Strategy

Be Careful What You Ask Your Customers

There is no doubt that understanding the needs and wants of customers in an ever-more competitive economic environment is critical. Major enterprises spend millions of dollars a year on painstaking market research and consumer surveys. Every year, thousands of shoppers are buttonholed as they enter stores or call customer service centers and then are quizzed about their shopping experience. But a study by Stanford Graduate School of Business indicates that marketers greatly exaggerate the value of matching presumed preferences of consumers and giving them what they want. The study has demonstrated that information gleaned from some widely used types of customer surveys can be misleading and even counterproductive.

The research strongly indicates that priming consumers to anticipate an upcoming interview leads to unexpected, and generally negative, results. The more shoppers were asked in advance, the more negative they became. Most negative of all were the consumers who knew they would be quizzed.

Some popular survey methods actually put consumers in a negative frame of mind, hardly the results the companies paying for the survey had envisioned. The mere fact that consumers are told in advance to form evaluations leads them to believe that they are expected to focus on negative aspects, and they act on that assumption. It marks a distinct departure from prior work that concluded polling consumers just prior to shopping or encouraging buyers to compare products on the shelves was likely to be more accurate.

Most consumers want to be honest, and even helpful, when they participate in a survey. But too many consumers, helpful means being (constructively) critical or at least offering suggestions for improvement, as opposed to simply stating their opinions—good or bad. Moreover, taking a survey and giving a thoughtful answer to complex questions about why they behaved in a certain way isn't easy. Most consumers don't have real insight into their own motivations. Consumers who decide on their own to compare products take decisions, as you might expect, subconsciously without rationalizing their choices, the way they do in research.

Telling consumers to make comparisons, which is a practice that marketers use a lot, can be very uncertain because it can change the behavior of consumers in very fundamental ways. The mere fact that they are asked to make a comparison causes them to become unusually cautious.

Lets Talk about Loyalty

I walked into my bank this morning and for the first time in the history of dealing with this bank I was actually thanked for my business. The teller, while completing a transaction noted the length of time I have been with the bank (14 years) and said “wow you’ve been with us a long time. Thank You!” She was the only one who’s ever thanked me, and that was the only instance where the length of time I had been with the bank had ever been referenced.

This got me thinking… about how often this actually happens.

Additionally, I heard a story on the radio not too long ago about some guy that had been a lifelong seasons ticket holder for a major Toronto team. It was a tradition passed down by his father. One year he ran into financial difficulty (having kids in University and other financial stressors) and had to make the difficult decision not to renew his tickets. He received not one solitary phone call or letter. 25 years of attending games in the same seats and not one person thinks to ask WHY.

Sure everybody wants new customers, more customers, brand longevity, and loyalty. But what are you doing to thank the customers you currently have? What are you doing to let them know that you appreciate them, that you think about them every now and then, and that they mean something? My guess is, not enough.

There are companies who do an outstanding job at this, but most, reduce this relationship to direct mail or email spam which, isn’t really a “thank you” and is more of a “here buy more stuff”.

Sometimes, when I finish a project with a client, I write them a hand-written note on a thank you card and send it along with some candies just to say thanks. This clearly wouldn’t work on a large scale (and not suggesting it should), but why not reward customers for staying with you the same way you reward employees for staying with you. Have 3, 5, 7 and 10 year milestones, each with it’s own reward.

These days loyalty is fleeting, consumers are looking for MORE out of their brands, and it is increasingly harder to compete with other brands. Companies have to get crafty in a variety of ways, including loyalty. If a customer isn’t feeling the love, they’ll run for the hills into the arms of another.

Ironically, before I got the “thank you” this morning I was thinking about switching my banking over to another institution.

Workplace Harmony between Gen Y’ers and Boomers

According to a recent Ernst and Young study, 45 percent of baby boomers say they are comfortable using technology, but only nine percent of Generation Y (born after 1980) think that boomers are adept at technology. These misperceptions can cause big problems in the workplace. About 84 percent of Gen Y’ers use technology to avoid difficult conversations while boomers prefer discussing difficult subjects in person or over the phone.

Younger people think that boomers’ inefficiencies with technology create lost opportunities for their workplace while boomers think that members of Gen Y need to work on having more face-to-face interactions. Let’s not forget who invented technology. Bill Gates is a boomer and so is Steve Jobs. According to the Savvy Boomer, a popular blog helping boomers understand how to use technology, the boomer generation uses technology as a means to an end. Younger people use technology as the end.

I have some tips for reconciling boomers and Gen Y on this subject: boomers should invite younger folks to more face-to-face meetings while younger people should teach boomers more about technology!

Employee Engagement, Customer Satisfaction and Profitability

A 2006 organizational survey by Northwestern University links internal performance strategies to market and financial outcomes. The study found a direct link between employee satisfaction and customer satisfaction, and between customer satisfaction and improved financial performance. The key organizational characteristic for explaining employee satisfaction is organizational communication (a measure of the downward and upward communication in an organization).

This is one of the few studies that does not involve face-to-face relationships between employees and customers. Those employees engaged in face-to-face interaction with an organization’s customers often comprise a small number of the organization’s overall human assets. For those employees not actively engaged in face-to-face relationships with customers, their attitudes and behaviors with respect to these customers are still vitally important.

Interaction between managers and employees with regard to supportiveness and goal setting, as well as job design were also key drivers of employee engagement. Organizational culture was another significant driver of employee engagement, where employees must be expected to cooperate and work together, but also to take charge and provide a voice for the customer within the organization. A fully cooperative culture feels the need to reach consensus on a single option, where a culture promoting healthy competition provides multiple choices which are then balanced against one another in an attempt to develop an optimal solution.

An Arcus survey also found that organizations with a clear understanding of their corporate identity tend to be more successful. (Email me if you would like to receive a synopsis of insights from the study.)

In Good to Great, Collins examines companies that made the leap from good results to great results and were able to sustain those great results for at least 15 years. He then compares these “great companies” to a control group to identify the factors that distinguished these businesses, factors that can be used by entrepreneurs looking for a path to build a great business.

From these factors Collins developed a model that summarizes how these great companies were able to consistently match their business strategy to their core competencies and business model. Collins’ “Three Circles” model is a useful tool to help any organization renew its business focus by assessing three key areas:

Passion — What do you care very deeply about?
Ability — What are you really good at?
Economic Reward — What is your potential for economic gain?

When individuals and teams are competing to implement the optimal behaviors oriented to the market and its customers, such competition can work to the advantage of both the organization and its customers. Organizations with engaged employees have customers who use their products more, and increased customer usage leads to higher levels of customer satisfaction.

It is an organization’s employees who influence the behavior and attitudes of customers, and it is customers who drive an organization’s profitability through the purchase and use of its products. In the end, customers who are more satisfied with an organization’s products are less expensive to serve, use the product more, and, hence, are more profitable customers. A focus on market outcomes, e.g., customer satisfaction, is warranted as they were found to mediate the relationships between employee attitudes and financial performance.

Increasing Marketing’s Impact on Sales Success

What’s wrong with marketing and sales at most companies?

Marketing and sales departments are notorious for not getting along. A lot of talent and money is invested in two groups that should have the same end goal – selling more stuff – but they often act like each other is the enemy. This disconnect, however, has reached a day of reckoning. Executive management is demanding that sales forces become more effective—and that marketing departments help get them there. No more blame game… no more finger pointing. The visionary marketing and sales executives believe better marketing and sales alignment actually represents the next big competitive advantage in markets where it’s hard to distinguish one competitor’s offering from another.

What’s at risk if companies don’t get their marketing and sales teams aligned?

Our company, CustomerCentric believes that there are four strategic areas at risk or “at opportunity” for companies willing to make the effort:

1. Avoiding parity in value propositions. The top concern among both sales and marketing people is that they will not be able to differentiate their company from same competition. Proper alignment around the customer buying process and the conversations one needs to have in order to set them apart in the marketplace is how companies will avoid parity and create a compelling difference. It’s not going to happen at the 30,000-foot-level with their advertising, PR, trade shows or campaigns. It’s going to happen at the 3.5-foot-level when sales are face-to-face with a decision maker.

2. Elevating from products to solutions. Everyone wants to move their companies from selling products or services to selling solutions. But, just saying it doesn’t make it so. Just changing words in our brochures doesn’t magically transform yesterday’s product into a solution. It requires a connected and concerted effort between marketing and sales to identify customers’ biggest problems, needs and goals and then align the company’s assets to respond to each of these opportunities, in order to create a true customer-relevant (not company-relevant) solution.

3. Training and equipping more effective sales people. Only 10% of any sales force can be considered “naturals” when it comes to facilitating customers through a solution development and value creation process – where the customer truly senses that a company can better solve their problems versus the competition. The other 90% are in competitive bake-offs where products are pitched against each other and price is the only mediator. Enabling sales people to be more effective in their customer conversations, presentations and communications is what will separate great brands from commoditized products pushers.

4. Generating meaningful Marketing ROI. The only ROI that counts is connected to revenue and profitability. The main engine for generating this is the sales channel. Yet, most of the marketing effort aimed at supporting the sales force goes to limited use. Some surveys say upwards of 90% of what marketing creates goes unused in the field. So, when management questions marketing’s impact on revenue-generating activities, the budget looks big in comparison to the documented impact. Marketers that can show greater utility and adoption of their messaging and tools, deeper into the sales cycle, will be the ones that can show greater impact on top and bottom line results.

Isn’t the biggest complaint that marketing never generates enough leads?

Everyone seems to think if marketing just gives sales people more “leads” then they will improve the marketing-sales disconnect. While generating enough sales opportunities is still a concern, several hundred sales people told us in a recent survey that their biggest concern related to the disconnect is “the usefulness of marketing messages, training and tools.” As one salesperson told us, “It’s not about where I show up…it’s about what I say when I get there.” Too often leads tell us who’s already in the market for something we’ve got to sell. By that time it’s really too late to have the desired impact on a sales cycle.

Sales people need to be speaking with prospects and customers well before that decision is made. In fact, they need to be equipped to be a part of the up-front strategic decision-making dialogue where opportunities are created based on business needs. This dialogue is going on at every one of their seller’s potential prospects, the question is: Are their sales people part of these conversations or are they waiting for leads? When marketing and sales are getting the message creation and delivery piece right, they are in a position to lead sales cycles versus wait for so-called sales leads.

Why are marketers not more aggressive in the area of sales messaging and tools?

Unfortunately, too many marketing strategists, schools and other experts keep telling marketers that sales support isn’t a strategic issue. It’s relegated to a tactical blip on the product launch checklist. Sellers spend lots of money on creating tools, but they don’t spend the time necessary to see if they are right… and whether they really work. We recently ran across a chart in a marketer’s office from a well-known product marketing training company and it showed sales support on the far right-hand-side as the most “tactical” part of the marketer’s job. This only serves to perpetuate the hit-or-miss approach too many marketers take toward their sales support responsibility.

Yet, no matter how you look at its customers, especially, B2B companies rely on sales people to help them sift through all of the hype, claims and indistinguishable marketing driven branding and value propositions. Sales people, and what comes out of their mouths, need to be viewed as the most strategic asset marketers have at their disposal when it comes to building a brand and selling more product or services.

What’s wrong with most companies’ value propositions?

Just that—they are company value propositions based on who the company is and what they have to sell. One big problem with this approach is that the seller often forgets about the customer and their most pressing business needs. Seller’s value propositions end up as nothing more than glorified feature-function-benefit statements. A true determination of value can only be made by the customer. So, if the seller neglects to put their messages into the customers’ context – in a way that the customer will see the seller helping them accomplish something – the seller is not equipping their sales people with true value messaging.

Value messaging needs to start with the customer target, their most pressing business objectives and relevant challenges and then align the seller’s capabilities that respond to those challenges and help meet the objectives. At this “intersection,” between the customer decision-maker, what they want to accomplish, and the seller’s aligned assets is the opportunity to create meaningful value messaging. We prefer to call this “value creation” versus “value proposition.”

Can’t this problem be fixed with good sales training?

The problem occurs when the seller’s sales skills training, such as solutions selling-type training sessions, are completely disconnected from our product training. It’s like building a racecar, but not putting the right gas in the tank. The seller wants salespeople to engage in more consultative conversations, but thesSeller isn’t equipping them with the necessary messaging and sales tools. The seller expects them to conduct customer-centric discovery sessions to discover what the customer wants to accomplish, but they train them on everything they need to know about their product and what it does. Now, that’s a disconnect.

Companies looking for a competitive advantage and a differentiated market presence need to re-orient their product messaging and align it with the consultative sales training approach – which starts with the customer and their business needs, not your product and its features. Transforming from a company and product-centric training approach to a customer-relevant training approach – in terms of both content and skills will elevate your sales-customer conversations and dramatically differentiate you from the competition.

If you would like to explore these topics further and learn how to create your own customized tools, consider attending the upcoming CMA roundtable “Aligning Marketing with Sales: Turning theory into reality” in Toronto Sept 4th.

Is it time we fired our shareholders?

The Problem:
Peppers & Rogers call it Short-termism. (Rules to Break and Laws to Follow)
A condition so dire they rank it as their #1 rule to break for a company to succeed. It speaks to the pressure the stock market places on meeting short-term profits and expectations - sometimes culminating in truly tragic consequences as evidenced by; Enron and Arthur Anderson, the $300+Billion US sub-prime mortgage crisis and even reaching into allegations of fraud:

"SEC Commission charges that Adelphia, at the direction of the individual defendants: (1) fraudulently excluded billions of dollars in liabilities from its consolidated financial statements by hiding them in off-balance sheet affiliates; (2) falsified operations statistics and inflated Adelphia's earnings to meet Wall Street's expectations"

Ironically, the quest for trying to meet the short-term profit goals of the stock market (perhaps also spurred on by a desire to merit contracted bonus targets) actually wiped out more shareholder ‘value’ than ever would have happened otherwise had but a modicum of fiduciary responsibility prevailed.

“…But along with the goal of accountability, there’s an unintended consequence since it effectively tells CEOs that their continued employment depends on meeting short-term goals. That’s because Sarbanes-Oxley has made boards less hesitant to dismiss CEOs, and the boards themselves serve at the pleasure of shareholders and their institutional fund managers, who are increasingly looking at short-term results.” according to Jagdish Seth, Professor of Marketing at Emory University: Are U.S. Companies Doomed to Keep Planning for the Short Term?

While dramatic and extreme, these aren’t isolated cases. Consider Southwest Airlines, often sited as a leading customer-centric organization (Ranked #2 on Fortune’s 2003 Top 10 Most Admired Companies in America) and their fall from grace in 2007 as reported by CNN:

“Discount air carrier Southwest Airlines flew thousands of passengers on aircraft that federal inspectors said were "unsafe" as recently as last March, according to detailed congressional documents obtained by CNN.”

While the airline claimed flight safety was never an issue that message was not heard judging by responses to the story from readers.

“…..Once trust is broken, it is hard to hand over the lives of my family to a company that does not have our best interest and safety at heart.” Phil - March 10, 2008

“I'm a retired airplane mechanic.…Thank de-regulation for your cheap tickets, but the excessive competition in the industry means cost controls eventually get a stranglehold on every part of an airline, except executive compensation…The next time you buckle in, remember that you are only getting as much airline safety as you were willing to pay for, and have a nice flight.” JC March 7, 2008

There’s a sizable concern that things just aren’t right. When Bain completed their 2007 global survey they found a ratio approaching 2:1 of managers (43 percent agreed while 25 percent disagreed) who felt their companies would have better long-term results if privately owned.

Some companies have intentionally avoided a stock exchange listing for that very reason.

"Certainly one of the advantages is being able to manage for the long term without having to become obsessed with quarterly results. When a company like ours (Bechtel) is taking on major projects with long-term risks, it is certainly advantageous to have that longer-term perspective." Jonathan Marshall - Bechtel Source

Others purposely engineer their ownership structures to protect their ability to thrive in the long term. Google’s IPO submission read in part:

“The standard structure of public ownership may jeopardize the independence and focused objectivity that have been most important in Google's past success and that we consider most fundamental for its future. Therefore, we have designed a corporate structure that will protect Google's ability to innovate and retain its most distinctive characteristics." Source:

Some point out the short-termism problem is "contained" to certain stock markets.

“…Other than London, the European stock exchanges and especially their Asian counterparts tend to have limited liquidity because of family ownership and bank holdings. … So the biggest stock owners don’t see their shares as commodity items. Instead they’re something to be developed and passed on to the next generation.”
Source: Professor J. Seth, Are U.S. Companies Doomed to Keep Planning for the Short Term?

Others still, may feel the current situation simply requires better risk management practices, management oversight and/or a realignment of compensation practices (see Rotman’s “The Risk Issue” Spring 2007 for an excellent overview). Perhaps they're right, but I think we need to consider that these are all symptoms of the same underlying short-termism problem. For those who agree the short-term focus is “wrong” – shouldn’t we do something about it?

An alternate view of the purpose of an enterprise:
The prevailing view (for many) that customers exist to create profit for the enterprise’s shareholders is in contrast to an emerging alternate vision which notes that the purpose, indeed the very existence of the enterprise is to profitably serve its customers. Without them, there is no enterprise….there are no shareholders. In this new paradigm we come to see that the ultimate stakeholders that define the success of the enterprise and to whom the enterprise is ultimately “accountable” to are its customers... not the shareholders.

So if we come to recognize that:

1. having a short-term focus does not have a privileged profit generating status
2. the enterprise’s profits are created by the will of customers, and
3. profit streams typically require some investment to ensure their continuation,

then we need to ask ourselves the final question...

IF we have shareholders demanding short term profits that will come at the expense of the long-term value of its customers, shouldn’t the enterprise seek to “fire” those shareholders?
Just as surely as it would fire an employee or supplier that was working at cross purposes . Just as surely as it ‘fires’ customers that aren’t profitable by minimizing interaction expenses and/or realigning fees.

If the pressure for delivering near-term profits puts the brand on a path that exposes the enterprise to greater risk, then surely the C-suite and the Board of Directors must take a stand and uphold their fiduciary responsibility. As noted earlier Boards may be afraid of being exposed to lawsuits from shareholders for not maximizing profits – but with this emerging viewpoint, they may face a similar legal threat from the other side (although I am not a lawyer). Shareholders after all, are free to select other enterprises or financial instruments benefiting as they do from their capital liquidity if they wish to maximize their short-term profitability objectives. Shareholders with a short-term investment horizon ……are not stakeholders.

This doesn’t mean the enterprise isn’t held accountable for meeting profit and other objectives. Quite the contrary, it places an even greater premium on identifying, developing and implementing sustainable value. Short term profits and time to market pressures don't have to win out over the long term investment decisions since it is not any less profitable if it is done right (if over the slightly longer term).

Collins & Porras (See: Built to Last) spoke of the need to have a BHAG (Big Hairy Audacious Goal), a long-term vision that is supposed to be so daring in scope that is seems almost out of reach. What is needed is a willingness to pursue this path led by the CEO adopting the mantle of responsibility of the Chief Brand Officer. (see Ted Matthews) The resulting realignment of systems, people, skills, program implementations and performance compensation will provide a stronger balance of what is good/better/best for the maximum accumulation and retention of profitable customers and the realization that retention is in fact the new acquisition.

Firing one’s shareholders just might be the most important BHAG the enterprise can embark on.
I look forward to the discussion.

Successful Ageing for Baby Boomers

Successful ageing is not an oxymoron, according to Sherry Cooper, Chief Economist at BMO Capital Markets and author of The New Retirement. Boomers can learn to age well through a growing body of scientific research that now suggests a number of predictive elements and learned behaviours can add healthy productive years to our lives.

Healthy older brains are better at dealing with complex situations that you have dealt with for many years, having the benefit of so much experience. Research also suggests certain predictors of how well an individual in mid-life is likely to age. These include no substance abuse; a good stable marriage; education and ongoing reading; brain work; exercise, normal body weight; and a positive attitude towards life. Mid-lifers who exhibit these characteristics have a greater likelihood of ageing well.

Education trumps money and social prestige as a route to happiness and health. Education is more than one or two university degrees earned ages ago. It is an ongoing interest in the world around you, reading newspapers, books, and other sources of information and awareness.

Continued brain work - be it through reading or writing, attending lectures or taking classes, playing bridge or chess, or doing crossword puzzles - exercises the brain and makes it more resilient. It also strengthens the immune system. Also, mental and physical exercise increases feel-good hormones.

We are never too old to learn, and under normal circumstances, we can continue to learn nearly as long as we live.

The Art of the Elevator Pitch

One of the most important goals marketers have is be able to influence others – to convince peers or senior managers that our approach makes sense in solving the problem of the day. So, the more eloquent and effective we are at communicating our idea, the better the chance it has at being understood and embraced in the workgroup.

Going Up?
Say hello to the elevator speech—once a tool used primarily by sales managers to communicate key facts about their product or service to a half listening audience, the ‘ES’ is aptly named because it lasts no longer than the time it takes to be lifted from lobby to the 5th floor (about 30 seconds). In our fast paced business world where we literally have to book time in our calendars to eat lunch, we don’t have time (or the patience) to listen to a long winded explanation – of anything. Everyone should have ‘an elevator speech’ ready to go describing key projects, competitive activity or sales issues.

Before you start – prepare.
Know what you’re trying to achieve and know your target audience. And like any good message, tailor your information to the audience it’s being delivered to. Understand their key motivators or position and viewpoint of the discussion at hand.

The magic of threes
Like any presentation skills workshop will teach you, if you communicate ideas in three parts, we’re programmed to recall the content more easily. It’s also easier to remember and repeat to others and maintain the idea’s original components.

1. Describe the fundamental marketing issue in one sentence: bring up the top problem, not a lot of small or insignificant challenges. Remember that you only have 30 seconds to get and maintain your boss’s attention, so start with what’s most important.

2. Articulate a specific solution in the context of its desired result: Communicate how you expect the approach to solve the issue, reach your customer, or blunt competitive activity.

3. Communicate how you are going to achieve the goal: Detail the top three tactics you need to put the plan into action.

Preparation is the key to confidence, so don't ever wing it. A first impression only happens once. Respect your audience enough to prepare well; that includes arming yourself with succinct answers to the toughest questions that might follow your pitch. Be flexible enough to be guided by your listener and their reaction to what you're saying. If he or she interrupts with questions, make sure you answer them.

Taking an 'elevator pitch' approach to communicating your best ideas will ensure your perspectives are not only heard but shared on every floor of the organization.

The underdog makes a move

It's not often we hear about Microsoft being the underdog. Microsoft dominates with a 95% share of the operating system market, a 75% share of internet browser use and somewhere around a 95% share of the "Office Suite" market.

Of course, the big area that Microsoft does not dominate is in the paid search business. Google has a 69% share, Yahoo is at 15% and Microsoft is at 10%. We all know about Microsoft trying to buy Yahoo over the past 2 months. Microsoft saw an opportunity to increase their market share of this very profitable business to more than 25%. Still a far cry from Google's 69% share.

One of the biggest criticisms of Google's paid search is that you pay Google for every "click" regardless of whether the consumer buys or not. Ultimately it doesn't matter since Google is so dominant. You have to work with them whether you like it or not.

Microsoft recently announced a new paid search opportunity for consumers. Currently only available in the US, Microsoft will now be paying consumers to use their Live Search engine to buy products. When you search a product, you will have the choice of seeing online stores that have partnered with Microsoft. When you click on the link, you will see price comparisons as well as a percentage off of the price by purchasing through Live Search. In my test, discounts ranged from 3% to 9% for a Canon Digital Camera.

Will it work? Some think Microsoft's Live Search is far superior to Google's when it comes to products. Online retailers will like the idea of paying for purchases, not just for clicks.

Perhaps this will give a boost to the underdog in the online paid search war...

What relationship do your customers want with your brand?

For quite some time now, marketers the world over have been fighting increasingly tougher battles to win over and keep their customers. Most observers seem to lay blame on:
a) the rising standard of products
b) the growing cadre of ‘good enough’ competitors and
c) the negligible risk of technical product failure
rendering sustainable product/performance based differentiation moot for all but the most focused world class product innovators and market disruptors who are able to redefine and establish advantageous segment barriers.

What about the rest? Many are coming to the viewpoint that their ability to compete and differentiate will lie in two arenas. The first being situational ‘relevancy’, the second -branded experiences.

While the branded experience arena leads to emotion based strategies, that approach will only be successful against those customers who are open to having an emotional relationship with the brand. Furthermore marketers must remember that emotion is but ONE brand relationship dimension - that others may have a transactional, logical or mature/external/we-centric brand relationship instead. This simply acknowledges that not all brands have legions of emotionally charged customers so why try to push strings? Instead by knowing the type of relationship customers want to have with the brand, marketers take an important first step in being able to communicate effectively with their customer in the ‘language’ they will be more receptive to.

Let’s take shoes laces as an extreme example. Most will have little affinity for brands in the category and gravitate toward expediency or value at the Moment of Truth. However consider a mountain climber who is likely more interested in product performance or perhaps even swayed by a testimonial from Sir Edmund Hillary. How about a teenager - probably ambivalent – unless the brand manager develops some ‘hip shoelaces’ for that group. Or perhaps another constituency that will look favorably upon the shoelace company for its good works, greenness etc…

So smarter marketers will not expend resources trying to accomplish the less effective/expensive/impossible and play the cards they are dealt – at least in the near term while giving their relationship-migration programs a chance to take root.

The next part of this puzzle is to track the mix of Communication, Experience and Overture (CEO) events being directed to the different customer segments that result in a purchase. The intent being to document the sequence of (campaign) elements associated with a purchase. And by identifying balanced programs, the manager minimizes the risk of becoming unduly price focused, commoditizing the brand in pursuit of short-term results.

Anyone interested in a greater elaboration of this view point and model are kindly directed to this link (Anatomy of a Brand Purchase).

P&G Increases its Internet Ante

At the CMA's 2nd Annual Business of Ideas Forum, Tim Penner (President of Procter & Gamble Canada) reportedly announced that his company was increasing it's online marketing spending from about 3% to 20% in the next year.

You may ask what could have triggered such a large shift? Below are some observations that I gathered through articles, conferences and monitoring P&G's marketing over the last 4 years.

Step 1: Global CMO Criticises Media Stakeholders

P&G's transformation started in 2004 when Jim Stengel (Global Marketing Officer) challenged US advertising executives at a conference and told them that core problems of media cost inflation and declining efficiencies was hurting marketing clients. Stengel assessed the Media industry was providing "C-" services. His message was...find another model and prove it's effectiveness through better measurement (better industry standards and more robust testing methods). According to the Wall Street Journal, P&G subsequently shifted 8% out of television and into alternative media.

Step 2: Testing DM & Emerging Media

So P&G started to test different forms of direct marketing and it dipped it's toe into mail, banner advertising, online contests and other interactive web elements. Direct Marketing was easier to measure and was seen as a natural "consumer involvement" lever.

P&G's mailing activity increased and there were a number of mail tests with brands. In Canada, some of these tests were with retailers (Shopper Drug Mart) and other mailers directly with brands.

In the US, P&G began experimenting with two separate viral groups of influential consumers: teens and mothers. Starting in 1999, P&G created a group of teenagers called "Tremor" (it took over 2 years to build a critical mass of 280k). Similarly, "Vocal Points" is panel of 650k engaged mothers who provide their feedback on products and who also help spread the "word of mouse" for new product launches. P&G finds that the one-to-one approach is especially effective when marketing sensitive products such as dandruff or tampons.

In 2006 at various trade shows I attended in the US and Canada, I noticed that a number of contacts mentioned that they were called by P&G for roundtable table discussions on internet marketing. The discussions were open ended listening sessions where the brand marketers tried to understand each online medium and key success factors.

P&G has significant experience with banners but is also using paid search.

Step 3: Aggressively Growing their Email Permission Base

With a critical mass of consumer opt-ins gathered through contests, P&G underwent a major email acquisition strategy to grow their Canadian permission lists to 1 million consumers. (Cdn DM News 02/01/06).

P&G's core email property is a newsletter called "Everyday Solutions". P&G have been an Epsilon/Doubleclick email customer since 2004 and has been consistently testing the email medium. P&G has one of the better approaches of relational newsletters and transactional alerts in their CPG sector.

Step 4: Focusing on Measurement

P&G used measurement through each of the previous steps and online measurement is becoming one of it's core competencies. At the end of the day, the new marketing is about measurement. Online marketing is perfect for sequential A/B tests, multivariate tests and a scalable/fast rollout.

Given their marketing discipline, I suspect that P&G examines both "above the line" and "below the line" impact. A quote from a senior US P&G exec confirms this…" Procter measures everything. We are a very data driven company, and every time we ran a program, we did a control group...and the results were significant". Leaders in online marketing have the formula and are quietly widening the gap.

Conclusion

So why is P&G upping the ante in online marketing?

This was all part of a multi-year strategy and shift to find a new optimal mix of mass media and targeted media that will drive profitability. While other CPG marketers hesitate about online, P&G is upping the ante. Now is the time for all eleaders to find their formula and stake their cyberturf.

Online marketing is effective for many marketing scenarios; it is measurable, has a high ROI and creates a Sustainable Competitive Advantage (SCA).

Geoff Linton is VP at Inbox Marketer and a Professor at Conestoga College in Kitchener-Waterloo.

To AJAX or not to AJAX: A Cambodian’s Perspective

Did you know that Canada is a Top 10 leader in global usage of broadband internet access? We are.

Did you know that Canada is in the Top 25 in terms of global internet penetration? We are.

Did you know that Cambodia has approximately 44,000 internet users (in total) translating to less than 1% of their population?
They do.

For a country with almost 14 million people (Cambodia), internet adoption, historically, has not been high.

For a country with over 33 million people (Canada), internet adoption, historically, has been very high.

According to Wikipedia and the CIA World Facts Book, in 2005, oil and natural gas deposits were found beneath Cambodia's territorial water, and once commercial extraction begins in 2011, the oil revenues could profoundly affect Cambodia's economy.

For now, they are still a developing nation.

Yet more often that not, when I am completing an online form with my mailing or contact information, the “Country” dropdown menu seems to think I live in Cambodia. It’s the first country that pre-populates the field when I type in “C” and the next country on the list after Burundi.

In this case, alphabetical listings decrease usability.

There are several solutions to this:

1. Sophisticated eCommerce sites know their customer base and they will pre-sort their dropdown menus to include, for example, the USA and Canada, at the top of the list.

2. IP Location software can pre-populate forms for users who have basic, visible data points. Take the simple example of a user login from Canada. The purchase form may be quite complex as some businesses need more information to prevent fraud and to ship and bill accurately. Certain dropdown information such as country of origin, postal code, IP and domain name can be identified and pre-loaded in to the fields using tools such as: http://www.ip2location.com/

3. Ajax (Asynchronous JavaScript and XML), is a group of inter-related web development techniques used for creating interactive web applications. A primary characteristic is the increased responsiveness and interactivity of web pages achieved by exchanging small amounts of data with the server "behind the scenes" so that entire web pages do not have to be reloaded each time there is a need to fetch data from the server. This is intended to increase the web page's interactivity, speed, functionality and usability. Type recognition also allows real-time intelligence with the database / lookup tables which can significantly increase speed and ease of use, such that a user would be able to type “CAN…” to get “Canada” rather than Cambodia, Cameroon or Cape Verde.

Milliseconds of time are saved for the user. And I need my milliseconds.

Joy Boyson is Director, Business Development, Technical Marketing at The Marketing Store in Toronto, ON Canada and a member of the CMA Digital Marketing Council. She can be reached at joy.boyson@tmsw.com

How to Create a "Seeing Culture".

The mission of innovative marketers today is to open up a continuous dialogue with customers. For them, focus groups and quantitative research are outdated methodologies. They have begun to add "idea partners” who act as catalysts for discussions about new ideas. These are the people at a dinner party who make sure everyone is having a good time.

Is the time ripe to create your panel of experts and idea partners? I look forward to your feedback on the value of deeper customer engagement.

Research by Arcus shows that on average, only 27% of customers are advocates for a company's products and services. The link between higher customer satisfaction and higher revenue growth is clear. To that end, companies need to develop customer engagement processes to measure the revenue at risk for a company based on the levels of satisfaction across customer clusters and whether its products and services excite customers.

Engaging customers to share ideas on how to improve the business is critical to today’s leaders in innovation. An example is Starbucks. According to Starbucks chief Howard Schultz, the company’s customer engagement processes have resulted in surprising ideas. One customer wants Starbucks to make ice cubes out of coffee so when they melt they won't dilute cold drinks; 7,660 fellow customers agree. Another wants the chain to install shelves in restrooms—where else can you put your drink when you've drunk too much? Although some customers are repelled by that suggestion, Starbucks thinks it's a "sleeper idea" worth considering. More than 10,000 Starbucks fans wish for something to plug the hole in lids to prevent sloshing. Starbucks listened and just introduced reusable "splash sticks" to do that.

Why a Customer Advisory Board makes sense

A customer advisory board is like a think tank and sounding board for initiatives that could impact your customer base. Marketers need to pioneer the concept of a customer advisory board to senior management at their companies. Increasingly, it has become important for managers to have an in-depth understanding of issues related to products, services, sustainability practices and customer support. A customer advisory board acts like a board of directors. In this case they provide feedback on broader issues at a high level. This is corporate democracy in action. At the month-old MyStarbucksIdea.com, customers can make suggestions, other customers can vote on and discuss them, and Starbucks can see which ideas gain popular support.

The process has been implemented by several Fortune 500 companies. Several others have set up "panels of experts" or "Think Tanks" for specific initiatives such as sustainability practices, engaging boomers, and retirement plans etc. For example, Bank of Montreal has set up an advisory board to advice managers on retirement related business initiatives.

The idea partners also act as advocates for customers' suggestions back at their departments, so that customers would have a seat at the table when product and brand strategy decisions are being made. To close that loop in an authentic way, a company must make a commitment to building those ideas together with customers. They need to adopt the ideas into their business process, into product development, experience development, and store design.

It's key to plans of innovative companies to invigorate their marketing. Another example is an initiative pioneered by Michael Dell, who returned to Dell Inc., a year earlier and launched IdeaStorm.com to gather and act on customers' ideas. Dell has implemented a score of suggestions, including the introduction of computers running Linux instead of Windows.

How would you achieve deeper customer engagement? Let me know.

The Age of Entitlement

According to a recent issue of The Financial Times, it was Yankelovich - the market research company - that claimed to have invented the term 'baby boomer". Generation Ageless, a book written by the research company's senior partners, explored the way today's grown-up baby boomers differ from previous generations: their refusal to grow old gracefully and, indeed, their conviction that they are not growing old at all.

They certainly have no plans to make way for anyone else. As the book says, these are people who, their entire lives, have "revelled in the attention like babies at bath-time". Generation X, those born between 1965 and 1978, can wait.

In the heat of the U.S. Presidential elections, we need to remember that the two Democratic Party Candidates vying for the Democratic ticket are both baby boomers. Barack Obama is a trailing-edge boomer while Hillary Clinton is a leading-edge one. Bill and Hillary Clinton were, in fact, the White House's first baby-boomer couple. As the oldest of the baby boomers enter their sixties, their values, disputes and, above all, sheer numbers are still with us. The Clintons represent much of what the baby boomers stood for, and still stand for.

Former broadcaster Tom Brokaw's book - Boom! Voices of the Sixties - Personal Reflections on the 60s and Today - looks at baby boomers then and now reminds us what a time it was. The 1960s have led to today's advances for black Americans and for women. The current showdown between Hillary Clinton and Barack Obama would have been unthinkable without the 1960s. Women now account for half or more of the students in American medical and law schools.

Although we're not Americans, the 1960's touched us all. Companies everywhere in the world now need to know what and how to sell to baby boomers. The Financial Times suggested that the answer to this is:
home offices and multi-generational cruises (for the ‘sandwiched’ boomers); easy-grip cooking utensils, higher chairs in shoe shops and cars with bigger dashboard displays. I've also blogged about fashionable hearing aids and 'tall' books. Baby boomers are getting older, whatever we think - just don't remind us!

Online video isn't the future, it's the present

Google Canada hosted a showcase last week in Toronto, complete with recent case studies and numbers from YouTube.

The following stats had several jaws hitting the floor:

• 10 hours of content is uploaded to YouTube every 60 seconds
• YouTube contributors produce 3000x more output than Hollywood
• Hollywood would need to premier 57,230 feature films a week just to keep up
• YouTube currently boasts 200M+ worldwide unique visits a month
• 25% of surveyed registered YouTube viewers watch more video content online than they do on TV

YouTube Demographics


• 55% suburban, 26% urban, 19% rural
• 71% employed, 15% students
• 47% married
• 69% college educated
(source)

Several case studies were featured, including a YouTube, HP and Fox Searchlight program called “Project Direct”.

Other highlights;
Mark Nicholson from ING Direct presented the Canadian Superstar Saver Search,
Paul McGrath from CBC presented some digital strategy including “The Hour” channel on YouTube

Here’s a little Advertising on YouTube primer to get you started: