Customer Experience Crossroads

Are you building customer equity with cross selling? Or damaging it?

"A marketing tactic that boosts sales in the short term can have a negative effect on customer lifetime value." ^*

I heard a great story today that highlights this issue brilliantly.

A bank customer got a replacement credit card in the mail, with instructions to call to activate the card. After working through the automated process, the customer was asked to "hold for an agent". So they did hold. And hold, and hold, for quite a while.

When the agent came on the line, they said they wanted to tell the customer about their balance protection insurance. The customer said: 'This is a sales pitch!'. 'No, no, this isn't a sales pitch', claimed the bank employee. Customer indicated all he wanted to do was activate the card. Employee advised that the card was active after the automated procedure was complete.

This little interaction damaged customer equity, didn't it? It's so obvious. And easy to fix.
Either stop doing it altogether, or tell the customer in the recording, "Your card is now active. If you would like to hear about balance protection insurance, please stay on the line for an agent".

Holding your busy customers hostage like this is just dumb.

Had a good experience recently? Or a bad one? Send us your story. We'll publish a selection of the best ones.

Resources

* Marketing When Customer Equity Matters. by Hanssens, Dominique M, Daniel Thorpe and Carl Finkbeiner. Harvard Business Review, May 2008

Using social media: focus on the message, and bridge new and old

I've been very interested in marketer and author Christine Whittemore's approach to social media in the carpet industry, a space not necessarily well known for innovative marketing. She graciously agreed to answer some questions about the  two business blogs she is now responsible for. In this second article in the series, (read the first one here), we'll focus on how she keeps the target audience engaged, and metrics for success.

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Focus on the message and bridge the new and the old

Ms. Whittemore believes that the relative ease of using social media tools -- versus traditional marketing communications -- allows the marketer to “focus on your message from the beginning", rather than the mechanics of delivery. But there are no quick results.

“Regardless of your industry, you still have to start from scratch to build your credibility, reputation, trustworthiness and your voice - one post at a time. And, then, you have to find ways to cross-merchandise your posts by bridging new and old forms of communication.”  Among the methods Ms. Whittemore uses to do this cross-merchandising: sending out press releases about the blog, mentioning it at presentations, and listing the blog address on a business card to hand out.

Marketers need to be prepared for ongoing learning. “I’ve heard it said that there’s no such thing as a social media expert because we are constantly learning and figuring out new approaches to what we are doing", she says."It takes time to internalize what works, and it’s easy to miss the obvious.”

As an observer, I can see a very consistent and significant effort to cross-link to previously published posts, and to engage other bloggers with comments, shout-outs and links to related content. It's an impressive effort, and really highlights that this sort of initiative requires real resourcing and time commitment if it is going to work.

The personal rewards: clear thinking and disciplined process

When people ask me about my own blogging experience, one of the things I always tell them is that my writing has improved enormously. This is Ms. Whittemore's view as well.

"Becoming successful in this environment has definitely been a stretch." She is now responsible for 3 blogs (Flooring the Consumer -- the trade blog, Carpetology -- the consumer blog, and a personal blog about her community -- The Smokerise Blog).

She publishes two to three times a week on the business blogs, in addition to writing trade articles, press releases, website updates and presentations. “Although I enjoy the written word, I never considered myself a writer.  I do now!” 

She finds the glut of information a marketer needs to deal now with a challenge to process, and hopes that the writing discipline will help with that. “I’m hoping that it will also force me to process information more quickly as it’s hard to keep up with and share the wisdom that is available.”

Engage your target audience with relevant stories

Ms. Whittemore has found that ideas, stories and examples need to be very relevant to the audience, and not too abstract. The blog needs to communicate with passion and relate to the retail experience, whether it’s in flooring or not.

While this sounds simple enough, a quick read of her blogs shows the effort that goes into this. For example, the January 12 Flooring story was about holiday store windows, and links to three other articles about store windows, complete with images, and highlights the web sites of some of the most interesting ones, such as ABC Carpet and Home, and Bergdorf Goodman. Like all the articles in this blog, there is a highly personal tone -- she explains why she doesn't have more of her own pictures of windows due to family commitments over the holidays -- and a veritable link-fest of connections to relevant content, pictures and even embedded videos.

An example of the consumer oriented content is shown in the image above, taken from the December 12 post on Carpetology. The carpet-buying sheet is a consumer-oriented one page sheet that outlines useful tips for buyers, such as keeping a sample of the installed carpet to support warranty claims. This is the sort of material that is usually buried deep inside the corporate website, and probably doesn't reach nearly as many people as it might located inside social media. The blog posting goes on to talk about how all vacuums are not the same -- "beware the beater bar!" Practical, relevant advice.

Ms. Whittemore believes the challenge now is to find ways to connect online and offline effectively. “There’s so much rich and relevant content available online that all can and should benefit from. It’s up to us as marketers to figure out how to engage those offline conversations … and make it part of the rich online discussion.  Otherwise, we’re just talking amongst ourselves.”

This theme is the topic of a new social media initiative called Bridging Old/New, “that I hope you will participate in.” [Yikes!]

Measurement and impact: tie it to the business objectives

Many bloggers are free agents of some sort, and pretty much in control of where they spend their time. We may want results, but no one is looking over our shoulder and asking the question. An employee spending this kind of time on social media is going to have to justify it for at least one stakeholder. I was curious how Ms. Whittemore is doing that.

“The beauty of this digital medium” she said, “is that there are all kinds of measures available: visitors, pageviews, subscribers, bounce rate, time on page, comments, and more.” It all depends on the purpose of the blog. Which is why her measures vary across the blogs.This is truly one of the smartest things I have yet heard spoken on the topic of social media measurement: to have objectives, and link your measurement to the objectives.

“For Flooring The Consumer, I monitor subscribers over time, comments both online and offline (I get many offline or email comments), and whether posts lead to other conversations.

“For the Carpetology Blog, I monitor overall traffic and which terms visitors have searched on, whether they have come from or go to the Wear-Dated website (http://weardated.com), and key word rankings. 

“And then, I look to see whether traffic I refer to the website is better qualified and stays longer than traffic coming from other sources. The Carpetology Blog was launched at the end of December 2007; and we redesigned the WearDated.com website on June 1, 2008.  Although it’s still early, it’s exciting to be noticing improved results!”

External recognition is always nice, though, so Carpetology was submitted to the Forrester 2008 Groundswell Awards. The submission required quantification of the value of the blog, which Ms. Whittemore kindly shared with all of her readers in a post on the Flooring site. Note that the application was for the consumer site, but the sharing was on the trade site, a neat trick that continues to support the advocacy mission with retailers. Ms. Whittemore reports that that particular article generated some great feedback from readers. The site now also has a very short pop-up survey to gather feedback from readers. Few angles are missed here.

Focus on value for audience, not measures

Despite having a good measurement strategy for her own initiatives, Ms. Whittemore cautions that measures are built over time, and there are no quick fixes. “You will NOT see sustainable radical day to day changes across any of these measures.  For improvement, you will need to show up day after day and produce authentic, relevant and valuable content. So, don’t fixate on the measures; better to focus on your audience and how to create value for them.”

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The third and final article in this interview series will be about the lessons learned from this work, and Ms.Whittemore's view of trends.

Using social media in a traditional industry: Flooring the Consumer Blog

A lot of businesses still struggle with how to use social media effectively to communicate with their end consumers. They don’t see their company or their industry as high tech, or sexy, or particularly cutting edge – in short, they just don’t see the fit of social media for their situation. Manufacturers and wholesalers of consumer durables might well consider themselves in this situation. Take carpeting for instance. I can't remember when I have seen this industry featured in a marketing magazine.

This is why I have been fascinated with the success Christine Whittemore of Solutia has had with her personal business blog, Flooring the Consumer, and have been keen to ask her a few questions.

Ms. Whittemore agrees the carpet marketing environment is traditional. “It’s not high-tech, and not promoted as high-touch – even though carpet engages the senses more than many home products.” Far from being cutting edge in retailing or marketing, price is often a more dominant feature than fashion or design in messaging.

So carpeting is a market few would see as ripe territory for new media.Stay tuned as we find out more about bringing social media to the marketing of a carpet manufacturer.

Seriously good statistics

Flooring the Consumer was launched in June 2006, and is now ranked as #108 on the Ad Age top marketing blogs, and has over 800 subscribers. These are seriously good statistics for a blog of this type.

More importantly, as you'll see in the coming posts, the blog is achieving business results. Ms. Whittemore is the Director for In-Store Innovation for the Wear-Dated carpet fiber division of Solutia, a $3.8 Billion company with 6000 employees. The company manufactures nylon fibers that go into residential carpet. Her work involves training, presentations, and thought leadership at retail for the flooring industry.

Below, authors of the Carpetology blog. The same team "elf themselves" at the Office Max site.

Born out of frustration with traditional marketing

The blog was born out of Ms. Whittemore’s frustration with traditional marketing to achieve her business objectives. “I had been flirting with the notion of a blog -- actively for 9 months prior to taking that step -- because I was so frustrated with traditional marketing, had things to share with my audience of flooring retailers and retail salespeople, and couldn’t get published fast enough and frequently enough by the trade press.”

In addition to this challenge, there was minimal budget for a traditional newsletter, and she felt these had become “inefficient” as a communication tool in any event.

After attending a Columbia Business School conference on marketing innovation, Ms. Whittemore says she realized “most of the people in the room not only blogged, but were also cutting edge marketers…  and true innovators.” She took her content ideas and her sense of urgency to work, and the blog was born.

About consumers and retailing, not just carpeting

There are now three blogs as well as a Twitter feed, and Facebook activity. The blogs each have a distinct audience. Flooring the Consumer is targeted to the trade, and addresses topics such as marketing to women, the retail experience and consumers in general.

Carpetology, launched in December 2007, is a consumer blog about all things carpet.

The third blog, The Smoke Rise Blog, is a community-oriented, more personal blog.

While the consumers are online, not all the retailers are. There are retailers keen to reinvent the experience, however, and these are the ones that Flooring the Consumer reaches, and that keep the author motivated.

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Next up: how to keep people engaged with relevant content, and how to measure success.

Don't panic and do anything dumb: and do filter your lists

I want to give you a smile in these bleak times when doom and gloom are everywhere -- in the skies, and in the papers.

So I've got something amazing to show you. Check out the image of the direct mail piece below. Notice anything odd?

Now this is clearly a product targeted to women. That would be, for the most part, names with an honorific like Mrs., Miss or Ms. Not the Mr. that it was addressed to.

Conditions are challenging for marketers everywhere. These are times that call for original thinking, and often, for stepping back and maybe not doing what everyone else is doing.

And while you are at it, you should ensure you are spending those scarce marketing dollars in the most effective way. [Hint: clean those e-mail lists.]

Customer managed experience: Facebook lets you vote on ads

The great promise of the web to let customers manage their own experience has only started to happen. But I saw a bright light emerge on Facebook. There are little "thumbs up", "thumbs down" symbols, as well as a "next ad" symbol under each right column advertisement. So you can start to influence what kind of advertising messages you see.

I love it. What a great idea!

I've written about customer managed relationships before. We are still a very long way from this ideal. But this is the kind of direction we need to see, and will see eventually.

Virtual sampling lets you try before you buy

Miro Slodki pointed me to this interesting development from Cathay Pacific: a 3d virtual environment that lets you try out their cabins.

I thought the demo would only show me the luxury cabins. But brilliantly, it lets you experience all classes of travel, from economy to first. You can walk around on your own, take a tour, or watch an avatar take your place as you. It's pretty engaging (and certainly makes me want to fly Cathay Pacific!)

And of course doing something like this has amazing viral value. I'm not sitting here writing about another luxury airline, am I?

Engagement on steroids: Doritos grabbed me with their Quest

Browsing a blog today, I saw an ad for what I thought must be a new adventure game reality TV show: The Quest.

Turns out it is a very cool creation of the Doritos people. You simply have to start by looking at this engaging landing page, which has several interactive elements.

I've been addicted to Nacho Cheese Doritos for years, but I guess I've been too busy wolfing the stuff down to notice their cool new marketing. This thing really caught me in my Riven and Syberia soft spot, so I clicked around.

The Quest turns out to be a contest with puzzles, not unlike the PC games mentioned above. The contest builds to a finale with a $100,000 prize.

Fortunately, they gave me hints to help me with the first puzzle, because I only ever pick up the nacho cheese, and had no idea of the bizarre flavors now available.

Pretty cool stuff, this.

Good games of this type provide frequent reinforcement [not unlike gaming machines] to keep you wanting more. Talk about sticky applications -- if you want me this weekend, I'll probably still be working on the next puzzle.

My take

Makes me wonder, once again, why some sites have to be so dull and boring. Granted, this is a snack food. But I keep wondering what a creative bank could do with this kind of thing. Or any kind of online training.

The ugly dark side of permission marketing

Permission marketing was thought to be the salvation to getting connected to customers, and simultaneously getting control of spam. Well, we're experiencing it now, and it has some nasty side effects.

Here's one that I seem to be experiencing several times a week, and maybe you are too. [Or maybe you are in charge of a program like this, and just never gave it any thought.]

The bad old way:
[1] We got your address and just sent you stuff, like it or not
[2] Once we got your e-mail address, we just sent you stuff electronically, like it or not

The even worse new way:
[1] We call you to check if we can send you stuff. This is important, since we don't want to be spammers. We only want to send out material when we have your permission.
[2] If you agree, we ask you to confirm all your details, including e-mail. We may ask you a few other qualifying questions about your company. Don't worry that you're not getting any information here, it's all going to be in the informative attachment.
[3] We send you some e-mail -- usually it has an attachment that is a PDF file of a PowerPoint or a brochure.
[4] We call back later to enquire if you have read it. You did give us permission to send it. Is there some reason you haven't read it?
[5] If you haven't had time to read it, that's okay, we'll diarize to call you again.
[6] Still haven't read it? No problem, we'll keep calling.

What's the problem here:
Most of these programs are run by people who have no ability to answer questions about the company or its services. If they are salespeople, they don't want to take the time.

If you ask them questions, they tell you that the information is contained in the PDF, if you would just agree to let them send it to you.They would really like you to read it first, and THEN call with your questions.

Typically, these organizations know totally nothing about the company they are calling. [That would be me, my company. Or you and your company. They haven't read our web site. They haven't read our directory listings. They haven't read your stuff either. They have invested nothing so far.]

Even if I tell them I'm not interested because we don't do that type of work, they want to send me stuff anyway. And they call back anyway. They think my needs might change in future, and they would like permission to keep in touch.

Someone, somewhere, thinks this is good direct marketing. I hope you're not one of them.

Go back to the past to find the future -- find a real sales person:

Here's the thing. My boutique organization is getting two to three calls like this each week, and on rough weeks, two to three calls like this a day. I'm starting to not take calls from numbers I don't recognize. Just how much traction do you think you can get from this approach?

Real sales people talk to prospects. They don't waste their time talking to non-prospects. And they do this quickly and politely. I've encountered a few -- they are out there, and you can hire them if you look. They are worth their weight in mailing lists.

Before you embark on a program like this, ask yourself why anyone should invest any time at all reading about your company if you haven't invested in reading about theirs.

Buzz marketing: what it's like to be paid to buzz

A great little article showed up today in a sample magazine, describing the experiences of author Bonnie Staring as she tried being paid to buzz about products.

It dealt with a question I'd been wondering about for a while, namely, what is it like to be part of one of these paid networks of influencers?

Initially, it feels kind of cool getting new stuff, especially a toothbrush that she really liked herself. But later, she thinks she may be overdoing it with people.

Some of my closest friends have asked me to stop talking about the fall shows. And the toothbrush. And the vacation-planning website... They didn't need "the sell", they said (although they were happy to take the coupons and free samples). Huh. I hadn't thought of what I was doing as selling. I was just sharing my opinion, wasn't I? I asked my husband. "But before, you used to wait for someone to ask for it," he answered.

The author concludes that she is not really enough of a trend-setter to enjoy this type of thing, and that overall, she was "trying too hard".

One thing I learned that I did not know before is that legitimate word-of-mouth (WOM to insiders) networks insist that their agents disclose their participation in a paid network. Sean Moffitt, a WOM expert interviewed for the article says transparency is essential to avoid a very negative backlash to the brand.

Resources:
Word of Mouth Marketing: Smart or Sneaky? Homemakers Magazine, April 2008
Bonnie Staring's blog
Sean Moffitt's blog -- Sean is our local buzz marketing guru, and the founder of the Influencers network

Marketing savvy consumers and what this means for marketing

I was cleaning six months of paper out of the office last weekend. Predictably, after a few hours of energetic tossing out, recycling, and crisp decision-making, I started to drift, re-reading this and that, shifting paper from place to place. [But also ... uncovering things worth sharing!]

I heard Chris Barnham speak at the QRCA conference last October. I had a few notes on this presentation that seem worth sharing.

[1] the consumer has become more sophisticated. They see brand owner "intentionality" everywhere. And they want to know what the brand's agenda is

[2] consumers may like the brand but distrust the marketing

[3] the brand and the brand owner are no longer the same thing. the brand owner has become a force behind the brand with an agenda of its own

[4] when the brand owner is not synonymous with the brand, the brand is not a vehicle for the owner's message, it is the thing that is being experienced. The brand is a repository for meaning. A wonderful analogy to explain this: the brand is to the company as the novel is to the author. We see the connection, but we don't see them as the same. We experience the brand as text on its own. Another analogy: Macbeth is not just a story about witches, it has much more richness than that.

[5] this situation makes the whole awareness --> interest --> decision --> action model of advertising / brand communications pretty unhelpful in unpacking what is going on with a brand, and a consumers relationship to a brand

[6] the brand is instantiating the values and meaning of the brand essence.

[7] the reality of the brand is in the mind of the reader, the watcher, the experiencer.

Mr. Barnham made reference to G.P.Radford, and his book, "On the Philosophy of Communication". Radford says that before the 17th century, the word communication is more about sharing, participation and association. Our notion of the word communication implying transmission of a message is relatively new. We went from the notion of sharing an idea to the notion of conveying an idea.

In the new world of branding, this old notion of communication is back. The one being communicated with is in communion with the sender -- in fact, both are sharing the creation of the idea. [Co-creation anyone?]

So, where does that leave us?

According to Mr. Barnham, if the brand is the manifestation rather than the sender of the message...

Then marketing activity becomes the actualization of brand essence ...

And brand communication needs to refocus on 'sharing' rather than 'sending'.

More practically, when we are conducting research, we may be going down the wrong path if we ask what a brand is saying. We should ask how a brand is being.

These are biggish ideas, with heavy duty implications. 

Also learned from this presentation:

[8] red type on a purple background is practically invisible. But the message was so good I stayed with it.

You know advertising is hot when it's displacing IT among IT research houses

I always thought of Forrester as an IT-oriented research house. And then they were on stuff like supply chains and outsourcing. However, they are now getting talked about for their thought pieces on where advertising agencies are going.

This suggests two things to me:

1. Forrester is good at figuring out what's hot
2. Marketing, advertising, and brand building are hotter than they have ever been, but also under more scrutiny than ever.

I have other evidence of this trend.

The Globe and Mail, my daily must-read newspaper, never deemed marketing topics worthy of business coverage. [Well, any kind of coverage, actually.]  Not long ago -- within the last 18 months for sure -- they have added regular material on this topic. It's thin, but it's there.

Friday, I heard Terry O'Reilly speak at a conference on qualitative research. Mr.O' Reilly is a regular feature on CBC radio, and known for his expertise in advertising, as both a creator and a commentator. Here's one of the notable things he said on the topic of insight and advertising:

"Creative ideas born of intuition are the last legal means of gaining a competitive advantage over your competition."

I thought this was a) brilliant, and b) true.   

Forrester seems to think that advertising agencies are not helping marketing people connect with consumers and customers in a meaningful way. This is the summary of their recent research report, The Connected Agency: Partner With An Agency That Listens Instead of Shouts

"Today's agencies fail to help marketers engage with consumers, who, as a result, are becoming less brand-loyal and more trusting of each other. To turn the tide, marketers will move to the Connected Agency — one that shifts: from making messages to nurturing consumer connections; from delivering push to creating pull interactions; and from orchestrating campaigns to facilitating conversations. Over the next five years, traditional agencies will make this shift; they will start by connecting with consumer communities and will eventually become an integral part of them."

I have not read the whole report, but I am having trouble seeing this as news. And it's far too easy to just blame the agencies, who are under tremendous pressure to deliver results these days. But they can only do what they get a mandate and a budget to do from the marketing people. Surely marketers themselves must take responsibility for connecting with consumers.

And so must executives.

Being in the insight and intuition business myself, I can only agree with Mr. O' Reilly: we need better strategies. We need insights. We need innovation in marketing and advertising.

At the same conference where Mr. O' Reilly was a headliner, I presented with a client a case study on some innovative research we did together. When we got to the Q&A, the biggest question that came up -- which we brainstormed as a group -- was HOW to convince executives to do something less conventional than a focus group or a survey.

These researchers and marketers -- they want to deliver innovation, they want to deliver category-changing insight, but feel challenged to sell it into the organization.

We came up with a flip-chart full of ideas of how to do this. Things like: start small, start with intractable problems where there is motivation to try something different, and so on.

But as one of the research buyers said, "We want innovation, we want to do something new, and we want amazing insights, but we only want it once it's been done before. How do you sell this into the organization?"

Of course, we on the practitioner side have another challenge. Having promised these category-changing insights, we need to stand and deliver.

I only wish these insights that can change the landscape could be produced on demand. [I'll be hunting for a good one this week, wish me luck.]

How creative takes a key driver and works it

Fabulous article here by Joseph Carrabis, called Men and Women in General. He's talking about how to sell to couples. But it is also a lovely illustration of how you take an insight and translate it into compelling communication. 

This is often a challenge for clients, because enormous subtlety is involved. You can't just take the insight and translate literally.

Couples and jewelry

In this article, Mr. Carrabis give us some insights about couples: couples are comfortable and relaxed when they are touching.

"All humans -- regardless of language, culture, education, vocation and avocation -- carry with them a sense of personal space.

"People touch when they're comfortable with each other, and the degree of comfort is shown in shared body postures, shared eye focus, shared facial expressions and so on."

He gives us a second bit of insight, related to the jewelry category; a gift of expensive jewelry signifies possession more than our modern concept of love.  It relates to the ability to provide abundance for another person.

Then he suggests how to translate these insights into compelling creative.

You visually show the touching, the circle of closeness between two people, their emotional connection. And you show the jewelry right beside those touching hands. The jewelry is part of the emotional closeness. He has three images that illustrate the idea.

Couples and travel

I wanted to see how this insight might translate to another category. So I looked for other products that target couples. Sandals, the couples resort, seemed a likely candidate. And just look at these clips. The circle  of intimacy is very clear. Even in the group shot, the couples are closer together.

I loved the way the ads suggest physical intimacy without saying a word, and without crossing the line of good taste.

Couples and homebuilding

A building supplies site gives us this uninspiring photo on their 'build your own home' page. If ever there were a project that would make you nervous about your relationship, building your own home together would surely take the prize. But we don't have a couple lovingly planning their home, we have a harsh image of a sledge hammer slamming into foundation molds.

I wasn't able to find a better example in this category, actually. The home-building industry seems to be all about 'the stuff', not the people. Except I bet that's not totally true.

The difference in emotional impact between these two images is quite striking.

Brand slogans, brand positioning: behind the scenes with irreverent slogans

Apparently the United Kingdom is considering a new motto. Naturally, the droll Brits are proposing many laugh-out-loud possibilities. I think Dipso Fatso Bingo ASBO Tesco is my favorite, as reported by the TimesOnline.

It reminded me of the irreverent slogans that people create for commercial brands, to capture the essence of their customer experience. Perhaps you'll remember a few of these, and feel free to add your own.

IBM - "We're arrogant, and we should be"
Microsoft - "We put the work in networking" and "The glue that holds your problems together"
Apple - "If you wanted support, you should have bought Jockey"

A great list of bank slogans is here. My fave, for UBS: "You BS, so we BS"

A related category is what the letters really stand for. Here are a few I've heard:

Technology companies are a popular target: IBM - I've Been Moved;  HP - Help Please

The car category is rife with these: FIAT - Fix It Again Tony

As is banking: TD - Turn Down Bank; NCB - Never Coming Back.

The cellular industry, so rife with acronyms, is fertile ground for this sort of fun: enormous list here.

Doesn't it make you wonder what your customers would say if I put this question to them? "Come up with an irreverent slogan for Company X."

Something different in automotive marketing: Nissan Rogue City Guide

I actually read an automotive advertising supplement this week, a rare event for me. And came across an interesting effort from Nissan. I can get a widget for my desktop that will keep me informed of events happening in my city. I don't think my social life is quite up to this standard, unfortunately... but what an interesting way to connect with your customers! And clearly based on a lot of insight into their target customer.
You can check out their site here.

How to differentiate your organization: HOK architects

HOK architects (Hellmuth Obata + Kassabaum) are a wonderful example of differentiation. I made this decision after reading about them in John Bentley Mays' column recently, Great architecture, using less 'stuff' in The Globe and Mail. Mays was interviewing the firm's chairman, Bill Valentine.

Here are a few of the things he said that really captured my attention, and are frankly inspiring.

On waste:

"I'm really interested in using less stuff -- less drywall, less steel, less concrete. We waste [materials] like there was an endless supply of everything."

On HOK's mission:

"At HOK, there are actually very few rules. But the one thing we hope to do, the thing that binds us all, is to enrich people's lives. Not to try being on the cover of every magazine. It's about being helpful in this crazy world we live in, especially in Western culture, where there's money being spent on all kinds of super-crazy things. ... If we can get ourselves wrapped around enriching people's lives as a goal, architecture can be a social implement."

"I know Frank Gehry, I like Frank Gehry. But the whole idea of how twisted can the next thing be, how expensive can it possibly be, how rare a metal on this one -- it's all a step in the wrong direction. I'm hoping HOK will push solving simple problems. That's our glue. We communicate with each other a lot, and try to have a good time, and we try to be helpful. It's that simple."

On architecture's relevance:

"I really worry that, in our profession, there's a schism between what real people think and what architects think. People know what's comfortable. The great cities are seldom [clusters of] these superglassy gizmos."

What this has to do with differentiation:

This firm has put a stake in the ground on who they are. Nothing could be clearer than what the chairman is saying about being helpful, avoiding waste, making things better for people.

They are not trying to be Frank Gehry. They are not trying to be anyone else. They are trying to be the best possible version of themselves. This is the essence of marketing differentiation. It's not so much about the marketing as it is about the mission.

And this no doubt is a major part of the organization's success. Because this firm has some 2,100 employees around the world, and billed $475.8 million USD last year.

Resources:

HOK web site

"Great architecture, using less 'stuff'", by John Bentley Mays, Globe & Mail, Sept. 28, 2007

Are they consumers or customers? Getting your marketing lingo straight

When I first started in the marketing research biz, a friend and mentor told me I needed to fix my language, and start referring to the target of research activities as "consumers". I'd been marking myself as a neophyte among all the advertising and packaged goods people  by calling these folks "customers".

My real problem was that I'd crossed over from a world where the buyers of your services have individual names (financial services), to a world where the buyers of your goods are largely a nameless mass (most consumer products).

After a little research, I found the definition and compiled and created the list below, adding some handy-dandy examples for each attribute.

With this convenient de-coder list in hand, you too will be able to spot people who have crossed over in some way, and are calling apples by an orange name.

What's the difference between a product and a service, really?

Here's a nice definition for a service:

"Any act or performance offered that is essentially intangible and does not result in ownership of any thing"

                    - Prof. Brian Engelland, MSU

There are many more attributes that we can dig down into, however, to understand why services and products are very different. Here's my list.

You are dealing with a service when...

[1] Production and consumption are hard to separate. Examples: travel, investments

[2] Intangibles form a large part of what is being purchased. Examples: insurance, consulting

[3] There is no change of ownership. Customers typically rent a service, rather than owning it. Examples: credit card or loan, hotel room

[4] A sale that does not happen today cannot be recovered in the future. Examples: empty seats in a theatre, lost interest on a mortgage

[5] Customers must evaluate the purchase decision with few tangibles to go on. Examples: health care

[6] Output quality is variable, and depends on the performance of individuals. Examples: Hair styling, interior decorating, surgery

[7] Manner of dress, body language, and expressed language form part of the brand experience.  Examples: air travel, retail banking

[8] Cycle of purchase is repeated through 'rental payments'. There is no smooth movement through a consumption cycle, and there are frequent 'moments of truth'.  Examples: health club membership, anti-virus software rental, weight-loss groups

[9] Employees behavior and knowledge is central to delivery and quality. Examples: financial planning

[10] The memories of the experience may be as important as the experience itself. Examples: vacation travel, theme parks

[11] There are high degrees of customer contact during production. Examples: health care, spa services

[12] Competing offerings may differ in how much of the work of production is shifted to the buyer.  Examples: online brokerage vs. full service, self-serve vs. full service gas station

[13] Suppliers assume real economic risks (exceeding the revenue potential) by choosing a given customer. Some interested customers must be rejected. Examples: credit cards, insurance, auditing

[14] Customers assume real economic risks (exceeding the fee paid for the service) by choosing a given supplier. Examples: mutual funds, home insurance

[15] Everyone calls them clients, users or customers, rather than consumers

So now you know. There you have it. Try to keep your customers and your consumers straight now, okay?

Understanding the difference between customers and consumers gives you some important insights into underlying truths that truly do affect decisions about marketing and other real world issues.

Resources:

The graphic came from the Prelinger Archives, from a composite movie called Much Better.

Why trust is essential to your brand and your service: lessons from the lemonade stand

Walking through my neighborhood yesterday I passed a lemonade stand. I may be steeled to the solicitations of street people, but this little girl had me licked. Fortunately, her lemonade was a) good, and b) only 25 cents a glass.

She was pretty little, younger than the girl in this picture. And she really wanted to hand me the glass and take the money in the same instant, with the same hand if possible. She wasn't yet used to the trust that pervades even the simplest of business transactions. She didn't want to take the money first, but she also didn't want to hand over the lemonade without getting the money. [We worked it out without spilling a drop.]

This interaction reminded me that trust is fundamental, even foundational. The simplest exchange relies on it. I imagine the earliest hominids trying to make exchanges.  It isn't easy to transact if one person can't go first.  [After all, you don't want spilled lemonade all over the place].

There are mechanisms in business to transact with people you don't know and don't trust, but they're all complicated things, like letters of credit. Even then, we would consider most people foolish to do business with anyone they actually do not trust at all, regardless of how secure the transaction seemed. So even things like credit cards, which resolve many risks related to payment, don't overcome the trust gap. If people don't trust you, they can't do business with you.

Very often, we trust first, and distrust later. You earn the distrust by losing the trust.

What all this means to me is that any loss of trust with your customers is not minor. If you make promises you don't deliver on,  you have proven yourself not trustworthy. If you surprise people with hidden fees, you have proven yourself not trustworthy. There are a gazillion ways to erode trust, and really only one a few ways to build trust. You build trust by doing what you say you are going to do and doing it in a fair, open and transparent manner.

Custom-manufacturer with clever marketing idea: Freddy + Ma

Custom manufacturing really seems to be taking off, and here's another example: Freddy & Ma, makers of custom handbags.

Pick a basic style, choose a leather color, then go wild on fabric choices, from a fantastic selection of fabrics. So many wonderful possibilities, and a very engaging interface.

And how did those clever people entice me to their web-site? They offered TypePad bloggers a generous discount on a bag. And look at all the free publicity they are going to get from this, to say nothing of new customers.

Eisenberg on the future of marketing: "Brands don't work the way they used to"

Thanks to Howard Kaplan at Grok.com for posting an audio link to a presentation by Jeffrey Eisenberg  on the future of marketing.

Eisenberg has a lot of interesting things to say about how marketing is changing because of the web, and other new communication technologies.  Here were a few of the things he said that made me sit up and take note:

"More and more money is coming online. More and more advertising is going online. And as more and more money gets spent on advertising it becomes more expensive. It's the simple law of supply and demand. And the people who can't convert high enough will not be able to afford that traffic. And when they can't afford that traffic they will either go bankrupt or get bought by somebody who can afford that traffic. "

"Brands don't work the way they used to ... Take a look at a company like Starbucks. Can anybody name a major brand, not a brand extension, but a major brand that in the last decade has been created primarily through advertising? Nobody. I've never met a crowd that could. If you think of companies like Yahoo and Google and Starbucks and Amazon, these companies have been built by experience and by word of mouth. Marketing doesn't work the way it used to."

"64% of people go out of their way to avoid companies that over-market to them"

Jeffrey Eisenberg is co-author of the bestselling book Waiting for Your Cat to Bark?

Co-creation and fashion brands

Reader Sophie R. is studying at the London College of Fashion, and sent me some questions with respect to her dissertation on fashion management. I thought her questions were interesting, and hope you do too.

Sophie: What has changed in the last decades in terms of : consumer behaviour, ways of consumption?  What do the consumers expect the most from the brand today?  Is consumer behaviour in fashion different? If yes, what is different?

Susan: With the advent of the internet, many people expected brands to become less important. This hasn't really happened, except in commodity purchases, where quality and status aren't that relevant. When faced with overwhelming choice, a brand that you trust can help you make a decision. In this sense, brands are even more important.  The big change with brands is that we no longer choose a brand for life; most of us are pretty fickle when it comes to our brand selections.  Another big shift is that we may be luxury brand purchasers in one area of our lives, and bargain purchasers in another, without finding anything inconsistent about this.
This trend is very evident in fashion, with the success of knock-off houses like H&M and Zara providing inexpensive access to high-style and design. Yet luxury brands still have tremendous presence, whether it's a Prada handbag or an Omega watch.

Sophie: Could you explain in a few words the concept of co-creation? How does the consumer react towards co-creation? How could you qualify the presence of co-creation on the market place   
nowadays? Does it have implication on any brands’ success?

Susan: Co-creation is about bringing consumers into a closer relationship with the brand by inviting them to take part in the creative process. This could be by letting people propose advertising. Or it could involve giving customers tools to customize and personalize their purchase. Mini Cooper gives customers an enormous array of customization options, for example. 

We would still want our brand to make sure we look good at the end -- my assumption is that BMW is not going to let me design an ugly Mini. So I can trust the brand, and experiment within the brand's boundaries.

A brand should only choose the co-creation route when they can make it fit into the brand promise -- co-creation is likely not for every brand. A brand that is all about stability, for example, might not be a good candidate for co-creation. I think most financial institution brands would struggle with this concept.

Sophie: Why is interaction important for the consumers? How can co-creation influence consumer behaviour?

Susan: Consumers don't want to be passive recipients of dispensed wisdom from big companies. There are a multitude of personal styles at work today, especially in the fashion world. There are so many 'looks' now, that we can all do almost whatever we want.

Let's consider a fashion organization that is conducting creative design workshops with their target customer on a regular basis. The customer involvement in the creation process will ensure that the product that emerges makes sense. This is a lot more than a focus group -- this is an ongoing involvement of customers in the creation of the future of the brand. The internal designers have the last word, but they have greater access to involve the customer in creation.  I don't see this being relevant for all consumers, but for those that are really engaged with the category or the brand, and are opinion leaders in their segment.

Sophie: Can you describe the role of Internet in the development of co-creation? How does Internet help brands to interact with the consumers?

Susan: The internet has provided a means of communicating with customers on a large scale, and allowing tremendous efficiencies in creating supply chains that can accommodate a lot of customization, and customer interaction. Web 2.0 applications like MySpace give people the opportunity to create and interact on a huge scale. This is now setting the standard for what we expect to be able to do generally.  So the internet has simultaneously improved the ability to create two-way communication, and raised expectations for it.

I expect that people like Madonna have always been able to enter into a dialogue of co-creation with designers like Gaultier. Patrons of the arts have had some co-creation capability since the time of the Medici. But the presence of the internet, and the general flattening of the global economy, has brought this possibility to a much larger number of people -- it has democratized co-creation.

Sophie: Is co-creation a short term phenomenon or a long term change?

Susan: We don't usually want to give up things we have learned to love. So I would say this is a trend that has long-term legs. But no organization, fashion or otherwise, should think this relieves them of the need to be cool and be design-focused, or to understand their customers and segments. In fact, that need has never been greater.

Co-creation does not mean telling me to go ahead and do-it-myself. It means bringing my ideas as a consumer / customer inside the company, creating an ongoing dialogue with this group, and giving them more influence over direction. In this sense, we could consider co-creation as the next phase of evolution of  Voice-of-the-Customer thinking. Except VOC is often a survey, and co-creation is much more connected, more of a dialogue.

Sophie: Last words: suppose you have one advice to give to brand’s managers who want to co-create with consumers, what would it be?

Susan: I think I've said enough already, and am going to throw this one out to the readers. Readers, how would you answer that one?

So Sophie - if you get an A, send us a gold star, okay buddy?