Monthly Archives: January 2014

January 23, 2014 · 11:40 am

Feeling The Love

I read something the other day that got me thinking.

Advertising

(Photo credit: Wrote)

Businesses spend over $200 Billion on advertising and yet surveys show that only 4% of customers trust advertising as a source of information about products and services.  I’ve written about this before and how word of mouth, consumer review sites, and other social media are far more important these days in many purchase decisions than is good old advertising.

Think about your own shopping habits.  You are interested in something, and the bigger the purchase (TV, technology, a car) the more likely you are to research the heck out of it.  Anyone you know bought something major without asking around or checking it out?   Much of the time, that “checking out” process happens in a physical store but many of us window shop online as well.  Maybe it’s advertising that precipitates the desire for a product but it’s what happens next that sells it.

I was in an unfamiliar store the other day and couldn’t find something.  I asked an employee who was replenishing the shelves where I might find the item, fully expecting an “aisle 5” sort of response.  Instead, he put down his box and walked me over to where the item should have been.  When it wasn’t there, he said “wait here” and went in the back to find me what I needed.  I was feeling the love and this store will be a regular part of my shopping.  Yes, it was advertising that got me in but had he just directed me to an aisle I would have left the store empty-handed, unlikely to return.

Maybe “customer love programs” needs to be a budget item.  Many retailers cut back on floor help after the holidays while increasing advertising.  Is that backwards?  Might money spent on customer service – read that as retaining existing customers – have a better ROI than on the ads designed to attract new ones?  A happy customer might not tell everyone about how great your products are unless they’re asked, but I can guarantee a large percentage of them (studies show 95% take action) WILL tell their friends how horrible you are (79% told others) should they be unhappy with you or have a bad experience.

We all have heard the old Attention -> Interest -> Desire -> Action paradigm, or  AIDA.  Maybe we need to get “show some love” in there somehow.  Thoughts?

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January 22, 2014 · 11:36 am

Benchmarks

There is a scene in the movie “Caddyshack” in which two of the characters are having a chat after golf:

Judge Smails: Ty, what did you shoot today?
Ty Webb: Oh, Judge, I don’t keep score.
Judge Smails: Then how do you measure yourself with other golfers?
Ty Webb: By height.

I know – I do manage to find ways to get golf references into the screed a lot.

Charts

(Photo credit: GrapeCity)

However, what you just read is an example of benchmarking – measuring your performance or a business unit’s performance against a standard.  It’s something we all do.  Clients ask if their email open rates are good or if their site’s bounce rate is higher than others I’ve seen.  Most of the time a company tries to identify standards that come out of best practices and benchmark themselves against them.  Sometimes even entire industries (usually through a trade association or some other third-party) will anonymously aggregate the results  across the industry to help the members figure out if their results are on par with the industry as a whole.

We see the benchmarks all the time in financial results.  ARPU in the wireless industry, for example, is a very public benchmark; percent subscriber growth is one in the cable industry.  I find them helpful but am probably not as fixated on them as a lot of other people.  Here is why.

In my consulting experience I’ve found very few businesses that align exactly.  Sure, many of the folks with whom I work face the same general challenges, but asking, for example, if a bounce rate is high if it ignores the purpose of your page or site vs. what others are trying to do. Where I have a bigger issue with benchmarks is when companies use them to judge other companies (or other people!).  Those sorts of comparisons get our eyes off our own goals.  By comparing and judging, we’re implying that every business is on the same journey (or that every person is as well).  We can’t know for sure what those journeys involve.

Benchmarks are like many other business tools.  In the right hands and using the right perspective they can be very useful.  The again, some companies do what Ty did in the example – he’s a tall guy, let’s measure results by height!  Used without context or skewed to a purpose or to pass absolute judgement, they’re dangerous.  That’s my take – what’s yours?

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January 21, 2014 · 9:30 am

Long Black Road

This TunesDay we’re going to look at an old song that’s actually new.  Recorded back in 2001 it wasn’t in wide release until recently when it was featured in the soundtrack to American Hustle.  The movie is very good; the soundtrack is excellent.  The song is Long Black Road which was recorded on ELO‘s last album (Zoom) and only issued in the Japanese version of the record as a bonus track.  Pretty obscure, but to those of us who’ve long  admired Jeff Lynne it was sort of familiar.  Here it is for your listening pleasure:

What makes this song of interest to us today is the message contained in the lyrics.  What I like about this song is it makes the same point in three different ways.  A directionless musician pursues his dreams in the first verse despite being told to get, in essence, a real job.  “Face reality” as the song puts it.  I’m sure every entrepreneur and every start-up has heard that at some point.

The second verse is the core message for anyone in business:

So I drifted for a while down the road to ruin
I couldn’t find my way, I didn’t know what I was doin’
I saw a lot of people coming back the other way
So I kept on goin’ when I heard them say,

“You gotta get up in the morning, take your heavy load
And you gotta keep goin’ down the long black road.”

How many businesses are caught up doing the same kind of drifting?  How often do we wonder if we’re lost?  In this case, despite the number of people coming back, the singer keeps going, having heard the message to persist.  Quitting is easy – taking the load down the long black road isn’t.   By the third verse, the singer is a success, but gets reminded that money won’t bring happiness.  The journey – overcoming the obstacles, facing “trouble and strife” are every bit as important as the end goal.  Three great business points.

Funny how much one can learn in three verses over three minutes if we’ll just listen…

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