Disassociation as a Strategy for Targeting Upscale Markets

If you were like most teenagers, the mere thought of being seen in public with your parents or siblings was a source of great angst. What if your friends saw you with these totally un-cool people- your image and reputation would be ruined! If your situation was like mine, it turns out in the end that parents and siblings were not so bad after all. But, image is everything, so we would go out of our way to disassociate our “brand” from someone or something with which we did not want to be connected.

This avoidance strategy practiced in our teen years can be brought out of retirement by marketers wishing to extend their business footprint to upscale markets. These customers expect higher product quality, personalized service, and an overall superior experience to mass market brands. Companies marketing a portfolio of brands face challenges in serving upscale marketers, including decisions about branding. Even a well known brand name is not necessarily an asset because if the aim is to reach a high-end market, those customers may reject a brand perceived as incongruent with being upscale. Auto companies recognize this dilemma, which is why Toyota created Lexus, Honda developed Acura, and Nissan sells Infiniti.

Another auto brand striving to connect with upscale customers is Ford’s Lincoln nameplate. Lincoln has gone from the top selling luxury brand in America to an also ran. Why? Product design had devolved into dressed up versions of Ford models. Ford’s solution to the problem is to commit $1 billion to an overhaul of Lincoln. In the next few years, Ford will roll out seven new or significantly redesigned Lincolns. Sales projections look for annual volume to more than double by 2015.

Ford’s strategy of a product design makeover is an important first step in energizing the Lincoln brand. But, greater transformation will be needed. A top class dealership experience is needed, both in terms of buyer-seller interaction and service after the sale. Brand communications that consistently position Lincoln as a unique luxury brand are needed. The further it can distance itself from its “average” relative Ford, the better.

Will Ford’s attempt to grow Lincoln pay off? It has the potential for success, if Lincoln can break away from perceptions that it is a Ford with more bells and whistles. Act like a teenager, Lincoln, and keep your distance from your parent… but do not forget that you need them!

Foxnews.com – “Ford’s $1 Billion Plan to Save Lincoln”

How to Connect with Justin Bieber (and Anyone Else)

Most of my blog posts relate to current events and practices in marketing. However, as someone who has spent the past 25 years involved with marketing in some capacity, I cannot help but see parallels between everyday situations and marketing practice. Today’s post is one such observation.

My friend, Mark, is a TSA agent at Nashville International Airport. In his position, Mark encounters many different kinds of people, including celebrities. One day last week, he realized a celebrity was passing through airport security- one Justin Bieber. The teen heartthrob quickly drew attention among travelers in the security lanes, as one would expect. Mark found himself near Bieber, and he did something that no one else was able to do: he made a connection with Justin Bieber.

What was Mark’s secret? Was it the fact that Mark’s teenage daughter is a huge fan, and he used that fact to get Bieber’s attention? No, in fact, Mark said others were trying to get Justin’s attention with the expected “I’m a big fan” type comments without much success. Apparently, they did not know something that Mark did. He engaged Justin by asking him if he still played hockey. What? This guy is an international singing sensation, and Mark wants to know if he is playing hockey! Justin took a moment to answer his question and have Mark tell him about his hockey playing son before going on his way. Mark had succeeded in doing something that most young girls at the airport would have loved to have done that morning- get Justin Bieber’s attention.

Mark’s ability to connect with Justin Bieber is similar to what effective salespeople practice: develop knowledge about customers and prospects as people. A buyer is more than a party to a business transaction; he or she is a person with family, hobbies, and interests, most of which are more interesting to think about and discuss than the business at hand. One of my favorite examples of “know thy customer” comes from author and business expert Harvey Mackay. He developed the Mackay 66, a comprehensive questionnaire that salespeople complete on a buyer that captures information personal interests and their business. A foundation of understanding buyers and their needs is instrumental in building trust to advance a business relationship.

Want to connect with your customers and prospects? Make it a point to know about them and their organizations- who they are and what they do. As John Maxwell says “People don’t care how much you know until they know how much you care.” Salespeople can demonstrate caring by taking time to learn about the person across the table. If it works with Justin Bieber, it will probably work with the clients and prospects you interact with on a daily basis.

Evaluating Service Performance is no Mystery

As someone who spent time in retail management and even more time as a marketing researcher, I am a proponent of mystery shopping. Enlisting persons to assume the role of a customer or shopper to evaluate a service provider’s performance gives an unfiltered view of employee performance. In a retail setting, mystery shoppers can assess touchpoints of the service encounter such as how quickly they are greeted (if greeted at all), salesperson’s product knowledge, selling skills demonstrated, closing attempts, and transaction execution. Findings can be used to give positive feedback to employees who are observed demonstrating desired behaviors or to give coaching to employees who do not meet expectations.

Recently, Sports Business Journal ran a story about a study by IntelliShop of ticket sales employees for Major League Baseball teams. Mystery shoppers were used to evaluate salespersons’ attempts to build a relationship with someone calling to inquire about tickets as well as whether the customer was invited to visit the ballpark to learn more about season-ticket options. The study was not sponsored by MLB, but one would think it would be very interested to know how its teams fared in terms of serving potential ticket buyers. Apparently not! A MLB spokesperson quoted in the article said “While I haven’t seen all of the data, I think anyone would question the results of a survey where the research company aggressively solicited more than two-thirds of the league to forge a business relationship. They are incentivized to demonstrate a need to teams, one that they can fill. It is a clear conflict of interest.”

I assume that the MLB spokesperson has neither worked in marketing nor has a grasp on the concept of a mystery shopper. Question the results? Clear conflict of interest? The spokesperson’s dim view of the survey’s findings may be attributed to some teams scoring very low in terms of: 1) percentage of mystery shoppers invited to visit the ballpark and 2) salespeople’s efforts to build rapport with mystery shoppers when they called. Instead of taking a defensive posture, MLB teams should embrace the data… especially since they did not have to pay for it!

Mystery shopping is a valuable market research tool for uncovering strengths and weaknesses, individually and organizationally, in delivering outstanding customer service. Rather than feeling compelled to engage in PR-speak when results are less than ideal, MLB and its clubs should be thrilled because they now have insights into how their ticket sales personnel’s interactions with buyers are perceived. In effect, mystery shopping removes the mystery of identifying areas of improvement in enhancing the customer experience.

Another Tale of ‘Differentiate or Die’

My favorite marketing mantra is the title of the Jack Trout book Differentiate or Die. It is at the same time straightforward, provocative, and applicable in many situations. In a world in which we have a great deal of choice for most of the products and services we buy, standing out from competition is a must. To be clear, it is not about standing out in a dye-your-hair-pink way; it is defining what you or your business does better or uniquely that distinguishes your brand from similar offerings. Without differentiation, it is very difficult to make a persuasive case that your brand offers sufficient value to justify product purchase. In the extreme case, failure to differentiate can result in business death.

Today’s installment of Differentiate or Die is brought to you by the Atlanta Thrashers. The NHL franchise is being sold to an ownership group that will relocate the team to Winnipeg. The Thrashers were the second coming of the NHL in Atlanta, which lost its first team in 1980 to Calgary. The second life of the NHL in Atlanta lasted 12 seasons but met the same fate as the Atlanta Flames 21 years earlier. Why?

There are many reasons, too many to discuss here. Perhaps the greatest challenge is the stiff competition for the sports entertainment dollar in the market. The Braves, Falcons, Hawks, Georgia Tech, and University of Georgia are formidable obstacles. And, that is only sports entertainment competitors. When other entertainment, leisure, and cultural opportunities are considered, the Thrashers faced immense competition in a nontraditional hockey market.

Competition was a significant issue for the Atlanta Thrashers, but in the end it would be too easy to blame the team’s troubles on the other sports properties in the area. The demise of the Atlanta Thrashers is due in part to what it did not do: differentiate itself from other sports entertainment brands in Atlanta. It was part of the sports landscape, but being a big league team is not a sufficiently compelling reason to become a fan, sponsor, or ticket buyer. It does not matter if you sell hockey or hot dogs, or whether you are a major league sports property or a local mom and pop business, differentiation is essential. Can you answer the question “How am I better, unique, or different?” I hope so.

An Email Marketing ‘Dear John’ Letter

I just ended a relationship. No, the break-up was not painful at all- it took only a couple of clicks and it was done. Now, I will no longer receive the almost daily emails you have showered me with recently. I like you, but your barrage of messages turned my impressions of you from a trusted source to seeing what you could extract from my wallet.

Why did I break up with you? Was it because you closed 2 out 3 stores in my area, making it harder for me to come visit? No, that did not factor into the break-up at all. I understood your need to leave. You had become too pushy, always wanting me to buy. Oh, you were nice and usually offered me a coupon. In the end, I felt sorry for you because you had to try to bribe me to be your friend. I know you are hurting right now, and that you need as many customers… I mean friends, as possible.

We have grown apart. It’s not you- it’s me. No wait, it is you. Perhaps you know it is you because when I left you asked me if it was because you sent me too many emails. Apparently, I am not the first to leave you under these circumstances. I wish you well, Borders- no hard feelings.

Permission-based email marketing is a valuable tool for connecting with customers and strengthening relationships. But, it is imperative that customers’ “space” be respected and not overwhelm them with email messages. Research shows that one of the main reasons consumers end permission email relationships is that the frequency of messages received is too high. Use email to deliver information and facilitate sales, but do not annoy customers to the point that they break up with you.

Word-of-Mouth Marketing: What’s in it for me?

The credibility and authenticity of word-of-mouth communications (WOM) is undeniable. When people tell friends and others about their experiences with a company, product, or service, recipients of the messages know that it is not a sales tactic; it is a first-hand account of one’s interaction with a business. Best of all, WOM is viewed as “free advertising.” The messages are not only coming from credible sources, but they are delivered at no charge! Channels for WOM are plentiful today. Email, Facebook, and Twitter are like office water cooler talk on steroids. Messages can spread quickly and extensively.

Note in the previous sentence the use of “can be” as fewer people are engaging in WOM today compared to just two years ago. A study by Colloquy found that 58% of people surveyed have conversations often with others about products and services they have used, a drop from 73% in 2008. An even more troubling statistic for marketers is that the percentage of people who have recommended a product or service to others has declined from 75% in 2008 to 57% today. It seems that consumers are more reluctant today to share their consumption experiences with other people at a time when engaging in WOM is easier than ever before.

Have consumers suddenly become bashful about sharing information with other people on products and services they use? While there has been some evidence of less conspicuous consumption (which includes talking about brands purchased) following the onset of the economic recession in 2008, that trend was not so widespread that it would create a downward shift in WOM communications. The ease of engaging in WOM online may also be contributing to the caution people are exercising in making recommendations to others. In some cases, people may not want others to know every brand that is in their cabinets and cupboard and thus are reluctant to engage in WOM.

In other situations, WOM may not occur because of a lack of developing brand advocates. People may need to be encouraged to tell others about brands. Merely having a link to a Facebook fan page or Twitter feed is not powerful enough to enlist people to spread the word. Encourage customers to engage in online WOM and reward them for their advocacy. Channels for WOM have evolved, but human nature has not. The age-old question “what’s in it for me?” is being asked still. Coupons, discounts, prizes, or other incentives can be used to promote WOM among a brand’s customer base.

Marketing Daily – “People Close-Lipped on Companies, Products”

Confession as Ad Execution Strategy

Confession is good for the soul; it lifts a burden from us when we acknowledge shortcomings or mistakes. Acknowledging a problem is the first step toward fixing it. This process of introspection and improvement applies to businesses, too. However, a major difference between businesses and individuals when it comes to acknowledging mistakes is we do not usually feel compelled to share our admissions of guilt with the whole world. Increasingly, businesses are making the choice to go beyond admitting mistakes and featuring them in advertising campaigns.

Domino’s Pizza brought attention to the tactic of confession as an advertising execution strategy in 2010. The company acknowledged that many pizza eaters did not like the taste of Domino’s, and it responded by taking steps to reformulate the product. To drive home the point that it recognized customers had come to dislike the product, commercials featured the “new and improved” pizza being delivered to homes of people who had complained about Domino’s product quality. The camphttp://www.blogger.com/img/blank.gifaign was an innovative way to say “http://www.blogger.com/img/blank.gifwe know we messed up.” Moreover, Domino’s demonstrated responsiveness to consumers as the complaints served as a catalyst for change.

Fast forward a year and a half and we find another restaurant brand employing the same strategy as it seeks to return to glory. Shoney’s had more than 1,600 locations in its heyday, but it is a shadow of its former self with only 230 locations today. The architect of the plan to turnaround Shoney’s is CEO David Davoudpour, who bought the company in 2009. Shoney’s has launched a “Starting Fresh” ad campaign that includes a commercial in which Davoudpour is driving a bulldozer directly toward one of his restaurants. Another commercial shows a “kidnapping” of the executive chef hired by Shoney’s to improve the menu. The admission is not as strong as that made by Domino’s, but the takeaway from the Shoney’s ad campaign is “it is broken, but we plan to fix it.”

So, is confession not only good for the soul but effective for persuading customers about the quality reputation of your brand, too? Admitting failure is admirable, as is going to the lengths of communicating it in an expensive ad campaign. But saying “we were wrong” must be followed with tangible evidence of what has been done to right the wrong. If the aim of “confession advertising” is to change people’s beliefs about a brand, then there must be evidence of verifiable change. A slogan of “we’re trying harder” will not do!

WPLN.org – “New Shoney’s Ad Campaign Concedes Failures”

What Do You Want to be Known for?

The headline poses a deep question, one that we are asked from time to time. What do you want to be known for? People can’t remember everything about you, so what is the one salient characteristic that should resonate with them? Businesses try to articulate this reason for being in their mission statements. Unfortunately, many mission statements devolve into a literary exercise. Their value often resides in contributing to the décor of an office. The mission looks splendid in a frame, but its contribution may end there.

The problem with many mission statements is that they are too wordy and ambiguous for front-line employees to recall, much less execute. The remedy for this problem is to express your purpose in a simple, straightforward way. I saw a sign on the outside of a convenience store today that drove home this point. The sign said:

“To be known for… Making the lives of our customers easier.”

This no-nonsense statement is one that every employee can grasp- this is why we are in business! The store is Kangaroo Express, the primary brand of The Pantry, Inc. The company’s mission statement is a bit more elaborate:

“To become an indispensable part of our customers’ daily lives by always satisfying their on-the-go needs in a fast, friendly and clean environment.”

Mission statements are important pronouncements that define the existence and priorities of an organization. I am a fan of the idea to simplify the mission, as Kangaroo Express has done. The guideline for crafting a mission statement should be to make an impression, not to impress.

Bigger not Always Better when Selecting Marketing Partners

Remember times from your youth when a group was divided into teams to compete? Often, the bigger kids got picked first because, well, they were bigger. Another example of a “big bias” is shared by Zig Ziglar who points out that if a car stops at a group of kids to ask directions, the driver is likely to direct her question to the biggest child in the group… even though he may be the dumbest one in the bunch! The tendency to favor the tallest, largest, oldest or those perceived as strongest is normal, but sometimes flawed.

When it comes to selecting marketing partners, we would be well served to think back to our childhood experiences and remember bigger is not always better. This analogy came to mind this week when the National Hockey League announced a new 10-year TV broadcast deal with NBC Sports. Fan interest has grown since the NHL returned from a year-long lockout in 2005, and the Winter Classic has quickly become a New Year’s Day sporting tradition in the U.S. The NHL’s current American TV broadcast partner is Versus, a Comcast property which is now part of NBC by virtue of the NBC-Comcast merger. When the NHL debuted on Versus in 2005, it was the up and coming sports channel’s best known professional sport property.

Fast forward to 2011, and the NHL attracted the attention of other networks interested in acquiring broadcast rights, including ESPN. NHL games were broadcast on ESPN prior to the lockout of 2004-2005, but unimpressive ratings and an abundance of other sports content left ESPN with little interest in bringing the NHL after the lockout. But, ESPN was in the mix for acquiring TV broadcast rights, primarily interested in broadcasting the Stanley Cup Playoffs. In the end, the NHL saw NBC as a more committed partner, one that will put resources toward promoting hockey. In contrast, NHL would be competing for attention and air time on ESPN networks that already serve up heavy portions of NBA, college basketball, college football, NFL, and MLB.

Some observers have criticized the NHL for not partnering with ESPN. Yes, ESPN is the dominant sports media brand today… with the key word being “today.” ESPN made its mark by securing leadership of televised sports in the 1980s. The media landscape has changed, and we have many options for consuming sports content- streaming games online, blogs, podcasts, mobile applications, and social media networks, to name a few. There are no guarantees that the behemoth of sports television will be the dominant sports brand of the digital age. In fact, history suggests that companies with a dominant position struggle to adapt as technologies and consumer preferences change. Look no further than General Motors and Microsoft as examples.

Bigger is not better when it comes to selecting marketing partners. Commitment to your success matters- who is willing to invest in growing your business?

NHL.com – “NHL, NBC Sign Record-Setting 10-Year Deal”

Consumers Want to be Green, But…

Several studies I have read in the last two years point to a greater emphasis in environmental concern among consumers. More people are expressing that they are concerned about how their consumption affects the environment and that they have expectations that companies will engage in sustainable practices to minimize their environmental impact. The latest study, conducted by NBCUniversal as part of its Green is Universal initiative, indicates a majority of American adults have strong inclinations toward being green consumers.

Among the study’s findings:
• 68% of persons surveyed said they would be willing to pay more for green products from trusted brands (up 8 percentage points from 2009)
• 90% agreed that companies have a responsibility to protect the environment
• 77% have a more favorable impression of companies that promote environmental causes
• 62% said they are making an effort to buy goods from environmentally responsible companies

These statistics and findings from other studies point to a new age of consumption, one that is influenced heavily by the values people hold about being stewards of the environment. However, the findings shared here must be tempered with the understanding that none of these measures reflect actual buying behavior. Yes, many consumers want to go green, but there are two limitations holding them back:

1. Marketers need to get serious about being green producers – Many claims made about companies and brands being green today are motivated more by an attempt to project an image of social responsibility than sustainability being integral to the business model. It is challenging for most companies to develop policies, practices, and processes that promote environmental stewardship. The evolution may take time, but if consumers put their money where their opinions are, being positioned as a green brand could pay off.

2. Consumers need to have green choices at fair value – One of the obstacles to greater consumption of green products is price. Prices for many items touted as green are higher than alternatives. As we wrestle with higher prices for gas, food, and other necessities, it will continue to be a dilemma of whether to do the right thing for the environment or for our wallet.

Consumer sentiment toward environmentalism is encouraging, particularly among young adults. Marketers should ratchet up their commitment to promoting environmental stewardship, not merely promoting their greenness. Only then will companies realize the benefits of sustainable business practices.

Marketing Daily – “68%: Green Products Worth Paying More For”