eCommerce

Surprise

Not many things surprise me after so many years in this business, but I have to admit, this did:

http://googlewebmastercentral.blogspot.com/2009/09/google-does-not-use-keywords-meta-tag.html

Since starting my own creative consultancy two years ago, I've written many websites for clients who think that key words actually matter. So you can imagine my surprise when I learned that Google doesn't use the "keywords" meta tag in their web search ranking. Obviously this isn't as earth-shattering as learning that cigarettes are bad for you or that Balloon Boy was a hoax, but it does raise an eyebrow given that Google hasn't exactly advertised this news. Thoughts?

Tell me I’m wrong!

The deeper we get into this cyclical (yes, Dorothy, there still is an economic cycle) recession, the more bleating I hear about changed paradigms, new economies, death of TV, death of print, and so on.

On friday afternoon I packed my brief case to go home for the weekend. I had trouble stuffing it full of the “dead medium” reading material that I receive just about every week (Marketing, Strategy, Contact Management, Applied Arts magazine, VUE (MRIA Magazine), Argyle (A lifestyle quarterly), Backbone (Business, Technology, Lifestyle), Driven (Fashion, Automobiles, Electronics, Fiction, Travel, Men’s Lifestyle), Report on Business Magazine, Midtown Post, not to mention three daily newspapers for Friday(I try to avoid the Sun on Friday). On Saturday around two hundred pages of newspaper landed on my doorstep (and I only read the Post and the Star on Saturday), and the list seems never to end.

Every one of these gems is supported to varying degrees by advertisers.

I watched the news on TV on Friday evening (twice, actually), 60 Minutes on Sunday, several Sunday Morning news shows, and, I confess, a rerun of Boston Legal on CITY. All of these are supported by advertisers. When I look out of my urban window I see, if it’s not snowing, billboards, superboards, backlit boards. All supported by advertisers. I took the subway to the movies last night and between the two I was barraged by more ads than I could count…I could go on forever, but I think you get the point.

New paradigm?

Talking of which, the Facebook site for “Advertising Week” in November, had, at its peak, 274 members: 4 news posts all describing the event; three posts to the “discussion board” all of them appearing to be ads for unrelated products and 7 posts on the wall, all of which seem to be shills posted by the organizers. The group was started at least two months ahead of the event. All of this, and Facebook is a social site, not a business site.

Which reminds me. The linked in site for the same event achieved 41 members, many of whom were speakers or presenters at the event.

If somebody doesn’t call the “experts” on their expertise soon, there will be seriously disruptive results. The marketing communication and persuasion industry is in the middle of a Tornado of cloudlike idiocy, propagated by people who should know better! So far, this has led to an obsession about measurement that will destroy strategic and advertising creativity, but not lead to any increase in business. Brand loyalty (in which, as you know, I hardly believe), or brand loyal-like behavior (in which I totally believe) will be reduced to short term bribery, and profitability and margins will be shot to hell. But mostly, we will all live in a dull, HTML driven world of bland pantone numbers, formulated letters making up “tested” sentences to "drive" immediate, "trackable", on-line behavior that matches the results predicted by the "modeling" programs..

Call me a Luddite, or anything else you want. But before you do that, prove to me that I’m wrong.

'Hey Billboard.....Say Cheese!'

Starting this month, US retailers will help consumers use their smartphones to experience Japanese-style point-and-shoot shopping. Luxury goods company Ralph Lauren is putting a bar code, called a QR (or Quick Response) in their company's store windows and on print ads and catalogues.

QR codes were created way back in 1994 and are widely used in Japan by millions of mobile phone users. They simply swipe their handsets over the codes on said media and are linked to websites with additional information and, of course - to shop.

In Europe, a company called BlueCasting offers a Bluetooth-based system to download video clips and music from codes printed on otherwise ordinary looking movie posters.

Ralph Lauren uses the technology, boasting it is the first US luxury goods manufacturer to offer it that links consumers directly to their website - no typing, no hassle. They alsy have a handy Q&A section on their website explaining how it works.

Retailers will no doubt be looking to see if the technology is driving incremental sales or merely offering up an alternative channel. I'm sure Bluecasting will have lots of interesting post holiday results to share.

In response to 'R.I.P. Monologue:' a Luddite Fights Back

In response to Selina Jane Eckersall’s unambiguous dismissal of all things not social-media, I can think of little to say other than,”Sorry.” (See “R.I.P. Monologue”)

Well, actually, that’s not true. I can think of a lot to say, but “sorry” seems a good place to start.

Sorry, for being one of those, presumably, “seemingly intelligent” marketing folks against whom Ms Eckersall rages. Sorry for needing to “get real.” And, most of all, sorry for Ms Eckersall herself who is so patently wrong.

It is wrong to say consumers are not interested in hearing “my monologue,” (but it is correct that they do not have to give me their time or mind share). Millions of people, many millions of people, in fact all people are faced with many, many monologenous messages every day, and respond to these messages in many, many different ways. I know that they are interested enough in what I say, that they give me give me enough of their “mind share” to be aware of my products and have an opinion about my brand.

What I find exciting, in my Luddite kind of way, is that many of these people are involved in social networking sites on their computers. They connect with friends and reach out (metaphorically) to the world around them, to become more interesting, more worldly people. Many of them use this fantastic facility to ask their friends (and even total strangers) for opinions about products and services they are thinking of buying. By capturing the opinions of 300 people who have experienced my product, these web savvy people become educated consumers. Social media is a wonderful way for all of us to learn about the products or services we are thinking of buying. A little bit like magazines, or newspaper articles or even talking to friends did in the old, old days. But, obviously more intense and apparently more credible, too.

So, I guess I see social media as one of many communication channels out there. But I don’t see how the existence of these channels makes people any more interested in my message. I don’t, for instance, believe that anybody wants to build a relationship, trust, converse with, listen to, share with, evolve along with, or collaborate with a brand. And just because the brand is trying to cajole people into doing all these things on a social networking site, does not make it any more attractive to “Canadians,” not even that small percentage of them who are active in social networking sites themselves.

Sorry, but the fact is that people will be interested in what you have to say if you have something interesting to say and say it in an engaging and appropriate way. It also makes sense to say it in a place (physical or virtual) where the people you are hoping will hear you, are within hearing range and in the right mood to listen to you. Sometimes a social networking environment makes a lot of sense. But, equally, the classified section in a newspaper often makes perfect sense. Shouting loudly through a megaphone also makes sense, sometimes.

To paraphrase Ms Eckersall , I can’t even count the numerous times I’ve heard seemingly intelligent marketing folks speaking about Social Media as if it were the only medium of any worth, and all other media are for Mad Men fossils living in black and white and eating Mrs. Cleavers cookies. Social Networking sites are one in an ever increasing range of alternatives to help consumers make intelligent choices.

But do not forget, consumers will use whatever media they want, and they hope they will be able to find out what they need to know from a wide range of alternative sources. And, most importantly, they really appreciate it when a brand introduces them to something wonderful by means of interesting, educational, and entertaining advertising (“$300,000 ad spends”, to be precise.) If there is any doubt about this, ask Apple, Virgin, WestJet, Guinness, and the list goes on.

How to make the most of seasonal e-marketing without alienating your international consumers

Christmas is usually a prosperous time for e-marketers. However, since the holiday season varies according to certain countries, those companies marketing in overseas countries ought to be aware of how to encourage the holiday spirit without exploiting overly West-centric Christmas imagery.

Below we’ll look at how the holiday season varies according to certain countries, and how best to incorporate this into an online Christmas marketing strategy for overseas markets.

China

Paper lanterns and tangerines are used as Christmas decorations in China. Though it is not an official national holiday, many Chinese enjoy getting into the ‘Christmas spirit’. The main “Spring Festival” takes place toward the end of January. It is a time when children receive new clothing and toys, ancestors are worshipped, and everyone eats luxurious meals. Red is often seen at Christmastime in China, because it is associated with celebration.

Brazil

South of the border, Christmas takes place in the dead of summer. For this reason, Papai Noel (Father Christmas) wears silk clothing. According to Brazilian tradition, Papai Noel lives in Greenland. In the Brazilian nativity scene, shepherds are replaced by shepherdesses and there is a gypsy who attempts to steal baby Jesus. Festivities go on in Brazil until January 6th, which is known as Three Kings Day.

Russia

The Russian orthodox Christmas is not celebrated until January 7th. St. Nicholas was the traditional Russian version of Santa Claus. He was, however, replaced during the Soviet regime due to the suppression of religion. The figure who took his place was Grandfather Frost, who is the Russian spirit of winter. Grandfather Frost brings gifts on New Year’s, which became a more celebrated holiday than Christmas.

India

Christmas Day in India is called 'Bada Din' (Big Day) in Hindi, and is a national holiday, celebrated very differently across the subcontinent. Christians in the south often light clay lamps on the rooftops and walls of their houses. Christians in the plains decorate mango or banana trees at Christmas time. Houses are decorated with mango leaves. Hectic shopping takes place as everyone buys new clothes and exchanges gifts for the Christmas festivals.

The Czech Republic

In the Czech Republic, the Santa Claus figure is known as Svaty Mikalas. He is believed to climb down to earth from heaven on a golden rope along with an angel and a whip-carrying devil. Many Czech children believe that baby Jesus brings Christmas gifts to them. Unlike Santa Claus, baby Jesus is a rather abstract figure with no particular physical image attached to him. He does, however, receive wish list letters from Czech children before Christmas.

Spain

The Spanish enjoy celebrations on Christmas Day, New Years, and Three Kings Day (January 6th). The Spanish believe that wearing red underwear on New Year’s Eve brings good luck. They also eat 12 grapes (one for each chime of the clock) at midnight, which they believe will start the year with happiness. Three Kings Day celebrates the Wise Men. Many Spanish children receive their presents on this day.

Germany

Many Germans believe that the Christ child appears as an angel called Christkind. German children leave letters for him on the windowsills. Christkind sends a messenger on Christmas Eve called Christkindl. Christkindl is a beautiful fair-haired girl with a shining crown of candles who pays a visit to each house carrying presents. Advent wreaths are put tables with candles in the centre. One candles is lit each Sunday, with the last one lit on Christmas Eve.

Iran

Christmas in Iran is called the Little Feast. A great fast is observed starting December 1st until the 25th, during which no meat, eggs, milk, or cheese is eaten. This is observed as a time peace and meditation, when church services are frequented. The boys and girls of Iran do not tend to believe in Santa Claus, and they do not usually exchange gifts at Christmas. However they do receive new clothes, which they wear during the Christmas week.

Internationalising your Christmas e-marketing strategy

If you want to take advantage of the ‘holiday spirit’ in your international customers, it’s a good strategy to incorporate their cultural holiday traditions. For example, a site aimed at Chinese customers could make good use of the colour red. Those targeting Brazil or Spain would do well to continue their Christmas marketing strategy until January 6th, while those targeting Russia might not even want to start their Christmas marketing until the beginning of January, keeping with the later date of Russia’s Christmas. German-targeted sites might incorporate the Christkind and Christkindl imagery.

There is, of course, much more to Christmas holiday traditions than the summaries incorporated into this article. Some further research into your target markets could reveal some key Christmas marketing tools.

Good luck and happy holidays from your global SEO friends at www.obanmultilingual.com

Your Website's Success - Beyond Online

In 3 simple steps to analyzing any online campaign, we ended the search for results with online conversion (sales, registrations or downloads -- whatever your objective), but the consumer's interaction with your brand does not end there.

It’s an alarming stat, if looked at on its own, that over 97% of visitors to your site do not end up buying online (if even 3% did buy, you'd actually be doing much better than the average eCommerce site). One barrier has always been the consumer's unwillingness to complete the transaction online whether it be due to security concerns, needing more information, needing to discuss with a spouse, etc…).

So instead of focusing on how to increase that 3%, put some effort into enabling the other 97% to purchase. One clear way is to breakdown the walls between channels and adopt a multichannel framework. Research has consistently shown that consumers “shop” across channels and the most profitable ones use multiple channels. So as marketers, we should make it easy to shop across channels, and more importantly, as online marketers, we should acknowledge that our hard work leads to much more than just 3% of the traffic.

Here are 4 strategies to spread your website's impact beyond online sales:

1. Unique 1-800 numbers: The easiest and fastest way. Place a unique, trackable 1-800 number at decision making points throughout your site. Then either through your regular call center metrics or by using services like Mongoose Metricshttp://mongoosemetrics.com/, you can track the number of leads and sales from that number.

2. Click-to-Talk or live chat services. Give your users the ability to connect with a customer service person by phone or online chat. Track the number of chat sessions and in-bound calls plus the sales and service requests resulting from them. There are many companies that provide such services, like LivePerson.

3. Call-me-back. Lunch hour represents one of the busiest times of day for traffic, but it's not necessarily the time when people are ready to make big decisions. Give them the ability to leave their number and arrange for someone to call them back at their preferred time. It gives a whole new meaning to telemarketers -- your phone call will actually be welcome in the evening. Track the out-bound calls, and sales and service requests resulting from them.

4. Store Locator. Most sites have one but may not be using it advantageously. Track the number of people who search for and get specific store locations -- there is a high likelihood they will visit. Allow them to book an appointment with an in-store associate -- you will likely get a customer who, having just researched on your site, is ready to make a decision and who may possibly be open to more than one product. Apple does this well with their OneToOne.

Now for those who are already doing the above and want to really explore the possibilities of measuring all offline impacts, Avinash Kaushik’s post does a great job at detailing other ideas and options.

The underdog makes a move

It's not often we hear about Microsoft being the underdog. Microsoft dominates with a 95% share of the operating system market, a 75% share of internet browser use and somewhere around a 95% share of the "Office Suite" market.

Of course, the big area that Microsoft does not dominate is in the paid search business. Google has a 69% share, Yahoo is at 15% and Microsoft is at 10%. We all know about Microsoft trying to buy Yahoo over the past 2 months. Microsoft saw an opportunity to increase their market share of this very profitable business to more than 25%. Still a far cry from Google's 69% share.

One of the biggest criticisms of Google's paid search is that you pay Google for every "click" regardless of whether the consumer buys or not. Ultimately it doesn't matter since Google is so dominant. You have to work with them whether you like it or not.

Microsoft recently announced a new paid search opportunity for consumers. Currently only available in the US, Microsoft will now be paying consumers to use their Live Search engine to buy products. When you search a product, you will have the choice of seeing online stores that have partnered with Microsoft. When you click on the link, you will see price comparisons as well as a percentage off of the price by purchasing through Live Search. In my test, discounts ranged from 3% to 9% for a Canon Digital Camera.

Will it work? Some think Microsoft's Live Search is far superior to Google's when it comes to products. Online retailers will like the idea of paying for purchases, not just for clicks.

Perhaps this will give a boost to the underdog in the online paid search war...

C-Level Marketing

It used to be critical for every marketer to understand and apply the 4 P's of marketing. They are Product, Price, Place (Distribution) and Promotion. Seems a bit out of sync these days given the new world of marketing and the evolution of consumer interaction in the digital space.

I'm not suggesting we forget about the 4 P's, not at all. However, I propose we move up the alphabet and expand out. I believe we are now faced with 7 C’s of Digital Marketing. They are Content, Community, Conversation, Creative, Campaigns, Conversion and Commerce.

All play a very significant role together in today's ever changing marketing landscape. As search, social media, social networks, online video, virtual worlds, widgets, mobile and a host of other areas and elements gain in popularity, marketers must continually reformulate the way they approach and engage their audience. Today context is vital along with utility and, to a certain degree, entertainment. And, we can't forget about measurement. The need to quantify the effectiveness of our efforts is greater today (and I'd argue more attainable) than ever before.

Understanding how the 7 C's overlap, intertwine and are used in combination is just as important as the foundation set with the 4 P's. Change is good.

Social Networks And Ad Spend - Should We Change What We Mean By Ad Spend?

eMarketer has reported $1.2 billion in projected advertising spend within social networks this year (an amazing 70% of money being spent is between MySpace and Facebook). As 37% of the US adult population and 70% of teens are frequenting social networking sites, it is a no-brainer that marketers and advertisers are keen to tap into these entities.

As more dollars shift to digital , eMarketer pegs total ad spend of $4 billion worldwide by 2011 against online social networks alone. Those are serious numbers. Naturally, the next question is "what will result from that spending in terms of effectiveness?"

My belief is that before we label social network marketing efforts as "ad spend", we should take a step back and see what is intended for those dollars and how they will be truly allocated. We know that Users do not want to be advertised to, so it may be misleading in terms of the investments marketers will make.

As I have previously written about over at The Client Side Blog and have recently read re:Chris Brogan's and Mack Collier's opinions, I wonder if we should begin segmenting our budgets to reflect "engagement spend" or "community spend" or "conversation spend"?

Outside of the online world we isolate budgets for sponsorship, local area marketing, community events etc.., all with unique objectives, goals and outcomes. So perhaps we should spend some time reviewing what we hope to achieve in social networks and take it from there. Lumping it all under advertising just sounds too easy.

The eMarketer study shows that brands see a huge opportunity to engage Users in social networks. My hope is that we are beginning to think beyond interruption and approach interaction as a platform. Marketers will have to challenge themselves to find the right balance of novelty, utility and relevance for todays consumers. Our best hope is that a good chunk of the "ad spend" goes to something other than ads.

Move Over Millennials - it's the 50-Plus set spending more online.

Being marketers, we’re constantly training our eyes on what’s next – new technologies affecting how to reach and interact with consumers. In recent times, there’s been lots of attention focused on the 15 – 24 year olds, the gadget savvy, text messaging set we call the ‘Millennials.’ Mostly due to their sheer size – around 80 million strong in North America, we’ve been watching and analyzing their every move, figuring out new ways to engage them with a 2 inch mobile phone screen. Today though, they don’t have high earning power yet, as many are still paying off student loans and getting their careers going. In fact, Millennials in some ways are an audience that holds promise but isn’t ready for prime time.

However one group emerging as an online powerhouse – wealthy, engaged, connected and spending big in travel, finance and electronics, you have to look no further than the heads of many households in Canada, according to ComScore Media Metrix and Statistics Canada. Say hello to mom and dad - the 50+ set!

It’s easy to overlook the influence older Canadians have on our economy, given our obsession with youth culture. Canada’s digital media universe increased 1 million to 23 million users in June 2007 compared to last year, according to ComScore Media Metrix Canada, with a large portion of growth coming from Canadians aged 50 or older. In fact, the average Canuck spends close to 43 hours a month online, burning through 4,000 page views – more than any other country in the world. And older Canadians use web services such as online banking at a higher percentage rate than Americans do.

What makes the 50+ target group such an attractive demographic for an advertiser isn’t just their size, although that is part of the reason as boomers account for almost a quarter of the entire population. It’s their spending power.

According to Statistics Canada, households with at least one member age 55 or older spent 71% of their incomes on discretionary purchases – or $144 billion annually, and are expected to grow to more than $215 billion in 10 years. Granted, older Canadians account for a relatively small portion of the total online universe (around 7%), but consider these recent insights on web usage from Ipsos Reid:

71% of 50-plus Canadians with home access to the web have a high speed connection and spend an average of 8.7 hours per week online.

50-plus Canadians spend a large portion of their online time on research type activities such as trip planning (47%), product purchases (40%) and comparison shopping (37%).

29+ of Canadians aged 50+ visited a social networking site in May 2006 compared to 8% in September 2006. This is mostly due to the influence of their children, using Face Book and the like to reconnect with family and old acquaintances.

The 50-plus Canadian consumer represents a large, diverse and growing segment of the online population. They like to comparison shop, need convenience purchases, shop for quality and most importantly have the time to spend looking for what they need.

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.

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

The Age Of Recommendation

It should not be any surprise that as consumers we believe each other. We are all in the game of consumerism together and trust opinions from people we believe to be just like ourselves. When you think about it, recommendations are likely what commerce was built right from the very start, so this is really nothing new.

However, what has happened on our watch is that the digital space has given rise of the voice of the individual and the ability for everyone to provide "word-of-mouse" testimonials. We have seen a rapid acceleration in terms of the abundance and availability of this kind of material more so than at any other time in history.

As Chris Anderson cites in his book The Long Tail - The New Economics of Culture and Commerce, "the trend watchers at Frog Design, a consultancy, see this as nothing less than an epochal shift":

We are leaving the Information Age and entering the Recommendation age. Today information is ridiculously easy to get; you practically trip over it on the street. Information gathering is no longer the issue - making smart decisions based on the information is now the trick... Recommendations serve as shortcuts through the thicket of information, just as my wine shop owner shortcuts me to obscure French wines to enjoy with pasta."

It makes perfect sense. And, so does the chart below showing that when it comes to CPG consumer product reviews posted on the Internet "virtually all shoppers now find them credible". They are an extremely influential part of the purchase decision - either positively or negatively.

Our opinions, tastes and degrees of satisfaction/dissatisfaction with anything and everything have now become navigation points that rise above any tag line or benefit statement we can muster up. The question marketers need to ask is how they are enabling the recommendation-factor for their brands and generating a collection of positive consumer generated content.

I believe there is no big secret on how to achieve this. It is as simple as creating something, be it a product or experience, that people will want to talk about, recommend and share with others. It all seems to fall into place from there.

CMA eMarketing Professional Certificate Course Starts In One Month.

Quick reminder that the fall semester of the Canadian Marketing Association's eMarketing Professional Certificate Course is just one month away.

I have taken on the responsibility of instructing the course from Ken Schafer of Tucows and have also revamped the course materials, updating the outstanding sessions originally crafted by Ken.

The course covers web site best practices, usability, social media, email, search, eCommerce, privacy, analytics and online advertising with practical examples, case studies and stimulating discussions over a 15 week period. Students will leave with a solid foundation of today's digital landscape and a superior marketing skill set in order to go forth and make their own mark in the growing medium.

It starts up September 26, 2007 and there are only a few spaces left. For those interested in taking a deep dive into the ever evolving world of digital marketing, don't delay.

Kick start your future with the CMA's eMarketing course. For more information, or to register for the course, please visit the CMA website. I hope to see you there.

UPDATE: I forgot to mention the course is available in Toronto and Montreal. Mitch Joel, and Dave Haber of Twist Image will be the course instructors in Montreal.

Are you going to Search Engine Strategies 2007?

If you are, you’ll be surrounded by new search technologies, hear ways to make your online marketing dollars work harder, meet smart techies – even find out how to build your ‘purple cow quotient.’

It’s a global conference that stops in Toronto June 12th and 13th at the Metro Toronto Convention Centre. This year sounds like a smart time investment judging by the conference lineup and list of exhibitors. In years past, SES attracted between 1,500 and 2,000 marketing types and business owners interested in brushing up their online marketing skills, networking with product managers and listening to technology innovations by industry leaders.

The conference itself is divided into three information tracks. The first – ‘Get me up to speed’ is an introduction to search marketing, optimization, key players in Canada, and how to identify online scams and performance myths. The second, ‘Let’s make some money’ covers monetization – there’s a website clinic, speakers who cover how to make cost effective online development decisions, and what skills we need in our online marketing tool kit. The third, ‘On the cutting edge’, discusses trends, innovations and new approaches in local search, paid listings and marketing to women online.

Of note is Track C (On the Cutting Edge) on Day 1 - Local Search: A Growth Industry. Leaders in the local search space including YellowPages.ca, Google and ZipLocal offer their update on the state of the art, explore chicken-egg frustrations, and attempt to glimpse into the future direction of local search. The moderator is Anne Kennedy, Managing Partner from Beyond Ink with speakers from Yahoo! Canada, ZipLocal and Darby Sieben, Senior Manager of traffic and distribution from YellowPages.ca. On Day 2, Microsoft showcases their much talked about new online advertising solution. The keynote address on Wednesday is entrepreneur and change agent Seth Godin, author of The Dip.

Make sure you spend time on the show floor too. Arguably this is where your investment really pays off. You’ll be able to meet with developers and product teams who work on search and optimization products everyday. These folks have an intimate knowledge of how the tools function and can showcase competitive differences between providers. Plus they offer unique and well thought perspectives on the online search industry as a whole. It’s a rare opportunity to get up close to the technology and the people who build it, have a personal demonstration and ask lots of questions relating to your specific business situation.

The Search Engine Strategies 2007 Conference & Expo is at the Metro Toronto Convention Centre (Front Street) June 12th and 13th. To register, visit http://www.searchenginestrategies.com/sew/toronto07