Value Acceleration

Preaching to the choir won’t increase loyalty … or converts

valueacceleration — Wed, 01 Feb 2012 22:27:17 +0000

Two recently released studies, unless ignored, may put a dent in many marketers’ plans for an easy media solution. Turns out Facebook ‘likes’ don’t mean much. And Facebook may not be anymore helpful than mass media.

A study by the Ehrenberg-Bass Institute “…found slightly more than 1% of fans of the biggest brands on Facebook are actually engaging with the brands.” Karen Nelson-Feld a researcher with the Institute said, “Facebook doesn’t really differ from mass media. It’s great to get decent reach, but to change the way people interact with a brand overnight is just unrealistic.”

In another study done by Ms. Nelson-Feld she found a greater occurrence of heavy buyers in the Facebook population than in a more general population of customers. The study also found that purchase frequency didn’t increase after someone became a fan. In other words, fans are already heavy users and being a fan doesn’t increase your usage.

This does not suggest Facebook is ineffective, simply that it is not the panacea. But I doubt that knowledge will affect their opening stock price.

Mitch

Dumping Shatner is only a symptom

valueacceleration — Mon, 30 Jan 2012 15:59:16 +0000

Priceline has announced they are ending their relationship with William Shatner because he has been too successful at positioning them in the “name your own price” travel market. Apparently generating $1.5B in revenue, which is a 45% increase over the prior year was not enough. Management feels they need to move more into the “maximum discount” travel space. You know the wide-open space not already occupied by Travelocity and Expedia. They seem to believe that by killing off Shatner (literally in an ad) they can eliminate the problem that Mr. Shatner is so closely identified with his character, The Negotiator, and Priceline. They want to to focus on the fixed-price discount (at 200,000 hotels in 140 countries) instead of the name-your-own-price business Mr. Shatner made famous.

So abandon a position you dominate to attempt to crack a market dominated by two other strong brands? That suggests some possible conclusions for me:

1. The name your own price business is actually unprofitable and after 14 years the Board finally figured that out, or

2. The Board and its management team don’t understand what happens with most brand extensions. No problem, their shareholders will learn.

Mitch

Another money maker for a branding agency

valueacceleration — Fri, 27 Jan 2012 23:03:10 +0000

Apparently Hyundai is aiming to move the brand to a new position of “modern premium.” That would be a phrase their agency made up. The problem is that they also want to keep making a wide range of vehicles from low-cost to higher priced. The Koreans may be obsessed with creating a higher end image and their U.S. brand agency may be feeding that delusion.

Nissan (Datsun) and Toyota both recognized that they could not brand extend successfully in that way. (Alfred Sloan understood that almost 100 years ago.) Thus they created Lexus and Infiniti, two successful brands while maintaining strong positions with their original brands. What outcome could Hyundai possibly expect from this effort (other than enriching their brand agency)?

There is some discussion that this may be a prelude to introducing an “upscale” brand like Lexus or Infiniti. If that’s the case, there is no need to reposition or brand extend the core Hyundai brand. And if they do create some “modern premium” position in the mind of consumers, how will they do that without scrapping a bunch of the lower-end cars in their line?

Brand extensions almost never work for anyone except the brand agency paid to try.

Mitch

It’s almost Super Bowl time … again

valueacceleration — Tue, 24 Jan 2012 22:40:33 +0000

The teams are set and the day is approaching. For us, aside from those of us who like football, or have a “dog in the hunt,” it’s about the ads. As in earlier years, we will offer our insights on the ads after the game. (No, not in real-time via Twitter. We believe the insights can wait until the game is over anyway.)

Our view on Super Bowl ads comes through in our commentary and regular readers will understand our bias. However, Jonathan Baskin wrote an article in Advertising Age, which we feel sums things up pretty well from our perspective. We commend it to you.

Mitch

Since ink is free they just won’t go away

valueacceleration — Tue, 24 Jan 2012 00:09:03 +0000

I posted twice last year about QR codes. My point was and is that they are fascinating to marketers, and another tactic they can use to raise the flag. But to what end? In yet another article which makes my point the author writes, “…consumers are not nearly as excited about QR codes as marketers are.”

Further to my earlier points, the article states, “Experts cite three reasons that QR codes haven’t caught on. First, people are confused about how to scan them. Two, there’s little uniformity among the apps required to read them. Last, some who have tried the technology were dissuaded by codes that offer little useful information or simply redirect the user to the company’s website.”

Melissa Parish of Forrester Research calls them the next “shiny object.” The author makes the point that, “The appeal to marketers is clear. Implementing the codes is far less expensive than developing a proprietary app. They offer the ability to measure consumer activity and can provide shoppers with information, freeing up salespeople and increasing productivity.”

But as he notes, if the payoff isn’t there the consumer won’t use them again. I have said since my first post on this subject that it is not about not using your QR code again, it’s about destroying the consumers desire to ever use them. For this reason I predict they will die.

What will cause their death? Limited space on packaging. While the ink is free, the space is limited and right now marketers have the delusion that the QR code is the best use of that space. Or they need to “keep up with the Jones” so they offer the code.

This a perfect example of confusing activity with results.

Mitch

Present sales in the future tense

valueacceleration — Fri, 06 Jan 2012 17:27:43 +0000

Been working on a couple client projects lately that required analyzing and straightening out sales data, and it brought to mind something that is often missing when management looks at sales. Mitch and I (and others at CMG) come originally out of the computer industry (Mitch from semiconductors, me from systems), and we always knew that sales numbers weren’t the most important measure of…well, what sales numbers really meant. Huh? We knew that this period’s sales weren’t as important as the number of “design wins” we has made that period, because design wins meant that our products would now be sold with every unit that our customer had designed them into. For example: getting your CPU designed into the next generation of iPhone meant almost no sales this period, but lots down the line.

Most companies have a similar measure, an analogous sub-set of raw sales data, that they out to be looking at when they review sales every quarter, and decide on incentive schemes for the sales force. Many companies, however, don’t.

Do you?

Ralph

Why does everyone forget how to do surveys?

valueacceleration — Fri, 06 Jan 2012 17:15:14 +0000

The third-party survey company, doing a quality survey for my health care provider (doctor’s office), just caught me at a weak moment and I agreed to answer their questions. 20 minutes later, I’m off the phone. What could possibly be wrong with this approach?

1) 20 minutes is way too long, and I’m now resentful. I forget the exact number, but I seem to recall “three”, as the correct number of questions to ask in order to get helpful, cooperative, actionable answers. This has been well-known for decades. How could management approve something so completely at odds with good practice? I like my doctor and her office staff, and even the cooperation they work for. But even I was tempted to simply hang up.

2) Because everyone knows how inconvenient they are, people with gripes are more likely to want to commit to answering telephone surveys. Why not take this inherent bias out of the picture by saying up front, “I have 3 quick questions and they won’t take more than a minute”?

Basically, I’m just aghast that in 2012, survey companies are still doing these ineffective surveys and causing resentment in their client’s customer base. And I’m really aghast that there are still people in management who approve it.

Ralph

Riley on Marketing makes her own point

valueacceleration — Tue, 03 Jan 2012 15:51:28 +0000

A recent YouTube viral video, Riley on Marketing, has been making the rounds because this very young girl is ranting about why girls only get to choose stuff that is “pink” and not super-heroes. As she correctly notes, some girls like super-heroes. True enough. But as she is ranting, she is hold a non-super-hero doll in her hand that she has been carrying. Perhaps she is demonstrating by her actions, rather than her rant, why marketers focus as they do.

Happy New Year.

Mitch

There are no advanced management techniques

valueacceleration — Sat, 31 Dec 2011 15:58:43 +0000

In almost any activity in which the stakes are high and the cost of failure immediately imposed — such as military operations and professional sports — there is a saying: “There are no advanced techniques, only the basics done to a high level of performance”. Indeed, spend time with any high-level trainer in one of these disciplines and you are struck by the utter simplicity of what they do. And by the discipline with which they do it to an extremely high level of skill.

Of course, new developments come along, and techniques change, but the new knowledge is almost always incorporated into training and performance in the form of a basic — not something that is only for “advanced” people in the field; that is: it’s incorporated into the basic training of the discipline.

It’s the same in business management. Almost nothing that makes a company successful is not part of the basic “blocking and tackling” that any business has to do. There are no magic techniques that can be granted to you by some wizard. The best companies just do what we all learned in management ( or marketing) 101 through 501 excellently, consistently, and with discipline. There are no secrets, only discipline and the leadership to encourage it.

This is why we are focused on process management in our practice. New developments in strategic marketing come along only so often, but the lack of a practical tool (process management) to leverage the basics that most companies already have is usually the missing element in obtaining excellent performance.

Ralph

So you think you care about quality? Here’s an acid test.

valueacceleration — Fri, 30 Dec 2011 21:55:43 +0000

My wife uses those fancy, high-end Moleskine planners, and they are very nice products. I was reading the little promotional booklet that came with her new one, and it said something that I’ve seldom seen. Each booklet is individually serial numbered, and the consumer is encouraged to contact Moleskine directly (not the retailer they bought it from) if they discover any problems with the product they purchased.

Sure, you have quality control in your manufacturing (or service) process: quality is measured by each downstream activity, any internal work station is empowered to shut down the entire line, blah, blah, blah. Great. But how many of you take it to the ultimate step, and encourage the ultimate “downstream” activity — the final consumer — to chime in on the quality of a particular product?

My bet is: not too many. And my question is: why not? The ability to individually number even items that are produced by the hundreds of thousands a day is pretty inexpensive and technically trivial.

Do you really care about quailty?

Ralph