May 14th, 2006 by admin

Take a look a the following statistics courtesy of the Environmental News Network

• 51 percent of consumers have bought a product or service based on social or environmental considerations.
• More than 60 percent of consumers say they’d switch brands
  after receiving just one piece of negative communication from a
  pressure group.
• Most consumers fall into the SWET (shopper with ethics)
  category, but 60 percent feel they don’t have enough information on
  brands to make a decision.

May 13th, 2006 by admin

Any shoe, any color at the touch of a keyboard.  I remember the days when shopping was about discovery.  I would have a mental image of the product I wanted and would then scour the mall to find the perfect match.  Today, companies like Nike have put the power of design in the hands of the customer.  Now if you want a black Nike Shox Bomber with a safety orange swoosh, green pin striping, and red shox you no longer have to wait around for Nike to come up with this daring combination.  All you have to do is go to their website, customize the shoe, and send it off to be manufactured.

Why talk about about this?  A few days ago Jennifer Rice of Mantra Consulting rekindled a discussion in her blog on Co-Creation.  This article, combined with Martin Lindstrom’s analysis of Brand evolution got me thinking about why Co-Creation is such a powerful concept.

First, let me recap what Jennifer Rice and Martin Lindstrom have to say.

Jennifer writes,

There are different levels of co-creation; how far you take it
depends on your product and industry. Here are a few terrific examples
of deep co-creation:

1. Open-source software. No explanation needed.

2. Google’s new API for on-line ads. An article in eWeek reports:

"There are a lot of things Google hasn’t thought of that
people could do with their ad campaigns," said Nelson Minar, a Google
software engineer. "One of goals is to enable advertisers and third
parties to create tools for their own purposes."

3. Lego’s Lego Factory,
where kids design new Lego models using a Digital Designer and submit
them to competitions. This is a primary source of ideas for new Lego
products.

In each of these cases, no one made assumptions about what customers
wanted. Customers were brought directly into the process. In shallower
levels of co-creation, customers aren’t directly involved in designing
products… but companies still seek to understand customers’ mindsets,
desires and unmet needs.

Martin Lindstrom identifies what Jennifer Rice calls Co-Creation as one of the current states of branding on an evolutionary scale.

MSP - Me Selling Proposition
- Recently interactivity  and technological innovation "have seen
consumers taking ownership of the brands… Nike and Levi’s websites
offer to customize any of their models exactly to your need and size."

Why is co-creation such a powerful tool?  I’ll provide my top three reasons.

1. Today’s customers have become accustomed to customization.  Rarely does someone walk into Starbucks and just order a coffee.  Everyone has their own twist on that caffeinated drink.  Whether it be a half-caf black or a triple, venti, fat-free, no whip vanilla mocha each customer develops a coffee drink to their own specifications.
2. Customers are not a homogeneous pool.  They have unique needs.  The Ritz-Carlton has known this for quite some time.  If you have every spent time at a Ritz, then you know what I am talking about.  The Ritz keeps a huge database of each customer’s preferences.  The more you stay there, the more fine tuned it becomes.  The Ritz has found a way to allow each customer to co-create their experience at the hotel.  One customer might sleep on a down pillow and read a New York Times in the morning, while another sleeps on a firm pillow and reads the Walls Street Journal.
3. We operate in a a marketplace that is becoming more dynamic everyday.  It is impossible for an internal department to keep a pulse on the changing needs of the marketplace.  A few years ago, Hot Topic became the favorite store among cutting edge teenagers.  The store attributes its success to a rapid time to market supply-chain model.  In an age when teenage fads live and die in a matter of weeks, Hot Topic is able to get the merchandise on the floor while the fad is still hot.  Today, companies like Zazzle and Cafe Press have embraced co-creation.  These companies provide the clothing and allow their customers to upload artwork to modify it on the fly.  Where at one time T-shirts had to be orderd in bulk, it is now possible the order a single shirt and have it delivered in a matter of days.  Zazzle has taken the concept one step further.  They allow co-creation of other customer’s co-creation.  For example, Zazzle provides the clothing.  One customer might have uploaded the latest trendy expression along with a apt picture.  That design is now part of the Zazzle marketplace.  Another customer can then add to this design and modify it to her specifications.

May 12th, 2006 by admin

Thinking about going forward with a new keyword campaign?
Before you do, take note of a few sobering statistics courtesy of a debate recently aired on CNBC.

• Experts figure on-line ad revenues to be about $12.5 billion dollars.
• Of this 12.5 billion, Yahoo and Google reap the biggest share.
• The average keyword search term now costs $4.75
• Click Fraud at Google and Yahoo is estimated to be over 12%
• Industry wide click fraud makes up 13.7% of on-line ad revenue

Interested in learning more?  Here are some sources:

• CNBC Televised Debate (not really a debate; more of an expose)
• Click Forensics
• Wired Article - How Click Fraud Could Swallow the Internet
• Wilkepedia - Continually Updated Info

The problem critics have with click fraud is that it since it accounts for such a large percentage of on-line ad revenue, there is little or no incentive for company’s like Google or Yahoo to put an end to it.  Critics demand that a legal entity should force Yahoo and Google to regulate this matter.  I disagree.

While I agree that Click Fraud should be looked at and not be allowed to run rampant, I do not see the dire need to force regulation.  I believe in efficient market theory.  Click fraud is analogous to the old Pay Per View banner ads of the late nineties.  Pay per view Banner Ads used to be very expensive.  Now they cost very little.  Advertisers realized that a random banner ad generated very little ROI.  The same will be true for search sensitive keywords.  As soon as advertisers stop realizing a positive ROI on their keywords, they will pay less for them. 

Right now the the average keyword search term cost $4.75.  Is the price
too high?  Maybe so, maybe not.  Advertisizer’s revenue will determine
whether or not it is too high.  Nobody is forcing advertsers to pay
$4.75.  As soon Click Fraud begins to take a tangible bite out of revenue,
then the price of the search term will go down.  On the other hand, if an advertiser is making a great deal of money on those keywords so as to offset the 12% fraud rate, then that advertiser will view the fraud as the price of doing business and continue to bid up the keyword.

The efficient market theory rules Google and Yahoo as well.  As soon as Click Fraud takes a bite out of their revenue they will regulate it.  Google stands to achieve a huge competitive advantage if they can prove that their keywords have a significantly less fraud rate than their competitors.

May 11th, 2006 by admin

Last night, during dinner, I had a heated debate about customer-centric marketing.  I steadfastly maintained that you have to trust your customers, allow them into your marketing program and allow them to create your brand message. 

The other person did not disagree, but thought too much emphasis was placed on the customer and you have to allow everyone into the marketing department such as value added resellers, prospects, and consultants in order to get a complete picture.

Midway through the conversation, It occurred to me that our contention was a matter of semantics.  For the other person, the customer is a person who has purchased your product.  Strictly this is true.  The definition comes from sales. ie  Leads, prospects, customers, etc. 

I, however, take a more holistic view of the customer. 

For me, the customer is anyone who is not currently employed by the company who may or may not add revenue to the company through a future or past sale.  In short, it is everyone not on the company’s payroll.  Yes, there are different classes of customers, but it is wrong not to include people such as value added resellers (VARs) and non-users in the equation.  VARs have a direct impact on a company’s bottom line.  They had to be sold on the idea of becoming a VAR.  People who have chosen not to use your product or service should be put into the same class as customers.  At one time this person was a prospect.  A company stands to learn more from a someone who consciously chose not to make the purchase.   Even if that person choose the competitor because the sales person was charismatic, he will defend his purchase with tangible reasons why he did not go with you.  Likewise, your clients will often times have more to say about why they did not choose the competition than why they chose you.

If you want to take my holistic customer base definition to its logical demise, you might ask, "what about the grandma from Nebraska?  How can she better help me market my new nanotech solution to life science companies?"

My answer would be that for any holistic class you have members of varying degrees.  If you had all the money and time in the world, then go ahead and talk with the grandma in Nebraska.  She might provide fresh insight.  However, if your time and money is limited, then you are better off starting in the sweet spot with people your company has existing relationships with and then slowly radiate out.

May 10th, 2006 by admin

Aside from finding the Ex-Spot, what can the company do?  How about making a kick-ass product?

The brand builder Blog brings up this this point

For all this talk of WOM, WOMM, Marketing 2.0, consumer-generated
content, co-creation, customer experience design, and everything else
that we’ve been discussing here and on Corante, why don’t we take a
quick break and consider that:

- Positive WOM is simply the result of  your company doing things right.

May 9th, 2006 by admin

The current marketing tool du jour is word of mouth advertising, or as Pete Blackshaw calls it Consumer Generated Media (CGM).  Companies long for it, bloggers write about it, marketers talk about it, and a few lucky authors have even gotten rich writing about it.  However, no one has discovered a fail-safe formula for creating a successful word of mouth campaign. 

While far from fail-safe, Pete Blackshaw offers his 2 cents on how to boost your chances in an article he wrote for ClickZ.  The article revolves around two CGM campaigns, a successful one by Pete’s Coffee and Tea and a disastrous one by GM.  You can read the details here.

In the article , Pete identifies the ex-spot.  He writes,

The
ex-spot is that critical moment of experience that makes feedback and
word of mouth slide off your tongue like kids on a waterslide. It is
always well-timed; piggybacks on the great things we love about
products, services, and brands; and is never — I repeat, never –
forced.

A big
reason so many marketers fail in word-of-mouth marketing programs is
they embark on programs well outside the ex-spot. They push messages
that are out of context with the actual customer or brand experience.

Pete suggests four factors that help a word of mouth campaign to be successful

• In store:
  Plenty of great experiences are nurtured at either the retail location
  or the point of purchase. Imagine the number of shoppers at Target who
  would jump at the opportunity to advertise for the brand while actually
  shopping.
• At the feedback moment: It’s pretty clear consumer affairs is already an ex-spot for negative advertising, but there’s a huge, untapped opportunity to turn it into a more proactive advertising engine
  for positive testimonials or incremental behavior. There’s clear
  evidence the folks who give direct feedback also sing loudly on blogs
  and message boards. Media planers rarely touch this zone, almost as if
  consumers with megaphones have nothing to do with brand building.
• On the Web site: Web sites are increasingly an
  extension of brand experience, even in ostensibly low-involvement
  categories like consumer packaged goods. Whether through feedback
  forms, surveys, or well-placed programs, the ex-spot can be readily
  teed up via Web sites.
• In search: Certain keywords provide clarity as to
  what’s on consumers’ minds or whether they’re actual users of the
  products. These are also good times to tee up such opportunities to
  create favorable CGM. What’s important is the brand use the
  target-ability of search to get consumers quickly to the ex-spot.

The bottom line is that the stars have to be in alignment for CGM to work.  Call it an ex-spot if you want, but for CGM to work the customer has to be in the correct state of mind for it to happen.  Once again a common theme arises.  The customer is the one in control.

May 8th, 2006 by admin

Today, most people view freedom as an external event.  Take a look at the dictionary definitions.  They are all external:

1. The condition of being free of restraints.
2. The capacity to exercise choice; free will: We have the freedom to do as we please all afternoon.
3. Ease or facility of movement: loose sports clothing, giving the wearer freedom.
4. A right or the power to engage in certain actions without control or interference: