Mythology - The Meaning Behind the Marketing

Working Harder, Not Smarter

You're familiar with the old marketing chestnut that it's five times more expensive to acquire a new customer than it is to retain a current one, right? Apparently few others have. According to the Council:

• Nearly 67 percent of companies surveyed say they have no system for re-activating dormant or lost customers.
• Only 50 percent of global marketers report having a strategy for further monetizing key account relationships.
• 45 percent rate the effectiveness of CRM systems as deficient or needing more work, with only 15 percent of companies rating themselves extremely good or effective at integrating disparate customer data sources and repositories.

Why do we all work so hard to chase the birds in the bush and neglect the ones in the hand? Perhaps it's the thrill of the hunt; it's more fun to capture a new customer. More likely it has to do with incentives. Incentive theory states that organizations should structure employee compensation in such a way that the employees' goals are aligned with owners' goals. 

Many organizations discount a salesperson's commission - or pay none at all - if additional business comes from a client that has already been "won." (Never mind that customers need re-won over and over.) How many marketing campaigns have been targeted primarily at existing customers vs. "lead generation" from new prospects? Who in your company gets an internal high-five for mining current relationships?

We like the Peppers & Rogers concept of treating customers as investments. With a "return on customer" approach, the entire organization looks at customers as a portfolio of investments with the goal of gaining the highest yield. If incentives within your organization are tuned into that mindset, chances are behavior will change and your marketing and sales organization will start working much smarter to yield more from those birds in hand.

How Do You Scale Social Media Efforts?

Many companies, hopefully yours, have begun to migrate away from the one-way megaphone approach to marketing and towards the two-way conversational marketing approach (let's call that the telephone approach). Where you are on the megaphone-telephone spectrum can be a factor of many things:

• Your industry type - Conservative, stodgy industries can be laggards in adopting new approaches to marketing
• Your company culture - We run into many firms whose CEO's are aghast at the thought of customers actually being able to talk back to them, or to each other ("They might say something negative!").
• Your marketing team's age - Let's be honest, younger marketers see the potential and explosion of social media, and are hungrier to enter into the conversation.
• Your resources - Many firms don't feel they have the person-power to manage two-way conversations.

But can social media efforts really scale to the point of replacing the megaphone? After all, marketers are in the business of selling as much as they can. The more qualified prospects they can get in front of, with the right value proposition, at the right time, with the right offer, the higher the return on marketing investment. Right?

Here are a few things to consider when deciding how to balance your megaphone (one-way)-to-telephone (two-way) communication migration path:

• Start with the influencers- Do you need to be the one talking to the entire base of customers, or do you really need to start with influential customers who will then represent you to the wider community? More often than not, you need to start the conversation with a smaller core group of advocates and influencers, and they can scale the conversation for you.

• Set expectations accurately- Sprint recently got into some trouble with customers when they invited them to email their CEO with their feedback. In return, they received an automated thank you email. Seems realistic, after all, a large corporate CEO can't personally reply to thousands of individual emails. But the campaign that initiated the emails made it seem like he would, and instead of a positive, the campaign created hard feelings. It's critical to let customers know what level of human response they will receive if you invite them to share.

• Automate - There are hundreds of useful Web 2.0-tools available in the form of widgets for your web site that can build in interactive, two-way conversational elements. Take surveys or polls, for example. People love to rate things or provide feedback, and then see instantly how their feedback stacks up to others. Technology can create the two-way response for you (again, make sure expectations are set properly).

• Outsource to volunteers or vendors- Companies are finding that motivated, advocate-oriented customers are willing to invest a lot of time volunteering in support of their favorite brands. Partly it's an ego thing; people love to be an "expert" and find fulfillment in helping others. At other times, you may need to hire a third-party firm who is an expert on customer response and who can serve this role less expensively than hiring more full-time employees.

It will be a while longer before completely personalized, interactive, social networking can replace the megaphone entirely. Until that time, be smart and use the tactics above to build a culture of conversation in your company and begin to influence the influencers to carry on conversations on your behalf.

The Wisdom of Customer Crowds

James Surowiecki's best-seller from 2004 The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations(whew, how's that for a sub-title?) never quite took off like Gladwell's The Tipping Point, but it certainly holds many smart lessons for marketers.

The basic premise of the book is that most often "crowds", or mass groups of people, make wiser decisions that a small number of "experts." For example, market judgment, which he argues can be muchfaster, more reliable, and less subject to political forces than the deliberations of experts, or expert committees. Wikipedia, of course, has a nice outlineof Surowiecki's main points from the book.

Someone recently posted a "CrowdChess" game to test the theory.

A key implication for marketers is this: how do you craft a marketing campaign with the highest likelihood of success? Most of us will agree that the vast majority of marketing campaigns are designed by "experts" within a company and within their chosen creative agency. But are those experts more likely to deliver a campaign that will generate high ROI than a large group of non-experts who may have a vested interest in the product or service marketed?

In other words, can your customers and prospects build a better marketing campaign (or brand, for that matter), than you can?

The trend towards building a conversation with customers has begun to lead companies down this path. By collaborating with customers via social networking tools or simple surveys on web sites, firms are listening to the expressed needs and desires of customers like never before. However, do firms really trust customers enough to build an entire brand or campaign around their feedback?

One of the challenges of listening to the wisdom of your crowd of customers is capturing that wisdom. People are busy; do they really want to participate in another survey? Do they care enough to tell you what they want in enough detail to matter?

You may be surprised. While not all customers are close enough to the brand to spend five minutes sharing their collective wisdom, many of the more passionate customers will be thrilled at the opportunity. We recently ran a customer survey for a tourism client where over 22% of their prospect/customer database responded in less than 24 hours! The survey answers were a goldmine, but the comments section was even more exciting to read. The tourism client was made to realize how little they were tapping into the passion of their existing customers to shape their future.

Today's online survey tools make it so easy as to really eliminate any excuses you have for not tapping into the wisdom of your customer/prospect "crowds" to shape your marketing.

Open Source Marketing and Product Innovation

You've heard of open-source softwarein which "volunteer" programmers around the world collaborate on a piece of software code and release it to the community free. The "open source" model is also influencing other industries from bio-tech to marketing and product innovation. It's sort of a "Wisdom of Crowds" approach to business.

Consider for a moment how most advertising or marketing campaigns get developed. A marketing decision-maker in a firm has a goal to increase revenue. Using all her best training, she (if she's one of the better marketers...how many campaigns get launched without any research or feedback?) holds a few focus groups, interviews salespeople, and consults with market data to develop the message, the reach plan, the "offer", etc. She most likely works with an agency to build the creative and launch.

Even if she took the next disciplined step and tested the campaign first before launching (only a fraction do), it's still a top-down, controlled approach to building a campaign. What would a customer-centric, community-oriented "open source" approach look like?

For one, the customers themselves could have been asked to share their ideas on what the company's campaign should look like. What would customers like to hear the company say, and how? Perhaps a contest from customers on campaign ideas, which would be released to the customers to decide the winner?

While it's true that most customers would not participate, the most passionate fans of the firm probably would. And after all, they tend to be the advocates who want the firm to succeed anyway and influence many others on your behalf.

The recent Inc. Magazine has a great article on innovation that highlights Threadless, a t-shirt company whose entire business model rests on community participation in the design of new t-shirts. From the article:

Threadless, he explained, ran design competitions on an online social network. Members of the network submitted their ideas for T-shirts -- hundreds each week -- and then voted on which ones they liked best. Hundreds of thousands of people were using the site as a kind of community center, where they blogged, chatted about designs, socialized with their fellow enthusiasts -- and bought a ton of shirts at $15 each. Revenue was growing 500 percent a year, despite the fact that the company had never advertised, employed no professional designers, used no modeling agency or fashion photographers, had no sales force, and enjoyed no retail distribution. As result, costs were low, margins were above 30 percent, and -- because community members told them precisely which shirts to make -- every product eventually sold out. Nickell's company had never produced a flop.

Interesting model, one that requires a lot of faith in your current and potential customers. Many will react to this with a cynical eye, thinking this could never apply in their industry (especially highly technical categories). But I suspect that it applies to almost every industry, at least to some level.

Why not run a small pilot in your company with this approach?

Make More Money...Stop Advertising

Now there's a snippet of advice you will rarely hear from an ad agency or marketing consultant. However, that's just what Gap, that historically ubiquitous purveyor or tragically hip TV advertising (here's a fun spoof), has done.

Few brands invested as heavily in television and print advertising as Gap. According to Ad Age, "Marketing expenditure at Gap Inc. was trimmed 18% during the quarter, driven by the absence of TV ads for the Gap brand, company executives said. That contributed to a 40% jump in profits at Gap Inc., compared to the same period a year ago."

What's behind this shift? For one thing, the economy. In these shaky times, Gap found that aggressive brand advertising was not driving as much foot traffic. Instead, they shifted their marketing focus on capturing revenue in-store via merchandising to the folks who were already moving through their aisles.

"It's a waste of money [for the Gap brand to advertise right now]," said retail analyst Jennifer Black. "In this kind of an economic environment, traffic is slow anyway, and there's so much competition with advertising. ... If there was a time for them to do this, it's not that bad of a time. You really want to yell and shout and scream about the product when it's really fantastic."

Which leads us to the second reason Gap pulled back: their brand is well-known, but suffering. Fashion brands are notoriously fickle, and the Gap has been limping for a while now. Why blow tons of advertising dollars until the brand is fixed?

Note that during this time, Gap's revenue has declined while profits went up. There is a clear trade-off. Gap is not building for the future with this strategy, it is simply watching the bottom line. Is this smart for any company in difficult economic times, or for those facing financial pressure?

Not necessarily, but it is worth summarizing the lessons from Gap's experience:

• If you drop advertising, prepare to face a drop in new customers and overall revenue.
• Cutting advertising will boost profit, but probably only in the short-term.
• Don't burn advertising dollars if your brand and value proposition are not effective; you'll only be adding to the noise in the marketplace and will most likely not drive a healthy return on investment. (Note the retail consultant's reference to "...there's so much competition with advertising." If you're brand can't break through, you're probably wasting major dollars.

 

 

The Role of Social Network Marketing

Custom Communications has delivered their list of most-viewed brand and commercial videos on YouTube. Take a look and see if you notice anything:

Top 10 YouTube Brands

1. Nike - "Ronaldinho: Touch of Gold" - Viewed 22.6 million times

2. Pepsi - "PEPSI (Britney Spears, Beyonce, Pink - We Will Rock You)" - Viewed 14 million times

3. McDonald's - "Fast Food Freestyle" - Viewed 11.8 million times

4. Coca-Cola - "Diet Coke+Mentos=Human experiment: EXTREME GRAPHIC CONTENT" - Viewed 8.5 million times

5. Unilever - "Dove Evolution" - Viewed 6.7 million times

6. Disney - "Internet is for Porn" - Viewed 3.3 million times

7. Budweiser - "Banned Super Bowl 2007 Bud commercial" - Viewed 2.1 million times

8. Microsoft - "Microsoft Surface Parody" - Viewed 2 million times

9. Ikea - "Banned Commercial - Swedish Midsummer" - Viewed 1.5 million times

10. Toyota - "Top Gear: Killing a Toyota Part 1" - Viewed 1.1 million times

Source: Custom Communications

The first thing that struck us was how few people actually viewed the videos relative to the number of consumers these brands are trying to reach. For a big brand like Toyota, 1.1 million views for a major commercial barely registers on the impressions radar.

So with so few views of these "viral" videos (many of which aren't really very viral, they are just normal commercials placed on YouTube...with the possible exception of the Nike and Ikea spots), what role should YouTube and social networks like MySpace and Facebook play for a typical marketer?

• As a way to reach "influencers" - Research shows that active participants in social networks are in fact more influential, at least in some product categories, than non-participants. So a major presence on these sites will help influence the influencers, creating buzz and tastes among the larger audience.
• As a way to reach the youth market - While older demographic groups are saturated in their web usage (with the exception of senior citizens, but even there you'd be surprised), it is the teen - 20something set who are power users of social networking. And to some extent, reaching the "young" executive market (30's-40's) is attractive on social networks like LinkedIn and Facebook.
• As a way to build PR and buzz - The media is still enamored with any company who builds a presence on these sites, so even if no one watches your video, make sure the media knows you posted it and you'll probably get a mention.
• As a way to extend the reach and life of a comprehensive campaign - Most of the big brands above used the social network platform as an extension of a larger campaign.
• As a way to position yourself as a credible underground brand - Many small companies begin with social networks as a way to carve out an anti-establishment niche vs. a dominant competitor. Bigger brands that need "street cred" will put edgier commercials out on YouTube that they wouldn't show on broadcast TV.
• As a way to gain presence with very little expense - YouTube has made Sammy from Flea Market Montgomery a minor celebrity...it could do the same for you if you're willing to put yourself out there in a creative, unexpected or self-effacing way. Note how many "mash ups" of Sammy's commercials exist and how they've extended his reach!

What about you? How are you using social networks and viral video? What other benefits have you realized?

Starbucks Logo Controversy and the Purpose of Imagery

The hubbub over Starbucks' new logo is a good excuse to remember how and why companies choose certain brand imagery. The old logo, having been well plastered into consumers' minds over the last 15 years or so (Side note: As a young Microsoft sales rep, I remember using Starbucks as a "demo" company when showing the new version of Office 95...Few people outside of the Pacific Northwest new the company then, but everyone commented on the logo), will be an interesting icon to transition.

What many don't realize is that the "new" logo is actually a journey back to the original. When George Schultz took over the tiny coffee chain in Seattle back in 1985 after finding inspiration in Italy, the logo looked like this:

So as you can see, the "new" look is almost identical to the original, with the exception of a bit more modesty for the mermaid (it's like one of those "what's different in these pictures" games; note the strands of hair...Still hasn't headed off odd calls for a boycott though. Really? Over a mermaid?).

What message is Starbucks trying to send? Well, consider how Mr. Schultz has been trying to focus Starbucks "back to the basics" due to perceived over-saturation and dilution of quality. Mirroring the re-training of baristas and a "coming back" to the original brand values, the logo decision could be reflecting this recommitment to the original inspiration and quality of the brand.

The best brand icons generate an immediate emotional spark that reflects the emotional archetype the brand is going after. Most brands need to fill that imagery with meaning over time (what would an apple logo really mean without the history of Apple's brand?), but smart branders select brand icons that come partially filled already (the Nike swoosh is a good example).

You can follow this and other interesting evolutions of logos at the http://www.logoblog.org site.

Sticky Stories That Sell - Geico's Cave Men

A favorite campaign from Geico features the metrosexual cavemen stewing over Geico's insulting assertion that their geico.com web site is "so easy a cave man can use it." A hilarious series of pouty comments and protests from one particularly surly cave man ensues.

Geico, being a commodity service (insurance), has layered on a rich and entertaining storyline with the cave men. But they also have invested in numerous other advertising campaigns. What makes Geico unique is that they have aggressively launched these campaigns at the same time. Does this confuse consumers or does it reach different niche audiences, thus broadening Geico's ability to sell their commodity service?

View some of Geico's campaigns and tell us what you think:

• Offended cave men
• Geico gecko
• Celebrities help real Geico customers tell their story

Based on Geico's long string of positive financial results, we'd say it's working. The overall Geico brand gets credit as an innovative marketer, a superior web site, and a consistent "15 minutes can save you 15% or more on your car insurance." The value proposition gets consistently hammered through each of the unique ad campaigns. 

One important note in Geico's rise: they've delivered on their brand promise of a superior web site and overall service, winning several awards. At the end of the day, performance and customer experience is what builds brands long term.

When Customers Love to View Your Ads

When is advertising welcomed by consumers? When they are bored, tired and captive is one powerful scenario.

When you think about it, humans are bored and captive in groups quite often. In the airport. In the subway. In lines at the bank or DMV. In most company meetings.

Monster Media has turned these unfortunate circumstances into rare new opportunities to place your message in front of an audience who will pay attention and interact with your brand, if only to relieve their boredom. Combining the power of large-scale video projection with interactive elements, Monster Media delivers attention-getting interactive advertisements on a wall, a window, a large-screen TV or on the ground.

In an IRI study, the ads had a 41% unaided recall rate, which is unbelievably high. Check out some of the creative ways marketers are using this technology.

The opportunity to genuinely surprise and delight consumers in today's glutted media age is rare. While this solution does not scale to mass audiences and can be expensive, it is a wonderful option to consider in the right targeted circumstances. If you can find a captive, bored audience of highly influential decision-makers or tastemakers at a trade show or other concentrated venue, it could generate powerful results.  

 

Influencers and User Generated Content

Within our "Priority" planning pillar, we here at Mythology think a lot in terms of how to profile and reach the elusive "influencer" in a given marketing scenario. The theory being that if you can isolate the few who influence the others, your marketing can become more targeted and generate better ROI by using narrowcasting vs. broadcasting programs.

This is easier said than done and one of the reasons that mass media isn't going to go away completely. In order to form a relationship with a consumer, they have to be aware of you. If they aren't aware of you, it's still very tempting to try and force them to hear about you through interruptive marketing tactics (ie, old school).

One of the interesting developments in identifying who influencers really are and what their power is comes from the study of user generated content (UGC) on social networks. Again, the theory is that people who tend to have the expertise and desire to influence others tend to be folks who take the time to write a blog, post on a message board, or upload a video. They have an inherent desire to connect with others through these mechanisms, while others are more consumers of that influence.

However, the gap is closing between those who generate content and those who simply view it. eMarketer recently provided some statistics on the growth of UGC in relation to UGC viewers.In 2008 there are projected to be over 75 million user content creators, and 81 million consumers of UGC.

John Horrigan of the Pew Internet & American Life Project said in a Clickz interview, "[The Web is] shifting now to user-generated content; it shows people engaging with the Internet in a number of different ways in their lives. It shows that people are pretty interested in using the technology to put something of themselves on the Internet, not just pull down information from the Internet."

So simply identifying someone as an active UGC contributor is less useful in building an overall profile of an influencer. However, we can begin digging deeper into finding out what kind of content a consumer contributes and how many people read it, thereby isolating their passions and - most likely - their areas of influence.

For a while now you've been able to sign up for alert services that notify you when conversations about your company are posted. Some data-mining companies are developing some amazing new services that will allow marketers to monitor the public conversations in aggregate on the Internet regarding their company or product. It's a massive data project, but imagine the potential of knowing on any given day what the all-up net impact of the chatter about your company really is - positive, negative, trends, volume, etc. And yes, you will be able to identify those UGC contributors who are most active and most influential.