Archive for February 26, 2010

The Three Minute Rule

Harvard Business Review recently posted an article by Anthony Tjan, CEO, Managing Partner and Founder of the venture capital firm Cue Ball.

He suggested that one way to know and understand customers better is by studying the broader context in which your customers use your product or service. To do this, ask what your customer is doing three minutes immediately before and three minutes after he uses your product or service.

The examples included Thomson, a media and information provider, asking the questions about products provided to investment analysts with financial earnings data. Immediately after getting the data, a large number of analysts were painstakingly importing it into Excel and reformatting it. This observation led to developing a more seamless Excel plug-in feature. The result was an almost immediate and very significant uplift in sales.

In a study of female drug store shoppers, a significant number of women picked up a disposable camera after putting newborn diapers into their shopping carts. Follow-up interviews confirmed that snap-happy moms were often new moms. Placing disposable diapers close to inexpensive disposable cameras furthered this purchase pattern and would not have otherwise been an intuitive merchandising or cross-selling strategy.

In the book, Why We Buy, author Paco Underhill describes how shoppers who do not have a shopping basket or shopping cart go quickly to the checkout when their arms get full. A casual observer says that is obvious. A savvier approach might be to interview people in a checkout line with an armful of goods to ask where they were three minutes earlier and if they would have considered buying anything else if it hadn’t been so difficult to carry so many items. Underhill concludes that more establishments should consider putting shopping baskets in the middle of the store to keep customers in shopping mode longer (since research showed that few would go back to the front of the store to get a cart once engaged with shopping).

These situations illustrate how easy it is to fall prey to narrow thinking. In the Thomson example, they thought of themselves as a data provider, though they were really part of a broader workflow solution. In the cross-selling and shopping-basket examples, the three-minute rule reminds us that rearranging the context of a shopping experience to better meet customer patterns can be extremely effective. Customers seek solutions, but it is likely that your offering is only part of one. The three-minute rule is a mechanism to see the bigger picture and adjacent opportunities.

Are you thinking of what your customers are doing? Is there a way we can help you provide a more complete solution?

Pay It Forward posted an extract from The Globe and Mail discussing the trend of helping consumers “feel good”.

“Paying it forward” is an old idea with new life lately. Many different major brands have launched promotional campaigns that blur the line between business and philanthropy.

Benjamin Franklin pioneered the idea more than 200 years ago when he lent a colleague some money on the condition that it be repaid not to Franklin but to someone else in need. Franklin wrote at the time: “This is a trick of mine for doing a deal of good with a little money.”

Maybe the idea caught fire because news of Feel Good Ripples spread due to what Wharton School professor Jonah Berger calls “social contagion,” a mechanism by which consumers and media decide what to pass along. “People like to talk about what is surprising, remarkable and unexpected,” Berger says. “They also like to talk about what makes them look good. Self-interest is a big driver.”

For more hedonistic brands, the experience has been mixed. Starbucks received some positive feedback in the mainstream press, but bloggers sniffed that the whole thing felt contrived. Starbucks customers reported feeling good about themselves when in 2006, news of a pay-it-forward phenomenon at Starbucks drive-throughs began to make the rounds. Customers pulled up to the window only to be told the driver ahead had already paid for their coffee. The cashier then asked if they would like to pay for the customer behind them. These chains of benevolent coffee purchases reportedly carried on unbroken for hours at a stretch (and still do, by some accounts). And that may be the real dividend from initiatives of this type. Berger’s assertion that acts of generosity are driven by self-interest may not be so cynical after all. In other words, if your company can make customers feel good–even in such an oblique fashion as facilitating their philanthropy–the customers are likely to transfer some of that goodwill back to your brand. That’s a “trick” of which Benjamin Franklin might have approved.

Here is a random act of kindness: Dean’s Mailing is offering a free marketing consultation to your favorite charity. This is valued at over $250.00 and will help save money and increase response.

What does your brand stand for?

Deliver Magazine provided some thought provoking questions for many organizations and their marketing teams.

You spend hours crashing through strategy documents, pulling out nuggets of customer insights, determining differentiators in the industry and understanding what it is that makes your corporation unique. And in the end, you have a vision of who and what your company is about. It’s that vision that helps establish relationships with customers, win over prospects and get your company noticed in this increasingly chaotic and fragmented world.

Then, after all of that strategic work, comes the execution part of the marketing plan and you decide to go digital. You send an e-mail — which looks just like any other e-mail in your best customer’s inbox.

Oh, we know, you finely tune the colors to match your brand (despite the fact you can’t calibrate how that color appears on any one monitor) or you include photography and graphics (which don’t download until the users request them) or you include the all-important link to your heavily branded Web site (although fewer than 10 percent click through).

So, maybe it’s not the optimum branding experience, but it’s cheap. Boy, is it cheap. And it’s efficient — you can reach hundreds of thousands, even millions in a single blast — and really, you’re getting the word out there.

Then the economy picks up, but your sales don’t jump as much, and at the next marketing meeting, as you’re puzzling over the numbers, someone asks why your customers aren’t so loyal anymore. What’s happened to that great relationship your brand used to have with them? And there’s a lot of this and that around the table, mutterings about “empowered consumers” and “everything’s a commodity,” and the meeting rolls on. You shrug your shoulders and concentrate on the next campaign. There’s work to do.

We understand. It’s not an uncommon problem. It’s just that, well, you could stand for something. You could put something in your customers’ hands, something branded. Imagine that: those finely tuned colors, the carefully selected images, the perfectly worded summation of what your brand is all about sitting right there in the hands of the people you most want to reach. It’s right there at their fingertips.

And inside that package, something amazing — something they could never get digitally. A sample, a tchotchke for their desk, a magnet for the fridge, a baseball bat, a brick, a salami — who knows? Something that’s amazing and brilliant and relevant, just like your brand. A piece that says “Hey, I know you,” and reminds that customer why he or she came to you in the first place and what your brand is really all about.

You could do that. But that’s direct mail, and some say that is old. No point in doing that, right?

The Hare and The Tortoise (or was it a snail)…

A fable based on tomorrow’s thoughts…

There once was a speedy hare who bragged about how fast he could run, how many people he could reach in a single mouse click. Tired of hearing him boast, Slow and Steady, the tortoise, (or maybe he was a snail) challenged him to a race. All the animals in the forest gathered to watch.

Hare ran down the road for a while and then and paused to rest (on his analytical reports of 5 percent open rates and great return on investment because hey even if you make a few sales, sending all that email cost almost nothing). He looked back at Slow and Steady and cried out, “How do you expect to win this race when you are walking along at your slow, slow pace?”

Hare stretched himself out alongside the road and fell asleep, thinking, “There is plenty of time to relax.” Or perhaps he decided go for a run on a treadmill, just for fun, staying in the same spot but moving furiously fast.

Slow and Steady walked and walked. He never, ever stopped until he came to the finish line.

The animals who were watching cheered so loudly for Tortoise (or was it the snail), they woke up Hare or did they scare him to try a different tactic? Hare  began to run on the road again, but it was too late. Tortoise (or was it the snail) was over the finish line, he won and is winning customers, sales and profits.

The moral of this story is the quick easy fast fix does not exist and the reality is that Slow and Steady direct mail also known as “snail mail” wins.

Advertising as Charity or Charity as Advertising? posted an extract from The Economist discussing a new trend by major advertisers: they are “doing good”.

The 107 million Americans who tuned in to watch the Super Bowl on February 7th did not see any advertisements for Pepsi. Instead of spending $20m on a handful of 30-second spots, the firm decided to give that amount away. Under the slogan “Refresh Everything”, the Pepsi campaign asked the public to vote online for charities and community groups to receive grants ranging from $5,000 to $250,000. A few days before the game its arch-rival, Coca-Cola, was also bitten by a charitable bug. It promised to give $1 to the Boys & Girls Clubs of America every time someone watched its Super Bowl ads on its Facebook page, up to a maximum of $250,000.

Other recent examples include Chase Community Giving, in which small charities competed to win $5m in donations from JPMorgan Chase, and American Express and NBC Universal’s “Shine A Light” program, which awarded a grant of $100,000 to a small business chosen through its website.

Marketing people say consumers are increasingly trying to do good as they spend. Research in 2008 by Cone, a brand consultancy, found that 79% of consumers would switch to a brand associated with a good cause, up from 66% in 1993, and that 38% have bought a product associated with a cause, compared with 20% in 1993. Rather than try to make products that can be marketed as ethical in their own right, such as “fair trade” goods, firms are increasingly trying to take an ordinary product and boost its moral credentials with what one marketing guru calls “embedded generosity”. The fad for online competitions to award the handouts also appeals to another trend, so-called “slacktivism”, whereby people are turning to the internet to give their consciences a boost without doing anything more onerous than clicking a mouse a few times.

Do you want to try something like this on a local scale? What about using direct mail to lead your customers to support your favorite cause?

Which Came First?

We did a study and analysis of our customers and sales over the last 14 years. We found a few surprises.

Even though we have a passion for helping new businesses get started and grow and love watching people realize their dreams. The average number of years that one of our customer organizations has been operating was almost 20 years. Are organizations more likely to spend more on direct mail the longer they are in business or are they still in business because they spend more money on direct mail?

The larger a company is in terms of employee size also correlated with average sales. In other words, the more employees that work in a firm, the more the firm spent on direct mail. Again you could ask did the organization grow because they used direct mail more or are they more likely to use direct mail because they have more employees?

Back to Basics

According to an article extracted from McKinsey Quarterly by Harvard Business Publishing, purchasers of consumer electronics have greater interest in products offering core benefits at attractive prices than in products with unused bells and whistles.

Consumer Attitudes Toward Products

Consumer Electronics Get Back to Basics

Part of marketing is product design, but I wonder do we need to embrace these trends in other areas too?

Function for All’s February 2010 newsletter highlights products that are simple, small and/or cheap. The products and services are designed for low(er)-income users in emerging markets, but manage to appeal to buyers in mature consumer cultures too.

Goods and services especially designed for emerging markets often incorporate one or more of the following characteristics:

  • Smaller and/or limited number of features, to keep prices low.
  • Simpler, or easier to use, for inexperienced consumers.
  • Energy efficient (or not using any traditional energies at all) and/or easy to repair and/or waste-reducing.
  • Robust, as some of them are used in rugged conditions.
  • Well-designed (the democratization of design is a global phenomenon).
  • Aimed at helping owners to generate income, or allow users to create self-sustaining systems.

Email & Texting or Marijuana?

BNET recently sent an email, the subject line read “Which Is Worse for Your Brain: Texting or Pot?” That is quite a question.

The post referred to a University of London study done for Hewlett-Packard that found that “infomania” — a term connected with addiction to email and texting — can lower your IQ by twice as much as smoking marijuana. Moreover, email can raise the levels of noradrenaline and dopamine in your brain by constantly introducing new stimuli into your day. When those levels get too high, complex thinking becomes more difficult, making it harder to make decisions and solve problems.

Read all your email and text messages, and your mind becomes so drained that it’s a challenge to get anything else done. Sure, some of it’s important — and that’s precisely the problem. “The brain hates uncertainty,” says David Rock, the CEO of Results Coaching Systems and author of “Your Brain at Work.” “It’s literally painful to not download your email the moment you arrive at your desk in the morning. But once you’ve processed 30 or 40 emails, you’ve ruined your brain chemistry for higher level tasks that are going to create value.”

In short, the brain’s capacity for decision-making was created for a time when people had less to think about. So now you have an excuse for not keeping up.

These are interesting facts to keep in mind as you plan communication with your customers and prospects. Maybe this is one more reason to think about direct mail?

Simple Sells

BNET recently shared this great post about simplicity. Marketers at Starbucks, Kraft, and Campbell have discovered that “simple” sells. Products that stress fewer ingredients – food, drinks, cosmetics, even pet food – are outselling rivals, as this USA Today story explains.

Is this a trend with traction? Will this “marketing megatrend” extend beyond consumable products? Leading consumers with creative marketing is one thing. Is ’simple’ something we should all be considering in our marketing, branding, and positioning? The answer to that is yes. Here are …

Five Reasons Why You Should Keep It Simple:

1. Communication. Regardless of whether your organization is Business to Business (B2B) or Business to Consumer (B2C), high-tech or high fashion or non-profit. When it comes to positioning, the simplest and easiest to understand way of getting across your unique value proposition (the reason why customers should buy from you and not your competitor) is always the best way.

2. We’re All Consumers. You, me, the CEO, even the seemingly unflappable finance and IT people. We’re all consumers and we’re all subject to mega-marketing trends that invade our subconscious day and night.

3. Stress and Overload. We’re all stressed-out on media, product, and “choice” overload. Too much choice can be a bad thing. We are all overloaded with media and product choices. Moreover, technology adds complexity that takes time to learn. It’s nice to have one less thing to analyze and worry about. “Simple” is calming, relaxing … for a change.

4. In Management and In Life, Keep It Simple. That simple rule goes a long way to explaining why Apple’s Mac continues to gain market share over PCs.

5. Left-Brain And Right-Brain Appeal. Emotionally, we associate “simple” with easy, quick, controlled. While we make left-brain decisions based on the perception of quality and performance, in many of those metrics – defects, moving parts, size and weight – less is more. These days we just want things to work the way they’re supposed to – no instructions, no drama, no returns.

Direct mail is a really great way to communicate “simple” in a clear-cut and easy to understand way. Call us at 602-272-2100 for some fresh ideas in graphic design or just let us mail your simple idea.