Mythology - The Meaning Behind the Marketing

Empowered Marketing Pillar #10: Beware the Low-End Competitor

You're a dominant player in your market. You're making fat margins. Everyone uses your products. Why worry about a pesky little new entrant in your market, one that is charging less but delivering less functionality and value than you are? If you lower your price to match them, you'll just be cannibalizing your own margins, right?

This competitive scenario and its implications is well-documented by one of my favorite business authors and speakers, Clay Christensen of Harvard. His Innovator's Dilemma laid out a framework that makes "disruptive innovation" (as compared to incremental innovation) predictable.

Christensen writes that the dominant player in an industry seems to have little incentive to develop disruptive innovations. Why? Because there is too much internal pressure to be self-protective. Often these disruptive innovations lead to cheaper solutions that fit the marketplace better. Many executives inside the company whose products/services would be cannibalized by the new innovation will fight it, often to the point that it dies on the vine.

Meanwhile, an upstart competitor with nothing to lose has no problem at all chasing the low-end. By offering a product/service that better fits the price range and needs of these low-end customers, they build market share. Soon, that disruption has taken hold and starts to seriously threaten the status quo. Christensen provides many good examples of this, such as the PC's growth at mini-computers expense.

Today, a major case study in the making is occurring right before our eyes. Microsoft, long dominant with PC and server applications, is seeing new Internet-based services ("cloud" services) such as Google Docs, Google Sites and Zoho.com offer a barrage of new "good enough" services. In many cases the services are free, supported by ads and/or fee-based add-on services.

Microsoft execs are certainly aware of the "disruptive innovation" model, and their Live Services strategy - lead by industry legend Ray Ozzie - has been an attempt to begin offering lower-end, often free online services. Unfortunately for Microsoft, their efforts have been clunky and not well accepted by the marketplace in most cases. Ozzie's challenge is to get a very large company back into a startup mentality to focus on their own disruptive innovations.

You may only be a dominant player in a smaller market, even a local one. But beware of competition that seems to be harmless today; it could be the disruptor that changes the playing field in your market.

Microsoft Marketing Goes "Bing!"

I often observe my old company's marketing with a mix of critical eye and hopefulness, all colored by my fourteen years at the company. So I'm obviously enjoying the marketing related to the launch of Bing, Microsoft's latest effort to humble Google.

In many ways this is classic Microsoft: an emphasis on feature-rich improvements over the competition, a major publicity push, and "launch event" stunts like a campy "Bing-a-thon" hosted by Hulu.com and (of course) a Space Needle stunt.

(Some of these launch stunts can go horribly wrong. I still cringe and break into cold sweats at the memory from my days as a young Microsoft marketer in the early Nineties when someone thought that sticking MS execs in a broadway-musical style product launch musical was a smart thing to do. Yikes.)

In terms of raising awareness that there is an actual choice in search engines now, it seems to be working.

Google has always taken pride in not really marketing itself other than by coyly generating buzz about what service it may or may not be launching. In some ways that approach has created significant media and consumer craving for the next cool Google innovation.

Microsoft has rarely, if ever, taken the understated approach to marketing. It has a saturation-style approach that in many ways is "old school." The Bing campaign seems to be an interesting mix of old and new media and tactics.

At least - thank goodness - the central marketing group has taught the Microsoft product groups to consider unique, memorable names vs. "Microsoft Search Engine 3.0". You can take that to the Bing. That's a major breakthrough, although some are disagreeing.

For the good of search engine competition and more options in search marketing, let's hope Microsoft gets some traction this time.

Advice on 21st Century Social Media Success from 1936

Recently I had the pleasure of presenting at West Virginia University's Integrated Marketing Communications Program Weekend. The IMC programat WVU has taken a leadership position in the journalism and marketing world with its unique online-only format and focus on a new approach marketing: viewing the whole marketing picture, not just the parts. Students in the program learn to see things they way the consumer sees them - as a constant flow of information from indistinguishable sources.

So what do you say to a roomful of professors, administrators, students and prospective students that they haven't heard before that will inform and inspire?

Well, you go back to 1936.

That's the year Dale Carnegie published his historic guide to social success, How to Win Friends and Influence People. In a world where the marketing and media megaphone has been replaced by collaborative conversations, Carnegie's advice seems more relevant than ever.

Here are a few of Carnegie's laws for success:

• Become genuinely interested in other people.
• Be a good listener. Encourage others to talk about themselves.
• Talk in terms of the other person's interest.
• Make the other person feel important and do it sincerely.
• Show respect for other people's opinions.
• If you're wrong, admit it quickly and emphatically.
• Let the other person feel the idea is his/hers.
• Throw down a challenge.

Think you could generate a few Twitter followers and Facebook friends with that advice? My wife probably exhibits these skills more naturally than anyone else I know. People are drawn to her because, well, she makes them feel valued and really does listen intently to them. She probes them with questions, getting them to open up about things that they would never share with others. (She's declined my suggestion to get her own talk show.)

Here is a view of the rest of the presentation. What do you think about Carnegie's advice and its relevance for today's social media world? (That's me being genuinely interested in other people.)

21st Century Social Media Advice from 1936

View more OpenOffice presentations from Jeff James.

Starbucks Fights Back

Starbucks is placing full page ads in major newspapers trying to reclaim its legacy of setting the bar for the best-tasting coffee. Starbucks of course built their wildly successful business through 1990's - 2000's based on creating brand value around bringing great coffee to America and the world, as well as creating a hip, smart vibe in their stores.

Lately, Starbucks has been under attack on both fronts. McDonald's McCafe launched a blisteringly dead-onanti-Starbucks positioning ad that made fun of the snootiness factor. Stores such as Dunkin' Donuts launched "taste test" style ads to deconstruct the myth of Starbucks' coffee superiority (can you imagine how insulted Starbucks brass must have been..."Seriously? Dunkin' Donuts?").

In the latest Starbucks print ad that I saw this morning, they attempted to take back the great coffee position. It will be interestingto see if the marketplace buys into the pitch or if their position has been too damaged by the competition. Personally, I believe it's the combination of emotional and functional factors that Starbucks lost in the past 4-5 years that has hurt them the most. Over-expansion, sometimes into very non-Starbucky places such as interstate highway rest stops, diluted the "specialness" of visiting a Starbucks store.

Mythology Joins Empowered Marketing Initiative

Since its inception in late 2007, Mythology has sought to help organizations build belief in their business. We believe marketing is at its core a "belief management" discipline. What your own team members believe about yourself, and what customers and prospects believe about you, determine your true brand.

One thing we've noticed is that there is a lot of anxiety out there about how to generate better results in marketing. CEO's are finally demanding more insight into what they're getting out of their marketing budgets. Marketers are anxious about all the new social media tools and how to move forward.

That's why we have partnered with our web services and digital marketing partner WELD to launch Empowered Marketing. This approach to marketing gets back to basics with the Ten Pillars of Empowered Marketing, a set of assessment and planning milestones that calm the nerves and open the possibilities for marketers.

Check out the Empowered Marketing site and watch the videos explaining this unique, yet powerful, approach to marketing planning and execution. With Mythology's strategic research, planning and management services, and WELD's advanced web presence, digital content and search engine expertise, we are well-positioned to empower you to reach the next level of performance with your marketing.

Build or Borrow a Social Community?

The mad dash to set up Facebook fan or group pages by businesses has reached the early majority and may be entering into the late majority. Even United Airlines has a "fan" page (Is anyone really a fan of an airline? Notice they seem to have turned off posts. Perhaps JetBlue or Southwest Airlines in their early days?).

The social media platform player Ning has grown quite a bit recently as more organizations determine they want more control and functionality over their organization-sponsored social network. Ning allows you to brand your site to your liking (for the most part), set up your own profiles and integrate more content than a public social network like Facebook.

However, if you set up your own network, you'll have to work harder to get people to join and participate. Facebook's beauty is its inherent viral functionality; when someone signs up for your page, all of their friends see that they've done it and some will sign up also.

We think it is useful to think of using each tool at different points of the customer adoption funnel. For example, a Facebook fan page will probably generate more members at the earlier stage of commitment, but due to its light functionality, it is less likely to deeply engage. 

A customer social community, on the other hand, is more likely to attract true advocates who are seriously ready to engage with like-minded advocates. This one that  designed and manages for the Hatfield-McCoy off-road trail system is a great example. Fans of HMT are already deeply engaged in answering questions, connecting with each other, and providing feedback. 

In some cases, companies and non-profits are forgoing a traditional web site and just launching a Ning-based site as their primary web presence. In many cases, especially where deep interaction with customers or constituents is important, this is a smart move.

Does your company participate in social communities? On what level? We'd love to hear about your successes and challenges in this ever-evolving world of social marketing.

What Does Zappos.com Sell, Really?

Zappos.com of course is the legendary online retailer. It's probably most famous for selling shoes and its rabid commitment to customer service. It has since gone on to sell many items, such as clothing, accessories, and bags.

Zappos.com's legend grew during a time when buying online was still quite a hassle. Who hasn't felt a twinge of uncertainty over buying something (especially clothing) online knowing that if you didn't like what you thought you bought, the hassle of returning it was far greater than stopping by a local store (a fact that many bricks and mortar retailers have leveraged in their ecommerce strategies).

You know the rest: How Zappos.com inserted a postage paid return envelope and a package in your shipment in case you didn't like it. How they encouraged people to buy it, try it and return it. How their customer service reps are encouraged not to follow call scripts, and how they have no time limits on their customer interactions. How they train their call center reps for weeks before turning them loose to spread Zappos.com joy. How they advertise free ground shipping, but most orders get shipped overnight...further surprising their customers with unexpected value.

So what is Zappos.com selling, really? What is their value proposition? It's customer joy, of course. They are selling a surprising, "wow" kind of emotional jolt. Let's be honest, it feels good to be treated extraordinarily. It's awesome to get someone on the other end of the phone who wants to help you, no matter how long it takes.

Some may counsel Zappos.com to stay focused, to stay in their retail niche. But customer joy is a powerful, extensible kind of value proposition. You can think of many industry niche scenarios where Zappos.com core value could improve things dramatically.

They are already monetizing their unique expertise and passion for customer joy by inviting other companies in to receive training on their model (is Zappos.com the next Disney Institute in this regard?). Their CEO has said, perhaps in jest - perhaps not, that he wouldn't rule out a Zappos.com airline someday.

Hmmm...An airline that brings customer joy. Sign me up.

Back to the Future With Sponsored Content

We've noted in earlier posts how early radio and television shows came with a singular sponsor so associated with the program that it was hard to think of one without the other (see Milton Berle and Texaco Star Theater).

Over time, in order to make advertising more affordable for more companies and to maximize their ad revenue, networks invented the :60 and :30 spots. At that point, it became about selling impressions, not aligning a brand with a popular personality or show.

Now that the Western World is thoroughly saturated with far too many commercial messages, marketers are beginning to rethink the value of impressions disconnected from the benefit they could have received back in the old "brought to you by" days.

One example of course is the smash hit American Idol, where Coke, AT&T and Ford have made long-term commitments to associate with the show.

Another example has been MSN's successful special content offering which spawned the In the Motherhood web series (which carried a "conceived by", not just a "sponsored by", tag for Suave and Sprint brands), now an ABC sitcom (hey, Cavemen aren't the only ones who can start as a commercial and end up with a real show).

The latest iteration from MSN is "The Guy's Manual- Get the Tough Things in Life Done." This time, Grape Nuts is enjoying the exclusive credit for bringing a relatively humorous look at tough life scenarios men must deal with and advice on how to handle them by host Kenny Mayne from ESPN.

This approach is an interesting mix of old school/new school advertising. While many "new marketing" gurus sniff dismissively at anything that smacks of interruptive advertising, the truth is that there are still opportunities to influence. This model is an interesting mix of desired (if done well) content with a much stronger opportunity for the brand to "take credit" for delivering it free to the viewer. The brand association is much stronger.

While not as attractive from a pure reach standpoint vs. traditional television, it attracts significant eyeballs with promotion on one of the world's most-traveled web portals, yet without the "hey, here's our advertising message" baggage. The brand is more subtly, yet powerfully, woven into the content experience.

This is most likely one of the experiences that will enable true interactive television content. While it won't be Milton Berle and Texaco any longer, it may usher in a new era of strong brands associated with specific content that develops strong emotional brand connections.

Beginning with Sticky Trust in Mind

Think of your own likelihood to open an email and act upon it. Your split-second decision process might look something like this:

• Unsolicited - Unknown Source: Spam, pure and simple. You delete it quickly and are probably more than a bit annoyed.

• Unsolicited - Known Source: You may know the company, but you still didn't request it. Still annoyed, perhaps slightly less so depending on your existing opinion of the company. However, your opinion probably went down slightly after receiving their spam.

• Opt-In - Coerced: An email received from a company who required you to give them your email address in order to get to something you wanted (a free white paper, etc.). In reality, you really don't care to hear from these folks again. Most likely you'll delete it, or perhaps open .5% - 1% of the time when you're cleaning out your Hotmail. If you have the energy and time, you'll probably opt out (although most people don't, preferring instead to ignore it or flag it as junkmail that gets routed to the delete folder).

• Opt-In - Desired: This is actually becoming less common and less needed with RSS, but there are times when you actually do want something sent to you on a regular basis. Sometimes it's related to offers, most often it's related to valued information. These emails get opened, but still only 3% - 20% of the time.

• Forwarded From an Annoying Friend/Colleague: You know the ones, thinking every other joke or urban legend is worth forwarding to their entire address book. You may pay attention for a split second, but mostly just to shake your head and wonder why they have so much time on their hands. These are tougher to opt out of receiving, but mentally you're most definitely opted out.

• Forwarded from a Trusted Friend/Colleague:  Ah, now we have something. This is an email from someone who you know personally, or have placed some trust in because of others' opinions of them. You've experienced a track record of value in what they send, so most likely you open it. You may even forgive them a couple of times if they send something less than valuable, but the long-term trust remains. These are the pinnacles of influence in a word-of-web world.

The question is: Why do we plan and spend so much time and money on architecting "campaigns" that look so much like the first few scenarios, and so little on thinking of something uniquely and consistently valuable that it would earn a forward from a trusted source?

Sure, it's harder. And we're not at a point where marketers can completely rely on word-of-web to generate enough response volume. The scale just isn't there. But...If we re-prioritized our planning, if we started with that end in mind, wouldn't even the rest of our "traditional" marketing (including traditional digital marketing) be that much more effective?

If we started with "sticky" in mind, most likely it would stick to all of our communications and lead us towards higher return on marketing investment.

Marketing Manager as Community Organizer

Hey, if "community organizer" is a stepping stone to the presidency, why not as a qualification for Chief Marketing Officer? As more and more marketing tasks are shifted to the community (The latest? Get your community to design your logo.), a key issue has been drawn out in regard to hiring marketing talent: What skills are really needed? 

In the past, a thorough understanding of traditional media planning was required. Who can we find who understands reach and frequency? Who knows solid direct marketing tactics that generate ROI? 

These days, more companies are embracing the fact that they need community organizing skills within their marketing department. It's not enough to spread the "message" through Twitter and Facebook, which are just tools; you have to understand how to build true community through those tools.  

Here's a list of a just some of the skills for a good community organizer, whether it's organizing on the streets or online:

• Building coalitions, including among those who may have felt powerless
• Mobilizing large numbers of people
• Training and empowering leaders
• Effective listening skills
• Effective questioning and messaging skills

The Marin Institute, an alcohol industry watchdog and a resource for solutions nto community alcohol problems has developed their own community organizer self-assessment test to help determine whether this is a good career choice.

Perhaps we need to adopt these kinds of organizing skill assessments for hiring marketing professionals?