Rational Marketing

Author: Catherine

  • Timing

    DMNews ran a great article titled “When marketing, travel through the four dimensions of time” by Paul Mandeville. They say “timing is everything”, it may not be everything but it sure can play a big part in the success of marketing efforts.

    Mr. Mandeville suggests that in a marketing campaign timing has four facets:

    Timing  (Recency)– the nearness of a message to a customer event that triggers that message, for example, sending a coupon for related accessories within 3 days of purchase.

    Frequency – the number of times you choose to send a similarly themed messages before you stop further attempts, for example customers should receive three messages from you within the first month of purchase and at least one message every three months for the first year or two after that trigger purchase.

    Pacing – the amount of time between messages of a similar theme, for example sent the first message within 72 hours, and if no reply, send message #2 seven days after purchase, and if still no reply, send final message #3 ten days after purchase.

    Sequencing – the act of coordinated, separate but related content.

    The article stated that financial services and retail firms have been able to achieve a double digit lift in response, without increasing their discount offers, simply by using timing to their advantage. You can do the same. Direct mail is a great way to implement this strategy or include it as a part of your marketing that speaks directly to your customer when they want to hear from you.

  • Writing About Intangibles

    To help you create messages that sell more of what can’t be seen, we are sharing an article by Pat Friesen that appeared in Target Marketing Magazine. Whether you sell insurance, toilet tune-ups, home loans, teleconferencing, investment services or other intangibles, we hope these tips help.

    • Call to action. This is basic, but often overlooked and undervalued. Tell people what you want them to do and why they should do it. What action do you want your customer to take as a result of receiving your message? What can you do to motivate your customer to call, click or complete an application?
    • Humanize benefits. Show people enjoying the end benefit of what you sell. For example, most parents want their children to get an education. So, if you market loans or insurance, show a smiling graduate in cap and gown with a benefit caption below it.
    • “You can’t say that.” The next time your attorney or compliance officer utters these words after reading your copy, respond with, “OK, what can I say?” It may mean changing just one or two words, and may make your copy even stronger.
    • Engage them with something unusual. Providing toilet tune-ups is more attention-grabbing than saying you check for leaks and rusted parts.
    • Focus on customer benefits, not company history. Nobody really cares that you are headquartered in Omaha, Neb., and have been in business for more than a hundred years unless you tell them why it’s important. Such as, you have a hundred-year history of paying claims promptly, and customer service calls are all taken in the heart of America, not offshore.
    • Create an offer with value that supports what you sell. Instead of giving away pricey tangibles such as iPods or free dinners, provide an easy-to-use calculator or a free checklist. Consumers value information that educates and empowers.
    • Keep it simple. Intangibles are often perceived as being difficult to understand. Confusion slows down decision making and results in avoidance. Your marketing mission is to make your product simple and understandable.
    • Never use the words “applying is easy” … unless it’s true. When was the last time you completed your company’s application? Give it to five people who fit your customer profile but don’t work for your company, and ask them to fill it out. Watch them do it. Simple-to-complete applications/forms combine the right words with good design, simple organization and readable typefaces.
    • Write in plain English. Yes, insurance and financial services do have regulatory content that must be included. However, don’t pepper your marketing copy with killer words like “undersigned” and “the party of the first part”. Instead, use plain English that’s easily understood.
    • Have your creative team work as a team. No matter which media you use, you get the best, most effective end product when you have your writer, designer, programmer and others involved in the creative process work together. Don’t isolate them.
    • Cross-sell. Cross-sell to both customers and prospects.
    • Reactivate. Policy holders lapse and account owners close their accounts, but this doesn’t mean they don’t want to do business with you again. Did you know that customers that previously had a relationship with you are more likely to buy than cold prospects? However, they need reassurance that you still love them. And they need to be asked. This applies across all industries, all products and services, tangible and intangible. In economic times like these, reactivation is one of the most cost-effective ways to generate new business.

    How can we help you deliver a message about the intangible benefits that you bring to your customers?

  • Marketing and Color

    Deliver Magazine talked to Cynthia Cornell a color researcher with Color Communications. She offered some loose meanings for colors.

    Blue-based reds (like raspberry) are associated with more expensive products

    Yellow based reds (like tomato) are imagined to be less expensive

    Orange can play up affordability

    Yellow is the first color the eye sees, when it is used with a dark color for high contrast, it becomes more powerful and easily read

    Green conveys possibility and hope

    Blue connotes confidence and safety, it is a great choice for financial and medical institution mailers

    Purple is very popular right now, but it is traditionally used with high fashion, sports teams or sweet treats

    Black conveys a strong sense of power, promise and the ability for high contrasts. Add sheen or matte to black and it becomes more powerful

    White implies sophistication and formality, but also a high-end price point

    Does this refresher about color inspire you to try something new with your design? Can we review your ideas or help you put them into new idea?

  • The Plan for Those Who Don’t Plan

    BNET recently offered these ideas about business planning. The premise started with the observation that during the last twelve months, the business and economic landscape has continued to change and no one can predict what’s next. So why waste time with five-year plans?

    One of the most prevalent rules for entrepreneurs is to create a long term plan! But in 2010, small businesses are learning that it’s more important to be agile and flexible. Plans are unhelpful when they restrict your thinking or don’t allow for deviation or reinvention.

    That kind of thinking can give you the edge in the market. Liberating your company from traditional business planning may mean you can be both more enterprising and more robust for survival in difficult times. Here are four tips for navigating your way through the unpredictable business landscape without a big strategic plan:

    1. Think fluid. Don’t get stuck to a rigid strategic plan. Instead, see where the water flows and trust your instincts — not your spreadsheet — in pursuing new options. Make sure your business is agile enough to react to market trends or new innovations in technology. If you spot a new opportunity, you don’t have to check it’s on the plan first — just go for it.
    2. Prototype. Test your ideas in the real world. Better to launch beta versions of your website, so you can evaluate and tweak as you go, rather than trying to perfect the model before you launch. Otherwise you might never get the site off the ground.
    3. Reinvent. Learn to love change and be prepared to rethink what you do and how you do it. Maybe your business feels a bit stale, a bit stuck. You might need to shake up your organization so your clients start thinking differently about you. Re-energize your organization by taking your team on an ‘away day’ to brainstorm new ideas; think laterally about how you can re-engineer your offering to grow the business.
    4. Think goals, not plans. Set objectives for the year: deadlines to meet, products to launch. It’s important to know what you want to achieve — if not necessarily how you’ll get there. This allows you to think big without initially worrying about the details. A goal may be “I need to get a new client every month.” Perhaps you don’t have a strict linear plan for how you’ll actually achieve that — you just start off the instinctive way: word of mouth, social networking, client meet-and-greets, and so on.  You can’t chart this activity on a graph, but mentally focusing on the goals will help you reach your desired outcome.

    A timeline or a spreadsheet can’t capture those opportunities that arise from serendipity and random meetings. If you remove the traditional business planning mindset, you’ll be liberated to grow your business in line with how the world really changes — not with what it says on a spreadsheet.

    How can we help you test a new idea or be fluid in your marketing?

  • The “Down Sell”

    BNET posted an article by Jeremy Quittner suggesting a new strategy. We are very familiar with “up-selling”, the practice of giving a product premium characteristics and a premium price too. There are success stories of luxury brands that began as basics all over the place. Think of what Starbucks has done to the 50-cent cup of coffee.

    In this economy, down-selling might be a worthy strategy. Consumers may be spending again, but they’re doing so cautiously and with a newfound resolve to stick to a budget. If they’re giving up the bells and whistles in favor of more basic and affordable products, why not follow suit and take the “premium” out of your premium products?

    It’s a much trickier proposition — that’s why. If you go too cheap, you risk, among other dangers, killing your profit margins and diluting your brand.

    Ways to try this strategy:

    Give Customers Something New
    You could simplify an existing product by stripping it down to its essentials, or invent a completely new, cheaper product. Go to your customers for clues about what they’re looking for and what they’re willing to buy. Just make sure you don’t give them exactly what they say they want — your customers probably only know what’s already out there. It’s your job to figure out what’s new.

    Pitch the Value
    Marketing non-premium products in a down economy requires a different kind of sales pitch. Convey that they are still getting a valuable product, but it’s priced for this economy, and the value may not last. That way, customers get the message that you are looking out for their needs and you are still providing the high quality that they associate with your brand.

    Know Your Brand
    Down-selling customers won’t work for every company, particularly if your image depends on an air of high-end exclusivity to differentiate it from your competitors. Don’t cannibalize your core (business, products, brands or customer base) to stimulate sales in the short term without thinking long term and strategically.

    When you are ready to introduce your new ideas, direct mail is a great way to test messages, approaches and innovations.

  • Cameron and Jobs: Passionate Leadership

    To celebrate the release of Avatar on DVD we thought we would share some similarities offered by BNET of two innovative leaders by looking at traits which produce incredible innovation. In fact, following any of these styles could get you fired — unless you have the inspiration genius that can deliver results like Cameron and Jobs.

    Bonding Through Innovation

    Cameron. “Breaking new ground is Cameron’s raison d’être — nothing interests this man unless it’s hard to do,” wrote Rebecca Keegan on HBR.org. “But innovation has also become a way of bonding his teams… For Cameron, a sense of exploration isn’t just personally enriching, it’s a crucial tool for motivating and uniting his teams.”

    Jobs. When Jobs created the original Macintosh team in the early 1980s, he moved the group to a remote building on the Apple campus, raised a pirate flag above the roof, and moved in a popcorn machine to give his people a sense of esprit de corps. Today, management experts prefer you unite your groups rather than pitting them against each other, but they also love the idea of inspiring your team with sense of purpose they can rally around.

    More Perfection, Please

    Cameron. On Avatar, Keegan reports, “Hours were spent on the smallest details, like getting alien sap to drip precisely right…. It’s hard to argue with Cameron’s nitpicky style, however, when audiences thrill to immerse themselves in the richly detailed worlds he creates.”

    Jobs: Just weeks before launch of the original iPhone, Apple decided to replace the plastic touch screen with optical-quality glass. The change not only delayed the introduction, but caused its screen vendor, Balda, to reconfigure parts of its assembly line “causing a material impact on financials,” according to AppleInsider. For Jobs, however, the aesthetic of the product would have been ruined by an inferior screen.

    Inspiration Through Fear

    Again, not a great trait you’d teach to MBAs, but both Cameron and Jobs are stern taskmasters who demand the most of their employees, and occasionally cross the line to get it.

    Cameron. “Many Cameron alumni will share a story from their first film with him, a day they were sure they were going to be fired, almost hoped for it. But Cameron rarely fires people. ‘Firing is too merciful,’ he says. Instead he tests their endurance for long hours, hard tasks, and harsh criticism. Survivors tend to surprise themselves by turning in the best work of their careers, and signing on for Cameron’s next project.”

    Jobs. “”It was probably the best work I ever did,” former Apple designer Corsdell Ratzlaff told Inside Steve’s Brain author Leander Kahaney. “It was exhilratating. It was exciting. Sometimes it was difficult, but he had the ability to pull the best out of people.”

    If these men, both brilliant in their own fields, managed by the book, they may not have been nearly as successful. What they share is passion for the work, and their management styles both demand and instill passion in the people that work around them.

    How can we help you be passionate and innovative with your marketing?

  • Courting a Wary Customer

    Deliver Magazine and Sid Liebenson suggest three ways to build and maintain loyal relationships when customers are running scared.

    Consumers are retrenching, economizing and just plain scared. But as the saying goes, the pessimist sees difficulty in every opportunity, and the optimist sees opportunity in every difficulty.

    The recession presents the perfect opportunity to finetune your marketing efforts that will build loyalty among your current customers. It also is the prime time to go into acquisition mode and attract competitors’ customers to your brand. Here are three ways to do it:

    1. Get personal. Consumers are vulnerable in a down market: They’re rethinking their brand loyalties as they look to economize and reconsider what they value in a brand. Keeping your customers means personalizing like you’ve never personalized before.

    Mine your data to let your customers know you understand what’s important to them. For example, you might send a message on a catalog overwrap saying, “In the spring, you bought this lightweight cotton sweater from us. Now that it’s fall, here’s what people who bought that sweater are buying now.” This shows you care about what they are thinking, and there’s some logic to what you’re recommending — you’re not selling them something just to sell it.

    Your marketing messages need to be not only personalized, but frequent. In a tough economy, it’s common for consumers to question where every penny is going. When they do that, suddenly every relationship is a little at risk. Their question becomes “Am I really getting value from this relationship, or is there something that will satisfy my needs equally for less money?”

    2. Don’t make cuts. Now is not the time to scale back on marketing spending. If you don’t stay in touch with your best customers — while they’re continuously exposed to messages from your competitors — the idea of buying your brand gets further from their mind. This is especially true when consumers are already reconsidering their brand loyalty.

    In several categories, competitors aren’t marketing as much or they’re reducing campaign frequency. With these cutbacks, some marketing media have become cheaper. If you’re not afraid to spend some money on acquisition, chances are your media costs can be a little more efficient.

    3. Show them you care. Empathize with customers to demonstrate you understand what they’re going through during the recession. Health care, for example, is a big concern for consumers right now.

    You should always practice good marketing — personalization, appropriate messages, frequent touches — but focus on these things even more to keep your customers with you through the economic crisis. When times are better, you’ll have your core group of customers — and then some.

  • Restore Old Customers

    Traditional customer re-activation strategies are struggling to deliver the results they once did. This has been fueled by cuts in consumer spending and communication channel fragmentation, forcing marketers to develop new approaches. A Target Marketing Magazine article told the stories of innovators who are leveraging customer data, analytical tools and new customer touchpoints to fuel their remarketing efforts with results.

    Start With the Basics
    The fundamentals haven’t changed. Identify your best customers and the attributes that make them the best. Analyze purchasing trends, patronage patterns and channel usage to bring to light key behavioral characteristics of the ideal candidates.

    Don’t stop there. Demographics, wealth data, transactional information and other lists can be used to enrich the customer profile. This information is useful for assessing the value of former customers who had sparse purchase histories but may still be good candidates.

    Last, match these reactivation profiles against dormant customer files to “pop” the segments most likely to yield a profitable level of response.

    Reactivation efforts most often are targeted at customers who have not shopped or purchased in the last year or more. While these consumers may not be shopping with you, they are buying from someone.

    Reactivation Rundown
    Reactivation is a form of advanced prospecting. By applying predictive scores to dormant customer files before fielding a reactivation campaign, resources can be prioritized toward those households with the greatest likelihood of response.

    A good reactivation strategy encompasses not only who to target, but how to target them. In today’s multichannel environment, opportunities to blend print and other media into an optimum delivery stream for each target segment exist. For example, leads might be generated via a print mail campaign. These leads might then be further qualified using lead scoring and either prioritized for rapid follow-up by phone for high potentials or routed to another channel for less qualified candidates. This blended approach can yield more profitable results. Marketers should choose the medium that optimizes reach and response, according to budget.

    Using Predictive Scoring
    Aim for a clear view of your best customers. While it is possible, and sometimes economical, to target all former customers, it’s more often the case that a campaign targeting high-value or niche segments produces the best financial results. Focus on predicting who will respond, and then determine the best channel and sequence for the message.

    Build New Relationships
    A reactivation strategy should include follow-up plans and next steps as well as an outline with how often customers would like to receive communication. Lastly, update files with new customer information and data to ensure future campaigns maximize the information available.

  • Competitive Forces That Shape Strategy

    This is classic business strategy information. We thought you would appreciate an opportunity to think about competition and profitability in different ways.

    The Harvard Business Review is selling an article by Michael E. Porter that updates a 1979 article.

    The article suggests that to sustain long-term profitability you must respond strategically to competition. Naturally you keep tabs on your established rivals. But as you scan the competitive arena, are you also looking beyond your direct competitors? Four additional competitive forces can hurt your prospective profits.

    • Savvy customers can force down prices by playing you and your rivals against one another.
    • Powerful suppliers may constrain your profits if they charge higher prices.
    • Aspiring entrants, armed with new capacity and hungry for market share, can ratchet up the investment required for you to stay in the game.
    • Substitute offerings can lure customers away.

    Commercial aviation is one of the least profitable industries because all of the about forces are strong. Established rivals compete intensely on price. Customers are fickle, searching for the best deal regardless of carrier. Suppliers—plane and engine manufacturers, along with unionized labor forces—bargain away the lion’s share of airlines’ profits. New players enter the industry in a constant stream. And substitutes are readily available—such as train or car travel.

    By analyzing these competitive forces, you can gain a picture of what’s influencing profitability in your industry. You identify game-changing trends early, so you can swiftly exploit them. And you spot ways to work around constraints on profitability—or even reshape the forces in your favor.

    By understanding how these competitive forces influence profitability in your industry, you can develop a strategy for enhancing your company’s long-term profits. Porter suggests the following:

    Position Your Company Where the Forces Are Weakest

    Example: In the heavy-truck industry, many buyers operate large fleets and are highly motivated to drive down truck prices. Trucks are built to regulated standards and offer similar features, so price competition is stiff; unions exercise considerable supplier power; and buyers can use substitutes such as cargo delivery by rail. To create and sustain long-term profitability within this industry, heavy-truck maker Paccar chose to focus on one customer group where competitive forces are weakest: individual drivers who own their trucks and contract directly with suppliers. These operators have limited clout as buyers and are less price sensitive because of their emotional ties to and economic dependence on their own trucks. For these customers, Paccar has developed such features as luxurious sleeper cabins, plush leather seats, and sleek exterior styling. Buyers can select from thousands of options to put their personal signature on these built-to-order trucks. Customers pay Paccar a 10% premium, and the company has been profitable for 68 straight years and earned a long-run return on equity above 20%.

    Exploit Changes in the Forces

    Example: With the advent of the Internet and digital distribution of music, unauthorized downloading created an illegal but potent substitute for record companies’ services. The record companies tried to develop technical platforms for digital distribution themselves, but major labels didn’t want to sell their music through a platform owned by a rival. Into this vacuum stepped Apple, with its iTunes music store supporting its iPod music player. The birth of this powerful new gatekeeper has whittled down the number of major labels from six in 1997 to four today.

    Reshape the Forces in Your Favor

    Use tactics designed specifically to reduce the share of profits leaking to other players. For example:

    • To neutralize supplier power, standardize specifications for parts so your company can switch more easily among vendors.
    • To counter customer power, expand your services so it’s harder for customers to leave you for a rival.
    • To temper price wars initiated by established rivals, invest more heavily in products that differ significantly from competitors’ offerings.
    • To scare off new entrants, elevate the fixed costs of competing; for instance, by escalating your R&D expenditures.
    • To limit the threat of substitutes, offer better value through wider product accessibility.

    Soft-drink producers did this by introducing vending machines and convenience store channels, which dramatically improved the availability of soft drinks relative to other beverages.

    Does this information inspire you to craft a new marketing message? Can we help you reach some customers with Direct Mail?

  • Low Cost Publicity Tips & Ideas

    You want to stretch every marketing dollar right now! If you decide to promote your own company here are ten ideas and tactics to get you started. We saved the traditional ideas for last.

    1. Network! Join groups and talk to people.
    2. Start a newsletter. This implies you have a mailing list. If you don’t have one, start building it now. In your newsletter always make sure you include news your readers can use – there has to be at least one part that will benefit your readers directly.
    3. Ask for testimonials. If your clients were happy with your services, ask them for a testimonial to use in your marketing. If they don’t time to write one, write it yourself and ask them to approve it.
    4. Blog about it. Don’t have a blog? Get one! If you’re worried about the cost, you can sign up for a free account. When writing your posts, take considerable time in writing your headline. Make sure to include keywords that relate to your post. Also comment on blogs. Compile a list of blogs that complement your service/company or relate to your industry and comment on their posts. Consider guest blogging too. Offering to guest blog on someone else’s blog can be a great way to introduce yourself or service to others. Research a list of relevant blogs and contact the blogger. You’ll be surprised at how easy it is and how willing bloggers will be to talk to you.
    5. Profile your company in Wikipedia. Check out how other companies profile themselves and use the same format. Be sure to include links to your site so people can find you.
    6. Leverage Social Media. Social networking sites can be a great way to market your company and/or offering. Make a list of groups on each that are relevant to you, join them, network with other members, and promote yourself and your service.
    7. Add E-Mail Signature Lines. You are probably constantly e-mailing vendors, clients, partners, etc. Did you know you can also market your new services in them? Add a signature line at the end of your e-mail with a link to your site that promotes your new service or blog post. It’s easy to do.
    8. Start a contest. Everybody loves to win something and a great way to market your company is to start a contest. Make one of your offerings for free as the prize. Use this opportunity to add to your mailing list.
    9. Write an interesting article. Writing articles is a great way to establish credibility. The key is to make sure your article ends up benefiting the person reading it. Send us an email and we will share lists of topic ideas. Your headline should draw people in make it short, funny, thought provoking and/or engaging. Sometimes writing it last works best. Your byline should give readers a brief background of yourself and your company. Be sure to include contact information.
    10. Submit a Press Release. Write a noteworthy press release in third person and submit it yourself at free online sites. You can also send the press release to the local media around your area. To gain a better chance of getting it picked up, include a cover letter that showcases how the information in your release benefits your local community. It may prove worthwhile to pay for one PR service if you have truly newsworthy information.