Price for the Tie, Experience for the Win

Optimism abounds for the upcoming holiday shopping season as retailing industry analysts predict sales gains in the neighborhood of 4 percent. Christmas sales are key to a successful year for retailers, so they are preparing to be very competitive this year. One area in which many retailers are focusing is pricing, specifically being price competitive with online sellers like Amazon. Brick-and-mortar retailers are fully aware of savvy shoppers roaming their stores armed with mobile apps that enable foster price comparisons with a quick swipe of a bar code as well as the ability to search the Internet for information and reviews. Fearful that shoppers will walk out of their stores to buy online, many retailers are touting their willingness to match price.

Meeting competitors’ prices is hardly a new practice in retailing. During my four years spent in retail management in the late 1980s, competitive shopping trips were a regular item on my to-do list. Technology has made price shopping easier for retailers and of course, customers. While a retailer does not want to lose a customer just because a competitor down the road (or online) is selling the same product for $5 less, a sole focus on price as a competitive tool is not productive long-term.

Matching competitors’ prices should be used as a move to negate any advantage competitors might realize from charging less. Communicating a price matching policy is wise, particularly for a retailer like Target that is proactively promoting price matching to inform potential customers that lower prices found elsewhere, including online, can be matched by Target. However, a long-term view should be taken with regards to what will keep a customer coming back to a store.

As a consumer, I am grateful when a store is willing to meet a lower price offered by a competitor. I will gladly take them up on their offer. But, meeting competitors’ prices does not inspire me to visit a store again in the future. The total experience of doing business with a retailer is much more influential – merchandise presentation, customer service, and feeling like my business is valued matter to me. Meeting price is a cost of doing business, not a customer relationship strategy.

Retailers should adopt a price matching policy but realize that it only gets them a tie with competitors. If parity is the goal, then playing for a tie is acceptable. But, if you are playing for the win the total customer experience still cannot be beaten.

Marketing Daily – “It’s Beginning to Look Like an Appy Holiday”

Struggles to Serve the Social Customer

Social media’s marketing influence extends beyond advertising, public relations, and promotions. The voice given to customers via social networks demands that businesses be equipped to deliver customer service online. Whether it is responding to customer complaints, answering questions, or acknowledging praise, the interactivity of social network sites creates a natural channel for responding to customers’ needs. How well marketers are doing with social customer service is unclear.

A recent survey  reported by Social Media Today found that 7 out of 10 businesses said they use social media in their customer service efforts. Of those businesses, 87% have experienced a positive impact from social customer service. Those numbers might suggest a shift toward social media as a key channel for managing customer relations, but other findings from the survey run counter to that notion. Social customer service accounts for less than 5% of all customer issues handled by 4 in 10 companies.

One explanation for the relatively light usage of social media to resolve customer issues is that many businesses do not have a social customer service strategy. Evidence of this weakness in how social media is being used for customer service includes:

  • 38% of companies have no formal process for using social media channels for customer service purposes
  • 6% do not personalize responses when interacting with customers via social media
  • 6% monitor questions asked but do not answer them

Customer service is challenging when a business does not know what customers are thinking or feeling. Social media alleviates that challenge by creating a direct communication channel with customers. However, the capabilities of social media as a customer service resource cannot be realized if a strategy is not put into place that specifies which social network sites to monitor, who is responsible for monitoring, how will customer service issues be resolved, and what level of empowerment will social customer service personnel have to satisfy customers.

An unintended consequence of social media could be alienating customers because of inadequate response or worse yet, no response at all. If you are going to use social media in your business, be prepared to listen and ready to respond when the conversation puts the ball in your court. You would not let the telephone go unanswered when calls come in; “calls” made via social channels must be acknowledged and answered, too.

Marketing Charts – “Most Businesses Claim Positive Impact from Social Customer Service”

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”

Quality is Taco Bell’s Newest Ingredient

Product quality is a key ingredient for marketing success. When customers judge you as having high quality products or services they are more likely to buy, pay more than comparable offerings, and tell others about their experiences with your brand. The benefits of being positioned high quality are clear; how to successfully arrive at that place is more elusive.

Brands that aspire to ratchet up their quality associations should look to Yum! Brands’ Taco Bell for inspiration. Taco Bell has competed effectively in the quick-service restaurant category by being positioned as a low-priced brand. The tradeoff for being perceived as low priced is that quality perceptions are lower. After all, is it realistic that we can get high quality and pay low prices?

Fortunately, brand associations are not permanent; they can be reshaped and image redefined. Taco Bell has used a new product line to shift quality perceptions. Its Cantina Bell menu, created by celebrity chef Lorena Garcia, touts premium ingredients and creative recipes that make for high quality products. The positioning for the Cantina Bell menu is a distinctively upscale move for Taco Bell.

Although the new product line launch occurred less than three months ago, the impact Cantina Bell has had on Taco Bell’s brand image is significant. The YouGov BrandIndex, which measures consumer quality perceptions daily and tracks over time, reveals that Taco Bell’s efforts to enhance menu quality has paid off in more positive quality perceptions. Noteworthy gains made by Taco Bell since launching Cantina Bell menu include:

  • Positive movement in brand quality score from 14.4 to a high of 25.9 in late September
  • Closed a six-point gap with industry average; Taco Bell’s score now at or slightly above industry score

Quality scores are influenced by two factors, observed an executive with YouGov:

  1. Communication – Advertising influenced perceptions
  2. In-store Experience – Confirms perceptions when quality expectations are met

These two factors remind me of one of my favorite sayings about products and marketing: “You can put lipstick on a pig, but it is still a pig.” The lipstick is the brand communications, messaging used to shift brand perceptions. Message content has to be real (i.e., quality must actually be improved) and relevant (claims made matter to customers).

Taco Bell has discovered a powerful ingredient that has the potential to attract customers and reposition its brand as a quality offering in its industry. Your brand’s quality is not a permanent condition. If you want to improve it, consider adding ingredients needed to enhance the quality recipe.

Nation’s Restaurant News: “Research: Cantina Bell Boosts Taco Bell’s Image among Consumers”

Moe’s Knows Three Key Ingredients of Social Media Marketing

Social media is a potentially powerful marketing tool that can build brands and grow businesses. “Potentially” is the key word – harnessing the capabilities of social media has proven difficult for many brands. Also, dynamics of social media consumption (user-driven, highly interactive communication) differ dramatically from traditional marketing communication conducted via mass media advertising. Applying old-school marketing thinking does not usually turn out well in social media marketing.

One brand that appears to get social media and is working it effectively to build customer relationships and grow sales is Moe’s Southwest Grill. The restaurant chain as deftly integrated social media campaigns and mobile marketing into its existing platform. Moe’s has used a variety of tactics to engage customers and drive sales. Examples include:

  • A check-in program in which customers posting Facebook or Foursquare check-ins earned “chips” toward earning prizes
  • A Twitter campaign in support of its annual Free Queso Day promotion
  • A Facebook contest “Raise the Salsa Bar” in which 700 people submitted salsa recipes, one of which will be offered in Moe’s locations nationwide next year
  • Mobile advertising in support of Free Queso Day, targeting mobile users within five miles of Moe’s locations on the day of the event
  • Ordering through Moe’s mobile app

Moe’s social media strategy is effective because the company understands three keys to social media marketing success:

  1. Give people a voice by inviting them to participate – Submitting salsa recipes as well as having Facebook fans vote on the 10 finalists
  2. Reward people for their engagement – The mobile check-in program and spreading the word about Free Queso Day through Twitter hashtags and Facebook posts are ways to give something back to customers and encourage them to bring more business your way
  3. Measure performance using metrics relevant to the business – Likes and followers do not translate into dollars; Design social media campaigns so that their impact is traceable. Moe’s measured activity (e.g., the number of mobile check-ins and number of tweets) and outcomes (an increase of 18% in net profit was realized for the Free Queso Day promotion).

Social media is not a stand-alone activity that is separate from other marketing tactics, nor is it separate from overall business strategy. Evaluate your social media strategy to determine if the elements of invite, reward, and measure are in place.

Marketing Daily – “Moe’s Southwest Grill: Hot on Social, Mobile”

Information is Gold for Advertisers

Information is like gold – you mine it, sift it, and hope that you find nuggets that pay off. For marketers, obtaining feedback from customers and others is the equivalent of prospecting for gold. It can be hard to obtain, it may contain junk that is worthless, but it is a quest that we must pursue because of the potential benefits. The challenge is how to gain valued insights without being intrusive.

The need for information should not be lost on any business that sells audience access. Mass media advertising, event sponsorships, and social network sites are channels in which the properties selling ads or sponsorships should look to enhance value by providing their partners with opportunities to mine for gold – collect market research data. An example of how advertisers can be given added value through market research capabilities is Twitter’s new survey feature. Twitter is giving some of its top advertisers access to users by allowing them to invite users to take a brief survey. The feedback advertisers receive will enable them to evaluate their Twitter ad campaigns and adjust tactics as needed.

If you are selling marketing real estate such as advertising space, you hold a valuable asset. Add value to that asset by enabling your advertising partners to tap the channel to collect information from your audience. Information is like gold; help advertisers with their gold mining efforts by giving them tools to collect information from your audience.

All Things D – “Twitter Rolls Out Surveys – And Reminds Us Why It Cares about ‘Consistent User Experiences'”

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.

Death of the Supercenter?

Big has been in for the retailing industry for much of the past three decades. Mega shopping malls, enormous supercenter stores, and big box specialty stores fit with the portrayal of American excess. Big retailing fit shoppers’ desires for selection and convenience. But, a shift taking place in how we shop will lead to significant changes in retailing in coming years.

According to a study by PwC, the emergence of social media and mobile commerce will alter the retail landscape by 2020. The concept of a store as the shopper’s destination will be replaced by what the study calls an “omnichannel” shopper. We will expect retailers to be able to serve equally well in-store, via the Internet, on social network sites, and through our mobile devices. The experience should be the same regardless of channel used. That expectation is a major departure from where most retailers are today in their ability to deliver seamless multichannel experiences for shoppers.

Will the supercenter be a retailing concept that has run its course by 2020? New store trends already reflect the shift as stores like Best Buy, Target, Wal-Mart, and Whole Foods are opening smaller stores. From a operations standpoint, it is logical to open stores that cost less to staff, stock, and operate. But, the customer experience must be maintained, if not enhanced, at the same time. “Less is more” will work if retailers are able to align the various interactions points shoppers have with their stores.

Presentation has always been important in retailing – the “5th P” of the marketing mix. Its importance does not diminish just because stores are downsizing. In fact, presentation may be more important than ever as we make judgments about a retailer’s presentation regardless of the channel in which we interact with the store – in-person, on the store’s web site, using a smartphone app, or on one of the store’s social media sites.

Marketing Daily – “Goodbye, Supercenters: Retailers Will Become Focused, Adaptable”

Creating an Eternal Brand Statement

I am not much on reading obituaries. While I have respect for the deceased, I worry that a regular perusal of obituaries could become a morbid fascination. So, when I was thumbing through the Minneapolis Star Tribune at my hotel one morning last week I initially turned the page when I realized I was at the obituaries. After all, who in Minneapolis would I know – I had been there a grand total of 36 hours! But, a headline stopped me in my tracks and inspired a second look.

The obituary for Marvin Borman, a local attorney, led with the headline “He spent decades helping community.” That got my attention, and I had to learn about his story. Mr. Borman passed away at the age of 89 but left a legacy for his family and local community. Among the most salient facts about Mr. Borman were:

  • Attained Eagle Scout at age 13
  • Graduated high school at age 15… and was valedictorian
  • Joined U.S. Marines just after Pearl Harbor was attacked
  • Married to his wife, Betty, for 66 years
  • Served on the United Way Board for 34 years
  • Enjoyed varied interests – spending time with family, fishing, tennis, and his work.

As I read Mr. Borman’s obituary, I realized that in front of me was his eternal brand statement. Unlike a campaign that launches with a catchy theme and flashy messaging but eventually gives way to the next big idea, an obituary gives an historical account of a personal brand. It is an eternal brand statement. Mr. Borman’s impressive personal brand is a call to reflect on our journey in creating an eternal brand statement.

How will your eternal brand statement read? Will it reflect personal values that are so clear that people who never met you will feel like they have been touched by reading your story? Our eternal brand statement is not written by a newspaper staffer after we die; it is being crafted daily by our values and actions. I like to say that the work of branding is never finished, but when it comes to our personal brand we can also say that branding never dies.

Marketing’s Role in Fighting Obesity

The marketing profession is ridiculed often for contributing to a society that craves instant gratification. Also, Americans on the whole have reached a level of affluence to the point that we tend to be more concerned with satisfying wants than meeting basic needs. Nowhere is this dangerous intersection of wants and self-satisfaction more evident than around our waistlines. We love to eat! Food marketers and restaurants have flourished by integrating their offerings into our busy lives. However, data from the Centers for Disease Control and Prevention and National Heart Forum provide a somber picture of how our food cravings will impact us in the future.

According to figures published in USA Today this week, the obesity rate (defined by CDC as an adult having a Body Mass Index of 30 or higher) will reach 50% in the US by 2030. More troubling is that 13 states are projected to have 60% or more of their population meeting the criterion for obesity. The fallout from a population in which more people are obese is evidenced in many ways including:

  • Higher healthcare costs
  • Lost productivity in the workplace
  • Shorter life expectancy
  • Decreased quality of life

The above “benefits” of a lifestyle in which dietary choices lead to the above outcomes are hardly sought out, yet as a country we appear to be on track to do exactly this to ourselves.

Personal responsibility is the greatest force for change to reverse the obesity trend. We have to make choices that are in the best interests of our health long term. And, regulations such as New York City requiring calories on restaurant menus and its more aggressive ban on large sugary drinks are efforts to help people make wise choices when unwilling to make the decision themselves. Now, it is time for the marketing industry to step up its involvement in the cause. We have the tools and technologies to spread information and influence minds and hearts.

The positioning of an anti-obesity campaign does not need to be (nor should be) negative in tone – cut back on this, you can’t have that, etc. Instead, creating a position of a healthy lifestyle and the resulting benefits should be the foundation upon which we fight the battle against obesity. As Zig Ziglar says, you don’t pay the price for success, you enjoy the benefits. You pay the price for failure. Marketers need to bring their talents to the table (pun intended) to work toward a shift in which we stem the rise of obesity in this country. Otherwise, we will pay a price for inaction.