Product do-overs difficult... do it better the first time

The comparison is stark:

• Apple sells approximately 200, 000 iPads every 2 days.
• RIM sold approximately 200,000 Blackberry Playbook tablet computers over 90 days this past summer.

The problem(s) with the Playbook?

First (and probably foremost), it doesn't have an Apple logo on it.  However, there are non-Apple issues.  The Playbook was introduced with just a fraction (40,000 vs. 1,000,000) of the available content and apps available to its adopters compared to competing Apple and Google Android tablets. In addition, the Playbook did not come with Blackberry's popular e-mail and collaboration service (Blackberry Enterprise Server).

RIM's proposed fixes to bolster Playbook sales?

1. Encourage app makers to get really busy.
2. Release a "major" software update.
3. Cut prices.
4. Keep telling prospective buyers the Playbook is just as good/better than the iPad.

The outcome? Consumers will soon decide

However, recapturing any momentum that came with the introduction of the Blackberry Playbook will be difficult (impossible?). While a staple of recreational golf, mulligans are in short supply in the business world.  A better path is to hit a quality shot on the first swing.

Don't overlook the details

Michael Jordan + humor + a continuing TV campaign = a promising ad -- but please get the other guy a pair of pants that fit!

Hanes has done several significant things promotionally to benefit their brand:

• sign Michael Jordan as a spokesperson
• drop Charlie Sheen as Jordan's sidekick (reportedly to avoid any linkage to Sheen's persistent negative press)
• developed a lasting humor-based campaign to promote the benefits of their product as well as highlight Jordan

If this is how Hanes make you look, maybe he should try Fruit-of-the Loom...
After all that, why not give the actor in the current ad a pair of pants that fit?  His pants are stretched so tight that the white liner on the front pockets show, the front of the pants have a very unflattering pull and the pockets are puckered. While some viewers would recognize the problem is with the pants, others might not. The question is why take the chance when a little more attention to detail would have made the issue a non-starter?

Power of a brand part II -- Call of Duty: Black Ops

Increasing brand positioning via association (to a video game).

In an earlier post, the integration of Apple's iPad into a product offering to increase product brand position via association with the iPad was discussed.

Now the popularity of Call of Duty: Black Ops is being used by Jeep in an attempt to influence prospective buyers.  If there is any surprise, it might be that the COD: Black Ops brand would be deemed so attractive to enough of Jeep's target market.  Jeep's consumer research would be interesting to see.

     

                                                                             Jeep Wrangle Call of Duty: Black Ops Edition

Humor without sacrificing customer image

To differentiate themselves from competition, two long-running television ad campaigns focus humor on things people dislike about their industries.

Some things about banking consumers dislike:

• hidden bank fees
• treating new customers better than current ones
• not giving all customers full information
• fine print

Some things about buying and owning stocks consumers dislike:

• impersonal service
• high fees
• feeling that best interest of investor is not broker's priority
• lack of information and support

So how do Ally Bank and Scottrade deal this such dislikes?  By using humor to highlight such common negative perceptions against their own brand positions.

Ally Bank Commercials




Scottrade commercials



One final thought... note that neither ad campaign used their customers as the butt of the joke (see the August 26, 2010 post). 

Retro comfort factor

In these challenging economic times, companies give consumers "comfort" via retro offerings

It's comfort food without the calories... products that remind one of the "good ol' days". Here are a few more recent examples. There are many more.

ThinkGeek's retro style blue-tooth headset (handset?):

Pepsi's temporary return of the retro can labels (even with "real sugar"!):

Is your packaging doing enough?

Going a bit beyond product protection, promotion & display

Packaging is an often under-utilized aspect of marketing. It is designed to protect products during shipping, act as a "billboard" in a store to attract attention, and to aid in store display (stacking, hanging, etc.).

Some businesses are finding ways to use packaging to add a bit more customer value and act as a differentiator from competitors . While some can be more substantial, many are smaller in nature. Here are a couple of examples:

• Sun Chips (from Frito-Lay) offer chips in 100% compostable bags.


• 1800 Tequila having its lid measure a shot (turn it over to fill up the lid).

Could your packaging be doing more?

Answering consumer questions

Starbucks does not leave consumers wondering why to buy new instant coffee

If anyone had doubts why to buy Starbucks' newly introduced instant coffee, they only needed to open the two-page advertising spreads in the October 23, 2009 editions of The New York Times (A24 & 25) and USA Today (8A & 9) to get some suggestions.

A formula for increasing sales during a recession

Competitors are hurting - how does Hyundai do it?

September 2009 sales statistics tell a grime story for U.S. auto sales... as soon as the summer federal auto bailout program ended, auto sales plummeted... except for Hyundai and Kia (which Hyundai has a significant ownership stake in).

Read it and weep
While September '09 auto sales declined for General Motors, Toyota,Honda, Chrysler, Nissan and Ford, Hyundai sales were up 27%.

How do they do it?

Hyundai has implemented a fundamental tenet of marketing -- an attractive product with high quality offered at a "good"(in the eyes of the customer) price = customer value. And if that value is judged significant enough, consumers will buy -- even in a down economy.

...........

This is not the only strategy option but it is the one Hyundai chose and is delivering on.

...................................

Two decades ago, Hyundai was a 'dirty' word in the U.S.

The introduction of the Hyundai brand in the U.S. was less than successful. A butt of jokes, quality issues negatively impacted the brand to the extent that Hyundai abandoned the U.S. auto market. After correcting quality flaws, Hyundai restarted U.S. sales... but had to offer 10 year warranties to induce consumers to buy a brand they remembered as inferior. While still offering the warranty, an increasing number of drivers are attracted to the combination of product, quality and price.

...............................................

Truth in advertising

Hyundai's current slogan describes it well: Hyundai Momentum

Impress customers, not yourself

If you have thoughts similar to these, think twice:

• "I've been in this business for 20 years... I know what to do."
  
• "Customers don't know what they want but I do."
• "Customers are dumb."
  

Thinking you know more than customers is a trap more common than one might think.

A case study:

The current Burger King advertising campaign featuring a very hip king (see above) gets attention and some acclaim for creativity. One never knows where the king will show up. From waking up people to promote breakfast at BK (right) to dancing with Sponge Bob Square Pants to promote Kid's Meals (see video below)... the BK King certainly gets around.

Burger King's current problem?

While fast food consumers seek products at lower prices, BK is sticking to the image of the hip king with little in response to customer pricing desires.

While McDonald's has responded to consumer economic concerns with an expanded "Dollar Menu", Burger King has been airing the booty bumping Sponge Bob commercial (and just recently adding a $1 Whopper Jr. TV commercial).

The results? Burger King revenue is down since March 2009 while McDonald's rose 7% in April 2009 alone .

Even in the current economy, Burger King thought their customers should value image over prices. Apparently, BK was wrong.

P.S. Promoting Kid's Meals with a crotch grabbing king and shaking square booties? That's a topic for a future posting.

Every store can't be Walmart

Every business cannot offer the lowest prices... so what else can be done to increase the chances that customers will buy?

Two January 2009 shopping trips, two very different scenes.

Trip #1 to a local mall on a Saturday afternoon. Few shoppers. Even fewer buyers -- it was startling how few people were carrying shopping bags with purchases.

Trip #2 to a local Walmart on a Saturday afternoon. Hard to find an empty parking spot (picture just below). The store was packed with shoppers. 35 of 38 cash registers were open and all had lines.














Fact: In the current economic climate, shoppers are attracted to low prices.

Fact: Not all stores can compete price-wise with the Walmarts of the world.

Question:
Beyond low prices, what are businesses doing to increase customer purchases?

Note: While not new tactics, the following are examples of methods some firms are employing in attempt to keep customers buying.

1. Bundle current products together for a "deal". Recently, Jack In The Box announced the new "Jumbo Deal" (picture below) that combined a sandwich, tacos and fries for $2.99. Even if the price covers only costs, the fast food restaurant can profit from the likely sale of a highly profitable soft drink.



2. Reduce purchase risk by offering attractive warranties and guarantees. Already tightening their purse strings and wallets, even willing consumers are looking for methods to minimize risks of unwise spending on products. Businesses can increase consumer confidence in purchases by offering strong (as perceived by the buyers) product warranties and guarantees (money back if not satisfied, you will not find at a lower price, etc.).
   
   
3. Allow consumers to try the product before purchasing. More businesses are finding ways to allow customers to "test drive" their products. Starbucks is offering free trials of two new Tazo tea drinks (with a coupon from a USA Today advertising insert -- picture below). This allows customers to be more sure that they like the product before purchase thereby increasing their buying confidence to overcome risks of spending money that is in short supply.
   
   

The "surprising" state of brand perception at General Motors

GM's recent television spots seem to be an admission of what the company knows too many consumers think about their vehicles

During the holiday season of 2008, General Motors ran a series of television advertisements for a "Red Tag" sales event (that would run through early January 2009). As would be expected, these spots were visually appealing and conveyed various logical GM branding points to consumers --such as vehicle safety, high resale value, good fuel mileage, and appealing / attractive vehicle makes and models.

However, upon deeper examination, it was not these points that were most revealing. Rather it was a tag line and story line that gave a glimpse into what General Motors understands how their products are perceived by the car buying public.

Example 1: "Made by GM... Surprised?"
One set of commercials for multiple GM makes and models highlighted product value points -- safety awards, resale value, fuel mileage -- of the featured vehicles. It is worth noting that after listing such a good vehicle attribute comes the tag line of "Made by GM... Surprised?".

These four words reveal what GM knows about the state of their brand. Should consumers be surprised that GM can make a quality vehicle? Apparently GM thinks so.

Here are three of the spots.

Example 2: Customer at Saturn dealership can't believe his eyes

Another television spot shows a customer walking into a Saturn showroom, then upon seeing attractive vehicles there, looks back outside at the street sign to make sure he was at a Saturn dealer. He is surprised to learn that Saturn has attractive vehicles. From the comments of the salespeople, many others share his surprise.

This glimpse into what GM understands -- that consumers perceive Saturn product offerings as non-appealing design-wise and that consumers will be surprised that Saturn can build attractive vehicles.

It is amazing to think that good vehicles from General Motors should be surprising to American consumers.

Lower prices plus

This holiday season, consumers are being flooded with so many "price deals" that it is difficult for a business to stand out from competitors.

Economic news is making consumers skittish. It seems that little is certain in the financial arena except that the values of their homes and 401k plans are both down. Bail outs of American business institutions seem to come on a daily basis.

Some good news... Gas prices have dropped by more than half from the summer highs of over $4 per gallon last summer.

The bad news? While nice to have more money left in pocketbooks and wallets after a fill-up, it has not been nearly enough to bolster shaken consumer confidence.

A textbook business response
In an attempt to attract such jittery customers, many businesses have lowered the effective prices on various products by offering sales and coupons. However, since so many retailers are doing the same, buyers have numerous options offering lowered prices. In addition, an environment of intense price competition -- where competitors keep lowering prices to match or beat other stores -- can "teach" consumers to wait to make a purchase. In this type of situation, consumers learn that postponing a purchase results in better (from their perspective) prices by giving retailers more time to keep lowering their prices.

Offering more than just lower prices
Some retailers have started to offer consumers "lower prices plus". The "plus" can be wide ranging -- including higher quality products, more service, better product selection, a better return policy, and so forth. In our lower price retail environment, the purpose of the "plus" is to give prospective buyers a reason to buy from that retailer and even possibly give consumers a reason to buy sooner rather than later.

Currently, Best Buy is doing this.

Best Buy is in a highly competitive market space... they compete with a wide variety of businesses such as Walmart, Costco, national department stores, and local electronics stores. Lower competitive prices are widely used. This retail space is so competitive that former Best Buy competitors Circuit City and CompUSA are either downsizing or are no longer in business.

Best Buy's current television advertising campaign "You, Happier." exemplifies the "plus" strategy. The thirty second spots each feature a "Blue Shirt" (Best Buy employee) sharing a brief story that shows how their product knowledge and empathy for people helps their customers. With Best Buy's assistance, you can be happier. Now that's a "plus".

Example A: Connecting grandpas and grandkids

Example B: Needing the perfect gift

Example C: Great gift ideas

Let your customers be involved

Businesses should do more than talk about incorporating customers into marketing efforts

Although businesses might not be able to go to the same level, the newly released movie Fireproof offers a lesson in customer involvement. The movie, which came in 4th place and earned $6.5 million for its debut weekend, asked for and got a level of participation from its constituencies during product development (shooting the movie) unimaginable to most businesspeople. For example, volunteers built the sets and it is reported that most of the people that made the movie also volunteered.

Why do it?
Allowing customer involvement is one way to increase customer loyalty. Such participation improves customer "buy in". They have a voice. They have a stake in the effort. They want you to succeed.

Easy to dismiss
Businesspeople should not dismiss this lesson too quickly due to an "our customers will not participate with us!" attitude. Granted, Fireproof is an example of extreme customer participation. However, too many businesses do not try hard enough to allow their customers to become involved with them.

Customer participation comes in many forms. A few examples of customer involvement across various industries include:

• Airlines providing programs to let participants in their frequent flier programs donate airline miles to charities such as the American Red Cross.


• T-shirt makers allowing customers to vote on which images (which were designed by volunteers) on shirts to sell.


• Businesses aggressively soliciting and acting upon customer feedback regarding their products and services.


• Providing online communities that allow customers to interact with each other and the firm.


• A soda maker featuring pictures taken by customers on the labels on pop bottles.

The questions to ask include...
.....1. How could we be helped by customer involvement?
.....2. How can customer involvement be facilitated?
.....3. How soon can we get it going?

Displaying benefits in promotions -- part II

A May 2008 post on this blog discussed the benefits of directly tying a business's promotional theme to variables impacting customer lives and telling how your product, service and/or store can assist consumers in dealing with that issue.

Currently economic concerns -- ranging from high fuel prices to falling values for their homes -- are now on the minds of many U.S. consumers. Several examples of advertising that clearly address such concerns are currently on television. Each commercial's appeal is easy for customers to understand... you are in tight financial times and our product can save you money.

Here is one such television advertisement:

Ask yourself

1. What issues are your customers dealing with?
2. What concerns do they have?
3. Do I know even the answers to questions 1 & 2? If not, that's an item for future blog posting.
4. How can my marketing efforts be tailored to address those issues and concerns?

Business is about today and tomorrow

Sole focus on the "here and now" can hurt in the future.

Premise #1
Businesses need products and services that are attractive to consumers in the "now". If a firm cannot sell enough in the "near-term", the "long-term" may not arrive for that organization.

Premise #2
Businesses cannot be so focused on their current product offerings that changing trends and consumer preferences are not recognized and acted upon.

Premise #3
Successfully balancing both premise #1 and #2 is difficult.

The example of the parking lot
While sitting outside a Starbucks in Burbank, CA (see 8-29-08 entry), the issue of balancing the near-term with long-term business perspective was parked right in front of me. Literally parked.

There were 24 vehicles in the parking lot on this Saturday morning at 7AM.
- the largest 11 vehicles were all from US automakers
..(12 SUVs/vans/pickups and 1 very large car)
- the remaining 13 smaller vehicles (all cars of various sizes)
..were from non-USA automakers

With gasoline around $4 per gallon, Toyota and Honda reported vehicle sales at very high levels during the summer of 2008. During the same period, American automakers' sales were poor. What caused US automakers to be in the position of not offering more fuel efficient vehicles when US consumers were craving them?

The lure of the high profit margins from larger vehicles (per unit profitability of pickups and SUVs have been - until recently - very high) was too tempting and became the prize of American automakers. Such a limited focus blinded executives from American automakers from possible opportunities and threats -- including the prospect of high fuel prices and the increasing green attitude of American auto buyers.

The impact of higher prices of fuel is not unprecedented. One only has to recall the high priced gas (with accompanying long lines at service stations) of the 1970s. Since such uncontrollable variables impacted the auto industry before, why were they missed by American automakers just 30 years later? The answer: too much focus on the "here and now" to the detriment of watching for (and reacting to) events and issues that would shape future consumer behavior, wants and needs.

Simplicity can be bliss

Product innovation and continual product improvement are two of the main mantras of US business. In many industries it is "improve or die".

However, product improvements and innovation for their own sake can be a strategy misstep and should be aligned with consumer desires.

Take In-N-Out Burger, for example. This western (California, Nevada, Arizona & Utah) burger chain has maintained a simple and stable menu (see picture) for many, many years and their customers love it. They offer just a few items but they do them all exceedingly well. No chicken sandwiches, roll-ups, salads or breakfast here. Just how many hamburger patties and do you want cheese? Only one size in servings of french fries, shakes and coffee.

.....

Obviously In-N-Out does not try to be the fast food outlet for every fast food buyer. They know their customer base and focus on them.

.......

Living in an area of the country without any In-N-Out Burger outlets, I continually get comments like "wish we had them here" from complete strangers when I wear one of my In-N-Out t-shirts.

.......

In-N-Out keeps its customers in mind and those consumers want few (if any) changes. Such simplicity and limited product assortment is not for all firms but businesses need to take care not to innovate their products away from their customers' desires.

Don't forget current customers

New customers not the only route to increased profits

While not taking anything away from the importance of new customers, current customers are often overlooked as a source of increasing sales.

How can this be? I think a major reason is that many businesses find it easier to track new customers than tracking increased sales from current customers. Businesses reward employees where data is available (i.e. attracting new customers) and, therefore, employees focus on new customers.

However, not looking at current customers as sources to increase profits is a mistake. By their very nature, current customers have an established relationship with the business... thus costs of their acquisition is lower than attracting someone that is not a customer.

An example

Dropping by a Starbucks one morning last week the sign above was prominently displayed (along with similar wording on the receipt). This "come back again later today" promotion has multiple potential benefits to the coffee chain:

1. Starbucks increases sales by bringing traditional AM customers back in the PM.


2. Starbucks gets the profits of the drinks ordered in the PM ($2 promotion price - actual cost associated with the drink = profit).


3. Builds the habit of stopping by Starbucks after 2 PM even after this promotion ends.

To do
The question is how can your business attract more purchases from current customers?

"Shoot straight" with customers

Be accurate,
.....don't overpromise.

On a recent trip I had the opportunity to eat at Pret A Manger -- a sandwich shop with locations in London and New York City. These busy eateries specialize in preparing "natural, tasty food".

One item I noticed was Pret A Manger's promise (see photo) that states:
"Just Made" organic when we can, always
preservative-free and "Just Made", of course

This product statement is straightforward and clear. It promises without overpromising -- note the "when we can" clause. From the crowds at the several locations we passed and/or ate at, it is a hit with customers.

How has it gotten to this?

Businesses versus their customers.... .... ..you've got to be kidding!

The title on the cover of the June 16th issue of BusinessWeek (see right) that arrived in the mail today highlighted the negative views some businesses have towards customers. It is sad to consider that businesses across industries look at consumers as a form of competition that need to be conquered. No wonder businesses complain of the lack of customer loyalty.

It is unfortunate that too many organizations fail to remember Business 101 and 501.

Business 101 -- customers are the only source of revenue.

Business 501 (graduate level) -- loyal customers are the most profitable customers.

When the situation gets to the point where a major business publication features your business against customers on the front cover in a replica of an old time boxing card handbill, it is time to make significant changes.

How would BusinessWeek represent your relationship with your customers?