Monday, March 23, 2009

The SMART Way To Do More With Less

If there was a theme that cuts across our professional and personal lives this year, it's "do more with less." By now marketers have probably heard the phrase more times than they like to think about. The big question is always how to do it, and, when it comes to advertising and media anyways, we'd like to help you come up with an answer.

We've rolled out a new service, The Copernicus SMART solution, specifically for consumer marketers looking to "economize" their marketing budgets. You can read all about it in our recent announcement:

Wednesday, March 18, 2009

Finally, Some Answers to the REAL Question

To cut or not to cut the marketing budget very often is not the question these days…..WHAT to cut and WHAT NOT to cut is more like it.

Pat LaPointe of MarketingNPV and Dave Reibstein, co-author of one of our favorite marketing books, Marketing Metrics: 50+ Metrics Every Executive Should Master, have some good guidance on MarketingProfs for marketers as they contemplate what goes and what stays in their 2009 budgets.

One of their best suggestions is:

…frame your cutting based on your strategy for competing effectively. Think about the relative value/importance of particular customer segments; product groups; channels; or even geographic regions. Not all customers or channels are equal, nor are they of equal value to you. Consider the expected returns of a dollar invested in each one and then rank them highest to lowest. Cut ruthlessly from the bottom. Starve weak projects to feed strong ones.
As LaPointe and Reibstein point out, all too often marketers make cuts across the board to get to the number the CEO has handed down as if all buyer segments deserve equal treatment under the law. Marketers may hit the reduction objective, yet they’ve done their brand, bottom-line, and, let’s face it, future job security no favors if they take a democratic approach to chopping up the marketing plan.

In terms of what not to cut and maybe even invest a little more in, the suggestion that stands out to us is:

Is your message strategy resonant and relevant? If not, spend to tighten it up. Mix-shifting from traditional to new media may lower per-exposure costs, but you won't improve engagement unless your message is right for the times.
It’s not surprising that, with so much emphasis on saving money, which media to buy takes center stage—it’s what carries the price tag. We get it. At the same time, marketers would see their media dollars go so much farther in terms of hitting market share, sales, or other performance objectives if they put some resources against the development of a compelling, highly motivating positioning and translating it thoughtfully into advertising messaging.

After reading one article after another that says not to cut spending, LaPointe’s and Reibstein’s piece finally faces the reality of the situation that most marketers have no choice in the matter. It’s refreshing to read something that manages to stay upbeat and strategic even in the face of hard times.

Monday, March 16, 2009

CMO Council Study: 3 Big Concerns Will Drive Spending in 09

Some uncharacteristically, downright cheery (relatively speaking) news from the CMO Council over the weekend as reported by Kenneth Hein in Brandweek flies in the face of other recent polls and anecdotal information about marketers' job prospects and budgets in general.

Among the 659 global senior marketers who participated in a CMO Council study which ran mid-January through the beginning of March, most reported no plans for major restructuring, layoffs, agency terminations, or, surprisingly, budget cuts.

  • 57% DO NOT feel their jobs are at risk, while 21% remain unsure.
  • 38% plan to keep their marketing teams in tact with another, 26% saying they expect to ADD staff.
  • 29% actually expect to INCREASE their spending this year and 21% indicate no change, positive or negative, in their budget.

We hate to be Doubting Thomases here, but we're not the only folks calling into question the CMO Council’s "optimistic" findings. As one marketing consultant told Brandweek, “marketing budgets in many, if not most categories, are subject to cuts and in many cases they are deep cuts. That’s just the reality. Marketing positions are being cut too, absolutely….People are putting a brave face.” Unfortunately, we tend to agree on that one.

Regardless, our major takeaway from the CMO Council report was on the issues senior marketing execs declared as THE primary areas of focus. Said Liz Miller, vice president of programs and operations at the CMO Council: “The big story for the marketing community is it is not about budget slashing; it’s about budget reallocation. Marketers are looking to better support the sales team, drive business growth and engage the individual customer.”

What are the big 3 concerns that will drive how marketers direct their resources? Well....

  • 61% of marketers say setting clear goals and tracking deliverables
  • 44% say integration with sales and channel groups
  • 36% say improving visibility, controls and accountability spend

Meanwhile, marketers report the big 3 priorities handed down from the corner office are:

  1. Growing and retaining market share (48%)
  2. Lowering costs and efficiencies (44%)
  3. Improving customer insight and retention (33%)

We can see #1 and #2 reflected in the big 3 concerns marketers say will guide resource allocation in the coming months, but what happened to #3?

Wednesday, March 11, 2009

Hey, Free Book...If You Have Kindle

Here's a problem we'd like to have.

People around the world talking about you, your company, your brand, and your products/services. On-line communities and influentials eagerly linking to your stuff on the Web and spreading the content around. Online buzz driving buyers to your website. A steady stream of highly motivated visitors to your web site and blog because they genuinely want to be there.....

Sounds great, doesn't it?

Apparently we can ALL learn the secrets to turning the dream into reality in David Meerman Scott's brand new book, World Wide Rave: Creating Triggers That Get Millions of People to Spread Your Ideas and Share Your Stories.

And "Give Free Stuff" has to be up there at the top of his must-do list because for all you Kindle users out there, he's got a promotion running on his blog for a free book.

Playing With Numbers Didn't Help Wall Street, So Why Would It Help Domino's?

Carl Bialik has a piece in today’s Wall Street Journal, “In Ads, 1 Out of 5 Stats Is Bogus*….*Actually, It’s Misleading, Incomplete or Obscured in Fine Print That Few People Read,” recounting recent moves by food and beverage makers and restaurants to take each other down in their advertising. “And their advertising arsenal includes numbers—based on their market research, often controversial and sometimes top secret.”

Domino’s Pizza can advertise that sandwich eaters prefer its subs two-to-one over Subway’s, but “all of this is a matter of taste, which is easily dismissed by any viewer as subjective. Unless, of course, you begin to quantify subjectivity through the use of credible-sounding numbers even if the numbers actually obscure the truth instead of revealing it.”

Yes, rules exist to “protect” the general public from the commercial misuse of statistical information, at least on TV. Yet, according to Bialik, marketers often do only the bare minimum necessary to get the ad on air. As University of Maryland advertising professor Eric Zanot tells Bialik, “I won’t say they’re trying to make honest ads, but they’re at least trying to make ads that pass the legal test.”

Positioning guru Jack Trout explains the uptick in “2-out-of-3 tasters say” advertising as a part of recessionary marketing: “When the tide is running out, and there’s less business, you have to take it from somewhere else.”

That may be true, but is playing with numbers really the best way to do it? Even if Progresso offers some manner of at least superficially believable proof that 19 out of 23 people say, “hmm, boy, I like Progresso soup better than Campbell’s,” is this really going to get people to buy less Campbell’s and more Progresso? Bialik quotes Priya Raghubir, professor of marketing at New York University’s Stern School of Business, that ads that use numbers are “extremely effective,” but effective at what?

Convincing regular Campbell’s soup buyers to buy Progresso instead?

Persuading regular Progresso buyers that even if Campbell’s runs a promo, the sacrifice in taste isn’t worth the cost savings?

Compelling folks on the fence about both brands that there’s no reason to even consider Campbell’s next time they’re in the market for some chicken noodle?

And “extremely effective” relative to what? Is it MORE effective than another messaging approach—maybe one that goes beyond some price-of-entry message? We mean, if it tastes bad to begin with no one is going to buy it. Is BETTER taste the driving problem buyers have when they're in the market for some cream of mushroom? Is it really motivating (OK, maybe for cream of mushroom soup it could be).

We’ve also got some questions about sustainability. How long can Progresso run with its taste test results if Campbell’s does its own set of taste or preference tests and promotes those likely-more-favorable-to-it numbers? Does effectiveness decline?

And how about feasibility, especially when it comes to restaurants. Are they sure that each and every location will be able to consistently deliver a better tasting sub, sandwich, burger, or meal? If it's not going to be something consistent, it could hurt credibility.

Granted we may be taking this a little too far here—we’re talking about soup and sandwiches after all—but is now really the time to be playing with numbers? It’s not exactly new news that Americans feel a bit disenchanted with business, lied to and cheated by financial advisors and banks. People are skeptical about numbers used in advertising to begin with—there’ve been plenty of well-publicized cases of companies manipulating numbers in the advertising company’s favor. Even Bialik’s article demonstrates why the stats don’t always stand on the most solid of ground.

We’re not saying comparative advertising doesn't ever work, but when the media starts reporting on sketchy numbers and campaign spots feature things like Domino’s president burning a cease-and-desist letter from Subway’s lawyer because of the study its promoting, we have to wonder what it’s really doing for sales, never mind brand equity.

Tuesday, March 10, 2009

Customer Experience: Knowledge is Power....and Little Extra Change Might Help, Too

If nothing else, the recession gives business a great excuse for losing customers.
Whether anyone buys it or not is another story, as Peter Merholz points out in a recent post on the Harvard Business Review Voices blog. “Recently, Sprint Nextel announced that in Q4 2008, they lost 1.3 million customers. It’s tempting to blame the recession, but then how do you explain AT&T Wireless gaining 2.1 million subscribers, and Verizon gaining 1.4 million?”

He suggests poor customer experience may have contributed to the mass migration. He cites the 2008 Forrester Customer Experience Index which ranked 114 companies from different industries as evidence. While Verizon and AT&T were in the middle of the pack, in 59th and 64th place respectively, Sprint Nextel was close to the bottom at 108th. “It’s in difficult economic times that customer experience matters most—you don’t want to make it even easier for your customers to walk away because they’ve been so frustrated working with you.” Amen to that.

Merholz next launches into an interesting discussion about what to do about the customer experience problem. “The key to delivering a great experience is to have empathy for your customers,” he writes. “In our experience, the single tool that does the best job of spreading empathy throughout a business is the Persona.”

We’ve certainly seen plenty of organizations using personas to bring different customer segments "to life.” We’ve heard of brand managers, advertising agencies, and web folks using them to design new products and services, campaigns, programs, and websites to suit the needs and proclivities of different personas. Merholz’s recommendation to bring the various customer personas to the front-line personnel who play an integral role in shaping the overall customer experience sounds like another good application.

We’re a bit more cynical than Merholz, so would probably say using personas is less about drumming up some empathy for customers experiencing a problem than about simply making it easier for customer service reps to resolve a problem to the satisfaction of everyone involved.

We can’t help but go back to the CMO Summit study from a few weeks ago where just 29% rate their company’s ability to handle and resolve customer complaints or problems highly. It stands to reason that the more help a customer service rep has in identifying a particular customer type and suggestions for responding with something resembling a script based on insights into their behavior, motivations, attitudes, etc., the better able they are to do a good job. Take some of the uncertainty and guesswork out of a situation—especially one as precarious as a customer service interaction—and you’ve made it easier to direct it towards a successful outcome, one that preserves and maybe even enhances a relationship.

And how about some empathy for the customer service reps? Going back to the CMO Summit study again, most companies aren’t compensating employees or execs for improving customer loyalty or satisfaction. These are tough jobs to begin with and now—and we feel pretty confident we CAN blame the economy here—even crankier customers. So how about a little something for the effort of really tuning in to what kind of persona is screaming at me here and what do I need to say and do to make things right? Knowledge is power, but a little extra change in the pocket for using that knowledge wouldn't hurt...and would probably help customer retention efforts along all the further.

Thursday, March 5, 2009

Fresh-Squeezed Marketing Lessons from Tropicana

Stuart Elliot has a good synopsis of recent events unfolding at Tropicana, makers of fresh-squeezed OJ, in his recent piece in the New York Times.

By way of recap, with great fanfare, in January Tropicana rolled out new packaging with a a darling little cap. Soon thereafter, bloggers started blogging, Twitterers commenced tweeting, and consumers began emailing, calling, and writing letters to the company to ask what gives? Influential blogs with a design and culture bent such as panned the new box as bland, “the people” weighed in with comments such as "ugly" and "stupid"....yatayatayata, Tropicana pulls the plug on the new box and promises to bring back the familiar orange with a straw container, apologizing that the company simply “underestimated the deep emotional bond” folks had with the previous packaging.

Neil Campbell, president at Tropicana North America, told Elliott that the fact that consumers can communicate with marketers, “more readily and more quickly” than ever is “a good thing” for firms that “put consumers at the center of what they do.” The tone of other comments from social media experts on Elliot’s piece also fell along the lines of how swell things like Twitter are for getting companies on the “right” track.

“You used to wait to go to the water cooler or a cocktail party to talk over something. Now every minute is a cocktail party,” explained PR exec Richard Laermer. “You write an e-mail and in an hour, you’ve got a fan base agreeing with you.”

Another PR exec and social media expert Peter Shankman added, “Twitter is the ultimate focus group. I can post something and in a minute get feedback from 700 people around the world, giving me their real opinions.”

We're not quite as ready to jump on the "this is great" band wagon. The fact that companies can collect feedback from more people on something like Twitter than it can by doing focus groups, doesn’t mean the data is any better. In the words of the former chairman of the American Marketing Association Bill Neal:

I’ve seen too many brand managers observe a focus group or two and then make major changes in their marketing programs based on what they heard in the focus group. Many of those changes are utter failures simply because the focus group was not a reflection of the real world. You have exactly the same problem with monitoring consumer generated media, except that now you have the equivalent of thousands of focus groups. Does that make the information more valid or reliable? Definitely not!

Tossing around a number like “700” makes it seem like the Twitter tweets are more accurate and should carry more weight, and this scares us a bit because it’s NOT necessarily—or even routinely—the case.

In his Brand New Day post on the subject, David Kiley posed a very important question (and it’s kind of funny too): “Just who the heck ARE these people who got so apoplectic about the new design of their orange juice box that they took time to e-mail, call, picket and threaten to change brands over a new box—not the juice inside as was the case with New Coke, but just the box graphics and the cap.”

Now according to Tropicana, the criticism was coming from some of “our most loyal consumers,” but how did it know that? Does it have a vast database of the email addresses of the most loyal customers across the U.S. so could link email comments, blog postings, or telephone numbers to the negative comments? How did it know that it wasn’t a competitor just trying to undermine the rollout? The originator of the design, Peter Arnell, has his fair share of enemies, how did it know there wasn't an effort afoot to make him look bad? Design critics panned the design and conjured up a lot of negative chatter, but do most OJ buyers base their purchase on what some culture maven blogger posts about the container anyway? How big an issue was the new box to the future profitability of the brand really? Was it impacting behavior in anyway?

Though there were plenty of knocks on the design itself, the big complaint that the company definitely should have paid attention to went more to the problems it posed to physically locating the brand on store shelves and distinguishing the variety of OJ—pulp, extra pulp, no pulp, added calcium, etc. As IdeaPad’s David Wertheimer put it, “As a loyal Tropicana buyer, I don’t love the straw-puncture fruit or the old logo at all. What I love is Tropicana juice. And the new packaging made it hard for me to buy it.” The new design made it easier for Tropicana to blend in with store brands, and the variety appeared in much smaller, lighter type.

The company reportedly spent $35 million on the new packaging effort and we’re not sure if, when it did the numbers, it just made more sense to scrap it altogether rather than make modifications—making the brand name and variety more pronounced and legible, for instance. Or perhaps sales were flagging off enough starting around the time of the introduction that the company just didn’t want to mess around any further and risk missing numbers for the quarter.

So what’s the moral of the story? That’s another good question. Perhaps it’s a lesson in incomplete research. Supposedly Tropicana did focus groups to test the new packaging BEFORE the rollout and got a positive reaction. It’d be interesting to know if the cartons were shown in a competitive context and/or if anyone brought up concerns about not being able to distinguish the brand or the juice type. It’d also be interesting to know if research efforts went much past the focus group stage.

Or perhaps it’s another indication that companies still don’t know what to do with social media and buyer feedback coming through those channels. While it’s dangerous not to react to customer problems or ignore negative sentiments particularly in public forums, it’s not necessarily better business practice to over-react to them either. Just because it’s online doesn’t mean it’s somehow MORE representative of buyer opinion or predictive of purchase behavior. On the surface at least, it seems like Tropicana might have balanced what it was hearing on-line with other tracking information to find some middle ground with the design here before scrapping it all together. Heck, it might have found from other research that it had nothing to worry about!

Tuesday, March 3, 2009

Thoughts from the Experts: Consumer Generated Media

Some interesting comments from the Advertising Research Foundation's Chief Research Officer Joel Rubinson on using data and insights gathered from different social media on Diva Marketing Blog.

We're happy to see the ARF weighing in on this source of information and particularly appreciate the caution to balance the "raw voice of the consumer" with more quantitative research.

In addition to the two-part interview with Joel, there's also a link to a chat with former AMA chairman Bill Neal from three years ago on the same subject. The concerns about credibility and reliability haven't gone away.

One of Neal's comment also has some relevance to the CMO Summit study we talked about in an earlier post: "The shear volume of product mentions [in social media] and whether they are positive or negative is useful information and may (and I emphasize “may”) provide a signal that something is going wrong, or right, about the product and how it is being marketed.Trending that information would be one of many ways companies should be tracking their marketing performance. I’d consider it one of many, albeit smaller, gages on the marketer’s product dashboard."

Why Don't CMOs Get Customer Service?

Ted Mininni had a good one for recessionary times on MarketingProfs’ Daily Fix, “CMOs Don’t Get Customer Service??? Yikes! He got that one right.

“Despite overwhelming agreement on the importance of customer experience and word of mouth,” reports the CMO Council, “senior marketers admit their companies are failing to take decisive, company-wide action to integrate customer voice and experience into key business and marketing processes.” New research from the organization indicates:

  • Only 29% said their companies rate highly their ability to handle and resolve customer problems and complaints.
  • Just 31% rate their company’s commitment to customer listening highly.
  • A whopping 58% do NOT compensate any employees or executives based on customer loyalty, satisfaction improvements or analytics.

Meanwhile, 44% admitted that high-profile negative customer experiences had at some time compromised their brands.

Geez, at a time when just holding on to the customers you DO have has become job #1 for many marketers, it doesn’t sound from this study that most marketers have made this task easier on themselves. As the executive director of the CMO Council Donovan Neale-May expressed, the “most critical role a CMO can play in an organization” is “to own every facet of listening, learning, interacting, engaging and optimizing the relationship with the customer, and understanding where the attrition, pain and aggravation is, and doing this in real time. It is mind-boggling to me that the level of attention to this is not what it should be, and fragmented in terms of who owns it.”

We wonder if maybe part of the problem here is there just is no strategy steering the ship. While there’s general recognition about the importance of retaining customers and fostering loyalty, so much of what’s happening in these areas is either reactive or tactical. A customer has a problem, the company tries (or doesn’t as is more likely the case, if the numbers from the study are to be believed) to resolve it. Want to keep a customer, offer them some sort of reward or program-based incentive, like frequent flyer miles.

Keeping tabs on all of these interactions could potentially offer some bigger picture insights and lead to improvements, but the potential problem is the tracking data—like so much of other kinds of marketing metrics—might produce a whole lot of numbers, but little in the way of actionable, useable information to guide marketing activities and investments from a bigger picture perspective.

To the point of many of the commenters on Ted’s blog, yes, these days, any problem could turn into a major headache for a marketer and companies in general need to do a better job responding to and resolving customer issues and problems. It’s just a whole other big leap to use the kind of information about problems and pains gathered at different touchpoints to drive decision-making.

Monday, March 2, 2009

Looks Like There Might Be Something to This 'Value' Thing After All.....

As Brandweek's Kenneth Hein reports on the latest results of Brand Key's Customer Loyalty Engagement Index,"Consumers are not buying based on price alone. Instead, they are relying more on their perception of value when deciding which brands to stay loyal to during the recession."

Turns out, even in categories where you'd least expect, brands that provided buyers with a perceived added value trumped the low priced guys.