Monthly Archives: December 2015

Bad Corn

It’s Foodie Friday! With the new season of Top Chef in full swing, I thought I’d use something that happened on last night’s episode as our topic this week. If you’re a fan of the series and have not yet watched the latest episode, mild spoiler alert!

Public relations of high-fructose corn syrup

(Photo credit: Wikipedia)

The chef who was eliminated last night made a dish that contained a corn and chorizo hash as an accompaniment to the protein, shrimp. When facing the judges, the question was raised why she chose to cook the corn. The judges thought that some crisp, cool corn would have complemented the shrimp, which was served outdoors (on a golf course!) in the heat. The chef’s reply was that the raw corn seemed overly starchy and she didn’t think it would have been any better raw than cooked. Her hope was that cooking would transform some of the starch. She was then asked the obvious question: why use the corn at all if you weren’t happy with the quality of the ingredient? Which raises our business point.

We often get handed inferior ingredients in business.  These can range from the dead weight employee who is unmotivated and less skilled to the messy financial plan.  The right answer isn’t always “let’s see what we can make out of this.”  Sometimes we need to find different ingredients or change our initial plan for the ones we have.  We get into trouble when we plow ahead, inflexible and wearing blinders.  Markets change, consumer tastes change, and stuff happens.  That doesn’t mean we should constantly be changing course, but it does mean that subtle adjustments are as much an ongoing part of business as tasting and seasoning is a constant part of cooking.

I rarely go to the market with a complete list.  I like to see what looks good with a general plan in mind about what I feel like cooking.  I try to approach business the same way – have a plan, but find the best ingredients and be ready to adjust.  I mean, who wants to pack their knives and go based on a bad piece of corn?

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Charging Facebook

I’m a believer in things repeating themselves in business, even if they take slightly altered forms or use up to date technology.  It’s an offshoot of my mantra about not confusing the business with the tools, I guess.  In any event, I got to thinking about a tidbit I picked up while going through my news feeds the other day.  It turns out according to SimpleReach, a distribution analytics company, referral traffic to the top 30 Facebook publishers  plunged 32 percent from January to October. Among the top 10, the drop was 42.7 percent.  The drop was confirmed by other analytics sources as well.  This, of course, got me thinking about cable operators and television networks.

Facebook logo Español: Logotipo de Facebook Fr...

(Photo credit: Wikipedia)

Like a cable system, a social network is a big, empty pipe.  It creates a method for distribution and little else.  All of the innovation at a social network is focused on improving that distribution and not on the content.  Back when the web started, publishers plugged right into the web and promoted like crazy to get “viewership.”  What Facebook and other social networks (read that as gatekeepers) have done is to take over much of the traffic creation.  This is exactly what happened when the world shifted from over the air broadcasting to cable, but there as a big difference.

In two words: affiliate fees.  This is compensation paid by the operators to the program providers.  It can run from pennies per home to $7+.  That’s per home, per month.  It’s a pretty strong reason why most “TV” content is only available with the blessing of a cable carrier (TV Everywhere).  Why would the publishers (content providers, a.k.a. TV nets) want to disrupt that business model, especially when the can supplement those dollars with ad revenues?

Back to Facebook.  Publishers spent several years building content islands on Facebook, only to have Facebook revamp their algorithm and sent less traffic.  The problem is this:

With social media driving over 30 percent of all traffic to publisher websites and Facebook delivering 75 percent of that social traffic, no publisher, from BuzzFeed to The New York Times Company, can afford to skip using Facebook as a means to promote its content.That gives increasing leverage to Facebook, which is able to greatly influence the prominence and visibility of publishers’ articles in the News Feed of its users.

So here is a prediction, one that might not happen for a couple of years, but one that I think, based on the history of cable TV, will occur eventually.  Content providers are going to charge Facebook.  I’m not talking about sharing ad revenues; I mean the digital equivalent of affiliate fees.  Someone will bite the bullet – a big guy like the Times or HuffPo or maybe BuzzFeed – and tell Facebook to pay up.  Maybe they will take technical measures to prevent their content from being shared there but they won’t publish it themselves.  One publisher gone is not a big deal.  Many publishers gone means an empty pipe, and that means fewer users and fewer ads sold for Facebook.

What do you think?

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Filed under digital media, Thinking Aloud

Letting Customers Win

I know we talk a lot in this space about being customer centric and how that paradigm shift can result in great sales.  It’s always nice when I can find evidence to back up that assertion, and I have some for you today.  Adweek ran the following as part of their eye-opening digital marketing stats a few days back:

English: Nissan car dealership

(Photo credit: Wikipedia)

Port City Nissan, Portsmouth, N.H., recently ran a campaign in which it claimed a 49 percent closing rate on the automotive leads it generated online using Dealertrack‘s system. The key to such success is pretty simple, Dealertrack told Adweek: Create as much digital transparency as possible when it comes to every car and give consumers a ton of control over the shopping experience.

I don’t care what you’re selling, online or off:  a 49% conversion rate is off the charts.  You can see the difference as soon as you bring up their website.  There are three very clear paths put in front of you – I know what I want (you search by make, model, and year), I know my budget (search by price), and I just want to browse (which is subdivided into price ranges).  But as it turns out, it’s not the website per se.  My local Nissan dealer is using the same template.  The key seems to be the Dealertrack system, which is basically an integrator of all of the dealerships activities.  They start with marketing and include CRM, inventory management, and all related functions.  They key is the system’s emphasis on this statement:

Customer transactions have always been the lifeblood of your business, and in today’s more transparent retailing landscape, they’re where reputations and long-lasting relationships begin.

Exactly.  They are trying to build increased customer trust, an area in which car dealerships have historically not been leaders.  Tying all the systems together to maintain that focus has been a critical component in delivering great results. Creating transparency and control for the consumer is key. The statement above is true no matter what your business, along with the willingness to make the consumer your partner.  After all, they’re paying the bills, so when they win, so do you, right?

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A Gift For Whom?

I received an email yesterday from a golf-related company with which I’ve done business as a consumer. I’m not going to name names, but I’ll bet you’ve had a similar experience as the one I’m about to describe, and you can feel free to hit up the comments, ratting out similar offenders. The note came with the subject line A Genius Gift For You. The body of the mail left me wondering exactly for whom the gift was intended.

English: Santa Claus with a little girl Espera...

(Photo credit: Wikipedia)

Enclosed in the mail was the following offer:

Tell us how (name of their product) helped to make your 2015 golf season great and be entered to win a $200 Amazon Gift Card.

So you’d like me to write you a love letter (which I assume will also require me to give you use of whatever I write in promotional materials) praising your product in return for a chance – and only a chance – to win something? How is that a gift, exactly? When your Aunt Sally comes in with a holiday gift, she doesn’t say “Hey, stroke me out a recommendation for promotion I can give to my boss and just maybe you can be entered in a lottery with all your cousins to win a nice sweater,” does she?

This isn’t bad advertising.  It’s not the equivalent of those horrible Michael Bolton in the snow ads from a couple of years back that never seemed to go away nor some of the random Santa appearances you see in an attempt to holiday up an otherwise bad campaign.  No, this  more Scrooge-like.  Do you want to give me a golf related holiday gift?  Maybe find 10 fantastic game improvement golf videos on Youtube, build a branded playlist, and send me the link?  Improve your game this Christmas!  Don’t like that?  How about a real sweepstakes then, one that doesn’t require me to spend even a second conjuring up what just might be  false praise? Enter me automatically and maybe even offer multiple prizes?

A gift or a present is an item given to someone without the expectation of payment, according to the dictionary.  This isn’t a gift.  Me sending along this free consulting advice to the marketing contact in the email – that’s a gift!  You want in?

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Pro Choice

I never had cable TV until I moved into New York City after college.  You needed the cable there because the big buildings interfered with the over-the-air signal.  Suddenly, a new world opened up, as I had access to several more channels, including HBO.

Cable tv

(Photo credit: Wikipedia)

I had more choice, and I was all for it.  Apparently, I wasn’t the only one either. Cable television contributed to the substantial drop in the broadcast network viewing from 1983 to 1994 when weekly broadcast audience shares dropped from 69 to 52 while basic cable networks’ shares rose from 9 to 26 during the same period according to A. C. Nielsen.  What had been a 6 or 7 channel universe now had almost 40!  100 channels was a dream for down the road and today’s world over several hundred channels seemed impossible.  But of course, as The Boss reminds us, there were 57 channels and nothing on.

Fast forward to today.  Our T/V (television/video) choices are unlimited.  The only real choice we need to make is who is going to do the programming – us or the channel’s programming department.  When we do it, we can watch what we want when we choose to do so.  We can binge on an entire season over a day and we probably won’t have to be interrupted by nearly as much advertising.  Allowing the channel to program our viewing means that those of us who don’t choose to make a decision about programming need not.  We can watch T/V as it traditionally was done – passively.

This changed environment has led to cord-cutters and cord-nevers.  After all, when 75% of people just want a “light” package of channels, paying more for the hundred the cable company chooses to carry seems silly.  As eMarketer predicts:

In 2015, there will be 4.9 million US households that once paid for TV services but no longer do, a jump of 10.9% over last year. And that growth will accelerate in the coming years, with the number of cord-cutting households jumping another 12.5% in 2016. In fact, by the end of next year, the number of US households subscribing to cable and satellite will drop below 100 million…Also noteworthy, the share of viewers who have never subscribed to cable or satellite (“cord-nevers”) is growing as well. This year, the percentage of US adults who have never subscribed to cable or satellite TV will reach 12.9%. That share will grow to 13.8% by 2016.

I have no doubt the cable providers will innovate – allowing you to upgrade your TV, for example, as the wireless carriers do your phone, bundling in streaming music, or changing their business emphasis entirely to being broadband providers (BYO Programming!).  But it’s going to be an interesting transition in the pro-choice video world.  You agree?

 

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How The Cookies Crumble

This Foodie Friday we’re doing something a little different and putting on our intellectual property hats. I know – how is that food-related? Well, I came across a lawsuit last week that involves both things: food and IP.

English: Milano mint chocolate cookies by Pepp...

(Photo credit: Wikipedia)

If you’ve ever been to Trader Joe’s you’ve probably seen a number of products on the shelves or in the freezers that look vaguely like other products you’ve seen in supermarkets. There are goldfish shaped crackers that are not Goldfish (capital G), cream-filled chocolate cookies that aren’t Oreos, and oval-shaped cookies with a layer of chocolate that are not Milanos. It’s these last items that triggered the lawsuit.

Apparently Pepperidge Farm does not consider imitation to be the sincerest form of flattery. As Reuters reported:

In a complaint filed on Wednesday in the New Haven, Connecticut federal court, Pepperidge Farm said Trader Joe’s is damaging its goodwill and confusing shoppers through its sale of Trader Joe’s Crispy Cookies.

We can debate whether or not a consumer would confuse the similar shape and packaging with the original cookie, but I’d like us to think about something.  When you see a store brand or other generic product in a store, are you confused as to whether this is the name brand?  I’d venture most of us aren’t.  Generics generally are competing on price while offering relatively equal (they claim) quality.  The issue, then, is how unique is your product?  There are lots of phones running Android (yes, I’m aware most of them us a forked version, unique to the phone and carrier).  While there have been lawsuits (Apple suing Samsung, for example) about the various features of a phone, no one is confusing an iPhone with a Galaxy.  I know about laws on things such as trade dress (the package, for example), but can you protect a flavor?  A shape?  Generally, when I buy a store brand, I know I’m trading off something for the price savings.

Rather than worrying about consumers buying “fake” Milanos, maybe Pepperidge Farm needs to focus on educating consumers as to why their cookie is just better and worth a few pennies more.  As a society, I think we spend too much time looking for people to sue and not enough time making what we sell better.  Better products usually mean better sales and better market share.  That’s the way those cookies crumble in my book.  Yours?

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The Agent Or The Dentist?

Holiday time is supposed to be a joyous season.  This, of course, as long as you have no need to call customer service.  When that happens, it becomes a season of frustration and anger, at least according to the latest iteration of the Customer Service Report from the folks at Corvisa.  It doesn’t sound as if it will be a particularly happy time for the businesses in the receiving end of the calls either.  You can have a look at the complete report here.

Here are some of the key takeaways:

  • Consumers are getting fed up with poor customer service and, as a result, business livelihoods are at stake.
  • When it comes to customer service delivery, companies don’t get many chances to make a good impression.
  • Long hold times hurt the bottom line.
  • Robotic-sounding agents are undermining ROI.
  • Consumers don’t hold back when they’re angry, and often share their experiences with others.

I don’t know that there is anything particularly new about any of those findings, but the degree to which some are an issue might be. When 48% of respondents said they have stopped doing business with a company due to negative customer service experiences in the past year, it should give any business manager a reason to pause and think about half of the customers who call customer service walking away.  25% of Millennials say it takes only a single bad interaction to prompt them to jump.

The other point that hit me was the need to stay human.  I’ve supervised a business that had to deal with daily customer service calls.  There is a tendency to want to script everything so that every customer has the same experience and issues are anticipated and resolved.  The problem is that customers “hear” it’s a script.  We need to train agents with general guidelines and protocols and then let them deal with each situation in a more human way.

Customer service is still, for the most part, broken.  52% of survey respondents said they would rather shop with the crowds on Black Friday or go to the dentist than speak with customer service.  Does that sound like it’s working to you?

 

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