Tuesday, September 28, 2010

Brand Appeal: Degrees of Warmth and Competence

For as long as I can remember, marketers have been applying animal or human characteristics to their brands to communicate a "brand personality".  But, I don't remember hearing that there was any real "science" behind that.  However, a recent study seems to suggest that there is something to it, afterall.  

In an article in Forbes Magazine, Chris Malone of Relationship Capital Group says, "According to a recent study of more than a thousand representative U.S. consumers, people respond to brands in much the same way they instinctively perceive and judge one another--on the basis of warmth and competence. Companies that understand what really lies behind that dynamic have a chance to win the kind of deep customer loyalty that has been elusive even for highly successful national brands." 

Recently, I had the good fortune of hearing Chris speak about how people view brands to a graduate level class in the Food Marketing Program that George Latella and I co-taught at SJU.  Chris's insights came from the research study his company conducted in July, 2010 using researchers from Princeton University.  One of the conclusions from the study was that there was a statistical correlation between how the brands in the study ranked on "warmth" and "competence" and purchase intent.  The brands in the study were McDonalds, Burger King, Shell, BP, Tylenol, Advil, Minute Maid and Tropicana.

I found this fascinating, and very promising for use in advertising and other forms of consumer marketing communications.  Does this also suggest that brands reaching out to form relationships with consumers through social media is on the right track?  I think so.  The link to the Forbes Magazine article is http://www.forbes.com/2010/09/01/marketing-brands-loyalty-bp-mcdonalds-burger-king-tropicana-tylenol-cmo-network.html

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Thursday, October 22, 2009

Mail Just Won't Die!

Years ago, industry forecasts predicted that the rise of the Internet and email would eliminate the need for direct mail.  Now that email has become ingrained into society, should we prepare for life without daily visits from the mail-truck?

Definitely not.  Last year, the United States Postal Service delivered 203 billion pieces of mail – an average of 3.9 billion per week – to 134 million addresses.  This is almost six-billion more pieces than in 1998.  Old-fashioned, “snail-mail” generated $75 billion in revenue in 2008 for the USPS. 

Direct mail is still the marketer's most widely used tool.  In fact, direct mail is the media of choice for marketers to drive people to their website.  Why?  Because it is still the most selective, scalable and measurable form of advertising.

But that is not all.  Email, while typically cheaper and faster than traditional mail, has its limitations, such as lower response rates (versus direct mail), deliverability issues with more sophisticated spam filters and image blockers, the need to find reliable list sources, stringent CANSPAM policies, and size limits and after all, not everyone has email. 

We recommend a multi-media approach, where budgets allow.  Statistics show that campaigns using both print and electronic mediums boast higher response rates.  We proved this out most recently with a B2C baked goods client.  In an effort to save their way to success, they decided not to mail their catalog to their customer base, instead relying solely on email communications during their 2007 holiday season.  The result?  A significant decrease in the year-over-year customer retention rate, and disappointing sales during their critical holiday period.  Upon our review and recommendation, in 2008 they mailed their current and lapsed customers, in addition to the email blasts.  This strategy yielded a 72% increase in the retention rate.  And in a down economy, sales were up significantly.  The ROI on the customer mailing was at 250%!  Was cutting out the customer catalog mailing really a good idea? 

The bottom line is that 88% of marketing experts use more than one medium to generate results (DMA – Integrated Marketing Media Mix Report).  And companies that sell from catalogs attribute 44% of their sales to their print catalog mailings.  The 2008 Catalog Report from the DMA's Statistical Fact Book reveals two key facts:

·         The number of catalogs mailed continues to increase year-over-year despite the web and rising print and postage costs

·         100% of respondents had a website, but only 11% considered them to be their principal order drivers.  That means success requires more than an, “If you build it, they will come,” mentality.

The conclusions that can be drawn from this are that the big catalog companies (who consequently know more than anyone else about effectiveness and efficiency) are not eliminating their print catalogs for a reason.  Knowledgeable direct marketers are using multi-media and know that they cannot rely on email and paid search alone.  And no, direct mail is not dead!

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Thursday, October 1, 2009

Customer Satisfaction and Profits

For many years the American Customer Satisfaction Index (ACSI) has been used as input for a model developed by the University of Michigan's Ross School of Business. One of the interesting findings from the model is that there is a high positive correlation between the ASCI index and the market performance of individual company's stock. The conclusion is that consistently meeting or exceeding customer expectations for product performance and service drives profits because of strengthened loyalty. This is not a new idea, but it is interesting to see it actually statistically proven.

Are you measuring and tracking customer satisfaction? You may think your customers are all very happy, and will remain loyal, but perception is not always reality. If you do not have a system in place to formally track and trend customer satisfaction, then you are missing opportunities.

Here is a short list of benefits:

  • Identification and importance-ranking of the issues that lead to customer defection
  • Ability to measure progress on initiatives put in place
  • Greater understanding of needs by key customer segment
  • Capturing specific and actionable feedback
  • Getting more candid input through a third-party
  • Learning how to capture more of a customer's requirements

Bottom line: Ask for feedback.  Listen.  Be prepared to take action. Repeat.

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