Tag Archive for Focus marketing

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?

Life Changing Opportunities

In December 2009, Deliver Magazine did a summary of statistics about new parents that they extracted from TheBump.com.

  • 69% of new and expecting moms use the samples received in pregnancy and parenting gift packs
  • $3,342.00 is the average amount spent during the first year of pregnancy
  • 85% of new parents set up a college savings plan
  • 82% of new parents create a will/living trust/estate plan
  • 67% of new parents book a vacation
  • 51% of new parents purchase or lease a new or pre-owned car
  • 32% of new parents purchase a home for primary residence.

These facts remind us that life changing events prompt changes in buying behavior. Other life changing moments:

  • Getting a driver’s license
  • Going to college
  • Entering the work force
  • Getting married
  • Empty nest
  • Retirement

I think you get the idea. I know that my friends are looking forward to children going away to college so they can finally fix up their houses. Can we help you reach a key group as they go through new experiences that lead to new needs and wants? Using a well defined list helps you speak directly to people who need and want what you have to offer.

List selection strategies

The list could be the most significant factor in the success or failure of a direct mail campaign. Regardless of how strong the creative and message may be, if the message isn’t communicated to the right audience, the impact will be compromised.

Surprisingly, few marketers spend the time and energy to accurately identify their audience. In an effort to make sure everyone knows about the promotion, they often communicate with people on the fringes, thus lowering the overall performance and value of the campaign.

One option is to build customer “profiles” for your products or services. If you can determine conversion as a percentage of desirable market segments, you can make an educated decision regarding which segment will produce a positive return on investment. Marketing only to those people with the highest propensity to purchase from you inevitably increases your campaign’s success, performance and value.

Marketing in Tough Times

These are ideas we shared some time ago. They are still true.

Don’t cut your marketing budget! Those businesses that continue to advertise will triumph when the economy picks up (and it will).

Let your customers help you. Retaining your existing customers and getting repeat business from them should be your highest priority. Customer testimonials are extremely effective in gaining new business. Referrals help you close new sales very easily and don’t forget to reward the customer who provided the reference.

Focus your marketing. This means use direct mail, marketing and offers that allow you to measure the results.

Be consistent with your advertising. If you are not persistent in your advertising, your customers will not recall you and will place orders with someone else.

Alter your marketing messages to take advantage of declining trends and promote features that relate to saving money for the user of your product or service. For example, “we just installed a new piece of equipment that is up to 50% faster — that’s a real labor saving advantage.”

Don’t keep doing what you’re doing just because you’ve always done it. Don’t let inertia be your marketing plan. Change creative often, unless it’s working.

Write a sales letter to your best friend, even if you’re not a writer: David Ogilvy got some of his best headlines from his clients. You’ll probably write a compelling, honest and factual account of why your product or service is worth considering.