Sunday, December 02, 2007

Hit ‘Em Where They Ain’t – Trying To Imitate An Entrenched Competitor Is Risky

A few years ago, I managed a field marketing program for one of the (at the time) major maker of MP3 players. The client, whom I’ll call Xco. was a multiproduct company known for computer accessories. It’s early music players had achieved some success, though they were a minor business for the company. These players were light, compact, relatively inexpensive, flash memory devices which used a replaceable standard AA battery.

That year the iPod was hot and it grew the category as it expanded its own business. The iPod featured an ability to hold a large collection of tunes made possible by a micro hard drive and came in an elegant polished metal case. It was the most expensive player, but it held the most tunes.

Xco and several competitors launched similar products – MP3 players with small hard drives. Xco’s product lacked the polished design of the iPod, but was serviceable and easy to use. To try to secure a beach head, Xco priced its players 10% to 15% below Apple’s. Not surprisingly, this wannabe product a – poor cousin at a slightly lower price – failed. Xco eventually exited entirely from the category.

There were a number of reasons for failure, but poor marketing strategy was significant. In effect, Xco tried to position itself as a parity product against the category leader with no positive differentiation except a small price discount. Since my research showed 80% to 90% of consumers preferred the look and feel of the iPod, the product was not perceived as competitive even at the lower price. Xco’s product was doomed.

What might Xco have done? Instead of trying to be an iPod, it could have built on the demonstrated market success of its initial products. Customers liked its solid state players, which were smaller, lighter and fit comfortably in the hand or pocket, in contrast to the bulkier and heavier iPod. Moreover, the ability to replace the battery with an inexpensive standard battery, satisfied a perceived need, which Apple still has not adequately addressed.

This compact light weight inexpensive player with replaceable batteries could effectively have positioned Xco against Apple given that Apple would have had no comparable product (with or without replaceable batteries) for two years. Thus with proper execution, Xco might have defended and grown its solid state player business.

This is not to predict that Xco could have indefinitely withstood Apple as it broadened its product line. At the least, that would have required continued innovation. But by avoiding a “me too” strategy, it would have likely earned a far better return on its business.

Monday, October 29, 2007

Extra Bases in Boston

Boston Baseball Fans and some normally indifferent to the game are even more enthusiastic leading up to the 2007 World Series. The reason – not just the Sox’ chance or a second title in three years – but furniture.

Those who bought sofas, dining room sets, etc. last spring at Jordan’s Furniture, a group of four retail stores near Boston, stand to have their full purchase price (up to $2,500) refunded if the Boston Red Sox win the World Series.

This promotion created news coverage at the time and thus amplified Jordan’s own marketing of the event. The press also reported that sales volume was substantially above the prior period and that during the last week of the event the store was “mobbed.” Jordan’s hedged their expense of the promotion through an insurance policy.

What does this have to do with the furniture business or yours? Why is Jordan’s so much more successful than most furniture retailers?

Sports relates sales promotions are common. But this one was unique. It was not a ho-hum official sponsor of, hire an endorsement from a particular sports figure, or buy and be entered in a drawing for World Series tickets.

A key question for any marketer is or ought to be what business are we in. For Jordan’s, the answer appears to be show business. The thought of dragging your family to look at mattresses, living room ensembles, and dining tables is not appealing. It becomes a chore to be avoided.

But if you could see first movies on a giant Imax screen, have free popcorn, and have a year-round Mardi Gras. In short be entertained and while your at get that desk and filing cabinet, you’ve been wanting for your home office. Going to Jordan’s during this promotion was participating in an event

Barry and Eliot, Jordans’ top executives and spokesmen, have long used entertainment to position their company as a venue as well as a furniture store.

All of this adds perceived value to what could seem like a boring commodity, encourages shoppers, and engages customers.

You don’t have to swing for the fences the way Jordan’s has, but what are you doing to get past first base with your customers?

Friday, September 14, 2007

The Blog Turns 10

The Blog turned 10 this summer. Aside from disappointment that you missed the party, why should you care? Should you join scores of millions of organizations, pundits, and malcontents in creating a blog for your business, hobby, or cause?

I’ve not seen a really good definition of blog. I’d characterize it as organized web content, such as by date and subject, which is very easy to update. You as a blogger don’t have to know more than how to type or cut and paste and click a button or two. Blogs can be far more elaborate with graphics, audio, and full motion video; but in general, you need no more than an Internet connection and an idea. Far too many blogs seem to dispense with this second ingredient.

As marketers, we like to experiment. Blogs can be quick experiments. They do not require significant investment. If your blog is getting bogged down in design reviews and policy meetings, stop. Your blog doesn’t have to be ugly, but its purpose is to dispense content. As in so much of marketing, the KISS principal (Keep It Simple Stupid) applies.

What can a blog do for you? Occasionally blogs become a hit and get lots of traffic. When that happens you can profit by selling ads through programs such as Google’s Adsense. This does happen, but is as optimistic as panning for gold in your bath tub not the basis for a business plan.

Blogging systems typically allow readers to comment, though this option can be turned off. If you enable this, a blog can be useful source of customer information and an early alert to problems. It’s also a way to engage customers, especially those who care about the product. These engaged customers could be the basis of a community of users.

Even unhappy customers have value. They could signal perceived or real problems you ought to know about, and the blog can be a vehicle to directly reach and respond to them.

Any visitor to the blog can comment, so a rude, lewd, or overly persistent commentator can be a problem. There are ways to deal with these such as moderating your blog, but they add complexity and labor to what is supposed to be an essentially simple system.

The key reason we recommend blogs is to keep adding new content to your site. Blogs are an almost spontaneous way for you to add relevant information, without another web design cycle. Indeed some blog software, WordPress comes to mind, could be used as a full blown web publishing and content management system. Having a blog can help your site’s search rankings. Because blog content can be readily refreshed and enhanced, it’s a reason for visitor’s to keep returning.

Because of their informal style, blogs can also be a window on the personality of your brand or products; and so a way to get closer to your customers. If you’ve got something to say, get a blog.

Saturday, July 28, 2007


Professor Robert Sutton’s latest book is short and easily readable in a few evenings. It’s provocative title is *The No Asshole Rule (Random House, 2007). It’s content is relevant to your business.

The book focuses on the disfunctions of teams and organizations caused by bullies, jerks, and “assholes”. The book is commendable in its cases, descriptions, and prescriptions for alleviating some of the damage caused by these toxic people.

In essence, the Rule is:

Avoid hiring them, even if they have other desirable skills. If need be include this formally in your job search requirements.

Failing this -

Find them. That is, diagnose and distinguish between the aberration and the occasional bad behavior, most of us occasionally commit, from the true chronic, certified jerk.

Fix them. This is problematic but sometimes possible. If an outright cure is not feasible, perhaps these bozos can be assigned a role, which best uses his strengths while insulating the rest of group from him.

Fire them. This can be tough to do. Very tough in some organizations. The result justifies the effort.

Sutton’s specialty is management not marketing, but his ideas are directly relevant. As marketers, we occasionally have these types as customers. The Rule should apply here as well. We’re not talking about simply difficult or demanding customers. We get paid to satisfy them. Their complaints and criticisms may improve our business.

What we don’t get paid for is dealing with tainted customers and prospects. Even if they’re “profitable”, and often they are not, they are not worth it. Even customer sovereign organizations, such Nordstrom and LL Bean, have come to recognize this. Ideally a CRM system would flag such individuals. In the real world, we shouldn’t be afraid to apply TNAR to our customers and if necessary fire them.

Wednesday, June 27, 2007

What Are Your Colors?

"The Customer Can Have Any Color He Wants So Long As It's Black" – Henry Ford

There is some dispute whether Ford actually said this. Regardless it has become a truism, whose influence persists. The message is also, if you don’t like our products, tough! Long after the decline both of Ford and his company, black is the one color in which virtually every model automobile is available.

Similarly, major appliances such as refrigerators and washers still tend to come in white and now a quite limited assortment of other colors. While consumer electronics and small appliances often come in metallic silver, white or black. This begs the question – why are developers of products from plumbing fixtures to household implements to tee shirts color blind?

Colors in product design are, subject to fashion. Remember the blizzard of beige a few years ago? Novel products used to be able to get away with superficial sameness but as product categories from mobile phones to sporting goods have become commodities similarity has become dangerous.

Those of you who stage shows and events as part of your promotional mix may have used tchotchkes such tee shirts. All too often they are white or black in size extra large. As a result, they often end up in trade show dumpsters.

The temptations, which attracted Ford, are still with us. Of course, it’s easier to have one or a small number of colors, flavors, or other features. One of our key missions as marketers is to differentiate our products favorably. We should also do this inexpensively. Here color can work, especially in the face of monochrome monotonous competition.

An interesting case is Dell. Personal computers are as much a commodity as any consumer product. Indeed computer “manufacturers” make none of the major components. Instead they assemble their products from standard parts produced by others.

Dell’s key differentiator had long been to compete on price – the typical strategy in a commodity business. Dell played that game for too long. Competitors caught up leaving Dell with neither cost leadership not profitability.

They have recently made radical changes from management to sales channels to marketing. And they’ve discovered color. Dell notebook computers now come in a choice of eight colors (7 plus black). The color option consists of replacing the top of the case with a plastic panel in one of the colors. This increases Dell’s bill of materials, but with it’s build to order products, it does not increase the number of SKUs. This feature is probably profitable.

Customers pay an extra $20 for color. As long as colored computers are unusual, this means the Dell logo is displayed on the top of an eye catching background. This not only polished the brand image, it builds a ruby, evergreen, gold, or azure box, which for now, is not a commodity.

Monday, June 04, 2007

Scientific Marketing

A recent commercial for Ocean Spray diet cranberry drink was, according to the Wall St. Journal (6/4/07 Page B8), created with the aid of “lab-coat-wearing scientists as it seeks to get deeper into the heads of consumers.” You can see the ad (along with another commercial) at here

The article goes on to describe that the agency, which created to ad, employs an individual with a Ph.D. in cognitive science. The ad superficially looks like an ordinary consumer spot, however the “scientist” is credited with changing the ad’s content to be less confusing and facilitate better information processing by the ad’s audience.

Should you add a cognitive scientist or any other scientist to your marketing team or is this a case buzz word invasion in marketing. For the commercial in question, we cannot yet say.

Physicist Richard Feynman, in his perennially interesting Feynman Lectures On Physics, characterized science as the discipline in which disputes are decided by experiment. Yet for the Ocean Spray commercial, data on outcomes, such as sales, are noticeably absent. Until they are included, I’ll go light on the diet cranberry drink.

Thursday, May 17, 2007

Give Your Communications A Basque Treatment

After a recent trip to see a client in Northern Spain, we spent a few days traveling in Basque country and neighboring La Rioja. Here the road signs are in bilingual in Basque and Spanish. They also tend to be in large letters in a highly readable sans-serif type. Our Spanish is so-so and our Basque, that unique language unrelated to anything else, non-existent. We were, however, better able to navigate the roads than in US cities we don’t know.

Where it’s important, such as entrances to traffic circles and narrow unlighted mountain tunnels, the signs are vivid graphical icons. We had never seen some of these, such as those for dimming lights, but we understood immediately.

Can you say the same about your package design, web pages, and ad layout? If not, we suggest giving your communications the Basque treatment. Think about what it would take to deliver a single message to prospects, who often don’t already know who you are and why they must have your products.

Thursday, March 22, 2007

Looks Like They Forgot To Add Marketing

Microsoft has been a marketing focused company for most of its history. Independent of the merits of its products, it has often excelled in both marketing strategy and tactics. It is hardly a coincidence that its current CEO, Steve Ballmer, began his career at Proctor and Gamble. Thus it seems particularly puzzling that for its latest and most ambitious product ever – Windows Vista, marketing appears an afterthought. Sales of what Microsoft expects to be a blockbuster are off to a slower start then predicted. The Vista products have received mixed reviews, but it’s the marketing that hurts.

Microsoft can commit marketing sins the rest of us cannot get away with, because over 90% of new PCs automatically come with Vista. The marketing opportunity is with the tens of millions of computers running one of the versions older than Vista. When the choice is to stay with the older product for free or pay for Vista, marketing is crucial. So what’s wrong with Vista’s marketing?

Too Many Products With Indistinct Positioning.

Vista is not a single product. It exists in five (count’em 5) versions each at different price points. The products homepage ( is longer on animation than substance. One clicks, waits for icons to dance around the screen, clicks again and gets a paragraph, which claims but neither shows nor convinces why this is for me. These are somewhat ordered on a continuum perhaps from simple to sophisticated or home to business, or clueless to tech-savvy. The positioning is not clear and that’s a problem

Unclear Benefit Proposition.

"Easier, Safer, More Entertaining, Better Connected" says the web site.

This smacks of “new and improved” from the bad old days out of the marketing museum. Want to know more, download the product guide. This guide may need a guide. Depending on its format, it weighs in at from 24 Mb to 61 Mb. The formats are not what computer users have been taught to expect. There is no Word document or Adobe pdf collateral for Vista. Rather the guides come in new proprietary formats, which require you to first download and install viewer software.

Vague Claims and What Seems Like Mere Puffery.

Clicking further does not always yield more information or enlightenment. Consider this description of the Vista Business version. Often hyperbole substitutes for demonstration. Why spend $99.50 for Vista Home Basic when for $ 159.00 or so, you can get Vista Home Premium with an “Elegant Windows Aero desktop experience”. Experience is getting expensive, but I guess you have to be there to appreciate it. The page depicting this is neither elegant nor an experience though it tells us:

"Windows Vista Business is the first Windows operating system designed specifically to meet the needs of small businesses. You'll empower your entire business to work more efficiently …"

Curiously Vista is subordinated on Microsoft’s own home page, not only to the new version of its office software, but even a to a fix for the new onset of daylight saving time. This last, some days after the time change, when you had either manually changed your clock or decided you didn’t care what time your computer claimed was.

Microsoft chairman Bill Gates is well known and for a businessman fairly recognizable. The site depicts him much younger and with a beatific smile that participants in an informal poll I conducted found unsettling.

Vista may be a fine product, but until Microsoft tells and shows what’s in it for customers and there by return to its roots, sales are likely to lag.

Friday, February 23, 2007

Your Sugar Mama

There are so many bad marketing campaigns, we like to salute one when we find it.

Campaign: Sugar Mama

Sponsor: Virgin Mobile


Offer: Reward Mobil customers with extra minutes in return for

  • Watching online videos
  • Receiving text messages
  • Filling out surveys

Details: Exactly how program works stated clearly and concisely on a answers page.

Execution: If you still have questions, there is an email address. And someone actually responds to the email with explicit answers within a day.

This is permission marketing as it ought to be. Customers can opt in and opt out at any time. Their participation is acknowledged with a simple token reward – for every minute you view our content, we give you a minute of airtime.

As a rate of pay this is way below minimum wage, but that beside the point. It is an acknowledgement and appreciation of the customer. When is the last time you got that as a consumer?

This straight forward clarity runs throughout. It’s easy to see what you get, what that costs, and what to do if you want to change your plan.

This shouldn’t be a big deal, but compared with the major communications carriers and cable system operators it is. It is the difference between earning customers and trapping them.

Tuesday, February 20, 2007

Best Practices – Do Not Make Perfect

Many of our clients assume that if a marketing stratagem or tactic is used by a major player it ought to be good. If a small to mid-sized firm can afford to, they’d do well to mount a similar program. “If (fill in the name of a feared or admired organization) does it, why don’t we?”

Consider the following. A major bank and credit card issuer sends multiple envelopes to arrive on the same day. One is a statement and with it the usual detritus of untargeted offers such as those blank checks allowing you to get cash at very high interest. The second package is more of the same, without the statement. Why do major firms clog your physical and electronic inboxes with multiple offers and why do they present the same or similar offers to customers, who over the years have shown no interest?

The cost to print, process, and mail offer, when you have scores of millions of customers is low. The return on those unfortunate folks who, for whatever reason, use those checks is high. Whether these programs have a high or even a positive ROI is tough to tell from outside the organization. Whatever the believed ROI, it is probably exaggerated, because it ignores several costs. These include:

  • The cost in time and potential irritation and confusion to the customer of overlapping offers.
  • The opportunity cost when customers perceive your company as inept and are less likely to buy other services from you.
  • The avoidable waste of communications sent to customers, who by their history, have shown they are not interested in a product.

Of course, we should always be willing to test offers, but the offer above, was dead on arrival. Next time you get a communication from one of the big guys, don’t consider it an example of a best practice. You can do better.

Friday, January 26, 2007

Will The Cat Drool?

Waiting for Your Cat to Bark, A currently popular marketing book, makes much of the differences between cats and dogs. Not the obvious differences. Dogs are a metaphor for customers of yore. Cats are the new non-compliant customer. The authors go on to make a specious case that Pavlov, the Russian physiologist of salivation dog fame, is no longer relevant.

Essentially Pavlov showed that merely the (almost) simultaneous pairing of two stimuli results in the learning that these are associated. The classic case is pairing of a sound with food, such that hearing the sound produces salivation. The effect is powerful and ubiquitous and applies to you and me as well as dogs and cats.

So what? You might well ask. Pavlov’s model was and is the prevailing one for marketing communications. A product may have a complex, systematic and rational value proposition, yet most attempts to enlist customers are Pavlovian.

Marketers try to induce interest or favorable perception by pairing the product or brand with something else the prospect perceives favorably or associate its absence with something unfavorable. Favorable stimuli include sex, safety, children, money, admiration, food, affiliation, and domination.

This attempted association or “conditioning” to use Pavlov’s term, is easy to spot in broadcast advertising, but is common in print, direct mail, email and web sites as well as tactics derived from these such as viral marketing campaigns.

Consider this next time you watch the Super Bowl, read a direct mail piece from Dell computer or brows banner ads for on-line gaming.