Friday, September 07, 2007

Another Lesson Marketers Can Learn from Apple: Listening and Communicating with Customers; Customer Loyalty Works Both Ways

Yesterday, I received an email from a friend and fellow marketer indicating that I needed to do another post on Apple. He was right.

When Steve Jobs made his latest announcement on Wednesday, September 5, that Apple lowering the price of the 8GB iPhone by $200 less than two months after its release and eliminating the 4GB model, it made a fair amount of iPhone owners feeling disappointment. As Apple's early adopters tend to be passionate, fiercely loyal, vocal brand advocates that most brands can only dream of (just do a search to get an idea how many blogs, websites, forums and publications are put out by Apple customers, it's impressive), Apple CEO Jobs knows this and respects his customers loyalty (and I am certain, wants to avoid losing it).

On Thursday, in an ingenious move, just one day after the announcement to drop the 8GB price $200, Jobs issued an open letter to iPhone owners offering them a $100 credit at Apple stores for being early adopters. Of course, this open letter sends a powerful message to the world about Apple's loyalty to its customers. I strongly recommend you read Jobs letter, because, I believe, this man knows how to talk and connect with customers. He claims to have read "every one of these emails" from customers upset about the $200 price drop. Jobs acknowledges customer disappointment with Apple, shows humility and respect for customers and what seems to be a genuine desire to do right by customers and makes good with a financial reward for loyal customers, putting his money where his mouth is (of course, smartly, the $100 can only be used at the Apple store).

Every marketer and CEO should be taking notes. This is a great example of how you talk to customers in the age of the informed consumer. Jobs' puts a very human face on the brand and rewards loyalty, which is very likely to make brand advocates more passionate about their choice. It's also resulted in an enormous amount of positive media coverage, blog and message board posting, emails and old fashioned word of mouth (not just word of mouse, but good old fashioned actual one-on-one, in-person and telephone communications) for Apple and iPhone.

Kudos Mr. Jobs. All of this is is so smart, part of me wonders if it wasn't a pre-planned publicity stunt. Whatever the case, Apple has gotten a great deal of good press and word of mouth off of this, and even more, it's gotten the appreciation of its loyal fans.

Tuesday, September 04, 2007

Why All Marketers Can Learn from Apple

While I left Motorola earlier this year and am currently am on contract to a leading B2B/B2C brand not in the cell phone industry, I continue to be fascinated by the competitive activity in the cell phone space. Like many others, I am particularly fascinated by Apple. But for me, my fascination isn't merely because of a cool new music cell phone. My interest is due to Apple's marketing and brand strategies. Today, Reuters reports that, in the US, during its first full month for sale (July), the iPhone has outsold all smartphone models. Impressive, but not surprising.

Apple has shown brand and marketing management expertise with the iPod and the iPhone (which I consider a kind of brand extension of the iPod) from which all marketers, b2c and b2b, can learn a great deal. Apple provides an excellent example of the care and feeding needed to build and sustain a strong brand. Apple has done this by continually moving the iPod brand forward (think Nano then iPhone) and never milking the brand's success; it's part of why it is very difficult to steal the iPod's market share. Apple has also done some smart brand extensions which always maintain the integrity of the core brand (or subrands, if you prefer).

Brand loyalty for iPod is complex connected to many factors: product design, user interface, software, the coolness factor (it's the cool music player to be seen with) -- the fact that a user gets locked in with his/her music collection being in the iTunes format, etc. Of course, you can buy a competitor mp3 player with more features for less money than the iPod -- iPod commands a premium price, always.

Sustaining the Apple iPod music player brand meant moving the product forward, which inevitably led to the iPhone, the convergence of the music / media player and a cell phone. Apple knew it was where portable music players were headed and wanted to cannibalize iPod sales before someone else became first to mind in the space (of course, Apple didn't make the first cell phone that played music, however, it quickly has become first in mind when it comes to cell phones that play music).

Part of managing the brand is managing pricing, and Apple has always smartly exercised strong control over it's retail pricing that most marketers should look at with envy. It's hard to imagine a premium brand selling for $49 - $99 USD (the price range of many subsidized cell phones in the US) and I am confident that Apple is too smart to let that happen to the iPhone (I am also confident that cell phone carriers appreciate this; like any business, they want products they can sell for a nice profit). With iPhone, Apple has innovated in this area too. In the US, cell phone carriers (AT&T, Verizon, Sprint, etc.) have traditionally subsidized the cost of cell phones looking to service for their profit. Not with the iPhone. Reports are that Apple has ensured that AT&T is making a sizable margin on the iPhone. That's smart for both companies. After all, any business is more likely to push a brand they make a profit from rather than a loss -- it's a great differentiator and incentive for the carrier to push the product, especially when you combine that with strong consumer demand for the phone. I've always believed that cell phone makers should have been working hard to do this (i.e., offering carriers high end phones they can sell at a profit), instead of marching to the beat of what's always been done by pumping out more subsidized cell phones. It's interesting that it took a new marketing and brand savvy entrant into the cell phone market to accomplish this.

Even more, only several years ago brands didn't mean much to carriers. I remember seeing a research study a carrier had done that showed that more than 70 percent of consumers could be switched to a different brand while at the carrier's retail store. I seriously doubt this will apply to consumers coming in -- and even switching carriers -- to purchase an iPhone. I am confident those consumers are not going to be easily switched.

I'm also confident that Apple and its iPhone will change the cell phone game in many ways.

Kudos Mr. Jobs. Brilliant work. I am eagerly anticipating your next move.

Monday, January 22, 2007

The Most Annoying Buzzwords of 2006

The Creative Group recently polled 250 marketing and advertising executives to create their latest list of the most overused buzzwords. Of course, they probably should have polled other departments to find out what they thought were the most overused buzzwords from marketing and advertising departments (we do generate a good deal of these terms). I’ve edited down their list to create the absolute worst of the worst of over-used, annoying buzzwords and added my commentary in parenthesis. Granted, many of these words have legitimate uses, but their overuse has been so dramatic, it is probably a good idea to limit their use as to not drive co-workers to the brink of insanity:

- “Outside-the-box”
(This phrase should only be used as a joke. It made in their past list too. It should go into the hall of fame – or is that hall of shame?)
- “Synergy”
(If you’re using this phrase, I’m willing to bet you’re probably wearing plaid pants and a bright bow tie.)
- “The big idea”
(Okay, if you actually said this, chances are you’re not the one with the big idea.)
- “ROI”
(While ROI is an important business measure, marketing and advertising professionals have abused this acronym so badly, I’m actually starting to think we should institute a law that says you can only use this term if you possess a permit that proves you understand what it means and are actually capable of generating positive ROI.)
- “Paradigm shift”
(If you’re still using this term, be advised, the paradigm already shifted sometime in the 70s. You actually missed it.)- “Integrated solution” (Are there really non-integrated solutions? This one is too meaningless to be spoken.)
- “Customer-centric”
(If you’re still over-using this one, odds are you have a sock puppet on your desk.)
- “Make it pop”
(Unless you own a time machine, there’s no need for this one.)
- “Break through the clutter”
(If this is the best you can come up with, clearly, you are part of the clutter.)
- “Take it to the next level”
(On second thought, perhaps the level you are on is most approrpriate.)
- “Free value”
(Huh? You lost me.)
- “Low-hanging fruit”
(As annoying as this one is, I admit, I’ve been guilty. I try to use “quick hits” which was probably a finalist for this list.)
- “It is what it is”
(And the plural form, “They are what they are.” I like this, but only when used for humorous effect.)

(The buzzwords I removed from the Creative Group’s list are: strategy, CRM and organic growth. All of these are, no doubt, over-used, but have legitimate meaning.)

The Creative Group’s previous list had a number of gems, including some on the latest list and a number of classics that some managers and consultants just can’t stop themselves from (over) using:

- “At the end of the day”
- “Solution”
- “Thinking outside the box” -
- “Synergy”
- “Paradigm” “Metrics”
- “Take it offline”
- “Redeployed people”
- “On the runway”
- “Win-win”
- “Value-added”
- “Get on the same page”
- “Customer centric”
- “Generation X”
- “Accountability management”
- “Core competency”
- “Alignment” - “Incremental”

Okay, it's time to wrap this one up. Please, don't hesitate to take this list to the next level and add the phrases you find most annoying. It's a win-win.

Sunday, January 14, 2007

Marketing 1.0 Skill Sets Are Not Sufficient in a Web 2.0 World

The phrase Web 2.0 has become popular lately. If you’re not familiar with the term (and like a lot of internet-related terms, its definition is not completely agreed upon), it describes the web’s second generation, which has more community applications, such as social networking sites, wikis, message boards, blogs, etc.

Web 2.0 means that users have a voice and increased expectations for commercial websites and communications with brands online have increased. It also means that online marketing has become incredibly more complex than the days when you could get by with throwing up your brochures and a contact us page and wait to see what happened. There are significantly greater opportunities for business as well as significantly greater complexity for those who manage online marketing. Of course, this means that the skill sets necessary to effectively manage web 2.0 must similarly evolve.

However, historically, companies have staffed their internet marketing department with personnel that lacks marketing experience, when, in fact, internet marketing is easily the most complex marketing channel to manage today. Very candidly, again and again, I’ve seen and learned from peers with similar experience that the reason for inadequate skill sets in the online marketing department is often rooted in senior marketing executives not being comfortable or familiar with online marketing. Consequently, they often view online marketing as an area to hire managers with strong technology skills, not necessarily strong marketing skills. My twenty two years of marketing and advertising and twelve years of managing online marketing tell me that companies should be looking for managers with very strong marketing and communications skills who are technology savvy. So, what is the result of online marketing departments staffed with inexperienced marketers? Check recent studies on marketing effectiveness, integration in the marketing mix and ability for online marketing to measure effectiveness from the CMO Council, Jupiter and others from the past several years. Although online marketing departments can provide a lot of web operational metrics, they rarely provide measures that are meaningful to the business. (Hint to CMOs: If you’re staff is providing you with low level web operational measures such as visitors, click-throughs and page views, you have a problem – you should be seeing measures meaning to the business objectives and ROI. Additional deficiencies include areas such as marketing mix integration, planning, setting quantitative objectives, properly testing, effectively leveraging media vehicles, etc. -- the list goes on.)

Web 2.0 not only means that marketing and metrics experience is even more critical than in the past, it also means that in-depth experience with communications is vital. Web 2.0 means that your targets have a voice – whether it’s on your turf (AKA website) or somewhere else. Which means that online marketing staff should be managing communications that are two way in nature. Think message board, blogs – it doesn’t matter if your company has launched one of these vehicles or if your targets use them somewhere else; if you’re not at least monitoring these vehicles and leveraging the information in your marketing -- plain and simple --
you’re not properly managing your brand.

All of this makes internet marketing incredibly more complex than it was a decade ago. It is no longer about throwing up brochures and watching what happens. I’m not even persuaded it is fair to call that interactive marketing, when that is about as interactive as someone reading a newspaper or watching a television show on their couch -- that's observing. Today’s web enables significantly greater interactivity. Internet users can rate things, provide their opinion to the community or brand, ask for help or give help to others, share their experiences with a brand – there are almost endless possibilities. However, companies still often manage this area with skills sets that fit more with Web 1.0.

I’ve put together a list of some of the skill sets necessary to manage online marketing in today’s environment:

- Advanced communications skills.
Merely understanding and communicating the value proposition isn’t sufficient. The web isn’t like one-way communications sent out to the public such as advertising or press releases, online marketers must be fluent in two-way communications with the public and know how to deal effectively with harsh critics. This is probably the most difficult skill set to expect from candidates, as this area is so new. Consequently, strong corporate communications experience is imperative.

- Strong knowledge of branding and a solid understanding of design, usability and user experience.
Visitors to your website, recipients of your emails, readers of your corporate blogs are all experiencing your brand. Your website being hard to use and forms not working might represent that your company is not customer-focused and concerned with ease of use in your products to her.
- Strong knowledge of other elements of the marketing mix.
Great online marketing rarely exists in a silo. It is integrated into everything else your company is doing, from PR to word of mouth marketing to traditional advertising to packaging to support. In order to be integrated, great online marketing requires integrated planning and, ideally (but rarely, in practice), integrated metrics. This means that online marketing managers must have a solid understanding of how these other elements work in order to best integrate.

- Strong marketing, segmentation and targeting skills.

Effective online marketing requires a strong foundation in marketing and direct marketing fundamentals (yes, I believe a foundation in direct marketing is very beneficial for online marketing, even if you're not doing direct selling), segmenting audiences and effectively targeting messages.

- Strong understanding of technology/information technology.
Managing online marketing requires a strong knowledge and comfort with technology to understand how things work and what is possible. It means working closely with the IT department, programmers, coders, designers, illustrators, analysts, etc. Even more, because internet technologies and usage is regularly evolving, it requires a manager to regularly stay up on technology. However, the technical aspect of managing online marketing shouldn’t define the online marketing position, marketing skills should.

- Strong analytical/data skills.

Online marketing, even for brands that do not sell direct (that is, through channel partners), requires constant analysis of data that indicates what users do. Database marketing experience is critical.

- Strong knowledge and experience with research and marketing testing techniques.

I’ve often thought that a good place to find great online marketers is from the direct mail marketing world, as these marketers are often experts with testing, complex metrics and database marketing. Doing online marketing campaigns at a best practice level requires testing and an effective online marketing manager must have a strong knowledge of testing techniques, and research in general to know when to conduct research and how to leverage the information learned from research.

Managing online marketing well requires a strong grasp of internet technologies, but it requires an even stronger grasp of marketing management. Perhaps CMOs are only beginning to realize this.