Archive for the ‘Marketing’ Category

Luxury and Value

by on Wednesday, April 17th, 2013

In a lengthy and thoughtful post on MediaPost about the evolution of luxury, author Steve Kraus claims:

Luxury, historically about being expensive, evolved to become value-oriented. At [the Ipsos] November 2011 Point-of-View Forum on luxury, we presented data showing 89% of Affluents agreed, “When I decide to purchase a luxury item, I go out of my way to find the best price possible.”

via shutterstock

via Shutterstock

This is great news for online marketers, because shoppers have to do two searches: first for the product they want, then for the price they will accept. Indeed, the first search may include not just the web sites or Facebook pages of top of mind merchants, but also reviews, forums, blogs and other social media interactions that go into forming purchase intent. Why is this good news? More time on site is one obvious reason but more opportunity to interact with the brand and with friends is another. More time to shop means more time to be social.

How can brick and mortar merchants take advantage of this phenomenon? First, provide large amounts of actionable, sharable information. Have a photo of those shoes in blue? Let the customer tweet it to her friends. Second, do what online merchants can’t do: change you mind, turn on a dime, make an exception. Surprise and delight – and watch your customer post to Facebook with a smile on her face. Third, use a well-designed loyalty program to turn current customers into loyal customers, and loyal customers into high spenders who will tell their affluent friends about your business.

The takeaway:

  • Luxury may be back. Tacky isn’t.
  • Shopping for value is as much a part of retail therapy as shopping for products. Smart brands promote both.
  • Brick and mortar merchants can take advantage of their one-on-one customer relationships to surprise and delight customers who are or may become loyal.

Hope Is Not A Strategy

by on Wednesday, September 19th, 2012

So said Hillary Clinton, and she wasn’t talking about marketing. Still, when local merchants think about word of mouth marketing, hope is often their only strategy.

It shouldn’t be. If your business consistently provides a rewarding customer experience you can do a lot more than simply hope that customers spread the word. Here are some steps you can take to extend the reach and effectiveness of your word of mouth marketing well beyond what hope alone can provide.

One happy customer tells another (via abardwell, Flickr)

There are 3 basic things you should do to amplify your word of mouth:

  1. Identify the most likely potential brand advocates
  2. Engage with them frequently and consistently
  3. Make it easy for them to be your advocate

Who are a business’ most likely brand advocates? In a recent post on All Things WOM, Cara Fuggetta of Zuberance outlined 5 characteristics of potential advocates’ “social DNA”:

  • They are inherently social people
  • They want to be looked at as experts
  • They recommend many brands and do so often
  • They are avid content creators and sharers
  • They want to help others

In short, they are not your typical customers, or even your typical satisfied customers. The reason they may become your advocates may have more to do with their own interests and motivations than with your business, but if you can get them sufficiently engaged they will be happy to be your advocates, too.

Even if you know what they are like, how do you find them? One way is to search: cross referencing valuable customers (you do know who your most valuable customers are, don’t you?) against social media activity should give you a starting point. But an even simpler way is to ask. Send your customers an email survey asking some of the questions Cara answered in her post. It isn’t a scientific survey but it doesn’t need to be.

Once you have identified at least some of your potential advocates, open a dialog. Ask for their feedback, and implement reasonable suggestions. And make sure they get the credit. Draw them closer with special offers just for them. Use soft benefits, too: early access to new products, or a cocktail reception after hours can strengthen the bonds between your business and your advocates.

Then do what you can to make it easy for them to spread the word. At the very least, return their emails, texts and phone calls. If they need content for Facebook, Twitter, or (recently) Pinterest, make it available – and in a format that makes it easy to use. Let them guest edit a catalogue, if you have one, or post to your blog. If they want you to speak at a local organization, jump at the chance. Remember, there is no shortage of media channels through which you – and your advocates – can communicate.

The Zavee takeaway:

  • Brand advocates are special people. Treat them that way.
  • They may have their own reasons for becoming your advocate. Insisting on your reasons won’t be helpful.
  • Brand advocates can be tremendously helpful. Don’t stand in their way.

4 Ways Local Merchants Can Take Advantage of Deal Fatigue

by on Wednesday, August 22nd, 2012

Business Insider recently noted that LivingSocial is “still burning money at an incredible rate”. The same publication also reported on an analyst’s downgrade of Groupon despite improved results for the first quarter of 2012. Publications from Businessweek to Yahoo are reporting on the new phenomenon of “deal fatigue”.

What is it? Is it for real? And what does it mean for local merchants?

Focus group participants expressing their perspective on coupons.

Not long ago, consumers were eager to sift through their inbox for the latest from Groupon, LivingSocial or one of their many clones for the latest version of “something for nothing”. Deal sites offered compelling discounts on a wide array of consumer products and services. Restaurants were common deal sellers, but consumer also could purchase “bucket list” experiences such as skydiving, drag racing, even pole dancing lessons. Consumers buy a lot, merchants sell a lot, what could possibly go wrong?

Here is one answer: Consumer behavior and merchant expectations were completely out of sync. The only surprise is that so few of the smart people noticed before the deal space took off. Daily deals were great for the type of consumer that treats shopping as an exploration. Deal hunters are (usually) younger consumers without much disposable income who want the make it go the furthest. So the opportunity to purchase something they may never be able to afford again is compelling.

Deal hunting can be fun and can expose consumers to a lot of new products, but building a long term relationship with the merchant that offers a daily deal is the furthest thing from deal hunter’s mind. Deal hunting is about the next cool offer, not the last one.

Merchants, unfortunately, had the opposite expectation. The rationale for giving up a substantial portion of a day’s receipts was that exceptionally high traffic and trial would result in sufficient repeat business to justify the cost and disruption of the daily deal. Restaurants especially anticipated increased sales off the regular menu and tips paid on the full price before coupon. It didn’t work that way.

In many cases, traffic was plentiful – too plentiful. Merchants were overwhelmed and their associates were overworked. In restaurants, this brought down the overall service level – which annoyed regular customers – while deal users didn’t spend extra (because they couldn’t) and didn’t tip on the full amount because most people expect to tip on what they pay.

The result, from an anaylst quoted in the Businessweek story linked above, is simple: “‘It appears the daily deal business has run into a wall,’ wrote Clayton Moran, an analyst with Benchmark Co., in a research note. ‘From what we can tell, the bears were right.’”

How can local merchants take advantage of deal fatigue?

  1. Discounts can promote trial, but merchants should avoid discounts that are so deep that they attract consumers who are motivated solely by the deal, and have no interest or ability to form a long term relationship with the merchant.
  2. Daily deals can be very expensive. Merchants should look for programs that can promote trial and stimulate development of long term customer relationships without disrupting the business, either operationally or financially.
  3. With the end in sight for the daily deals arms race, the most compelling offers will provide value in ways that go beyond discounts. Merchants that can use offers to facilitate engagement will weed out the deal hunters and be able to focus better on potential customers
  4. Merchants who don’t buy daily deals no longer have to worry that they are missing out on a game-changer. Instead, they can look at different ways to create long term customer relationships that will yield value throughout the customer life cycle.

Any other suggestions for how local merchants can find the opportunities in deal fatigue? Let us know in the comments.

What Makes A Review Trustworthy?

by on Tuesday, June 19th, 2012

There is no shortage of research demonstrating the rise of the user review as a valuable component of consumer decision-making. One of the first sites to make reviews a central part of their business model was TripAdvisor. I read reviews on the site almost every time I travel to someplace new. I recently needed a hotel in Chicago, and read reviews on TripAdvisor before booking my room on Expedia.

Turns out Expedia has reviews now, too. I wanted to see how the sites differed, so I reviewed my hotel on both. There is only one difference between the two that I found significant: On TripAdvisor, reviewers must accept the site’s Terms and Conditions, which include a promise that the reviewed transaction actually took place. On Expedia, the site can detect whether booked travel was used (or at least not cancelled) and only solicits reviews from its so-called “verified reviewers”. So, on one site reviewers promise that reviews aren’t fake, while on the other the system operates to prevent fake reviews.

Zavee’s review engine is far closer to Expedia’s than to TripAdvisor’s. In addition to accepting reviews only from Zavee members who have actually shopped at the merchant, we only accept reviews of transactions less than 30 days old. So, in addition to reducing the chance of fake reviews, we also limit reviews that are dated.

Yelp and TripAdvisor both suffer from an absence of limits on false and dated reviews, but Yelp seems to handle the issue better. How? Community. Perhaps because most people eat out more frequently than they travel, it appears that more people are active on Yelp, and they are more inclined to react to each other. Whatever the reason, Yelpers at least give the appearance of policing themselves and each other to a greater extent than the (presumably less frequent) posters on TripAdvisor. TripAdvisor appears to be trying to create a greater sense of community among its users, but it isn’t an easy task.

Which site’s reviews do you trust most? Let us know in the comments.

When Is a Sale Not a Sale?

by on Thursday, June 7th, 2012

Discount retailer J.C. Penney announced in January something they call “fair and square” pricing. It is supposed to do away with discounting in favor of everyday low prices. Penney did not invent the everyday low price (EDLP) strategy but it is a pivot for a company that in the past was very discount-oriented.

Fair and square?

Several media outlets are now reporting that, six months later, Penney has pivoted again. According to Retail Wire:

CEO Ron Johnson told attendees at a Piper Jaffray investor conference that substituting terms such as “month long values” in place of “sale” was “kind of confusing” to the chain’s regular shoppers. So, from this point forward, Penney will call a sale “a sale” and nothing else.

It takes a certain amount of size, margin and brand equity to be able to make significant changes to pricing strategy. Penney has been positioned as a value retailer just about forever, so a change in pricing strategy doesn’t necessarily affect their brand.

But what about local retailers? Does it ever make sense for them to adopt an EDLP strategy? My guess is: rarely. Local retailers often charge higher prices than mass market chains. They justify these prices with more personalized service and a more carefully curated assortment. This “boutique” positioning makes sense for many consumers, even in categories which would never use that term.

My take is that local retailers would lose more than they gain if they tried to sacrifice the boutique factor for the higher volumes that EDLP can sometimes bring. Better for them to (1) make judicious use of sales and (2) find ways to incentivize and reward customer loyalty at prices that produce the margins they need.

3 Ways The Customer Isn’t Always Right – And What to Do About It

by on Wednesday, May 16th, 2012

In a recent post on MediaPost’s Marketing Tools: Customer Relationship Management blog, Kathleen Stockham writes about the appalling situation in which a terminally ill Spirit Airlines customer, who was medically advised not to fly after he bought his non-refundable ticket, was repeatedly rebuffed in his attempts to secure a refund. After taking a beating in mainstream and social media alike, Spirit relented, although none too graciously.

This event led Ms. Stockham to write her post, in which she posits the following three rules:

Rule #1 – We screw up; customers, brands, retailers. We all have our blind spots, but it is in how we recover that customers remember and react to.

Rule #2 – The customer is always right. Yes your mileage may vary but in the end, the customer is always right or rue the day you tell them otherwise.

Rule #3 – Social media is your best friend and your biggest adversary, when in doubt, see Rule #1 and #2.

No refund for dying man? That's NOT the Spirit!

I take issue with Rule #2, although Spirit should have found it easy to accommodate its customer and put him in the right. There are situations in which the customer is “wrong” and can’t be accommodated – and these have to be some of the most difficult customer relationship challenges around. Here are three examples:

  1. Accommodating one customer will severely inconvenience others. This actually happened to me. A few years ago, my family and I showed up at the airport check-in counter for a flight to the Dominican Republic one minute – one minute! – after the doors closed. The airline would not accommodate us (or anyone else on line) by putting us on that flight. The background is that the night before we had been hit by a disastrous ice storm. Our usual half hour trip to the airport took 2-1/2 hours and we passed countless accidents and abandoned cars on the way.

    The airline explained that if they held the flight it would lose its place in the de-icing queue and takeoff would be delayed by up to three hours. In addition, the airline put us on a flight to a different part of the island (waiving change fees) that took off only an hour later. And while it took us all day to traverse the DR – it’s a big place! – we believed we were treated very fairly. Here’s what the airline did right:

    • They explained the situation neutrally, without making the situation “us vs. them”.
    • They had the facts on their side. We could just imagine being “those people” responsible for a planeload of passengers spending hours sitting on a cold plane instead of a warm beach. No need to rub our noses in it, and they didn’t.
    • They tried to find a solution. The counter staff sent out a radio call for staff familiar with the DR. They got us on the next flight and gave us detailed directions to our original destination. Insisting on change fees would have left a bad taste but they waived them without being asked. In short, the airline successfully balanced our interests against those of a large number of other customers
  2. The customer has an agenda. The customer is angry that the company is unionized – or non-union. Sells products made in Israel – or has taken them off the shelves. The list of potential grievances is endless, and the ability of aggrieved customers to reach an audience is growing daily. What to do?

    • Take the customer, and the issue, seriously. The customer might be factually mistaken, and might be willing to share correct information, especially if he/she has already shared content that is misleading or untrue. If the customer is factually correct, it is a good idea to engage to the point of taking the complaint seriously. There is no need to agree with the customer’s position, but there is no need to treat him/her as a wingnut, either.
    • Promise consideration, not change. In most cases, it is reasonable to forward claims from advocates to the appropriate person in management, and it is therefore truthful to tell the consumer that that is what you will do. It’s probably true that management is open to feedback from customers on almost any subject, and if so, say so. If the issue is one like Chick-fil-A’s “Closed on Sundays” policy, which is well-known and immutable, it’s only fair to politely inform the customer that, although you respect his/her position, the company’s policy is not likely to change. The best that can be hoped for is that delicate handling defuses the customer’s hostility before he/she reaches the keyboard.
  3. The customer wants a benefit that hasn’t been earned. This is something that can give businesses fits. A free bottle of wine, an upgraded rental car, a pass to an airline lounge – these are just a few of the soft benefits that companies use to reward loyal customers. When the benefit is conferred right in front of a less deserving customer, feelings can be hurt and demands can be made. Here are some suggestions:

    • Always have access to customer profiles in real time. A customer who is one visit away from earning the benefit he wants probably should get it. The first time customer … not so much. It’s easier to deny a request for a benefit (politely, please!) if you know the facts and they are on your side.
    • Explain the rules. Even if eligibility for soft rewards is somewhat discretionary, explain to the customer what it takes to qualify. A customer who understands your expectations, and knows how to meet them, is less likely to go away angry.
    • Consider half a loaf. It’s important to determine whether this is a customer you want to retain, and it’s sometimes difficult to make these judgments on the fly. Associates should always feel free to bring in a supervisor without fear of an adverse evaluation. You don’t want to incentivize bad behavior, but if this is a customer you want to keep, and the request was made politely, consider trying to meet the customer part way. A free dessert instead of the wine, perhaps?

Is the customer always right, when he/she has ready access to social media? Let us know in the comments.

What Super Bowl Ads?

by on Wednesday, February 8th, 2012

Over the years I’ve generally been much more impressed by the quality of the Super Bowl spots than the quality of the game itself. I remember the Super Bowl pioneers, such as Master Lock’s famous Super Bowl spot, which was said to absorb the company’s entire TV budget for the year. But I don’t remember the game. I do remember the game when the E-Trade Baby first ran, because that was Super Bowl XLII, the first Giants-Patriots game. And then there was this, which said it all.

via Maxim34874 (Creative Commons)

But I do remember Sunday’s game, and not just because I’m a Giants fan (I actually grew up with the Jets). No, I remember Sunday’s game because it was one of the most exciting football games I’ve ever seen. Even my non-fan teenager was watching.

And with few exceptions, I don’t really remember the ads. I remember Matthew Broderick for Honda, a spot I really dislike (Ferris grew up to drive a Honda?) despite its 14 million YouTube views. I remember the Fiat Abarth spot, because it shows that good execution can sometimes overcome a predictable strategy. I remember a couple of others, including the user-created Chevy spot. But mostly, I remember the game.

And isn’t that how it should be?

Loyalty Marketing [INFOGRAPHIC]

by on Thursday, September 22nd, 2011

Sometimes they are brilliant and sometimes they are useless, but infographics are almost always fun. Here is one about brands and loyalty programs, courtesy of Get Satisfaction.

One of the most interesting factoids is that 60% of respondents intend to use the social web and networking tools to derive ROI from loyalty programs. If so, that would be a significant change from how the loyalty industry’s historically slow adoption of technology.

Enjoy!

via getsatisfaction.com

The Old Ball Game Finds Some New Tools

by on Thursday, September 1st, 2011

ESPN baseball writer Jayson Stark has an entertaining and informational column this week about how the iPad has taken over baseball. Not just the device itself, but the information that it can display and the way that information is used.

Instead of relying on scouting notes, which are inherently subjective and qualitative, managers, coaches and players can look at opponents’ statistical tendencies – and video clips that back up the stats. Citing the RaysJoe Maddon, Stark calls this the “second great renaissance” in baseball, the first being Branch Rickey‘s pioneering use of statistics from the 1920s on.

Marc Falardeau via Creative Commons

Today, of course, the growth of Sabermetrics has made the breadth and depth of available statistics in baseball somewhat overwhelming, so computers are essential to unlocking their value. What the iPad does is put the necessary number crunching and report displaying power required into the hands of every pitcher, catcher and hitter – as well as every manager and coach. Stark cites many examples of how these changes have changed the game, from increases in defensive shifts to decreases in fastballs in fastball counts. It’s a fascinating piece, and not just for baseball fans.

The theme of Stark’s column, obviously, is that knowledge is power. Many smaller businesses operate like the baseball teams of twenty years ago, knowing intuitively that more data would help them perform better but believing that experience and intuition can fill the gap. But like baseball teams that are slow to embrace statistics and technology, the difference in achievement is there for all to see.

Savvy marketers, of every size, know that there is no substitute for data. Judgment is important, and no business – or ball club – should be run by robots, but merchants need to have the most in-depth understanding possible of who their customers are, what they are doing, and what they want. Some if this information is difficult to obtain, but some is there for the taking.

For example, Zavee lets merchants see every purchase by a Zavee shopper, observe trends, and even determine which Zavee offers are working better than others. This is the kind of information that lets merchants segment their customers and market separately to each segment. It lets merchants test and evaluate marketing plans. And it helps merchants determine the return on their marketing investment. It even works on an iPad.

The Zavee takeaway:

  • The only businesses too small to use data are the ones that want to stay small.
  • Some information is difficult or expensive to find, so obtain what you can afford and use it creatively (Hint: Zavee can help).
  • Do what baseball does and decentralize information – let colleagues help collect, analyze and use information to grow the business.

Ron Stack of Zavee to Speak on Marketing for Shopping Center Retailers

by on Thursday, July 21st, 2011

I will be speaking tonight on a panel sponsored by the Broward County chapter of the International Council of Shopping Centers (ICSC). The ICSC is the world’s largest shopping center trade organization.

The topic for the evening is “Shopping Center Marketing and Networking Trends” and I will be speaking about how Zavee expands the reach of merchants’ word of mouth marketing, offers effective, affordable, easy-to-use loyalty tools, and provides actionable data about merchants’ customers and their purchasing behavior. More generally, I will be discussing how technology like the Zavee platform and the wide adoption of social media offer local merchants effective and affordable new ways to build their business.

Also on the panel will be several shopping center professionals plus a representative of Living Social. One of the points I intend to make is that Zavee’s social loyalty platform combines the social media tools that have helped Living Social and Groupon grow so quickly with the core loyalty marketing strategy of building long term value creating relationships between merchants and their customers. This gives merchants the best of both worlds: social shopping that builds loyalty as well as traffic.

The seminar is today at 5pm at the Hard Rock in Hollywood. If your business is in a strip center, why not call your landlord and suggest that they attend. What they learn can help them market better – and that can help you.