Results Count ... everything else is conversation.

Build it and they will come … Maybe not.

Critical success factors for finding “brand fans”

Which is more important … building a Facebook fan page or an i-Phone app? Given the recent triple digit growth of social networks, many would argue that “fan pages” are more valuable in building brand relationships.  But, if you invest to build a fan page will they come?  Which companies have successful fan pages, which have missed the mark … and why?

Brands seek fans – Rush to “social media”

Facebook is the current darling of social media.  Not only is Facebook one of the few that is turning a profit (staying power), it is by far the most popular of social sites.  Facebook is estimated to have 40% share of the social media traffic, with more than 300 million members.  According to Nielson, users average six hours per month on just Facebook. Power social media users are on social networks more than email.

It is no surprise that major brands have rushed to build fan pages in order reach customers on Facebook.  Not only can you build a base of loyal fans for your brand, the communication can be highly interactive.  Even better, the cost of Facebook “fan pages” is essentially free. Ads to potential fans are optional. And even better yet, there are built in metrics:  number of fans, visits, and unique page views!  

So, what’s not to like?  Indeed, well known brands have been building multiple fan pages, especially on Facebook.  But, the success in creating loyal fans varies dramatically … even within the same line of business.

Ad Week recently published a very insightful article by Brian Morrissey regarding the success factors for Facebook fan pages. Morrisey provides some fan stats, as well as key insights regarding fan page success.  Here are some interesting highlights on the “winners” and “misses” by key competitors:

 

·   Winner – Coke;  3.7 million fans

Uses regular promos, events and solicits interaction from fans, including fan videos for a chance to be in a Coke commercial

·   Missed – Pepsi:  250,000 fans

Primarily uses fan page to provide updates on marketing activities

 

·   Winner – Best Buy:  850,000 fans

Highly interactive, shop & share between fans, gift ideas

·   Missed – Walmart:  17,000 fans!

Little or no content, no promotion of green initiatives or value

·   Winner – Southwest: 80,000 fans, but this is an airline!

Highly interactive, personal chat hosts, solicits customer feedback

·   Missed – United:   11,000 “potential fans”

Pitiful communication, no posts for months, no fan involvement

 

Building fan pages does NOT mean they will come, or stay

I encourage you to read the rest of Morrissey’s article on fan page success factors.  Even if you are the largest in your category, or the most well know brand, it doesn’t mean a fan page will attract fans.  In fact, a lousy fan page can have the opposite effect and drive away customers.   A key take away is that even though building a fan page might be free, it takes consistent hard work and investment in creating value to attract loyal fans, and to keep them coming back.  

 Key factors in building and keeping loyal fans:

1. Marketing of the fan page to create awareness of  fan page itself

2. Promotions that create a reason to come and become a fan

3. Value – unique content and/or interactions

4. Consistent and regular posts, updates, content

5. Highly interactive, with high regard for consumer input

6. Connection opportunities between fans

7. Tone, voice, atmosphere consistent with brand

 

If you have flown United Airlines recently you will clearly understand the last point and why they only have 11,000 one time fans!  The interesting paradox about social media is that it takes synergistic execution of traditional marketing media, advertising, promotions, events and messaging to create a successful fan page. Said another way, a large fan base on Facebook is perhaps more of an outcome of holistic marketing, rather than a low cost means to an end.

What is old is new again – Coupons are back!

How coupons have re-emerged in a digital age

Coded coupons were used by Claude Hopkins in 1909 to test consumer responses to headlines and promotions.  Hopkins is often credited with being the father of direct marketing.  As coupons re-emerge in today’s digital world, marketers would do well to read his book, Scientific Advertising.  You have to love a marketer that measures results!

Coupon clipping in frugal times

During the US depression in the 1930s, coupons surged as a marketing tool.  Shoppers became extremely frugal and used coupons to find bargains and stretch budgets.  During the depression, coupons were found everywhere in print – newspapers, magazines, inserts and even in flyers.  Coupon clipping literally became a way of life for consumers to save money, and for marketers to track and measure results. 

When the economy improved, coupon clipping diminished as shoppers were not as pressed to save nickels and dimes.  With the advent of EDLP, there was no need for paper discount coupons, at least at Walmart.  However, as the current economy again stresses family budgets, the “old marketing” of coupons has re-emerged, especially in the new digital media.

Couponing in a digital age

Coupons have traditionally been associated with groceries and packaged goods items.   And, Nielson data indicates that coupon clipping is in vogue again in the US.   Nielson reports that 1.6 billion coupons were redeemed in the first half of 2009, which is up 23% year over year. 

While most of the consumer packaged goods coupons are still coded paper, there is an evolving trend toward digital. It is now estimated in the US that 40 million people print online coupons.  With pioneers like JC Penney and others now accepting digital coupons on phones, many future coupons may in fact never get printed.   This is already the case with digital coupon redemption at internet shopping carts.

Do your own simple online test of digital coupons

Coupons may not be as “sexy” as other visual media, but they are highly valued by consumers.  Most importantly, they drive sales. The “coupon moms” of today not only value the savings discounts, but highly value the convenience and time savings of being able to search and redeem digitally.  In fact, the major digital break through has been digital coupon consolidation sites.

Still wondering if this applies to your business or consumer electronics?  Do your own personal test.  Go to Google or Bing and type in “coupons” and a category like “electronics”.  Look at how many digital coupon consolidation sites like “CouponCabin” and “CouponMom” emerge.  Indeed, one of the core value props behind Bing is “Cashback”.

Results Count … especially with digital coupons

There is ample evidence to indicate that coupons can and do drive sales.  With digital couponing rapidly increasing, coupon reach to more consumers is increasing, as well as redemption rates.  All good for consumers, but what do marketers get?

Today’s marketers would be well advised to go back and read Hopkins book Scientific Advertising.  Hopkins original genius was “coding” the coupons so that he could measure the results of different headlines, offers and messaging.  

With digital coupons today, there is a multitude of new opportunities to collect marketing data about the consumers using them, where they are using them, and to systematically test what works best where. At a minimum, today’s marketer using digital coupons must do more than merely discount price and measure sales. 

Just like in 1909, the ability to measure coupon impact hinges on systematic coding, testing different variations and tracking sales results.  If you are not measuring at least some of the following, you are not harvesting key insights and value of coupons in today’s digital world:

· What is the original source of the coupon?

· Did the consumer go through search engine(s)?

· What are the most effective means to directly deliver coupons?

· Where do consumers redeem digital coupons?

· What factors / attributes most affect redemption rates?

· In addition to the coupon item, what else is in the basket?

· What is the incremental sales and ROI impact of different offers?

Perhaps coupons never really went away, at least with consumers.  Coupons are not as sexy as “flash & splash” of  other digital media.  But, the data suggest that coupons, especially digital, have become a major factor in driving retail sales both online and in-store.

Today more than ever … Results Count!  Today’s marketers would do well to rediscover the power and insights that coupons can provide … IF there is systematic measurement of attributes that drive profitable results.

 

Don’t have friends or fans … you can buy some!

What does “buying fans” say about your marketing?

Like many others, we have commented in past posts about the potential of social media and marketing.  If you have been late or unsuccessful in building your social marketing, now you can buy Facebook “friends” and Twitter “followers”.  Is social media transforming, or does this new “social spamming” corrupt the value of the media and marketing?

The explosion and power of social media marketing

Twitter quickly caught most marketers’ attention as a very unique way of reaching a customer base through almost real time messaging. Twitter became the medium of choice to reach consumers “in the moment”, as well as a means of collecting immediate consumer responses, impressions and feedback.  The case of the CEO of Zappos reaching millions of consumers through tweets has become a case study of almost legend.

And, who doesn’t now have a fan page on Facebook?  Yep, we even have a Retail U fan page on Facebook!  It has almost become a requirement for businesses to have a fan page to establish “social presence”. 

Facebook has become a premier medium to connect with and build loyalty with “fans”, as well as promote products.  In many ways, Facebook has be become more of a valued marketing vehicle than a website. Facebook fan pages have the value proposition of being able to “push” directly to a targeted audience, rather than “waiting” for them to come.

The power of “friend”, “fan” and “follower” metrics.

Blame it on Ashton and Demi, who perhaps first created the phenomena of racing to get a million “followers” on Twitter.  Or, the new push by media celebrities, such as Shaq or Ellen, to reach a new standard of 3 million followers.  Much of the early zest and efforts were focused on testing the limits and potential reach of the new social media.

But, it isn't just ego or a status symbol of celebrities if a marketer can get millions of followers on Twitter or fans on Facebook. It becomes a very powerful base for direct, targeted marketing.  Marketing to "loyal" friends and fans becaomse very low cost, with messaging capabilities 24/7 365.

Just compare the logistics and the cost of trying to reach a million targeted consumers through traditional direct mail campaigns, or even through managed email lists and blasts every week!

Don’t have friends or fans … buy some?

The really good marketers using social media have applied solid principles in recruiting followers and building a loyal fan base.  And, the marketing principles of “value” still apply – if you create reasons to come and messages of value, loyal customers will come, come back … and spread the buzz about you.

There now seems to be a new phenomenon for late comers and the lazy social marketers.  Instead of building a loyal fan and follower base, simply go buy “friends” and “followers”.  Here are the going rates for what you can buy from USocial:

· 5,000 Facebook “friends” - $ 654.30 or 6.6 cents per friend

· 10,000 Facebook “fans” -  $1,167.30 or 7.6 cents per fan

· 1,000 Twitter “followers” - $280 or 28 cents a follower

Why do Twitter followers cost 4 times those of Facebook?  Not sure.  Even USocial claims that each Facebook friend/fan can be worth up to $1 per month, but Twitter followers only generate 10 cents per month.  Where did they get those figures?  Who knows!   More importantly, what is the conversion rate to those that “stick” around and follow after you have solicited them from the list?  Of course, no data on that.

Dangers of quick fixes and the wrong metrics

Does all of this sound familiar?   When I saw the ads for this, it struck me as the exactly the same thing as buying email lists used for “spamming”.   I don’t know what happens to you when you get the umpteenth Viagra solicitation in email, but it creates immense ire and angst for most of us just trying to sift through over flowing email inboxes.

I don’t know about you, but my Twitter now looks like the worst of Craig’s List.  I get notifications that I’m being followed by everyone from real estate and insurance sales people, to “professionals” offering a “happy massage”.   

Frankly, I’m so sick of the “social spamming” resulting from people buying Twitter lists that I now rarely ever go to Twitter.

With Twitter, they just show up as solicitors now following you.  At least with Facebook you get to screen your “friends” before they become part of the network.  Facebook, like any new social media needs to find ways to monetize its value.  However, if it goes down the slippery slope of breaking its promise of NOT allowing “personal profiles for commercial gain”, it will seriously jeopardize its integrity and the status of preferred and valued social marketing medium. 

The bottom line:  There are no quick fixes or short cuts in any marketing media.  To buy lists and use “social spamming” creates a very high risk of turning potential “fans” into detractors.

Michael Learmonth perhaps said it best in his recent Ad Age article:

“So maybe money can buy you friends and fans, but as Paul McCartney said, it can't buy you love.”

Are you measuring the right internet metrics?

Standard search metrics no longer enough for marketers

The good news about internet retailing is the mountain of data available.  The bad news about internet retailing is you can easily drown in the data smog and lose sight of the profit drivers of retailing online.  As more retail businesses and marketing investments move toward internet retailing, marketers need more sophisticated metrics to provide intelligence on how to invest to improve bottom line results.

Internet retailing is not necessarily “low cost”

In past articles, we have highlighted all of the ways to “invest” in internet marketing.  From banner ads to search optimization rankings, you literally pay for each piece of marketing on the internet.

The classic “pay to play” metrics focused on “clicks” are still key traffic drivers, and revenue generators for both e-tailers and search engines.  No one debates the need to invest paying for keywords to get traffic to your products and messages. But, the cost per click or click through is rapidly increasing, with keywords on some retailer internet sites exceeding $1 to $2 per click.  Click through metrics are necessary, but superficial to the overall objective of selling something online.

The foundation of any retailing is profitable conversion

While traffic to your products and messages are critical, the real key is conversion. The standard conversion metric for internet retailing has been AOV – Average Order Volume.  The best internet retailers are focusing on not only the average selling price (mix), but increasing the AOV through attachments and bundles, which grow the overall market basket.

While AOV is still a core metric that focuses on sales conversion, it is primarily volume based. While it is important to know that investing in the right clicks drives sales conversion, what is the marketing ROI for these investments?  At the end of the day, marketers need more sophisticated metrics in order to be able to make decisions on how to bid for keywords, online ads and the myriad of other investments.

Marketers lack sophistication in measuring internet results

In today’s competitive market, clicks and click-throughs are superficial metrics.  In fact, they are not focused on results at all. They are indices of marketing costs … analogous to ad metrics, coupons and promotion redemption rates. Today’s internet marketers need to focus on a broader array of internet metrics focused on the bottom line.

In a recent survey of more than 500 marketers, Omniture found:

• 43% of e-commerce marketing managers who responded to the survey don`t know how to accurately measure profit per customer or profit per order.
• 67% of respondents say they don`t have enough time to effectively manage search marketing campaigns.
• The majority of search marketing managers use Excel spreadsheets to manually manage keywords, and only 35% use an automated keyword bidding application.

Bottom line - what’s your ROI profitability per internet order?

There is no end to the ways that money can be spent on the internet with retailers. Cost per click through has become a bidding war.  And, it is a competitive bidding process that has become real-time.   

Just as it is impossible to make investment decisions in print ads without uplift and mROI (marketing return on investment for incremental sales), it is impossible to make internet retail investment decisions without results based, profit focused metrics.

Key questions for your marketers, category and account managers must include both the investments and ROI with internet retailers:

· What is the investment on click-throughs

· What is the click-through conversion rate

· What is the AOV … $ and gross margin

· What is the incremental market basket attach

· What is the profit per order and / or customer

So what works best in these economic times?

How the best retailers grow sales beyond circular ads

As the economy slumped, retailing has gotten even tougher!  To survive, retailers are turning to other forms of marketing, which are more efficient and cost effective than traditional print ads.  There are at least four major strategies: SEO, direct, social and mobile. So, where are retailers investing?  What works best to grow sales?

SEO - Search Engine Optimization

Consumers are increasingly turning to the web for both research and to make the purchase.  As a result, keywords customers use to search become prime targets for getting traffic and a major source of revenue for search engines like Google.

Retailers are indicating that they will increase spending on paid search as much as 50% or more.  In these economic times, the real key is not just clicks, but “search optimization”.  SEO is focused on increasing efficiency and effectiveness, especially sales conversion rates and average order volume.

With paid search, you literally get real time data on the results of clicks and conversion.  But, with some keywords costing more than $2 per click, it can also be very expensive!  The best retailers and vendors are now focused on optimizing for “organic” or natural search that leads consumers to their websites and products.

Direct – Email, e-newsletters and even snail mail

While direct marketing may seem “ancient” in terms of the new media and social networking, it is still around and effective.  Direct marketing to known customers and prospect lists takes many forms:  electronic email and newsletters to using regular mail to deliver brochures, offers, catalogs, etc.

Some retailers are reporting that email offers are producing 20% to 50% greater results than keyword search and optimization.  This is particularly true if the email lists are “opt-in”.  In fact, direct marketing always works better with targeted lists and produces the greatest results with the most loyal customers.  The results from direct marketing are very measurable and indicate that it will continue to increase, albeit in a variety of formats.

Social – Social networks … Facebook, Twitter

Social networks have received a lot of hype recently.  For example, Pizza Hut selling pizza on Facebook gets a lot of press.  Now, both retailers and vendors are scrambling to use Twitter to launch viral marketing campaigns for a variety of new products.

While there are those who plan to invest as much in “social” as search, the data on results seems very thin.  While social networks can drive brand awareness and even aspiration, they do NOT have a “cash register”.  Social networks may drive brand connections, but search drives customers with “cash” to purchase.

Mobile – Marketing via Smartphones

Mobile marketing might be considered a hybrid between “direct” and “social”.   From the social perspective, marketers can direct messages and even “text” to networks of users on their mobile devices.  Billboards or locations can direct promotional offers to a phone, or have a “tag” that consumers can read to take them to a site. In the best forms, the mobile phone enables marketers another screen to reach consumers with “directed” marketing.

While the mobile is often the darling of the media, there is little research to show that marketing to phones is cost effective, at least for retail.  Retailers and marketing are only spending a small fraction of their budgets on mobile.   Mobile truly becomes effective when it becomes a “smartphone” that enables internet search and direct marketing.

So what works best? … Results Count!

Retailers and vendors are investing heavily in search and SEO.  It is the one form of the new media that can lead to real-time measurement of actions and results.  With effective optimization strategies, search leads consumers to sites with a “check out” to take payment on their original item, plus recommended accessories.  Compared to massively expensive ad circulars and TV commercials, expenditures on search and SEO can produce much better ROI.

However, many retailers maintain the best results come from direct marketing that reaches targeted consumers with affinity and loyalty.  The key here is, and has always been CRM (Customer Relationship Management).  With carefully managed lists or email opt-in lists to enable target messaging, direct marketing via email can outperform search and social in terms of ROI.

Bottom Line:  The clear winners, regardless of media are those that measure both results, and the efficacy in terms of the ROI.

Why you must go back to “High School”

Fastest way to determine “nice to have” vs. “gotta have”

In Retail University, we create exercises where manufacturers must visit stores to test their strategy and products in the retail reality of where consumers shop.  There is no substitute for retail floor experience!  However, a couple of teachers recently convinced me that we have a “gaping hole” regarding consumer product awareness.  We need to spend more time watching the behaviors of core consumers, who actually “live and breathe” products … we need to go back to “high school”.

High School – Consumerism and behavioral trends in action

While much of retail and product marketing is focused on “sell”, it is consumers who determine what they will purchase based on how they use it.  A couple friends, who are still brave enough to teach high school, had these key observations about high school consumers:

·         Teens always seem to have still have “disposable” cash to spend

·         They are downright picky in what they buy to fit their style

·         They are behavioral trend setters for technology adoption

Much of retail and product marketing focuses on product features, functions, price and promotion.  Today, more than ever, it isn’t about what technology can be “crammed in the box” at a price.  It is always the consumer who decides what is “valuable”, especially in the youth segments. In the case of today’s teens, they very quickly filter “nice to have” from “gotta haves”.  Their changing behavior patterns are in fact changing fundamental category and purchase criteria. 

Music à From “Social Stereos” to “Private Earbuds”

When I was in school (admittedly a long time ago), it was a rite of passage to get your “stereo system”.   Music was primarily a social experience shared with friends.  Even my kids had to have at least “boom boxes” to listen to the most recent hits by playing CDs with friends.

Walk through any high school today and count the number of “earbuds”.   Ask, and very few have or want a “big honker” stereo in their rooms.  Yes, there are a few males with raging testosterone that want speakers to blow their car doors off to impress peers, but for the most part stereos are history, because kids don’t simply don’t listen to music in groups.

What changed?  MP3 players greatly expanded the library of music from albums to individually purchased tunes.  Music became very personal collections.  The “social” of music has become more about exchanging playlists, less about listening to the same song at the same time together.

Communication à From “Private Phones” to “Public Chat”

In the days of wired telephones, the conversation was essentially private, because of the limitation of technology (except for “party lines”, but that is now a story of ancient history).  Even with “cell phones” the conversation remains essentially private one-on-one conversations.

What transformed “phones” public to communication?  Today, kids would rather broadcast a “text” than “talk” with friends.  It is both the screen and the new social interface technology that now enables teens to stand huddled over a smart screen watching chat sessions, reviewing Facebook pages and watching YouTube together.

It is no longer about the “phone or calls” … teen behavior has transformed their smartphone in to a “social connection” center.  As a result, color touch screens, keypads for texting, and broadband for search have all become “gotta haves” based on behavior and lifestyle.  When I asked a group of teens staring at a single smartphone what they valued most, the immediate response:  “It’s all about the Apps”.

Why we all need to go back to High School!

It always amazes me how many technology products are developed because “we can”.   Equally amazing is the philosophy is that “if we build it they will come”.  In today’s economy, simply putting more features in the box, or building the box in different colors, no longer justifies a higher price, or that it will even sell.   There is no better “litmus test” than a high school, where teens choose and use products based on what it can do for them and their social connections.

Teens are certainly not the perfect forecasters!  But, high school represents a real-time “Petri dish” to examine the front lines of how tech savvy consumers are actually using and choosing products.

1.     Teens grew up online … they “live online” … it’s their lifestyle

2.     Teens choose based on what a product can enable them to do

3.     For teens it is not about “a product” … it’s about ecosystems that enable real-time connections, access

4.     While there are price limits, teens have the greatest ability to stretch price elasticity to get something they value

5.     By virtue of their behavior, teens have the viral network and potential to promote or kill products based on how they perform

There is no better marketing test in the world than to have one teen ask another teen “what is that …or how did you do that?”   When the other teen responds “you gotta have” this product, this service and these apps, that is the essence of consumer centric value adoption.

Perhaps, this is yet another reason why Apple has had a strategic, competitive advantage in designing both products and ecosystems.  They don’t survey students on feature preferences … they are actively engaged out in the schools, observing actual student behaviors!

When is the last time you visited your high school to observe how teens are actually using and evaluating your products?

Traditional Retail is a Left Brainer …

Apple’s success comes from the right

Left and Right aren’t just about politics or which way you “lean” on issues.  Left and right are about the two hemispheres of the brain and how they process information differently.  The people with left side dominance tend to be logical, methodical and detailed.  People who are right brained tend to be holistic, creative and tend to focus on the visual or big picture mental images. 

So how come all the left brain people wound up running consumer electronics retail stores? 

A bit of Science first:  Lefty = Verbal, Right = Visual

Nobel Prize Winner (1981) Roger Sperry is typically credited for the discovery of how the brain hemispheres process information.  Through "split-brain" experiments Sperry isolated that certain modes of thinking are dominate in the left or right half of the brain.  The left hemisphere tends to focus on the verbal while the right tends to focus on the nonverbal and creative.

Your genetics and how you grew up, determine whether you are either left brain or right brain dominant.  Although not a perfect correlation, more right handed people tend to be left brain dominate, while left handed people tend to be right brained.  Being a left hander, I’ve always enjoyed the old saying:

Left-handed people are in their right mind.  Right-handed people are in what's left of theirs.

Only about 10% of the population is left handed … so Sperry may be right about society discriminating against those that are right brained!

So what are YOU … a Left or Right Brainer?

It is easy to identify your dominant hand or side by how you write with a pen or swing a racket.  Chances are if you are right handed like 90% of the population, you are left brained dominant, but not always.  

There are a number of “tests” you can take to determine your hemisphere dominance without having someone split your brain!  One of the most popular out there is the “spinning dancer”, although its accuracy has been questioned.  If you don’t like the results, take another.  Regardless of the “test” there is a strong case to be made for hemispheric dominance.

Click here or on the picture to take the spinning dancer brain dominance test.

Why traditional retail is left brained

The old axiom about retail is still appropriate:  Retail is Detail!  Like most of today’s business, senior managers in retail tend to be fact based and financially driven.  Hence, most of large organized retailing tends to be dominated by left brained, detail oriented managers.

But just look at traditional CE retail stores.  Products are lined up in “logical categories”.  The focus in store, as well as in most retail print ads, is largely on the verbal … the details … the speeds and feeds.  Large big box retailers epitomize the dominance of left brain analytical planning and execution. 

Al Reis – Marketing success comes from the Right

Al Reis posted a great article in Ad Age on Feb 3^rd outlining why marketing success tends to come from right brain thinkers.  He offers one of best, most concise summaries I’ve seen on the state of management, especially for retailing:

What works in marketing today is simplicity, not complexity.  But a simple idea can get lost in an overproduced, overdramatized marketing presentation designed to impress management … [dominated by left brain thinking]

In these economic times there is even more pressure on the details of inventory, pricing, turns, GMROII, etc. “Retail Survival is the New Normal”.  The danger here is that the retailer focus becomes exclusively left brained … focused entirely on cost and risk containment.

Why Apple’s success comes from the right!

Just look at an Apple store … it is the epitome of right brain dominance.  The stores are visually compelling, organized around consumer experiences of how to use the devices in their lives:  music, photos, and movies.  Rather than logical, analytical categories, lined up in rows … products are marketed simply with the focus on consumers having a visual, interactive experience.  The “necessary details” are on very small, discrete tags.

While the “devil may be in the details” of retail operational execution, Apple’s growth and stats show that consumers are drawn to right brain marketing, merchandising and holistic “ecosystems” such as i-tunes and i-phone apps which transcend products with visually appealing design.  

Lest Apple grab all the right brainers and some “leftys”, big box CE retailers need some right brain balance right now!

Waiting for the “Shoes to Drop” …

It’s not what you think … or anything that you have seen

TOMS Shoes … A case study in consumer evangelism

Normally, when you hear the phrase “waiting for the shoe to drop” it portends some impending doom or other bad news ... which hasn’t been hard to find in this economy.  

In this case, the “shoe drop” is about an incredible model of cultural participation and evangelism.  It created the company … and it is the foundation of the buzz that is creating both exceptional demand and loyalty from a wide array of retailers—Nordstrom’s to Whole Foods.

TOMS Shoes Simple Premise … Give away a pair for each pair sold

The founder, Blake Mycoskie, was struck by the poverty he found in Argentina, where many kids simply did not have shoes.  In many cases, no shoes means not being able to attend school.  So, he founded TOMS Shoes, a company based on the premise of giving one pair of shoes to shoeless children for each pair of shoes sold.

The shoes are not just shipped anonymously to a third-world country.  They are delivered through a “shoe drop,” where they are placed on the feet of shoeless children by company employees and volunteers.  So far, TOMS shoes has sold and given away more than 200,000 pairs of shoes.

Marketers can learn much from TOMS Shoes success factors:

·         A unique product based on an Argentina shoe style (alparagatas), which is both low cost and stands out from a sea of clones.

·         A simple, inspiring story that is easy to tell and differentiates.

·         A strong culture of participation among both employees and consumers that creates evangelism.

·         Evangelism that creates enough buzz and affinity marketing, so the company does not incur much traditional marketing costs.

·         Cultural activism— through simple act of purchasing a pair to give a pair … with opportunities to participate all the way through a shoe drop experience to give away the shoes personally.

For the record, there is no Tom in TOMS Shoes.  According to the founder, the name grew out of an abbreviation standing for “Shoes for Tomorrow” … and now represents the collectively cultural identity of everyone working for TOMS.  And, the TOMS evangelism has spread to restaurants and musicians, who have adopted wearing the shoes in loyalty to promote the cause.

Will TOMS Shoes survive?  

Realistically, they’ve only been at it a couple of years, so it may be a bit early to tell.  Currently, they are suffering immense growing pains to meet consumer demand through serving national retailers, as well as affinity relationships with brands like Ralph Lauren. This is a “nice high class problem” that many vendors would love to have in this economy.

Right now, TOMS Shoes can’t keep up with demand and are frantically adding staff.  As a proud parent, whose daughter just joined the TOMS Shoes team in Santa Monica, California, I am closely following the success of their business and their cause.

For further information:

Church of the Customer

Tree Hugger Radio

If you must cut … sharpen the saw!

When “chasing numbers”, spend more on measurement

The source of this post is a recent email I received from Dan in Australia.  The subject line of his email read: I’ve been too busy driving my numbers instead of thinking how I can ‘sharpen the saw’.

I don’t know how much firewood Dan has cut in Australia, but seems like he has great insight regarding efficiency in wood cutting and marketing effectiveness in today’s market. 

If you have ever cut firewood on a cold day, you quickly discover there is a tendency to just keep sawing in order to finish the pile.  The typical outcome is to bury the saw in a log, because time was not taken to sharpen the blades on the chain.  The end result is lost time, frustration and very cold hands after disassembling everything to get restarted.

Sharpening the Saw – A perfect metaphor for these economic times

It’s in the world news almost daily ... economic conditions are forcing cutbacks, especially in marketing.  How are you facing these challenges ...  How are you making the “cuts” in order to make the numbers?

All too often the budget cuts are being made as a percentage “across the board”.  The fast and “easy way out” to make the numbers is to reduce costs for everything, including:  creative, branding, media, merchandising, people ... and measurement.  

Invest in sharpening your saw – Invest more in measurement!

Look at the graph below.  Most of us intuitively know that different types of marketing investments yield different results.  And, more importantly, the sales impact from different kinds of media can vary dramatically for different products categories.  

In the IMS case study below, Print Ads produced a dramatic ROI for Category C products, but had a negative ROI for Category A.  In contrast, marketing spending on in-store Displays produced the greatest ROI for Category D products, and was the only investment with significant ROI for Category A products.

Measuring Category Marketing ROI of Different Media

Ignorance is NOT bliss … or effective in these economic times!  To be effective, category managers and marketers need more than an ax to chop budgets to make their numbers.  Marketing measurement and analytics creates the scalpel to cut underperforming investments.  More importantly, sharpening the approach to measure marketing effectiveness yields the intelligence to selectively invest in other areas, which positively grow sales and profitability.

5 Ways to Sharpen your Saw for Marketing Effectiveness

 

1.     You don’t have to be perfect to start ... but start by focusing on measuring results that count, not just impressions or intent.

 

2.     The law of averages will kill you … the overall sales and budget numbers mask differences by category.  Measure results at least at the category level … if possible, measure results by key SKUs and roll-up.

 

3.     Measure sales uplift … In these times, sales volume and Year-Over-Year comps can be misleading. Measure what drives incremental sales uplift by event, activity and by selling season.

 

4.     Joint metrics – Manufacturers aren’t the only ones facing tough times. Engage retailers to benchmark how they measure effectiveness & ROI.

 

5.     What gets measured can be managed …  You can’t manage what isn’t visible.  Regardless of the level of precision, produce scorecards that enable proactive management to produce results, rather than passive, reactive budget cutting.