Canadian Marketing Blog

The Ultimate Decision

The Promise:
It came upon us as a promise, wrapped in the innocence of simplicity. The inner core of a brand captured miraculously in a simple question.

“How likely is it that you would recommend us to a friend or colleague.”

The Net Promoter Score was born. The brainchild of Fred Reichheld, a Bain & Co. Fellow and Dr. Laura Brooks of Satmetrix Systems. The sort of material that Harvard Business Review writes their cases about. In fact HBR did publish an article in Dec 2003 with the eye catching title “The one number you need to grow”. The equivalent of a viral campaign unfolded, supplemented with a book… global speaking engagements.

Just as a black hole, the simplicity drew everyone to it. The promise, incubated by field studies at 400 businesses (turns out to have been 50+ in the end) which held that if we managed our customers properly – our business would grow. To do so only required our focus on customers who are either our promoters (scoring you a 9 or 10), passives (scoring you a 7 or 8) or detractors (scoring you 6 or less). Wait a minute – that’s all our customers. Exactly, but we’ll get to that again at the conclusion.

The Formula: % of Promoters - % of Detractors = Net Promoter Score (NPS)

Therefore if 50% of your respondents were promoters and 20% were detractors – you netted out at a score of 30. The higher the score the better.

NPS we were told would accurately predict a company’s ability to impress customers, turn customers into advocates, and -- in turn -- become an indicator of potential business growth. Scientific proof that this simple metric was ultimately more powerful and meaningful than any other management theory about customer satisfaction, customer retention, passion, loyalty or …well anything. So simple even a CEO could follow it ;-^)

And so the market embraced the theory. From all corners of the world. Heavyweights like GE (Real Estate division) Philips, HSBC, IBM (Enterprise Content Management), LEGO, Enterprise Car Rental, Intuit, Schwabb, American Express, Microsoft and others.

A simple approach, developed by respected accreditted professionals, endorsed by a world class university adopted by companies. What’s so bad about any of this?

The Questions:
Cracks in the foundation started to develop because of the lack of support to the contentions. Namely that the NPS was not a strong predictor, that there was evidense of research bias in the support used to substantiate the NPS and that the ACSI was not uncorrelated with firm growth..

“We find no support for the claim that Net Promoter is the ‘single most reliable indicator of a company’s ability to grow.’ The clear implication is that managers have adopted the Net Promoter metric for tracking growth on the basis of the belief that solid science underpins the findings and that it is superior to other metrics. However, our research suggests that such presumptions are erroneous. The consequences are the potential misallocation of resources as a function of erroneous strategies guided by Net Promoter on firm performance, company value, and shareholder wealth.”

Source: Timothy Keiningham et al. July 2007 A Longitudinal Examination of Net Promoter and Firm Revenue Growth

Other studies, other experts, opinion leaders, bloggers (see below) added their voices to the boisterous cacophony – worthy of the NYSE trading floor on a black bear day.

Undaunted, NPS supporters countered (see below) with their own assertions the NPS being as good as more complex measures and for the most part avoiding any direct discussions surrounding the statistical annomalies brought forward by Keiningham.

In this quote, Dr. Masden acknowledges being part of the team at the London School of Economics that vetted the NPS Score and asserts its ongoing validity as a reliable method of linking customer loyalty to growth.

"As far as the current debate goes, anyone who has read the information being disseminated from the “anti-Net Promoter” camp quickly comes to the realisation that the one Net Promoter question is, at the very least, just as good as more complex proprietary measures, that are tough to translate to the average executive and employee. But that leaves me questioning: why are we hung up on the measurement? The real conversation needs to be about how to get an organisation to be customer-centric and what that can mean for a company’s future”

Source: Clickadvisor.com on Sept 17 Net Promoter: the ultimate debate on customer loyalty

The Stalemate:

There is too much of an industry and ‘cult’ established around the NPS for it to dissapear on the basis of the allegations laid against them. In defence and defiance they point out that we are all ultimately pursuing the same path. True.

One can argue that the NPS may have accelerated the customer centricity movement, the other important benefit is that in its simplicity it has refocussed the dialogue on using metrics which can be widely disseminated and easily understood. Well in the words of Tim Keiningham

“ I too believe that loyalty consultants and researchers have over-complicated the message (and the analyses) with more advanced statistics than it took to get the Apollo space missions to the moon. It makes it impossible for management to understand, communicate, and rally support. This is ridiculous!”

The Ultimate Decision:
Believe it or not up to this point was the easy part. The hard part is deciding for yourself what happens next.

Will there ever be one metric to fit all needs? Highly improbable – and any contenders will not be allowed to make unsubstantiated claims. Instead of waiting for the new simple metric, we must continue to move forward with as simplified a system we can devise, implement and gain compliance with.

There are many competing schools of thought (Customer Experience Management, CRM, Loyalty/Continuity, Value Drivers, Image, WoM) reflecting the different successful business models/brands in the market.

To understand which approach will work best for your brand you must identify three things:

1. who your profitable customers are

2. what kind of relationship your profitable customers wish to have with your brand
a.Share of Wallet: the traditional CRM-centric make me a compelling (price/promotional) offer and I’ll buy it from you (or perhaps your competitors) – a brand relationship centered on the transaction.
b.Share of Mind: the traditional marketing promotions/communications approach – focussing on the key value proposition – a rational based brand relationship.
c.Share of Heart: Customer Experience Management – How people feel about the brand experience. Experience seen as a price mitigator and continuity reinforcer – an emotion based brand relationship.
d.Share of Life: How customers see the brand as a longer term partner for their category requirements, solutions and corporate/sustainability responsibility – an ‘adult/mature’ brand relationship.

3. within the relationship type identify the activities the enterprise must do to instill the longer-term repeat purchase pattern it seeks.

The key in my opinion is instead of defining your brand as an advocate of a particular ‘school of thought’ and then trying to mold your customers to fit within that model, we must instead look and manage this from the customer’s perspective. Therefore come to recognize the ALL of these relationship types exist simultaneously among different groups of your customers. What and how you communicate will be best served by understanding the type of customer they are first and from there make the ultimate decision as to how to relate and evolve with your customers.

Cheers
Miro

Suggested Reading:
NPS Adovcates:
The Ultimate Question. Driving Good Profits and True Growth. Fred Reicheld

www.satmetrix.com

www.netpromoter.com

Dr. Laura Brooks’s – VP Satmetrix latest blog posting

The Satmetrix white paper describing the research

Research conducted by the London School of Economics

Dr. Marsden from Clickadvisor.com on Sept 17 Net Promoter: the ultimate debate on customer loyalty

NPS Contrarians
Loyalty Myths: Hyped Strategies That Will Put You Out of Business and Proven Tactics That Really Work, Tim Keiningham, Terry Varga, Lerzan Aksoy, Henri Wallard

A Longitudinal Examination of Net Promoter and Firm Revenue Growth

The Value of Different Customer Satisfaction and Loyalty Metrics in Predicting Customer Retention, Recommendation, and Share-of-Wallet

January 2007 Maritz Research White Paper

COLLOQUY magazine article

Peering Into the Marketing Crystal Ball - Part 1

At SiriusDecisions we have identified four key marketing issues that will receive significant attention in the upcoming year.

- Metrics, organizational balance and influence will all be key buzzwords for marketing leaders over the next 12 months.
- Technology is an important driver of marketing success, but must be supported by the proper process and leadership commitment.

As 2007 rolls to a close for b-to-b marketing executives, we can say one thing for certain: It is a year that has been all about the “more.” Whether it is more specialization, more technology or more of a commitment to the generation of new business pipeline, you can find some comfort in the fact that you’re not the only one feeling much more pressure. Next time, I will share four key areas that together will paint the picture of an even more changeable landscape in 2008. These areas include:

- One: The intersection of metrics
- Two: A true demand center
- Three: Expanding influence
- Four: A technological crossroads

Guiding principles for user-generated content

Some of the biggest names in the Internet and media business have been busy creating principles around user-generated content (UGC).

In a recent press release, “Several of the world’s leading Internet and media companies today announced their joint support for a set of collaborative principles that enable the continued growth and development of user-generated content online and respect the intellectual property of content owners. The principles serve as a comprehensive set of guidelines to help user-generated content (UGC) services and content creators work together towards their collective goal of bringing more content to more consumers through legitimate channels. The principles acknowledge a collective respect for protecting copyrights and recognize that filtering technologies must be effective and are only a part of what is necessary to achieve this goal.”

This initiative includes some of the largest organizations in media for example, Disney, MySpace, CBS, Microsoft and Fox to name a few. However, there are some very big names missing, like Google’s YouTube and Facebook. Not to mention the hundreds of blogs and small USG communities popping up every day. Also, what about the end user? Did they forget to invite the end user to the table to discuss a topic that is well, about them!?

Principles and guidelines are great and we do need to protect our content creators and IP owners. But to be honest, I just don’t see how this is really going to stop copyrighted content from being mashed-up and uploaded somewhere on the web.

Out of the bag thinking on climate change

What is the impact of recyclable shopping bags when environmentally friendly packaging isn’t part of the agenda in retail?

It seems marketing is being used to change consumer opinion instead of a new pipeline of environmentally friendly products.

In markets where plastic and paper compete as packaging materials, plastic is expected to increase its market share to 53 percent by 2010. The fastest gains for plastic are occurring in soy and other nondairy beverages and pet food applications, followed by frozen food, fruit beverages, detergents and single-serving milk bottles. According to a recent Arcus climate change survey of 2000 Canadians consumers and 1200 business leaders, consumers want honest claims that have a tangible and measurable impact on the environment. Consumers are catching up.

Business is not keeping pace with growing concern among consumers about climate change. Canada has one of the biggest shifts in consumer concern about global warming out of the G8 and OECD countries, an increase of 18% to an all time high of 31% in April 2007. The global average is 16%. Consumers are shifting toward more environmentally friendly alternatives, but market forces alone are unlikely enough to meet the challenge of climate change.

There are many instances where an “environmentally friendly” brand with a low revenue contribution in a brand portfolio becomes a “flagship” brand with a substantially larger share of the advertising budget. The phenomenon of “image transfer” across the entire portfolio is well known. According to the Arcus study, less than 5% of executives admit that their organizations monitor their overall carbon footprint and just 4% have a carbon reduction plan in place. Although these numbers look set to rise rapidly, nearly one-half of firms have no intention of implementing carbon-reduction plans within the next three years.

Why have a majority of marketers been slow to recognize the shift in consumer attitudes? Businesses are playing catch up. The Canadian Council of Chief Executives, 150 of Canada's top chief executive officers, released a declaration this week calling climate change “the most pressing and daunting issue” today, and acknowledging the need for “aggressive” action including “absolute” emission cuts. It's the clearest signal ever sent by a broad coalition of Canadian businesses that they embrace the fight against climate change and accept the need for emission cut targets.

Some industries have recognized this opportunity and translated it into profitable businesses. A global retailer recently mandated new packaging guidelines last year. The policy led to a cascade of policy changes among thousands of vendors. For example, the focus in retail has been on cutting greenhouse-gas emissions with fuel efficiency of truck fleets, reduction of solid waste from stores and increasing organic foods offerings by selling them at prices more affordable to the masses.

QR (Quick Response) Codes have been touted by many industry insiders as the next big thing North American marketers should be paying attention to. The 2D bar codes store data on QR-enabled mobile camera phones that can be translated and viewed directly on the phone, or transferred and decoded on home computers. They can also be deployed to help marketers cut down on paper use. They're already big in Japan, even popping up on flour bags to transmit recipes for busy moms.

Other industries have different perspectives on the problem. Resource intensive industries are concerned about power generation capacity. Consumer product and retail companies are concerned about regulatory impact of packaging and recycling. Transportation firms are concerned about carbon emissions legislation.

One thing is clear, business needs to address the issue head-on with a coordinated plan of voluntary and regulatory mechanisms to meet the expectations of consumers and the environment.

Video resumes are changing the face of recruiting

More and more, prospective employees are turning to online video services like YouTube in order to attract the attention of potential employers and placement agencies. A search for "Video Resume" returns 1,400 results on YouTube.

Most of the applicants are young, tech-savvy and ambitious. They range from humorous to professional, and from C-level executives to students. The variety is quickly expanding. These applicants have also been taking advantage of various Web 2.0 technologies that complement their efforts. Facebook, blogs, RSS, social bookmarking and other tools have all been used in order to obtain employment.

HirePatrickNow.com is a web site for a young Toronto man who's looking to expand his professional options. It's a simple letter of introduction that he sends to managers after having submitted his conventional resume to HR. Patrick's approach is simple, innovative and effective. Although still in its infancy, this practice is expected to become more common within the next few years. Experts have said that this could be most significant recruitment trend since the introduction of online Job search sites.

What about personal branding?

My firm had an opportunity to speak at the annual Investment Funds Industry of Canada (IFIC) Conference in early October. With a banking background, I was intrigued with the opportunity to share some of my firm’s insights on what makes for successful strategic branding in the financial sector.

To our delight, internal branding and employee engagement (a progressive area of brand management and a recent CMA White Paper) intrigued our audience enough so that a Director, from one of the major Canadian banks, later approached me requesting help to build a ‘personal branding seminar’. His Learning and Development Team had an upcoming financial advisor recognition conference and he wanted to expose seminar participants to the professional management tool that is ‘personal branding’.

This made me think, what is personal branding’s linkage to business branding? How does one distill the most impactful elements of business branding to a personal service level? The answer I have found is to not over think it but ‘make it real’ by adapting the most focused branding processes to an individual level. For example, just as companies will ensure their core strengths are aligned with the business brand, individuals must ensure their skills/strengths are aligned with their personal brand. This will help a personal brand be more relevant, actionable, and value adding to the business brand.

To ensure individual ‘personal brands’ are successful and relevant, there must be a support network in place for individuals to learn from each other. This can be accomplished in a follow-through session where they can share their successes and discuss their challenges together. This likely is a new professional development endeavor for many thus this support network will be very important to help ensure any ‘personal branding’ initiatives remain relevant and strong.

Have other fellow bloggers and readers had similar experiences with personalizing their business service offerings?

Award winning creative comes in many forms.

As we head into mid – November, the 2007 awards season is in full swing. Last month was the DMAs. Last week saw the CASSIES and Media Innovation awards. This week it's the "black tie" Canadian Marketing Awards.

If you think awards shows are a self-congratulatory love in, designed for the winners to slap themselves on the back and hug their creative team, you're missing the bigger picture. Yes, the shows are no doubt a party - part celebration and part reflection. However the best award shows fill an important role in our industry – to learn from best and brightest in marketing about what campaigns succeeded in breaking through the clutter and connecting with Canadians. And, as much as we can, understand why they succeeded so well.

It's a great feeling for marketing and advertising teams to be singled out for producing programs that achieved results. Being client side, I tend to measure campaign results first by increases in revenues or share points. Creatives, on the other hand, first tend to look at production values, emotional impact or how memorable their message was with its audience.

Naturally, there's tension that's created by looking at the same challenge from different perspectives. That's why in my opinion, a show needs to recognize both viewpoints in order to identify outstanding work.

Despite all the great work that has been, or about to be recognized this year, there's one category that consistently impresses by delivering focused and clear messaging that rarely fails to impress. I'm talking PSAs. If you asked me to name just three PSA campaigns that were standouts for me, I could easily remember six.

The Sick Kids “Believe” campaign featured children and babies fighting off the evils of cancer and disease, but only with our help (of course). Produced by JWT, it succeeded in generating $79 million in fiscal 2007.

The Stupid.ca TV spots and amazing website by Youthography, are in my opinion excellent examples of work that speaks directly to young people, not down to them. The list continues - Flick Off, United Way, Canadian Blood Services, work by DDB Canada, and my newest favourite PSA campaign by Participaction.

Even though in most cases, we’re being asked to open our wallets, we can’t help but listen intently and be moved by what is being said. Why is this work so powerful, so memorable? I have my theories....

1. Is it that the PSA message, almost always emotional and empathetic, taps into our humanity far more profoundly than the benefits of XYZ detergent ever could?

2. Is it that the work is done pro bono by an agency, so clients are more hands off, less meddlesome in the creative and copy writing process, so the essence of the idea isn't harmed?

3. Are PSA marketing briefs better written? Less muddy and more clear and concise, with objectives and approaches clearly laid out?

It's worth thinking about why so much PSAs end up winning awards every year. It's the best for specific reasons, not simply by chance. Perhaps the reason agencies clamour to work on PSA campaigns is for a chance to flex their creative muscles with the least amount of intrusion, and show the depth and power of their abilities. Persuasion at its purest and most powerful.

At this year's CMAs, creative now accounts for more of the judges' score. The new breakdown: 40% Results, 40% Creative and 20% Production. Show producers are promising a celebration of the science and the art of marketing – Results-driven as always, passionate about great creative work like never before.

Regardless of who and what is recognized, industry award shows raise the bar for creative and marketing innovation in Canada. So if you happen to be one of the lucky recipients of an award this year, make sure you give your creative director a big hug to show that you care.

Should the Big Agencies Dump their Creative Departments? Let's discuss...

Advertising in Canada hit its largest growth spurt in five years reaching, 7.2% in 2006*. And not surprising to those pulling the all-nighters, internet advertising increased by 42.6% just in the last year.

As the internet continues to be the largest growing advertising medium, I can't help but wonder where Canadian agencies will responsibly spend the projected two billion US dollars they have earmarked for online media yearly through by 2011*. We may see the value of the coveted big-box on Sympatico.MSN's landing page hit 150K on any given Tuesday, or perhaps we'll see the sponsored Facebook group hit a half million just for entry, but at a certain point internet advertisers are going to hit the same wall their mass-advertising brethren are hitting now. Budgets and awareness are not the problem. Credibility is.

The role of media continues to evolve into the future as does advertising continue on its trajectory towards an "opt-in" model. As digital media begins to consume all others and another generation of digital-savvy consumers enters the workforce, opt-in will be the norm. There are ways, however, of encouraging consumers to opt-in: provide value in doing so. That doesn't mean couponing or fancy flash graphics; it means sourcing real value for the consumer in a scale currently unidentified in relation to the projected spend of two billion dollars a year to 2011.

In order for this spend to be effective, we'll need to see a fundamental shift in the agency model. How crazy can it get? Well, here are some ideas I've overheard or discussed lately...

#1 Should the agency and client work on product innovation together?

Do you find it strange that product R&D on the client side and strategy/planning on the agency side are not the same department? Why wouldn't an innovation team charged with identifying the needs of the consumer be working with the people who are tasked with the job of communicating how those needs can be met? The coming together of these two sides must happen at the genesis of the needs assessment, not during the last few months before a product hits the shelves. In a more radical notion, shouldn't this also include the future creative department?

#2 Should Agencies Dump their Creative Departments?

What if the creative department was client-side and the agency simply dealt with planning, strategy and insights? Agencies rarely make money on creative anyway. For all that effort, the work they put in before the brief may actually be more effective if they didn't have to execute on it in the end.

In a strange world, this may actually work. Many people believe that smaller agencies have better creative departments, but I disagree. They just have fewer layers of approvals to get to client. In the big agency world, great creative gets to the client about 20% of the time, and the rest is squashed by an internal review process.

Discussions with creative peers across the country have confirmed this tragedy. Furthermore, I'd say only 5% of "great" creative makes it to production, but even then the idea is usually watered down by the client approval process.

That's why we rabidly email each other only about a dozen TV ads a year - the lucky few that make it through and are thus worth passing. Cut the agency out of it and you could see an 80% increase in creative quality. It's a strange new world and I don't know any world but this one.

Wait a minute... If you're going to move strategy, innovation and creative client-side, what need have you for the agency at all? That brings me to my next point.

#3 Should agency media departments thin out and spread out, just like their peers in media?

Will the role of the agency media department shift from charts filled with white boxes to outreach and understanding? Is the only thing the agency really offers the client a keen understanding of would-be buyers? Perhaps a deeper understanding of consumer needs could be the role of the media department; particularly if you're looking at social media - where being social is required. This can't be achieved from towers in the big three urban centres of Canada. This has to happen across the country, across multiple neighborhoods, cultures, ages and economic communities. The opt-in insights will come from the people themselves. That means bottom up, and you better be there to hear them.

We have about $6.3 billion* to spend by 2011 and figure it out. Let's do it wisely. We all deserve a future.

Of course, this is a blog, so you can't hold me to any of this when I completely agree with the comment or counterpoint you're about to make... but that's the point of discussion isn't it?

*source: PricewaterehouseCoopers' Global Entertainment and Media Outlook, 2007-11

A new way to advertise

On November 7th 2007, Mark Zuckerberg announced a "completely new way of advertising online" with Facebook Ads.

Facebook Ads allows organizations to create pages for their brand or product, and integrate into the social graph that is Facebook. People can become friends of the brand or product much the same way they become friends with each other. By aligning yourself with a brand in Facebook, you are telling all your friends that you recommend the brand. We all know the power of recommending a brand in viral marketing.

Focussed advertisements can then be customized to the person and show up on their Facebook home page as news feeds. Facebook has provided tools for marketers to see where their advertisements are and how they are doing within the social network.

Some powerful companies were on hand to assist in launching Facebook Ads including Blockbuster, CBS, Chase, The Coca-Cola Company, Microsoft, Sony Pictures Television.

On the first day over 100,000 new Facebook pages were published by organizations hoping to jump on the bandwagon.

So will this work? Certainly Microsoft thinks so. They recently invested $240 million dollars in Facebook. This seems like a great deal of money for an organization like Facebook since they only generate about $150 million in revenue at this point. The shock is that the $240 million dollars only gets them a 1.6% stake in Facebook. If Microsoft valued the company correctly, then Facebook is worth about $15 billion dollars.

If we follow the math, there are more than 50 million active users on Facebook as of November 2007 (and more than 250,000 new users per day). $15 billion divided by 50 million users is $300 per active Facebook member. I know it's much more complicated than this, but interesting all the same.

How big will this get? It could be very big since Mark Zuckerberg has surrounded himself with market leaders in launching Facebook Ads. Not bad for a guy who's only 23.

Social Advertising?

We are all familiar with the impact of word of mouth marketing. People are social creatures and they talk about brands all of the time. There is no greater influence than a recommendation from a friend. According to some studies, in one capacity or another, the average person may mention various brand names up to 50 times a day. Just think about it – how many times do you hear the brand “Starbucks” mentioned in your office each day?

Just yesterday, Facebook announced that in a twist on word of mouth marketing, they will sell ads that display people’s profile photos next to commercial messages that are shown to their friends about items they purchased or registered an opinion about. For example, if you rent a movie on Blockbuster.com, you can choose to broadcast your movie selection to all of your Facebook friends. The kicker – your friends can’t opt out of receiving that message from you. They are calling this “social advertising”.

According to Facebook, many of their 50 million active users already tell friends about products or brands that are special to them. The difference now is those communications will now include ad messages from brands.

From a marketer’s perspective, I’m incredibly excited. Marketers have been struggling with how to capitalize on social media for quite some time now. This would catapult social media into the marketing mix, blurring the line between traditional media and “new” media.

I appreciate how Facebook will allow consumers to be advocates for brands they love. Facebook believes this type of marketing would make the site feel less commercial because the marketing messages would be accompanied by comments from friends.

From a user’s perspective, I believe this will either be a huge success or will fail miserably. It will be successful if they do it right. Some suggestions for success are: allow the user the chance to opt out of receiving the message, provide promotional content with your marketing message and make the message beneficial to the consumer by providing them with added value.

Social advertising will fail miserably if the user feels she/he is blatantly being marketed to. They will begin to delete their friends who have signed up for the program and will eventually leave Facebook completely for the next hot social networking site (and I’m sure one will be along shortly).

This is a critical time for social media. Let’s see how Facebook paves the way.

I would love to hear your thoughts about this.

How we got here from there: A digital community mosaic

So here we are, in the head spinning world of the new Web. Concepts like You 2.0, social media, user generated content, the mobile web, virtual worlds….they’re enough to keep your head spinning like plates in a Russian circus.

Lately, I’ve been examining the digital landscape and asking myself “what’s next”, as any strategic marketer should. And it’s become plain to see that the future is very much tied to the past.

To understand where we are going, we need to truly comprehend how we got here to begin with.

So I began looking at major evolutions in the digital space that have truly impacted my life, as well as the marketing landscape. I’m thinking that if we can get a clear picture of the online innovations that humans (and Canadians) have truly embraced and engaged with, we will find the common thread of how we have developed as online citizens, and where this evolution is headed.

But I am just one lone voice in the Canadian digital landscape, and to truly envision our history towards trying to predict the future, I need your help.

What websites, applications, inventions, people, events, and content that made a difference in how you connected with people, behaved as a consumer, operated in your professional life or lived your life in general?

In a few words, submit your list as a comment to this post. If we all get involved, we should have a pretty clear picture of our digital “genealogy” as Canadians.

I’ve kept my list short, because it forced me to really try to pinpoint the factors that truly created a paradigm shift in how I live my life, online and offline

Here are mine:
* Netscape – my first web browser!
* Hotmail / MSN Chat – email for everyone
* Napster – changing the game on content distribution
* Google – information for all!
* Blackberry 7290

Can’t wait to read yours…

Is all the world a-Twitter?

...i'm hung over from the CMA's last night...(send)
... it’s warm in my bed...(send)
...i think i need new batteries for my camera...(send)
...I just paid my hydro bill. (send)
...is it ok to eat yoghurt after the sell by date?...(send)

No I haven't cut and pasted sentences from various emails into one incoherent paragraph, nor am I playing a thought association game. I'm demonstrating the art of Twitter. The New York Times calls it, "one of the fastest-growing phenomena on the Internet." TIME Magazine says, "Twitter is on its way to becoming the next killer app," and Newsweek noted that "Suddenly, it seems as though all the world's a-twitter."

Welcome to the art of Twitter - living in the moment and staying connected, Millennial style.

A new toy for the tech savvy Millennial.
Those of you following trends created by the current 'it' group of society, Millennials, you’ll know that when these guys do something en masse, marketing people tend to notice - even if it doesn’t amount to much. Millennials number around 90 million strong in North America, and include people born between 1980 and 1995. They’re also the most coddled, preened and fussed over generation in memory, raised by dotting parents who told them they were special every chance they could (or at least left them voice mails to that effect).

Millennials are also the most connected, tech savvy, gadget owning group in history, and have a strong emotional need to stay connected with friends and family. Twitter could only make sense to this generation.

Creating a running life narrative.
Twitter began as a research and development project inside Odeo, Inc. by Noah Glass and Jack Dorsey, and debuted in March 2006. Also called micro blogging, it’s based around a simple idea – what R U doing right now? In 140 characters or less, users send text messages or “Twitter” at regular intervals to a pre-screened list of friends about the events in their daily life, from the mundane to the magnificent.

“It’s like creating a running narrative about our lives,” says Evan Williams, co-founder of Twitter and Blogger. “In the beginning, bloggers were viewed with disdain (do they think their lives are so important to write about?), but as it moved mainstream, writing about oneself on My Space and Face Book became the norm. People are reacting in a similar way to Twitter, (do they think their lives are so important?) What we’re creating is an ambient intimacy with our network of friends that’s real, readable, and then gone.”

It’s the paradox of the Millennials’ need to feel close and connected to others, but at arm’s length that makes Twitter intriguing. It’s an easy, non committal way to keep tabs and staying emotionally close to our friends with low effort, risk and intrusion.

Next Steps.
Setting up a twitter account is easy and takes a few minutes - http://twitter.com
And there’s a handy Twitter guide that answers your questions.
The product team at Twitter is focussed on building a large following of users...with business models and revenue opportunities to follow. A Millennial said it best – “Some people may say that I think narrating my own life is crazy.... but for my own selfish reasons, it’s fairly natural to me.”

And said in 140 characters or less (136 to be exact).

What’s a good marketing plan without a domain name?

Marketers design campaigns around domain names, so the chosen name has to be available.
Even parents are registering their kids’ names as domain names.
Where can you check if a potential name is available?

The public database of domain name owners is the Whois database, which tells us who owns a particular domain, or at least a company that represents the domain name owner.

Trouble is that public access to the domain name owner database creates all kinds of problems.

In addition to searching to see if anyone else already has the domain, there are other, less constructive uses: Spammers send their e-mails to addresses they find on the whois directories. There may be direct marketers using the information to place cold calls or email solicitations (not that there is anything wrong with that). There is also an element of opportunism from the whois database: apparently there are ways to determine if anyone has searched the database for a particular name, and opportunists will park on the domain name in the hopes of selling it to the prospective owner.

In case you don’t know, unused domains names can be registered with InterNIC (and therefore reserved or “parked”), but the websites themselves are inactive.

The question is, should the ownership information be public?

Whether to continue to allow public access to the owner information was recently debated over at ICANN . No decision was made. The committee, the Generic Names Supporting Organization Council, decided to study the matter further. What kinds of studies are needed will be decided on February 15, 2008.

By the time the studies are complete, chances are the internet will solve the problem itself.

Balancing customer aquisition / nurturing retention

Recently I went through a customer experience that struck a cord with me as a consumer and also as a marketer.

As it happened, I recently made the decision to upgrade one of my household services to take advantage of the latest technology. Having earlier consolidated lots of business with my chosen service provider, I went into this purchase with high expectations for receiving my just recognition in the form of the best possible price. First step, I researched the product options on the web and made my selection. I then decided to call rather than visit a retail store in person believing it was the best way to be acknowledged for all my current business with this company – counter intuitive, as it may seem. Shortly after the conversation began the sales person told me the price I would need to pay for the upgrade. To my surprise the quoted price was more than double that advertised on the web and in the paper. When I probed the reason, I learned that “the lower price is for new customers only”. The sales person remained un-phased by my plea for a better price, so I decided to up the ante and threatened to cancel my service. It seemed unfortunate but I knew from experience – the squeaky wheel gets the oil. As I began speaking to a “customer save representative” (I thought to myself, why wasn’t the last person empowered to “save” my business), I launched into my spiel explaining why I deserved a better priced. As a client with considerable business I felt strongly that I should not only get the new customer price, but now I rather politely demanded an even better price or else. The rep left me on hold to see what she could do. After several minutes of silence later I received the good news that I would indeed get a lower price (than a new customer), and some additional savings I was not expecting. Customer saved and happy, soar ear and all.

As a marketer I can appreciate the challenge – develop compelling offers to attract new clients while profitably managing your existing client base. But how do we proactively ensure a positive customer experience for all, especially customers who’ve already put trust in a company. While I was willing to raise the bar with a threat to get what I wanted, how many others would have bailed after the first rejection? How can we empower those on our front lines to assess and reward deserving clients? It seems many companies can sometimes lose sight of nurturing existing customers at the expense of those who we do not yet know. As they say “the grass is not always greener on the other side.”

Louis Vuitton – Brand Shrine to Luxury

I have recently returned from Paris where I had the opportunity to visit the Louis Vuitton flagship store on Champs-Élysées. I was struck by the mix of customers and by the complexity of their Brand segmentation model.

There were older, more affluent, established, and status-driven customers mixing comfortably with younger, middle income, career oriented customers. Plus, there were the wanabe shoppers aspiring to the attributes and benefits of Vuitton. While all of these groups are different demographically, they all place a high degree of importance on Brand prestige or Brand value.

The Vuitton differentiation is both tangible and intangible with a focus on status, peer acceptance, and self esteem. Their positioning is clearly more for more. The Brand essence is all about luxury.

This newly renovated store is a temple/Brand shrine to the designer Marc Jacobs. Every effort is made to emphasis the luxury value of the merchandise. Many treated as if they were museum pieces; driving home the point that fashion—or at least Vuitton fashion—is as valuable as art.

Social Space - adding a new dimension

Seems both Google and Yahoo want to come to the social party and are looking to introduce new personalized home pages and email systems to allow us to form our own private social networks.

“Web-based e-mail systems already contain much of what Facebook calls the social graph — the connections between people. That’s why the social networks offer to import the e-mail address books of new users to jump-start their list of friends. Yahoo and Google realize that they have this information and can use it to build their own services that connect people to their contacts. “ Source NY Times: Inbox 2.0: Yahoo and Google to Turn E-Mail Into a Social Network

Yahoo’s reported plans include allowing users to have more control over the email stream by giving closer circle of friends more prominence in the emails and personalized home pages will have more options for incorporating social streams.

In the words of Yahoo’s Brad Garlinghouse, the missing ingredient are the personal profiles of its users so that those you are interacting with can click on one's name and see whatever information that person has chosen to make public.

These aren’t the only kids on the block looking to stake their territory in the space.
This list will direct you to several others approaching beta testing including both web email and outlook email applications.

http://blog.grouply.com/
http://www.emaildashboard.com/2007/11/inbox-20---emai.html
http://xoopit.com/
http://www.xobni.com/

As the space morphs – I think the eventual winners will keep 4 things foremost in their minds.

1. As users we want a consolidation of feeds and the flexibility to configure and reshape on the fly to meet our personal requirements whenever/wherever - in all media formats.

2. As content producers we want consistency across channels – write once send everywhere and control over who is able to see what.

3. As marketers we want to know everything we can about our customers and send them relevant offers …. and let’s never forget - brand communication.

4. As people we want respect and control over our personal level of privacy – otherwise the party is over.

Its that simple.

On your mark…Set…..GO!

Is Radiohead better at marketing or making music?

According to Nielsen SoundScan, retail sales of CDs in the US have fallen by 20% in 2007. Eighty-nine million CDs were sold in the first three months of this year compared with 112 million during the same period in 2006. Even the growth of digital music downloads failed to pick up the slack, with overall album sales dropping 10%. (SoundScan counts every 10 downloads as a "digital album.")

By contrast, individual song downloads are up 20% from the same period last year, to a record 288 million. Customers are exercising control over their media experience - cherry picking songs rather than downloading entire albums and being stuck with tunes that end up dragged directly to the recycle bin.

Singing the blues.
Arguably more than any other, the Music industry has been suffering from technology’s affect on their business model. From a splintering audience, increasingly complex distribution channels, free downloads, and reinterpretations and challenges of existing copyright law, music companies are frequently cut out of the transaction when music is swapped and traded. And some would say the industry has been slow to address this rapidly changing marketplace.

When heavy metal band Metallica heard a demo of their song “I Disappear,” circulating across Napster, even before it was released, the band quickly launched a lawsuit in 2000. The band won, Napster filed for bankruptcy protection in 2002 and was later acquired by Roxio, but the existing distribution channels and copyright laws were forever changed.

That’s why I listened closely to a promotion by the band Radiohead to promote their new record, “In Rainbows.” An industry first for a band this well known, they allowed people to set their own price for downloading it – from $0 to the sky’s the limit. People could pay whatever they thought it was worth. And Radiohead would watch to see what happened.

Why Radiohead?
Radiohead seemed to be the best case to test a ‘pay-what-you-can” approach. They have a large, loyal audience composed of educated, sophisticated listeners, the sort who may actually care a bit about the issue of how artists are compensated. Plus a reader survey in the British music magazine New Music Express asked fans how much they would pay – most said an average of $10. Not scientific but anecdotally it confirmed what they were already thinking.

Results so far.
According to ComScore, of the 1.2 million visitors to Radiohead’s “In Rainbows” website between October 1-29, 62% of customers who downloaded the album did so without paying – and 17% spent $4 or less. On a happier note, many of the payers, about 12%, paid between $8 and $12 per copy. This translated to an average $2.26 per download. Not great results if revenue is the only metric.

Interestingly, other music research done in this pay-what-you-can approach suggests fans are much more likely to pay less money for music from mega rich artists like J-Lo, Gwen, and Justin. They won’t miss it, right?

Lesson Learned - again.
For me, the Radiohead “pay-what-you-want” promotion succeeded in many ways if you look beyond just the revenue it generated - modest at best.

First, the approach generated millions of dollars in media coverage, far more than the label would probably have spent on promotion.

Second, the distribution model was less costly, meaning better gross margins with more money ending up in the band's pocket.

Third, in this age of digital downloads, trying new approaches and challenging old models, the 80/20 rule of marketing still seems to apply, for around 20% of Radiohead customers generated about 80% of the revenues.

A reassuring insight the next time a music executive (or any marketer for that matter) wants to try this approach again. Now that's a note worth sharing.

Mobile Best Practices: The Mobile Call-to-Action for Media Executions

A mobile marketing company should offer more than a technology infrastructure for executing and managing wireless applications. Because this is a relatively nascent form of marketing/communications the strategy and tactical execution are critical components to successful campaigns. Details matter! A good mobile provider will provide insight into the details that can make or break a mobile campaign. And since all campaigns begin with a media execution, I thought I would share some creative best practices

The prominence of the mobile call-to-action has an enormous impact on the results of a campaign. Here are some creative guidelines for Art Directors to consider when they are designing and producing POS, OOH, packaging, T.V. (including VOs) creative.

The two most important elements to a mobile call-to-action are:
1) What the consumer should send, like a “keyword” or PIN number – For example text MALIBU
2) The shortcode number - in the above example 212121

Placing emphasis on these two pieces of information will positively impact results.

Additional Guidelines:
•The keyword and shortcode must stand out from the rest of the copy. Designers must ensure they don't bury the call-to-action in ‘mouse print’ or results will suffer. Designers should consider reversing and bolding the keyword and shortcode number.
•If non-static media like T.V., Digital signage or Radio is used, producers and directors must ensure the keyword and shortcode number get enough airtime so consumers can act on it. Repetition never hurts.
•In cases where the shortcode number is a long string of continuous numbers like 777777, it’s best to have a space between the 3rd and 4th digit. A person’s memory works by grouping numbers in 3. Therefore 777 777 is more effective than 777777.
•The price point must be included in the execution. Most often brand-related mobile campaigns will include “Standard text-messaging rates apply”; it reinforces that the shortcode is NOT a premium rated code. Conversely, if the code is premium rated than the voice over and media execution must inform consumers of the price point in Canadian dollars. (for some odd reason the CWTA forces broadcasters and content owners to publish rates in Canadian currency, which seems very odd to me because no non-Canadian wireless subscriber would be able to interact with the shortcode anyway)
•A value exchange: why would people interact with the shortcode? Typically that value is: 1) a reward i.e. a chance to win something, 2) information, or 3) entertainment.
•Mobile phone imagery
•A tagline informing users how they can opt-out, for example “to end this subscription send the word STOP to the shortcode number.

Drop in a comment with thoughts on good mobile creative integration and share examples of executions that have caught your eye – the good, the bad and the ugly.

Peering Into the Marketing Crystal Ball Part II

In this post, I will discuss the first two of four key areas that together will challenge b-to-b marketing leaders in the upcoming year.

One: The Intersection of Metrics
What should we measure? This question, or some variation on its theme, dominates many of the interactions we have with our marketing clients. The heart of the answer lies in the theme of intersections; more specifically, the intersections that occur across the three core b-to-b outputs of reputation, demand creation and sales optimization/revenue. The intersection of reputation and demand creation largely focuses on influencer impact; it helps to seed the ground for demand to be created more effectively. The intersection of demand creation and sales optimization is all about the facilitation of the demand funnel from cold to close. The intersection between reputation and sales optimization focuses on message deployment, and the consistency and efficacy with which the field communicates your core value propositions about an organization. The fourth and final intersection brings all three outputs together to drive a mantra that should drive every b-to-b marketing