Archives for category: Marketing

Gamification is a fascinating subject; it’s the process of engaging audiences by leveraging the best of loyalty programs, game design and behavioral economics.  While we may not notice it, virtually are all of us are involved with gamification everyday, whether it be through airline miles programs, credit card rewards, supermarket loyalty cards or liking something on Facebook.  About a month ago, Gabe Zichermann and Joselin Linder released a thought provoking, worthwhile read, The Gamification Revolution: How Leaders Leverage Game Mechanics to Crush the Competition.  It focuses on gamification in two arenas.  It discusses a company’s internal gamification of their employees in order to find, retain and entice talent.  Secondly, of equal importance, it looks at the art of increasing customer engagement through positive feedback loops, to generate excitement, enthusiasm and loyalty.

Gartner Group predicts that by 2015, nearly 70% of the world’s largest enterprises will be using it, driving 50% of all innovation.  M2 Research expects that US companies alone will be spending $3 billion per year on gamification techniques and services before the end of the decade.  Gamification has always been a vital marketing tool, even if we called it by other names in the past.  It will play an even bigger role in the future.

A few highlights from The Gamification Revolution: How Leaders Leverage Game Mechanics to Crush the Competition are listed below:

  • Gamification presents the best tools humanity has ever invented to create and sustain engagement in people.
  • The best way to beat the competition is make your employee and customer experience as fun and engaging as possible.
  • Mastery is different that winning – although it’s easy to confuse the two.  Winning is really about achieving a goal, while mastery is about acquiring knowledge and demonstrating control and doing so in a steady consistent progression.  Mastery is continuous improvement, whereas winning is a destination.
  • Games are not synonymous with winning – and arriving at a “winner” is seldom the goal of gamification.
  • Points are feedback systems used to track behavior, keep score and provide feedback.
  • Gamification and the entire engagement layer are essential elements of the whole, and as the top layer, they serve as an invitation to the cake.  But remember, people will not eat a second bite of the cake if its bad, nor will they be excited to keep eating if the icing doesn’t do its job to complement the cake.

Contagious: Why Things Catch On, is written by Johan Berger, a professor at The Wharton School (so I’m probably biased).   Contagious was published a week ago, and is genuinely a fun, worthwhile read. Johan Berger discusses why certain videos (products and ideas) go viral, while others languish unknown.  The book is very well written, uses memorable examples, and is backed up by solid research.  The author describes six STEPPS to give an idea/product the best shot at going viral: Social Currency, Triggers, Emotion, Public, Practical Values, and Stories.  This book is a fantastic overview of social contagion and is a must read for any marketer.

A few tidbits from Contagious:

  • Word of mouth is the primary factor behind 20% to 50% of all purchase decisions.
  • Word of mouth is more effective than traditional marketing for two reasons.  First, it’s more persuasive…Second, word of mouth is more targeted … is naturally directed towards an interested audience.  We don’t share a news story or recommendation with everyone we know.  Rather we tend to select particular people who we think would find the given piece of information most relevant.
  • We need to design products and ideas that are frequently triggered by the environment and create new triggers by linking our products and ideas to prevalent cues in that environment. Top of mind leads to tip of tongue.
  • Making things more observable makes them easier to imitate, which makes them more likely to become popular.
  • People don’t care how they are doing, they care about how they are doing relative to others.
  • To get people talking, companies and organizations need to mint social currency.  Give people a way to make themselves look good while promoting their products and ideas along the way. There are three ways to do that: (1) find inner marketability; (2) leverage game mechanics; (3) make people feel like insiders.


Interview with Johan Berger:

3D Printing has the potential to change multiple industries. The following are the books I have enjoyed most concerning 3D printing:

  • Makers, The New Industrial Revolution; by Chris Anderson  -Genuinely fun, fast read.  See Makers review.
  • Fabricated, The New World of 3D Printing; by Hod Lipson an Melba Kurman – Well done book with lots of worthwhile information.  There is less cheerleading than Makers, with more meat about future 3D printing areas, including Bioprinting, Food processing and environmental.
  • Additive Manufacturing, 3D Printing, and the Coming Stock Market Boom; by Dr Alexander Elder – Short blurb which gives solid background info on 3D and also discusses the few 3D printing companies that are public.
  • 3D Printing: The Next Technology Gold Rush – Future Factories and How to Capitalize on Distributed Manufacturing by Christopher D Winnan – Fantastic read with lots of entrepreneurial ideas.
  • Getting Started with MakerBot, by Bre Pettis, Anna Kaziunas France, and Jay Shergill.  A must if you are purchasing a Makerbot, but it also offers good tips for home 3D printing in general.
  • It Will Be Awesome If They Don’t Screw It Up: 3D Printing, Intellectual Property, and the Fight Over the Next Great Disruptive Technology, by Michael Weinberg – Short white paper (30 pages) mainly concerning Copyrights, Patents, and trademarks with respect to 3D printing.
  • What’s The Deal with Copyright and 3D Printing, by Michael Weinberg – Another short paper (30 pages).
  • From Bits to Pieces: The Business Innovation of 3D Printing, by Peter Keen – Discusses 3D printing for larger corporations.  The case studies of auto makers and shoe makers show the influence, use and dramatic impact of 3D printing.
  • The Tinkerers: The Amateurs, DIYers and Inventors Who Make America Great, by Alec Foege – Not about 3D printing, but celebrates the American innovative spirit.

We had previously designed six different die-cast car continuities, and were designing a new series.  To launch a new continuity, we would give away the lead car with purchase of two other cars.  The lead car was typically the strongest, best-known car in the collection.  We tried to improve the quality and detail of each successive continuity.  We wanted to give the customer more, while not increasing our production or development costs.

The lead car in this new continuity was the 1953 Corvette, beautiful polo white with red interior, the first Corvette made.  The car looked great as a sleek convertible or as a sporty ragtop.  We even argued which photo would look best as the brochure cover shot.  We designed the die-cast model to have a removable top, which  gave us the best of both worlds, and allowed the customer to display this legendary car as either a convertible or ragtop.  Our development and product costs were virtually unaffected, and the dual displays made for fantastic photographs in the brochure.  The response rates for the new continuity were the highest we had seen in several years, in my opinion, because we were able to give the customer more without increasing the price.

It’s easy to make the mistake that more is always better.  If we add in an extra freebee, of course response will increase, but in reality the freebee can be detrimental if it takes focus away from the main item offered.  When creating your offer, you need to watch out that your amazing offer doesn’t turn into ‘the kitchen sink’.  This is one occasion were more can actually hurt rather than help response.

We created a beautiful 6*9 mail package for a die-cast car offer.  The offer consisted of a free die-cast car with the purchase of two other cars.  Each car also came with a free glossy trading card.  The offer was successful and rolled-out.  On an expansion mailing we decided to test adding in an extra freebee.  For the program, we had produced a leather display wallet to show off the trading cards.  It sold well inshipment, as well as an upsell to phone orders, so it seemed like a logical freebee to test.  For the mailing we A/B split, with 2/3 getting the original offer, and 1/3 getting the free display wallet in addition to the original offer.  Normally the test portion of the mailing would be much smaller, but we went with a larger test size because the response to the second offer had to be better, as the customer was receiving everything from the original offer, plus more.

Response from the test group dropped by 20%, while the control group continued to perform the same as prior mailings.  The original offer was great and focused overwhelmingly on the free car.  The test offer, distracted some of the customer’s focus away from the free car and shifted it to the less impressive free display wallet.  In hindsight, the results made sense.  When we created the offer we fell into the trap of more is always better, but the math proved sometimes less is more.

A collectible is a niche product; this has its advantages and disadvantages.  I have found a success rate for collectible television spots of better than 1 in 4 while successful mass market spots range from 1 in 20 to 1 in 40+.  Collectibles will never do the overall sales of a mass market product, however, product niches can often be targeted very successfully.  For the Obama Presidential Coins, one individual station accounted for 50,000 customers.

Programming also is more impactful on a niche product.  On a recent campaign, spots airing on a profitable station did 2.5x to 3x when the spot ran on a program that was related to the genre of the collectible and over 7x when the programming concerned the actual subject matter of the product.  Typically it was only an additional 10% expense to make sure that we aired during specific shows.

Niche products require more of an exacting pinpoint rather than shotgun approach.  They do not offer the retail opportunity, however niche product customers have a higher lifetime value, as they often continue to purchase similar products in the future.  Niche products do not offer the home-run potential of a mass market product, but they definitely offer a better batting average.

Once the order is placed through the IVR or Web, the second portion of the back-end is the fulfillment.  This is an area that is not focused on enough, as it is often outsourced.  You have spent tremendous efforts to lower you CPO (Cost Per Order) and increase your RPO.  But are you maximizing the efficiencies of your fulfillment?

The piecemeal billing of fulfillment companies is relatively straightforward, but marketers often leave costs out of their forecasted economics.  Are you truly counting all of your fulfillment expenses in your economics?  Do you know what your true shipping costs are for each customer shipment combination, including split package charges, gas surcharges, etc.  I realize how simple this sounds, but speaking from previous experience, accurate data is often difficult to obtain.

Companies are often using antiquated computer systems that were created when the company was much smaller.   Over time, they have continuously built additional modules that were not thought of when the computer systems were originally designed.  This can lead to portions of the computer system not correctly interpreting information from other portions, thereby producing bad data.  There is nothing worse than making a ‘correct decision’ off of incorrect data.  Does your internal system communicate efficiently with your front-end (orders coming in from IVR, web and affiliates) as well as with your fulfillment house?  Are you able to produce the proper reports to accurately analyze all aspects of your programs?  Accurate data is the lifeline of direct response marketing; you should never feel like you are flying blind.

Another issue to look at is inventory.  Are you shipping product as soon as orders are received?  Any delay causes increased credit card decline rates that can have a detrimental effect on the bottom line (even though the front-end CPOs looked fantastic).  Do you have inventory of all of your upsells in stock, or are you unnecessarily splitting shipments to customers?

The front-end of DRTV is what most marketers view as the fun part, but it’s the ‘boring’ back-end that can have the biggest impact to profitability, as back-end improvements drop directly to the bottom line.

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