Category Archives: Reality checks

October 13, 2015 · 12:27 pm

I’ll Take Bad Ads

I’m sure you’ve had the experience of going into a store where the staff is charming and can’t do enough for you, but you left without buying anything.  You’ve also probably seen a wonderful product description in some online store, only to get to the customer reviews and find out that the product wasn’t nearly as good as the advertising.  That is a truism in marketing:  good ads can’t sell a bad product.  Conversely, even the worst marketing can’t keep a great product out of consumers’ hands.   Give me the bad ads every time and a great product.

I put customer experience right in there as part of product.  That experience isn’t just customer service.  It’s any engagement your product and brand has with a customer – social media, email, etc.   Since the product is more important than advertising, improving those engagements can yield a significant competitive advantage.  Having an ongoing, transparent, truthful series of interactions with your customers as well as consumers at large will probably have a larger effect on your business than doubling the ad budget.  You want to improve your product without retooling, repackaging, or developing a better formula?  Improve the customer experience and you’ve done so.

So why aren’t brands spending more to improve those engagements and the products they support?  Beats me.  Maybe it’s because they didn’t have it in last year’s plan.  Maybe it’s because you can’t run that on TV.  Maybe because we tend to emphasize creativity over basic blocking and tackling. Whatever the root, it’s something to think about.

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October 8, 2015 · 9:31 am

Beyond The Data

If you’ve been reading along this week, it must seem as if I’m obsessing with data. While my inner nerd is peeking through a bit, that’s not my real obsession. The data I’ve been writing about is only one aspect of what is a primary business obsession of mine: customer retention. It ought to be one of yours too.

Simply put, the only two things that should be a primary focus of your business thinking are making great products (or services) and providing great service to customers. Why? Because those are the two keys to customer retention and customer retention is the key to a successful business.

There is lots of research on the value of keeping a customer versus acquiring a new one. According to research by Market Metrics, your success rate selling something to an existing customer is around 65 percent. The probability of converting a new prospect, on the other hand, is only 5 percent to 20 percent. If you’ve been servicing those customers well and providing great products, that’s a very believable finding since the folks that know you, love you. They spend more too: research says about a third more.

So why aren’t you spending more time thinking about customer retention and about how to cut down the churn rate? Probably because the data points you’re reporting as KPI’s are emphasizing customer base growth. There is a place in the dataset for acquisition information and an important one at that. But, for example. when Google reports that 25% of new app users leave after the first day they install an app, obviously new users can only take you so far. Are you looking at retention rates by acquisition channel? Didn’t think so.

Data is a tool, not a crutch.  The business is about growing and retaining customers.  There are lots of ways to do that but at the core of every one of them are a great product and even better service.  Is that what you can honestly say you have?

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October 5, 2015 · 11:17 am

It’s The Solution, Stupid

One of the great meme/clichés since 1992 has been the form based on James Carville‘s famous slogan for the Clinton presidential run:  The Economy, Stupid.  The popular version always adds “It’s” upfront, as I have done above.  The point of his slogan was to keep Clinton campaign workers focused on the main points the campaign was trying to make (it was one of three).  My point is to keep you focused on the marketing you should be doing. That introduction out of the way, let us address my point – it’s the solution.

The first point on all three lines L 1–3...

 (Photo credit: Wikipedia)

I can’t tell you how many times I’ve sat with clients and listened to their spiels to potential investors or customers and come away not understanding why either of those groups would give the client any money.  I used to wonder the same thing from the other side of the desk when I was listening to people pitch me new partnerships or technologies when I was at the NHL.  In both cases the person speaking would explain the features of their product or company but they’d miss the most important point: how what they had solved a problem.  Actually, how it solved MY problem.

If you’re a marketer, you can’t assume your audience has any clue what your product does or what problem it solves.  I’m amused by the brands that go straight to paid search marketing or other immediate calls to action, never having done any brand building.  The classic framework for marketing (AIDA) begins with “attention.”  Branding campaigns get that attention and build awareness.  That’s the time to educate the audience on one thing: how the product solves a problem and why that solution is the best one for the audience.

So it’s the solution, stupid.  Identify the problem you’re solving, make sure it’s a big enough problem (one that a large number of people have, even if they don’t know it yet) and then market the solution. Advertising the product, not the solution, is a recipe for disaster.  Make sense?

 

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