Add Value, Not Fees

One of the greatest benefits of paying attention to the world around us is that we can learn from the mistakes made by others. When we see someone make a decision or take an action that leads to an undesirable outcome, our response might be “Note to self: Never do that!” While observing the mistakes of others does not serve as insurance that we will not fall into similar traps, we can have our eyes opened to missteps and consequences that we may not see otherwise.

Businesses have the same luxury of learning from the mistakes of others. After all, business decisions are made by people who have the capability to exercise bad judgment. But, even savvy businesspeople sometimes fail to take advantage of the opportunity to avoid mistakes made by other businesses.

Case in point: Verizon Wireless and its short lived plan to charge a $2 “convenience fee” for certain payments. The fee would have been levied on certain payment methods that were already available to customers… for free. No additional service or benefit being added; just a fee tacked on to the bill total. Customer backlash was swift and vicious in social media, and Verizon quickly backpedaled and announced it would not implement the fee based on “customer feedback.”

From the outside looking in, it seems Verizon Wireless could have saved goodwill and not created customer angst if it had only paid attention what happened in the banking industry just a few months ago. Banks that announced a $5 monthly fee for debit card usage were besieged with customer protest, and the plans were scrapped. But, damage was done as banks that did not plan to implement fees used that point in their marketing in contrast to the “greedy” banks.

What can we learn from the banking industry and Verizon Wireless and their ill conceived plans to implement fees? Price increases are inevitable, but it is better to increase price via new value. Adding fees without new value being offered is bad business. Consumers are too savvy and these days too connected to passively accept higher costs without more benefits delivered. And, for most products we buy there are enough alternatives that enable us to not have to do business with companies that seek to extract extra dollars without giving anything new in return.

10 Ideas for Small Biz Marketing in the New Year

I spend a lot of time at hockey rinks serving as taxi driver, equipment manager, and cheerleader for my 11-year-old goalie, Ethan. Recently, hockey took us to a goalie camp in the Atlanta area. Besides Ethan having a good experience at the camp, I ran across an interesting article in the Gwinnett Business Journal. It was a list of 10 small business trends for 2012. Marketing advice is plentiful, even if not always useful. However, I thought the 10 items on the list was excellent food for thought. The ideas may not be a perfect fit for every small business, but they can be taken as a challenge to refresh approaches taken to marketing in the coming year.

Below are 3 highlights from the list. The complete list can be viewed here.

• Listen to customers differently. Take advantage of social media for listening, but face-to-face communication remains vital.

• Offer bigger value propositions. Be able to clearly articulate your point of difference and why someone should buy from you.

• Identify and pursue new growth opportunities. Whether it is new products or new customer segments, how can you expand your footprint?

Here is hoping that 2012 is your best yet, professionally and personally.

Prediction as the Future of Customer Engagement

Engagement with customers is the Holy Grail pursued by marketers today. Awareness is not enough- quality interactions have gained favor over exposure and repetition as goals of marketing communications. Understanding this trend is easy; how to make customer engagement happen is much more elusive. How can people be persuaded to invest time and interest in your brand?

One solution to the engagement challenge is prediction. No, not marketers predicting buyer behavior using sophisticated modeling techniques. I mean consumers predicting future outcomes, doing it in the form of games. An example of the harnessing the power of prediction as an engagement tool can be found in a game being tested by The Tennessean, a Gannett newspaper. Nashville-based Consensus Point developed Football Futures, a stock market-style game in which players predict outcomes of future events and buy units (with points, not money) based on their level of confidence that the event will occur as predicted.

The goal of Football Futures is to amass points to maximize net worth with the potential to win prizes. Whether it is whether LSU or Alabama will win the BCS Championship Game, Norv Turner will be fired as head coach of the San Diego Chargers, or Tim Tebow will win more games as a starting QB than Cam Newton, Football Futures enables players to express their views and potentially parlay their opinions into prizes.

If there is one thing for which there is no shortage where sports are concerned, it is opinions about what should or will happen. Football Futures gives players an outlet to have a voice in the discussions that surround sporting events and stories. More importantly for The Tennessean, it draws people to its website and encourages them to spend time engaged with the site. The possibilities for using prediction-style games to engage consumers seem limitless. Politics, popular culture, and other sports are obvious prospects for themes for other games like Football Futures down the road.

Engagement does not occur because a marketer wishes it; people must be willing to commit to interaction. What better way to invite engagement than to ask the simple question “What do you think?” As we move toward the fresh start of a new year, it is a timely reminder that marketing relationships must be customer-centered. The voice of the customer must be heard, and it is up to marketers to provide platforms for making it possible.

Tim Tebow on Branding

I am at the same time amused and confused by the polarization created by Tim Tebow. The Denver Broncos quarterback was a college football superstar at the University of Florida, but many experts felt his style of play was not suited to the pro game. Then, there is the issue of Tebow’s faith and the prominent role it has in his words and actions. It is too much for some people to bear who want sports to be devoid of any aspects of faith. His story continues to evolve as he has gone from third-string to the starting QB, leading the Broncos to seven wins in the last eight games. While many people are ecstatic about Tebow’s emergence as an NFL QB, it seems that many others cannot wait for him to fail.

This blog is not about sports; I will not be breaking down Tebow’s strengths and weaknesses on the field. However, I cannot help but see a teaching moment that relates to how businesses should view branding. Like him or hate him, Tim Tebow is grounded in values that define his purpose and meaning. To this point, he does not seem to have been affected by the trappings of the celebrity lifestyle lived by star pro athletes. His personal brand has remained consistent as his professional career has taken off.

Marketers can learn from Tim Tebow what branding is… and is not. Branding is a never ending pursuit- there really is no such thing as a “branding campaign” as that implies a beginning and end. Branding entails identifying and articulating meaning- the purpose, values, and core beliefs that drive day-to-day and long-term business decisions. A great brand remains true to purpose, values, and core beliefs even though economic conditions, technology trends, and customer tastes are evolving.

Marketing is important- research, design, advertising, and selling are vital to a firm’s success. But, branding transcends all of those activities. Without a great brand, marketing is little more than a functional area in an organization. The brand brings life and energy. Time will tell if Tim Tebow is a great “product” in terms of a successful NFL quarterback. But, it is clear that brand Tebow is on solid ground, which will serve him well far beyond his playing days.

Can You Teach an Old Brand New Tricks?

I am a rather nostalgic guy- like many people I am drawn to the past. Things like retro architecture of baseball stadiums, classic ad campaigns, and branding from days gone by remind us of the past. To this day, I laugh when I think of the Calgon laundry detergent commercial in which a Chinese dry cleaners owner claims his cleaning formula is an “ancient Chinese secret” but his wife exposes him as a fraud… Calgon is his secret!

Another brand from the past that is at a crossroads in its history is Duck Head. The apparel brand has a heritage that dates back to 1865. However, the brand actually disappeared from the market when its owner, Goody’s Family Clothing, went out of business in 2009. The brand has been licensed by Eagle Dry Goods of Nashville (where the company originated) and returned to market. The obvious question now is whether Duck Head will succeed in connecting with men like me who wore the brand as a teen and young adult as well as capture the attention of that same market today.

For a brand with a heritage story like Duck Head, there are two key criteria that it will have to meet in order to gain traction in the market: 1) Be relevant to its target market and 2) differentiate the brand from the myriad of apparel options that men have. Relevance will be easier to establish with “alumni” who are familiar with Duck Head and wore its products in the past.

For the young male market, achieving relevance will be more challenging. It will take more than having a Facebook page and Twitter feed to be “cool.” Duck Head must figure out how to integrate the brand with young males’ lifestyles. For example, linking the brand with a Southern tradition like college football is a strategy that could raise consciousness of Duck Head among young males. Differentiation will be even more challenging- Duck Head must create a niche related to its relevance. Perhaps it is tapping the Southern traditions theme, or it can be done through linking the brand with a greater aim, as it has done with Soles 4 Souls, a charity that donates gently used shoes to people in need.

The bottom line question for a consumer in Duck Head’s target market is “Why should I buy your brand?” Right now, Duck Head is just another brand vying for attention. It must succeed in working its way into the lifestyles of the audience it seeks to reach. The nostalgia buff in me hopes Duck Head succeeds- I am ready to buy. The marketer in me is more skeptical, but if the brand can leverage its heritage to be a lifestyle brand it will prove that you can teach an old brand new tricks.

The Tennessean – “Can Duck Head Rise Again?”

The Potential of #YourMessage

One of my favorite parts of Thanksgiving is the buffet of college football rivalry games. Among the must see games for me is the Egg Bowl, pitting Mississippi State (my undergrad alma mater) against Ole Miss. This year’s game was a treat to watch as State thumped Ole Miss 31-3, but as a self-proclaimed marketing geek I was even happier about the recognition State received for its social media innovation.

The acclaim Mississippi State received before and during the game was its integration of Twitter into the game, painting #Hail State in one of the end zones. The nod to Twitter, along with replacing players’ names on the backs of jerseys with “Hail State” (the name of the school’s fight song), garnered media attention and created a buzz among fans and viewers watching the game on ESPNU. One estimate put the number of tweets including the #HailState hashtag at more than 1,000 during the game alone. While that figure pales in comparison to the buzz generated by breaking news or celebrity gossip, the idea to weave social media into the game production was a genius move by Mississippi State’s marketing staff.

While #HailState was an innovative tactic for college football, the bigger question it raises for marketers is what is the true potential of engaging people via Twitter? As I watched the game and unfolding conversation on Twitter, I considered the possibilities for hashtag marketing. A few examples of how Twitter can be incorporated into existing marketing efforts:

• Addition of Twitter search terms in print and digital ads- Just as including a website address is common copy, inserting a Twitter search term would be a way to drive people to brand conversations.
• Twitter search terms that are based on ad slogans or product traits- Do not limit creation of search terms to company or brand name.
• Connecting to other IMC tactics – Twitter search terms can link an audience to a brand’s sports sponsorship or support of a nonprofit organization. Connecting social media with sponsorship enables telling of the brand story by reaching audiences may be difficult to access with sponsorship alone.

The three examples merely scratch the surface of how Twitter can be integrated into current marketing campaigns. Social media does not replace existing communication channels; it enhances them by encouraging the audience’s involvement in the communication process. Of course, this idea loses its effectiveness if the landscape becomes a sea of hashtags. Be strategic in communication of #YourMessage. If you encourage people to embed your term in their messages, there must be significance or meaning to the conversation you seek to create. Otherwise, your Twitter efforts may be described with a common hashtag: #Fail.

The Commercial Appeal – “MSU Athletic Director Hopes to Score with End Zone Hashtag”

The Spirit of Radio

Invisible airwaves – Crackle with life – Bright antennae bristle – With the energy – Emotional feedback – On timeless wavelength – Bearing a gift beyond price – Almost free…

Lyrics from “The Spirit of Radio” – Rush (1980)

I am pretty sure that my favorite band was not singing about the virtues of radio as an advertising medium, but the song may just be an ode to radio’s effectiveness for connecting with audiences. A recent study found that exposure to a radio ad campaign resulted in higher levels of consumer response across all stages of the purchase funnel. The magnitude of impact varied from brand awareness being 10 % higher to a whopping 38% lift in brand recommendation and 39% lift in brand affinity. In other words, radio works!

Results of research on the impact of radio advertising suggest an ability of radio to engage listeners on an emotional level. The greatest difference between the exposure and non-exposure groups was in “feeling” responses of liking and advocacy. It is challenging enough to break through advertising clutter to get your audience’s attention, let alone eliciting positive feelings about your brand. Radio seems to have the potential to meet a vital need of tapping into the emotions of an audience.

One huge question is left unanswered: Why? What characteristics of the audience and the medium make radio effective for connecting emotionally with listeners? One possible explanation is that the favorable mood created by a radio station’s programming may influence the audience’s receptivity to ads. Also, radio spots can create powerful mental imagery as we supply the “video” in our minds to the audio of a radio commercial. This level of engagement with a message can have a positive impact on its “stickiness.”

The lesson learned is to not give up on radio just because there are newer, trendier communication tools like Facebook and Twitter. As long as people are listening, marketers should tap the spirit of radio to strengthen emotional bonds between their brands and customers.

Media Post Research Brief – “The Power of Radio”

A Brand is Meaningless without Integrity

What is a brand? Of course it is a name, logo, and colors that form its identity. The identity represents the tangible aspects of a brand. But, that is not why you and I are attracted to certain brands and become loyal customers. We are drawn to brands because of the promises they make and deliver against. Some promises are explicit, such as product warranties and service guarantees. Other promises are implied benefits that one can expect from a brand. Consistency, fairness, and integrity are three implied brand promises that can either strengthen or destroy customer relationships depending on how well a brand is managed.

A brand that finds itself at a decision point to manage an implied promise of demonstrating a high level of integrity is Penn State University. The institution is engulfed in a child sex abuse case against a former assistant football coach that has swept up the iconic head football coach, Joe Paterno. The purpose of this post is not to opine on Paterno’s culpability or whether he did the right thing when made aware of improprieties. In fact, the effect of this scandal on Joe Paterno should be of secondary concern to those persons entrusted to manage the Penn State brand, its trustees.

The overarching concern, besides the well being of the victims, is protecting the integrity of the Penn State University brand. Any crimes committed cannot be undone, but the institutional values of Penn State University can be affirmed, which could mean that Joe Paterno and other leaders who could have done more to prevent some of the alleged assaults must step down immediately.

A truly great brand is larger than any one leader or star employee. Remember, a brand is really owned by the stakeholders to whom the brand matters. Their interests must be served, and that can be best accomplished by making decisions that send signals that Penn State University is committed to being a high integrity brand.

“Put Bacon on It” as Product Strategy?

I saw a commercial for KFC’s “new” menu item, the Cheesy Bacon Bowl. The message in the commercial provided a paradox for the role of product strategy in a business. KFC has offered bowl menu items for some time; the innovation that makes Cheesy Bacon Bowl new to market is the addition of bacon. KFC’s brand extension could be interpreted as either marketing genius or an example of what is wrong with product management today.

The genius behind the Cheesy Bacon Bowl is enhancing customer value by adding a proven feature to a product. In this case, it is as simple as adding bacon. The tagline of the commercial – “everything tastes better with bacon” – contains a reminder for marketers that the best products are those that people value for what they do, or in this case for how they taste. Adding bacon does not require investments in R&D and test marketing; there is very little risk involved.

So, what is wrong with “put bacon on it” as a product development strategy? It is symptomatic of the lack of risk taking that is needed to bring truly great innovations to market. It is a safe, but unimaginative approach to developing new offerings for customers. And, depending on how such a minor innovation is marketed, it may not be taken seriously by buyers. Does a Cheesy Bacon Bowl meet a need that has gone unmet or underserved in the market? Probably not. Yet, KFC will spend heavily to market a product that essentially exists already in the market but has one new ingredient added.

Is “put bacon on it” a viable product strategy to drive business growth? It is possible that a product can be transformed by the change or addition of a component or feature if it delivers new value to customers. But, most great products are not the result of adding bacon; they are new solutions for customers that require greater and risk to develop.

Want to Market Experience? Create One

“Experience” is a word that is top-of-mind with marketers today. Offering experiences is seen as a solution to how we can attract and engage people to pay attention to brands and stay connected with them. Clutter and intense competition plague most industries, and developing experiences around brands is a strategy for achieving brand differentiation. Sounds great, but it is easier said than done.

Some categories lend themselves to being marketed as experiences- services, sports, and entertainment are three that come to mind. But, how is experiential marketing utilized when a natural link to creating experiences does not exist? The answer is simple: Create an experience to attract people to your brand. Cars.com has developed a customer experience that relates its brand to something highly intertwined with driving cars- music. The connection of music and cars is done through three branded custom channels on music streaming service Pandora. The three stations tie in to significant musical experiences people have related to cars: 1) Road Trip, 2) Car Songs, and 3) Tailgate.

The Cars.com program on Pandora illustrates the difference between exposure and engagement when marketing to an audience. It would have been simple for Cars.com to buy ads on Pandora, plastering its brand name across the site. Of course, we would have largely ignored Cars.com, just as we do most of the ads that are directed toward us online. While we focus on delivering great experiences at the point of consumption such as when people are visiting Cars.com, it is important that we explore other experiential points to interact with our audiences. Cars.com has succeeded in establishing additional experiential contacts that will “drive” development of brand relationships.

Marketing Daily – “Cars.com Sets Up Custom Channels on Pandora”