Social Media Salaries
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The Paper Bag Myth & Other Consumer Delusions
This may sound like a rant. But, in reality it is another example of how delusional the typical consumer is. I like to say that people in the act of consumption are not intelligent. This is not a reflection on their intellect or education level. It is a reflection on the tunnel-vision that takes over the mind of the consumer when the rationalization process kicks in.
Take for example the paper bag syndrome. Whole Foods, as well as other supermarkets, have adopted the paper bag in order to appeal to the Green Movement and the Save-The-Planet Demographic. What I find interesting is that they did not cut down on how many plastic containers they have in their stores. Thousands of plastic containers filled with cut fruits and veggies. Why? Because those who want paper bags to save the planet don’t want to wash and cut their own vegetables. One thing Marketers have learned well is that consumers have few beliefs that are core. They seek symbols of their beliefs. A paper bag. A metal water bottle. An organic apple. Listen carefully to your consumer. What you think are beliefs are usually just cries for a symbol that will allow them to join the cool group of the day.
Nokia Announces It Is Microsoft’s Bitch
Let’s call the Nokia/Microsoft deal what it is. An act of desperation by a company who is obviously lost. Did Nokia really need a new CEO to make this move? This is not a strategic move. This is nothing more than raising the white flag. By entering into this agreement Nokia labeled its Symbian OS as a loser. It also positioned itself as nothing more than a hardware manufacturer and bet its existence on its ability to design great phones. It bet its existence on something it wasn’t really great at doing to begin with. When was the last time a Nokia phone made someone stop and look? This is not to say that its phone were or are ugly. They are just not Apple or Motorola or Samsung. So Nokia decided that the only way to penetrate the U.S. market is to scrap its point of differentiation. Will this get Nokia more distribution? Maybe. But now they not only have to sell the consumer on a Nokia phone but on a phone that is not Android, Apple or Blackberry. Where are the cool applications? It hopes Microsoft will have developers recruited and writing them. Where is the cool factor? It hopes it will be able to design great phones that will make people stop and want it. There are a lot of questions in Nokia’s present and in its future.
But one thing is for sure, from my perspective, Microsoft doesn’t need Nokia more than Nokia needs Microsoft. Maybe not even at all. Why? because Microsoft, at least in the near term has a lot of revenue streams that generate billions in free cash flow a month. If Microsoft wanted to, it could make a bid for Blackberry. It could buy Motorola Mobility. Heck, it can try and buy T-mobile. Revenue streams gives Microsoft options.
So, my point is, very simply, that desperation is not strategy. Nokia would have been better off reworking the design of its phones, and hiring some top notch coders to revamp its operating system so it can be on par or surpass Apple’s. Or it could adopt Android. Anything would have been better than the go-for-broke plan they adopted.
New Facebook Instant Personalization takes effect.
New Facebook Privacy Law is effective today. If you want to prevent websites and Facebook partners from getting access to your data follow the instructions below.
The New Facebook Privacy setting called “Instant Personalization” goes into effect. The new setting shares your data with non-FB sites & it is automatically set to “Enabled”. Go to Account>Privacy Settings>Apps & Websites>Instant Personalization>edit settings & uncheck “Enable”. BTW If your friends don’t do this, they will be sharing info about you as well. I want to thank Celine Fosse for bringing this to my attention.
Stay Safe. Stay Private (as much as possible in today’s digital world.)
Why Your Website Is Like A Cake.
Have you ever thought about your website as a cake? You should. Because in my experience, clients care more about the “icing” — the colors, the design, the pictures, the way a website looks — than the “cake” — the technology that makes the website function and perform its marketing tasks.
I am not diminishing the importance of design, after all it is what attracts, but it is not what makes a website function. So, let’s start by making the cake before we discuss what color icing we put on it.
In the beginning — circa 1996 — most website were nothing more than informational, pixel-based brochures. Their content did not change much because changing it was always a big and costly deal involving a designer and a coder. So, a lot of businesses did not change the content on their website often.
Today, your website needs to be more than just informational. It needs to be dynamic. Your visitors are looking for content; fresh content. They want customized information. They want to subscribe to an RSS feed. They may want to share it with their peers. Therefore, the first ingredient in the cake you need to consider your content management system or CMS. In short, CMS allows you to manage the information on your site. You can add content, photos, pages, almost anything, and do it in an instant without the benefit of coders or designers. It allows your website to grow and adapt as your business needs grow.
The three most popular CMS systems are WordPress, Joomla and Drupal. Each is open-source and well-supported.
The first, WordPress, is a blog platform that can easily be converted into a fully functional website. It is very flexible and can be downloaded for free. You can customize its look, icing, with WordPress themes and you can customize its functionality with WordPress Widgets. Just Google WordPress Themes or WordPress Widgets for a list of providers.
Both Joomla and Drupal are Linux-based and open-source. My techie friends prefer Joomla. But, both offer a lot of functionality and are very well supported. Many web hosting services offer one-click installation of any of the three I mentioned. You can’t go wrong with either of them but you should choose based on your needs and on the abilities of your programmers. For 10 simple rules on how to choose the right CMS click here.
Remember choosing the right CMS is much more than the icing on the cake. And, come back tomorrow for ideas on how to create killer SEO content. See you then.
What Your Business Can Learn From Hotel California.
In 1977 The Eagles released Hotel California; the song on the album by the same name.
Welcome to the Hotel California
Such a lovely place (Such a lovely place)
Such a lovely face
Plenty of room at the Hotel California
Any time of year (Any time of year)
You can find it here
Your business should be lovely. It should be welcoming. It should be the type of place that when your customer enters, she will feel like she has entered a world that was built for her. A good example is the retail store Opening Ceremony. What started as a passion for finding and selling only things that the owners themselves would wear, has turned into a retail chain, whose claim to fame is, selling what others don’t. And, they sell it in an atmosphere that is unmatched. It has made the store a destination.
The same can be said for Uniqlo, Apple Stores, Urban Outfitters and Abercrombie & Fitch. The same can be said for restaurants like Chipotle and Starbucks. Some say it is an emotional connection that brings the customers back. But it is more than that. These retailers create an addiction in their customers. They are more than brands. They are retail crack.
And that is the second thing your business can learn from Hotel California.
Last thing I remember, I was
Running for the door
I had to find the passage back
To the place I was before …
You can check-out any time you like,
But you can never leave!’
Your have to lock your customers in. As much work should go into your barrier to entry strategy; keeping the competition out as goes into your barrier to exit strategy; keeping your customers in. This strategy is not limited to large companies or to big budgets. This is a function of your offering, the environment in which your offering lives and the sensory way in which you reach out to your customers. Anyone who has ever shopped in a Trader Joe’s market and then walked into a generic supermarket has felt the withdrawal symptoms. The same can be said for Amazon or Etsy shoppers who venture to other sites. They start missing the environment that is supportive and unique to Amazon and Etsy.
In the Brick and Mortar world your employees are the linchpin to your success. Are they allowed to express their personalities? Are you hiring the right personalities? What is unique about your business shopping environment? Online, you must make people want to come back. Product recommendations and customer reviews is just technology. Building a personal and useful experience is the hard part. If you don’t allow technology to veto the human element you won’t have to worry about your customers checking out.
Warning! Sales Promotion Is Not Brand Promotion.
“But I make a profit of three and a quarter cents an egg by selling them for four and a quarter cents an egg to the people in Malta I buy them from for seven cents an egg. Of course, I don’t make the profit.” Joseph Heller Catch-22 Milo, Chapter 22: Milo the Mayor.
I doubt very much that in 1961 when Joseph Heller published those words it was intended as a foreshadowing of the internet sales promotion craze of 2010. But, it very much did just that; as illustrated by the quote below.
“We looked at the results for a lot of $50-for-$100s and a lot of $50-for-$125s,” Perloff said. “One-twenty-fives got a much bigger response. We felt in terms of creating new customers and getting new foot traffic, it was worth it to give people a better deal.” … “We anticipate taking a loss on this,” he said. Brett Perloff, Marketing Director, The National Jean Company on using Groupon for a sales promotion. [article]
There is nothing wrong with taking a loss on a promotion. A lot of retailers use this tactic to increase sales, to sell-off inventory, to penetrate a new market or to attract a new demographic. But, knowing you are taking a loss must come with the solid promise of a future profit. And, there is a difference between a sales promotion to a known consumer and a sales promotion to an unknown consumer. An unknown consumer may only care about the price. And, she may not return without financial incentive. She doesn’t value your brand. She may not even know your brand. The long-term consequences may be a diminishing of your brand’s value in the consumer’s eye and an expectation of price cuts on a regular basis.
As illustrated in this Wall Street Journal article “…the popularity among merchants and customers has had an unexpected consequence: Some businesses have attracted more bargain hunters than they can handle.”
Ironically, sales of luxury goods are booming this Christmas. According to the Wall Street Journal [article] “While many on Main Street are struggling, companies that sell to the biggest spenders–from Tiffany & Co. to Cartier and Louis Vuitton to Remy Cointreau–are having themselves a merry little Christmas. Luxury sales are surging here and abroad. Profits are widening.”
So, what is the lesson? First, sales promotions should have intended consequences. One way to ensure this is by carefully selecting who you promote to. Rewarding your best customers is never a bad idea. Have them shop with a friend and share the reward. This way you can have new customers come in and get goodwill from your most profitable customers. A win-win.
Second, if you can’t do this, make sure that your promotional price is low enough to be attractive, but not so low that you lose money. It is better to get fewer new customers that you don’t lose money on, than a lot that you do.
A third alternative is to offer a promotional price only on items that you have an exclusive on. This way, you are guaranteed that if someone wants to repurchase you are the only source.
Finally, remember that while the temptation of increased sales or increased traffic is great, it may be at too high a price.
In the end price is the only source of profit your business has. And, as such it must be protected and nurtured. A pricing strategy, once abandoned is not easily recovered. You are what you charge. And your customers are a reflection of that.
Did Facebook Kill Your Customer?
Some of us who are over forty remember the good old days when the relationship between a company and its customers was clear-cut and to the point. It was pure. The party of the first part; made stuff, you as the customer; or the party of the second part; wanted or needed. This, sometimes, led to a purchase. We also remember when the word friend was associated with a person you knew and who grew over time from being a stranger into an acquaintance then into a friend.
The genius, and I have to call it that, behind Facebook is that it sells “friends” as a commodity and it has integrated the concept of “friending” as a necessary step in the consumer buying decision process. Facebook leverages the idea that human beings are “social creatures” into a marketing platform. And, as a Unique Selling Proposition it worked. It worked because corporations are two things; sheep and in a constant state of panic.
So now, brand managers, like good little corporate soldiers, are running around telling you how much they care about you as a person. Public Relations people are busy hiring 20-something interns to answer even the most idiot post on their company Facebook page. Advertising people have no idea what they are supposed to do, so they make sure that every creative execution has a Facebook URL at the end and a plea for friending. If you are truly desperate or feel lonely you can always buy fans.
But, what happened to the idea of the customer? Are they friends or sources of revenue? Because, they can’t be both. A friend is not someone you use. A friend is not someone who is a means to an end. A friend is not something that is a function of profitability. A customer is.
Oh get over it Ted. Don’t be so literal. Why must everything be so black and white with you? Because, when there is clarity, there are few misunderstandings. When there is clarity there are fewer unmet expectations. When I have dinner at a friend’s house I don’t ask for the check at the end of the meal. I do when I eat out, even if I am a “friend” of that restaurant. So, for 2011 and beyond let’s end the euphemisms. Customers can be fans. They can be brand loyal. They can like you. They can have a preference for you. But, unless you will post bail at 3 AM or hold them and tell them everything will be OK, you are not a friend. Stop pretending to be and let’s go back to having an honest relationship based on what we can do for each other. We might even get back to having actual friends. How great would that be!
Who do you trust when you don’t trust anyone?
Social Media was supposed to be the answer. Marketers would no longer have to fight the uphill battle to appear honest. Friends and friends of friends and friends of friends of friends would endorse them and give them that credibility they were so missing in their marketing messages. But that thinking appears to be so 2009.
According to Edleman Public Relations, only 39% of those surveyed felt the messages conveyed by consumer spokespeople was credible compared to 45% in 2009. CEOs on the other hand have seen their trust level increase. (article)
So what is a marketer to do when faced with such sentiment? Should Social Media be abandoned in favor of tradition media? Should Facebook pages be abandoned in favor of advertising again? The answer is “it depends.”
Neither traditional nor digital marketing is the holy grail Each has its own limitations. The big difference I believe is that the general public has found out a few things about the “friend” recommendations: 1. they are not experts and their opinions are based on emotions a lot of times, 2. consumers are passionate but usually more when they have been wronged that when they were treated as expected, 3. most products don’t have a great enough following for the comments to be statistically worthy of following.
This brings into question the value of Yelp and other sites. Let’s just say that social media, if treated properly is a lot like chicken soup; it can’t hurt (unless of course your company/product/service is so contemptible that social media will hurt you a lot). So what is Social Media? It is a communication tool that should remain in your marketing toolbox, but like all tools it should be applied with care and with a vision in mind for what you want to accomplish.
Unfortunately, throwing stuff at the Social Media Wall and seeing what sticks is not a plan. Listening to conversation should not be stopped but remembering opinions are like ____holes, everyone has one is critical.
In the end it is not how many friends you have BUT who they are. It isn’t as much what people are saying BUT who is saying it. WOW! It sounds a lot like traditional marketing.
iPad huge success before one unit is sold.
The success of the iPad doesn’t rest with the product attributes. It has nothing to do with the features. It’s immediate success is built on its business model. More often than not it is the business model that is the catalyst for the success of a product or business rather the actual product. If you are old enough to remember, in the battle between Betamax and VHS, Betamax won on picture quality but VHS won on selection of content. VHS won.
When Apple created the iPod, Apple tied it in with the iTunes music store and a 99¢ per song price. This was a simple business model that destroyed the competition’s subscription price model. It helped that the iPod was great to hold and use, but the purchase impetus was the right business model.
In the case of the iPad, by allowing the publishers to determine their own prices, Apple effectively attacked Amazon’s $9.99 pricing model for e-books. $9.99 is a price point that publishers complained about since its inception.
While a lot of sellers look to create better products the successful ones look to great better business models to support those products. In the end, the model wins more often than products.
