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CORPORATE MASH-UPS CAN PROPEL YOUR BUSINESS THROUGH TOUGH TIMES

Corporate thinkers and marketing strategists wondering how best to navigate through turbulent economic downswings should turn their attention to non-competing products, where they can add customer convenience and value while reducing cost-of-sale.

Because, let’s face it, in this economy you have limited choices. You could: – Spend your money on restructuring consultants – Slash prices in the hope that keeping busy will hide your losses – Increase incentives and slash prices for even greater losses – Stare frozen into the headlights and wait for the inevitable…

Or be creative. Find more values to sell to your existing customers and enable them to do more with less.

Here are some examples:

B-2-B

Office Cleaning & Building Security – lower property management costs and improve on the cleaning staff integrity. Payroll Processing & Job Placement Agencies – as payroll fee income drops earn commissions on placements of the displaced staff, as well as increase reach for your payroll services.

Couriers & Food Services – fill up the water fountain/coffee machine while you pickup/drop-off the packages. Cut your cost of distribution and make margin on the sale of snacks.

Computer Manufacturers & Airlines – digital and physical connectivity from point-to-point, e.g. in-flight hookup to your virtual desktop, best price reservations to frequently-used, business destinations on the purchase of notebooks with extended warranties. Etc.

B-2-C

Toys & Tools – for the chip-off-the-old block, an incidental purchase for dads while they calculate how much drywall they need.

Fashion, Flowers & Gifts – you can surely trust your fashion stylist/boutique to know how to create the right bouquet or pot pourri for you.

Shoes & Socks – socks wear out more quickly than shoes. Shoe sellers should stock socks (say 10 times quickly) as a traffic driver and an incidental profit booster.

Home Entertainment Systems & Movie Studios – create a utopia of choice and a measurable market to forecast demand for in-home or out-of-home entertainment metrics. Etc., etc.

You can do this in a number of ways:

  • strategic partnerships
  • mergers
  • cross-promotions.

You have to care and share to make it work. And be customer-centric in bringing the value home to the customer, so that they can gain to ease their pain.

There are thousands of potential mash-up opportunities. These came to mind quickly, to make the point. Corporate mash-ups can be a low-cost, low-risk investment. Each party has control of its own customers. The strategy is to be customer-centric, to increase your value to your customer and reduce their total outlay for the same services. Unlike a straightforward customer promotion, a mash-up increases your reach into the market as your partner extends it to their customers. So your total market reach is expanded without additional marketing cost to you. It’s not a freebie, and the discount comes through real cost-efficiencies, not profit slashing.

Tangential thinking comes naturally in this business; so if you have a sense of the possibilities but no immediate notion of how to move it forward, call me.

 

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Selling the Environment With Customer-Centric Values

Since Canada’s political balance of power may weigh in on the environment in the near future, how does this monumental issue affect the day-to-day choices of Canadians?

Politics is all about customer-centric marketing. What the voter won’t buy, the politician won’t sell. The marketing of environmental issues and products has to factor a number of different perspectives that reside within voters and customers and bring conflicting values when making personal choices:

The pendulum swings back and forth:

– “It is the nature of humanity to turn land into garbage and garbage into land.” (Jon Sherrington, 2006). Not a pretty idea, but the drive for consumption does just that. Do we feel remorse? Yes and no. Consider a growing forest that chokes the land of sunlight and lives off its own decay. It creates an environment ideal for its living conditions and all other organisms adapt or die. Is the forest a problem or a solution? It is no different with humans. Humans expand and change the environment to suit themselves and in the process all other organisms adapt or die. Environmentalists want to limit this impact of change, and the general population focuses on the consumption it needs to sustain itself, regardless.

– Within the three constants: the sun, gravity and geothermal energy, our atmosphere is a contained bio-system in which whatever exists will return to its original state at some point in the future. Carboniferous trees can reproduce, crystallize, liquify or gasify. As implausible as it appears on the surface, the earth’s bio-system will not fail under any circumstances outside of sun, gravity and geothermal energy. This constancy insulates the human conscience from reacting to changes in the environment influenced by specific human intervention. Whatever we are doing is a pin-prick in the earth’s history. But that doesn’t mean it won’t change.

In a recent consumer poll conducted by a non-profit organization sponsored by IPSOS-Reid in 2006, the greatest number of Canadians cited the Environment as the biggest issue that will face Canadians 20 years from now. Why are we not seeing this survey response impact politically and in terms of consumer behavior today? Because the environmentalist lobby is not very good at customer-centric marketing. It has become associated with left-spectrum politics. This is strange. How can climate change and ecosystems be valued within a political spectrum when it affects us all?

The answer is because they don’t know how to sell it. In the macro-political view, the majority of consumer-voters really care more about growth than its consequences. This includes even those polled in the survey. Yet the influence we exert on our environment shapes the immediate aspect of our lives, not just the future.

If the politics could sell the environment better we wouldn’t see it pushed behind considerations of growth. But don’t expect politicians to be influenced by anything other than what people are buying – and people are still turning more land into garbage and more garbage into land. If marketers could sell the environment better, consumers would make environmental choices because these reflect their own values.

So it is a marketing challenge that speaks to the heart of customer-centric marketing – how to align products and services to those values that enable customers to achieve the growth they desire without consequence to the environment. As long as the majority of marketers are concerned with growth more than its consequences, customers will side with the majority and politicians likewise.

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ENTITLEMENT AND THE FREEBY GENERATION

If civilized society has anything to gripe about concerning the psychology of the Next-Generation it is the notion of Entitlement. Everyone feels entitled to whatever they want. Whether it is media attention, petty theft, massive fraud, obscene public demonstrations, more pay for less work, or the calculated elimination of ‘whoever gets in my way’, the overbearing sense of “What’s right in my eyes, is not wrong” is at the core of a society overfed on a diet of Entitlement.

I was musing on the source of this growth of human failing and I arrived at the conclusion that it is We Marketers that have fed the beast. We took a youngling generation and bombarded them, not only with hyped-up aspirations, but also the tempting lure of anything FREE – the unearned reward offered for future gain. Nothing breeds a false sense of entitlement better than providing something for nothing to someone that has done nothing to deserve it. It is the classic case of the parent that spoils the child. And, if you consider carefully enough you will see that the lure of so many competing brands has been carved out of the ‘I’ll give it you for FREE’ promotion. To the extent that mortgages went sub-prime, and that Central Banks are actually contemplating PAYING interest to get you to borrow money in order to keep the economy liquid. The word FREE has become so common place in marketing that it has become a nickname for WORTHLESS.

So I was quite happy to see that Apple had reported its highest profit report in contradistinction to the World Economy having gone SPLAT. Nothing Apple sells is for free. The opposite is true. It sells at a premium and makes a healthy profit. Yet I have attended many conventions and read many marketing experts who say the best way to get your product out there is to offer it for FREE.

How to understand the paradox? It is not so simple as to say that a gift cheapens the giver. Or that entitlement cannot be resisted. A free trial will get the product into the customer’s hands. But then you start to lose control. There are two psychologies at work here. Entitlement and Ambition. If you think about it further, you will realize that these are polar opposites. Ambition is to strive for. Entitlement is to stagnate.

Apply a customer-centric marketing scenario: if the relationship is built on the customer’s Entitlement values, then you won’t find room for growth. Any improvements in service or quality will just feed Customer Entitlement and you will have to keep adding more value to maintain the current relationship, while cutting into your product margin. But, if you focus your marketing on your customer’s values of Ambition, then it drives you to innovation, invention and a means to grow the premium value of your product. This is how Apple is distinct from the other PC vendors.

We have known for a long time in marketing that price promotion kills margin and resets the bar of customer expectations to a lower level. But did we ever consider how we have bred a generation of entitlement sociopaths? The sense of entitlement over all material aspects of our society is deeply embedded. It is only the products that are the fruits of customer Ambition that can truly succeed without the ubiquitous FREE offer. Those products are the ones we want to pay more for. It satisfies our Ambition.

So what do you think? Is FREE a death word in marketing. Any takers?

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Jon Sherrington

Owner, Strategist, Writer – Hydrogen Creative Inc.

May 1996 – Present

My role is to provide strategic marketing guidance to clients to ensure their objectives are attainable, remain in focus and the communications solutions work.

My expertise is in how to realign goals-oriented brands, products, services or businesses to customer values to build loyalty, frequency and continuity.