Marketing Research: Consider the Source

I read an interesting article recently that discussed results of a study about consumers’ preferences for mail as a way for businesses to communicate with them. In particular, the study found that consumers prefer receiving certain types of correspondence from businesses by direct mail rather than e-mail (e.g., info about products and bills/statements) and they are less likely to ignore direct mail than e-mail. These findings are eye-opening for firms that use direct mail, especially firms that may question whether direct mail is a relevant medium to reach their target market.

Now, before anyone abandons their e-mail marketing efforts and shifts those dollars to direct mail, we must consider the source of the study. The study was commissioned by Pitney Bowes. Yes, that is same the Pitney Bowes that offers many products and services to the direct mail industry. The company has a vested interest in the promotion of direct mail as a viable communication tool for businesses. While the research design was no doubt sound, one can’t help but fight the temptation to nod and wink that research sponsored by a supplier to the direct mail industry would find that direct mail enjoys high preference levels with consumers… especially when compared with e-mail, a medium that poses some level of threat to direct mail. Survey research findings help businesses make more informed decisions and have the potential to be framed in a way that can influence decisions and behaviors. But, we must be careful not to blindly accept findings presented to us. Link

NFL’s Policy for Photographers is Marketing Overkill

The National Football League recently announced a new policy that requires photographers working the sidelines of NFL games to wear red vests. You may be wondering, “What’s the big deal about making photographers wear a vest?” The vest itself is not the problem, it is the logos of NFL sponsors Reebok and Canon that appear on them. The American Society of Newspaper Editors and the Associated Press have voiced their displeasure with the new policy. They do not want photographers to become walking billboards for NFL sponsors. The NFL’s weak response to criticism so far has been to point out that photographers have no problem exposing brand names and logos of their equipment or shoes that they wear, so why should they have a problem with a vest containing two small logos on it? Also, the NFL claims the logos are smaller than photographers covering other sports are required to display.

This tactic is marketing overkill that borders on the absurd. It is one thing for the NFL to regulate the brands that can or must be displayed by its teams, players, and coaches. It is quite another matter to require people not directly associated with the NFL to adhere to the league’s sponsorship policies. How far will this go? Will fans be barred from wearing Nike products to games for fear a camera shot could broadcast a non-sponsor’s logo across the airwaves? The NFL has enough problems with player conduct off the field that policing what photographers wear would seem to be a low priority. It does nothing to add value for fans, just sponsors. However, the NFL could suffer negative consequences if it allows its product to become too sponsor driven and fails to take care of more important issues such as the impact of player conduct on the NFL brand. Link

Potter Passion

My wife and I took our three sons to a Harry Potter book release party at a local bookstore last Friday evening. It was the second Potter book release party we had attended, so I knew to expect a fairly large crowd and a lot of young people. Friday night’s event was as expected on those points, but I was surprised by the number of adults actively participating in events at the party, especially the costume contest. I have been familiar with Harry Potter books since the beginning of the series, but I always equated it with children and teens. However, the more I thought about it I realized that seeing a large contingent of young adults shouldn’t surprise me as twenty-somethings were reading earlier J.K. Rowling books in their teen years. Some parents got hooked into the Potter series by reading books with their children or reading them before allowing their children to insure the content was age-appropriate. It was surprising initially to see so many adults dressed like the many children gathered, but I realized quickly it should not be surprising at all.

The excitement and passion displayed for Harry Potter at the book release party was very enjoyable to observe. I couldn’t help but think how marketers would do almost anything to create a fraction of the passion and affinity among their customers that was exhibited by Potter fans. Brands like Apple, Harley Davidson, and Ikea can claim success in the ability to elict passion from the marketplace, but for most companies that idea is as much fiction as the adventures of young Mr. Potter!

P.S. – An interesting book about the passions held by people is Who Are You People?, by Shari Caughron. People with passions ranging from ice fishing to Barbie collecting are profiled. You’ll never see “fanatics” the same way again after reading the book!

Concerns about Green Marketing

I listened to a very interesting segment on NPR’s Science Friday last week about efforts to produce environmentally-friendly packaging. It was pointed out that in some cases attempts at green marketing may have unintended consequences. For example, a container for a television that uses less materials but does not adequately protect the product could lead to damaged goods that would not only create costs to repair, but it is possible that products would have to be disposed, thus creating waste when the idea was to save natural resources.

Another point raised about green marketing is that environmental policy that affects business is often politically driven, not scientifically driven. The case of ethanol as an alternative fuel for automobiles was cited as an example. Uncertainties exist about how widespread adoption of ethanol as a fuel might impact the food supply (specifically foods whose production relies on corn), but some policy makers are promoting ethanol as the alternative fuel. In addition to concerns about how much corn would be needed to produce enough ethanol to meet our fuel demands, ethanol is a less efficient fuel than gasolinein terms of energy production. Such limitations have not stopped some lawmakers from jumping on the ethanol bandwagon (or would that be a harvester?).

The importance of conducting business in a way that protects the environment cannot be overstated. It’s more than just the basis for an advertising campaign; everyone benefits when we use our natural resources responsibly. The temptation that must be avoided is practicing green marketing simply for the sake of being able to say “we’re green!” It must be driven by the aim of being a good steward of the environment, which can also lead to a potential side benefit of a competitive advantage.

It’s the Execution, Stupid!

A recent study by Carlson Marketing and the Peppers & Rogers Group provides insight into what consumers value from retailers. In the report, “Getting it Right at Retail,” respondents rated customer service and being “easy to do business with” as very important attributes in a retailer. These service issues, along with price and availability of merchandise, were of great importance to the consumers surveyed. Retailers should be concerned with another finding from the study: over 40% of respondents indicated they were as happy with other retailers as they were their primary retailer choices. In other words, many customers have little problem with switiching to other retailers when their primary retailers do not meet their expectations.

Results of the study are interesting, but are they really surprising? Consumers want to be treated fairly and and have their business valued by retailers. I doubt companies like Wal-Mart, Auto Zone, and Macy’s that scored low with consumers in this study have set out to create bad experiences for their customers. It’s all about execution, or lack thereof. For example, another finding from the study is that many times retailers that have well conceived loyalty programs do not effectively implement them as front-line service employees are too often ignorant of these important customer programs. This problem is not new for retailers; employee turnover in retail organizations has been high for years. A mixture of low salaries, being put in stressful situations dealing with difficult customers, and the saturation of retail outlets that necessitates filling more positions (that are low paying and stressful) has contributed to the customer service woes experienced in this country. Retailers willing to invest in employees in terms of training and compensation are poised to develop a competitive advantage, assuming other elements of their strategy are in place (e.g., merchandise mix, pricing, and presentation/experience). Link

Sprint Hangs Up on Unprofitable Customers

Wireless communication provider Sprint recently made headlines when it announced that it was terminating the service contracts of approximately 1,000 customers. Subscribers in the affected group were identified by the company as being unprofitable because of their numerous calls seeking customer support. The customers’ frequent interaction with Sprint support personnel was viewed as a drain on resources that could be used to serve other customers more effectively.

It takes courage for a business to “fire” a customer. Maybe it’s human nature or at least traditional marketing thought that we want to be liked by everyone. We want our customers to like (if not love) us, and if someone is unhappy with us we should not rest until they are happy. The customer is always right, you know! Perhaps that slogan should be modified to read “A profitable customer is always right.”

I applaud Sprint for taking the step to end its relationship with customers it has been unable to serve to their satisfaction. It is not easy to give up on customers, especially when you consider how hard it is to acquire them. However, it seems ironic that a company that has no trouble binding its customers to a long-term commitment is walking away from its commitment to customers when the relationship is less than perfect. Wouldn’t it be refreshing for companies like Sprint to create a two-way street and allow customers that are chronically dissatisfied to end a contract! Not likely to happen any time soon, but you never know. Link

"You Go Girl"

A study by researchers at Iowa State University reveals that women wield a great deal of power in the home. The study’s researchers were quick to point out that their findings go beyond the amount of communication initiated by wives, such as the popular notion that wives talk more than their husbands. Rather, it is the significance of the issues being communicated and the finding that husbands are often receptive to going along with the ideas communicated by their wives.

These findings are counter to the traditional view of the “lady of the house” having a lesser role in making household decisions. The marketing mindset has been to focus on reaching the male head of household given that he is often the primary provider for the home. The assumption has been that the leadership role of the male wage earner extends to taking the lead on deciding how money is spent by the family. However, it appears that in today’s household consumption decisions are often a joint venture between husband and wife, with many decisions made based on the wife’s influence.

So, rather than believing wives are relegated to handling certain household purchases (food, clothing, and home furnishings), marketers must consider every purchase situation and seek to learn more about the dynamics of the buying decision process in the household. Whether it be complex purchases such as health care services and automobiles or more mundane purchases such as casual dining and entertainment, the “traditional” role of wives in making these decisions no longer applies in many households. Marketers that respond to the more proactive role of women in the household could reap benefits from their efforts. Link

Humor and Aging

A study by Washington University researchers published recently in the Journal of the International Neuropsychological Society on the relationship between age and humor has implications for creative design of advertising messages. Researchers found that adults over age 65 have more difficulty getting the punch lines of jokes than young adults because of age-related changes in processing abilities. Link The researchers point out that their findings do not mean that older adults do not respond to humor, but rather that the reasoning and cognitive skills used to process humorous messages change with age. These findings are similar to those of a Canadian study published in 2003 that found humor comprehension among older adults is less compared with young adults. These researchers also point out that their findings do not suggest older adults aren’t funny or don’t appreciate humor. Link

So, what does these findings mean for marketers? Ad agencies involved in the creation of brand messages must take into account this phenomenon when developing messages aimed at senior consumers. Obviously, any copywriter or creative person would take into account characteristics of the demographic being targeted. But, these results suggest that it’s more than just recognition of age differences in the processing of humorous messages. When marketing to seniors, encoding humor into messages is still a viable option, but the approach taken to developing a humorous message must be different than that used to create humor for younger audiences.

Price Bundling: Added Value vs. Added Burden

My family recently enjoyed a vacation in Canada. A great time was had by all as we took in tourist attractions in Montreal and Toronto as well as visited relatives near Montreal. Being ever-observant of marketing practice as I am, I couldn’t escape noticing the marketing activity going on all around us. In particular, I was struck by the pricing practices of two tourist attractions and how one used price bundling effectively while another’s use of price bundling may actually hurt rather than help.

While in Toronto, we purchased a City Pass to take in six different attractions. City Pass bundles multiple attractions together for a single price. The price of the bundle is substantially less than purchasing tickets for each of the six attractions. Besides being a good deal for consumers, the tourist attractions that participate in City Pass benefit because they are likely to gain revenues from visitors who might opt to not visit an attraction when unbundled. In our case, we visited all six attractions in the bundle: Casa Loma, CN Tower, Hockey Hall of Fame, Ontario Science Centre, Royal Ontario Museum, and Toronto Zoo. We likely would have only visited 3 or 4 of these attractions if the bundle hadn’t been available. Our vacation experience was enhanced because of the added value the City Pass provided.

I wish I could say the same for another attraction I had hoped we could visit on our trip. The Granby Zoo, located about an hour’s drive from Montreal, is outstanding. I have fond memories of visiting the Zoo as a child and wanted to share that experience with my three sons. My enthusiasm was tempered, however, when I discovered that the only ticket the Zoo sold was a combination ticket for the Zoo and a water park. The price itself ($26.95, Canadian) is not the issue. The issue is I want a choice of purchasing a bundle or buying each attraction separately. We did not have time nor the desire to visit the water park, but we could not buy a ticket just for the Zoo. So, we opted not to go.

Price bundling is great because it can be used to deliver greater value on a cost-per-item basis when compared to buying items unbundled. However, price bundling should not be offered as a take-it-or-leave-it proposition, making consumers feel burdened if they buy a bundle of items that they cannot or do not want to use.

Are You Ready for some iPhone?

I think I now understand how football “experts” feel the week of the Super Bowl. All of them weigh in with their opinions about which team will win the big game, keys to success, and other observations that could impact the outcome of the game. For marketing experts, the launch of Apple’s iPhone this week has a similar atmosphere surrounding it.

Depending on which experts you wish to believe, the iPhone will revolutionize the wireless industry and add $10 billion in reveunes for Apple, or it will serve as a humbling experience for the same company that gave us the Newton. I believe conditions are favorable for the iPhone to succeed, but there are three keys to success that must be met:

1.The user experience must be positive. One of the reasons iPod has been a smash is it is easy to use. If users can learn to perform the multiple tasks of the iPhone with ease, they are much likely to sing the iPhone’s praises to others and serve as unofficial buzz agents by giving demos to people in their network. The multiple uses of the iPhone are irrelevant if owners perceive it’s too hard to use.

2.Behavior modification is necessary. Consumers must go from thinking in terms of specialized devices to generalized devices. We have been conditioned to shop for separate devices to serve our needs for wireless phone, camera, music player, and mobile email. Now, we’re being told that a single device can do all of these things. Accepting a generalized device involves making trade-offs in performance as you can buy specialized devices that do each of the tasks better than an iPhone. The iPhone’s promise is one of simplifying our electronic gadget needs!

3.Customer support will be crucial. Service at point-of-sale and post-purchase will be influential in determining whether the iPhone succeeds. This key has a twist in that this is not up to Apple alone. AT&T will be a key partner in educating consumers about the iPhone and keeping them satisfied when product or service failure occurs. Conumers want a seemless experience; they don’t care which partner’s part of the offering is at fault. If they purchase an iPhone at an AT&T store, they will expect support there. If they contact Apple with a problem that is technically a phone service issue, they’re going to expect Apple to provide assistance.

So, for all of the hype surrounding the Apple iPhone the bottom line is that if consumers see value in the iPhone, that it adds to their quality of life in some way (e.g., adds enjoyment, creates convenience, or enhances image),the iPhone will likely succeed.