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Thursday, December 31, 2009

Growing pains

Growth probably needs to be a part of your business plan. There are a handful of businesses who are happily producing at capacity in a profitable way, but it is rare. Even the most content business will eventually begin declining returns.

So we must grow.

Like a plant, we can't grow indefinitely by just growing up. We need to expand the roots and have new avenues of growth. This takes more work than just watering and maintaining the status quo. But that's why it's called growing pains. It may not be easy, but it is necessary.

If you're a restaurant, this may mean adding a new dish to the menu occasionally. A service provider may need to explore new services to add to the repertoire. Movie theaters have been adding special events and screenings other than the new-release blockbusters. Marketing and public relations agencies have begun adapting to social media. The key is to keep the steps close to your roots, and make it a natural change that makes you stronger in the long-term.

Growth is something that requires you to think and behave differently than what has brought success in the past. It requires taking chances. Not every new seedling survives, but a plant that keeps trying will endure.

Wednesday, December 30, 2009

Does Redbox exist anymore?

Of course I am kidding. But there is definitely a lot less talk about the DVD rental kiosks lately. It is still a household word, but could it be that like all new retail concepts, people have gotten used to it? Or, could this be an early indicator of another business destined for the declining revenue train?

Right now, Redbox kiosks are still being installed everywhere. It is the best deal in movie rentals in nearly every city across America. But recent changes to their promotions are not only causing increasing frustration among customers, it has also stopped the conversation about the brand.

Customers subscribed to receive emails and mobile updates so they could receive free rental codes every Monday. The codes worked for every customer, which prompted people to forward the SMS messages to everyone on their phones, post on Facebook, and post to Twitter. The codes were spread so quickly and frequently that you could count on Redbox as a trending topic on Twitter each Monday.

Then the free Monday rentals were cut-off. Redbox announced it would only offer their mobile subscribers one free code each month. Shortly after, the codes became personalized, so that each code could only be redeemed once, not just once per customer.

Understandably, it can be hard to make money when giving your product away. The problem is that Redbox cut off too much, too quickly. Then they followed that up by eliminating their best advertising program when they made the new codes unsharable.

Customers can understand when prices increase. We are not happy about it, but we know it happens. However, Redbox needed to find a way to increase revenue without throwing this many disruptions into their customers' behavior. Especially considering that they are in a business that is increasingly threatened by new technology.

I'm sure Blockbuster could tell them what happens when the customer base is no longer talking about them.

Tuesday, December 29, 2009

Keep your fans & subscribers

Every day we see or hear ads from companies that want us to sign up to receive emails, SMS alerts, facebook updates, tweets, and more. But what does the consumer get in return? Sales pitches, irrelevant updates, and repeated messages from their many methods of advertising.

The value exchange is out of balance. The advertisers get what they want, but too often the consumers don't often get anything of significant value in exchange for the opt-in. Companies assume that when people opt-in, that they want to hear everything from that brand. This may not always be the case, which results in unsubscribes and consumers who just ignore and delete.

When a customer opts-in, this is not traditional advertising where you broadcast the same message everywhere and hope for a small percentage to act on it. This is your time to show these customers you truly value them. Offer your text-message subscribers something more than the general public will receive. Give your "fans" a reason to follow your facebook updates. Most importantly, encourage these opt-in customers to talk about you and share with their friends.

It's about building business, right? So make these fans of your business fanatics. Don't just buy your time with them until they give up on you.

Sunday, December 27, 2009

Trust: desired by you, required for you

When you have a problem with Amazon, they send you a replacement before they get your returned item. They trust you.

Zappos does the same, if the shoe doesn't fit, they replace it immediately.

Popular retailers are the ones who treat their customers with respect, and trust. They don't give them problems or hassle them when a return is being made.

Would you let an issue of trust destroy your reputation and lead you out of business? Instinctively, everyone would say no, but more often than not their behavior does otherwise.

When you have a disagreement with a customer, do you send them away upset? I have been watching the unfolding of a dispute between a local restaurant and a group of disgruntled customers who believed they were lied to, then subsequently treated poorly. At issue: a $60 cover-charge added to the bill for a pay-per-view event. What that $60 got the restaurant: a horrible rating on UrbanSpoon, Yelp, and throughout the internet; also 12 former customers who will now tell everyone they encounter to avoid the restaurant.

Is it the end of the road for this establishment? Probably not, but would they be better off today by forgiving the customers and making everything peaceful? Definitely. There are situations when customers are truly taking advantage, and you have to walk away, but your business needs to establish trust with your customers to become the business everyone loves. Especially today, where every upset customer can reach more people, faster than ever.

Wednesday, December 16, 2009

Domino's is rolling the dice

Domino's Pizza is taking a couple of big risks. First, the chain will change the recipe of its pizza from the crust up. Second, it will promote the change by gathering bloggers and others who have criticized the taste of their product, asking their opinion in a live tasting.

Can a major chain change the recipe of their product? According to Russell Weiner, marketing chief at Domino's, "We weren't winning against everyone at taste." One consultant cautioned, "It's like McDonald's changing the ingredients in the Big Mac. Risks are akin to Coca-Cola's change — undone after a fan revolt — in Coke's taste." While Coca-Cola failed to understand there is more to a brand than blind-taste-test preference, this assumption implies that Domino's customers are primarily concerned with the taste of the product.

Domino's ranks first in convenience and price. The delivery pizza industry has declined 6% over the past year, and Domino's feels the crunch. While some may believe that a recipe change is admitting that what the brand stood for was wrong, would you rather ride a sinking ship until you've drowned, or get that boat to dock and make repairs? The essence of Domino's brand is hot, convenient, and affordable. Why wouldn't they make an effort to add delicious to their brand?

The only risk I foresee is their challenge to get reaction from their critics. Asking for live feedback does have a chance of backfire. The bloggers could taste the new recipe, claim it's still not great. Honestly, what do they have to lose? The people who have a poor perception of the brand will have not changed, but if Domino's is confident with their recipe they could get those very people who advocate against their brand to give it a nod of endorsement. Sure, it's a bold chance they're taking, but one which could pay off for them.

It's not unprecedented for a chain to make recipe changes. Adding enhancements to your product helps gain new customers, and satisfy existing customers to keep them longer. Domino's enhanced their brand to include hot with the introduction of their heat-wave bags. No one will complain when their convenient, affordable pizza arrives hotter and more tasty.

Tuesday, December 15, 2009

Time to buy the stuffing

An antic from my past, that is a little late for Thanksgiving but ironically appropriate.

I worked for a foodservice company one autumn. The company excelled at tracking average use of products, but did not have any protocol or support for forecasting seasonal needs. This is bad news for a food item such as stuffing, which has more demand in one week than the other 51 weeks combined. Just days before the holiday, all the stuffing was sold out, and there was massive demand from upset customers.

It was a crisis, and it was about to be held very badly.

Rather than determine when the stuffing could arrive from suppliers, and how much demand would be remaining upon arrival, the merchandise manager simply ordered all the stuffing available. Unfortunately, even stale breadcrumbs have a best-by date, and they take up a lot of space in a busy warehouse.

In business we will face many crises, we can choose to take a deep breath, evaluate options, and minimize the damage; or we can make a quick over-reaction that will provide us a new set of problems.

  • - Did you run out of a key item in your store or restaurant? Don't just buy up everything you can get your hands on, make a plan.
  • - Get bad feedback from customers in a public forum? Don't try to discredit the commenter with "positive" comments. You'll make their opinion (and others) much worse.
  • - Try a promotion that didn't work out as planned? Think quick & carefully about what will rectify the situation rather than make it worse.

You need to act quickly, but quick does not mean without significant discussion and evaluation. Maybe it's time to call in some help to put a fresh perspective on the situation from someone not directly involved.

Just don't buy too much stuffing.

Thursday, December 10, 2009

Social is the key word in "social media"

You go to a party and there is someone you haven't met before. This guy spends hours talking about how great he is, putting others down when their opinion is different than his, and even outright lying to make himself look better. I think we would all agree this is antisocial behavior, and this is exactly how many individuals and organizations handle their social media strategy.

There are many involved in antisocial media, they may even offer a few shallow incentives to get more friends, fans, and followers. But they never listen to those people who have agreed to be part of the conversation with them.

A couple tips to stay out of antisocial media:
  • - Offer your fans something without worrying what you are going to get in return. Whether it be advice, a discount, anything to be a resource. People know when they're being sold to, and would rather have someone being a resource than a salesperson.
  • - Be a part of the conversation, don't just use social media to advertise to everyone, it is a medium that requires being a part of the party.
  • - Know that you will be criticized, and train employees and other customers how to react to criticism. Never allow an employee to criticize those who comment on your blog or other pages. You cannot put out a fire with more fire. Reach out to the upset customer, and if there is no pleasing them, just let it go.
  • - Be human, a business is made up of people. Your customers are people. Everyone should be on the same level, rather than a hierarchy that puts the business on top. We rely on customers for our living, so they are just as much a part of the party as those who are hosting.
Think about others, and truly be their friend.

Tuesday, December 8, 2009

Clarification of "viral"

Since the Utah Flash fiasco continues to get as much media attention as a Tiger Woods family crisis, I thought I'd take a little more time on the concept of viral and the natural spread of word of mouth.

In a blog post apology, Brandt Anderson states,
"off the court we are going to embrace the fact we are a minor league team, and therefore do crazy fun promotion in the hope to get people talking about the team... If you were offended by the stunt I sincerely apologize. Good or bad I hope it got you talking."
In a statement to ESPN, he further stated:
"We wanted to test the strength and effectiveness of viral media by putting him (the impersonator) out in Provo with bodyguards, and some hype," he said. "I always assumed it would be uncovered very quickly that it was a hoax. I'm tremendously sorry for the way it came off. It was never intended to play out the way that it did"
The assumption in this entire situation was that viral=good. They believed that getting people talking about the team would be good, even if it was talking about a hoax.

How about we ask Motrin how awesome having an ad go "viral" can be? The "Motrin Moms" debacle caused a lot of pain for the company, and certainly did not leave a good taste in anyone's mouth.

How about Mel Gibson's famous rant? The video of his drunken rant went viral, and how has that worked for his career?

There is bad publicity. You don't want it for your business. If the general consensus of your target market is that you have done something wrong, then you have done something wrong. This is not a shock-factor marketing tactic like heavy-metal artists use to excite their target audience. When Marilyn Manson pisses off the Christian Coalition he is not trying to sell albums to them, he is selling albums to those who want to rebel against the moral majority.

A good viral campaign is when people are sharing their positive experience with others. A funny ad shown on TV or online that appeals enough to make people want to share it. A new product launched which finds evangelists telling everyone how much they love it. Viral is not planning a hoax or asking people to talk about something. That is fraud.

Motrin did not mean to upset thousands of mommy-bloggers. They stumbled accidentally into a bad situation. The Flash created this bad situation for themselves. Perhaps they hadn't considered the backlash, but it could have been easily avoided, and should have.

So what now? Continue to reach out the olive-branch to the public, apologize profusely, and mean it. Do not tangle at all with anything that could fuel the fire. Brandt Anderson has been openly accepting comments on his blog, and has addressed some of the concerns. Some of the comments may need to be moderated, and it's not the ones you may be thinking. It sometimes is better to delete those "defender" posts, the people who are supporting Anderson and calling the negative commenters idiots. Whether they are or not (and I am certainly not making the accusation) the public will believe these are shill comments from those involved with the organization.

Never, never, never, never post fake comments or reviews to attack criticism and bad publicity! Commenters who are taking your side are often more damaging than saying nothing at all. Once people suspect a shill there is very little that any official word from the organization can fix.

Stay classy, listen to your customers, and learn from your mistakes. Bad publicity is a virus, not a happy viral campaign.

No such thing as bad publicity?

I have sat in many meetings, having laughs about ideas that seem hysterical when proposed. These times are great for building teams, generating ideas, and loosening up everyone's stress levels. However, the ideas that have everyone laughing often need to die in the meeting.

We want our customers to be entertained, but we don't want them to be offended.

Now I am not one to avoid all risks, and there are situations when reaching your target audience may result in upsetting people outside of your target. Not in a blatant way, but messages cannot be perfectly safe for everyone. What I am talking about is sending out a message to customers that will back-fire. The old adage "there's no such thing as bad publicity" is a lie. Bad publicity can destroy a business.

Today's example comes from the Utah Flash, a professional development league basketball team who has a very enthusiastic owner. Looking at some of the activity he has been up to shows someone who is willing to take some risks and think outside of the box. More sports teams need to be like this. It is not a great time to be a sports-owner, as many markets simply cannot afford the big dollars to sell out stadiums at premium prices. I am not poking fun at the situation, rather showing how good intentions and enthusiastic marketing can lead us to bad decisions.

It all started with Bryon Russell calling out Michael Jordan, challenging him to a one-on-one match to show who was the better player. Sports commentators have been mocking this suggestion for months, but Utah Flash owner Brandt Anderson decided to capitalize on this media spectacle. They put a challenge to the hall of fame basketball player, and told fans of the plan to have a Jordan vs. Russell half-time show at the season opener.

While there were no definitive promises that Mr. Jordan would be there, the game sold out. There was also a staged "sighting" of the legendary player in the Provo area, where a look-a-like was dining with Men-In-Black security entourage by his side. At half-time it became obvious that there was to be no real Michael Jordan appearance, and many fans walked out.

Mr. Anderson posted an apology on his blog that evening, stating that the "challenge didn't go like any of us hoped." By Tuesday morning, there were 55 comments to the post, most critical of the stunt, and many demanding refunds. In reading the comments, it is apparent that many negative comments were deleted. Likely profanity-laden, and I do not condone Mr. Anderson for deleting that type of content from his blog, I would likely do the same in his position. The point is, this upset people. It did exactly the opposite of what a marketing person is responsible for doing. Just because something was risky, does not make it brilliant.

Great idea to propose the challenge. Get your name out there, participate in the world of sports entertainment. Had you approached Michael and he turned you down, you're not out anything for trying.

Great job of posting your blog apology. You didn't want thousands of angry fans. As you said, you wanted a season of fun. It was a bold move, that could have worked had there not been the outright deception.

Bad ideas: getting peoples' hopes up. You knew there would be no MJ, which is evident by the phony sighting. Think of this like any product, you can tell people about the attributes of your product, how it tastes, what it contains, what it can really do for customers. You cannot and should not imply something that is not going to happen. It is illegal. While there was not implicit promises that MJ would be there, and therefore you're not likely to be fined, sued, or otherwise punished, it is a bad road to walk along using deception.

Another bad idea: calling this "viral" marketing. Rather than the positive buzz-word that viral has become, people will be talking about this like it is a virus no one wants. You do not just want people talking about your product, you want to connect good-feelings with your product. No one ever got rich by selling the product no one wants.

My message to Brandt, please keep taking risks, be bold, and put the fun into sports. But get someone on your team who is a seasoned veteran at making people happy. My offer stands, I will take on the Utah Flash as a pro-bono client. No bait & switch, no strings, no hoax, and no imitators.

Friday, December 4, 2009

Freebie Friday: Not the Droids you're looking for

AT&T & Apple need to strike back at Verizon. As you may have gathered from my previous post, I don't believe the Wireless Wars will be won with vicious attacks but with smarter tactics to entertain and make people feel good. So how does a company go about fighting smarter? Who fights smarter than the Jedi?

My free advice for AT&T: Call George Lucas today to negotiate terms for an ad campaign using the most iconic sci-fi characters of all time.

Commercial 1: A group of storm troopers walk into a Verizon store. They survey the phones available, shake their heads disappointed. A Verizon employee approaches them to offer assistance.
"These are not the droids we're looking for."
Close with storm-troopers carrying iPhones, using various applications to locate the right droids, communicate with the Empire, and view tweets of the rebel alliance.

Commercial 2: A customer walks into a Verizon store which is entirely staffed with Sith lords. A customer is looking at a Motorolla Droid, explaining that he/she wants a phone that is effortless and provides thousands of reliable apps. The customer mentions wanting an app store that recommends apps based on interests and is easy to use. After a short discussion about what he/she wants from a phone, a Jedi knight approaches and waves his hand "these are not the droids you're looking for" and presents the customer with an iPhone.

That's my free ad campaign idea for you, AT&T. But feel free to send a check as a sign of thanks.

Wednesday, December 2, 2009

You've built a monster, please don't feed it

This is my open letter to Ted Gilvar - CMO of Monster.

Dear Ted, you've made it about 18 months in a big role and continue to have an even bigger challenge ahead of you. Unemployment is high, which means a couple of things. You have a lot of potential users who need your service. But, there are fewer opportunities for those people to find on your site. So what do you do when there are too many customers looking for too few products? You need to make it the best damn experience those people have ever had.

You've already built a monster, please don't feed it anymore.

As someone who has frequently utilized Monster and many other job search boards, we hate them. For the most part, job boards are just a necessary evil that we endure. Painfully gnashing our teeth and cringing as we type every letter of the URL. To be fair, Monster is infinitely better than CareerBuilder, and I do prefer it over HotJobs. But no one is getting excited to use your site.

We don't need any more advertising. We don't need clever promotions. We don't need banner ads, search ads, a social media presence, or interface updates. We don't need a logo redesign, website refresh, or anything like that. We need a brand we can trust.

Why does a marketing executive of over 10 years get search results for a "home health nurse," "finance & accounting manager," or "administrative assistant," all of which could be disastrous. But even worse, there are somewhere around 2,000 ways to say "door-to-door commission salesperson who will never earn $1" and you have them all wonderfully camouflaged as legitimate job listings that we have to sift through to find something that may even be remotely relevant to us.

I understand that you don't create the jobs, and there is a natural urge to not turn down money from advertisers. But a bit of quality control and categorization to help users find relevant jobs would make you the uncontested number one job site and make your brand the one and only household name anyone would ever think about using when they need a job. It is time to improve your product. It's called brand management. Make a product that people won't stop talking about. If every user was able to upload their resume, fill in a profile, and see nothing but relevant opportunities, hiring managers and candidates alike would love you forever.

You've got $250 million to spend. Certainly it would take a lot less than that to make it happen, and you'd never need to advertise again. It is time to improve the product in a big way. It's not as if we don't know what Monster is, we just don't want to use it.

Are consumers gaining power?

A report from the Chief Marketing Officer Council states that out of the 91% of consumers who opt-out or unsubscribe from email marketing, 46% are driven to brand defection because the messages simply are not relevant. Don't worry about those who unsubscribe? Perhaps you should be a bit concerned about those people who hit the unsubscribe button. They may be opting-in to your competition permanently.

A blog post from Facebook founder, Mark Zuckerberg, provides additional interesting insight into the future if you read between the lines. Facebook originally created networks by region and school. While the community was small, this worked to achieve what people wanted. It connected those students who wanted a way to connect and communicate to others around them. Now that seemingly everyone is on Facebook, people do not necessarily want to share their information with their bosses, family, and advertisers. The connection of living in the same region is not necessarily relevant to all consumers.

What do these things have in common? Consumers exercising their voice to make real changes in new media. This is not a new concept, it is likely that consumers have been defecting due to irrelevant messages since the first time a cobbler hammered an advertisement on a lamp post. This puts some information in our hands that we need to use in communicating.

Traditional wisdom was to create a message and broadcast it to the largest number of people possible. It was known that not every person would react positively (make a purchase) to the communication, and only in the event of accidentally insulting people would that communication result in negative reactions. What this information shows is that a very large number of consumers may actually gain a preference for the competing brand if they feel your communications are irrelevant.

Putting it all together now. Facebook is an example that shows people want to communicate and belong to a community. They are willing to become "fans" of their favorite brands, join in discussion groups about products and services, but that does not mean they want to connect to everything. Consumers who actually opt-in to communications from a brand they use, then defect to a competitor because of irrelevant communications shows that what we say and do can have positive and negative effects. Even if the communication was simply an offer that was not relevant to that consumer.

What you say matters. A lot. It is not safe to assume that you can bombard people's inboxes, television sets, Facebook pages, Twitter streams, etc. with any message, as often as you want. People watching may not just unsubscribe or change the channel. You may be sending them right into the arms of your competition.

Every time you communicate with your customers, think carefully about what you want to say. Make an offer that people will appreciate. Be relevant.