“New business” is the sexy part of what we do. It’s our opportunity to marshal all of our skills, arguments and resources to identify, persuade and close a new customer. It validates our product strengths. It’s the pay-off for all the planning, strategizing, analyzing and quantifying we’ve done. It’s a validating notch in our marketing belt.

Yet as important as winning over new customers is, rarely is the new customer our most profitable customer. For many organizations, it’s not unusual for up to 80% of its profits to come from just 20% or less of its customers. And more often than not, that 20% are those customers we won over long ago.

It is important for all of us in marketing to recognize what an important resource our long-term customers are. Not only do they buy from us often (usually with very little persuasion from us), they know us pretty darn well. They know our strengths. They know our values. And yes, they even know our weaknesses (though most of the time they keep that part to themselves). And by them using our products, they are exemplifying our benefits in the flesh.

The idea that once you’ve sold someone, you won’t need to sell them again is on its face ridiculous. Customers are bombarded all the time with competing messaging, new opportunities and new offers. The fact that most customers are staying put may have less to do with what you’re doing and more about the fact that they’ve yet to be approached with a more compelling offer.

Customer retention isn’t as sexy as customer development. There is no “close.” Customer Relationship Management is a process, not a destination. The dollars allotted to CRM on a spreadsheet are hard to translate into ROI. Yet without it, you’ll find that customers are churning out at an accelerated rate, and you won’t have much of a clue why. And replacing them is expensive. For most organizations, it can cost up to five times as much to develop a new customer as to retain an existing one.

Okay, so we can all agree that creating a Customer Relationship Management system for your organization is important. Enough with the pep talk, how, exactly, do you approach it? I’ll offer up a few suggestions our next post.

Posted by Mickey

The tactic I’m speaking of is for a marketer to create/remix/mash-up a commercial message to run exclusively in a specific environment. The latest case in point is Clorox Bleach, who created this television commercial to run during the airing of the acclaimed AMC series “Mad Men.”

“Mad Men” isn’t exactly tearing up in the ratings. The show averages just over a million viewers per episode, which for an original broadcast series is a microscopic audience. So why would Clorox go to the trouble of creating a one-off spot that will only run a few times at most, reach comparatively few people, and might not even index well against its core target audience?

The answer, I believe, is impact. By tongue-in-cheekily tying its creative message to recurring themes of the series, the brand shares an inside joke with the show’s fans, while still honoring the brand promise of the product (gets whites, whiter). The production values of the spot are quite modest, so it didn’t cost a heck of a lot to produce the spot.

Another important thing to note about this spot: people are talking about it. Just Google “Clorox Mad Men Commercial” and you’ll be greeted with more than a page worth of search results, with bloggers, commenters, Facebookers and even news web sites weighing in on the spot. Something tells me that doesn’t happen when Clorox runs one of its one-size-fits-all spots in the pabulum of afternoon programming.

Small investment. Big viewer involvement. Even bigger buzz.

The bigger question is, of course, will the ad help sell more product? Or was it simply a case of clever ad guys talking to each other? Time will tell. But because the spot played up the advertiser’s key sales point, I gotta think it will reinforce that point with viewers.

Advertisers have been creating special ads to run in event programs or one-time specials (such as the Super Bowl) seemingly forever. But what makes this a winner in my book is the special combination of relevant, edgy creative and spot-on placement.

It’s the kind of success you can expect if you really get to know your market and endeavor to make a meaningful connection with them.

Posted by Mickey

It doesn’t take a genius to conclude that ads that do a better job of engaging or entertaining us also do a better job of selling. Yet there are some in this business who still tend to discount creativity in advertising to be somewhat of a commodity. They see “entertainment” and “selling” as somehow being mutually exclusive. These folks for whatever reason have yet to buy into the notion that the quality of creative corresponds directly to the success of a marketing program. As support, they may point to the success of spots such as the infomercial-esque “as seen on TV” ads as proof that it’s what the ad says, not how it’s said that matters. And they have a point: interrupt people with $30 million in paid media, and the needle will move.

But more and more, we are moving to a model of opt-in content. Less are we able to interrupt the consumer with whatever message we feel like and expect them to pay attention to it.

The dynamics of Social Media illustrate this perfectly. There are no multi-million “buys” on YouTube, Facebook, blogs or the like. The barrier to entry is non-existent. Access to Social Media platforms has been democratized. Anyone can post anything. And the success of that content isn’t how much the creator puts behind it. It’s on how many users feel inclined to pass it forward and to talk it up.

In the opt-in world, you’re only as good as your content. A great illustration of this point would be to compare the results of a recent Social Media success (The Old Spice “Man Your Man Could Smell Like”) to one that’s not-so-successful (Cisco’s “Ted From Accounting” series).

In the Old Spice campaign, Social Media users were invited to correspond with The Old Spice Guy. Old Spice’s agency (Wieden & Kennedy) then shot nearly 200 “personalized web videos” addressed to fans (and Social Media heavyweights) over a couple of days and posted them online. The resulting buzz generated an estimated 1.4 BILLION views, hits and mentions over the period of a few weeks. (Oh, and sales were up over 100% over that period.) You can view some of the spots here.

On the other hand, Cisco’s “Ted From Accounting” series was launched as a web series in hopes of going viral.

Response to the web videos was less than overwhelming (fewer than 10,000 views, despite a huge PR push). One commenter on their YouTube page summed up reaction to the campaign this way: “I am embarrassed for your marketing department. This is the sad result of a poorly orchestrated attempt at some sort of viral leaching by a room full of middle aged guys, who’s (sic) kids saw something on YouTube that they thought would be a good idea to copy.”

Ouch.

Granted this is hardly an apples-to-apples comparison. The Old Spice campaign started as a mass media campaign and extended to include the digital component. But while “Ted in Accounting” didn’t have that mass media lift, my bet is that you could have put millions behind it and viewers’ reactions wouldn’t have been any different than the YouTube poster above.

The digital world is proving what we who have developed offline content for years have always known: people aren’t going to waste their time with boring content.

Posted by Mickey

But as more and more products appeared on the scene, and competition for the public’s attention, time and money intensified, simply pointing out a need no longer became enough. Hence was born The Modern Age of Marketing. Suddenly shoppers had a multitude of options, and the differences between products or brands were minimal.

It was during these time the idea of “Strawman Marketing” came about. Marketers dramatized a negative situation that might occur should the consumer not buy their products. Hence was born campaigns for Glade’s “House-a-tosis”, Scope’s “Morning Breath” and one of the most grating of all (presented here) Wisk’s “Ring Around the Collar.”

Without a doubt the strategy of setting up a straw man worked. Phrases like “The Fear of Being Close”, “Choosy Mothers Choose Jiff” and “It’s Not Nice To Fool With Mother Nature” not only sold product, they became part of the popular lexicon.

But how would these “straw man” tactics work today, in the age of Social Media, where audience skepticism, self-appointed brand watchdogs and the need for transparency rule the day?

One thing that has remained constant in advertising is that we’re not selling products, we’re selling the possibility of a better life. To that end, competitive advertising (whether of the head-to-head variety or against the so-called straw man) continues to have its place. I believe, though, that any such attempt to “create a need” with our audience must come from a place of authenticity. Anything that reeks of being misleading, manipulative, irrelevant or disingenuous risks suffering sever blow back from customers and the blogosphere.

What I’m noticing these days is that successful straw man marketing is tempered with a fair amount of self-effacing humor. A few examples that come to mind are the Axe Anti-Perspirant spot that shows the “perpetual sweating” guy, and this recent “Bacon Neck” spot from Hanes. The tongue-in-cheek humor of these is a lot easier to swallow than, say, the mock exasperation of “Ring Around the Collar.”

Want to set up a straw man to beat down in your marketing? Feel free. Just be smart (and sensitive) about it. Treat it as an inside joke with your followers. And whatever you do, avoid “Ring Around the Collar.”

Posted by Mickey

Such is the state right now of the mindset of the American consumer. Several research studies released over the past month seem to paint conflicting pictures of what’s going on with consumers, their shopping habits and their view on spending. Given that 70% of our economy is based on consumer spending, you can see how important it is to get a handle on what consumers are thinking.

Many an economist has talked about the current state of the economy as being “the new normal.” But given actual consumer behavior, we may want to rename it “the new abnormal.”

Their houses are being foreclosed. Their retirement plans are gutted. But they’re lining up for iPads and $3 coffees.

Wal-Mart and Target are in the doldrums, but Mercedes Benz is having a record sales year. Procter & Gamble is struggling to keep people from abandoning its Ivory soap and Crest toothpaste brands for generics, but Starbuck’s just announced its most profitable quarter in more than four years. And while consumers self-report that they are being “cautious” about spending, a Consumer Reports study shows retail spending per household has actually gone up $40 a month.

As marketers, what are we to make of this schizophrenia? I consulted my Magic 8-Ball, and it reported that, “The answer is murky.”

No doubt the severity of the economic downturn and how it affected American households is going to have some long-term effects. What we know for sure is that there’s less credit out there and that consumers are no longer able to use their houses as ATM machines. So their spending is going to be scrutinized. My belief is that consumers will continue to splurge on “affordable luxuries” such as $3 coffee drinks and moderately-priced electronic doo-dads because of the “highs” they experience from them. But I do believe the recession is making people think they need “post-rational” justifications for their extravagant purchases.

In dealing with an uncertain future such as this, it helps to approach the situation as a baseball team who has lost 100 games would approach the coming season: focus first on the fundamentals. And the fundamental concern for every marketer (in any economy, really) should be about demonstrated value.

Know your customer better than your competitors know theirs. Find out what they expect from you, and the real reason they buy from you. Then set about amplifying that, giving them more, and giving them reason to talk about you in their circles. Find out where you have the opportunity to surprise them. And for crying out loud, don’t scrimp when it comes to creating that positive experience.

For more in depth look into some of the most recent customer surveys, check out the Alix Partners study or the Deloitte “American Pantry Study”.

A rising economy can be forgiving of a lot of marketing laziness. But in an economy where, literally, anything goes, stick to the basics.

Posted by Mickey

A logical ploy would be to play the odds. A quick calculation helps you determine that if you take another card, you have a 54% chance of busting. And your chances of drawing to an 18 or higher are less than one in three. So your logical move would be to stand on your 15. Right?

So why do knowledgeable blackjack players advise you to hit on 15 (and again on 16, should you draw an Ace)? Because they understand the goal of Blackjack is NOT to avoid busting. It is to have a winning hand. And, as experience shows, in most instances 15 isn’t going to stand up.

It will be a long night at the table if your strategy is to simply stay in the game and rely on the competition to fail.

And so it is in business. When presented with a situation or opportunity, we quickly assess our probability of success. And if our odds of failure are 50% (or 20% or sometimes even 10%), we “stand.” But we forget. Our goal in business (as in Blackjack) is NOT to avoid failure, but to succeed. And as in Blackjack, standing on 15 is not going to lead to much success.

When the odds are in your favor, the calls are easier to make. The risk of failure is less. But what separates the world class Blackjack player from the tour bus crowd (besides having a humongous bankroll) is the courage to not freeze up when the odds are NOT in your favor.

A couple of examples of companies who refused to “stand on 15” come to mind. One is Kellogg, who in the teeth of the worst economic climate in more than a century, and against the advice of its financial people, launched and promoted a new breakfast cereal, Rice Krispies. This event was the turning point for Kellogg, who for the last 70+ years has been the undisputed leader in the breakfast food category. Then there’s Apple. We forget now, but the first iPod was launched just a few weeks after 9/11. Both companies could have stood pat. They could have waited to be dealt a more advantageous hand. But they realized they had plenty to gain. And you think the hand you’re holding now is bad?

Play to win. Not to not lose.

Posted by Mickey

So far, the program has been a win/win for Pepsi. The soft drink maker received plenty of media attention for its Refresh Project, and it gave it a chance to connect with its fans and followers in a meaningful way.

In light of the recent Gulf disaster, Pepsi expanded its Refresh Project into a “Do Good for the Gulf” Refresh campaign. Pepsi has pledged $1.3 million to consumer submitted ideas that could “refresh the communities of the Gulf states.” Pepsi invited the public to submit ideas through July 16. Starting August 2, consumers can vote on the ideas they like best. Finalists will be announced on September 2, and grants will be awarded on September 22.

On the surface, this initiative seems to hit all the right notes. It’s a natural way to extend Pepsi’s Social Media campaign while doing some much-needed good. But to the skeptical part of me, this just doesn’t smell right. By tying itself to a major disaster, the company has to carefully walk the line between legitimate cause marketing and shameless self promotion. Is the company’s driving intention to help the residents of the Gulf, or is it to promote the Pepsi brand?

Here are a few of my reservations:

1) The amount pledged. Hey $1.3 million isn’t chump change by any stretch of the imagination. But knowing the inner workings of corporate marketing/PR departments, I can easily imagine the company is paying ten times that amount to promote and administer the program. It’s like those solicitations you get to help feed the children of Africa, but when you look into the financials of the organization, you find out that only 5 cents of your dollar goes for food. In other words, if Pepsi’s #1 concern is providing for Gulf residents, it could do better.

2) The company’s involvement in the “crowd sourcing” part of this project. The focus strictly on Social Media means the system will be gamed—heavy users Social Media will have more of a say than your average Gulf resident. While that fits with the original intention and structure of the Refresh Project, it feels somewhat ham-handed for dealing with people’s legitimate needs and concerns.

3) The very public way the company is going about this promotion. It seems a little too “corporate” and well-planned. Disasters are messy. Carefully orchestrated philanthropy feels out of place. For an example of a company that did it right, think back to WalMart in the days following Hurricane Katrina. With no fanfare, the company’s stores loaded tens of thousands of bottles of fresh water on its trucks and delivered them to needy residents before the media even showed up.

There’s nothing wrong with an organization striving to get noticed for its good works. If I were advising Pepsi on how to follow through on this project, here’s what I’d tell them:

1) Find out what the needs are NOW and address them. Why wait until the end of September to actually do something? The days immediately following a disaster are when the needs and opportunities are most critical. Find out what needs aren’t being addressed now, and address them. If there’s a need for more shovels or graders to comb the beaches, provide them. If volunteers need accommodations, equipment, hazmat suits or respirators (or cell phones to call home), provide them. Go ahead and collect nominations from the Facebook crowd, but don’t let them lead you on this.

2) Involve the Pepsi community as a whole. Allow folks beyond the Gulf in California or Nebraska or Idaho to contribute to the cause. Set up a dollar-for-dollar match campaign with specific projects in mind. Or start a general Gulf Fund where the company would handle all administrative expenses so every dollar goes to the cause, whether its shrimp fishermen’s families, bankrupted hotel operators or whatever.

3) Make a long-term pledge. Don’t bug out as soon as the story falls off the front page. Commit that “five cents of every Pepsi product purchased will go to Gulf aid,” or something like that.

4) Don’t focus on getting attention. No need to string huge Pepsi banners on the beaches, put logos everywhere and arrange for press briefings. Just get out there and do what you know needs done. People will notice. Stories will spread. This will be more powerful than an orchestrated Social Media campaign.

Public skepticism of corporations is high right now. The first question many consumers will ask of your good works is “What’s in it for you?” It pays to be as transparent as possible. If your #1 intention is to do good, then do good. Don’t worry about how you can milk your efforts.

Posted by Mickey

“As one of the worst recessions in recent history seems to loosen its grip, both fundamentally and psychologically, it’s time to take stock in what I hope we’ve learned.

Real relationships took a back seat in business. That’s not what caused the recession, but a quick scan of the worst headlines would suggest that if the major ethical lapses reported on Wall Street could occur, then perhaps even the smallest of firms had let go of behavior that looked something like decency.

As we rebound and even boom, I hope that we will see a return to business relationships built on a foundation of mutual respect, trust and decency.

While words like trust and decency can be hard to define tangibly, there are behaviors that any business can adopt to keep the focus where it should be.

Create more value

Price is a function of value, there’s no question about that fact. And value is delivered in many little ways. Now is the time to deconstruct our products and services, and perhaps more importantly, the way our customers experience our organization, with an eye on making the entire collection more valuable, remarkable, fun, flexible and personal. Doing that can set an organization on the path to a solid foundation of customer loyalty that serves in good times and bad.

Take a holistic view

As we view your customer needs, what if we tried to understand everything they need, including areas unrelated to our products and services? If we can come to appreciate all of our customer’s desires and goals, we can develop a team of strategic partners that can plug into our offerings and help us dramatically deepen our customer relationships.

What if we began to think of our role as a customer booster rocket and “go to” resource for everything they needed? Do this and we also develop a referral network that will turn into our ongoing lead generation machine.

Mine the collaboration universe

One of the greatest developments associated with the growth of the Web is the proliferation of tools that make it very easy to collaborate, both online and off, with prospective customers, vendors, mentors, suppliers, staff and even competitors. We must mine this technology and enable the players in our collaboration universe to expand what they can offer us, our team, and our customers.

And for decency bonus points…

Let’s take a quick look at our closest competitors. What’s happened to them during this downturn? Is there an opportunity to grab market share? If so, resist it and consider lending them a hand instead. I know this may run counter to competitive wisdom, and I’m not suggesting we need to take on their payables, but I do think there’s a long view in being the kind of company that uses their position in the community to establish a statement about what’s really important.

I grew up in a farm community and while it’s unlikely one farmer thought of themselves as fierce competitors of another, they did provide a market with the same products. However, if one farmer experienced a hardship, a broken down tractor, loss of livestock, or need to get the crop in before a big storm, they could usually count on the help of neighboring farms without the need to ask or expectation of payment. Everyone in the community knew that they would probably need this same kind of support and gave a hand willingly. I wonder if today’s small business community could take this view?

Learn from social behavior

Social technology affords us a glimpse into the personal lives of those around us. Certainly this can be abused on both ends, but it also calls out for a new form of leadership that is much more open and willing to blend business and personal.

With mainstream acceptance and sharing on social networks we have the tools to automatically build deeper relationships that take into consideration the challenges and objectives of those around us in ways never before experienced in the business world.

I often use the Mister Rogers quote, “It’s hard not to like somebody once you know their story,” to drive this point home. If we use the shift in social behavior to tell our own stories and learn from the stories of others and we’ll be much more equipped to create a culture of decency throughout.

Say thank you

With the rush and go, always crushed with things to do, it’s pretty easy to get complacent about who and what pays the bills. If we’ve lapsed into this, we need to remake space to thank the people that make our businesses possible.

This process starts with letting our staff members understand how valuable they are and how much we appreciate what they add. (In fact, acknowledging a job well done is the most powerful motivation tool in the box.)

I’ve taken up sending hand-written notes to those I should thank. It’s not that hard to establish a habit of sitting down at a set time each week and sending inked words of appreciation, recognition and observation.

That might be the most decent thing any of us can do.”

Thanks, John, for your thoughts.

Posted by Mickey

In other words, marketing malpractice at its worst.

Like most cases of mismarketing, this one started out with success. Chrysler succeeded admirably at creating buzz for the PT even before its launch in 2001. Described as a cross between a 1930’s sedan and a vintage milk truck, it was the darling of car shows. Pre-orders were strong. Anticipation of the model drove scores of the curious (most of them non-Chrysler types) to dealer showrooms. Early adopters paid well over invoice for the PT of their choice. Fan clubs were formed. Rallies were organized. Aftermarket pimping commenced. It was also the first of the “post retro” crop of vehicles, which has grown to include the Ford Mustang, the Dodge Challenger and the Chevrolet Camaro and HHR.

The Cruiser also proved to be a demographic-buster, appealing to everyone from retirees to customizers to first-time car buyers looking for something spacious, inexpensive and yes, head-turning. (In the spirit of disclosure, I must inform you I purchase a 2002 model, which I still drive today.)

It didn’t take long for Chrysler to squander its success. Here are a few of the marketing sins commited by the automaker on behalf of the Cruiser:

• It failed to reinvest in the brand. We’ve written before about the necessity for marketers to continually add value to their offerings (click here for post). If you see a PT coming down the street, you’d be hard pressed to tell if it was a 2001 model, a 2007 model or a 2010 model. Version 2.0 never arrived. Initial owners loved their Cruisers. But when it came time to trade them in, I suspect very few bought another one. Why buy the same car twice? As an example of an automaker who has done it right, check out the 2010 Honda Civic compared to the 2001.
• It failed to understand its user base. The downside of having a product that appeals to many demographics is that it is easy to lose site of your “sweet spot.” While you never want to turn away buyers, you definitely want to cater to your bread and butter. And Chrysler could never decide who its core market was. Was it the young urban family looking for economical transportation? The boomer who was swept up in the nostalgic looks? The soccer mom who wouldn’t be caught dead in a minivan?
• It allowed the model to become too ubiquitous. This is a tough one. The idea, after all is to sell more units, right? Well, actually the idea is to make more profits, and there are a lot of ways to go on that. The initial demand for the PT should have signaled Chrysler that it had a powerful niche model on it hands, but that’s all it would be. It was too polarizing to become the automaker’s flagship vehicle. By limiting production of the PT, Chrysler could have justified a premium price, which would played into the “individualism” the model inspired. And by upgrading the model (or adding variations: a panel truck, a woody station wagon, a top-less roadster, a club coupe?) Chrysler could continue to appeal to that crowd. Make the product’s Brand Vision “Head Turner.”

A former client of mine who was in the auto business once shared with me his early indicator of when a model was in trouble. “When you see rental car lots full of them, then you know the end is near,” he said. That was certainly true of the PT.

But perhaps the biggest marketing sin committed on behalf of the PT was to take a product that inspired passion, loyalty and camaraderie and allow it to suffer a Saturn-like fate.

Good luck, Fiat. Your work’s cut out for you.

Posted by Mickey

David Blaine, he’s not.  Harry does not create a distance between himself and his audience as most performers do. Instead he wows you with the results of his creativity and endless hours of dedication. And then he lets you in on the gag. At that moment, he becomes an ‘everyman.’ Members of his audience connect with him by thinking, “Hey, with enough practice, maybe even I could pull this off.”

Does this transparency diminish Harry’s act? Does it make his illusions any less “magical?” No. In fact, quite the opposite. Once you have an opportunity to “look behind the curtain,” you can more fully appreciate Harry’s act. By “giving away his secrets,” Harry his making magic more human and approachable. It’s one thing to make a 40-story skyscraper disappear. It’s another to have the magician show you how he did it. It gives you a more complete story. It gives you “expert knowledge” that you can try out on your own or share.  It gives you a deeper connection to the craft.

So how can you apply this to your marketing? Instead of attempting to be secretive about everything that goes into the creation of your products, consider what would happen if you were more transparent. Sure, there is a fine line here: there are always patents, trade secrets and competitive intelligence that need to be protected. But most of what we do on a day-to-day basis doesn’t exactly fall under the auspices of “classified information.” Yet we’re reluctant to share much about our processes.

One thing you’ll find out is that the customers who are truly passionate about your products want to know as much as they can about the organization. Just as Harry’s act creates a more complete story for his followers, inviting followers to learn more about your products, people and processes builds a more complete story for them to share.

Here’s Harry perfoming one of his most famous tricks: the old “needle-though-the-arm”:

And here’s the follow-up revealing how it’s done:

Now that you know how the trick works, aren’t you more likely to talk about it later? A more complete story provides a more complete experience.

Posted by Mickey