Category Archives: Consulting

Thanks For Nothing

I get emails all the time urging me to win something. In a previous life, I used to send those emails as well. Because of that, I became very well acquainted with the rules that govern sweepstakes and contests. I’ve had multiple lawyers explain the three-legged stool of chance/prize/consideration to me on more than one occasion, and I’ve never run afoul of the gaming laws either here in the US or in Canada.

I thought about those rules as I reviewed an email from an electronics company this morning. The email urges me to “Get Rewarded For Sharing Your Opinion.” I had a couple of immediate thoughts that might just be pertinent to your business, whether you’re running a contest or not (BTW, I know the difference between a “contest” and a “sweepstakes” but I’m lumping them together today, OK (damn lawyers…))?

My first thought was to wonder if asking someone to write a review isn’t consideration? We used to wonder if asking for a photo or a video as part of an entry constituted consideration. My take is that even if it’s not deemed to be such by a lawyer, it is still asking someone to take some time and write a review. For some of us, writing is like breathing but for many people, cranking out a couple of hundred coherent words is grueling. Asking them to do so for a CHANCE to win a $500 gift card with nothing else as a consolation (a coupon, you cheap bastards?) seems like an unfair trade-off.

More importantly, the headline on the company‘s landing page is “Your Thoughts, Our Thanks?” Really? Unless you dive deeply into the fine print of the rules, you might not realize that unless your review contains a very specific phrase it won’t be counted as a contest entry. That won’t, of course, stop the company from using it in advertising and by entering, you’ve signed away all rights to it as well as the right to contest the company’s use of it and your name.

The bigger point is that the company is positioning this as a “win-win“:

Write an honest review and you’ll automatically be entered for a chance to win $500*. How’s that for a win-win?

It’s not, actually, You win. You get the content you can use to sell your products. A consumer might win but the vast majority of them will send off the review and get bupkis, maybe not even an entry if they haven’t read the rules carefully. You’re awarding cards every two months (and by the way, your entry doesn’t count after the two month period in which it was received). $3,000 over the course of a year for an important type of social proof – consumer reviews seems awfully cheap on your part, particularly when most of what you’re selling costs hundreds of dollars.

We can’t ask our customers for something beyond buying our products without offering something in return. Don’t hype a relatively low-level reward that’s not universally available to everyone supporting your brand when all you’re really offering is a fuzzy “thank you.” Your thanks? Thanks for nothing in this case. Do you agree?

Leave a comment

Filed under Consulting, Huh?

Generically Speaking

This Foodie Friday, I’ve been thinking about store brands. Some of them – such as the Costco vodka really being Grey Goose at under half the price – are the stuff of legend. Other places – such as Trader Joe’s – have built entire enterprises on top of their own brands which are basically repackaged and rebranded versions of mainstream products. It’s well-known, for example, that TJ’s pita chips are made by Frito-Lay, who puts Stacy’s pita chips in TJ’s packages. Of course, you can buy a  6oz bag of Trader Joe’s Pita Chips for $1.99 whereas a 7.33oz bag of Stacy’s Simply Naked Pita Chips sells for $2.99 or more.

An example of a Trader Joe's storefront.

(Photo credit: Wikipedia)

Many of Walmart‘s Great Value branded products are just name brands rebranded. Most people can’t tell the difference between the name brand and the store brand, although in fairness, every so often the store will have the manufacturer make a minor change (a little less lemon, a little more salt) so they’re not identical products. Still, In 2012, Consumer Reports did a test. They found:

In comparing store-brand and name-brand versions of 19 products, our savings ranged from 5 percent (frozen lasagna) to 60 percent (ice cream). Many of those store brands were also as tasty as the alternative. Our sensory experts found that the store brand and name brand tied in 10 cases, the name brand won in eight cases, and the store brand won once.

So why do people continue to pay more for the same product? The easy answer is marketing. Name brands spend an awful lot of money each year to influence consumers’ perception of their products. Some of it is mistrust, particularly when it comes to store-branded drugs. Even though the law says that generic medication contains the same active ingredient as the name brand (yes, I know generic brands may have different inactive ingredients that can make them behave differently), people spend more for branded pain relievers, antacids, and other types of drugs. It’s interesting that studies show that chefs and pharmacists tend to buy generic food and drugs, respectively.

I think a good chunk of why people tend to spend the extra money has to do with experience. They expect that a brand name will provide a quality, consistent product experience. In instances where others are seeing what products are being used (guests in your home, coworkers in an office), the brand name is more socially acceptable. Finally, over time, brand names build loyalty. Once again, we end up at the cost/value equation, but we always need to remember that value isn’t just measured in dollars and cents.

I buy a lot of generics or store brands. There are, however, some things for which I pay extra because I do perceive a difference. Still, knowing that most of what’s at Trader Joe’s or Walmart or Costco is the same as what’s at the supermarket (but less expensive!) lets me splurge on those things with a clear conscience. The question for those of us that market is how we get consumers to see the value that goes along with our brand.

Leave a comment

Filed under Consulting, food, Thinking Aloud

Eating With Your Eyes

It’s Foodie Friday, and today’s topic is the thought that we “eat with our eyes.” While sometimes you can smell food coming, most often our eyes are the first sensory organ we use as part of eating. It’s why many cooking shows (Chopped, Top Chef, etc.) grade dishes not only on taste and creativity but also how the dish is plated and its visual appeal. Since the rise of Instagram, eating with our eyes has taken on an entirely new dimension. As The Verge reported:

For years now, Instagram has sat at the center of trends in food and beverages. Rainbow-colored “unicorn foods” are often designed with Instagram in mind…Now some entrepreneurs are taking the idea a step further, designing their physical spaces in the hopes of inspiring the maximum number of photos. They’re commissioning neon signs bearing modestly sly double entendres, painting elaborate murals of tropical wildlife, and embedding floor tiles with branded greetings — all in the hopes that their guests will post them.

I’d encourage you to read the full piece, but it does raise a business thought in my mind. I did a little search for “love decor, food sucks” and got over 2.5 million results. In the course of helping people eat with their eyes and/or to gain social virality, many of these places have forgotten their primary mission: to cook great food. “Going viral” isn’t a strategy. While it may increase your visibility, as Chipotle will tell you, so will an e-coli outbreak. Gaining followers and visibility is ideally a reflection of the quality of what you’re doing.

Designing any business or product so that visual appeal is its primary focus is designing for failure. Yes, it’s smart marketing, but as with any marketing, there as to be, as Gertrude Stein said, a there there. We might eat with our eyes, but ultimately we want something more substantial than a great visual. None of us should forget that our customers may come based on good marketing, but they stay because of great a great product or service. Don’t you agree?

Leave a comment

Filed under Consulting, digital media, food

Staying Alinged

One thing that bad golfers do (and I’m speaking from personal experience here) is to misalign themselves. They might point the clubface at their target but they fail to get their hips, shoulders, and knees properly aligned. When they go to hit the shot, inevitably the ball goes someplace other than where the golfer desires.
I thought of that this morning as I read the results of a study on marketing compensation. Conducted by MediaPost, the study found that:

Agencies and their clients are far apart in terms of what they deem to be the most fair method of compensation, according to findings of a survey of advertiser and agency execs conducted recently by Advertiser Perceptions for MediaPost. While labor-based fees are the No. 1 method preferred by agencies (45%), incentive methods were the top choice among marketers (40%).

You might not be a marketing agency or a marketer, but there is something to be taken from that for whatever business you’re in. Think of a car’s four wheels. When they’re properly aligned, the car is easy to hold on the course you set. If one wheel is out of alignment, the car pulls left or right and you’re constantly having to fight to keep it heading where you want.

Your business is no different. Your goals and your customers’ goals have to be in alignment. So too do yours and your team’s. Being paid fairly is a critical part of the employer/employee relationship, and no one is going to do their best work if they feel like they’ve been treated unfairly. I’ve known agencies who’ve resigned clients because they felt that they were losing money servicing the account. I actually had a client who hired me to complete a project over a few weeks. When I presented the completed work in a little over a week, they asked to reduce what I was being paid since “it didn’t take as long as we thought.” In that case, it was my fault for not being sure that their expectations (how long it would take and the value of that time) were in alignment with how I did the work and the value of the project regardless of the time spent. Sure, I could have sat on the completed work until it was due, but that has no benefit to my client and only helps me justify what they’re paying.

All the wheels need to be aligned. The club face and your body need to be aligned. The goals and expectations of everyone in your organization need to be aligned, and that alignment must extend to your customers as well. Hard to do sometimes, but always worth it, right?

 

Leave a comment

Filed under Consulting, Huh?

Nobody Knows Anything

I’m going to start the week by running the risk of bumming you out. At least we’ll have the rest of the week to recover, right? I was looking at some analytics data this morning and as I looked at it, I realized that much of it is wrong. So is a lot of the other information this client is using to make decisions. Yours is too, by the way. I’ll explain why but along with the realization came an insight that I think will be helpful to your business.

When I began in digital we used server logs to track traffic. They were pretty accurate although pretty limited as well. Web analytics came along and the quantity and quality of the information we got about who was coming to our web sites, how they got there, and what they were doing improved quite a bit. As business people, we were able to make content and marketing decisions based on the data we were getting.

Things have grown quite a bit more complex over the last 20 years and that complexity has obscured much of the good, useful information. Anyone who knows analytics will tell you that much of the referral data you see (where traffic comes from) is wrong. “Direct” traffic is way overstated. “Referred” traffic is encumbered by referrer spam. A lot of so called direct traffic is really dark social traffic (I send you a link). Transfers from HTTPS to HTTP sites report as direct as well. Keyword data is “not available.”

I’m not trying to make your head hurt nor to get really wonky. The point is that if you’re relying on that data to make decisions, you’re really just guessing. It’s the same with much of your ad data. I’ve written before about the lack of transparency in the programmatic ad markets and that opaqueness obscures the validity of the data as well.

I can add search data, email data, and more to the list of what probably isn’t what you think it is, but all of this fostered a thought: what do we really know that’s truly actionable?

I can answer that. We can know how our products and services are really differentiated and how much better we are at solving peoples’ problems. We can know (yay review sites!) how good our customer service is. We can know how our revenues and costs and changing and we can ask why.

I’m the last guy to say we should ignore that large and growing amount of data every business gets each minute. But maybe the time has come to act on what we KNOW and less on what we really don’t. What do you think?

Leave a comment

Filed under Consulting, Helpful Hints, Huh?, Reality checks

All Kitted Out

There is a relatively recent phenomenon in the food world which is our topic this Foodie Friday. I’m talking about the explosion of companies offering food kits. Blue Apron, Plated, Hello Fresh, and others have been joined by Amazon in offering up boxes of already measured and portioned ingredients along with the recipes that tell the cook how to combine and cook everything to create a meal. For busy people, not having to shop for ingredients or to research and think about recipes is a godsend. That said, there are several things I find wrong with meal kits and they just might be helpful as you think about your business as well.

I’ve tried Blue Apron. The food was pretty good and the quality of the ingredients was better than I expected. Not having to shop or to think about what I was making (once I’d chosen the meal from the website) saved time. That said, a less experienced cook wouldn’t really have been able to save much time. You still need to chop vegetables (although I know some kits have them pre-chopped – not great for flavor or texture!). You still need to be able to interpret the recipe and follow the instructions (which contain cooking terms inexperienced people might not quite grasp). And they’re not cheap: $10 per meal per person is generally a lot more than most people spend per portion on home-cooked meals.

The real issue I have is that you’re trying to change habits. How so? Many people dread going to the supermarket but most of the better cooks I know relish shopping. I know that many supermarkets now offer a service where you can shop online and the store will fill your order either for pickup or delivery. I’ve never used them because I’m picky about produce and I’m always looking for opportunistic specials to plan a menu around. That experience is taken away with these kits. You can’t keep them either. Like many folks, I’ll buy ingredients and when my plans change, I can freeze the proteins for later. That doesn’t really work here.

The people who don’t cook don’t do so because they either don’t know how or they don’t like it. They find recipes with more than three steps complicated (these kits often are a lot more). They’re slow – I can chop an onion in under 30 seconds. It might take an inexperienced cook a few minutes. They don’t have tools that make the jobs easier: sharp knives, the right pots and pans, a decent stove, etc. Meal kits don’t solve any of those things as they try to change people’s habits.

Pay more, save time shopping, and worry less doesn’t solve the basic problem: people don’t like to cook and this is an expensive program that doesn’t solve that problem. In addition, you’re adding another issue: managing the subscription online. And customers seem to be finding that as well. Blue Apron reported that customer retention is their number one issue. Business Insider reported that:

According to a new poll by Morning Consult and Money Magazine, 49% of respondents who canceled a meal kit service cited the cost as the biggest reason for their cancellation…Not liking the recipes (13%) and unavailability in their area (15%) were the second biggest factors for those who canceled their service and those who have never tried a meal kit service.

As we try to solve consumer’s problems we need to be sure we’re actually doing so, and doing so in a way that doesn’t create other problems. I’m not sure that meal kits meet that test. You?

Leave a comment

Filed under Consulting, food

Not So Great Expectations

The gasoline that keeps a good portion of the sports machine running is sponsorship. I’m using the gasoline analogy today because there has been a high profile sponsorship dispute going on in the world of auto racing and I think it’s instructive to any of us who sell or buy pretty much anything.

You’ve probably heard of Danica Patrick, NASCAR‘s only female driver in its top-level series, The Monster Energy Cup. She drives for Stewart-Haas Racing (SHR), who sold the rights to sponsor her car in 2016 for several years. Somewhere along the line things went south and Nature’s Bakery terminated what was a three-year deal after the first year, claiming that SHR “did nothing other than collect Nature Bakery’s money”. An additional issue was that Danica personally endorsed a competing product (albeit one with no visibility on the car or around the races). SHR sued to recover the agreed-upon payments. As it turns out, Nature’s Bakery will sponsor four cars during this season, split between SHR’s drivers, as part of a settlement.

I spent a lot of years selling sports sponsorships and I know first-hand how hard it is sometimes not to over promise in your zealous pursuit of the sale. In this case,  Nature’s Bakery was told to expect a 4-to-1 return on investment. The reality was there was no significant increase in sales. That could have been due to any number of reasons, including some that had to do with logistics and not with awareness, but it points to a core issue.

When you’re selling anything, setting expectations and agreeing on how performance is going to be measured is key. In this case, many of the measures of awareness did rise significantly, but if the client’s goal was sales then the buyer and seller seem misaligned. Keeping expectations of both parties on the same page and in alignment must be the goal of all parties, and the documents shouldn’t be signed until that goal is reached.

There also seems to be some inexperience in sports sponsorship at work here. A team that has Coke as a sponsor might very well have athletes who endorse Pepsi. An arena with Mastercard as a building sponsor might see an athlete who plays in that building in an American Express commercial. Danica is one of NASCAR’s most visible drivers and her personal endorsements should have been identified to the buyers (even though anyone could find them easily on her personal website). Always remember that a good seller sits on the same side of the desk (figuratively speaking) as their buyer since you’re both trying to accomplish the same thing.

Aligned expectations, appropriate measures of reaching goals, and transparency are how sports sponsorships (and others too!) get done and stay on track. You with me?

Leave a comment

Filed under Consulting, Helpful Hints, sports business