Customer Crossroads

Chasing the wealthy

Merrill Lynch and Capgemini recently reported that there are now 9.5 million people who are "high net worth." This only seems like a big number until you consider the world's population, or even the developed world's population.

High net worth defined

The Merrill/Cap study defines high-net-worth as individuals having net assets of at least $1 million USD, excluding their home and consumables. [I guess this means the contents of the wine cellar don't count?]

Ultra-high-net worth individuals have to have at least $30 million by this definition. There are about 95,000 of these people worldwide. A few, of course, have much more. There's no category for them, but they can afford to buy wide-body private jets at $150 million a piece. Boeing apparently had 11 such planes on order at the time of the report.

True customer-centric approach demanded

The point of the Merrill/Cap research is that the needs of this group are becoming ever more demanding, and they need the services that only an organization with global reach can muster. More important, they want a true needs-based approach to managing their money and investment needs. 

Some want to buy luxury goods, such as the jets mentioned above. Others want to invest in philanthropy. None of these folks wants a cookie-cutter solution. Nor do they want to integrate all these services themselves, which is time-consuming and kind of boring really, if you can get someone else to manage it for you.

Two implications to ponder

We have a lot of people out there in the wealth-management industry chasing a very small number of wealthy people. Europe and North America each have about three million of these HNWIs. In Canada, we have a measly 248,000, less than one per cent of the population. If you can't move to a high-value-added delivery approach for this exclusive group, perhaps you need to rethink your target market.

There is another implication that is important for anyone covering the mass affluent -- those people who don't quite make the cut as HNWI. And it's this: soon you will be expected to provide something closer to what HNWIs can get in terms of customized and customer-focused investment and money management services.

There is a consistent pattern where services only available to the most wealthy -- either businesses or individuals -- gradually become available lower down the market. At one time, you could only buy currency futures in seven-figure amounts. Then it was only in six-figure amounts. I believe it's now five-figure amounts, but I may have missed something. There may well be locker-lunch and lemonade-stand futures being sold somewhere.

The same thing happened with Treasury Bills. Heck, it happened with maid services, didn't it? Look at luxury spa services. It's even happened in eco-tourism. It's getting harder and harder to find a category of goods or services that is truly exclusive, available only to a select few.

Exclusive goods and services tend to become less exclusive over time. One reason for this is that a successful business strategy can be built on bringing that exclusive stuff within the purchasing power of the next layer down. The corollary to this is clear: if you want to serve that exclusive market, you need to keep pushing the bar higher, to avoid having your exclusivity eroded.

Resources:
Merrill Lynch and Capgemini announcement is here

PDF file of the report is here
There are some interesting charts in this report, including the one that compares the current approach to serving the needs of wealthy individuals with the new, more customer-centric direction.

The ratings game: President's Choice gets 3 stars for their new star system

Star systems have been in use for decades, maybe longer -- the Michelin and Zagat guides, the auto association guides, the various star systems for European hotels.

Even university students can rate courses and professors. The trend continues to grow, and becomes continually more democratized.

Amazon gets free content created by their customers with the book reviews. And customers get the insights and ratings generated by average folks. Anyone can rate anything on Amazon, not just books. These Tommy Hilfiger Nantucket blue extra-long twin sheets were rated high by some, poorly by others.

Given how useful these ratings are to most people, it's interesting that it has taken a long time for the trend to spread. I was excited to see that President's Choice has just launched a rating system for their line of food products. It's a great idea, and I hope they stick with it. Here's why:

In addition to the useful feedback, this kind of approach acknowledges customers as an active part of the story -- participants, not just consumers.

Consumers get useful information. I read somewhere that even negative reviews on Amazon didn't necessarily translate to lower book sales.

Imagine adding a 5-star label to the packages of crowd favorites? This is as good as a testimonial.

The image pictured above is a PC Goat Cheese Torta, and hors d'oevre that gathered 5 stars from at least 4 raters. It's construction uses several products. They could have featured recipes in the store (or by cell phone?) that give you ideas and ingredients for highly rated recipes.

My one complaint is that the web site is painfully slow. I looked around for a while to try to find a negative rating, and just gave up in frustration. If I hadn't been writing an article, I would not have persisted as long.

So their system gets 3 stars out of a possible 5: good idea that could be much better.

Addendum:

I added a review to their Noodle Wrapped Shrimp. Was annoyed that I have to say "value for money," because I have no idea what the shrimp cost. They just came out of my freezer. I think this is a limitation that would discourage some people, because you are required to rate on three categories.

The other note that I would make is that there is a loyalty question, "would you recommend?" But surely the correct question for a food item is "did you like this enough to buy it again?"

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."

Jason Oke talks about what's wrong with qualitative research

Jason Oke is a planner for Leo Burnett -- a guy who spends a lot of time thinking about finding leverage points for the creation of great advertising. And is, incidentally, an excellent speaker. He thinks there's a lot of bad research being done, which has created a credibility problem.

Chief among his complaints is that there is far too much direct, literal Q&A going on, which we know -- I mean we really know this -- is not very useful. This kind of technique lacks so much subtlety, it is akin to "strip mining their heads," according to Mr.Oke.

By literal Q&A I mean approaches like asking people to tell us "what's important to you in a vodka", which will generate nothing that can help a vodka marketer. If the target group even knows, which is unlikely, they are hardly going to say things like, "I want to feel like part of an exclusive club" or "I want a wee boost to my social status."

This is not just true for products like vodka, by the way. I just completed a business study in which one group of people were clearly motivated by reducing their fear level. Now just how likely do you think they would be to [a] know that and [b] say it out loud? In fact at least one of them did know that, but she didn't say it, she wrote it down as part of an exercise. [Of course this creates an equally large challenge for the creative team, but that's another article.]

Jason Oke also believes that people are bored by the idea of sitting in a dimly lit room for two hours being poked at with inane questions and limp exercises. He thinks this is a major reason why it is getting difficult, and expensive, to recruit participants for focus groups. This was a new idea for me, and I think he's on to something.

Mr. Oke's recipe to turn the situation around:

[1] Take brain science into account.

People can tell us many things, but they don't have direct access to unconscious motivators. When we ask them questions depending on this access, they will tell us something, but it's unlikely to relate to the problem at hand. It may not even be true. But most people will generate an answer to a question like "what's important to you in a vodka" just because people are very good at generating reasons.

[2] Plan research activities that meet the needs of #1, and are also fun and engaging.

Mr. Oke's solution to the Vodka problem, for example, is to ask small groups of people to design a new vodka and how it will be marketed to people. Exactly. Generates great data, and is a lot of fun for the participants. He showed us clips from the tape, it was brilliant.

[3] Stand up to clients when they ask for bad research. Evangelize for good research.

The thing is, once clients have experienced really good research, they are left unsatisfied by the other kind. At least I think that's the case. I hope and pray that is the case. But it feels risky the first time you get on.

[4] Think of research as a brand touch-point.

Absolutely correct, and great advice.

Resources:

Jason Okes' blog is here

A related Malcolm Gladwell blog post is here

Clips from the Prelinger Archive film about marketing research, here

Book he recommends [I have not read, but it sounds great]: Herd by Mark Earls.

Mr. Oke presented to the qualitative division of MRIA at "Qual in the Fall" on Nov. 9, 2007 in Toronto.

Monitoring Web 2.0

Reader, technophile and very capable researcher Matt Towers sent me this link to everything web 2.0.  Great list, thanks Matt.

Thoughtful quote for today

Reading Karen von Hahn recently, I pondered her evolution from the writer of the Super Shopper column -- to the writer of Noticed. With this remark, taken from her analysis of the current incarnation of the hooded sweatshirt, I believe she has officially crossed over and is now a professional noticer:

"Nothing is just itself any more. Everything out there is a symphony of signifiers, a mille feuille of meaning, encapsulating -- just like the print hoodie -- many layers at the same moment in time." [Karen von Hahn, Globe & Mail, 10 Nov 07]

Although I enjoy her column, this journey represents a journey we all seem to be on. By way of evidence, let's look at what has happened to the Women's section of the daily newspaper.

It goes something like this...

If you want to write in the LifeStyle section now, you need to aspire to cultural observer status, and even better if you can bring some interpretive chops to the party.

As we all engage in a life mission to make meaning, with few formal rules to guide us, we need our experts more than ever.

Web 2.0 Watch: Facebook as the new collaboration tool

I started a new Facebook group recently, and am finding the groups application a bit sluggish. When I went searching on Google for a way to upload a document to Facebook, I discovered a whole new set of collaborative tools.
Here's a few of the ones I found:

Scrib'd -- a free service that lets you upload and publish any document on the web, and also embed it in many different formats. To solve my problem with Facebook, for example, I would upload the document, then link to the document's permalink in Facebook. Problem solved. Read their FAQ here.

ThinkFree Docs -- they describe themselves as YouTube for Office documents. They have a Facebook application already set up, and are working on iPhone integration, according to the ThinkFree blog.

Adobe Share -- discussed on Tim O'Reilly's blog. Adobe Share will be a place to upload or download any digital object, and share it with either a specific group, or the whole digital world. Mr. O'Reilly also referenced  Adobe's recently acquired Buzzword, which is an online word processor that also allows collaboration.

It turns out that I'm not the only one who wants better group functionality on Facebook. Some companies are starting to use this platform for business purposes. Serena Software in California reports that they are launching Facebook Fridays (part of their recruiting and profiling strategy), and also launching an employees-only Facebook group. Reported in Businessweek, second BW story here.

My take
Web 2.0 is really about working together online, not just putting up information. It's not just two-way traffic, it's more like multi-dimensional traffic. It's the brain xynapse model on a computer.

Social networks may be a starting point, but they are going to morph into work networks as well. This means -- once again -- that weensie enterprises will have access to similar capabilities as huge enterprises. Such as collaboration tools.

I spent a lot of money on a collaboration tool for the client part of my web-site a few years ago. It was only a qualified success. I will soon be able to supercede it's capabilities for free, or very close to free.

And this development of document sharing online is also another major democratization to publishing, just as web sites initially were, and blogs now are.

I recently conducted a study [on my own dime, or I couldn't tell you this] on teens and technology. Canadian teens are fully expecting to be amazed and delighted by the new technologies that come their way. And I'm 100% with them on that. It's just really cool. Our challenge as business people is [a] staying on top of this stuff and [b] figuring out how to leverage it. Equally cool, but somewhat more difficult.

What's your take?

Targeted advertising algorithms need work

There are a number of sites that target advertising based on profile information, and then serve up Google ads. I'm sure you've been on lots of them yourself. I captured a screen shot from LinkedIn which nicely illustrates the current challenge of this kind of targeting.

Mostly, these ads are about other people like me, not about services I might like to buy.

Which I guess has its uses, such as monitoring who is advertising in your space. But this isn't likely to be helpful to the advertiser. It's so close, but it's not quite right.

The kinds of things I actually buy for the business are on a relatively small list. Qual researchers use sticky notes, index cards, felt pens, and flipchart paper in truly shocking quantities. We rent focus group facilities, and meeting facilities. We hire recruiters to find respondents for us. We use a lot of travel and hotel services. Like all businesses, we use software, computers and telecom. Some of us would buy specialized software or license various online applications like bulletin boards.

But hiring competitors is not a frequent activity. Nor is installing large scale CRM systems. I advise on these things sometimes, but would never be a buyer.

If I had the option, I could tell the company what services I would like to see advertising for, but that would put control in the users hands, not the advertisers. Surely that would improve effectiveness though.
I briefly tried adwords, and found that many of the click-throughs were coming from other organizations like mine, not from potential client companies. The irony of this is that I can define potential clients quite clearly -- I just can't easily target them using these tools.

I'm curious if others are experiencing this.
Are you being served relevant ads?

Best of the blogfest, or how to increase your traffic using a crazy topic

I've been away and chronically behind, and so missed reading many of the posts from other bloggers taking part in the bathroom blogfest 2007. Catching up today, I wanted to mention a couple of posts that caught my eye. As well as a few marketing observations.

Interesting Posts - not an exhaustive list by any means!
From Kate Rutter at Adaptive Path - Office bathrooms as key indicators of team culture. Great article. Reminded me of the private bathrooms that executives in some industries get as part of their perks, and what this might suggest about the caste system in place in those organizations.

"The point is that bathrooms signal what’s important to the team culture:

• Does the bathroom feel more personal than institutional?
• Do you care about keeping the bathroom clean because you care about the other people that use it?
• Can you get a good look at yourself in a good mirror before that big meeting so that you don’t embarrass your team with spinach in your teeth?
• Do you enjoy seeing artworks created by your team members?
• And the big one…are you trusted not to misuse the supply of toilet paper?"

Her translation of Maslow's hierarchy of needs to the office bathroom is worth the drive over to read. For extra credit: see if you can translate your product or service into Maslow.

Laurence-Hélène at Blog Till You Drop updated us on the trend of luxury public/private bathrooms, a trend that is spreading. There are now three of these: London, Japan, Paris. And clever companies are using these spaces to encourage trial of their products. I have heard that some nightclub ladiesrooms offer additional services on busy nights, like manicure services and quick massages.

Sports arenas appear to have among the worst ladiesrooms anywhere.

Reshma Anand reported seeing an improvement in public washrooms in India since the blogfest last year. And wondered if more fathers would like to have change tables in the men's room.

Katie Clark at Practical Katie was dismayed to see a bathroom that subordinated usability to design in a new library. There's no place to put down a purse or anything else.

Marketing observations

You can get a lot of people talking about something with a blogfest. Many of the less well-established blogs on the list saw major traffic boosts as a result of their participation. But the big jump in traffic on the group blog set up by organizer Stephanie Weaver was especially interesting to me. She sent in a note to Blogger, letting them know, and they highlighted the blog. Instant jump to thousands of page views. of course Blogger would not have done this if they didn't think the concept was interesting. So the formula remains the same -- you can get publicity if you have something interesting to say.

Extra touches at convention hotel ladiesroom

When I go to a conference, I always envision a time to relax and rejuvenate. More often, you find yourself mentally stimulated by physically exhausted. You're dragging around bags of stuff from the trade show, handouts you picked up at the sessions, plus your own works-in-progress. After several late nights and early mornings the wear and tear is starting to show.

So when a convention centre goes to some extra effort to add comforting touches, it is noticeable. The Westin Bayshore was practically flawless in this area. They had creative buffet and finger foods, things like mashed-potato bars (looks like ice cream but the sprinkles are cheese and bacon bits). They used coffee mugs and go-cups instead of weensie hotel coffee cups.

And the bathrooms had actual hand towels, rolled up in stacks, in addition to the paper dispensed kind. Plus this nice basket of hand cream and mouthwash. Just the thing for late in the day when you need a little pick-me-up.

Interestingly, there was lots of angst expressed about the environmental aspects of this, but we used the stuff anyway, and appreciated just that little bit of luxury.