Marketing 101: The Buyer Decision Process: Evaluation of Alternatives

In my examination of the Buyer Decision Process, I've started by exploring the first two stages: Need Recognition and Information Search.  Need Recognition refers to the instance when a consumer recognizes that a need, or problem exists that needs to be satisfied, ie: I need a new refrigerator.  If the need is strong enough, an Information Search is usually initiated.  As a consumer does more research they will inevitably become aware of competing brands and products that are available for purchase.  It is at this point that the Evaluation of Alternatives begins.  An Evaluation of Alternatives is the stage of the buyer decision process in where a consumer uses the information gathered in the Information Search to evaluate alternative brands in the product category.

So how does a consumer choose among these alternatives?  The truth is that there are several processes at work inside the consumer's mind, forming beliefs and attitudes about all of the products to choose from.  However these processes all "evolve" based on the individual's buying situation.  The situation evolves from the set of attributes the consumer is choosing to evaluate products by.

Let's say a consumer is evaluating the attributes of a groups of computers. They have identified four attributes: performance, design, price, and value.  During the evaluation the consumer will place different levels of importance with each attribute based off of what is most important to them.  The consumer will "evaluate" each brand and form beliefs on how each brand rates on each attribute.  The consumer may turn to friends and family, consult consumer reviews, or discuss their situation with sales people during the Information Search.

We know that all brands vary in their degree of appeal to each consumer.  A consumer may buy a brand based on a single attribute, or a number of them.   If during the Information Search you were able to deduce how a consumer assigned value to each attribute you could predict the buying behavior more accurately.  Marketers must study buyers to discover how they actually evaluate brand alternatives.  If you know how your target customer's evaluation process occurs, you can take steps to influence the buying decision early on and lead the buyer to purchase much faster.

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Marketing 101: Primary Data - Contact Methods

In my last Marketing 101 piece, I spent some time introducing the Research Methods that we typically use in Primary Data collection.  Remember that Research Methods consist of surveys, experimentation and observation.  Surveys are the workhorse of Primary Data collection.  They tend to give us the bulk of our information related to customer trends and buying behaviors.  In order to conduct these surveys, information is collected in a variety of manners.  Typically these Contact Methods include mail, telephone, focus groups, and various other online technologies.

Mail
The mailed questionnaire is a classic primary data collection method.  It is very valuable, because it can be used to collect massive amounts of primary data for a very low cost per respondent.  We're talking the cost of paper and postage.  (Remember that you do need to calculate the labor costs of crafting the survey and processing the data once it comes back to you)  The data that you can collect from mail methods is usually considered very good for a few reasons.  First, there is little chance for "interviewer bias", because there is no live person there to ask the questions in a manner that could influence a person to respond in a manner different than they normally would.  Second, because they are not being interviewed in person, the respondents are usually more willing to give more honest responses.  And third, because you are not relying on the interviewer to record responses, no interviewer bias is introduced to the answers.  

However there are downsides to using mail as a contact method.  First, mail-based surveying is not very flexible, because all respondents are required to approach their surveys in the same way.  Second,  collecting primary data via mail is very slow.  It can take months before a reasonable amount of your sample sends the questionnaires back to you for processing.  Third, because written surveys usually take longer to complete, the response rate trends lower - simply because it takes more work.  The response rate is actually considred to be very fair.  It's harder to control the sample, beacuse you don't know which households will respond, let alone who at the residence will respond. 

Telephone
Telephone has always been a fairly good method of collecting Primary Data.  First, it is possible to collect massive amounts of data very quickly by using multiple people at the same time to call and conduct phone interviews everyday.  Second, telephone interviews allow for more flexibility, because your interviewers have the opportunity to provide clarity about any questions that respondents don't understand.  Third, you have excellent control of the sample, because interviewers can screen out callers before an interview is conducted. Fourth, with the right incentives, typically the response rate is actually very good.  

There are problems with collecting Primary Data via telephone as well.  First, the quality of the data you collect can only be considered fair at times, because the interviewer can inadvertently introduce bias into the answers based on how the questions are asked.  Second, because the respondents are interacting with a live person, they may not want to provide completely honest answers to questions that they may consider too private.  Third, telephone surveys are more expensive, because they require more labor.

Focus Groups
Focus Groups are a Primary Data collection standard.  Focus Groups have become a leading method for gaining valuable insight into consumer thoughts and feelings and their buying behaviors.  Traditionally focus groups consist of a moderator leading six to ten people.  However technology has allowed focus groups to be conducted through video conferencing and webinars via the internet, which allows people from different locations to be connected together which can improve sampling. These groups will participate in discussions about products, advertisements, services, and even organizations.  The focus group attendees are usually paid a small sum for attending.  The moderator will attempt to lead an easy and free flowing discussion hoping that free honest responses will be given.  Data is usually recorded by the moderator, however sometimes focus groups are observed by staff members via cameras or through one-way windows.  

Focus groups also have their issues.  First, focus groups use much smaller sample sizes in order to control cost and keep their sizes manageable.  Second, because sample sizes are so small, it is hard to reliably statistically generalize the results.  Third, attendees of focus groups are not always candid and honest.  The phyiscal and sociological environment of the focus group can create peer pressure, which leads attendees to alter their results in order to "fit in" with the people surrounding them. This is being combated by using environments that are relevant to the products and services being studied in order to get more relevant and open responses.  Fourth, focus groups cost much much more to conduct due to the costs of time, labor, location, and data acquisition.  Only use focus groups when it is appropriate and you are looking for specific types of data that you cannot reliably acquire with other Contact Methods.

Online Methods
The internet has single-handedly changed the Primary Data landscape.  Researchers are no longer confined to using mail, telephone, or physically location-bound focus groups.  There are many electronic alternatives to all three primary contact methods.

Email surveys and survey research websites are very affordable alternatives to direct mail and telephone interviews.  Because they are electronic, they are much less expensive to conduct, and data is instantly stored into a database that can be manipulated and analyzed. It is also quicker to create a large sampling, because your contact list can be created by interfacing with your existing customer database, or by purchasing lists of consumers from secondary data companies.  As with mail, the quality of responses tends to be very good, because it is an impersonal process and respondents feel more open to share more "private" information.

Another alternative to the telephone or physical focus group collection methods is Skype, or any other video conferencing type of technology.  Because Skype and services such as Oovoo are available for free or very little cost, it is much less expensive to conduct focus group research when the researcher needs to observe the reactions of the attendees.  These services will usually have the ability to record online "meetings", which allows you to store and refer back to interviews easily.


No matter what contact method you choose to use in your Primary Data collection process, it is important to spend extensive time up front evaluating the type of data you need, and which methods fit your required data types, cost, and schedule.


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Marketing 101: Microenvironment - Publics

This week's Marketing 101 is going to continue on in Marketing Microenvironments.  Today we are focusing on Publics.

In simple terms, a Public is any group of people that may have an real or potential interest in ... or an impact on ... your business's ability to achieve its objectives - whatever they may be.  Why should you care about Publics?  It's simple.  Publics can help, or hinder your ability to get your message out to your customers, and collect value from them.

Financial Publics
Your relationships with Financial Publics are extremely important.  These relationships directly influence your ability to obtain funding for your business.  Financial Publics typically include banks, investment houses and stock holders.  How these groups perceive you will directly affect your ability to get loans, favorable payment terms, and whether or not other Publics choose to do business with you.  For example, if a brokerage perceives that you are having issues internally, or your products have deficiencies, then it may give your stock a low rating.  If that happens, people may sell your stock, your market valuation will decrease, and your customers may start to buy less of your products and services.

Media Publics
Media Publics can be extremely valuable, or they can be a thorn in your side.  Media Publics typically carry news, features and editorial opinions, delivering them to your customers and other Publics.  They include newspapers, blogs, magazines (print and digital), radio (broadcast and internet) and television outlets (broadcast and digital).  You can carry out your "relationship" with Media Publics via VNR's, PR media releases, op ed's, interviews, or open invitations to review your products and services.  Do not be afraid to make friends and connect with people in the media.  You can gently influence what they say about you.  Having a good relationship with people in the media can make a bad situation for your company "tolerable" or a PR disaster in the eyes of your customers.

Government Publics
Take note: Management MUST take governmental developments into account.  You should always keep an eye on the current state of any laws and regulations that effect the production of your products, the day-to-day operation of your business, or the methods you can use to sell your products and services.  Marketers must often consult with government officials, their lawyers, and sometimes lobbyists.  Get to know your local government, and keep tabs on what your government officials are doing.

Citizen-Action Publics
The decisions you make will sometimes be questioned by citizens, consumer organizations, environmental groups, minority groups and others.  Your PR department can help you stay in touch with these groups.  It can keep you abreast of any concerns or problems that arise.  Make it your mission to get to know the citizen groups that may affect your business and your marketing practices.  Make it a point to have a friendly relationship with any of their representatives.

Local Publics
Local Publics typically include neighborhood residents and community organizations.  Businesses will usually appoint a community relations officer to meet with the community, answer questions and contribute to worthwhile causes.

General Publics
A business needs to be concerned with the general public's attitude and perception towards its products and activities in the marketplace.  The perception of the business, it's brands, products and services in the public directly effect consumers buying habits.  Keep an eye on Twitter feeds and FaceBook posts.  You will be able to get a very real sense of the general public's perception of you in the marketplace.

Internal Publics
Internal Publics are groups of people inside your own business.  These groups can consist of employees, managers, volunteers, and the board of directors.  Businesses typically use newsletters, memos, company meetings, intranets and other means to motivate and educate their internal publics.  When your employees feel good working for you, when your board of directors are happy with your success, when your internal communications send the right messages to motivate, encourage, train, and edify your staff, this positive attitude spills over to external publics, and helps to communicate your brand message in the marketplace.

A business can construct strategic marketing plans for some or all of these major Publics alongside it's chosen customer markets.  Suppose a business wants to evoke a specific response from a particular Public, such as donations of time or money (Cause Marketing).  The business would have to design an messaging campaign for this Public that is enticing and persuading enough to coax the desired response.

Is it realistic for all businesses to pay attention to all of these Publics at the same time?  No.  Can you effectively market to all Publics.  Yes and No.  You have to make the judgement where to spend your time and resources.  However, at some point in time you will have to deal with each of these Publics in some capacity.  It is in your best interest to at least get to know them, and when appropriate, take action.

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Marketing 101: Microenvironment - Suppliers

Last week, we examined the Company in the Marketing Microenvironment.  Your relationship with other departments within your business can greatly effect whether or not you are able to successfully get a product to market, communicate the right message, create customer value, and get value from your customer.  Now let's examine Suppliers.

In the Marketing Microenvironment, Suppliers form a critical link in the company's overall customer value delivery system.  Suppliers provide the resources you need to produce the products and services that you are selling.  Supplier's not only supply you with resources, they also can partner with you in the customer value delivery system. 

When it comes to actual physical resource management, Marketing Managers must watch supply availability.  Resource shortages, delays, labor issues, and other unforeseen events can cost sales in the short term, and damage customer satisfaction in the long term.

However the real key to delivering customer value with your suppliers is partnering with them.  Partnering with them allows them to receive value from you other than payment for goods.  For example, have you considered offering to test new products and goods from your supplier?  What are you doing to help your supplier work with you?  What kind of customer service are you providing to them?  Good partnership management results in success for not only you, but for them, and in the end, your customers.

Take the next week and honestly evaluate the state of your supplier relationships.  It might be a good idea to send them an impromptu survey with carefully worded questions that will help you assess how good (or bad) of a job you are doing maintaining your relationships.

Next time we will examine Marketing Intermediaries.

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Marketing 101: Microenvironment - The Company

In this continuing Marketing 101 series, I think it's time to begin looking at the Marketing Environment.  The Marketing Environment consists of the factors and forces outside marketing that affect marketing management's ability to build and maintain successful customer relationships with target customers.  Within this environment we have the Macro-environment and the Micro-environment.  Let's start with the Micro-environment.

The Micro-environment consists of the factors close to the business (usually involving business relationships) that affect its ability to serve its customers.  We can break the micro-environment down into specific segments:

- The Company
- Suppliers
- Marketing Intermediaries
- Customers
- Competitors
- Publics

Let's start with The Company.

The Company
Inside the Company (think your business), marketing managers must work closely with other company departments.  They simply cannot work within a realm of isolation.  They have to depend on, and take other groups, into account.  These groups can consist of top management, finance, research and development, purchasing, operations, and accounting.  The reality is that these other departments have a direct impact on the marketing department's plans and actions.  In order for these plans and actions to succeed, the "marketing concept" contends that all of these functions must be "thinking consumer", and they must all have bought into the the strategic marketing plan in order to work in harmony to provide customer satisfaction and value.

Top management can directly assist and fast track your plans, or they can stop them in their tracks.  Finance has a direct influence on your budget, and whether money is available for your strategic plans.  R & D has direct influence on product development (think what you are selling).  Purchasing, operations and accounting all influence staffing, media execution and how well you stay on budget.

So the key question is: how is The Company?  Have you taken a hard look at the relationships you and your department have?  How does the rest of the Company perceive you?  Have they bought into your strategic marketing plans?  Are there any conflicts, or relationships that need to be restored?

Take the next few days and sincerely evaluate The Company.

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Artists.MTV: Smart or Just More Confusion?

It feels a little bit like deja vu.

This month Viacom's MTV announced a "MySpace"-like initiative called Artists.MTV.  The basic idea is to provide music artists a centralized place to access MTV's 60 million+ monthly visitors.  Aritsts.MTV will allow musicians to "claim" their sites and upload music, videos, photos, and link their "pages" with social-media accounts and other online shopping carts. "Pages" will go public at MTV's Video Music Awards this fall.

We've seen this before.  MySpace's music initiative was a mildly successful attempt at the same "thing."  Digital downloads have driven the price of music down to very affordable levels for consumers.   Once there were only a few places for consumers to get their media.  Now the problem is that there are almost too many places to get your music, music videos, and self-promote.  Add the juggernaut of iTunes into the picture, which is estimated to have up to 70% of digital music sales market share, and one has to wonder if anyone can change consumer's buying and mind-share habits.  At first glance, Artist.MTV could just be adding to the current marketplace confusion outside of the iTunes ecosystem.  But if you take another look at it, it very well could be extremely smart.

One of the biggest pet peeves of many artists is that they don't get a large enough cut of music sales revenue.  Over the last decade, declining CD sales revenue, piracy and a paradigm shift to digital music sales have steadily lowered the revenue artists receive from their music. Lower concert-ticket sales have also lowered the income artists receive each year.  According to Shannon Connolly, VP of digital-music strategy at MTV Music Group, "We felt like the world needed a place that's comprehensive and thorough, and that allows artists to connect with fans at scale...The goal is to help artists get paid." Summarizing their efforts, Ms. Connolly commented that ..."the goal here is to give artists the opportunity to monetize what they do...artists can get heard, get promoted and get paid."

What?  They want the artists to get paid?

It may be a basic play off of greed, but quite frankly, it may be enough to make a difference.  The Artists.MTV initiative (which includes the  VH1 and CMT brands) will share sales revenue with artists and ANY ad revenue generated on the pages through an agreement with Topspin Media.  This also gives artists the ability to receive the majority of revenue from sales of music, tickets and merchandise.  An increased share of sales may be the "ticket" to show iTunes, and other record companies, some real competition.

Digital sales, the digital marketplace, self-selling and self distribution are all meant to increase the income of the actual creators and producers.  Artist.MTV may actually be more than lip-service.  It may actually be the real deal.  Only time, and MTV's 60 million monthly visitors, and a significant marketing campaign, will be what tells us if anything can crack the thick shell of the iTunes ecosystem and the traditional record companies distribution network.

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Data: Knowing How Your Customers Use Media

I can't say this enough, so I will say it again:  It's all about Data.

Another illustration: today the Pew Research Center released the results of a recent survey, stating that less than 10 percent of people are using social media for up-to-date news.  So what does this mean?

I think we can gleam a few points:

1) This shows that your customers are probably using Facebook and Twitter for other types of information.  Social media is a losing proposition and a waste of resources if it isn't used properly.  Know where your customers are looking before releasing any type of news.

2) Press releases and other types of media announcements should not be on social media as a primary method of dissemination.  Social media should be a part of the whole information release strategy.  As with any properly constructed strategic marketing, a variety of communication methods should be used.  Social media may be cheaper to use, but it's going to cost you real dollars through lost sales if you're not getting information out via the proper channels.

3) Social media's value is in it's ability to give marketer's a more direct, personal connection with their customers.  Press releases and product information don't build customer equity.  Personal, meaningful connections with products and brands build customer equity.  Social media gives us one of the best avenues ever to build equity with our customers.

As always, armed with the right data, our jobs as marketers becomes much easier.  Don't waste your company's time or money.  Arm yourself with the right data so you can use the tools available in the most effective manner.

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Reality Check: Marketing Defined

Every so often you have to evaluate how you are doing.  If you are a marketing professional, it's your responsibility.  So when is the last time you stepped back, and took a look at what you were doing?  Sometimes the best way to do that is to start with the basic definition of marketing.

The simplest definition of marketing I can think of is: Managing profitable customer relationships.  The goals are to attract new customers through superior value, and to keep growing customers by delivering customer satisfaction.  If you are doing these things, then you will be able to capture value from customers to create profits and customer equity.

So if we break this down, then we get some basic questions that are extremely useful for evaluating your current strategic marketing plans:

1) Are your customer relationships profitable?
If you're not making money, then it's time to start figuring out why.  Start collecting data and begin looking for trends.  It's going to take time to get things back to profitability, so it's best to get started now.

2) Are you attracting new customers?
As much as we hate to admit it, we're always going to lose a customer.  Even the most loyal customers may eventually buy another brand.  If you're not attracting new customers, eventually your sales will fall flat, and you will not be profitable.  So what are you doing to attract new customers?  What value proposition are you presenting to them?  Are you properly differentiated from your competition in your target market?  If your value proposition isn't clear, if you're not clearly different from your competitors, then confusion may be keeping customers from being convinced you are the solution to their want or need.

3) Are you creating satisfied customers?
Are product's perceived performance exceeding expectations?  Meeting expectations? Are customers buying your goods and services again?  Are you gaining new customers?  Or are you dealing with dissatisfied customers and poor sales?  Remember that customer value and satisfaction are the building blocks for developing and managing your customer relationships.

4) Do you have key measurements of your customer equity?  
Customer equity measurements can be better indicators of your performance than sales and market share numbers.  If sales are high, and market share is high, but your customer equity is low, you're going to be losing sales and profits will be tanking soon.  Get some data so you can make some real decisions.

Sit down by yourself, and with your team, and take a day to honestly answer the above questions.  You may be surprised at some of the responses.  Now may be a great time to make adjustments to your strategic marketing plans.

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Media Consumption In A Digital Age: It's One Big Experiment

In the past, there was a silver screen, a few broadcasters, and a lot of paper.  If you wanted to watch something, you sat in front of someone's television or a theater screen.  If you wanted to listen to music, it was on a stereo - home or portable.  If you wanted to read something, or take something with you, it was most likely printed on paper.  You were in your home, in a movie theater, picked up the mail, or you went to a store to purchase your entertainment.

A few large companies controlled the publishing and availability of the media you chose to consume.  Prices were pretty much the same everywhere you went.  Competition was non-existent.  That's the way it was.  Then this "thing" called the personal computer appeared.  Then the internet appeared.  Everything changed, and it still is.

Last year Time, Inc. hoped to take advantage of it's multiple consumption and distribution publishing model. Time Inc. was attempting to bundle "digital" media with a traditional print subscription under an "All Access" strategy - which would have eliminated print-only subscriptions in the process - and would have allowed Sports Illustrated to raise its price to $48 from $39. Sports Illustrated reversed course in January.  Said Steve Sachs, Executive VP of Consumer Marketing and Sales, "That price, we found, was higher than the market commanded.  Monica Ray, the Executive Vice President of Conde Nast, commented, "The whole industry has the opportunity to redefine what a subscription is."

What kind of subscriptions do consumers want?  Is a "subscription" model appropriate anymore?  How do I find out?  The only way you can find out is by collecting data.  Without data, you're making decisions in the dark, you are walking around blind.  Since the way consumers consume media is changing, we need to be collecting data and study how our customers are using our media products.  If we don't adapt, if we aren't willing to constantly evolve our model of media delivery, we will forever be stuck in our traditions, and more media institutions will perish.

There are no longer a few ways to consume media.  Now there are many publishers, many screens, and the vast majority of them are portable.  Oh ... there still is some paper too.  Because traditional publishing methods have changed drastically from decades of old, traditional media publishers are walking around blindfolded, feeling their way around a media consumption environment that they no longer control.  Today publishing in a digitally dominated ecosystem has become one big experiment, and understanding what will work for you is all about knowing your customer ... and that requires data.

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Using Online Communities to Create Brand Awareness - Part 2

This is Part 2 of my thoughts on Using Online Communities to Build Brand Awareness.  Last time I discussed how online communities help you build credibility and general awareness about your products and brand.  This time I want to discuss how online communities help you create SEO-aware content, and how they can help you build customer satisfaction.

Many marketing directors don't realize that as you are building awareness through your community posts, you are also creating SEO-aware content.  All posts and comments are index-able.  Search engines such as Google are able to look through and "store" your posts from an online community.  Because these posts are on a website other than your own, Google gives this content more weight, since it considers content about you on other websites more relevant.  As a result, your brand name and product information move up in ranking within relevant search results. 

Google also looks for links back to your website.  Make sure to put the address of your website in your signature.  This insures that your website's address is always displayed with every post, and that it is indexed as many times as possible when a search engine crawls the online community's site.

As you post more searchable content, it becomes easier for existing customers to find information that may help them solve problems.  Online communities are a great way to get involved in the first steps of basic customer service issues.  You can use the posts of others as an opportunity to acknowledge issues with your product.  You can also show your willingness via the public domain to serve the customer and create a positive brand experience.  However, remember that people tend to be more vocal on the internet, because it's a more anonymous experience.  You must always write posts that are calm, clear, and emotion free.  Use positive language, but never "beat around the bush" when a clear acknowledgement of a problem is best.

Remember that today being a part of online communities is necessary when marketing digitally, because it gives you a direct opportunity to build credibility, build awareness, create SEO-aware content, and address customer service issues.

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Using Online Communities To Create Brand Awareness - Part 1

We should always endeavor to connect with our customers.  Isn't that one of the great goals and mysteries of marketing and branding?  What is the best way to connect with our customers?  How should we convince them to purchase our products?  How can we spend AS LITTLE MONEY as possible doing this and still make a profit?

It seems that many small businesses, and even large ones, still have not discovered the online community "gold mine".  Being a part of online communities is necessary, because it gives you a direct opportunity to build credibility, build awareness, create SEO-aware content, and address customer service issues.

Online communities give you a direct way to connect with consumers and build credibility.  Online communities allow you to present yourself as a subject manner expert.  By answering consumer's questions and helping them solve their problems in a friendly, non-pressured manner, you present yourself as a credible and knowledgeable, even though you are somewhat biased towards your product as a solution.  With a good attitude, and a friendly, clear writing style, you can present your product and brand as the wise solution to their needs.

As you are helping community members meet their needs, you are constantly building awareness.  Your participation helps to show others their potential need for your product.  Also, your participation helps to inform others of the existence of your product who may not have known about you.  Online communities also provide you with a great opportunity to receive feedback about your product.  If you are an advertiser in that community, you can also build awareness by posting news releases about new models and product updates.

Next time we will discuss using online communities to create more SEO-aware content and help create positive brand experiences via customer service.

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What Are You Doing To Create Awareness Today?

Did you do anything to market yourself today other than think about it?

Marketing doesn't happen by itself.  You have to do it.

People don't find out about you on their own.  They won't bring up Google and search for you unless they have a reason to do so.

So what are you doing today to create awareness?

If you need a jump start, here are some ideas that might be relevant to your customers:

1. Offer A Discount
Sometimes the easiest way to drive traffic to your website, or to retailer locations, is to offer a discount or a coupon.  However, remember that spending money can be an incredibly emotional thing.  The right price, or discount, can drive a person to spend money "easily" without any thought.  5%-10% off might not be the ticket.  Don't be afraid to explore 20%, even 30-40% off.  If you're concerned about your margins, make it a limited or exclusive offer to a select group of customers.  Once they are in the door, they tend to buy more.

2. Hold A Product Demo Event
People love to research products, and price-shop online.  But at the end of the day, a consumer that touches the product, tries it, and likes it, usually ends up buying it.  Consider putting on a demo event in a location that contains your primary customer demographic.

3. Ask For Product Testimonials Via Social Media
Social media makes it very easy to connect with your customers.  It can be a customer service haven and nightmare.  One of my favorite uses of social media is testimonials.  It's as easy as this:  Ask users of your product to submit positive experiences of your product: video is preferred, text and pictures are great as well.  Incentives are a must.  Offer discounts off of new product, or free accessories to those consumers whose testimonial you choose to post.  Post one a week for 13 weeks - the length of a typical television or radio ad buy.

4. Participate In Online Communities
This fourth option can take the most work, but it can reap some of the largest gains for building your brand's credibility.  It's as simple as joining relevant forums and blogs.  Put your name and company in your signature.  Make it clear who you are.  Offer advice and sensible solutions.  However, you cannot blatantly advertise your product in your posts.  It's best to offer sound advice that may or may not include any of your specific products.  Over time you will see a few benefits:
- Community members will see you as an expert
- Community members will begin to explore your website and your product
- All of your posts will be indexed by search engines (like Google) and it will increase the amount of searchable, relevant content about you online.

It's a good idea to put one of your best PR reps or customer service representatives in charge of online community participation.  Your Social Media Director is a great fit as well.  You can take this a step further by becoming an advertiser in that online community.  This allows you to blatantly post about your product and any specials you may be offering.

These four things are simple, yet highly effective ways to increase Brand Awareness for little cost other than labor and time.  If appropriate, and if used in a focused manner, they are a great way to connect with current and future customers, and can provide a great ROI for a little marketing budget expenditure.

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The Department Store Finally Evolves

Well maybe it already did, through Kohls.  But I digress...back on topic.

Yesterday JC Penney CEO Ron Johnson announced sweeping changes in an effort to refresh the brand, and the department store "way" of selling product. 

It's about time. 

During Mr. Johnson's tenure at Apple, his team, "always parked at the department stores...because there 'weren't any cars.'.  You know you have a problem when people are using your parking lots to visit other retail locations other than your own.  Mr. Johnson, while noting that JC Penney was in it's 110th year, said, "I believe the department store is the No. 1 opportunity in American retail. And this isn't something I decided last June when I took the job. This is something I decided 10, 15 years ago."

So what does this new opportunity look like? 

First, it starts with a dramatically more realistic product pricing structure.  Consumers rarely purchase products at full price.  In any economy, up or down, consumers are more willing to part with their dollars when products cost less, ie: when they are on sale.  Mr. Johnson, acknowledging this, is leading JC Penney to adopt a "fair and square" pricing model.  It's this simple: If a T-shirt that usually is priced at $14 but typically sold for closer to $6, will be priced at $7. This puts it right in line with what a consumer was actually paying for that shirt.  If it's a featured product, it will be priced at $6. Clearance time: $4. This change alone should help to drive sales.  Why?  It allows JC Penney to sell product at prices consumers are willing to pay, instead of constantly holding onto inventory, and hoping to clear it out every quarter. 

The second thing Mr. Johnson is doing is completely revamping JC Penney's promotional calendar and spending.  Currently, JC Penney's sales year has 590 promotional events.  Mr. Johnson wants to reduce that to 12.  The reason: noise.  When you are constantly promoting promotion after promotion, it creates "noise" for the consumer, and eventually it all blends together and the consumer doesn't know what to focus on.  As a retailer, you become less relevant and harder to keep track of. 

To illustrate his point, Mr. Johnson had presentation attendees walk down a hall covered with old ads and circulars, calling it the "Hall of Hell." Promotional spending will also change; instead of $2 million per promotion, JC Penney will now devote $80 million a month towards entire product line promotion.

This is so refreshing.  To finally see a department store (or any big-box retailer other than Walmart) understand that their pricing structure and promotional model is so out of touch with consumer buying habits is amazing.  For that brand to make realistic ... frankly common sense changes ... is fantastic.  I sincerely believe that, if successful, JC Penney will force their competitors to re-brand and re-price.

Consumers will be the beneficiaries of these changes.  Products will sell for lower, more realistic prices.  Sales will increase, and retailers may begin to see the growth that they have been hoping for. 

I hope JC Penney succeeds.

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Targeting Ads Via Smart TV's Will Alienate Consumers

Let me say that I love technology.  I love gadgets.  I wish I had the money to buy more gadgets and try them out.  I love iPads, and iPods, and TV's and game consoles.  I have a special affinity for the good old fashioned television.  I'm a picture snob.  The idea of a "smart tv" with services such as Hulu and Netflix built in are interesting to me.  I've also come to accept the fact that "free" TV comes at a cost: the advertisement. 

I love the "ad".  It's a great way to reach a targeted audience.  It's an effective marketing and branding tool when used appropriately.  But allowing manufacturers to create their own ad networks and present ads via "smart tv's" is just a really fast way to alienate both the buyers of TV's and the viewers of media content.

At CES on January 9th, Samsung announced that it would enable the delivery of ads to a TV user's "home screen", even in 3-D on so-equipped models.  In November 2011, LG made a similar announcement.  This isn't a new model.  TIVO has delivered ads in it's DVR software, and many MSO's such as Cox and Time Warner display ads or poll-type questions via set top box software as well.

As it stands now, the current model is mostly passive.  A user may see an ad on a part of a screen they are on.  It is not part of the content they are about to consume, and it is not a road block that they must endure before viewing content, like the Hulu model for free users.  However, this could easily turn into a model where a television user, through the TV's operating system software, is forced to view an ad before tuning a live channel or opening an "app".  This absolutely cannot happen.  If after spending hundreds, if not thousands of dollars on a television, I must be forced to view an ad to do anything on my set, you will immediately alienate me as a customer, and the ad sponsor may also lose brand credibility with me.  The potential consumer backlash could be considerable.

Television is a passive form of entertainment.  It should never be active.  It should never be difficult for a consumer to get to the content they want to consume.  If there are too many road blocks (ads), then they will give up and not view the content.  This could keep eye balls off of sets, and off of normal broadcast and cable content, reducing ratings and potentially lowering the inherent value of  advertisement delivery via television.

This development does nothing but attempt to give TV's manufacturers a slice of the ad revenue pie, and in the process hurt the advertising industry as a whole.

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Number 1 2012 Marketing Resolution: Communicate Clearly

In 2012 we want to accomplish many goals:

- Sell millions in product
- Grow our brand awareness exponentially
- Achieve the largest marketing ROI for as little cost as possible
- Get promoted to, or hired as a CMO (I wouldn't mind that)

But before you can do anything above, or anything else, here's what you need to do from the first day of 2012: communicate clearly.

It seems simple, doesn't it?

In reality, communicating clearly involves a little bit of work.  Whether you're writing an email, or putting together a message for marketing, follow these steps, and you will be on your way to communicating more clearly:

1) Slow down.  When we rush, we make mistakes.  We say things that we don't intend.  We mix up our words.  Slowing down gives you the time to...

2) Think.  Think about the message you need to convey.  Ask yourself: Who is it for?  How will it be consumed?  What important information needs to be communicated?  After you slow down, think, answer these questions, and compose your message...

3) Review and edit.  You won't believe how often you will catch a typo here or there.  You may have reversed the order of your words.  You might catch a phrase or two that convey the wrong message, or potentially confuse the consumer of your message.

Using this three step method will help you communicate simple or complex messages more clearly and mistake-free.

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Be Purposeful Or Else You Will Be Ignored

On Tuesday, Facebook announced that it would begin adding "Sponsored Story" ads to users' news feeds in January.  This will not happen in mobile apps yet.  This announcement is another step in Facebook's plan to monetize it's business and make it a viable advertising platform. 

If you're an advertiser, this gives you an easier way to get in front of the eyeballs of millions of Facebook users.  If you're Facebook, you just earned yourself some more ad dollars and paid a few more bills.  If you're a Facebook user, you may have another reason to ignore Facebook today.  And that's the caution to throw into the wind:  "Sponsored Stories", if overused, will quickly be ignored, and will have little to no value for any advertiser.  In fact, if Facebook isn't careful, and if you aren't as a media buyer, "Sponsored Stories" could be a huge flop.

Remember that "reach" basically is the number of individuals you want to expose your message to through any type of media scheduled over a given period of time.  For focused groups of audiences, Social Media and other online advertising provide great reach.  However, frequency is where things can go wrong.  When you're visiting a website, such as a news outlet, you expect to see ads.  You're voluntarily allowing yourself to be exposed to them.  Even if advertisements appear, we tolerate them, because we're simply using the website to consume information in an impersonal matter.

Social Media isn't impersonal, it's personal.  Frequency can quickly die off with Social Media, because when ads invade our personal "space" online, we change our usage patterns; quickly visiting a services like Facebook less, or even stopping altogether.  Once that happens, you've lost that consumer, potentially alienating them from your brand (as an advertiser), and possibly losing another revenue generating user. 

That's the slippery slope.  As an advertiser, you need to make sure not to abuse Social Media advertising.  It's users may be more receptive to your messages, but if you over "communicate" to them, too frequently, and without specific value or purpose in your message, they will quickly ignore you.  Once they ignore you, your Brand Awareness measures and credibility may start to decline as well.

Facebook needs to quickly decide how much advertising they really want to force their users to view.  If they continue to add more "ads" to people's feeds, Facebook may quickly lose users, and one of the "pot of golds" of internet advertising may cease to be.

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Saying Apple Won The Mobile Flash War Is Misleading

Remember the headlines in November?  Ones like those in this CNET article saying Apple won the mobile Flash war.  Sources at Adobe were quoted as saying that "We will no longer adapt Flash Player for mobile devices to new browser, OS version or device configurations." (source CNET UK).  So Steve Jobs won.  Flash really is unnecessary on mobile devices.  Actually, it is very necessary.

Adobe made the right move, enabling a successful development platform (Actionscript) to exist in an "app" consumer model within the mobile space via Adobe AIR.  Let's remember what Flash is: a development environment for delivering rich, interactive content to users.  This has traditionally been done via the Flash plugin, allowing web browsers to decode and display this content. However desktop and laptop PC's have more CPU horsepower and screen real estate available for processing Flash content and Actionscript code.  Mobile devices, with their smaller screens, and slower processors, are not ideal vehicles for delivering Flash-based content.

Adobe, FINALLY, recognized this.

So Adobe took a step back, surveyed the situation, and realized what they have: a viable, established development platform.  This development platform not only delivers games and entertainment, but it enables advertisers to create dynamic ads and apps, allowing them to connect with consumers in new ways that traditional advertising does not allow.

That's why the mobile play is so important.  Traditional advertising methods don't work in a mobile environment.  In February of this year, Comscore reported smartphone usage was up 60% year over year (Business Insider).  If you want to get your costumer's attention, it's no longer via a television or a regular PC screen.  In order to win mind share, you have to get consumers in their pockets, so that they will open up their pocketbooks.

Flash/Actionsctipt development via Adobe AIR packaging makes sense. It allows Adobe to continue to sell software.  It allows Adobe to stay relevant with developers. It allows Adobe to be a key player in the mobile advertising realm.  It just makes sense.

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Another Ad Network = More Fragmentation

On Wednesday Yahoo released it's "Living Ad", interactive video ad format for advertisers.  This new ad format works within an ad network, that is centered around Yahoo's Livestand publication app.  Livestand, along with it's ad network, enters an already saturated ad "market" occupied by the likes of Flipboard, Zite, AOL's Editions, and Pulse.  Yahoo is pushing advertisting packages to buyers, some of which are said to run upwards of $500,000.

According to Yahoo, Livestand features a magazine-style layout.  It will launch with some content from third-party publications.  Those publishers will share their ad revenue with Yahoo.  The details of these revenue sharing arrangements are not yet known. These publishers can also re-sell ad packages on the plarform.  I can only deduce that Yahoo get's a cut of that revenue as well. Diane McGarvey at Scientific American, which is offering some content on the Livestand, states Yahoo will keep about 70 percent of revenue on ads sold to appear inline with Scientific American content.
Living Ad, along with Livestand, is one of many initiatives to attempting to make Yahoo a relevant player in mobile advertising.  Mobile advertising is projected to net around $1 billion this year in the U.S. and up to $1.2 billion in 2012, according to eMarketer. Yahoo is positioning itself to receive as large a portion of this pie of revenue as possible.

The mobile ad space is already over-saturated.  Frankly, none of the ad formats and networks bring anything new to the table.  Nothing currently compells a consumer to do anything after viewing these ads compared with any other form of advertising medium.  We don't need another ad network.  We don't need another "method" to get an ad to a consumer.  What we need is a new type of ad, a new way to interact with a product, that might actually compel a consumer to buy.

Advertisers, and content networks, need to bring new ideas to the table.  The internet and mobile phone networks bring whole new possibilities to advertising via interactive ads.  An interactive ad would allow a consumer to configure products, explore them, walk around them, try a focused "demo" of it.  After they have played with it, or configured it to their hearts content, they could be connected with a vendor to purchase that product within a few clicks.  This gives the consumer a quick way to satisfy their emotional desire to buy the product.

However, most online ads don't do anything other than present a picture, an animation, a call to action phrase, and link to a normal website.  There's no point to showing a traditional ad online or on a smart phone if there's nothing new about it's experience.  None.

Yahoo's Living Ad is trying to do this.  However, most advertisers don't seem to know how to create an ad "experience" that really compels consumer interest.  We need to stop telling

If advertisting is going to survive, and make money, the "ad" as we know it needs to evolve along with the technology available to deliver it.  With the growing popularity of mobile devices that are connected to mobile data networks, there is a new opportunity to truly try something new.  Who is going to lead the way?

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Where's The Beef?

I was born in 1980.  I remember lots of things from my childhood.  I remember GI Joe, the Transformers, Mask, the Challenger disaster, Christmas at my grandmother's, and a basic, loud phrase coming from an elderly woman on television: "Where's the beef?"

In 1984, a spot entitled "Fluffy Bun" appeared featuring actress Clara Peller, asking the question, "Where's the beef" upon receiving a massive hamburger bun containing a paltry piece of "beef."  Wendy's used this iconic phrase to poke fun and embarrass competitors such as McDonald's and Burger King, bringing to light the tiny, sliver patties being put into fast food burgers at the time.

Fast forward over twenty years.  The phrase has become part of our American culture, but the origins, and the meaning, have slowly faded away.  Over time, with Wendy's leading the charge, the major fast food restaurants have been offering more items with more natural ingredients.   Now they are upping the ante again, releasing a new line of value hamburgers that aims to one-up category leaders based on quantity and quality of the beef in the sandwich.  In order to do this, Wendy's resurrected "Where's the beef?"  It's a spot-on approach.

In order to bridge the gap between a generation of consumers from the 1980's and the 21st century, Wendy's used today's current retro fashion trends, placing "Modern Family" actor Reid Ewing in a 1980's styled "Where's the beef sandwich" walking down the sidewalks of urban settings.  Along the way, people familiar with "Where's the beef?" give him the proverbial "thumbs up".  The main character doesn't understand the recognition he receives, until he comes up to a sign at a local Wendy's.  Then it all makes sense.  Cut to juicy shot of large hamburger, product sold.

Frankly I think this is brilliant.  We could have seen Clara again.  We could have seen the big bun, small patty.  Instead, what we see is a brilliantly simple connection between two generations.  There's no hard sell, not silly gimmick, just a recognition of pop culture history, and a delicious looking hamburger.

The most powerful messages are sometimes the simplest ones.

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Facebook helps advertisers engage their customers

I'm taking a break from my review of basic marketing fundamentals to discuss something key from the recent Facebook F8 event.

On September 23rd, Michael Lazerow published an article on Adage commenting on Facebook's Ad product evolution.  In his post, Michael comments on three key items:

• Facebook now helps you build better connections
• Facebook can be used to let your customers tell your product's story
• Facebook can help you unlock the value of people

I want to comment more on these ideas.

First, the whole "point" for a business using Facebook is to connect with their customer.  Seems like a no-brainer, right?  Maybe ... but what many businesses assume is that once someone "Likes" their business, they are instantly connected, and their "Likes" will pay attention to whatever they post, even if they post nothing.  "Like" DOES NOT equate to "connecting".  Mr. Lazerow is correct when he says, "It's about what you offer them and it's clear that the company's (Facebook) focus has shifted from growth to engagement" (reference to Facebook added).

Facebook isn't about announcing another product.  It isn't about beating your chest.  It's about posting CONTENT that is relevant to your customer.  It's about GIVING them something that matters. If you sell cameras, post tutorials about photography techniques.  Give them tutorials focused on teaching them to use your product.  Post a 50% off coupon for Facebook members for camera accessories.  GIVE them something that is VALUABLE to them.  Remember when we were talking about Brand Equity in my last post?  Facebook is a great place to build brand awareness and brand equity.

Use your customers to build your brand equity.  Have them tell your product's story.  Have them show and tell others about how they have used your product.  Their voice (positive and negative) carries more clout and emotional credibility than yours ever will.  Continuing on the camera example, inviting users to post their photos from vacations with your camera allows them to share their emotional connection with your product.  Awarding prizes for the best photo taken with your camera helps to strengthen the customer's "bond" with your product and brand.  The "community" built, and the quality of photos submitted (hopefully) will build better brand equity than you could do yourself through traditional advertising via any medium.

Advertising doesn't always "reveal" the fact that your customers have value.  They don't just give you money.  They are a very real voice in the marketplace.  Make them a voice for you.  Facebook (and potentially Google+ in the future) allows you to connect and unlock their value in a way that we never had before social networking existed.  It's time for you to take advantage of it and truly engage with your customer to build your brand equity.

Credit: Adage

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