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The Fool’s Gold Rush

Early adopters are frequently thought to be the leading edge of the next mammoth venture, inviting speculators and venture capitalists to whet their expectations for the next iPod/iPhone/Blackberry revolution. Yet, in many cases early adopters turn out to be the only segment that values the product or service and the venture stalls beyond this low-hanging fruit. This is probably not what a myriad of high-tech hopefuls want to hear right now. But I am not the voice of despondency. The dot.com meltdown did that already. I am saying that there is a way to eliminate the threat of over-promising and getting burned.

How does the over-promising come about? The goals-oriented marketer defines a market, measures performance based on test marketing (or early adoption) and extrapolates based on an exponent of the total market volume. Call this building Castles in the Air, based on a model built on the ground. We…

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The Good Old Days or The Good New Days

If population, technology and economic growth were predictable then the value of a product’s unique selling proposition would also be predictable and the stable growth of a business would be assured. There was a temporary experience of this phenomenon in the post-war 50’s in America when industrial technology released from the war effort into a stable market hungry for innovation created a boom in both the economy and the birth-rate.

However population mobility, economic volatility, technological innovation, geopolitical instability have since created such unpredictability that consistent values seem impossible to gauge. These destabilizing factors weaken the corporate armor of even the most dyed-in-the-wool product icons for competition to attack. And the greater the proliferation of choice, the more unpredictable the customer appears in how they make choices.

Stuck In Tunnel Vision
Despite all this uncertainty the most common practice of businesses and organizations is to mold their values around a core…

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The Vicious Circle of the Marketing Cycle

I have spoken throughout this blog about the problems of the goals-driven enterprise, as opposed to the customer-driven enterprise. The goals-driven enterprise has one mandate: to leverage its assets to achieve maximum wealth. The fastest way to do this is to tender shares publicly. This is how the shareholder becomes more important to the enterprise than the customer.

In an economic downturn, in order to maximize shareholder value the enterprise cuts prices to stimulate demand and cuts costs to maintain a margin. Marketing investment becomes highly expendable. What the enterprise is effectively saying is, “My products and my customers are now worth less to me so I am going to invest less in them so that my shareholders don’t complain about achieving a lower rate of return on my customer investment.”

This is perfectly reasonable accounting view of the marketing cycle. The Corporate Treasury says “When I am profitable I don’t…

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Marketing ROI

I have been doing a lot of reading on ROI lately and found that writings on this can vary quite significantly on how to address this, and yes it appears to be very muddy. At the end of the day though, the big question still comes down to “How do we know we are spending our marketing dollars effectively – and how do we demonstrate it to others?”.

When trying to answer this question, there is not one clear cut ROI formula that defines this that can be applied universally for all marketing activities. (I am stopping here but his comments continue in the forum)

Reply from David McNab:
Here is a thought that might incite fear in the hearts of marketing departments everywhere – instead of muddling around with a whole sloough of measurements of ROMI, ROI, ROC and the like for measuring marketing performance why not simply make…

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SUPPRESSING DIGITAL FLATULENCE

What is digital flatulence? It is the unexpected, public, disruptive and frequently embarrassing electronic notification that someone (other than the person with whom you are speaking) wants your attention. It could be your mother, or about something of no immediate consequence. Either provides the same distraction.

The range of audio styles for this is so diverse that, unlike organic gaseous emissions, it is easily traced back to its source. It doesn’t matter how permissive the recipient is (opted-in) to receiving interruptions, the intrusion affects everyone in the vicinity. Therefore the onus of digital flatulence (no pun intended) falls to the sender, not the receiver.

We are only a few years into the popularity of this media, and there still exists in the minds of many users a certain cachet, that they are so sought after, or that the present moment is never as important as the interruption. This cachet is trumpeted…

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Selling Integrity to Truth-starved Customers

My log-cabin beach vacation, cooking with charcoal, without TV, cell phone or laptop, using my own paddling power for water sports has given me a reaction to returning to life as I usually know it. But here goes:

Q. How do customers evaluate marketing hype?

A.
Perceived Customer Value = √ Brand Value Proposition (√ is the square root of)
Actual Customer Value = Retail Price LESS 40%

It is an automatic filter. We need the hype to penetrate any sense of value and we need the discount to feel it was worth paying for it.

Q. What is the reason that most customers don’t read either the blurb or the small print?

A.
Because they make a choice to believe in the realm of mythical marketing. Tolerance for myth and brand legend has been drummed into consumers through mass media hypnosis (a.k.a. hype-nosis?)

Q. Aren’t money-back, satisfaction guaranteed programs assurances that…

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How to Rebuild Your Brand in Your Customer’s Image

OK. You have a product, service or company that became successful based on your accurate determination of product/price/place/persona (brand relationship). But now competition has made inroads, or leapfrogged you. The market has changed. Your revenue curve is slipping, price-cutting is killing your margins, you don’t seem to be able to satisfy your customers, and they won’t reveal why. What do you do?

Reinvent yourself, rebrand your business, keep it fresh? One of the most expensive undertakings a marketer can entertain is a rebranding process. And it is commonly one of the most futile acts when it is to combat a negative trend in the business cycle. A valued former client in the computer manufacturing business went through this undertaking three times in the course of two years, and ended up being swallowed by another titan, after shelling out a tidy six-figure number to a NY-based rebranding consulting group.

When you define…

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SUPPLIER FROM PLUTO, CUSTOMER IN ANOTHER SOLAR SYSTEM

Borrowing from a recent article in the Nat Post Business Section (that applies the standard Mars/Venus equational imbalance), about a book called “Wired to Care: How Companies Prosper When They Create Widespread Empathy”, penned by Business Strategist Dev Patnaik, also founder and chief exec of Jump Associates, adviser to businesses on growth strategies:

“Companies often hinder their success by focusing too narrowly on selling products and not on their customers’ actual needs.” ibid.

He has written a book about a concept he describes as the ’empathy gap’ between employees and the customers they serve. Well, that saves me the trouble.

Dev specifies the gap as a chasm between employees in organizations and the people (customers?). I wonder if the euphemism was derived from actual experience of shopping at The Gap?

Not wanting to put the onus entirely on employees I was relieved to see he spoke of “Companies stamping out customer empathy” within…

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Loyalty and Price Elasticity

In recent marketing history the belief was formed that rewards increase customer retention. Up to what point is the value of the reward negated by a price increase? Forget rewards – with any price increase, what is the melting point of intrinsic loyalty?

Questions:

Hypothesis: Wal-Mart unilaterally increases its pricing by 15%. Could the Wal-Mart brand handle a 15% bump in prices?

Fact: gasoline goes up universally 50% and is absorbed. At 100% it starts to topple one of the world’s biggest companies. What do you do next?

Experience: your insurance company surcharges you on your dental plan because your dentist increased his fees outside the range of their policy limits. Do you swallow the difference or find a cheaper dentist?

Air Miles Rewards offers to double its rewards on select brand name products. Do you buy them or go for the store brand at the lower price?

Your hair-stylist: on whom you depend doubles…

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Price, Shmice!!!

I recently went head-to-head with my toughest critic to argue that A.C.C.E.P.T. decision criteria accurately summarize the values that purchasers use, knowingly or unknowingly, in making a purchase decision, regardless of whether they are a consumer, a business or a procurement agency.

A quick refresher on the criteria:

> Achievement: will this purchase help me to achieve my goals??
> Convenience: how easy is it to buy this product/ service?
> Comfort: can I use this with peace of mind?
> Esteem: will my decision be respected?
> Pleasure: can I derive pleasure from the outcome?
> Trust: can I trust that my expectations will be met?

The first comment hurled back at me was “PRICE!!! How can you possibly represent purchase decision criteria and exclude price?”

So with my back up against the wall I had to explain how price is a value indicator that is relative to…

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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.