 questions that Lois asked him, and finally here for a rough transcript of the whole session)
  • Heath Row's Squidoo lens on the changing face of marketing

You can also find a podcast interview with Larry here and listen to a Skypecast that he and Lois did ahead of the conference here.

After that we had a session on the future of advertising - led by Joseph Jaffe from Jaffejuice and including Chris Hoyt from 141 Marketing, Lee Johnson from McCann, Rick Klau from Feedburner and Len Ellis, most recently with Wonderman. A set of summaries for this session can be found at:

The last session before the wrap-up was a discussion on the future of PR - which consisted of a lively panel with Neville Hobson from Nevon, Lois Kelly from FogHound, Shel Holtz from Holtz Communication + Technology, and John Moore from Brand Autopsy. A good summary for this session can be found at:

Professor Bernd Schmitt then closed it all up and you can find the summary of his closing remarks at:

Other, overall conference commentary can be found at

A photo stream of the event can be found on Flickr.

You can also listen to tens of podcast interviews which Shel Holtz and Neville Hobson did during the event - including interviews with Craig Newmark from Criagslist.org, Dianne Hessan from Communispace, Max Lenderman from Axe fame, Johnnie Moore and John Winsor on co-creation, David Sutherland from the Launch Institute, Eric Mankin from the Center on Enterpreneurship at the Babson University, in addition to the ones listed above with Russ Klein, Deepak Advani, Bernd Schmitt and Larry Weber.

Keep checking the site as we will be adding additional edited audio versions of the sessions in the next few of days.

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June 8, 2006

Conference feedback on many sites at this point

Unfortunately I have not have much time to report back from the first day of the 2006 Innovative Marketing Conference. The conversations so far have been unbelievable rich and at times intense. Fortunately you can read or listen to some of the things that happened here today on the Fast Company blog, David Weinberger's blog, Johnnie Moore's weblog, the social customer manifesto, and of course on the For Immediate Release report.

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June 2, 2006

Another really interesting Skypecast on the future of marketing

I was lucky enough to host PR guru Larry Weber and interactive marketing pioneer Lois Kelly for a great conversation on the future of marketing. You can listen to the conversation by downloading the MP3 of the session here.

Some random snippets from the discussion include:

"...the first thing marketers should do is stop spending so much money on traditional media - it's like throwing water into the boat, and not out of the boat..."

"...many marketing departments embrace the new marketing platforms but it's amazing to see how they organize themselves like they did 25 years ago..."

"...I would organize marketing from the bottom up....innovation still never comes from the top down....I would look at things less in categories like PR, advertising, direct marketing....and start looking more in campaign orientation...."

"...the weaker the dialog the weaker the brand...the stronger the dialog the stronger the brand..."

"...Madison ave hijacked the browser in the last 10 years...we need to reclaim it..."

"...marketing should be at the center of everything...because the center of dialog will be at the center of a company's success..."

"...the "idiot of the month" award goes to the Disney Corporation..." talking about their TIVO proof technology.

I will publish a more thoughtfully digested version soon, but wanted to give you some snippets to entice you to listen to this great conversation asap. And don't forget that Lois and Larry will be having a live conversation at our marketing innovation conference next week - so make sure to join us there!

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Pew: 35% of all internet users have posted content online

connectsm.jpgPew Internet & American Life Project Report found that "35% of all Internet users have posted one or more of four types of content to the internet: having one's own blog; having one's own webpage; working on a blog or webpage for work or a group; or sharing self-created content such as a story, artwork, or video." If you only look at broadband internet users, that number becomes 42% (via ClickZNews - click here for PDF download of the report).

"Sharing a variety of creations online is among the most popular kinds of user generated content," says the report, in fact, 26% of internet users "have shared their own artwork, photos, stories, or videos on the internet." Younger people are more likely to do so, with 51% of the "under 30" home broadband users posting content online vs. 36% of older high-speed users.

Combine this with some other research - like the one that says that adults spend as much time online as watching TV - and you can start seeing, in quantifiable ways, the potential creative effects of the Internet as well as the already obvious enhanced social networking effects.

But considering that the study found a statistical correlation between broadband use and many of its other findings, it also goes to show that governments have a duty to ensure that a high-quality, high-speed Internet infrastructure is accessible to all its citizenry - not exactly a feat that many large western democracies can point to.


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June 1, 2006

Don't miss tomorrow's Skypecast - Larry Weber & Lois Kelly on the future marketing department

Tomorrow at noon (EST) we will be having Larry Weber, PR Guru, author and founder of the W2 Group, and Lois Kelly, interactive marketing pioneer and partner at Foghound, discuss the future of the marketing department in a Skypecast.. You can find more information about the upcoming Skypecast here. To join - simply go the Skypecast url at noon and log in with your Skype account. If you do not have a Skype account, it's easy, sign up for a free account, it will take you less than 2 minutes.

If you missed some of the Skypecasts that we ran leading up to our Marketing Innovation conference next week, you can go to the event's home page and look for MP3 recordings in the sidebar (contact me at francois AT corante DOT com if you still want to get access to the physical conference next week - I will find a way to get you in!).

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May 31, 2006

The debate over which type of word-of-mouth is more damaging continues

mercedesstern_320x320.jpgFirst a refresher - the Keller Fay group came out with a study that found that 92% of word of mouth (wom) happens offline and that positive wom outnumbers negative wom 6 to 1. I argued that online negative word of mouth might have a more devastating effect on buying decisions because the buyer is in a more active buying mode when searching for information than when being the recipient of positive wom at a cocktail reception.

Pete Blackshaw wrote a great piece commenting on the same study and concluding that "incidental" word of mouth - which is mostly negative and online - might indeed have a bigger impact on buying decisions than positive offline "intimate" word of mouth. Walter Carl from Northeastern university responds with a call for more research. Interestingly enough, he also lists the primary motivations for people to spread negative WOM - altruism, anxiety-reduction, advice-seeking, and vengeance.

All in all I wonder if the studies take into account that online negative word of mouth repeats itself - so while I may only have left one bad review of Mercedes online, the fact that 5,000 people read it , and that search engines keep sending 20-40 people a day to read it, is the same as if I would have told the story 5,000 times, and still tell it 20-40 times a day.

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May 30, 2006

Another interesting conversation leading up to the innovative marketing conference

If you have not heard the transcript of the Skypecast conversation we had with Pete Blackshaw and Max Kalehoff from Nielsen BuzzMetrics and Chris Tolles from Topix on the threats and opportunities of online marketing in the context of consumer generated content - make sure to go to the Corante/Columbia University 2006 Innovative Marketing Conference's home page and download the MP3 file of the conversation from the sidebar.

While there, also make sure you check on the latest list of speakers. It is packed with awesome people who have shaped the field of marketing and are likely to shape the future of marketing.

If you have not signed up yet - make sure you do so - we still have some spots left!

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May 24, 2006

Spoof advertising - what do you do when this happens to your brand?

Ouch - I bet you that Absolute is not too pleased with these (from Adbusters via Coolz0r)...

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Caption on this one says "Nearly 50% of automobile fatalities are linked to alcohol. 10% of North Americans are alcoholics. A teenager sees 100,000 alcohol ads before reaching the legal drinking age."

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Caption on this one is " "Drink provokes the desire but takes away the performance" -William Shakespeare"

And it's not just Absolute...here is another good one from Adbusters

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There are some good examples of consumer generated content...

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New study finds no link between ad performance and magazine reader time

A new study by Starch Communications research found that there is no connection between ad effectiveness and reader "engagement" with magazines - i.e., the frequency with which they read the magazine, the total time they spend with the magazine, how much of an issue they finish, etc. (via adage).

This is so counter-intuitive that at first it seems almost impossible. After all, with high engagement comes a whole lot more impressions. That being said, maybe this proves the point that advertising only works on those people who are susceptible to that particular brand message at that particular point in time - either because they have an active need or because some other channel triggered their attention to the brand first.

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May 23, 2006

Cheap advertising - or an expensive peep show?

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"One million Swarovski crystals were needed in all to cover our breath-taking model with these sparkling little stones, thus creating an erotic overall-artwork.

With each purchased stone you uncover the artwork a little bit more and you help to overcome frontiers and make the earth sparkle!"

So goes the copy on the Million Crystal Body web site - and it goes on with "This way, we create a world-spanning community of people who appreciate high-quality aesthetics."

One Euro gets you one stone removed from the model's body. 50 Euro gets you a banner ad on the site.

Cheap advertising or a really expensive peep show? You can be the judge...

(via MIT Advertising Lab)

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More on online vs. offline word of mouth - incidental vs. intimate WOM?

weak links.gifPete Blackshaw - who also was a panelist at Beyond Blogging 2006 last Friday and got to listen to the same keynote address by Ed Keller which promted my last post - has a different alternative to differentiate between the offline word of mouth and the online word of mouth.

In his post he introduces the "2I Framework" - "Intimate" word of mouth, which happens between people who are familiar with one another, and "incidental" word of mouth, which which has no basis in an existing (or trusted) relationship and which is what happens to the vast majority of web based word of mouth. He too argues that the impact of online, search-based word of mouth may go far beyond the power of offline word of mouth, especially when it consists of negative word of mouth. And when negative comments are online - it does not matter whether they came from an "influential" or an "average Joe!"

Again, I do believe that the fundamental question is to understand what stage of the buying cycle the buyer is in when searching for information online or when looking for recommendations offline. If he or she is in the early stages of the buying cycle while surfing for information online - trying to narrow down the list of potential choices to two or three - then online negative word of mouth would have a dramatic impact on that buying decision, no matter how much offline WOM is happening about a given product. Of course, given the recent Yahoo!/OMD study "the role of online research on offline purchases" results, the answer to that question is not that easy if indeed the shape of the traditional purchase "funnel" changes into a "tumbler!"

Pete brings up another good point - that with the increased amount of artificial WOM happening offline, the "trust" part of the equation with friends and family may erode - resulting in people becoming disproportionally influenced by other consumers.

Hey, it's the "theory of weak links" for WOM!

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May 22, 2006

More and more "edgy" ads released by agency/company

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After a version of the Volkswagen Passat ad was released a few weeks ago on YouTube where one of the characters with ego problems says "because mine is only yeah big" instead of the official version where he says "because I am overcompensating for my shortcomings," here comes another example of a vendor/ad agency planting a seemingly unapproved ad version online. This time the Durango ad, banned for TV, has two guys in a bathroom arguing about "Mine's bigger, no, mine is" (and 7 inches makes a difference - via Adrants).

While these are fun to watch, it can be dangerous for companies to release what could be construed as consumer generated ads. Although there is of course a major difference between the two, take the Sony PSP graffiti as an example of one such campaign that backfired.


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Most word-of-mouth buzz is positive and travels offline - but don't get rid of your online WOM efforts just yet!

online press sm.jpgNew research from the Keller Fay Group has found that the average American mentions specific brands 56 times during approximately 100 conversations in a week's time (via advertising age).

Other findings from the research include:

  • Positive mentions outnumber negative mentions 6 to 1
  • 92% of brand conversations are happening offline, of which 20% happens over phone
  • Only 9% of conversations are "mostly negative"
  • People are more likely to pass along good mentions than bad ones - so good news travels faster than bad news!
  • 41% of conversations mention advertising
  • 72% of opinions about brands are shared by family members and personal friends, 13% are shared by co-workers and 7% are shared by a professional or expert on the topic
  • The Internet (12%), television (7%) and newspapers (5%) are the top three media channels most frequently referenced in brand-related buzz
  • Email, instant message and online chat rooms/blogs comprise 6% of word of mouth

It would have been interesting to see how this data correlates with people's buying stage. While the study shows that most brand related buzz happens offline, people may be in a more advanced buying stage when looking for brand related information using a search engine than when seeing friends and family at a reception or dinner.

When I asked Ed Keller (CEO of the Keller Fay Group and author of "The Influentials") that question at a recent conference, he said that the study did not look at the correlation between online research and face-to-face brand messaging. While the research shows that 92% of brand related buzz happens offline, it could be that the effect of online word of mouth is disproportionately more impactful on buying decisions. The "buzzer" may be in an advanced buying stage when he or she is talking up a brand offline - but the recipient of the brand message may not be as receptive as if he or she were actively looking for brand related information online.

On that very topic, Yahoo! and OMD released a study last week that shows that 62% of buyers use a combination of online and offline sources to gather information before they buy.

It would also have been interesting to see what kind of brands people talk up in different situations. If it is true that most people identify or talk "through" their brands, then the brands they talk up with friends and family would likely be different than the brands they talk up during company gatherings. In fact, people's need to identify or talk through their brands could explain why so much word of mouth happens offline!

The good news is that offline "positive news travels faster than bad news." We should not forget, however, that online "negative news stays there forever," and that the impact of a bad customer review can have long lasting effects on brand purchases (according to the same Yahoo!/OMD study, 25% of people have posted online product reviews). Take my recent bout with Mercedes - which after much deliberation I decided to blog (also here, here, and here). When I wrote the posts, thousands of readers came to view those posts. But now, almost two months later, search engines are still sending over 20 people a day to read those posts - that is 140 people a week! And every now and then, someone will share their horror stories with that same brand in the comment section, or they will comment on how they would never buy a Mercedes Benz again - or in one case, an independent garage owner who had been servicing Mercedes for 20 years shares his story of how he is switching brands because of poor product quality and horrible customer service. So over time, what started out as an individual product rant has become a collection of (mostly disgruntled) customer reviews - nevertheless, something of a real useful service to potential buyers.

So while 92% of word of mouth may travel offline - don't stop your online word-of-mouth activities just yet - at least not until we understand the true impact on buying behavior!

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May 21, 2006

Commercializing relationships?

P&G.jpgBusiness Week this week has an article on how P&G has mobilized 600,000 moms to chat up its products. Under the umbrella of Vocalpoint, which will take on assignments for P&G as well as other clients, P&G has developed the largest army of word-of-mouth agents yet.

A key requirement to becoming part of the Vocalpoint team of "buzzers" is to have a large social network. Vocalpoint mothers generally speak to 25 to 30 other women during the day, while the average mom talks just to five. In return for spreading the word about new products to friends and family, they get product samples and a sense of empowerment by being given a voice back to the manufacturer for which they are pitching products.

The results? For certain products in special test markets, they found sales to be double that of markets without Vocalpoint!

One of the main potential detractors of the program is that P&G does not require its agents to disclose their affiliation with the marketer - leading some to believe that this could result in "the commercialization of human relations and the undercutting of social trust."


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May 19, 2006

The new scarcities - should we care?

John Hagel thinks that the new scarcity in marketing is "attention" . Barry Diller thinks that the scarcity is talent. Joe Plummer from the Advertising Research Foundation thinks that the new scarcity is trust. When speaking with Doug Rushkoff, he says that scarcities are something made up by economists and that in the marketing value chain you do not have any scarcities...

What do you think? Should we care?

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May 18, 2006

New research on word of mouth marketing

Boldmouth report.pngBoldmouth.com has recently released a research report on perceptions, practices & ethics in word of mouth marketing (pdf here).

Some interesting findings from the study include:

  • 34.7% of study participants stated that they plan to use WOM marketing
  • Nearly 64% of all survey respondents noted that WOM is either "very important" or "extremely important" to their overall marketing plans
  • Interestingly enough, nearly 59% of respondents said that they had active WOM plans with an active WOM campaign in market
  • Nearly 90% (89.9%) of all study participants noted that WOM was ethical
  • 80% of organizations reach out to both customers and prospects

The numbers are probably a bit skewed in the positive direction, as a majority of early WOM efforts involve the the launch of a corporate blogging strategy - which fairly often does not result in any real word of mouth activity because of poor implementation.

Another interesting finding, reinforcing the need for companies to integrate their customer service into their overall brand communications strategy, is that 82.2% of respondent said that the "type of service that customers received" is what gets people talking, while 53.3% thought it was "satisfied customers." Contrast that to 35.6% who think that what gets people to talk is "advertising they've seen."

BzzAgents may have proven that you can "manage" the word of mouth channel for simple products - but can you really "manage it" for complex B2B products?

One thing is for sure - if your post-sale customer experience is not a good one, you will get a ton of negative word of mouth, and in this business, the mantra "any news is good news" clearly does not hold true.

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May 17, 2006

Brands and customer service

whisper small.jpgWe had a pretty interesting conversation at the Syndicate conference in NYC yesterday - where the topic was syndication and communities and what happens when your content gets remixed or mutilated in those communities. The panelists included Pete Blackshaw from Nielsen BuzzMetrics, Bill Schreiner from AOL amd Jason Levitt from Yahoo. Josh at Hyku has a recording of the session on his blog (here for MP3).

A particularly interesting point was made by Pete Blackshaw when he said that brands should put their customer service at the center of their brand universe. Customer service is where people give you real feedback about their brand "experiences," and most often when things start going negative, as was the case when Jeff Jarvis started documenting his negative experiences with Dell on his blog - it starts off in the customer service department. In fact, Pete said, "the value of the customer service department may be 10 times as valuable as bean counters account for..."

This is something I could not agree with more, and in fact we have argued this point many times - going as far as recommending that customer service becomes an integral part of the marketing function. You cannot spend dollars on creating demand and making promises to prospective customers and then not deliver. The brand promise and the brand experience needs to be consistent across all customer touch-points - and one of the most crucial touch-points is your customer service department.

Another interesting point was made by someone in the audience - saying that the youth market has no interest in communicating with brands but that they communicate through brands. I am not sure that this is an exclusive youth market characteristic, as I think that most people could care less about the brand outside of how it makes them feel about themselves when using/wearing those brands.

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May 13, 2006

First Skypecast went flawelessly...

Our first in a series of Skypecasts leading up to our Marketing Innovation Summit in June went flawlessly yesterday. You can listen to the recording of David Rogers, Associate Director for the Center for Global Brand Leadership, interview experiential marketing expert Prof. Bern Schmitt by downloading the Skypecasts' MP3 recording..

Also of interest for the upcoming event is that we will be having a team of bloggers who will blog the event live on a Fast Company marketing BlogJam. Bloggers who will make up the team so far include:


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May 11, 2006

Who needs a CMO anyway?

problems sm.jpgMarketing communications guru Larry Weber may have been one of the first to publicly question the need for a C-level executive in marketing when during his keynote address at the Syndicate Conference last year he said: "Whenever a business category gets messed up, we get a C title. Now marketing is so messed up, we've got CMOs."

Triggered by the recent Spencer Stuart survey, Marc Babej and Tim Pollack (disclosure: both acquaintances/friends and contributors to the Corante Marketing Hub ) tackled the question in dept in their most recent "Unsolicited Advice" column which gets published weekly on Forbes.com.

In their analysis they conclude that the reason that an average CMO's tenure is shorter than that of a CEO's is because their job is ill-defined, and they proceed by making a recommendation for what a CMO's job description should be - "responsible not only for marketing communications but also (sorry to be stepping on toes) for product development and sales."

More specifically, they believe that a CMO's responsibilities should include: ensuring the company's products and services are in tune with customer demand, directing new product development and ensuring the continuing appeal of existing offerings, marketing communications, achieving top-line growth objectives, and meeting corporate margin goals.

While they bring up some great points, some of them deserve some further discussion. First off, let's start with an area of responsibility that was omitted from the list but that arguably should be part of a CMO's responsibilities. A CMO should be responsible for all customer "touch points," and that should include customer service. You can work for years to build an awesome brand, only to squander it after a few months of poor customer service (and following that with poor communications makes the demise event faster - as witnessed by Dell, Kryptonite, Mercedes, etc.). The CMO needs to be held accountable, and have the responsibility, to ensure that the customer experience is consistent across all customer touch points.

This next point may just be a semantic difference, but from a company's products and services point of view, the focus should not be on meeting customer demand but on meeting customer needs - both explicit needs as well as latent needs. Finding the latter and building successful offerings to meet those is an especially tricky proposition, but one which if done properly, often results in disruptive, breakthrough, and market-creating product innovations. Customers will not tell you, nor could they, how you should build such products. You "invent" them first and then find ways turn the latent market needs into active active needs.

Having a CMO responsible for product development instead of product definition and product marketing may not be such a good idea either. The product definition process is a process that should be driven by the CMO's product management team in partnership with the technical/product development team. But once a product is defined, including cost targets and time-to-market targets, the product development process itself should be run by a dedicated and independent product development executive, not the CMO. In fact, having the CMO in charge of product development may result in more "me-too" products, not more competitively differentiated products. Another unintended consequence of having the CMO run the development show, especially true in high tech and if the CMO is also in charge of sales, may be an abundance of one-off product versions/special editions built specifically to satisfy end-of quarter requirements. Such situations eventually lead to costing a company millions of dollars in wasted upgrade and migration resources, not to speak about the fact that it can also severely limit a company's ability to innovate in the future.

While CMOs should be held accountable for achieving top-line growth objectives and corporate margin goals, hopefully that is an accountability that they share with the rest of the executive team.


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May 9, 2006

CMOs get a lot of lip service in the executive suite

According to Advertising Age, a survey released by Spencer Stuart yesterday finds that CEOs are falling short in working with marketing.

While 85% of the 278 executives who were surveyed said that it was either "extremely critical" or "very critical" for CEOs to communicate with marketing, only slightly more than half found that happening in practice. In fact, only 18% said that CEOs were excellent at at that! The survey also found that CEOs are not very good at holding other executives accountable for ensuring that they partner with marketing.

Often times, it is the CMO who sets the direction for the company, and when that happens with little support from the CEO or the rest of the executive team, you get what's happening at many companies...they look rather rudderless.

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May 8, 2006

Series of Skypecasts leading up to the marketing conference

Skypecast.pngIn the weeks leading up to the 2006 Innovative Marketing Conference - June 8-9 in NYC - we will be hosting a series of provocative Skypecasts in which we will chat with conference participants as well as allow our audience to help shape the conversation at the physical event.

The first one will be a chat with Columbia Business School Marketing Prof. Bern Schmitt, while the second one will be with craigslist.org founder Craig Newmark.

These should be fun...make sure you attend! We will announce more of them in the near future.

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Google competitors in search advertising still have a long way to go

It's not a secret that Yahoo, Microsoft and a slew of other smaller players are trying to play catchup with Google in selling ads on web searches as well as on content-specific sites - in fact Business Week dedicated a pretty good article to it last week (requires subscription).

We have been a user of Google AdWords for awhile and recently started playing with Yahoo's solution as well as with other solutions from smaller players.

The solutions from the smaller players were generating a lot of traffic, but we found a lot of the traffic to be garbage - coming from sites that do not even have content. That is especially the case when you enable foreign sites to carry your text/link ads.

While Yahoo has a powerful UI, it is not very intuitive. But perhaps the biggest issue with Yahoo's solution is it's human interface - the editors who are setting up things for you and who are approving or denying your ads. When you set up an account you fork over $150 for someone to help you set up an account. Not only does that process take 3 days, in our case everything was set up wrong. We wanted to advertise our upcoming Marketing Innovation event, but instead all the ads were set up to promote Corante as a place to find information about technology and science events. After trying to get them to fix it for a week, and after pre-paying another $475, we decided to toss out most of the original ads and recreate new ones ourselves. Of course, that takes up to 3 days to get approved by their editorial staff. Since this is a conference, and since a lot of people go to conferences to network, we thought that advertising the conference in the context of marketing job searches would make sense. The editorial staff did not think so and rejected all the job based keywords because of the word "job".

Now what is the value of having editorial control over the keywords? Having editorial control over content is understandable, but if someone wants to sell diapers or wipes in the context of searches for Mercedes, who cares?


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May 4, 2006

Real HipHop

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From Coloribus

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May 3, 2006

Can word of mouth marketing be considered a "new" media "channel"?

conversation sm.jpgDave Baltar, the CEO of BzzAgent, along with the BzzAgent Director of strategy led a pretty interesting workshop on how to run a word of mouth (WOM) marketing campaign at Ad:Tech last week.

First let's look at some of the numbers that were bandied around - as some of them were quite interesting:

  • 2/3 of the US economy is influenced by WOM - this is according to a McKinsey report

  • 15% of all conversations contain a reference to a product - based on a recent Northeastern University research paper

  • 40% of all WOM episodes include a reference to other media - according to their own research

  • 80% of consumers trust WOM recommendations more than any other source - according to a Forrester report

This is all very much in-line with the research done by Everett Rogers on Diffusion of Innovation - some of which was first reported in the 60's and 70's

At BzzAgent, they now have close to 160,000 BzzAgents - volunteers who engage in conversations with friends, family, and acquaintances and make word of mouth recommendations for products in the context what happens naturally in their environment. In trying to develop and manage WOM as a real media channel, BzzAgent tries very hard not to turn their evangelists into "sales" people. In fact, the principles they adhere to include - no scripting, 100% volunteer, double opt-in, allow both positive and negative WOM, and ensure disclosure.

While WOM is not a "new" media channel, but one that has been in existence for as long as social networks have existed, if you look at BzzAgents' rate card, it looks like they have been able to turn WOM into a manageable and predictable media channel - and that maybe something new. For $65K they will deploy a 1,000 agents, which will generate 47,375 conversations over the period of 12 weeks. If you've got a little over $2M to spare, they will deploy 75,000 agents who will generate 3,553,125 conversations in a 12 week period.

If this is all working, and all indications are that it is, then there may be another hidden "lesson learned" here - one that companies should apply to their traditional sales force - have them be less scripted, and freer to improvise and create real dialogues with their prospects instead of delivering sales pitches. But that is not "new" either - David Weinberger and his co-authors of the Cluetrain Manifesto have been saying that for over a decade..

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May 1, 2006

You really do get what you pay for!

placebo sm.jpgOther fascinating research by Stanford Professor Baba Shiv includes this study which essentially finds that discounts can actually change consumer behavior - not just buying behavior.

So say that you are buying a drug at a 25% discount - you could actually end up having less effect from using the discounted drug then if you would have bought the drug at full price! So not only do we associate a lower price with lower quality - which result in specific expectations about a product - we actually activate these expectations, which then translate into self-fulfilling prophecies that actually impact our behavior.

The same study found that advertising has the same effect. If a drug is promoted as being very efficient, then the effect of using the drug will be better than if it were not advertised that way. The implications of this finding are actually far reaching - as they affect overall consumer health.


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Appealing to a buyer's primitive emotions

In the current issue of Business 2.0 (not yet online), Andy Raskin writes about interesting consumer behavior studies done by Stanford Professor Baba Shiv.

The research found that if you can keep someones cognitive side of the brain busy while they are making a "buying decision," they are much more likely to use their emotional impulses to make that buying decision. One of the tests used to demonstrate this fact involved two groups of people who were told that they would participate in a memory study. One group was asked to memorize a seven digit number while the other was asked to memorize a two digit number. Just before they were prompted to recall the numbers, they were presented with either a scrumptious piece of chocolate cake or a fruit salad. The group that had been asked to memorize a seven digit number was 50% more likely to choose the chocolate cake rather than the fruit salad. What happened was that the cognitive side of the brain - that part that can decide that "cake is bad for you" - was busy, leaving the more primitive side of the brain - where emotions like desire and fear reside - to make the decision.

Related research by the same Professor Shiv found that reminding people of their own mortality had the same effect.

The bottom line is that people do not behave like the rational subjects looking to fulfil their basic "needs" which economists use in their models.

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April 26, 2006

Frequent flier miles just another discount program

Reveries Magazine has an article on how a once promising marketing program - the frequent flier mileage program - turned into a mere commodity discount program.

The main reasons for this switch is that companies have come up with "clever" ways to prohibit employees from paying more to fly their preferred airline, and also because of the increasing shortage of excess seat capacity that can be used to accommodate free upgrades and mileage based trips.

Unfortunately, it is always a bad thing when companies and buyers get addicted to discounts.

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April 24, 2006

Extreme Product Placement

AXE sm.JPGWhile being out West last week it took us a few days to figure out that what looked like a bunch of Buddhist monks were in fact people promoting the AXE deodorant. After we figured it out and felt comfortable approaching them, we got a small bottle of snake peel shower scrub with absolutely no directions, causing my 11 year old son to ask me whether he should just put it under his arms or over his whole body.

My first reaction was that of a failed marketing campaign - nobody really wants to deal with religious monks when on vacation, and if you did figure it out, you ended up with a product which the target audience did not know how to use.

But then I read in Business Week (requires subscription) that this is in fact part of an "extreme" product placement campaign - one that includes product vendors like Unilever to produce original content for cable TV. In this case Unilever "put together two specials built around its AXE Shower body wash: The Gamekillers on MTV and Exposing the Order of the Serpentine on SpikeTV."

As it turns out, and according to Business Week, "sometimes producing a show gives advertisers more bang for the buck." The cost of producing and placing a 30 second spot vs. producing a half hour show can be be in the same ballpark. And networks like advertiser-generated content as the advertisers "foot the entire production cost of the show or pay for a portion and agree to buy big blocks of advertising on other shows in return."

I am still not sure about the monks being a success...

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April 13, 2006

What to do when you have excessive customer churn

According to a recent Forrester report (via Center for Media Research). mobile phone subscriber churn amongst US mobile subscribers is 24% a year. That's right - they loose one out of 4 customers annually.

The main reasons why people switch are price and service - with handset selection, customer service, data services and original content as secondary reasons.

The study suggests ways providers can differentiate themselves to maintain their base and attract switchers, including giving customers the ability to store pictures, IM, and other stuff on the network, be an objective advisor to customers, delivery of audio and video, up-sell the biggest spenders to the hottest handsets, and multiservice bundles.

It is surprising and possibly blinding to see that customer service comes out as a secondary reason for switching. While it may be a secondary reason that people gave in the survey for "leaving" the company, it may also be the one area where cell phone providers could differentiate themselves and "keep" those same customers longer. If instead of spending tons of money on aggressive new customer acquisition campaigns, they would spend more money on proactive customer service calls, they might find their churn rate going down dramatically. Would you switch as quickly if every so often a friendly service rep would leave you a message to explain a new service feature, or to tell you that you might benefit from being on a newer or different plan, or to let you know that there are existing features which you are not using yet that might benefit you and perhaps offer some help in getting you acquainted with its usage, or if they simply were to send you a text message wishing you happy birthday, or a message welcoming you to a new town with some simple factoid about the place when you travel, and the ability to get more information about the place if you want to.

If they could make their customers feel good about being their customers, churn would go down more so than if they were to try to "lock them up" into multi-service contracts or if they were to just continue adding bells and whistles to the service.

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April 11, 2006

What do you do when your brand becomes the target of xenophobic rumors?

aligators sm.jpgThe Sunday New York Times had a great story on how Lenovo has gotten under fire by a bunch of xenophobes including Lou Dobbs, a couple of people from the U.S.-China Economic and Security Review Commission, an advisory body to Congress, and other politicians.

The gist of the story is that Lou Dobbs and a few others, including some members of congress, are "suggesting" - based on mostly unfounded insinuations and allegations - that Lenovo computers currently being sold to the State Department as part of a competitive contract won by Lenovo "could provide shadowy spooks in the Chinese government with an ideal means of conducting espionage."

Being framed in the context of "buy American" and also in the context of "national security," the story inevitably took on a life of its own. It does not matter that it is virtually impossible to "buy American" when it comes to PCs, as most PCs are manufactured and assembled, at least in part, overseas. Nor does it matter that it is extremely unlikely that the Chinese could put "spook" software in the Lenovo PCs as they are assembled in North Carolina and as the PCs have to pass the State Department's two computer security groups, which oversee the administration of their own test suites and install firewalls and other security software. It also does not matter that the company has historically been a meritocracy - now run by Americans. The fact that the story is framed in the context of cultural anxieties will ensure its rapid spread.

Regardless of whether you believe that xenophobia like this is bad or really bad for the economy as a whole (there are some good lessons to be learned from some European economies on that front), it goes without question that it is damaging the Lenovo brand. And while articles like the one in the New York Times, exposing the fact that there is no substance to the points being raised, and undermining the legitimacy of the claims being made, are necessary - from a brand perspective they only add fuel to the fire. In the long run they could potentially cause more harm than good to the Lenovo brand.

So what is a company to do when faced with rumors that either appeal to fundamental cultural anxieties or that are framed in popular worldviews? Rebutting while staying on the same playing field is a losing proposition - a fact proven over and over in the world of politics. Could there be an opportunity to reframe the debate or start a new one on a playing field that is more advantageous to the company? Or should they just paint themselves in green and lay on the grass 'till it all blows over?

Other blog post on the subject:
Brad Feld at Feld Thoughts - "Maybe Penn and Teller should do an episode on Bullshit! on Dobbs and the current “security issues” "

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April 9, 2006

Mercedes Benz - poor customer service ROI

Mary Schmidt makes a great point in the comments of a previous post where I outline Mercedes' mangled response to a catastrophic engine failure that happened with our E320 while my wife was driving my son to his birthday party.

In it she asks the basic question that any marketer should ask themselves when faced with irate customers who warn their friends about the bad customer experience they had with a company: "Hmmm. Would be interesting to tally up: 1. How many people read your blog; 2. How many comment here; 3. How many link to this post (and then comment). And so on. Seems to me Mercedes is losing some business out of this, ya think? Perhaps you should do a conservative example cost benefit analysis and send it along to the CEO. Say, "Lost 5 customer at $60K each" versus repair of existing customers' engine, and so on....You can count me among the "lost" I'll certainly never think of buying a Mercedes (new, used or classic) after reading this horror story."

This is so true. Close to 4,000 people read the story so far - and that is just on my site, it does not include all the readers of stories that were picked up by many other sites (one of which made it into Yahoo news for over a day). Everyday multiple people find my stories from googling some Mercedes related search terms. And it even came with some unintended consequences, like having some people who are mentioned in the stories (and who never had the courtesy to get back to me) have my story show up first when you Google them.

For a blogger it is an ethical dilemma as to whether or not to write up a bad experiences like this. For this story I gave Mercedes ample time to respond to me first, and whenever I had a new rant or gripe, I sent it to them first. But the whole situation was ludicrous enough to justify my going public with the story. A 5 year old $60K products that fails after 100K of mostly highway miles should result in an answer that is different than "it's your fault and we can give you $6,000 for the car in a trade-in."

For a company which started losing money hand over fist, and which tumbled to 21st place in customer satisfaction, and which lost its title of world's best selling premium brand to BMW for the first time in since 1993, you would expect a different response. It would have been easy, and relativelly low cost, for them to continue to keep me as a believer in their brand promise. And at my age, I might have bought 2 or 3 more of their cars in my lifetime. That will clearly not happen now, and there is at least one other confirmed person who will never buy their products again because of this story. The ROI on their way of handling the situation is clearly not in their favor when you look at it this way.

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April 5, 2006

Mercedes says that cars fail in the first 50K miles - after that it's the fault of the driver

dumb user sm.jpgIn the continuing saga of dealing with Mercedes Benz and their dealers following the recent incident where a loose engine part blew a quarter-sized hole in the engine block of our Mercedes E320 while my wife was driving my son to his birthday party, Mercedes finally got back to us (story described here, and follow up here) .

Someone in their customer service department cleared up all possible confusion by telling us in an email that "It is our experience that manufacturing defects occur early in the life of a vehicle (typically during the warranty of 4 years/50,000 miles, whichever occurs first) and not 50,000 miles after it's expiration. After reviewing the matter, Mercedes-Benz USA continues to stand behind this decision."

Get it?

But wait...what are they really saying???? Oh now I get it - it's the stupid customer's fault! That's it!

...while maintaining the car flawlessly according to the E 320 manual, and always with Mercedes dealerships, and with all the receipts to prove it, I must have still done something wrong to cause that. It cannot possibly be the product's fault, or an error on the part of the dealer who serviced the car 2 1/2 weeks prior to this catastrophic failure. It must have been a dumb user error! That's what they are telling me...

I guess it's time to move on, get rid of this piece of junk called Mercedes "Bang," and look back East to some good quality Asian cars. Thankfully, citizen marketers around the world are not letting this story die. Hopefully we will save a few souls from wasting their money on buying this german junk.

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Learning how to thrive while being out of control

remote control sm.jpgDo you feel like you are losing control? Are your customers taking over your marketing? Are your customers and suppliers getting involved in designing your products? Do you feel like you cannot control your team anymore?

Welcome to the age of control-less management. One way or the other you will have to learn to thrive in a control-less environment or you will commit yourself to obsolescence.

Co-creation of products without being in control can lead to wonderful innovations. In speaking with Johnnie Moore last week, he mentioned the use of some fun improv-based exercises with groups of people that do not know one another where they co-create things in a totally control-less environments. You can read up on some of those exercises in a published paper on the More Space Project.

The same is true for consumer-generated marketing, or for what the Church of the Customer folks call "citizen marketers." You can chose to ignore them and find your next unfavorable ad on YouTube, or you can decide to harness this form of self-organization and turn it into a real powerful competitive weapon.

Now if you accept that control has shifted out of your hands, a recent article published in Point (AdAge's CMO Publication - requires subscription) warns that there are still two dangers in not treating the phenomenon of consumer control with the respect it demands. The first is to interact with consumers without following up, while another is to try to prevent criticism or influence the conversation. Do either one of those and the citizen marketing backlash will be worse than any bad press you've ever had in the old marketing days.

The only thing you can perhaps try to control is yourself. Anything else will require you to learn to function "out of control."

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April 3, 2006

Mercedes Benz does not care about its customers

mercedes_buldog1.jpgAdding insult to injury following the recent incident where a loose engine part blew a quarter-sized hole in the engine block of our Mercedes E320 while my wife was driving my son to his birthday party, the Mercedes dealership launched into a "blame the customer" and "insult their intelligence" routine.

During the conversation where he relayed the news that neither Mercedes nor his dealership would help us the dealer service rep started off by “blaming” us – saying “we (meaning him and the Mercedes factory rep) think it could have been caused by two things. The car overheated because it had no cooling or perhaps “you” did not put oil in it. We can also find no record of changing the oil in the last 20K miles.” As it turns out, we have religiously serviced the car according to the E 320 manual, and always did it with Mercedes dealers. We have the receipts to prove that. But more importantly, we have a receipt dated Feb 28th, 2006, 2 ½ weeks before the car blew up, that specifically states that his dealership did change the oil and the oil filter on that day. So not only did he do the “blame the customer” routine, he actually launched into false accusations!

When my wife rebutted, saying that the reason there was neither oil nor cooling fluid in the engine was because there was a quarter-sized hole in the engine block, he said that he would have to check on that. Check on that?! The other dealer, where we originally had the car towed told us that this is what happened. Would you call this Mercedes-like behavior? Coming out and accusing someone and then “having to check” when asked a pertinent question?

He then told her that this was all just bad luck – and neither the fault of the dealership nor the product. “Everything “looked” good when we serviced the car”, he said. He then proceeded to further insult her intelligence by saying that cars are like people – “some people are healthy and live a long time and some people get sick a lot and die young. You never know!” What is this supposed to mean?

Being flabbergasted at this (hopefully) un-Mercedes-like behavior, I decided to send one more email to register my outrage with their VP of Marketing, their GM for the customer assistance center and a few other folks in their marketing and customer service department. I also decided to copy someone who labels herself as "I am responsible for generating positive press and mitigating negative press on Mercedes-Benz vehicles in the USA" on LinkedIn.

Do you think I got a response? Nope...not a peep from Mercedes land!

For those of you who know me, I am a consummate marketer, and I do know something about marketing, product quality and customer service. I also realize that sometimes things break down, and I was not expecting a call from the CEO or a free upgrade. But this being a $60K consumer product from a company with a reputable brand, and with a proven track-record that we maintained the product according to their specifications, I was also not expecting them to “blame” the customer or to insult the customer's intelligence in the face a of a premature and catastrophic failure of their product.

That is just unacceptable!

For a follow up - click here

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March 30, 2006

Mercedes - a case study on how to squander a great brand

mercedesstern_320x320.jpgAlmost 5 years ago - I decided to buy a Mercedes E320 for my wife's birthday. The brand attributes that were appealing to us at the time were:

  • safety - important as she was driving around our 6 year old son in New England weather
  • reliability - we trusted that the German engineering would not cost us a fortune in service charges
  • a relationship - we were looking for a relationship with the car manufacturer instead of a dealership . We were told that we were buying a Mercedes, and that all promises would be honored by any dealer - no matter which one
  • luxury - that is what the brand stands for after all
  • status - in hindsight there was unfortunately some of that

It did not take long for us to realize that Mercedes was not delivering against most of its implied brand promises.

I bought the car from Herb Chambers' Flagship Motorcars, as they were the only one willing to provide me with a quote via the Internet at the time. Soon after we bought it, various parts of the car started to break down and the engine started to lose oil. And soon after that we found ourselves looking for an alternative dealership as we were very dissatisfied with this dealer's service level. One dealership, which was actually closer to us, did not have Saturday servicing. Nor were they willing to provide a loaner car during major services to customers who did not buy the car directly from them. So much for the promises across dealerships.

We ended up with Foreign Motor West, a 45 minute drive from our house, and over the years spent thousands of dollars with them on all kind of problems, which ranged from small things, like various indicators and buttons failing, to bigger issues such as a leak in the air conditioning system in year three which unfortunately could never be located and resulted in repeated air conditioning failures, to brake problems, to the ongoing oil loss problems and more expensive repairs for things I don't even understand - nor care to understand. What I do know - it is a long, too long list.

Less than a month ago we had the car serviced again - this time it needed a new air flow meter and a few other things - costing another $1,100. Three weeks later , while driving to our son's birthday party, my wife's car blew up on the highway less than 3 miles after leaving the house. To our surprise, Mercedes Roadside assistance did not cover the tow - which ended up costing $5/mile. We had it towed, at our expense, to the nearest dealership.

But the biggest surprise came a few days later when they called us from the dealership with the estimate for repairs. Turns out something had blown a hole the size of a quarter in the side of the engine. Which meant we needed a new engine. The cost: $14K!

I am not a car expert, but I feel confident saying that a 5 year old Mercedes with 100K miles (mostly highway miles), should not blow a hole in the engine. The dealership where we had the car towed to told us there was nothing they could do other than putting a new engine in. When we contacted our dealership they towed the car back to their garage for inspection, only to get back to us a week later and tell us that the engine had overheated because there was no antifreeze in the car. A rather important point here: the other dealer had told us that the reason there was neither antifreeze nor oil in the car was because of the aforementioned quarter-sized hole in the engine.

Now I really felt taken for a ride (and not the smooth, luxurious one Mercedes promised us)... Mercedes was turning what should have been their problem into a chicken or egg problem - did the hole come first or did the antifreeze disappear first? And they were blaming me for not having antifreeze! Where, oh where, did the antifreeze go in the three weeks since they ran all their sophisticated electronic equipment on the car? Maybe most Mercedes customers are stupid (including me for being motivated by emotions instead of economics), but to me (and the other dealer) it seems obvious that the antifreeze leaked out after something blew a hole in the engine!

Still believing that this was just a bad movie and that nobody at Mercedes corporate would want anybody to perceive their brand this way, I wrote to Mercedes customer service asking for their help and also emailed a few PR folks as well as their newly minted VP of Marketing - Mark McNabb - asking for help. I never heard back from the office of the Vice President, but someone from their PR got back to me and introduced me to Paul Juron, the GM for the Customer Assistance Center. I pinged him twice but never got any response. Finally I did get a response from someone in his department - simply stating "Thank you for your recent e-mails to Mercedes-Benz USA, LLC. After review, I have been asked to respond on our organizations behalf. Arrangements have been made for your concerns to be reviewed on a local level; you may expect further contact shortly, if not already." Well, as it turns out, the local decision stayed the same...it was deemed to be our fault/problem that something got loose in the engine and blew that hole in the engine block.

My final analysis? No wonder Mercedes has tumbled to 21st in the most recent JD Power Satisfaction Survey. It is mind boggling (instructive too) to witness and experience how such a prestigious brand has fallen so far so fast. And while I've learned something, believe me that it's been no fun being on the receiving end of this knowledge.

Oh one more thing: Mr McNabb, if you happen to stumble upon this post, I would like to extend you a complimentary invitation to our upcoming Innovative Marketing Conference's CMO Summit - a $1,500 value. Not only would it be fun to have you there to discuss Mercedes as a case study, but you might actually walk away from the event with some valuable lessons on how to do the right thing for your customers.

Check here for the rest of the story, and here for another follow up.

Other posts linking here:
Pito's Blog
The brandbuilder blog


PS - if you like this story - please digg it!

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March 29, 2006

[announcement] innovative Marketing Conference with The Columbia Business School

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As you will have noticed from the button in the sidebar, Corante is organizing a two day marketing event in partnership with the Columbia Business School and the Center for Global Brands. The event will be held at the Columbia University campus in NYC on June 8th and 9th and promises to be a chock full of interesting activities and sessions. You can find up-to-date information about this event at http://events.corante.com/imc.

The first day of the event will be a highly interactive day for a small group of VP's of Marketing and CMO's. The main premise is that the current marketing rule book has dissolved and that we are in need for a new marketing foundation. During the first day we will tackle 3 main topics - the emerging challenges related to creating new products and services; "attention" being the new scarcity in the marketing value chain; and whether you have the right skill sets in your marketing department - or whether we actually still need a traditional marketing department. Those three topics will each be introduced with a short 10 minute provocative point-of-view. Following those intros, attendees will split up in smaller groups to discuss those topics from slightly different angles with qualified facilitators. So for example, following the attention scarcity point-of-view, one group might go off and debate what attention scarcity means to reach your audiences, while another might go off and debate what attention scarcity means to your brands. Following those small group discussions, the group as a whole will reconvene, where we will have report-backs from the small group discussions, more interactions, and then a closing summary by the original speaker to tie it all back together. The day will be framed by two keynote speakers, an opening keynote by a CMO who will talk about life in the trenches, and a closing keynote by Prof. Bernd Schmitt from the Columbia Business School, who will attempt to tie it all back together at the end of this exciting day.

The second day will follow the same themes, except that we will have a lot more speakers as well as report-backs from the previous day's findings. We will also experiment with some different formats that will ensure a high level of interactivity.

We want everyone who attends this event to walk away with actionable things to do and test out.

If you would like to nominate someone for the first day, please fill out the following form. If you'd like to register for the second day, click on the button in the sidebar of this blog.

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March 28, 2006

More thoughts on selling complex products

I've been involved with the challenges of marketing and selling complex information technology products and services ever since the computer industry was known as IBM and the seven dwarfs. (I'd love to hear back from anyone who remembers who the dwarfs were). Over the years (make that decades) I've seen a recurring set of barriers that stand in the way of adoption of such products. In fact these barriers are as high today as they were when Honeywell (they were one of the 7 dwarfs) was desperately slugging it out with the other 6 for the 15% market share that IBM didn't own.

What I find surprising is how few companies selling complex products today have learned anything from the past. As Winston Churchill advised: "the further you look back, the more clearly you can see ahead." So here is my look back at what stands in the way of success when selling and marketing complex products. The good news is that it is a very short list. The bad news is that they must all be dealt with equally if success is to be achieved.

Barrier 1: Integration.
Complex products rarely stand alone. They must be integrated into existing systems and work flows before they can do anything worthwhile. It is this requirement to work with other stuff that contributes to their perception of being complex. The problem is that many potential customers see the challenge of successfully integrating the new product into their environment to be beyond their capabilities, and for a variety of reasons are not convinced that the vendor can solve this problem for them. Companies that successfully overcome this barrier often do so by pro actively addressing integration as a part of their product offering, They frequently brand the integration process and sell it as a service, with a detailed action plan that lets the buyer see what happens when, and very importantly, what responsibilities the buyer must assume during the integration process. If the seller does not have the resources to handle the integration themselves, they would do well to partner with an integrator whose brand is respected in the market they are selling into. In effect, they can borrow the brand equity of their system integrator to overcome the buyer's concern about achieving a successful outcome.

Barrier 2: Transcendence
The decision to acquire a complex product cuts across multiple organizational (and political) boundaries. Sales success depends on the near-simultaneous buy-in from multiple influencers and approvers, each with their own receptivity to innovation. The bell curve that describes the diffusion of innovation reminds us that the majority of people in any market are followers, not leaders. They resist change, especially when change may require learning and applying new behavior (see barrier 4).

The problem for the seller is that their internal champion is likely to be an innovator/early adopter. They "get it" early in the sales cycle and are eager to see their company adopt whatever the new solution is. So the salesperson is often seduced by the champion's ability to derive the benefits his or her product offers (rarely to be found in any marketing materials about the product) by understanding how the product works. But keep in mind that while the internal champion gets an A for his/her technical understanding and enthusiasm, the typically get a D or F for their ability to build the same enthusiasm across the organization. Why? Because they are not trained sales people. When they share their insight about the product with others they do what they know best: the describe how it works. And in doing so, either put others to sleep, or worse, scare the hell out of them.

To overcome this barrier, the "how it works" story that appeals to early adopters must be supplemented by one or more "how you'll benefit" stories that the champion can use to influence the more conservative decision makers within the organization. The way to think about it is to remember the following play on words: The way most innovators and early adopters think is. "I'll believe it when I see it." But for the early and late majority, that changes to, "I'll see it when I believe it."

Barrier 3: Trialability
Due in large measure to the first barrier, complex products are difficult, if not impossible, to try before they are bought. Many companies attempt to overcome this barrier by offering scaled down "pilot" versions of the product that attempt to give the potential buyer a sense of what the product can do. All too often the pilot fails to impress for two major reasons.

First, buyer expectations are set too high. By the end of the pilot program the results represent a small subset of what the vendor promised the product is capable of. The buyer finds it difficult to extrapolate these results into a full blown implementation and decides against purchasing.

Second, and even more problematic, is the reaction of the end users who are selected to use the product during the pilot project. Typically these poor souls are caught in a tough spot. They are asked to use the new product, while at the same time continuing to perform their assigned tasks using current tools and procedures. Naturally to use the new product effectively they need to go through a learning process (often taking time away from their assigned tasks). And once they learn how to use it, they need to use it a lot in order to truly experience its benefits. The latter requirement is rarely met because they really didn't have enough learning time, and they are too busy keeping up with activities that require use of existing systems. So it is not surprising that these early testers are often unenthusiastic about the product and help contribute to a growing consensus within the company that the product doesn't offer enough benefit to justify the price.

To get around this barrier, wise companies avoid pilots like the plague. Instead they offer a well-defined multiphase implementation (typically three phases work best). This enables them to control buyer expectations, especially during the initial phase. Ideally during that critical phase, you want to define a level of improvement or performance that if attained will pave the way for the customer to fund the second and third phases. To help insure success, some innovative companies provide on-site mentors that work side-by-side with the initial end user group in a master/apprentice relationship.

Barrier 4: Behavior
In order to take full advantage of the many features offered by a new complex product, individuals, departments, and sometimes entire organizations must change their behavior. And the more enterprise-oriented the product is, the more significant this barrier becomes. Lots of enterprise software winds up as shelf ware, not because it couldn't be installed or or used, but because users simply were not motivated (though training, incentives, or stronger measures) to use it effectively. What many sellers of complex products fail to grasp is that there is significant revenue to be had by offering branded programs that focus on bringing about the changes in behavior that are needed to fully exploit the benefits of any new product; especially one that is complex.

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Customer's expectations of sales people does not match vendors' expectations

drunk sales.jpgThe latest issue of the Harvard Business Review contains an interesting short article on customer expectations for sales people: "What B2B Customers Really Expect" (requires subscription).

There is a tremendous mismatch between what customers are expecting from their sales people and what vendors think customers expect. Amazingly, there is also a big gap between what vendors think their customers expect from their sales people and what vendors actually recruit for.

The top quality that customers are looking for is salespeople's subject matter and solution expertise - followed by understanding of customer's business and industry, and professionalism. Vendors thought that subject matter and solution expertise would only rank third on customers' priorities - after professionalism and understanding of customer's business and industry. So vendors have their customers' priorities for sales people reversed.

Most interestingly is how vendors actually recruit. The top attribute that vendors recruit for is social and communication skills - a priority that ranked dead last for customers. The second top attribute vendors hire for is organizational and decision-making skills - which ranked just before last on the customers' priority list.

The authors of the article - both partners at Infoteam Sales Process Consulting - recommend that companies hire for industry and subject matter expertise instead of social skills.

It makes no sense for sales people to acquire subject matter and solution expertise, nor understanding of a customer's business and industry on the job.



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March 27, 2006

The challenges of selling complex products

failed.jpgEven though products can have great and demonstrable benefits to organizations, sometimes they can be very hard to buy. That can happen when products are used across functional areas, with no single owner. Or when a product is being sold too high up within an organization. It can also happen with new innovations in markets with few innovators and early adopters as buyers. Or it can happen when products have more than one barrier to adoption, as is the case with most collaboration-based products.

So what is an organization to do when faced with this kind of dynamics? Sure, you can do what most of them do: improve sales force training, develop better tools with tangible ROI's and case studies, have better demo's and make it easier to try out the product, etc. But those are all efforts focused on improving the seller or selling channel for the product.

There are two other levers you can play with in this equation - specifically product and buyer related levers. On the product level you could "dumb down" the product so that it becomes a single problem solution, with a clear owner for that problem. You could also evaluate whether your product could be turned into a service - and as such reduce the buyer's risk for trying the solution. On the buyer side of things you should look at your value proposition and find ways to tweak it so that some, if not all of the value, benefits the buyer personally instead of the buyer's organization. Is there something in your value proposition that the buyer could put on their resume or gain additional professional status or advancement from? Because remember - if there is nothing in it for the buyer or the users of your product, your product will fail - even if you can achieve a few sales early on!

The key point which most companies miss is that they should be focusing on the "buying cycle" instead of the "sales cycle." The buying cycle has a lot more moving parts than the sales cycle - and thus a lot more alternative solutions when things don't work as planned.

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March 16, 2006

Communicating with your competitors' customers

This is a pretty cool Durex ad (via Coolz0r).

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March 15, 2006

The role of advertising in startups and new product categories

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Research, such as the research reported by Everett Rogers in Diffusion of Innovation, has shown that advertising works best on innovators and early adopters. It does not work as well on the early majority buyers. For majority buyers, interpersonal communications (word of mouth) from peers is the preferred mode of getting information. In fact, the same research shows that for all buyers as a whole, interpersonal communication has an effect on buying behavior that is over tenfold that of mass communication.

Furthermore, advertising works best in the awareness stage of the buying cycle. That is, if the buyer has the right predisposition to be informed by the ads. That occurs when the buyer has a need, or when some other change agent has approached the buyer about the possibilities first (i.e., expert in the press, colleague, etc.). If neither of those happen, then the buyer will not even hear or see the advertising – it will just be tuned out. In the preference stage, when the buyer starts forming an opinion about the product, most information comes from interpersonal communication. In the preference-forming stage, interpersonal communication may sometimes be substituted by expert commentaries and reviews.

Based on this, and stating the obvious, start ups who are peddling new product categories to innovators and early adopters should not waste their time and energy on brand advertising. Instead they should focus their efforts on lead generation and on influencing the influencers so that the right interpersonal conversations can get started.

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March 9, 2006

Negative word of mouth hurts retailers

hey you.bmp
According to a new research study from Wharton and the Verde Group - published in the Results of The Retail Customer Dissatisfaction Study 2006 (PDF) - of those shoppers who experienced problems with a retailer, only 6% contacted the company, but 31% went on to tell friends and family. Of those, 8% told one person, 8% told two people, and 6% told six or more people. The study further found that out of 100 dissatisfied customers a retailer stands to lose between 32 and 36 current or potential customers.

While this is less than the old rule of thumb which said that you typically only hear from 1 out of 10 dissatisfied customers - the impact of negative word of mouth can be more devastating as the tools that amplify word of mouth are getting increasingly powerful.

The study truly illustrates the power of negative word of mouth and the retelling of stories. Indeed, and according to the study, "the complaints have an even greater impact on shoppers who were not directly involved as the story spreads and is embellished. Almost half those surveyed, 48%, reported they have avoided a store in the past because of someone else's negative experience."


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March 8, 2006

Another "old" marketing voice bites the dust

After the Ries statement on branding, we only needed to hear the Trout statement on word-of-mouth marketing to conclude once again that the world is in need of new authoritative marketing voices.

Here is what Trout has to say about Word of Mouth Marketing:

"Now for the really bad news. There's no way to control that word-of-mouth. Do I want to give up control and let consumers take over my campaign? No way."

The amazing thing is that even in Jack Trout's heyday (a few decades ago) products were being bought because of the story about the product more so than because of the product itself. And most marketers ran into trouble when their product story was too hard to "re-tell". So in effect, he is right when he says that word-of -mouth marketing is not new - it's just surprising that he never realized the power of it.

As for the new marketing voices, the story was picked up and intelligently commented on by Olivier Blanchard at the Corante Marketing Hub as well as by two (updated 3/9) three other Corante contributors to the Hub - Johnnie Moore, John Moore, and Mary Schmidt (and as an active Corante team member, I am off course biased).

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February 16, 2006

Are you suffering from Overactive Adrenaline Disorder

Ford Marketers believe that you may feel good about being associated with this fictional disorder.

Indeed, according to ClickZ Network, Ford launched this invented disorder as part of an integral campaign designed to reach out to casual racing fans and to build an affinity between them and the Ford Racing team.

Rick Ross, the account director for JWT on the Ford Cars account, explains the underlying strategy as follows : "This was supposed to really make a connection with the fans and the drivers themselves. If you are a fan, you have an enjoyment of speed and thrills, and so do our drivers."

Building a campaign based on associating the shared values of the fans and the racers makes sense - but building it around a shared disorder may not be something that fans will feel good about. Would you feel good about being tagged with a disorder just because you like watching Ford racers?

Time will tell...this is clearly a good one to put on the watch-list...

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February 8, 2006

Interesting marketing project at Bentley College

Bentley College marketing honors looks like an interesting college project - with the following mission:

"The students in the honors seminar in marketing at Bentley College have created a multiple author blog in order to complete a class assignment as well as to introduce other marketing students to cutting-edge ideas and principles by monitoring and commenting on some of the best marketing blogs in the blogosphere.

So, each student will monitor a particular blog and post a commentary on a particular blog posting every week. A few of the Corante Marketing Hub contributors got adopted as blogs to follow, and there are already interesting commentaries on posts from those blogs - including the brandbuilder, marketing to women, diva marketing, and brand autopsy.

When Melissa reviewed a post on Word of Mouth Marketing (WOM)from this blog she raised some interesting questions. Why is that when people disclose that they work for a company for which they are recommending products, the rate at which the message gets passed along is 70% higher than when the relationship is not disclosed? This is a very counter-intuitive result after all. She also says: "Francois does not offer any insight into the real significance of this finding. Rather, it just states the results of the study. It would have been helpful to see what he saw as implications from this study." - good point!

Walter Carl, the author of the original research paper, offers some possible explanations for the results of the survey. One is that the average length of time that the agent and their conversation partner knew one another in the study was 6 years. That is a long enough period to build a lot of trust so that the conversation partner feels that the agent has his or her best interest at heart - no matter what the commercial relationship is between the agent and the company for which products are being recommended. His second reason is that credibility is either unaffected or increased by the disclosure.

While these are plausible explanations for why a commercial message would get passed along after disclosure, they are not really reasons for why the pass-along rate would increase with disclosure. If the average length of time that people knew one another was indeed six years, then perhaps one reason might be the motivation of the conversation partner to help the agent out. Just like with some of the better referral incentive programs, which work on the premise that is better to give an incentive to the person who is being referred, rather than the person who is making the referral - it plays off a basic human need to "give." Another possible explanation, which Melissa alludes to in her post as well, is that the conversation partner sees the fact the the agent is willing to associate with the product/company as an extra endorsement for that product. If the agent is willing to get into a commercial relationship with the company that makes the product that is being endorsed, and is willing to disclose that relationship, that means that the agent must feel really good about himself or herself in the presence of that brand - and that is maybe what adds to the contagiousness.

While I am not so sure that there any major implications coming out of this study, I am concerned that marketers will screw up WOM marketing by trying to optimize it and by looking for measurable ROI's. It is and will remain hard to measure, and just like physicist learned a long time ago - you can dramatically disrupt the environment by measuring it.

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February 1, 2006

The ads you won't see on Superbowl

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Heavy.com has assembled ads that were censored and will not make it on the Superbowl (via online media daily).

Make sure you check out the "My Busted Apple", or "Bush's new career". The "Gone Daddy" and a few other ones clearly show that advertisers still believe that sex sells!

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January 30, 2006

Strong brands are not the only key to success

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"Building strong brands is the key to success, in our opinion, not better products or better people " said Laura Ries from Ries & Ries (the other Ries is Al Ries - who once wrote that "line extension has become the marketing sickness of the last decade. It seldom works." ) (via A Clear Eye - where Tom Asacker clearly disagrees with her).

She also states that: "Because in America marketing is not considered important. Management, human relations, customer service are all considered of higher importance that marketing."

Marketing may not be important in America, but to compare it as something distinct from customer service and human relations is so...well...20th century thinking and wrong. And it is equally wrong to say that brands are more important to a company's success than products and people!

Where is the customer in this whole equation? Take Harley Davidson as an example - they truly have "branded" customers as defined by the original meaning of branding. But who owns that brand? And how tightly is it integrated with the product, or with customer service people?

Thinking of marketing as another silo-ed organization is a key to failure, and those who still believe that brands can be controlled and created by marketing departments are in it for a rough ride and big disillusionment.

We are seriously overdue for a new breed of marketers to come to the foreground and eclipse this old school of marketing thinkers.


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Carnival of Marketing roundup for week 10

While I do believe that this Carnival of Marketing is a great idea, I only got three submissions this week – so like others before me, I took the liberty of adding some editorial selections of my own.

First let’s go to reader submissions:

  • Mike Sigers from Simplenomics pointed me to a post he wrote which I thought would summarize a speech by Hal Becker he attended on “success in customer service”. I guess he got so enthralled with the speech that the post turned into more of a fan pitch for Hal rather than an actual summary.

  • Next up is Jack Yoest - who thinks that the world of politics could learn some lessons from the traditional marketing world - and writes a post predicting that the "new" Hillary will go the same way as the "new" coke did.

  • Jim Logan has some suggestions on what to do if you realize too late that you just printed 5000 sales letters on a tiny budget - only to find a typo in it.

Now on to the editor's selection of marketing posts worth reading from this past week:
  • As usual, Grant McCracken hits the nail on the head when he talks about the potential brand challenges that Apple will face by introducing Intel-based machines
  • Shel Holtz contrasts two very different ways of apologizing in the blogosphere - one arguably better than the other.
  • Tom Asacker rightfully disagrees with a blog post written by Laura Ries from Ries & Ries in which she says: "Building strong brands is the key to success, in our opinion, not better products or better people."
  • David Wolfe has an interesting post on how an aging society is "right-minded" and what that means to marketing.
  • Lastly - check out Dominic's post on return on innovation over at the Innovation Insider.

That's it for this week. Please send in your submissions - as this is a worthwhile effort!

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January 27, 2006

Looking for more entries for this week's Carnival of Marketing

As we said last Monday, we are honored to be hosting this week's Carnival of Marketing. Somehow we got very busy in the latter part of the week, but we are still looking for more entries!

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Send us your best entries by Sunday (for how this works, check here) and we will post the best of the best on Monday. Make sure to tell your all your marketing colleagues and friends.

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January 23, 2006

Carnival of Marketing

Next week we will be hosting the Carnival of Marketing - started by Noah Kagan - and on Monday 01/29 we will be posting the coolest posts on marketing for the week.

Please email your submissions to symbiotic [at] emergencemarketing [dot] com before Sunday!

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January 20, 2006

Word of mouth marketing is not hampered by disclosure

A new study by Northeastern University and released at WOMMA's latest conference found that disclosure does not hamper word of mouth marketing (here on AdAge).

In fact the study, which included 800 word of mouth agents and the people to whom they talked up brands, found that: "More than three-quarters of respondents called the affiliation a “non-issue.”", and that "Moreover, he concluded, the rate at which messages were passed along was 70% higher when that relationship was disclosed."

if this study holds up to scrutiny, this is a pretty interesting finding. So if people know that the word of mouth message is part of an organized campaign they are more likely to pass on the message.

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January 12, 2006

Are Chinese Buyers really that different?

great wall china sm.jpgAccording to a recent report from JWT (via Agenda Inc.) :

"denizens of the Middle Kingdom are profoundly Confucian. They are motivated by a religious zeal to maintain order. One one hand, Chinese are passive, willing to conform to rigid, hierarchical convention. On the other, they are boldly resolute, intent on moving up the ladder of success. This master conflict between regimentation and ambition exists in the heart of the citizens and defines the bull's eye of consumer desire."

It's a pretty interesting report, with profiles of the middle class as well as of urban buyers, and with detailed descriptions of what makes Chinese women, men and teens "tick". The report is also full of "fun facts" - like the fact that they consume 21 liters of beer in China vs. 84 liters in the US, or that 90% of Chinese own cell phones vs. 54.6% in the US.

Apparently Chinese consumers like to buy expensive, foreign brands for the outside, and local, cheap brands for the inside.

Hmmm...I know people in the Western World that are not all that dissimilar in their buying behavior.

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January 4, 2006

Building emergent business models

chaordic.bmpAs I am working through my (huge) pile of books to read I hit another good one last night. It is "The birth of the Chaordic Age" by Dee Hock. Not exactly a new one, but I never claimed this site to be a news site or a recent book review site...

As many of you know, Dee Hock was the founder of VISA - one of the largest companies in the world. The interesting part about VISA is that it is one of the few large-scale commercial entities where the organizational infrastructure is not based on a command and control hierarchy, but rather on a true emergent self-organizing infrastructure. When Hock realized that none of the traditional company models could handle such a massively complex and distributed business model he focused instead on building a DNA for the new company, based on purpose and principles, rather than building a command and control infrastructure with all of its associated rules and regulations. The results - a huge company that emerged from chaos in less than 2 decades to become one of the most successful self-organizing companies in the world.

It is interesting to see what questions drove him throughout his career and ultimately led to the creation of VISA:

  • Why are institutions everywhere, whether political, commercial, or social, increasingly unable to manage their affairs?
  • Why are individuals, everywhere, increasingly in conflict with and alienated from the institutions of which they are part?
  • Why are society and the biosphere increasingly in disarray?

It's also interesting to read him say that: "...the need to harbor the Four Beasts that inevitably devour their keeper, Ego, Envy, Avarice and Ambition, and of a great bargain, trading Ego for humility, Envy for equanimity, Avarice for time, and Ambition for liberty..."

Maybe that is the way to ensure that marketing is not just another department (or worse - a set of departments) in a company - but rather a way of doing business, a way to behave in the marketplace. Instead of creating organizational structures with hierarchies, goals, rules and regulations we could focus instead on developing marketing DNA that can spread throughout the whole organization and become part of the company's fabric. On a certain level, Ritz was able to do that with their "every employee can spend up to $2,000 to fix any customer problem" principle. That's not a rule which gets enforced, and it's not a goal that gets measured (other than maybe to track potential abuse) - it's really a "behavioral" DNA strand that gets injected throughout the company. We could expand on that and come up with "listening" DNA strands, "innovation" DNA strands, or "branding" DNA strands.

Heck - why stop with marketing? Why not "financial" DNA strands, or a "governance" DNA strands?

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January 3, 2006

Quantifiable marketing measurements can be a double edged sword

Copy of golden egg.jpgI think that everyone will agree that marketing is most effective when it is fully connected and integrated with every aspect of a company’s behavior in the marketplace. For example – marketing cannot succeed if it is disconnected from customer service, nor can it achieve its goals if it is disconnected from sales, or from product development, etc.

So, not only do we need to break down the silos that exist within marketing departments – but if we really want to ensure success – we also need to break down those silos that exist between marketing and the rest of the company’s operations.

While counter-intuitive at first, the increasing trend for companies to hold marketing departments accountable for ROI’s and other quantitative program measurements can potentially have very negative effects – not only on marketing integration, but on its overall potential for success.

When people are made accountable for programs that can be measured, two things tend happen. First they will dump or under-fund projects that cannot easily be measured – the “soft stuff”. Second, and based on our predominantly western “atomic” worldview – causing us to always want to break down processes into their tiniest core elements – most people will split up marketing into the smallest subsets that can still be measured and goaled – thus creating worse silos than we used to have in the first place.

The problem with dumping or under-funding the soft stuff is twofold. First off, some of those activities are actually real high value activities or even “must have” activities, even though they are hard to measure. Think of reaching the influentials, or the connectors in your markets, and other thought leadership programs. If you do it right they will not only form a social network system that will serve as an amplifier for any good message in your marketplace, they will also serve as a dampening system for negative messages that invariably will emerge from time to time. That is invaluable – yet most companies will only pay lip service to thought leadership – as it cannot be measured. The second problem with under-funding the soft stuff is that you risk killing off all innovations and the much needed continuous learning that you should be expecting from your marketing department.

The second side effect of relying too hard on quantifiable measurements in marketing – that of increasing silos – is easily proven by looking at some recently announced marketing conference programs. Take for example the upcoming conference on marketing from the IIR – it has 7 tracks! And if you’ve been in the trenches, you have probably experienced the silo madness firsthand.

So all in all – and while there is no question in my mind that marketing should be held accountable with quantifiable goals – I also think that companies that rely too much on quantitative measurements for their marketing programs – and especially those that are too granular in their measurement – are potentially doing themselves a disservice.

Marketing has to include the “soft stuff” and it cannot be siloed. It needs to be fully integrated with all market-related business processes!

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December 20, 2005

Ads talk back...

06Repeal-Smoking-law-Now.jpgThe bubble project is a pretty interesting one. People put empty bubbles on public display advertising - which encourages others to fill them out - click here for the bubble project manifesto. The filled out bubbles are then photographed and displayed on the bubble project's web site. Next year there are also plans to have them published in a book.

I am not sure that I would call this an open dialog with the advertisers, but it does make for some interesting results.


(via Church of the customer)

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December 19, 2005

Advertising that will not be shown in America

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Advertising Age has a list of 10 advertising clips that will not be played in the US - probably for fear of those same people that tried to boycott Ford (and they are it again!), Target and others..

...too bad!

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December 16, 2005

Word of mouth marketing - potential pitfalls

The Onion had a great spoof on paid-for word of mouth marketing that highlights some of the pitfalls of the practice.

And of course, the ever vigilant word of mouth marketing association has a response to the issues surrounding stealth word-of-mouth campaigns raised in the spoof.


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December 15, 2005

Marketing to people that are skeptical of advertising, media savvy and have ADD...

Now there is an opening sentence that got my attention. I found it in a recent Knowledge at Wharton newsletter - which actually started as follows:

"How do you market to an audience that is skeptical of traditional advertising, very media savvy, and possessed of short attention spans? And how do you turn a product that is highly dependent on seasonal sales into a product of choice year-round?"

That summarizes the fundamental problem which most marketers are facing today - and except for the seasonal part - that is true for both B2C and B2B companies (and to a certain extend for C2C commerce as well - i.e., eBay, Craig's list, etc.).

While the article focuses primarily on teens, the lessons learned are true for any segment:

  • speak their language (don't have 20 year olds write ad copy for aging boomers - even if you have pictures of older people)
  • identify their latest trends
  • find the optimal ways to target them

Some of the conclusions are a bit more puzzling to me - like:

"Teens are an enormously important segment because they are disproportionately powerful in terms of being trend setters and early adopters"

...huh...I thought the percentage of early adopters was the same - regardless of age group. Maybe I need to go back and revisit my copy of Diffusion of Innovations by Everett Rogers...

They also talk about real life experiences and best practices from a set of panelists who participated in one of their recent conferences, some of which are quite interesting - like this one from Doritos (Frito Lays):

"When an advertisement that featured male teens looking up girls' skirts proved offensive, it was pulled the first day. "We really thought this was the way to talk to 19-year-old boys, but the problem was that we focused on 4% of the population and basically offended" the other 96%, she said (the product manager at Frito Lay that is)"

...aha...so 4% of teenage boys actually like looking up girls' skirts - fascinating, don't you think?

The article closes with a quote from the CEO at Hershey: "realize that neither brands nor leaders are industry neutral. Brands either create energy with consumers or they sap energy; leaders do likewise."

I buy the leader piece of that statement - but have you ever seen a brand that saps energy?

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December 14, 2005

Ford reverses it's decision...and will continue to advertise in gay magazines!

Ok...so maybe I will not feel so bad about driving a Ford after all - as they got the message - and reversed their decision not to cave in to religious extremists who wanted them not to advertise in Gay Magazines...

Religious boycotts (and many others) do not have real economic impact...they're just noise!

Ford - great move!

...next!

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Should you care about influentials?

Piaras Kelly argues that Dell should not care about Jeff Jarvis on his blog today. And he goes on to say that what's really important is not what a few key influentials are saying but what the masses are saying.

Having thought about this topic and having written about quite a bit (here and here), I agree with Piaras - but the lesson learned from the Dell saga is that by not responding they let this whole issue fester beyond control and to the point where people who had been happy with them in the past - like Shel Israel, or myself - to no longer buy Dells and switch brands. Plus, if a newbie is searching for reviews on Dell, I am sure that the results are full of negative publicity.

I think that they could have avoided much of that by being better listeners and by being more responsive.

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Strong statements about marketing by Larry Weber

(cross-posted on the Corante Marketing Hub)

Chris Carfi from the Social Customer Manifesto brings us some strong statements made by PR Guru Larry Weber at the Syndicate conference (via Doc):

  • If your sites don't have a social interface, you're going to lose the leadership position in what you do.

  • Whenever a business category gets messed up, we get a C title. Now marketing is so messed up, we've got CMOs.

I am not sure about the cause and effect, but based on many discussions with marketers and people who consult with marketers we've had - marketing is truly in "death valley" at this point - somewhere between the old models and the new emerging models.

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December 12, 2005

More on why people do not care about your business - but how they care about themselves in your presence!

Tom Asacker wrote and published a visual illumination (85 page pdf) on how to connect your brands to your customers' lives. He starts his posts today with the following words of wisdom, which should give you an indication of what to expect:

"It doesn't matter what people think about you or your business. What matters is how you make them feel about themselves and their decisions while in your presence."

I also love it when he says "branding is a journey - not a destination"!

Tom - thanks for a great presentation!

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December 9, 2005

Big business - people don't trust you!

20051209_PR_GRAPHIC.gifThe NYT today reports on recent polls and surveys from Roper, Harris, and the Pew Research Center to find that nobody here (US) trusts any of their institutions anymore - not their companies , not their government, not their courts, not their media, and not their unions.

Check out the numbers in the chart - it's somewhat frightening.

Animosity toward big company executives is especially rampant - with 72% of those being polled in Roper poll feeling that "wrongdoing was widespread in industry" - up from 66% last year.

One of the many reasons listed in the article is "Technology has given the angry voices a more public outlet. The blogosphere is rife with postings castigating Coca-Cola, Wal-Mart and other big companies, citing everything from unfair labor practices to dangerous smokestack emissions." - hmmm, isn't that mixing up cause and effect?

Wouldn't it have more to do with the fact that people increasingly feel lied to - both by the companies they buy from and by the government they "elected"? And that excesses in both corporate and government behavior are slowly eroding the middle class - which not only made this country so powerful - but which leads to an unhealthy polarization of everything?

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People don't care about your product!

That's right - did you get that? Let me say it one more time - your customers could care less about your "product" or your company- they only care about themselves!

Unfortunately there are very few marketers that get that. They worry about the relationship between their customers and their company or their products. And they focus on just that - not realizing that what really counts is how customers feel about themselves when purchasing or using your product or frequenting your company's premise.

Tom Asacker gets it (if you have not read his book - do so soon) - and in a great post today brings up a few new examples to make his point - a woman not switching from Starbucks because she fears she would be missed, and of course the classic one, Harley Davidson selling esteem and not motorcycles. I mean, how many brands do you know that people are willing to permanently "brand" (i.e., tattoo) on their body without being forced or paid to do so? They don't do that because they feel good about the product or the company - they do it because they feel good about themselves when using the product.

And that's not just true for consumer goods - but also for B2B products!

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December 8, 2005

[rant] Ford caves in to religious right - and I thought marketing boycotts did not work!

I just heard this on NPR, and now read it on CMO Magazine's blog:

"Ford has announced that its Jaguar and Land Rover brands will no longer advertise in gay publications, by which they meant The Advocate and Out and Curve but which I always think means GQ or Men’s Health. This announcement came not long after the company had a sit down with members of the American Family Association (Motto: “America’s Foremost Right Wing Busybodies) which had called and then suspended a boycott of the car maker because of such ads and charitable works that it deemed a threat to heterosexuality."

(also here in Washington Post)

Well - I sure hope for Ford that all those religious nuts will be buying Fords, because with two of them in my driveway, I will never buy one again!

Isn't there enough evidence that boycotts rarely have a real economic impact?

[/rant]

Update - 12/08 [newrant] I will be doing a lot of my Christmas shopping at Target this year. Not because I am a regular customer - in fact I rarely set foot in the store - but because they are one of the only chains that did not cave in to another boycott to restore Christmas by those same religious extremists that pushed Ford to stop advertising in Gay mags - they actually want stores to use "merry christmas" in their advertising - ironic, if you ask me! (here for business week article, here, and here for int'l perspective) [/newrant]

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December 7, 2005

Interesting advertising technique...

This week I was talking with a friend of mine, who had just arrived in San Francisco and who was walking downtown when he interrupted our phone conversation to tell me how he had just seen a car running by with a Starbucks cup on the roof - and how he could not believe how that that thing was staying up there.

Well here is the answer - via the Business 2.0 blog, and referring to Thomas Hawk's experience - it's an new advertising technique!

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Whatever it takes to get people's attention...

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December 5, 2005

Firms of edearment returns surpass "good to great" companies

David Wolfe over at Ageless Marketing has started chronicling the stories of firms of endearment - in advance of his upcoming book, which should be published early next year (here and here).

Firms of endearment challenge Milton Friedman's premise that companies only have one social responsibility - maximizing shareholder return. Firms of endearment do not favor any particular stakeholder, but rather treat all 5 stakeholders on the same footing - employees, customers, suppliers, society and shareholders. David believes that firms of endearment are forerunners of a new business model - one that could very well change capitalism at its core.

And how are the firms of endearment doing compared to the S&P 500 or good-to-great companies? Check for yourself...

foe_stock_performance_2.jpg

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December 4, 2005

Are you buzzword compliant?

Creating passionate users has a great post on web 2.0 related buzzwords...and as usual, mixed in with some great illustrations.

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Kathy Sierra's (the author of the post) recommendation? Rewrite the buzzwords into content that keeps it focused on what it means to the user...

And here is another funny one (via Marketing Roadmaps).

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November 30, 2005

Don't call me stupid...

Grant McCracken has a brilliant reply to "It's the Purpose Brand, Stupid" - an article published in the Wall Street Journal yesterday by Clayton M. Christensen (HBS), Scott Cook (Intuit) and Taddy Hall (Advertising Research Foundation) .

While I agree with the authors of the article that "to build a product that people want, you need to help them do a job that they are trying to get done", and that many companies are building the wrong product by not following this simple rule, I also agree 100% with Grant that taking that to the next level and start talking about "purpose brands" is somewhat ludicrous.

I love it when he points to the costs of building true purpose brands:

"Some costs of the Purpose Brand proposition: Pucini becomes entertainment, indistinguishable from Disney. There is no difference between time keep devices called Patek Philippe and Timex. Ford makes the same thing as Volkwagen. All business schools, mark you, Dr. Christensen, are pretty much the same. Intuit is only a couple of features different from Microsoft Money. Most of all, Mr. Hall, there is no longer any such thing as advertising strategy. Now, it's sell the function all day long. (And to think that marketers and agencies actually fund the Advertising Research Foundation!) "

No reason to wonder what Grant really thinks about the authors...it's clearly stated in his post: "The three wise men are a wrecking crew. "

:)

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Are you focusing on big "M" Marketing or small "m" marketing?

As I may have mentioned before, we (Corante) are in the planning stages for a Marketing Symposium which will be held early next year. To help us create a real compelling event, one where the debate around the future of marketing goes a few steps beyond what you would find iin most other venues, we assembled an advisory board of thought leaders and practicioners. They include:

  • Elizabeth Albrycht - a public relations professional, consultant, blogger, and permanent student of the industry

  • Tom Asacker - writer, teacher, consultant and frequent speaker - Tom Peters calls him a "Marketing Guru"

  • John Hagel - writer, consultant, business strategist, and frequent speaker

  • Renee Hopkins Callahan - Director of Innovation Services at Decision Analyst, and blogger

  • Lois Kelly - strategic communications professional, consultant, speaker, blogger

  • Grant McCracken - cultural anthropologist affiliated with the MIT Brand Culture Lab, author, and consultant

  • Johnnie Moore - marketing consultant, speaker, writer and fascilitator

During our last advisory meeting we debated what might interest CMO's, the circumstances under which they might be highly participatory, whether traditional marketing is dead - or merely going through a major transformation, whether companies have the right skillsets in their marketing departments, old models vs. new models, and many other topics that might help shape the event. If you have any thoughts on the topic - feel free to contact me!

But then we came to a topic that really struck a chord with me - how many marketers out there are focusing on small "m" marketing (the tactical stuff), when they should really be focusing on big "M" marketing (the fundamentals, the strategic stuff)?

I bet you it's way too many of them...

Marketers are often primarily focused on optimising tactics - how to get a better ROI on lead gen or other programs (or how to get to an ROI - period), how to drive more traffic to online seminars, how to get customers to upgrade faster, or how to better manage the PR and advertising budgets. In reality, and if marketers were brave enough to reevaluate their big "M" marketing - do you have the right value proposition, do you have the right customers, do you have the right people - many of the small "m" stuff would take care of itself!

I suppose that a lot of that is driven by job-preservation motives - but as counter-intuitive as it might sound, I think that having the guts to challenge the fundamentals, no matter how deeply ingrained they are in the corporate culture - will result in more successful careers than if you're just a good "operational" marketer. And regardless of that, such an attitude would definitely benefit your shareholders and customers.

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November 23, 2005

Ads going along with the durex viral "Let the beast go..." campaign

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The print ads that are going along with the Durex "let the beast go..." campaign in the Belgian magazine humo are quite interesting...you can see more of them at the advertblog.

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November 22, 2005

Viral marketing embedded in social rejections

Large.gifThis one is too funny! NotMyNumber is a service that you can use to give a guy who asks you for your number a number, except it's not your reall number. When you dial the number ( I looked for a local number and got 617/459-4088), you get a girl telling you to go pound sand, but in the process she also praises budweiser.





[via agenda, Inc.]

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November 19, 2005

A free condom with your mainstream magazine?

Adverblog has the story about a mainstream magazine in Belgium (my home country) which is including a free durex condom in each magazine and promoting it through a very funny, albeit it "provocative" (by this country' standards) "viral" ad called "durex: let the beast go."

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WARNING: this is perhaps not suitable for download at work in countries that harbor religious extremists - and I'll let you compose that list!

;)...

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The importance of people announcements

I have always been against "people announcements" in companies - not because I think that people are not interested in some "star announcements" but because I believe that "personality cult/promotion" is not reflective of how a company really works and it can negatively impact morale - especially when less known individuals or teams are having a disproportionate impact on the company's success.

All that being said, I also believe that most people could care less...

Well I maybe wrong on that last point. According to a little test done by McClenehanBRUeR Communications and as reported on their blog (via Amy Gahran at Contentious), they sent out an email newsletter on behalf of one of their customers that contained all kinds of seemingly interesting content - including white papers and the like - as well as a few links to press releases at the bottom of the newsletter. The item with the highest number of click-throughs was a little news item about a couple of new people joining that company's advisory board.

While there is too little information to draw any serious conclusions (make sure you check the comment exchange between Amy and Jeff - the author of the post), it triggered a couple of interesting thoughts (at least I think so).

First off, promoting external advisers or board members is not the same as "personnel announcements". They are an indication that you are trying to open up another channel of market feedback into your strategy - be it your go-to market strategy, your product strategy or any other strategic issues that you are dealing with. And the most valuable proxies for good feedback/advise (=advisers) will also likely enjoy somewhat of a good reputation in your markets.

The second thought that I had when reading this is that most companies that do hire advisory boards do so for news-generation purposes only instead of for getting the great advise that such boards can deliver if managed properly.

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November 17, 2005

Communicating through bloggers is different!

There are two good posts on how PR folks and marketers are still clueless when it comes to using the blogosphere in spreading their message.

First is Jeremy Zawodny over at Yahoo - who writes about the PR agency, who also happens to represent Six Apart (so you would expect them to know better), spamming the Yahoo! Search Blog email contact for some new AOL video format.

Next is Bruce Fryer - who writes about how he lost a consulting gig after he would not guarantee a startup that bloggers would indeed pick up their story.

Are people truly clueless? Or is it just all too new and we're doing something wrong in communicating what this new social media is all about?

...personally, I vote for clueless...

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November 14, 2005

IBM sees blogging as marketing's next big thing!

For an update on how IBM's blogging strategy is evolving - check out the AdAge article from last week.

Here are some of the highlights - there are 15,000 internally registered bloggers, of which 2,200 people maintain an external blog. IBM's embrace of new media in marketing extends to podcasting as well.

When the "un-official" Chief Blogging Officer Christopher Barges is asked about blogging as a sales and marketing tool, he replies: "This is a way to get our expertise out there, not by shoving it down people’s throats, but by just starting conversations,” Mr. Barger said. “It expands our reputation, perceptions and reach of IBM, at the same time expanding the number of people we can learn from.”

It's good to see that some large companies do get it!

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November 11, 2005

Marketing is not just about demand generation - it's also about listening

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Brad Feld has a great post on how marketing in startups is broken. He despises the word "marketing" because it is often the weakest link in a startup company. He goes on to say:

“Marketing” is vague and non-specific, often poorly executed and measured, and usually a huge waste of money relative to the output. Oh – and while there are plenty of “tried and true” approaches (that any marketing consulting would be happy to charge you plenty of money to explain to you) – the effective approaches have been evolving a lot lately, especially as user-generated content becomes ubiquitous.
So far I sort of agree...marketing is not only broken in startups, it is broken in most companies. There are many reasons for this - including what I call a lot of "text-book" marketers who don't truly understand marketing and manage marketing as a set of predetermined task lists (that should be the same from one product to the next, and from one market to the next) and who measure their productivity by the number of press releases, or the number of leads (regardless of quality), or number of trade shows they attended (regardless of whether trade shows even make sense for their particular products). Today, failure for those people is guaranteed at an even faster rate, especially in the face of a marketplace where the old rules are no longer valid - you don't "control" the message, people distrust you and they don't have time to listen to you, they listen to other users, etc. So yes, I am sure that you will find many consultants that will gladly take your money and give you advise - but buyer beware - many of those consultants are the same people who used to be "text book" marketers before, and may not realize that their marketing text-book is no longer valid!

In his post, he goes on to say:

Several years ago, I suggested to my portfolio companies that they fire their VP of Marketing and hire a VP of Demand Generation (it could be the same person if the VP of Marketing was willing to accept a quota and meaningful, measurable variable compensation.) Hopefully, this VP of Demand Generation understands the incredible power of having your customers so happy with your product that they’ll talk about it online.
Here I am only partially in agreement because the solution he brings forward is only part what I think the solution should be. Of course marketers should do whatever they can to get the buzz going, and be measured accordingly, but they should own that same metric/goal with the person running customer service - who is probably still measuring his call center performance by how long the wait is to get a live person (good), and the length of the call (bad) - and the person running sales. All of the customer touch-points need to be looked at as an integrated set of levers through which you will create the enthusiasm needed for market buzz.

And then the marketer needs to be held accountable for a whole bunch of other things, because if you only measure her or him on "new" demand generation metrics, all your go-to-market efforts will ultimately fail. The other tasks for which the marketer should be responsible for can all be bundled in a category called "listening" - listening to marketplace for emerging negative buzz - so you can at least "try" to nip it in the but early; listening to the marketplace for competitive moves and thought leadership - so you have the right inputs in your strategy; and of course listening to the marketplace for what people really want - so you can bring the right offer to market. Because without the right offer, you can do anything you want - you will never be able to create buzz. At least not the kind of buzz you want to...

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November 10, 2005

Marketing is all about getting someone's attention

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Ghost Pops and Net#Work BBDO won the Gold Loerie Advertising Award for their Ghost Shopping cart advertising stunt (via MIT Advertising Lab):

"To create awareness at point-of-purchase, we rigged everyday shopping trolleys with motors, thereby creating and arsenal of "ghost trolleys". The trolleys were then filled with ghost pops and driven by remote controls from hidden locations. They moved around supermarkets by themselves prompting shoppers to take a pack while getting quite a few interesting reactions."

It all goes to show that marketing is all about getting people's attention - and that is increasingly hard to get.

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November 8, 2005

You know you're a marketer when...

Here are few of the entries from a fun survey conducted over at Marketing Profs. These and other entries are available in their newsletter, Marketing Profs Today.

From Roberta Silverstein:
"You query your friends at Super Bowl parties regarding their unaided recall of product/company ads."
"At the local diner you start rewriting menu descriptions for better purchase appeal."
"At home you rearrange your cat's food dishes into a POP display."

From Bill Stiles, Stiles Healthcare Strategy:
"During annual physicals your doctor encourages you to smoke and drink a little more."
"You divide your hours worked into your pay and realize you are making 4 bucks an hour."
"You lecture Girl Scouts at your door on how to segment the cookie market by the types of vehicles parked in neighborhood driveways."
"You don't have family reunions—you have a Boomer, Buster and Gen-X focus group."

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Please - don't split marketing even further

[warning: rant coming] The latest issue of productmarketing.com has an article on "where does product management belong in the organization?" Very shortsightedly the author recommends that product management should have its own exec reporting directly to the CEO. He calls it the VP of market problems...and describes the VP of marketing as the person who owns collateral, sales tools, lead generation, and awareness programs.

Come on - give me a break! This is such industrial revolution-like reasoning...If that is how your organization looks like you do not fix that by hiring a VP of product management, but you do it by firing your marketing department. Besides the fact that it is idiotic to still believe that they are "in charge" of lead gen - the marketing exec has to be the person in the organization that owns how the company behaves in the marketplace. And that includes defining the offer that you bring to market. Product management is not just a "marketing function" - it is marketing. It is at the center of everything you do in the marketplace.

The biggest problems with companies is that marketing is as fractured as it is. It is because the marketing departments are siloed that we witness all those weird company behaviors these days - where the left half of the company behaves totally different from the right half. We do not need more division of labor...we need less!

Sure enough - the product strategy has to be on the CEO agenda. No question about that! But it has to be on the agenda as part of the overall market strategy - not as another independently measured "thing". And companies need to realize that there are different types of new products - some which belong on the executive team's agenda day in and day out, and some that don't. And to believe that product management should be driven by fixing "market problems" is not just ignorant - it is a dangerous assumption for any company to hold. I can just hear the next sentence - "if your product looks more like an aspirin than a cure for cancer, you will fail!"

All that being said - the development of a product, much like all the other marketing functions, is not a one person/department affair. It is clearly a cross-functional activity that crosses all departments in a company. And just like with any cross-functional projects - different people have to take the lead for different components at different stages of the project.

Of course - just by reading the intro to the article's side bar: "I have found that the key to success in technology companies is an understanding of Star Trek" - and how companies should evolve from Start Trek the Original Series to Star Trek The Next Generation - I should have known about the quality of the article and skipped it instead of getting all wound up about it...really - he missed all the wonderful lessons from Star Trek Enterprise and Star Trek Deep Space Nine!

[end of rant]

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November 4, 2005

Marketing by learning from politics

I have been saying for awhile that for us marketers, there is much to be learned from the world of politics. Thanks to Elizabeth Albrycht I found this great article in the Herald Tribune on how Wal-Mart is doing exactly that - hiring politicos from both the Kerry and Bush presidential campaigns to help them improve their image.

They set up a rapid-response PR team that operates out of a "war room" in Arkansas - much like a campaign war room. Their target is the "swing voter" - that consumer who has not soured on Wal-Mart yet.

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November 3, 2005

How brand advocates are born

iMedia has an interesting chat with Guy Kawasaki in which he talks about consumer evangelism.

I especially like the part when he is asked about examples of innovative uses of evangelism:

"Very few companies use evangelism. Sure, they hand out business cards to employees with the title "evangelist," but "evangelist" isn't a title, it's a state of mind."
As you know, I feel that way about marketing in general. He continues by saying:
"To start, the key to evangelism is a great product. Very few companies have a great product, and very few companies understand evangelism. Thus, the set of companies that have a great product and understand evangelism is tiny -- about as likely as a professional hockey player from Hawaii."
I love it! This is so true. Now that word-of-mouth is the latest craze in marketing - I cannot wait to watch all those people who will try using it (or more likely abusing it) to promote crappy products.

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November 2, 2005

Traditional interupt marketing is dead!

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Yesterday I was having lunch with a friend who was lamenting about the fact that most high-tech company marketing departments she deals with are still so silo-ed - with budgets for events separate from budgets for PR and now even influencer marketing being set up as a separate activity. She was also telling me how many companies were disappointed with the results of sponsoring recent events.

To me these kind of statements make my blood boil. So many companies are so stuck in old ways of doing things that it is surprising to me that they succeed at all. There are two major problems with this. First off - some of the comments show that there is indeed very little corporate memory. Companies stopped doing event sponsorships after September 11th, 2001, because nobody went to conferences anymore. Now that people are traveling to conferences again - companies are rushing to sponsor events - forgetting that event marketing was something really hard to do well and with success before 9/11!

As a company you need to realize that most conference attendees are not going to those conferences to see YOU. Get over it! They are there because they have needs that most likely go way beyond what you have to offer. A good portion are probably there for reasons that you cannot do anything about.

But the problem with event marketing, and traditional interrupt-driven marketing in general, is much broader than that. You need to realize that what people have in deficit is "attention". If you try to "hijack" that attention without delivering real value - whether through aggressive conference exhibit behavior or intrusive email actions - you will turn them off! We need to start thinking about how we can deliver value when we get their attention and we need to stop thinking about "interrupting them" or trying to get their attention in silos. A much better thing to do is to take a lesson from politics - in order to get the vote, you need to have a clearly articulated and well understood value proposition which needs to be delivered, and "received" by the voter, through at least three different channels.

And when you think about how to deliver "value" - keep in mind the inherent need that most people have to help others, but also to warn others. If you deliver true value and your value proposition is easily understood and retold, then people will pass that value on to others because they too want to deliver value to acquaintances. If on the other hand, they feel like they've been had, that same motivation will cause them to "warn" others about the dangers of wasting their time and energy with a particular product or vendor. And these days, when they warn others, it can hurt much more than it did when they did so a few years ago (i.e., my airline story was in top 4 Yahoo News stories for 2 days).

In general, companies have to think about marketing as a way to behave in the marketplace - not as an unrelated set of independently measured interruption activities. I know the metaphor is a bit overused, but it truly comes down to participating (no NOT managing!) in multiple market conversations that cross multiple media and that can last for a long time - and where the buyer is in charge.

It really is simple...

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October 31, 2005

Most business concepts are "simple" to understand

I had the pleasure to meet Tom Asacker in person last Friday. He had brought me a copy of his latest book - a clear eye - which I started reading this weekend.

I immediately connected with the book. Just reading the intro (which you can download here in pdf) made me chuckle. He basically describes a psychological study designed to see how people would react to flawed reasoning. Here is how it went:

"In the study two people, A and B, were seated on opposite sides of a dividing wall, looking at a screen. Each person was instructed to learn by trial and error how to recognize the difference between slides of healthy cells and sick cells. For each slide, they had to push one of two buttons in front of them, “Healthy” or “Sick,” at which point one of two lamps, labeled “Right” and “Wrong,” would light up.

Person A received true feedback, meaning that his “Right” lamp would light up when he was correct and his “Wrong” lamp would light up when he was incorrect. These people—the A’s—learned to tell the difference between healthy and sick cells with a high level of accuracy. Person B’s situation was quite different. His right or wrong lamps lit up based not on his own guesses but on Person A’s guesses. He didn’t know it, but he was searching for an order where none could possibly exist.

A and B were then asked to work together to establish the rules for determining healthy vs. sick cells. The A’s told the B’s what they had learned and what simple characteristics they had looked for to tell the difference. Bs’ explanations, by necessity, were subtle and quite complex—and completely bogus. Here’s the amazing part. After their collaboration, all B’s and nearly all A’s came to believe that the delusional B had a much better understanding of healthy vs. sick cells. In fact, A’s were impressed with B’s sophisticated brilliance, and felt inferior because of the pedestrian simplicity of their assumptions. In a follow-up test, the B’s showed almost no improvement, but the A’s scores dropped because the A’s had incorporated some of B’s completely baseless ideas."


This is too funny - you too must have met those people that are trying to cloud what they do behind nonsense or unnecessarily complex explanations. In reality - most business concepts are simple. People that use gobbledygook language to describe what they do are either incapable or they know that they are frauds in their jobs and try to protect it with a smokescreen of complexity.

I did get further than the intro and it looks like a great read! More on it later...

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October 25, 2005

Sex in ads does not sell

MediaAnalyzer just released the results of a survey where they looked at the impact of sexual ads on brand recall (here - via Brand Autopsy).

While almost half of the man said that they liked sexual ads, less than 10% of those that were exposed to the sexual ads could recall the brand that was advertised (compared to 19.8% for non-sexual ads). MediaAnalyzer calls that the "vampire effect" - with the sexual object sucking up all the attention. On the women side, 28% of them said there were too many sexual ads, and while they tend to avoid the sexual imagery when looking at sexual ads, their brand recall with sexual ads was less than half that of non-sexual ads (10.8% vs. 22.3%). The study hypothesizes that this might be attributable to a general numbing effect that sexual stimuli has on the brain.

...general numbing effect?

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Search Engine "miss"-optimization

Forgive my ignorance with SEO techniques and the like, but as we are starting to get a fair amount of Google search referrals to our blog I noticed some strange things worth mentioning.

First off - the largest number of searches that result into a hit to our blog come from a misspelled word - "funy". While I caught the spelling error early on, Movable Type software had decided to archive the page as "/too_funy_devolu.php" - so even though I fixed the spelling error, the search engine is still categorizing the page under "funy". It is funny to watch how many people misspell the word funny - or why anybody would look for "funy innovations". Maybe a good seo trick would be to go look for the most misspelled words and then have two separate page entries on your site for those terms - that way you never loose the search traffic from those bad spellers. Ok - as I said before, I am no SEO expert - so try this at your own risk...I am not doing it.

Next is the bagel chain that I wrote about in this post. I do not want to increase the Google juice for this one by mentioning their name in this post (and maybe I am doing just that by linking to it)...but to me it was amazing to realize that if you search for their name using Google my post shows up in second place...talk about the influence of a small dissatisfied blogger. The other intriguing part is how many people are searching on that bagel chain's name - Gabe thinks it's all the people from their legal department...yikes.

One last thing for which I have no explanation is the high amount of referrals we get from Google images - if anyone can shed some light on that - that would be great.

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October 24, 2005

Unbelievable customer service

In trying to help the family of my friend, who passed away this weekend, I offered to arrange for the ticket of her brother for him to attend the funeral later this week. What followed is pretty astonishing.

First I checked fares online and settled on a Delta flight. I went through the complete registration only to find out at the end that the passenger must present the credit card with which the ticket was purchased. Figuring this was just a glitch and that I could get around that I called Delta and explained the situation. Not only did the agent not acknowledge the situation, she said that this problem could be solved by paying an extra $100. I said, "you must be kidding me - how can $100 fix this situation and how can it not be fixed with $0?" Upset, I added "this is theft." She proceeded to repeat the exact same sentence as if I was some kind of moron who did not understand English. I hung up...

Then I called American. Not only did the attendant acknowledge the situation, she offered me an emergency fare that was $100 cheaper than what they had on their web site, and she was also very patient while I was placing other calls to get the funeral home information. Go figure...

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AARP ad on marketing to older people

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Last week I ran across this ad in AdAge. It's an AARP ad soliciting customers to advertise in their magazine. The copy reads "To most marketers, consumers die the minute they turn 50."

I wonder what David Wolf over at Ageless Marketing thinks about this one...


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October 20, 2005

Human advertising space

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I just ran across this article in Entrepreneur Magazine (sorry not online yet) - where they talk about this guy who sells temporary tattoos on his forehead. He made good money so far and has gotten a lot of press - which is of course good for his clients. But Entrepreneur Mag goes so far as to say that the media coverage is probably helping his self-promotions as well - and that I am not so sure about...

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October 18, 2005

Early adopters are everywhere

Sorry for the light blogging - as I have been dealing with an ill friend in the past few days...

But that resulted in me reading the USA Today yesterday where they reviewed a study that concluded that early adopters are all over the US - not just in the spots you would expect them to be.

The study's numbers on early adopters were a bit out of whack - you just cannot have 29% early adopters - but that was partly due to the fact they measured early adopter status by looking at people who bought technologies that I would now consider mainstream.

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October 14, 2005

When systems stand in the way of good customer service...

I have always been a big champion of Vistaprint. using them for business cards, over-sized postcards and datasheets. I tell all my friends about it and I know for a fact that many others have used their service because of my recommendations. But then came my latest order...

It started out fine, with me ordering 500 copies of a 2 page datasheet to distribute at an upcoming conference. The person I dealt with was pleasant and helpful and even did a reorder last Friday after I had discovered a minor error. I paid to have my package delivered on Wednesday - but it did not arrive on Wednesday. On Thursday I emailed, and they confirmed that while it should have been here on Wednesday it would get delivered on Thursday. That still gave me enough time as I had to have it in the conference organizer's hands by Friday or Saturday at the latest.

When I received the box however, I noticed a major color problem on the front page - some color was either missing or had been tuned the wrong way - resulting in everything looking deep purplish. I emailed and was told that they could not ship any faster than within 3 business days. I begged and pleaded asking them to reprint overnight and then ship overnight for Saturday delivery - but no go! While I got the standard apologies, I was really upset - as this will not only reflect bad on us, but I have now been wasting all kinds of money and opportunities as well (I did get a refund - but that still results in me wasting money and opportunities).

The bottom line is this - I am convinced that the reason they could not help me is because their stupid order entry system does not allow for deviations from the normal ordering procedures. While physically it would have been possible for them to help me, their IT infrastructure stood in the way of delivering awesome customer service.

And in a world where the product is a commodity, and the service/price ratio is the differentiator - they not only lost a customer, they also lost a real champion. All because of poor IT planning...

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October 13, 2005

Creating a brand before there is a product...

Grant McCracken - who I had the pleasure to talk with recently - has a really interesting post on his blog about a startup idea for a consultancy that specializes in the creation of brands...brands that are product free that is. The idea is that once the brand is created, you sell it to companies.

He believes that companies that would buy pre-launched brands like that could shave months off their go-to-market time.

Now, I was one of those guys that believed that there must be an organic connection between the product and its brand - actually between product "usage" and its brand. But then again, throughout my career as a marketer I have also always preferred marketing/selling the vision/idea about the product without showing/demoing the product itself - believing that I could create a stronger impression in people's mind without the constraints of the actual product. Am I mixing things up? How do you get through to early adopters and innovators if you have no products? Don't they love to tinker with the innovation, not just the concept?

Considering that Grant is an expert on branding and I am not - I am really intrigued about this and will noodle on this one for some time to come.

If you haven't read it before, his blog is *very good* - talking about branding and marketing at the intersection of anthropology and economics (and complexity theory).

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October 12, 2005

Shocking kids with advertising

wsmurf08.jpgBeing from Belgium, and having grown up with the smurfs, this one came as a bit of a surprise.

In an effort to raise money to rehabilitate the children soldiers from Burundi, Unicef decided to create a short episode of the smurfs where the whole village get's annihilated by war planes. Apparently the short film pulls no punches - the final scene shows a scorched and tattered Baby Smurf sobbing inconsolably...

hmm...I am not sure how this will work. How about the kids that will get to see this?

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Marketing accountability anyone?

According to MediaDailyNews, the Association of National Advertisers and Enterprise Marketing Management Group have released best practices for marketing accountability.

So what did they find?

"90 percent of what most companies spend on marketing is measurable, but providing the right metrics is a process that takes dedication and money." and also that "The task force also found that the pursuit of accountability can be difficult--especially demonstrating the effect of short-term marketing expenditures on brand equity".

According to the CEO of ANA: "The study aims to provide marketers with "strategic direction" for their accountability practices."

Why is it that I do not feel good about this? I have not seen the whole study, but to me it sounds like we are measuring discrete programs again instead of overall impact on customer buying behavior and most importantly - repeat buying behavior.


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October 4, 2005

Great series of posts on marketing lessons learned at Starbucks

John Moore over at Brand Autopsy has a great set of posts (here is one) on what he learned at Starbucks - some which definitely resonate with my high tech marketing background, others which are confirming what goes behind delivering the experiences that I have been enjoying as a loyal Starbucks customer.

Some of the lessons learned include - "rarely, if ever, can you sprinkle magical branding dust to create an endearing and enduring brand." - referring to the fact that you need to first and foremost focus on building your business and not your brand. One will flow out of the other - not the other way around.

Another one is - "remarkable business make the common uncommon" - well Starbucks clearly did that!

And in a third post he quotes Howard Schultz, the Starbucks Chairman as saying “If we greet customers, exchange a few words with them and then custom-make a drink exactly to their taste, they will be eager to come back.” He calls it delivering great customer experiences though "touchology" - brilliant!

Like many of you, I have experienced firsthand how powerful the results of those practices can be - both positive as with Starbucks, and negative, as with Brueggers (update since I last posted this: the last time I went there they had virtually no bagels - their excuse: they ran out of dough - that's like Starbucks running out of coffee beans - unlikely) and many others.

It is amazing to me how many companies are still not focusing on the overall customer experience - which happens through all the customer touch points - advertising, word-of-mouth, product, packaging, service, delivery, repair, etc. It must be too logical for silo-ed companies to understand. Or maybe it's time to redefine the role of marketing!

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October 3, 2005

Buzz marketing up for regulatory scrutiny?

According to the latest edition of Ad Age (print edition), word-of-mouth marketers could run afoul of longstanding advertising law.

It is indeed illegal to pay people to spread goodwill without disclosing their connection to marketers and agencies.

At issue is a potential catch-22 - that disclosure could undermine the value of buzz marketing. While some marketers may feel that way - the article quotes BzzAgent, one of the most successful players in the space, as a company that found it beneficial to have its workers reveal whom they were working for.

According to the article it is still a nascent business - putting its total revenue at around $40-$60M last year, up 100% over the previous year.

That is one way of looking at it. I am sure that there are many word-of mouth marketing campaigns that just cannot be measured because they were truly grassroots/viral.


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The continued growth of the blogosphere - and its impact on marketing

OMMA Magazine this week has an interesting article (requires registration - which is free) summarizing recent industry studies and projections and reviewing the future of online advertising with industry experts.

We have touched on some of those recent studies here and here, but the article has some other interesting market tidbits about the role of blogs in the world of online marketing.

Here they are:

  • 71% of U.S. Bloggers feel advertising on blogs is ok (according to BlogKits)
  • 66.7% have clicked on ads (according to Blogads)
  • 22% of business respondents planned to offer a new blog within the next six months (according to a CMO Magazine survey)
  • 23.2% of respondents had used blogs to learn about products and services they were considering buying (according to a recent Taylor Nelson Softres study
  • 93.7% of those found them helpful in making purchase decisions (Dell are you listening?)

The article is chock-full of great information. If online advertising is anywhere in your job description, it is definitely worth the read.

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October 2, 2005

Buzz marketing anyone?

From the most recent issue of Harvard Business Review (requires subscription)
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"Instead of relying on buzz, perhaps we should just go ahead and produce something."

Cartoon by Thomas Runyan

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September 30, 2005

Beat the vandals by copying them

According to the Russian Marketing Blog (via Global Voices - a fantastic blog btw) - Hachette was able to thwart vandals who were braking the light boxes and spraying graffiti on their Maxim magazine ads by modifying the ad so it looks as if it's behind broken glass and has graffiti already on it.

Not a single light box was broken since they did that!

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September 29, 2005

WOM and Botox

Do you know the latest product to be sold at parties - much like Tupperware and some other products?

Botox.

According to Cosmetic Enhancement (no, I am not a regular reader, my BlogBridge smartfeed finds stuff for me like that - disclosure: I am affiliated with those guys), the success of Botox has much to do with how it is marketed.

Doctors buy the stuff in bulk, and at a discount, and then organize Botox parties.

Interesting word-of-mouth marketing tactic for such a product...I wonder what's next, liposuction parties, silicone parties?

This also reminded me of the interview that Terry Gross did yesterday with writer David Rakoff - who basically listed a whole list of great actors & actresses who would never get a job today without some form of extreme makeover. I am not sure this is a good thing...but with consumer-driven health care on the horizon, I guess it is inevitable.

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September 28, 2005

"Ad skippers" are more likely to respond to consumer-generated media

According to an Intelliseek study (release here - via ClickZNews): "Consumer-Generated Media (CGM) Exceeds Traditional Advertising for Influencing Consumer Behavior."

It's a fact - word-of-mouth (WOM) continues to grow in importance in consumer awareness, trial, and purchase of new products. In fact the study finds that "consumers are 50% more likely to be influenced by WOM from their peers than by radio/TV ads."

Interestingly enough the study also found: "important correlations between consumers who regularly skip over or delete television or online ads and those who shape, create, and absorb consumer-generated media (defined as experiences, opinions and advice posted on the Internet by consumers for others to read and share). "Active ad skippers," for example, are 25 percent more likely to create and respond to CGM on Internet message boards, forums and blogs."

Other interesting findings include:

  • Teens lead all segments in overall CGM creation but remain more trusting of advertisers
  • Bloggers create an enormous amount of CGM, elevating their overall inlfuence
  • Negative reactions to "shill" marketing - that is when people are paid to spread WOM - no surprise here

Of course it's always fun to watch dinosaurs in the making - see what Bill O'Reilly has to say about CGM.

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September 27, 2005

Put the customer in the center

The CMO special report on innovation has a great interview with Jim Stengel - the CMO at P&G. His take: "Put the consumer at the center of all we do".

This sounds so obvious, yet so few companies message or position products that way. Go browse a lot of web sites, especially tech company web sites - and you will find that many of them put either the product at the center of their communication or worse, their company and it's divisions.

Besides enabling consumers to better associate with your offer, Stengel sees a few other benefits from living the customer-centric moto:

  • Tremendous effects on culture - with people being out of the office more and working together in unexpected situations.
  • It galvanizes teams on what's really important
The article has some other great insights and is definitely worth the read.

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Boomers turn 60 in 100 days...

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The Wall Street Journal yesterday had an in-depth report and podcast on boomers turning 60 next January.

The article takes a look at what we can expect from this generation that brought us rock 'n' roll, working moms, SUV's, Botox , Viagra and Starbucks.

Here is the list of what possibly to look forward to:

  • longevity for sale - with boomers expected to live much longer and having tremendous spending power, expect seeing consumer-driven health care
  • work - take two - 75% of boomers intend to keep working past retirement
  • a return to communal living - 55+ communities are springing up all over my area already
  • personal technology - memory boosting games, etc.
  • already 7 out of the average 13 cars one buys over a lifetime are being bought by buyers over 50 - and with that number expected to go up - we can look forward to a big boomer impact on everything that helps us get around
  • leisure quest - enough boomers will have enough money to drive up the demand for exotic travel destinations
  • legacy - the movie - new and creative ways to expressing their death

The article has some interesting (and sometimes scary) stats too:

  • in 25 years - boomers will make up 20% of the population (between 66-84)
  • in 2000, only 7.3 of the boomers lived below the poverty level, lower than any other segment (that is not good - the middle class is what made this country strong!)

As I said before, the difference in population distribution across the different world economies will lead to interesting challenges for worldwide brand marketers.

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September 22, 2005

Advertising for boomers - right picture, wrong message?

As I was talking with David Wolf from Ageless Marketing yesterday he brought up a real interesting point - one which he's actually been writing about a lot, like here and here.

The point is that while the largest growing population segment in the US is that of the aging boomers - advertising still focuses primarily on the young. And even when companies try to appeal to the aging boomers by putting un-models and older people in their advertising, the message is clearly developed by young people and most often does not appeal to the value framework of aging boomers - so they see the pictures without resonating with the message.

It would be interesting to put that in context with the fastest growing population segments of growing economies like China and India - and see what challenges that mix brings to global brands.

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September 19, 2005

Advertising on money to promote TV show

According to the MIT Advertising Lab, NBC is promoting a show by advertising on money. They go into grocery stores and offer to pay for people's purchases using stacks of one dollar bills that have tiny advertising for the show attached to them.

I'd be curious to see how far these bills spread. Hopefully someone will do some network analysis on this one.

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eMarketer has new study on online ad spending

eMarketer released a new study on online ad spending - talking about online advertising as the comeback kid.

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Some highlights include:

  • 2005 will see a 33.7% growth in online ad spending year over year
  • 2005 will see online ad spending go over $10B for the first time - and double the amount spent in 2002, when the market bottomed out
  • as can be expected - much of the online spending growth comes at the expense of traditional media
The funny thing is that the growth of online advertising hasn't kept pace with audience growth.

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September 16, 2005

Why monopolies are bad for customers

I lost Internet access at my place up in Vermont. I called Adelphia and in a relatively painless fashion they dispatched a technician out today.

He was a nice enough guy, knowledgeable too, and clearly going the extra mile to help me out – except that his company had decided that Internet access technicians do not need laptops. So in order for him to diagnose the problem correctly, I had to loan him my brand new laptop for two hours. He took the thing outside, schlepped it up and down the stairs – you get the picture. Plus it made me nervous as I have sensitive information on there.

Of course, and in this country, cable companies are holding somewhat of a monopoly – so in a way that could explain why they make such customer-unfriendly decisions.

But is nobody thinking about the future?

As they are starting to roll out VoIP and other services, they will start running into competition. And then of course, even in their core offerings – cable and high speed Internet access – they will increasingly have competition.

But wait – the competition is coming from large telephone companies!

…never mind – they’ve got us cornered…

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September 14, 2005

Marketing Sherpa releases top three search marketing trends to watch in 2006

Excerpted from their Search Marketing Benchmark Guide 2005-2006, this short report (pdf) on "the top three search marketing trends to watch" is pretty interesting.

The three trends are:

  • Search engines as tv networks jockeying for audience - using search engines is the third most popular activity online, just behind email and surfing. The fact that there are only a few search engines being used reminds the author of the TV audience in the 70's when there were only 3 channels.
  • SEO still a tiny portion of total search marketing spend - only 12% of paid search budget was spent on SEO/free listing optimization (although that number is growing)
  • Search marketing - a new application for press releases. This one states that if end users can now read press releases online, reporters are no longer interested in them. Companies now use search engine optimized releases to talk directly with end users.
I am surprised not to find anything blog related in the report. After all, blogs do get you higher rankings in the search engines and many companies are starting to use those as vehicles to communicate directly with end users.

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September 13, 2005

Product placement in other companies' ads...

According to Agenda, Inc. - that's apparently the latest trend

...no more room left I guess.

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The importance of product names on consumer choice

New research from Wharton indicates that the stranger the name of a color or flavor the more likely consumers will pick it up (here (pdf) - via philly.com (requires registration))

Sin Blush, Riptide Rush Gatorade, ionic antiperspirant...how about Orgasm Blush? Well - apparently the latter sells even better than Sin - which is a best seller. When names focus on emotions - the products sell better than if the names are functional.

The study looked at 4 types of names: common (i.e., dark blue), common descriptive (i.e., cherry red), unexpected descriptive (Coke red), and ambiguous (antique red). What they found is that students liked the ambiguous color names better when they saw the name before the color and preferred the unexpected descriptive ones if they saw the color first.

...interesting...

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September 12, 2005

Marketing requires a little common sense

I am amazed to see how some companies market themselves. Sometimes it is as if nobody is thinking at the company.

We have a big french door that needs replacement, and after getting quotes from multiple vendors we selected one over a month ago. At the time, the vendor told us that it would take no longer than 2 weeks to get the new window manufactured and then a day or so to install. Well over one month later - and after a lot of increasingly angry phone calls - our door is still in manufacturing. Then this weekend I get a letter from them - explaining to me that their best sales channel is word-of-mouth - and asking me to recommend someone else in return for a $500 coupon on my next purchase.

How hard is it to tie your direct marketing efforts to your CRM system? Forget about me being ticked off - but how does the company expect me to recommend them to someone if I have not even been serviced yet? Like I said before - trying to stimulate WOM is the right idea - but unless you apply some common sense when you implement the program, you may as well flush your money down the drain.

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September 7, 2005

Forrester looks at Social marketing

In a weekly email, and in an effort to promote their "social marketing bootcamp", Forrester this week talks about "social marketing" - those marketing vehicles that are being embraced by consumers who increasingly distrust traditional forms of advertising.

As part of "social marketing" they consider:

  • WOM marketing (word-of-mouth)
  • blogs
  • RSS
  • and podcasting
I am surprised to see RSS as part of this list - after all that is just a distribution mechanism for content coming from traditional web sites, blogs or podcasts.

Interestingly enough, they do have a small graph showing RSS users as real Info Junkies - with 42% using national news sites every week (vs. less than 15% for non RSS users), and with 40% researching products for purchase (vs. less than 20% for non-RSS users).

The email also reiterates some of their previous findings - that only 2% of the online adults use RSS.

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September 6, 2005

The most powerful form of WOM (word of mouth) – rumor/whisper campaigns…

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First off – and as a reminder – all the opinions expressed on this blog by me are mine and not those of people and companies that I am associated with. That being said…here is another rant…

As communicators, we should learn something from the current US Administration. And when I say learn – I mean “learn” and find ways to “immunize” ourselves from these nasty practices – and definitely not copy them as best practices. And while the “lesson” for me is not a new one – it is an important enough one to pause and take a closer look at it.

The lesson I am talking about is the one teaching us that the power of whispers and rumors far outweighs communication campaigns based on facts and rational arguments (surprise, surprise…).

Remember the McCain rumors swerving around during the South Carolina primaries after he soundly defeated Bush in New Hampshire – unsolicited black child (he, unlike most of us, had enough room in his heart to adopt a girl from Bangladesh), mental problems, being gay, drug addiction issues of his wife, etc. The facts – all allegations were false. The result – a deafening defeat for the candidate who had much of the truth and credibility on his side. Then came the “swift boat” veterans’ ads against Kerry. The facts – dubious claims at best. The result – a deafening defeat for the guy who actually fought and defended our country instead of going AWOL (I am not arguing whether he did or not – just that the “facts” on that never got cleared up vs. the “rumors” on Kerry totally overshadowed his real record). Then there was the leak exposing an active, deep undercover CIA agent by a senior Bush Jr. Official – something which Bush Sr. had declared an "act of treason." Such information is not only good enough to ruin your career, but it is life threatening as well.

Another example happened just a few days ago – when the Washington Post (here - requires subscription), Newsweek and NPR incorrectly announced that the Governor of Louisiana had never declared a State of Emergency (via TPM – here). According to the Washington Post, the source of this rumor was a senior Administration official – probably the same person who should be in jail instead of Judith Miller of the New York Times.

Heck, after hearing the story on NPR - I found myself retelling the story. And needless to say, I really regret that now!

Why do rumor stories spread like wild fires? Why do they defy factual counter arguments? Why do they even fool those whose job it is to fact check information?

Part of the reason is that people have a bigger sense of ownership in those stories. They feel more “in the know” and are more likely to “retell” the story as is. Often times, these rumors are also easier to understand than the factual stories that matter – again, making them easier to “retell”.

So what do you do if such a rumor campaign hits you?

Short term, the only thing to do is to rectify the record (for posterity – as you cannot win the battle with facts in the heat of a rumor campaign) and change the playing field as quickly as possible. In order to do that, you need to find something more viral than the original rumor campaign.

[UPDATE 09/07] Here is an actual timeline of what happened (Adapted from: Katrina Timeline)

Friday, Aug. 26: Gov. Kathleen Blanco declares a state of emergency in Louisiana and requests troop assistance.

Saturday, Aug. 27: Gov. Blanco asks for federal state of emergency. A federal emergency is declared giving federal officials the authority to get involved.


Sunday, Aug. 28
: Mayor Ray Nagin orders mandatory evacuation of New Orleans. President Bush warned of Levee failure by National Hurricane Center. National Weather Service predicts area will be "uninhabitable" after Hurricane arrives. First reports of water toppling over the levee appear in local paper.

Monday, Aug. 29: Levee breaches and New Orleans begins to fill with water, Bush travels to Arizona and California to discuss Medicare. FEMA chief finally responds to federal emergency, dispatching employees but giving them two days to arrive on site.

Tuesday, Aug. 30: Mass looting reported, security shortage cited in New Orleans. Pentagon says that local authorities have adequate National Guard units to handle hurricane needs despite governor's earlier request. Bush returns to Crawford for final day of vacation. TV coverage is around-the-clock Hurricane news.

Wednesday, Aug. 31: Tens of thousands trapped in New Orleans including at Convention Center and Superdome in "medieval" conditions. President Bush finally returns to Washington to establish a task force to coordinate federal response. Local authorities run out of food and water supplies.

Thursday, Sept. 1: New Orleans descends into anarchy. New Orleans Mayor issues a "Desperate SOS" to federal government. Bush claims nobody predicted the breach of the levees despite multiple warnings and his earlier briefing.

Friday, Sept. 2: Karl Rove begins Bush administration campaign to blame state and local officials—despite their repeated requests for help. Bush stages a photo-op—diverting Coast Guard helicopters and crew to act as backdrop for cameras. Levee repair work orchestrated for president's visit and White House press corps.

Saturday, Sept. 3: Bush blames state and local officials. Senior administration official (possibly Rove) caught in a lie claiming Gov. Blanco had not declared a state of emergency or asked for help.

Monday, Sept. 5: New Orleans officials begin to collect their dead.

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August 23, 2005

email newsletters no longer work

According to MarketingSherpa, the opening rate of email newsletters has plummeted by 10 points in the last year (here - free for 3 weeks or so).

The main reasons seem to be a combination of spam filters and reader boredom. The fix? Switch to irregular email broadcasts.

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August 22, 2005

When your customers stay with you until you screw up

I have been reading a few stories of disgruntled long time phone customers who are switching companies because of one screw-up (here for a Verizon story, here for an Orange story). I can absolutely relate with that as I have done it twice in the last 10 years or so.

It is also in-line with what happened to me this morning. I have been a loyal service customer of a local Ford dealership for years. Actually I bought my last car there as well. Yesterday, on my way back from our weekend trip, I noticed a high pitch noise coming from my engine when I was driving fast. So this morning I call my garage. The (obnoxious) scheduler told me that they have nothing available until next week. The problem is that I am going on vacation next week and that I do not want my car to break down when away and relaxing. I begged the woman to check for a spot for me, reminding her how much money I had spent on them over the years, but to no avail. In the past I would have tried to escalate the discussion and talk to a manager - but I didn't. I called another Ford dealer - got into a phone answering machine hell and hung up. Then I called another one and got connected to a very friendly man who said that he would be able to squeeze me in on Wednesday.

Guess what? If those guys are any good, I will continue to go to them until they screw up.

I suspect that this is true for many customer relationships - and not just in the phone service or car service industries. If you don't screw up, they will stay with you. Printers, computers, and cameras all fall into that category to a certain extend. People will research their first buy, but after that, a majority of them will keep buying from the same company until that company screws up. Dell, HP, Canon...all have a significant portion of their customer base that are loyal because it's easy to buy from the same company over and over again.

If this is true, and I am convinced that it is, then why do companies spend so little attention to the quality of their service department? And why does marketing not step in and demand control over the quality of that post sale relationship?

This sounds like easy money to me...

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August 19, 2005

Comcast screwing up

An irate Comcast customer service rep changes the name of a problem customer to "bitch dog". The next month, that shows up in the mail on the customer's statement. I don't think you need much more detail to imagine what happens next (here - from Church of the customer).

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August 16, 2005

The anti-model ad - maybe not

Nike has come up with an interesting ad - my butt is big (via business 2.0 blog).

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It's interesting to see that advertisers are moving away from the anorexic looking models to more real life models (another is Dove - as mentioned in the same B2.0 blog post).

I assume that means that buyers relate better with people that look like them as opposed to people that they may aspire to look like...not sure...but works for me.

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August 15, 2005

This is an unbelievable story

Check out the Cindy Sheehan blogpulse chart vs. the President (from BlogPulse). I knew from the minute I heard that she had set up camp there that this one would take a life of its own - this is truly a fascinating buzz diffusion story.

And if you care and wonder what you can do to help - see David Weinberger's (a fiend) post on what you can do.


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August 14, 2005

Incompetence must be a job requirement at Bruegger's

I already wrote about how impressed I am with the Starbucks service. Well now I am increasingly convinced that the Starbucks in my town has found a way to have Bruegger's hire every single person that fails the Starbucks interview...

Today, just like yesterday, and like about one in three or four times I go there, they ran out of plain bagels. It's the same people managing the place for years - so it's not like they are missing some history to develop a semi-predictable supply and demand process. Yesterday it also took me 10 minutes to pay - with only two people in front of me. All because they decided to argue with a little old lady that she could only use one coupon at a time. She wasn't even trying to use two coupons on one item - she had two items and wanted to use a coupon for each item. And then there is the constant slowness in everything they do...I have waited 5 minutes to get served with 4 of them in the store and only one of me. They just happened to have been "assigned" to other tasks while the manager was out back.

It blows my mind that chains like that do not realize that their employees are the company/brand to me. If it weren't for my son liking their bagels (plain), I would never go back to any of their stores...

Hire well - and train your people to use some common sense - it's well worth it! In the retail business you cannot build a brand based on good quality products only. The product that I am buying is the whole buying experience.

Thankfully, after this frustrating buying experience, I crossed the hall to go buy my Starbucks coffee, and those guys instantaneously put a smile on my face.

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August 12, 2005

Bumvertising

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This is too funny - this guy is paying bums for advertising space in Seattle (from Agenda Inc.)

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August 6, 2005

Some people just don't get it!

Yesterday someone commented on post I wrote awhile back on some new and exciting LinkedIn features. I closed my posts wondering how much those new features would cost...

So in his comment this guy starts out by giving me prices and then suggests that I switch to Openbc or soflow - and signs the post with a link to his profile on soflow - where you need to be a member to view it (duh...I must be missing something in this scheme). It peaked my interest enough to check him on LinkedIn and there I find out that he is the country manager for openbc in France...

I guess this guy forgot blogging rule #1 - be transparent!

And I think he is also missing a whole bunch of marketing rules - does openbc really think that they will increase membership by having their country manager spam blogs? Did I say country manager?

Oh well...enough calories wasted on this one...

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August 3, 2005

This is what I meant - Dell did not get it!

Shel over at Naked conversations writes about how he's been happy with his Dell and never had any problem with it - but will nevertheless never buy one again.

That is exactly how I felt when I saw all the fallout.

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August 2, 2005

Another top 10 list for what marketers will do in the next 10 years

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This time for internet marketing from Larry Chase (via Sacred Cow Dung).

  • Pay per call rings in - a step further than per click

  • Feed marketing flourishes
  • email marketing will survive
  • Personal agents propagate - I don't think that agents alone will fix the problem - we need to include experts in there somewhere!
  • Reverb Marketing, in stereo - listening to multiple media at the same thing