Category: Customer Relationships

Who Owns Your Brand? Not You

One of my favorite quotes about brands comes from John Stuart, former chairman of Quaker Oats. He said “If this business were to be split up, I would be glad to take the brands, trademarks and goodwill and you could have all the bricks and mortar – and I would fare better than you.” In other words, the really valuable asset that is owned is the brand. I share this quote with students in my Promotion class early in the course to make a point about the importance of brands. After all, that is what we are “promoting” when using promotion tactics- building a brand by attempting to create awareness, build associations, achieve preference, or influence purchase.

It’s Not Yours
John Stuart’s legendary quote about the power of brands is poignant, but unfortunately it is misguided. His statement suggests the marketer owns the brands. Of course, the firm has legal rights to using the brand’s name and marks. But, who really owns the brand? The world around you, namely your customers and product users. One dimension of a brand is that it is an image, which is a collection of perceptions. Where do those perceptions reside? In the minds of customers and others. Another dimension of a brand is that it is an experience, an interactive consumption engagement. Who is the central figure? The customer, without whom there is no experience. Finally, a brand is also a relationship- no customers, no relationships, and no brand. So, three out of four dimensions of a brand (image, experience,and relationship) are customer owned.  If you don’t believe me, just ask the marketers responsible for Nutella.

Nutella Knows… Now
Nutella has been sold in the United States for more than 25 years. The hazelnut spread enjoys a committed fan community. Two Americans living in Italy, Sara Rosso and MichelleFabio, created World Nutella Day, a website that celebrates the product that they love. On February 5 of this year, the 7th annual World Nutella Day was observed. However, the future of World Nutella Day was uncertain when Rosso and Fabio received a letter from Ferrero, Nutella’s corporate owner, demanding they cease and desist use of the Nutella brand assets. Rosso took to her blog to let the Nutella fan community know about the action. Response was swift and condemning of Ferrero’s stance. The company backpedaled and said that after reaching out to Rosso a “positive conclusion” was reached. The company’s explanation for the threat of legal action was that “the case arose from a routine brand defense procedure…” triggered by alleged misuse of the Nutella brand on the World Nutella Day site. The legal explanation did not necessarily win over Nutella lovers, but the legal department was doing what it is charged with managing- the one dimension of the brand that Ferrero actually owns.

As one reads the events that unfolded in this situation the immediate thought is how many brands would love to have advocates so passionate that they start websites and create brand holidays? Nutella is fortunate to have built a passionate brand community (World Nutella Day has more than 40,000 likes on Facebook). You may own the legal rights to your brand, but understand your territorial dominance ends there. Customers, the community, and others interacting with your brand own the rest of it. This external domination of your brand is why it is crucial to be involved in building community. You do not have to own it, just as World Nutella Day is not corporately owned. But, you want to be an engaged member- it is your brand, after all (sort of).

Ad Age – Nutella Day Likely to Survive Unscathed

40% of Your Customers Would Leave You- What to Do?

Would it be unsettling if you learned that 4 out every 10 of your customers are thinking about switching to a competitor? For many business owners and marketing managers, it would be a nightmare scenario that could cause many sleepless nights. This statistic is not a hypothetical question for wireless communications providers. A recent global survey of 8,700 consumers by Nokia Simmons Networks found that about 40 percent of wireless customers would entertain switching companies. That figure is astounding in itself; it is further amplified by the fact that this figure is 20 percent higher than just one year ago. Wireless companies hold leverage in the form of restrictive contracts that include early termination fees, but otherwise it appears that they are vulnerable to customer switching behavior.

What Customers Want
According to the NSN survey, what matters to wireless subscribers is pretty straightforward:

  1. Voice quality
  2. Network coverage
  3. Contract conditions

If these factors are the greatest influences on customers’ choice of wireless provider, it should not be too difficult to manage these issues to make them positive contributors to a customer’s experience of doing business with the wireless provider of choice. Managing these factors and other touchpoints in the customer experience (e.g., billing, customer support) can be reduced to one word: Simplicity. A product whose underlying technologies are anything but simple to communicate via voice, text, and access the Internet must replace complexity with simplicity when it comes to the user interface with wireless companies.

Managing the Customer Experience
Knowing what customers value in their consumption experience is a starting point in managing customer satisfaction and minimizing customer churn. Going forward, one characteristic of companies that effectively retain customers will be a commitment to mapping and measuring the steps of the customer journey. In the wireless device category, voice quality, network coverage, and contract conditions influence satisfaction but are not the only determinants. Companies that commit to getting a more in-depth understanding of what customers want at every step in the customer journey will be better positioned to meet those wants and minimize dissatisfaction that could trigger a desire to switch to a competitor.

Here is a parting thought shared by Sarah Reedy, who wrote the article linked below: “Acting like you could lose a customer at any minute is the best way to ensure you don’t.” 

LightReading.com – “Mobile Users Yearn to Churn, NSN Finds”

Social Media: If You Start Talking, Be Prepared to Listen

One characteristic that I truly appreciate about social media is that it can open a direct line of communication between customers and a business. Questions, complaints, praises – whatever the reason for interaction – can be accomplished easily and quickly via social media channels (sure beats the mind-numbing process of going through a phone tree). Yet, there is one important caveat that too many brands with a social media presence fail to understand: If you start talking, you must be prepared to listen.

Social media expert Steve Olenski goes so far as to say that failure to listen and respond to customer-initiated communications on social networking sites is the number one mistake that retail brands make. Olenski cites statistics revealing that although 90% of the top 50 retailers have a presence on Twitter, only 29% use the platform to actually engage in communications with customers and others. The problem according to Olenski is a mindset of “set it and forget it.” In other words, more thought goes into establishing a social media presence than developing objectives and strategies for social media. He points out that setting up a Twitter account for a business then failing to respond to people who interact with your brand would be like opening a call center but not answering the telephone. It would be a waste of resources and harmful to brand image to ignore ringing telephones; failure to acknowledge or respond to posts on social networking sites potentially has the same effect.

For most businesses, the question to ask is not whether to have a social media presence – the answer is usually “yes.” The more pressing issue is once you decide to establish a presence for your brand on Twitter, Pinterest, Google + or any other social network, you must be ready to listen. It is like throwing open the doors to your business, inviting people inside to interact with you. You would not leave your business unstaffed when customers are coming in, so why would you invite interaction on social networks without a plan for sustaining the interactions?

When it comes to social media as a marketing channel, listening trumps talking. Be willing to listen, assign sufficient human resources to make listening happen, and empower your listeners to resolve problems or concerns.

Forbes – “The Number One Mistake Retail Brands Make When it Comes to Twitter”

Turn Up the Heat on Cold Calling

Cold calling is a term synonymous with selling. The thought of contacting potential prospects with whom there has been no prior communication is unsettling to many marketing students who want to avoid a sales job requiring cold calling at all costs. It is understandable – asking total strangers to consider buying a product is not exactly consistent with relationship selling practices students learn. While many sales pros have made their fortune because of their ability to cold call, the long-term goal of salespeople should be to turn up the heat on cold calling so that reliance on it is minimal.

Sales expert Jeffrey Gitomer offers 7.5 “one a day” strategies that if practiced eliminate the need for cold calling and are 10 times more effective than making dreaded cold calls. The three ideas I like most are:

  1. Visit one customer a day – Too often we are so focused on making sales that we do not devote enough time to building relationships that drive future sales and referrals.
  2. Give one referral a day – When salespeople think about referrals it is usually in terms of how can we get customers to refer people to us. Add a twist to your thinking about referrals and commit to giving one referral a day – promote the good work of your clients by sending business their way.
  3. Attend one face-to-face networking event a day – Salespeople are in the relationship business. You cannot form relationships sitting in your office or driving around in your car. Be intentional in putting yourself in situations that enable you to meet other people.

Check out all 7.5 strategies in Gitomer’s article. His recommendations are a mix of old school relationship building and new media savvy. Leave cold calling to the salespeople unwilling to make the needed effort to build relationships with current and future customers.

Brand Love: It’s not What You Think

Marketers talk a great deal about developing relationships between their brands and customers. The underlying assumption is that we can equate brand relationships that people have with interpersonal relationships. Are brand love and interpersonal love the same? Are the characteristics of a brand that attract customers to fall into love with a brand similar to the characteristics that attract people to each other?

These issues were examined in research performed by Rajeev Batra, Aaron Ahuvia, and Richard Bagozzi published earlier this year in Journal of Marketing. A series of three studies identified elements of brand love that ultimately yielded a three-factor model:

  1. Passion-driven behaviors (e.g., desire to use brand and past involvement with brand or company)
  2. Self-brand integration (e.g., brand matches current and desired self-identity; intrinsic benefits more important than extrinsic rewards)
  3. Positive emotional connection (e.g., emotional attachment and positive feelings or mood elicited by brand)

A contribution made by this research is that a distinction was made between brand love as an emotion felt by consumers and brand relationships exhibited by the behaviors of customers and clients. The latter is realized by tapping into the power of the former. Affinity held for a brand can be a catalyst for deepening one’s integration of a brand into his or her life. Thus, feelings of brand love (i.e., the emotion) cannot be equated with desired buyer behaviors like repeat purchasing and positive word-of-mouth. However, when brands leverage emotions to strengthen customers’ bonds with a brand it can be a catalyst to creating true love… brand love, that is.

I Like You… Even Though You Don’t Listen to Me

Facebook was once like a breath of fresh air because it was a space in which people could gather without intrusion from advertisers and others vying for our attention and dollars. Of course, that has changed as have our feelings about the co-mingling of social interactions and commerce. A study by market research company Lab42 found that 87% of Facebook users like brands – a statistic that hardly suggests anti-consumerism sentiments.

In fact, many Facebook users have positive attitudes toward businesses using Facebook for marketing purposes. Among the findings from the Lab42 study:

  • 82% said Facebook is a good place to interact with brands
  • 50% said that a brand’s Facebook page was more useful than the brand’s website
  • 69% said they liked a brand on Facebook because of a friend liked the brand, too

If you are a business owner or marketer, you have to love these numbers! It is evident that brands not only can co-exist with Facebook users, but they can be a “friend” in their own right by interacting with fans and building relationships. Or can they? The sobering news from the Lab42 study was that only 35% of the persons who said Facebook was a good place to interact with brands believe that brands actually listen to them.

The remedy to this problem is simple and difficult at the same time. The simple remedy is “listen!” It is our nature to desire to feel valued by others, and being ignored is a sure-fire way to feel devalued. Brands should not establish a presence on Facebook or any other social network site unless it is prepared to commit resources to listen. Therein lies the difficulty of solving this problem. Who is going to listen? How much will it cost? What resources will be committed? How will performance be measured? These questions can be stumbling blocks to making a commitment to true engagement via social media.

People who like brands on Facebook show the love (or at least the like); it is up to marketers to reciprocate. Begin by listening to the people who are talking to you and about you.

Center for Media Research – “Like It or Leave It”

Make Sales Interviews a Win-Lose Proposition

The sales force is uniquely positioned to be the eyes and ears of an organization. Their proximity to customers should be utilized to gather insights and feedback from product users. This benefit of the sales force should be tapped to learn from people who do not buy from you. Dan Bernoske recently wrote on the Sales Benchmark Index blog that the ability to give feedback to other departments in the organization from product users should be extended to gathering information from non-buyers. Bernoske uses the term “win-loss interviews” to describe what salespeople should be doing with buyers in the post-purchase stage.

The number one benefit of conducting win-loss interviews is that the information obtained ideally can be used to improve a company’s products and services. Interviews with buyers should reveal reasons why they went with your product. Patterns of responses would suggest strengths that could be leveraged to develop new products and market existing ones. While loss interviews (conversations with non-buyers) might be less enjoyable and even awkward for salespeople, they are vital to learning from a lost customer why the decision was made to buy elsewhere.

A great deal of emphasis is put on the process of selling – persuading someone to buy. The sales funnel focuses on moving prospects through to the point of purchase. But, what about post-sale, after a customer comes out the other end of the funnel? Salespeople should not ignore customers at this point. Now is the time for the win interview. And, if the funnel springs a leak and prospects do not buy, the loss interview is useful in figuring out how to patch holes in the funnel to reduce the number of lost customers.

Dan Bernoske makes the point that although user reviews posted online are valuable sources of information to learn from buyers and non-buyers alike, there is no substitute for face-to-face conversations about a buyer’s experience with your company and products. Transform your sales force from product sellers to information gatherers and relationship builders. The win-loss interview is a methodology for making the transformation possible.

Would Customers Wear Your Colors?

Happy College Colors Day! If you are unaware of this special day, the Friday before the first full weekend of the college football season is designated as College Colors Day. People are encouraged to don the colors of their favorite college sports team as football fans revel in the beginning of a new season. Why not – your favorite team is undefeated! An interesting side note – College Colors Day is orchestrated by Collegiate Licensing Company, the market leader in officially licensed products for colleges and universities. Creating a “holiday” around your business is savvy marketing!

The passion for college football and fans’ desire to show their affinity for their favorite team by wearing t-shirts and jerseys led me to wonder how a “Brand Colors Day” might play out. Would I be willing to go with an outfit featuring the red, black, and silver of Diet Coke? Could I find a Chipotle cap to wear that day? More importantly, what would it take for me to feel so strongly about a brand that I would lead me to identify with it by wearing its colors?

Although a Brand Colors Day may not become part of our popular culture, maybe businesses can benefit from thinking that there is such a day. Would customers wear your colors? Do they have a compelling reason to identify with you? Social media provides a virtual means of wearing colors by liking or following brands that matter to us. But, we have to bring people to the point that they are willing to wear our colors.

If your brand is not relevant or little more than a commodity, do not expect to be represented heavily on Brand Colors Day. Great value and memorable experiences forge brand relationships. We are inclined to tell others about brands that matter to us. It is up to marketers to make it happen – give a reason why people should be passionate about your brand.

Happy College Colors Day! Enjoy the pageantry of college football.

Daily Deals are not a Bargain

The daily deals coupon market made popular by Groupon and copied by many others (with mixed results), reached a saturation point very quickly. Consumers are bombarded with offers from restaurants, spas, service providers, and retailers offering 50% off on a “hot deal.” The novelty of daily deals wore off as numerous competitors joined Groupon in vying for customers. Yesterday, Groupon’s stock price closed at $4.37, an all-time low. Groupon’s stock value today is a far cry from the $26.11 per share close on the day of its IPO last November.

In less than four years, Groupon has gone from start up to category creator to a troubled business. What happened? Reality has hit businesses using Groupon that the bargains consumers receive come at the expense of their profitability. Groupon’s revenue sharing model typically calls for a 50-50 split in revenues deals sold. Given that deals are usually a 50% discount off regular price, a business has effectively given away three-fourths of potential revenue for every Groupon-bearing customer walking through the door. It is hard for the math to work for low-margin businesses that forsake significant revenue to attract buyers.

Deep discounts like those offered by daily deals are detrimental to building brands. They are gifts to buyers, at least that is how I feel when I am able to get a 50% discount at a restaurant. But, it does little to foster long-term loyalty between customer and brand. In theory, coupons are an incentive that attracts buyers to sample a product. Assuming they see sufficient value, potential future purchases might occur without an incentive. Unfortunately, the glut of daily deals gives consumers leeway to shop around for the best deal rather than buy from brands because of a relationship anchored on something other than a discount.

Customers are the lifeblood of a business. But, attracting them with unprofitable daily deals will cause bleeding that harms a business. Instead, explore how to strengthen relationships with your best customers by rewarding their patronage. It likely does not require a 50% discount, and they will reciprocate your gesture with continued support of your business.

Know Your Customers’ Mindset

As a new academic year begins for me, I find it useful to take a closer look at my “customers” to gain better perspective of the world as they see it. One way I do this is to review the annual Mindset List, a collection of facts and characteristics of the year’s incoming college freshman class. This year marks the 15th edition of the Mindset List. Among the 75 items on the Class of 2016 Mindset List are:

  • Women have always piloted war planes and space shuttles
  • History has always had its own channel
  • They have never seen an airplane “ticket”
  • They watch television everywhere but on a television.

The Mindset List evokes feelings of nostalgia, surprise, regret, and excitement, depending on your age. For me, the Mindset List is a reminder that the world around us is a dynamic place in which people are constantly adapting their behavior. When people change, their needs and wants change. Yet, the rate of change for businesses often fails to to keep pace with shifts in customers’ lives. The main reason is that we are slow to observe significant changes in customers’ mindsets.

Take a few moments to look at the Mindset List for the Class of 2016. Although the list describes today’s 18-year-olds, apply the idea of a mindset list to consider how your customers see the world. Is that view markedly different from past years? Has your business responded to changes in customer mindset? Customers expect you to meet them where they are today. Knowing their mindset is essential.