35% of offline researchers purchase offline – resulting in negative channel conversions

Multichannel marketing has been a buzz word for quite some while yet as it seems, for most stationary retailers, it still turns to the ugly side with negative channel conversions. According to a recent study by GFK and Accenture, about 35% of all online purchases made result in a prior stationary retail research (research offline, to take up Google) before a purchase is finally made online. With that, a stunning of 5.4 B EUR resulted in these negative channel conversions in 2009. In other words, 5.4 B EUR are most likely lost transactions for stationary retailers, as chances are that the online purchase is not done via their online shop (should they have one).

Think cross channel and not multichannel!

Cross channel marketing could be one solutions for retailers to look at. Instead of relying on multichannel marketing perspectives, which often result in channel centric marketing models and thus quite some linear conversion, cross-channel marketing aims to put the user in the centre of all action while using channels as supporting instruments to assist the user in the web 2.0 buying funnel. E.g. a retailer should not rely upon stationary offline (even offline rich media) initiatives but a dynamic channel conversion alongside the customers progression in the buying funnel. This is not a revolutionary idea but amazingly only a few large retailers have jumped upon that bandwagon.

 

 

 

Tagged , , , , , , , ,

BA’s lost luggage fiasco is based on a $1000 twitter campaign

@hvsvn has taken his luggage complaints with BA to Twitter by creating, as @hvsvn just revealed, a $1000 Twitter campaign by buying a promoted tweet. With the campaign statistics attached, one can only imagine the type of flurry this is going to spark over the coming days.

@hvsvn twitter campaign

@hvsvn twitter campaign

@hvsvn twitter campaign

@hvsvn twitter campaign

Tagged , , , , , ,

Brand’s watch out – consumers are getting on the social payback bus

Some call it a new trend, others just a lone payback story – yet a privately bought promoted tweet of a disgruntled passenger of British Airways proved the power a single consumer has gained with the help of Social Media (and granted – some budget to buy a promoted tweet). The customer using the Twitter name @hvsvn seemed to have been disgruntled by BA’s missing service mentality over his lost luggage and has taken his frustration online.

promoted Tweet against British Airways

promoted Tweet against British Airways

To quote one of his tweets “I was about to send them a telegram but then I realised Twitter was faster”, a new area of customer complaints has begun. What started years ago with a United Airlines breaks guitars song, has gone to a new level which should be ringing all alarm bells for brand managers and general managers to check upon their delivered market performance. It also shows how important a working social media crisis management is – besides the basic lesson that a top down communication approach is long gone. It took BA almost 4 hours to react on this tweet, long enough for Mashable to get wind of it and the tweet going viral and even being reported in the news (tv). Although the damage to the brand will be hard to quantify in real terms, it is indisputable that BA’s brand has taken its toll over the last 22 hours – more can only be expected to come.

hvsvn tweet

hvsvn tweet

Tagged , , , , , , , , , ,

B2B customers are ready to be socialised

According to a new Forrester Research study, the majority ( I question the “all” in their report) can be reached via social media. As they claim, 98% of business decision makers can be reached on social channels these days.

Forrester B2B Report

Forrester B2B Report

 

 

It is even more staggering to then contrast the social media habits of B2B organisations who often fail to move beyond the publication stage (from print to electronic to social). Interactive marketing (meaningful, time and location sensitive and most importantly behaviourally induced) should be used to bridge the gap from publication to interaction. The start might be to build listening capabilities in online channels to not only learn about customers but to also develop a feel for all available channels. A further rollout should be well prepared and accompanied by enough resources to be able to react on potential pitfalls and market responses. After all, every journey is accompanied by great learnings and new insights – the jump into social media engagements is nothing else.

Tagged , , , , ,

silos kill great branding – organisations need to rethink organizational structures

Brand and marketing management is often focused on external image analysis to mirror image to identity gaps to define improvement processes. In most cases, these process definitions happen in a certain degree of isolation from the rest of the organisation and lead to an inevitable image incongruence across multiple brand touch-points, particularly if measured along the entire brand value chain.

Figure-1-Brand-Audit

Figure-1-Brand-Audit

 

 

 

 

 

 

 

 

 

 

 

 

Two of the easiest image to identity gaps to uncover are highly public yet often badly integrated organizational functions such as marketing or customer support. In a recent field test of roughly 170 organizations across multiple sectors in Germany, Austria, Switzerland, the UK, Ireland and the US, all of mid to large size market cap, I was able to identify tremendous image gaps in either of the two mentioned functions. Particularly HR stood out negatively by completely diverting from organizational branding aspects through evidenced actions, behavior and conduct. In some follow up interview, however of non-statistical relevance to the study, interviewed brands revealed a 180 degree diversion from the overall brand promise and even suggested contrary behavioral elements to be of higher importance than explicitly stated values or brand elements in publicly available material (e.g. websites, social media). Whilst I haven’t finished accumulating and analyzing results, preliminary results do not suggest a high integration of brand values throughout organizations, similarly to the often in isolation formulated organizational value statement. For marketers and general managers, it is thus of importance to reflect upon organizational and brand core values to define stringent and coherent organizational processes adhering to set core value statements. At this point it is even argued that a general core brand value audit, as conducted by numerous consultancies, is not going to discover these evidential discrepancies due to their complex and cross-functional differentiation.

Preliminary outcomes:

> brand image and brand identity differs in 9 out of 10 organizations when it comes to assess explicit HR behavior (e.g. reaction on hiring requests, phone support, interview scheduling, reply time etc)

> brand image and brand identity differs in 6 out of 10 organizations when it comes to customer support; in highly competitive and or retail oriented organizations, these numbers even increase!

> employees, particularly in HR, do not seem to understand brand value concepts and what the brand for whom they try to source staff stands for. With that cultural aspects need to be assessed, too.

Tagged , , ,

Only 26% of marketers are able to measure their social engagement

According to a recent Social Media Examiner study about the social media usage of both B2B and B2C organisations, resulting in over 3000 respondents; the overarching majority of marketers (86%) claim an importance of social media to their business. Whilst this result comes as no surprise and seems to correlate with other surveys, it is interesting to note that a mere 26% of marketers claim a proficiency in measuring the social media engagement’s impact on their business. This numbers becomes even more staggering if the social media marketing experience is taking into consideration. 45% of responding marketers have been using social media tactics for 2 -5 years, 5% of this group even claims a social media experience of over 5 years.

With agencies pushing hard to have their clients engage in Social Media Campaigns (particularly in B2C), it is interesting that despite big data and ongoing digitalisation, the majority of organisations is still willing to invest money without being able to measure its ROI. To proof Henry Ford’s famous quote about misguided marketing spending wrong, it is inevitable to not only be brave enough to try new things (e.g. social media efforts are largely trial and error based) but to continuously work on defining bottom line relations to increase attributable marketing spendings to business results.

Some efforts to define the social media marketing ROI exist, such as MDG’s ROI of social media or the famous HBR blog about the calculation of a “like value” in Facebook but most efforts seem to lack consistency in measurement and a lack of bottom line integration. Engagement and conversation measures are being frequently reported and often lead to wild claims about social media campaign success with high reported engagement numbers, yet they too lack to correlate social media engagement to to bottom line results or business objectives. This is were the smart, engaged and eager marketer needs to start to employ digital metrics to track multivariate correlations and subsequently develop smart social media cause effect models.

 

 

Tagged , , , , ,

how much product choice is too much?

After having listened to Barry Schwartz TED talk (multiple times – if you haven’t CLICK HERE) as well as Dan Gilbert’s TED talk (if you haven’t – CLICK HERE) I couldn’t help it but observe how companies deal with the paradox of choice in a different manner.

From an economic perspective, increasing product choice, assumed costs can be controlled, should make a lot of sense. The economist trained mind thinks of course about a perfect world inhabited by an infinite number of homo oeconomicus, occupying an infinite number of price value points along the price curve, yet for one product class (perfect price discrimination). The marketer on the other hand, will join the discussion and argue that a finite number of heterogeneous target groups exist, displaying however homogeneous needs and wants (the basics of traditional segmentation). The mix of these two worlds is exemplified by Samsung; for the non-trained aspiring mobile phone customer, Samsung offers (at the time of writing) a staggering 145 different mobile phones. Note, this includes various carrier combinations. Switching over to TVs is even more confusing. One has to wonder, particularly after reading Schwarz’s books or listening to his talks, if brands are increasingly hurting themselves by increasing the number of product choices offered to consumers.

just a phone

According to Schwarz, increasing choice for humans lead to several negative effects but most of all a decrease in overall satisfaction which in itself sounds like a paradox, yet manifests itself in the following terms:

Opportunity cost of choice: the higher the number of options, the more attractive the 2nd, 3rd of nth option becomes to the consumer. In other words, with each option the value of opportunity costs increases until, in theory, it reaches a point of paralysed decision making.

Expectations increase: the more choice consumers’ perceive, the higher expectations become. The more unlikely however becomes, that set expectations will or can be met by the current product offering.

Doesn’t it also seem like a paradox to offer double digit product choices in one product category , assuming today’s stressed consumers have both the time and the drive to research product differences. Shouldn’t the smart marketer argue, that in the light of the ROPA effect (read here if you haven’t), diminishing cannibalisation of marketing efforts is hardly achieved with a complex and almost undistinguishable product portfolio? Is it still seen a sign of weakness in our society to reduce offering instead of enlarging the portfolio – after all, who wants to claim product offering declined under his or her reign?! Does it make sense to spread marketing budgets across +100 different product variances instead of focusing efforts to get one product message and positioning right? Wouldn’t it make much more sense to establish one dominant product design and then allow to establish alternative for price discrimination purposes instead of working the other way around: “let’s throw all we have and see what sticks the most – this will be our flagship product”?!

I argue that in the light of big data, marketers should increase their influence on the company’s product portfolio and not only emphasise on social listening post launch but also social rational pre launch.

Tagged , , , , , , ,

Applied gamification – a supermarket in Austria

I have blogged quite a bit about the topic of gamification and its application to drive user behavior. The use of leveling, scoreboards and ranks has been successfully applied, mostly with intrinsic motivators attached, such as status and public profile display. What I came across recently is however a great example of a gamification in a day to day application with amazing effects. An Austrian based supermarket “Billa” applies gamification scoring to induce an increase in spending.

The amazingness of this example is its easiness, customers spend 100 EUR and get a 10% discount, 200 EUR lead to 15% discount and 400 EUR to 20% discount. Tracking couldn’t be easier, to participate one is asked to use a store savings card and thus plays nicely into the see through customer concept, which makes any ROI calculation a relatively easy task.

Makes me wonder why this hasn’t been applied on a wider scale, particularly in this setting as it seems to heavily affect repurchase behavior and short term loyalty.

applied gamification - receipt

 

Tagged , , , , , ,

If the sky isn’t the limit anymore… what is?

Redbull’s Stratos campaign has set a new dimension of campaign and social engagement with consumers around the world. It also sparked discussion about the terms paid, owned, earned and shared media, however seldom has somebody questioned if the reach for the stars and current campaign scopes are still in line with resource theories of the firm. I argue they are not, excess capital holdings allow certain organizations to device campaign stunts, driven by eager agencies to score the next big thing, without establishing a full campaign to business objective link.

Watch somebody jump from space vs. going to space yourself (Axe Apollo):

YouTube Preview Image

Questions that should be raised by marketers and budget holders:

> Is the race for the most extreme campaign to gain a healthy and sustainable race?

> Is it just too easy to spend money on paid media to get audience attention through extreme campaigns vs. meaningful content stimulation throughout the customer journey?

> Are campaigns like Stratos and Axe Apollo really justifiable beyond the hype of press and bloggers? Shouldn’t we as marketers not look beyond total reach and claim target audience reach in meaningful numbers? What is it that we achieve with campaigns? Can we create meaningful links towards the bottom line? I argue big media allows us to do so but at the same time introduces campaign limits.

> As most marketing organisations are setup as cost-centres, don’t we have an obligation towards stakeholders and the firm to justify our spending even more so these days?

> Are we just making use of aggregated fluffy terms like earned or shared media to hide behind walls of agency influence and ego stipulation to have the biggest campaign? Does size really matter in that sense?

Paid, earned, owned and shared isn’t what is seems like – we need to dig deeper:

If we spend $20m on a campaign and estimate to reach x number of people on the premise of paid media, y number of people on the premise of owned and z number of people on the premise of earned and zz number of people on the premise of shared; do we really measure what is meaningful to the brand, to the bottom line and to our budget responsibility? Shouldn’t we segregate reach into current customer reach and potential customer reach, furthermore increase in sustainable purchase effects and short term campaign spikes? Furthermore, I argue that smart data allows us to construct a media model which assigns values to each theoretical nod, we can start to differentiate between dead-end reach, multiplication reach and bottom line effective reach.

Dead-end reach: non current and non-potential customers, low network degrees

Multiplication reach: non-current or non-potential customer with a value generation network degree, e.g. one or more nods are either customers or potential customers

Bottom line effect reach: the total of current and potential customers reached through the conglomeration of paid, owned and shared. This number should be in a healthy relation to both substitute media spendings (e.g. $ effort) and also the total number of people reached. If we assume our target reach is equal to a sample population, the sample to total population ratio becomes a statistical ratio and the marketer’s task is to find the sweet spot instead of trying to cover the entire population to also reach the target group by intersection effects.

Tagged , , , , , , , , , , , , ,

6 reasons why… forget it, this is just a funny ad from Adobe

Adobe claims a top spot in online advertising with their funny Super Bowl commercial (see below) and well, their “You can measure Social Media ROI ad”. In times of smart data (I still refrain from using the word big data to specify the use of data for decision making advantages), this should come as no surprise, yet as it seems, business schools (as I currently experience the no 1 ranked business school in Europe), marketers and organisations still avoid the ROI discussion and shift to the topic of online brand building. I particularly like how Adobe uses current stereotypical personas to play in their ads – which in my opinion should put 85% of today’s marketers (see their Super Bowl ad), advertising agencies and “consultants” to shame.

YOU CAN MEASURE SOCIAL MEDIA ROI…

YouTube Preview Image

 

Adobe’s Super Bowl commercial… wondering who the “winner” is now:

YouTube Preview Image

 

As always, if you made it this far, check out the Adobe blog for more – worth a visit.

Tagged , , , , ,