This Foodie Friday, let’s talk about eating wood. There have been a whole host of articles written about it. We all do it, unknowingly most of the time. Oh, you’ll not find “wood” on any label, but you will for sure find “cellulose” or some variant thereof. As The Street explained it:
Cellulose is virgin wood pulp that has been processed and manufactured to different lengths for functionality, though the use of it and its variant forms (cellulose gum, powdered cellulose, microcrystalline cellulose, etc.) is deemed safe for human consumption, according to the FDA.
Don’t we all need a little more fiber in our diets? It’s in shredded cheeses, ice cream, and pretty much any “low fat” version of your favorite food. To my knowledge, it doesn’t lead to an insatiable urge to gnaw on a table leg. I think the real issue is one from which all of us can learn, and it’s our old friend transparency.
Sure, it says cellulose on the label, but when it also says “natural” or even “organic”, I think that there is an expectation that the product is made from the same sort of stuff that you might find laying around your kitchen. It’s disappointing (or worse) when people hear that wood fiber is being used as a filler to make the product cheaper to produce among other things. Of course, that’s one of the trade-offs that consumers never think about. Do you want a less expensive, potentially better for you product or do you want it to cost more but be made from the same ingredients you’d buy at the market to make it yourself?
There are tradeoffs like that one in a number of areas. Do you want a secure phone, safe from hackers, or do you want terrorists to be able to plot without governmental monitoring? Any trade-off involves a sacrifice that must be made to get a certain product or experience. To me, it isn’t so much about what’s being sacrificed as much as consumers aren’t helped to understand how these conscious choices affect them. I think we can all do better in helping them to do so.
I don’t suspect any of us is going to sit down with a nice bowl of wood fiber anytime soon, but I bet you might read the label a little more carefully on your next bowl of whatever.
Where do you come out on the retention vs. acquisition question? What I mean is do you think it’s more of an imperative to keep your current customers happy (retention) or to keep filling the revenue pipeline with new customers (acquisition)? A study from the Forbes Insights folks says that:
42% of respondents said that expanding their customer base was an important strategic priority for their company. And, nearly one-third of executives worldwide said that retaining their existing customer base was a priority.
This is from a study called “Mastering Revenue Lifecycle Management: Customer Engagement Leads to Competitive Advantage,” which talks about a systemic approach to maximizing revenue throughout the lifetime of the customer relationship. On the surface, this struck me as strange since I’ve always felt it was more cost effective and easier to keep an existing customer than to acquire a new one. The Ipsos folks say that I’m off base – the whole “it costs 5x more to find a new customer” is a myth.
Maybe it has to do with how “old” a company is. The study found that more than 70 percent of respondents from mature companies believe that enhancing customer loyalty is their organization’s primary goal, as opposed 39 percent of less mature companies. That would make sense since one would expect that the longer a company has been in business, the larger a customer base it has.
Maybe I’m just partial to the “fewer but deeper” relationships thinking, but I fall into the retention school with respect to priorities. Let me repeat the question with which we began: where do you come out on the retention vs. acquisition question?
Way back when in the dark ages before digital, I used to be involved in selling sports programming to sponsors. One of the truisms with respect to selling golf was that a lot of CEO’s played and that they would have no problem instructing their marketing folks to sponsor a tournament so they might have a chance to rub elbows with the best golfers on the planet. Heck, they’d even get to play in the pro-am with the golfer of their choice. The assumption was that they would see the world through their own prism and justify the marketing expense based on their own views of the world.
You might think that marketing in that manner is a piece of ancient history but you’d be kidding yourself. One can see exactly that same mindset at work today. For example, how many companies are spending way too much of their budgets on traditional media because the CMO never has streamed anything? How about the companies whose social media efforts are totally devoted to Facebook – a place where the head of social media spends hours reading her 50-something friends’ posts – when most of their young audience is over on Snapchat?
We can’t be everywhere. Even the biggest brands have limited human and financial resources and the smart ones allocate them to the places and platforms their customers use. You might find Buzzfeed ridiculous but if your customers find it entertaining, that’s where they need to find you.
One of the biggest mistakes we can make is to assume that our customers share our media habits, both content and social. It’s not a bad idea for you to share theirs, learning to use the platforms they use, even if those platforms aren’t where your friends and family hang out. You can laugh at the CEO who assumed all of his customers shared his love for golf, but you might be making the same mistake. Are you?
If you’re typical of most consumers these days, you spent part of the past week watching streaming video. I watch a fair amount of it, and I like to use a Chromecast to stream it on the big screen TV. I’m a subscriber to the big 3 video services – Netflix, Hulu, and Amazon – and use my TV provider to authenticate streaming of other services such as ESPN3. It all works quite well with one exception, and that’s our topic – and business point – today.
(Photo credit: Wikipedia)
Nearly every app or every service supports streaming to the Chromecast with one major exception: Amazon. Because of that, I find that I use my Amazon subscription far less than I do Netflix or Hulu. It’s not that they have inferior content. Far from it: there are many things I’d like to stream. The issue is that I don’t like watching things on my computer or phone since I’m usually using one or both while watching. So why doesn’t the service support Chromecasting? As one article pointed out:
Google allows any app developer to add Chromecast support to their iOS or Android app. There is no technical or policy limitation that prevents Prime Video from “interacting well” with the Chromecast. And Amazon has made no statement indicating why they refuse to support it.
In a word, business. There are no technical reasons why Amazon hasn’t built Chromecast support into their service, but they have chosen to ignore a user base that is almost 20 million opportunities strong (the number of Chromecasts out there). The war between the two – Amazon and Google – has become so heated that as of last Fall Amazon no longer even sells Chromecasts in their store (go ahead and check – I’ll wait). You might think that it’s because Amazon wants to push their own FireTV devices, but the fight is much bigger than that. The business point is that it doesn’t matter who believes they’ll win. We – the consumers – are the losers.
I’m a big Amazon fan (and shopper!) and have been an Amazon Prime user since the first day it was offered. This, however, is terribly misguided thinking on their part. Yes, I’m aware that I can use a browser extension to mirror my phone or screen and cast Amazon video that way, but it’s a much inferior user experience. This is a rare, but big, misstep on Amazon’s part. As businesses, we can’t be placing customers in the middle of our business disputes. We might think that we’re hurting a competitor but what competitors aren’t also in business together somehow these days? Moreover, this thinking by Amazon flunks the most basic business test we need to apply to any thinking: is this good for my customers and will it enhance the value of my product or service if I proceed? Not in this case. Agreed?
This Foodie Friday Fun comes to you via South Florida where I have spent much of this week. It wasn’t exactly a vacation but as with any trip, it did provide the opportunity to try some new restaurants. Turns out it provided some decent business lessons too.
(Photo credit: Wikipedia)
Last night I went out to eat with my parents at one of their favorite local places. I asked them ahead of time why they liked it so much. As it turns out, they had good reason to be happy with the place but not for the reasons they cited. They thought the food was excellent. I realize I might be jaded (or a food snob), but to be honest, I could replicate any of what our table had and probably do a better job on some of the dishes (how can you serve burned garlic as food pro?). That said, I’d recommend the place without hesitation. Why?
We got there on the early side and so there was a prix fixe menu available. $20 for a starter, an entree, and dessert. My dad ordered two starters – pea soup and the salmon cake appetizer. He’s a light eater. After taking all of the orders, our server said, “Sir – if you order the soup and the salmon cakes ala carte, you’ll save $4 and get a second salmon cake.” I can’t recall another server ever placing the customer’s interest above the restaurant’s revenues like that, and it’s a great example of how any business ought to prioritize.
My folks said that they had been served by this guy before and he always had a little something to say about a dish, a wine, of some food pairing. My mom has some dietary challenges and he offered her several substitutions to make up for the dishes she couldn’t eat. When she suggested something else, he said “of course” without hesitation. This, dear readers, is customer care at its finest. This is not about “we can’t do that” but about “how can we help you enjoy your meal and your time with us?”
If you’re not thinking along these lines when dealing with your customers, you should be. This is an example of the deficiencies in one part of the business (above average, but not great, food) being compensated for by the superior service and creating a fantastic customer experience that is worth repeating. A lesson for us all, no?
Many of us who hang around in marketing circles often mention the word “engagement.” It’s a term that expresses a connection between a consumer and a brand and is a highly sought after end result of our marketing activities. There isn’t any question that we need it to happen but there does seem to be some question with respect to how it should be measured. That was the topic covered but a survey from the CMO Council and reported by eMarketer.
The survey asked marketers about the primary metric they used to measure engagement. As you might expect, many of the marketers (more than a third) focused on revenue metrics. That’s not a bad idea since there is not a heck of a lot of interpretation needed. Either someone bought, and revenue went up, or they didn’t. Customer lifetime value, revenues per customer and overall revenue increases were the primary type of metric they used. Then there were those who focused on things such as clicks, conversions, shares, traffic and web analytics. These are campaign metrics, and another 30% of respondents said that these were the primary type of metrics they used. Lead generation metrics, finance metrics, and service metrics had far fewer choices as a primary metric for measuring engagement.
Here is the thing. As the eMarketer piece said:
Though not the most popular way to gauge successful engagement, customer service is important—and many consumers feel that good service makes them feel more positive about brands. In fact, nine in 10 internet users worldwide said so.
That gets me asking if we are trying to grow our businesses by aligning ourselves with our customers’ concerns and needs, should we not be measuring success using metrics that reflect those concerns and needs? The above data suggests that many of us aren’t. Sure, I get that if revenues are growing we’re probably doing something right, but maybe that’s a short-term gain based on a promotional offer or a single new product. Have revenues grown because you’re keeping customers happy or despite the fact that they’re unhappy? Today’s food for thought!