Archives for category: Marketing

Aggregated Credibility is a valuable, dynamic asset most businesses underutilize.  The products and services your business sells everyday have positive impacts on your customers lives and each sale (or service you provide) inspires trust in your company and brand.  This trustworthiness adds up over time to impressive, confidence-inspiring information that should be shared with your current and future customers.

Small, as well as large businesses, can create powerful, compelling headlines and press releases proudly proclaiming their Aggregated Credibility.  If Joe’s Plumbing, a local plumbing company, services 10 customers a day, five days a week, over the course of a year it earns the Aggregated Credibility of Happily Servicing Over 2,000 Local Neighbors in the Past Year or Joe’s Plumbing, Your Local Plumber, Proudly Servicing 2,000 Fairfield County Neighbors in the Past Year.

Many people choose their supermarket based on coupons.  If a supermarket sees 400 customers a day, and the average customer saves $10, then in six months the supermarket has saved customers $700,000.  We saved customers over $700,000 in the last six months, how much can we save for you?  Or We saved customers over $123,000 last month, how much will you save today?  Both are potentially enticing headlines.

Bombas.com utilizes Aggregated Credibility to inspire confidence in the company and the company’s mission of donating socks to those in need for every pair purchased.  The constantly growing ticker displayed on their website of the 16.6 Million Pairs Donated shouts instant credibility for Bombas and encourages customers to engage in their socially responsible mission.

Aggregated Credibility needs to be relatable to resonate with customers.  In 1955 McDonald’s, under its famous Golden Arches displayed Over 1 Million Served.  In 1960, the sign was increased to 400 Million, and to 1 Billion in 1963.  McDonald’s periodically increased it at various milestones (5 Billion in 1969, 20 Billion in 1976 and 50 Billion in 1984), until 1994, when McDonald’s served its 100 Billionth customer and changed the iconic Golden Arches signage to Billions and Billions Served.  Even though they have served over 300 billion customers to date, McDonald’s continues displaying Billions and Billions Served.

Your company has worked hard to develop trust and authenticity one customer at a time, and deserves to effectively utilize the impressive, persuasive headlines it has earned. What is your Aggregated Credibility?

#AggregatedCredibility  #UnderutilizedAssets

 

Aggregated Credibility Cloud

It is hard to believe that it has been 10 years since the launch of the Obama Coin program.  October 2008 was an interesting time with the upcoming Presidential Election.  The Barack Obama campaign seemed more like a movement than a campaign, with individual events filling arenas and drawing as many as seventy-five thousand people.  There was a buzz around the candidate, and the campaign, that was unlike prior recent Presidential elections.

By late October, Obama appeared to be the strong front-runner (We did not bother to do a McCain commercial as we didn’t think he would win and even if he did, his supporters did not seem to have the same level of passion as Obama supporters). The products were created, offer developed and scripts written over a weekend.  The commercial was produced from start to finish in five days and cost a modest $5k.  The spot could probably flow perfectly in a Saturday Night Live skit, but I really liked the attention-grabbing opening “Own a Piece of American History”, and felt the spot had a decent chance for success.

Media test schedules were booked on the condition to run if Obama won, tapes arrived at stations the day before election day.  A little luck never hurts. The Presidential election results were announced the day after Election Day and the first Obama Coin commercial ran on MSNBC at 9:57 Thursday morning.  The results were obvious instantly as the CPO of that initial spot came in at under a dollar. By that afternoon we were already booking the roll-out. We were fortunate to have a week head start before competitors aired other Obama collectible commercials.  We tested dozens of stations, analyzed results several times a day and expanded to the strongest stations as soon as we had reliable reads.  The program received 100,000 orders in the first ten days and over 250,000 within about 45 days.

I was originally told that the Obama commercial would never work for numerous reasons.  We had tested Obama coins in print twice earlier in the year, once versus Hillary Clinton and once versus John McCain.  Both times the test failed miserably, but black & white print is not necessarily a good predictor of TV success.  The economics of the product also did not fit the typical DR formula.  Typical DRTV markup was 5:1, but we were at 3:1 since both coins were gold layered, colorized and had intrinsic currency value.  To combat the tough economics, we developed five strong, complementary upsells which helped the campaign bring in an average rpo of $66 from the original $10 plus s&h offer.

Overall it was a phenomenal lesson on maximizing an event.  We were a marketing led organization, but back-end operations were also vital to the program’s success, and provided numerous lessons as well.  Successful campaigns can quickly turn into true disasters if back-end operations do not ramp efficiently.  The Obama Coins were a simple product, but it still offered fantastic logistical experiences.  The 250,000 orders came in quickly, but there were significant production issues to solve (originally only 10,000 coins could be produced per week, and we would need nearly two million coins).  The presidential dollars and half dollars were acquired directly from the US Mint (we bought the entire remaining supply of 2008 halves, and at one point needed to wait until 2009 to purchase additional half dollars).  After receiving batches of coins from the Mint, they were sent to the gold plater, from the gold plater the coins went to a contract manufacturer to add the colorization.  The coins were then shipped to a newly created make-shift workshop to encapsulate the individual coins (Thinner capsules were specifically designed to make the encapsulation process more efficient), batch them together along with a certificate of authenticity, and seal everything in cellophane packages.  Finally finished product was shipped the fulfilment center.

It took until March 2009 to fulfill the final orders, but we kept in constant communication with customers (mainly through postcards).  Fortunately, our creativity and adaptability allowed us to successfully fulfill the large influx of orders, while keeping cancellations to a minimum.

The Obama Coin Program was a fantastic educational experience.  The success of the campaign was due to a passionate audience, fortunate timing, strong complementary upsells, maximizing marketing opportunities, a flexible and adaptive supply chain, as well as, collaborating with strong vendors whose turnaround times were exceptional.

#MarketingLessons #DirectResponse #Collectibles #Direct-to-Consumer #Fulfillment #Operations

A company’s most important asset is its customers.  They are extremely expensive to acquire, but keeping them happy is incrementally inexpensive.  Happy customers buy more product and stay in programs longer.  They are more responsive, and potentially purchase large multiples of product, or higher margin deluxe versions.  They are your best advocates.  What is the lifetime value of a happy advocate?

My first job after university was as a program manager at The Danbury Mint (MBI) overseeing various collectibles (dolls, plates, ornaments, die-cast cars, etc).  Most programs were sold as a one-shot, then converted in-shipment (and through follow-up mailings) to the rest of the series (typically a collection of either 4, 8 or 12 items).  The customer acquisition cost often exceeded 50% of the retail price, and on larger series could be 200%.  If a customer only bought the lead item, the amount of profitable marketing available was minimal.  Through conversions to the rest of the collection, the average customer purchased 2.2 to 2.7 products in a four-item program.  This additional margin allowed us to mail deeper inside, as well as, more outside lists.  Since lead customers were so expensive to acquire, it was vital that we treated them like gold.  It was essential that products shipped quickly, with packaging that would enhance the customer experience.  This was a fantastic educational experience on the lifetime value of a customer.

Direct Response is a fantastic medium that can ramp-up quickly and effectively in a test-expand approach.  Unfortunately, too many marketers focus only on the short term, with a one and done mentality; they often ignore the longer-term value of customers at the expense of immediate profits.  Think more from your customer’s perspective.  Have diligent inventory management so that shipments are never delayed and make sure to regularly ship product to yourself.  How does the product arrive?  Are the proper additional offers enclosed in package?  Is the unboxing experience impressive to your customer?  Is he incentivized to reorder?  Is she incentivized to tell a friend?

Treating the customer well may be slightly more expensive today, but invaluable for tomorrow.

Amazon has been a fantastic deflationary source for consumers, however it is also constantly squeezing seller margins.  Fees, as a percentage of Gross Selling Price, have increased every year since 2009. In 2009, Amazon fees totaled less than 20% of the gross selling price for most third-party sellers.  Now, nearly 10 years later, Amazon fees have risen to nearly 35%.  Since most third-party sellers are unable to increase prices to offset the majority of these fees, margins are constantly under pressure.

Sellers can combat some of the increasing Amazon fees by more effectively managing their inventory to reduce monthly and long-term storage.  Sellers can also redesign certain products to reduce weight and optimize shipping expenses.  However, sellers ultimately have no choice, but to accept the Amazon fee increases.  The margin squeeze has caused valuation multiples of Amazon only businesses to drop significantly over the last several years, especially sellers of staple white-label items.

Several years ago, sellers could offer white-label products, optimize their listings and enjoy year-over-year growth due to the increasing Amazon audience.  However, Amazon is directly capturing an ever-increasing share of white-label products (from batteries and charging cables, to bedding, luggage, and recently small appliances and apparel).  Amazon only had a minor share (or even zero share) of these markets a few years ago, but will control the vast majority of each within the next couple of years.

The speed of this transition is rarely talked about, but will make an amazing case-study in the future, as Amazon is capturing, virtually, entire category after category.  Differentiated, proprietary products were beneficial for third-party sellers in the past, but now they are an absolute must to thrive on the Amazon platform.

Update:  The New York Times published an detailed article today (July 23, 2018) on Amazon capturing increasing market share of white-label products.  How Amazon Is Winning the Online Retail Game. Again.  A few snippets below:

The results were stunning. In just a few years, AmazonBasics had grabbed nearly a third of the online market for batteries, outselling both Energizer and Duracell on its site.

The company now has roughly 100 private-label brands for sale on its huge online marketplace, of which more than five dozen have been introduced in the past year alone. But few of those are sold under the Amazon brand. Instead, they have been given a variety of anodyne, disposable names like Spotted Zebra (kids’ clothes), Good Brief (men’s underwear), Wag (dog food) and Rivet (home furnishings). Want to buy a stylish but affordable cap-sleeve dress? A flared version from Lark & Ro ($39), maybe in millennial pink, might be just what you’re looking for.

Amazon is utilizing its knowledge of its powerful marketplace machine — from optimizing word-search algorithms to analyzing competitors’ sales data to using its customer-review networks — to steer shoppers toward its in-house brands and away from its competitors, analysts say.

Update: October 16, 2018: The below excerpt is from a Bloomberg published article:  Amazon Doles Out Freebies to Juice Sales of Its Own Brands

Amazon has more than 120 brands, about 100 of which were introduced over the past two years, according to TJI Research. One is Amazon Basics motor oil. Less than three months since its July debut, the product has a 4.5-star rating based on about 100 customer reviews. That’s almost as many reviews as a similar Valvoline product sold on the site for six years. More than 80 percent of the reviews for Amazon’s new oil came through the Vine program;  the Valvoline oil had zero Vine reviews.

#Amazon  #DirecttoConsumer  #Private-label  # AmazonThirdParty  #AmazonSqueeze

View story at Medium.com

Invisible Influence: The Hidden Forces That Shape Behavior, is is another well-written, fun read by Johan Berger.  We underestimate the social influence of others on ourselves, yet we acknowledge its influence on others.  Through various research studies and quirky experiments, the book discusses how everything around us influences how we act, even if we don’t realize the impact.  Invisible Influence discusses how people imitate each other, as its safer to choose what has already been chosen by someone else, and this popularity can be self-fulling.  That restaurant must be good since its always crowded.  (This lasts until its oversaturated and eventually falls into the Yogism: Nobody goes there anymore, its too crowded).  Invisible Influence is an excellent companion to his bestseller Contagious: Why Things Catch On published in 2013.

Invisible Influence also touches on how successful products are often ‘similar but different’ than prior successful items.  This matches a personal mantra of offering customers more of what they are already buying.  If a customer is making a purchase they obviously like the item, therefore the next questions should be:  Do they want multiples of the item, Do they want the item in a different color (or format), Would they like a deluxe (or miniature) version of the item, Do they want complimentary/symbiotic items?  When we introduced Obama Coins years back, the original item was $10, but through offering additional strong similar and complementary items, we were able to raise the revenue per order to $66.

Below is a short animated introductory video to Invisible Influence:

Loyalty 3.0: How to Revolutionize Customer and Employee Engagement with Big Data and Gamification is a fantastic read, probably my favorite of 2013.  The book was published in late May and written by Rajat Paharia, founder of Bunchball.  It builds on the gamification theme with genuinely implementable ideas.  Loyalty 3.0 is the combination of Motivation (behavioral science), Big data, and Gamification.  It stresses intrinsic motivation over external motivation, although there are definitely appropriate uses for both.  Loyalty 3.0 discusses game mechanics (Fast Feedback, Transparency, Goals, Badges, Leveling Up, Onboarding, Competition, Collaboration, Community, and Points) using real world examples and provides a roadmap for implementing a Loyalty 3.0 game plan (Plan, Design, Build, Optimize), weaving in case studies throughout.  This book is a must read for all marketers, especially anyone interested in gamification.

A few highlights from Loyalty 3.0 are listed below:

  • Loyalty 3.0 has three major components that, when combined, are much greater than the sum of the parts: Motivation + Big Data + Gamification
  • Knowing what truly motivates people – and what doesn’t – enables us to create stronger engagement and true loyalty.
  • People often wonder why others dedicate their time and efforts such as contributing to open-source projects and writing and editing on Wikipedia for no financial gain…. Because there is a strong sense of purpose, of making a dent in the universe.
  • Gamification is not about creating games at all.  With gamification, your core experience is the centerpiece, and the gamification mechanics go around it.
  • It takes talking to fewer users than you think to find most of your problems.  “Once you talk to one user, you’re already getting valuable insights.  By the second user you’re hearing some of the same things you’ve heard before.  Beyond the second user, you increasingly hear the same things from each subsequent user so that by the time you reach the sixth user, you’re learning very little that’s new”.
  • Think with Arcs – people need beginnings and endings.
  • Put Levels and Goals on a Curve – Consider making the first few levels achievable in a fast, easy progression to get user engaged and create a sense of accomplishment and progress.  The goals and levels should then get increasingly more difficult.

 

Last Friday (May 9th), after writing a short blog post about gamification based on the book The Gamification Revolution: How Leaders Leverage Game Mechanics to Crush the Competition by Gabe Zichermann, I came across a MOOC (Massively Open Online Course) on Gamification being taught by Kevin Werbach, a Professor at the Wharton School.  Unfortunately the class had actually begun five weeks earlier on April 1st, and was to be completed by May 12th.  Over the course of three days, I listened to the six weeks worth of lessons (generally about six ten-minute lessons per week).  The course was fantastic and I highly recommend taking it.  Gamification will likely be offered again on Coursera.org in September.  Professor Werbach, thank you.  I can genuinely say that I enjoyed Gamification as much as I did classes on campus twenty years ago.

Professor Werbach mentioned a book he had written with Dan Hunter, For The Win: How Game Thinking Can Revolutionize Your Business.  The book was not needed for the course, but it is a fantastic read.  I picked up the book after I finished the last MOOC lesson, and read through it in about four days.  It is a must read for any current marketer.  You have probably already used game-elements in campaigns already and if you haven’t, you will almost certainly use a variety of game-elements in upcoming campaigns.

Below are some short snippets from For The Win: How Game Thinking Can Revolutionize Your Business:

  • Engagement is your competitive advantage.  Game-design techniques provide your means to achieve it.
  • Successful gamification involves two kinds of skills.  It requires an understanding of game design, and it requires an understanding of business techniques.
  • At its core, gamification is about finding the fun in the things we have to do.  Making business processes compelling by making them fun is the coolest thing we can think of.
  • The motivational dynamics of gamification must interact with the firm’s existing management and reward structures.
  • Gamification:  The use of game elements and game-design techniques in non-game contexts.
  • Gamification is the process of manipulating fun to serve real-world objectives.
  • Sid Meier, legendary designer of the Civilization series of games, defines a game as simply “a series of meaningful choices”.
  • Games are a process, not an outcome.

The following is an article (and podcast) about Professor Werbach:

http://www.marketplace.org/topics/tech/education/life-online-professor

Added 5/17: Well done interview with Professor Werbach:

http://www.epicwinblog.net/2013/05/epic-gamification-hangout-with-prof.html

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